0000827099false--12-31FY2024false0.0012000000001843704691900121240.0010.0010.00112500002700000140014005187502300000falsefalsefalsefalse000.0010.0010.001518750230000000315191250000270000014000000008270992024-01-012024-12-310000827099us-gaap:SubsequentEventMember2025-01-012025-01-310000827099us-gaap:SubsequentEventMembercpwr:CommonStocksMember2025-01-012025-12-310000827099us-gaap:SubsequentEventMember2025-02-012025-02-280000827099cpwr:CompanyCEOMember2024-12-310000827099cpwr:CompanyCEOMember2023-12-310000827099cpwr:CompanyCEOOneMember2023-12-310000827099cpwr:CompanyCEOOneMember2024-12-310000827099cpwr:CompanyCEOMember2024-01-012024-12-310000827099cpwr:CompanyCEOOneMember2023-01-012023-12-310000827099cpwr:CompanyCEOOneMember2024-01-012024-12-310000827099cpwr:CompanyCEOOneMember2023-05-012023-05-310000827099cpwr:CommonStocksTwoMember2022-01-012022-12-310000827099cpwr:CompanyCEOMember2023-01-012023-12-310000827099cpwr:CEOMember2024-01-012024-12-310000827099cpwr:OneJanuaryTwentyElevenMembercpwr:EmploymentAgreementMembersrt:ChiefExecutiveOfficerMember2024-01-012024-12-310000827099cpwr:BrettMRegalMember2019-05-012019-05-280000827099cpwr:TradeBaseSalesIncMember2019-05-012019-05-2800008270992022-08-012022-08-2500008270992018-05-302018-07-1900008270992018-08-012018-08-0800008270992018-08-012018-08-2200008270992019-08-012019-08-150000827099cpwr:SeriesDConvertiblePreferredStockMember2023-06-060000827099cpwr:SeriesDPreferredStockTwoMember2022-12-310000827099cpwr:SeriesDPreferredStockTwoMember2023-12-310000827099cpwr:SeriesDPreferredStockThreeMember2023-12-310000827099cpwr:SeriesDPreferredStockOneMember2024-12-310000827099cpwr:SeriesDPreferredStockOneMember2023-12-310000827099us-gaap:SeriesDPreferredStockMember2022-12-310000827099us-gaap:SeriesCPreferredStockMember2022-12-310000827099us-gaap:SeriesBPreferredStockMember2022-12-310000827099cpwr:CommonStocksMember2023-01-012023-12-310000827099cpwr:CommonStocksMember2024-01-012024-12-310000827099cpwr:SeriesDPreferredStockTwoMember2023-01-012023-12-310000827099cpwr:SeriesDPreferredStockThreeMember2023-01-012023-12-310000827099us-gaap:ConvertibleNotesPayableMember2024-12-310000827099us-gaap:ConvertibleNotesPayableMember2024-11-012024-12-310000827099cpwr:ConsultantMember2023-11-300000827099cpwr:ConsultantMember2023-11-012023-11-300000827099cpwr:WarrantsMember2023-12-310000827099cpwr:WarrantsMember2024-12-310000827099cpwr:WarrantsMember2022-12-310000827099cpwr:RemeasurementDateMembercpwr:TopMember2023-01-012023-12-310000827099cpwr:RemeasurementDateMembercpwr:BottomMember2023-01-012023-12-310000827099cpwr:RemeasurementDateMembercpwr:TopMember2024-01-012024-12-310000827099cpwr:RemeasurementDateMembercpwr:BottomMember2024-01-012024-12-310000827099cpwr:RemeasurementDateMember2023-01-012023-12-310000827099cpwr:RemeasurementDateMember2024-01-012024-12-310000827099us-gaap:FairValueInputsLevel3Member2024-12-310000827099us-gaap:FairValueInputsLevel2Member2024-12-310000827099us-gaap:FairValueInputsLevel1Member2024-12-310000827099us-gaap:FairValueInputsLevel3Member2023-12-310000827099us-gaap:FairValueInputsLevel2Member2023-12-310000827099us-gaap:FairValueInputsLevel1Member2023-12-310000827099cpwr:CommonStocksOneMember2024-01-012024-12-310000827099us-gaap:NotesPayableOtherPayablesMemberus-gaap:SeriesDPreferredStockMember2023-01-012023-12-310000827099us-gaap:SeriesDPreferredStockMember2023-01-012023-12-310000827099cpwr:NotePayableThirtyNineMember2024-12-310000827099cpwr:NotePayableThirtySevenMember2024-12-310000827099cpwr:NotePayableThirtySixMember2024-12-310000827099cpwr:NotePayableThirtyFiveMember2024-12-310000827099cpwr:NotePayableThirtyFourMember2024-12-310000827099cpwr:NotePayableThirtyThreeMember2024-12-310000827099cpwr:NotePayableThirtyTwoMember2024-12-310000827099cpwr:NotePayableThirtyOneMember2024-12-310000827099cpwr:NotePayableThirtyMember2024-12-310000827099cpwr:NotePayableTwentyNineMember2024-12-310000827099cpwr:NotePayableTwentyEightMember2024-12-310000827099cpwr:NotePayableTwentySevenMember2024-12-310000827099cpwr:NotePayableTwentySixMember2024-12-310000827099cpwr:NotePayableTwentyFiveMember2024-12-310000827099cpwr:NotePayableTwentyFourMember2024-12-310000827099cpwr:NotePayableTwentyThreeMember2024-12-310000827099cpwr:NotePayableTwentyTwoMember2024-12-310000827099cpwr:NotePayableTWentyOneMember2024-12-310000827099cpwr:NotePayableTwentyMember2024-12-310000827099cpwr:NotePayableNinteenMember2024-12-310000827099cpwr:NotePayableEighteenMember2024-12-310000827099cpwr:NotePayableSeventeenMember2024-12-310000827099cpwr:NotePayableSixteenMember2024-12-310000827099cpwr:NotePayableFifteenMember2024-12-310000827099cpwr:NotePayableFourteenMember2024-12-310000827099cpwr:NotePayableThirteenMember2024-12-310000827099cpwr:NotePayableTwelveMember2024-12-310000827099cpwr:NotePayableElevenMember2024-12-310000827099cpwr:NotePayableTenMember2024-12-310000827099cpwr:NotePayableNineMember2024-12-310000827099cpwr:NotePayableEightMember2024-12-310000827099cpwr:NotePayableSevenMember2024-12-310000827099cpwr:NotePayableSixMember2024-12-310000827099cpwr:NotePayableFiveMember2024-12-310000827099cpwr:NotePayableFourMember2024-12-310000827099cpwr:NotePayableThreeMember2024-12-310000827099cpwr:NotePayablesThirtyEightMember2024-12-310000827099cpwr:NotePayableTwoMember2024-12-310000827099cpwr:NotePayableOneMember2024-12-310000827099cpwr:NotePayableThirtyNineMember2023-12-310000827099cpwr:NotePayableThirtySevenMember2023-12-310000827099cpwr:NotePayableThirtySixMember2023-12-310000827099cpwr:NotePayableThirtyFiveMember2023-12-310000827099cpwr:NotePayableThirtyFourMember2023-12-310000827099cpwr:NotePayableThirtyThreeMember2023-12-310000827099cpwr:NotePayableThirtyTwoMember2023-12-310000827099cpwr:NotePayableThirtyOneMember2023-12-310000827099cpwr:NotePayableThirtyMember2023-12-310000827099cpwr:NotePayableTwentyNineMember2023-12-310000827099cpwr:NotePayableTwentyEightMember2023-12-310000827099cpwr:NotePayableTwentySevenMember2023-12-310000827099cpwr:NotePayableTwentySixMember2023-12-310000827099cpwr:NotePayableTwentyFiveMember2023-12-310000827099cpwr:NotePayableTwentyFourMember2023-12-310000827099cpwr:NotePayableTwentyThreeMember2023-12-310000827099cpwr:NotePayableTwentyTwoMember2023-12-310000827099cpwr:NotePayableTWentyOneMember2023-12-310000827099cpwr:NotePayableTwentyMember2023-12-310000827099cpwr:NotePayableNinteenMember2023-12-310000827099cpwr:NotePayableEighteenMember2023-12-310000827099cpwr:NotePayableSeventeenMember2023-12-310000827099cpwr:NotePayableSixteenMember2023-12-310000827099cpwr:NotePayableFifteenMember2023-12-310000827099cpwr:NotePayableFourteenMember2023-12-310000827099cpwr:NotePayableThirteenMember2023-12-310000827099cpwr:NotePayableTwelveMember2023-12-310000827099cpwr:NotePayableElevenMember2023-12-310000827099cpwr:NotePayableTenMember2023-12-310000827099cpwr:NotePayableNineMember2023-12-310000827099cpwr:NotePayableEightMember2023-12-310000827099cpwr:NotePayableSevenMember2023-12-310000827099cpwr:NotePayableSixMember2023-12-310000827099cpwr:NotePayableFiveMember2023-12-310000827099cpwr:NotePayableFourMember2023-12-310000827099cpwr:NotePayableThreeMember2023-12-310000827099cpwr:NotePayableTwoMember2023-12-310000827099cpwr:NotePayableOneMember2023-12-310000827099cpwr:NotePayableThirtySevenMember2024-01-012024-12-310000827099cpwr:NotePayableThirtySixMember2024-01-012024-12-310000827099cpwr:NotePayableThirtyFiveMember2024-01-012024-12-310000827099cpwr:NotePayableThirtyFourMember2024-01-012024-12-310000827099cpwr:NotePayableThirtyThreeMember2024-01-012024-12-310000827099cpwr:NotePayableThirtyTwoMember2024-01-012024-12-310000827099cpwr:NotePayableThirtyOneMember2024-01-012024-12-310000827099cpwr:NotePayableThirtyMember2024-01-012024-12-310000827099cpwr:NotePayableTwentyNineMember2024-01-012024-12-310000827099cpwr:NotePayableTwentyEightMember2024-01-012024-12-310000827099cpwr:NotePayableTwentySevenMember2024-01-012024-12-310000827099cpwr:NotePayableTwentySixMember2024-01-012024-12-310000827099cpwr:NotePayableTwentyFiveMember2024-01-012024-12-310000827099cpwr:NotePayableTwentyFourMember2024-01-012024-12-310000827099cpwr:NotePayableTwentyThreeMember2024-01-012024-12-310000827099cpwr:NotePayableTwentyTwoMember2024-01-012024-12-310000827099cpwr:NotePayableTWentyOneMember2024-01-012024-12-310000827099cpwr:NotePayableTwentyMember2024-01-012024-12-310000827099cpwr:NotePayableNinteenMember2024-01-012024-12-310000827099cpwr:NotePayableEighteenMember2024-01-012024-12-310000827099cpwr:NotePayableSeventeenMember2024-01-012024-12-310000827099cpwr:NotePayableSixteenMember2024-01-012024-12-310000827099cpwr:NotePayableFifteenMember2024-01-012024-12-310000827099cpwr:NotePayableFourteenMember2024-01-012024-12-310000827099cpwr:NotePayableThirteenMember2024-01-012024-12-310000827099cpwr:NotePayableTwelveMember2024-01-012024-12-310000827099cpwr:NotePayableElevenMember2024-01-012024-12-310000827099cpwr:NotePayableTenMember2024-01-012024-12-310000827099cpwr:NotePayableNineMember2024-01-012024-12-310000827099cpwr:NotePayableEightMember2024-01-012024-12-310000827099cpwr:NotePayableSevenMember2024-01-012024-12-310000827099cpwr:NotePayableSixMember2024-01-012024-12-310000827099cpwr:NotePayableFiveMember2024-01-012024-12-310000827099cpwr:NotePayableFourMember2024-01-012024-12-310000827099cpwr:NotePayableThreeMember2024-01-012024-12-310000827099cpwr:NotePayableTwoMember2024-01-012024-12-310000827099cpwr:NotePayableThirtySevenMember2023-01-012023-12-310000827099cpwr:NotePayableThirtySixMember2023-01-012023-12-310000827099cpwr:NotePayableThirtyFiveMember2023-01-012023-12-310000827099cpwr:NotePayableThirtyFourMember2023-01-012023-12-310000827099cpwr:NotePayableThirtyThreeMember2023-01-012023-12-310000827099cpwr:NotePayableThirtyTwoMember2023-01-012023-12-310000827099cpwr:NotePayableThirtyOneMember2023-01-012023-12-310000827099cpwr:NotePayableThirtyMember2023-01-012023-12-310000827099cpwr:NotePayableTwentyNineMember2023-01-012023-12-310000827099cpwr:NotePayableTwentyEightMember2023-01-012023-12-310000827099cpwr:NotePayableTwentySevenMember2023-01-012023-12-310000827099cpwr:NotePayableTwentySixMember2023-01-012023-12-310000827099cpwr:NotePayableTwentyFiveMember2023-01-012023-12-310000827099cpwr:NotePayableTwentyFourMember2023-01-012023-12-310000827099cpwr:NotePayableTwentyThreeMember2023-01-012023-12-310000827099cpwr:NotePayableTwentyTwoMember2023-01-012023-12-310000827099cpwr:NotePayableTWentyOneMember2023-01-012023-12-310000827099cpwr:NotePayableTwentyMember2023-01-012023-12-310000827099cpwr:NotePayableNinteenMember2023-01-012023-12-310000827099cpwr:NotePayableEighteenMember2023-01-012023-12-310000827099cpwr:NotePayableSeventeenMember2023-01-012023-12-310000827099cpwr:NotePayableSixteenMember2023-01-012023-12-310000827099cpwr:NotePayableFifteenMember2023-01-012023-12-310000827099cpwr:NotePayableFourteenMember2023-01-012023-12-310000827099cpwr:NotePayableThirteenMember2023-01-012023-12-310000827099cpwr:NotePayableTwelveMember2023-01-012023-12-310000827099cpwr:NotePayableElevenMember2023-01-012023-12-310000827099cpwr:NotePayableTenMember2023-01-012023-12-310000827099cpwr:NotePayableNineMember2023-01-012023-12-310000827099cpwr:NotePayableEightMember2023-01-012023-12-310000827099cpwr:NotePayableSevenMember2023-01-012023-12-310000827099cpwr:NotePayableSixMember2023-01-012023-12-310000827099cpwr:NotePayableFiveMember2023-01-012023-12-310000827099cpwr:NotePayableFourMember2023-01-012023-12-310000827099cpwr:NotePayableThreeMember2023-01-012023-12-310000827099cpwr:NotePayableTwoMember2023-01-012023-12-310000827099cpwr:NotePayablesThirtyEightMember2024-01-012024-12-310000827099cpwr:NotePayableOneMember2024-01-012024-12-310000827099cpwr:NotePayableOneMember2023-01-012023-12-310000827099us-gaap:ConvertiblePreferredStockMember2023-01-012023-12-310000827099us-gaap:ConvertiblePreferredStockMember2024-01-012024-12-310000827099us-gaap:ConvertibleNotesPayableMember2023-01-012023-12-310000827099us-gaap:ConvertibleNotesPayableMember2024-01-012024-12-310000827099cpwr:WarrantsMember2024-01-012024-12-310000827099cpwr:WarrantsMember2023-01-012023-12-310000827099us-gaap:RetainedEarningsMember2024-12-310000827099us-gaap:AdditionalPaidInCapitalMember2024-12-310000827099us-gaap:CommonStockMember2024-12-310000827099us-gaap:PreferredStockMember2024-12-310000827099us-gaap:RetainedEarningsMember2024-01-012024-12-310000827099us-gaap:AdditionalPaidInCapitalMember2024-01-012024-12-310000827099us-gaap:CommonStockMember2024-01-012024-12-310000827099us-gaap:PreferredStockMember2024-01-012024-12-310000827099us-gaap:RetainedEarningsMember2023-12-310000827099us-gaap:AdditionalPaidInCapitalMember2023-12-310000827099us-gaap:CommonStockMember2023-12-310000827099us-gaap:PreferredStockMember2023-12-310000827099us-gaap:RetainedEarningsMember2023-01-012023-12-310000827099us-gaap:AdditionalPaidInCapitalMember2023-01-012023-12-310000827099us-gaap:CommonStockMember2023-01-012023-12-310000827099us-gaap:PreferredStockMember2023-01-012023-12-3100008270992022-12-310000827099us-gaap:RetainedEarningsMember2022-12-310000827099us-gaap:AdditionalPaidInCapitalMember2022-12-310000827099us-gaap:CommonStockMember2022-12-310000827099us-gaap:PreferredStockMember2022-12-3100008270992023-01-012023-12-310000827099us-gaap:SeriesDPreferredStockMember2023-12-310000827099us-gaap:SeriesDPreferredStockMember2024-12-310000827099us-gaap:SeriesCPreferredStockMember2023-12-310000827099us-gaap:SeriesCPreferredStockMember2024-12-310000827099us-gaap:SeriesBPreferredStockMember2023-12-310000827099us-gaap:SeriesBPreferredStockMember2024-12-3100008270992023-12-3100008270992024-12-3100008270992025-10-2400008270992024-06-30iso4217:USDxbrli:sharesiso4217:USDxbrli:sharesxbrli:pure

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to ___________________

Commission File No. 033-19411-C

OCEAN THERMAL ENERGY CORPORATION

(Exact name of registrant as specified in its charter)

Nevada

20-5081381

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

3675 Market Street, Suite 200, Philadelphia PA 19104

(Address of principal executive offices, including Zip Code)

717-299-1344

(Registrant’s telephone number, including area code)

Securities Registered pursuant to Section 12(b) of the Exchange Act:

Title of Class		Trading Symbol		Name of Each Exchange on Which Registered
N/A		N/A		N/A

Securities Registered pursuant to Section 12(g) of the Exchange Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☐ No ☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter. The aggregate market value of the voting and nonvoting common equity held by nonaffiliates computed as of the price at which the common equity was last sold on the last business day of the registrant’s most recently completed second fiscal quarter was $1,987,521.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. As of October 24, 2025, there were 190,012,124 shares of the registrant’s common stock outstanding, par value $0.001.

DOCUMENTS INCORPORATED BY REFERENCE: None

TABLE OF CONTENTS

		Page
PART I
ITEM 1. BUSINESS		4
ITEM 1A. RISK FACTORS		12
ITEM 1B. UNRESOLVED STAFF COMMENTS		21
ITEM 1C. CYBERSECURITY		21
ITEM 2. PROPERTIES		22
ITEM 3. LEGAL PROCEEDINGS		22
ITEM 4. MINE SAFETY DISCLOSURES		22
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES		23
ITEM 6. [RESERVED]		24
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		24
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		27
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA		27
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE		27
ITEM 9A. CONTROLS AND PROCEDURES		27
ITEM 9B. OTHER INFORMATION		29
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS		29
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE		30
ITEM 11. EXECUTIVE COMPENSATION		32
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS		33
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, DIRECTOR INDEPENDENCE		34
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES		35
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES		37
SIGNATURES		42

Table of Contents

Throughout this report, unless otherwise designated, the terms “we,” “us,” “our,” and “our company” refer to Ocean Thermal Energy Corporation, a Nevada corporation, and our subsidiary. All amounts in this report are in U.S. dollars, unless otherwise indicated.

CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS

This report may contain certain “forward-looking” statements as such term is defined by the U.S. Securities and Exchange Commission (“SEC”) in its rules, regulations, and releases, which represent our expectations or beliefs, including statements concerning our operations, economic performance, financial condition, growth and acquisition strategies, investments, and future operational plans. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as “may,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate,” “might,” “plan,” “propose,” “predict,” or “should,” or the negative or other variations thereof or comparable terminology, are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, certain of which are beyond our control, and actual results may differ materially depending on a variety of important factors, including uncertainty related to acquisitions, governmental regulation, management and maintenance of growth, the operations of the company and its subsidiaries, volatility of stock price, commercial viability of OTEC systems, and any other factors discussed in this and our other filings with the SEC.

These risks, uncertainties, and other factors include those set forth under “Risk Factors” of this report. Given these risks and uncertainties, readers are cautioned not to place undue reliance on our forward-looking statements. All subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. Except as otherwise required by applicable law, we undertake no obligation to publicly update or revise any forward-looking statements or the risk factors described in this report or in the documents we incorporate by reference, whether as a result of new information, future events, changed circumstances, or any other reason after the date of this report.

This report contains forward-looking statements, including statements regarding, among other things:

	·	the significant international political and economic disruption caused by Russia’s military invasion of Ukraine;

	·	our ability to continue as a going concern;

	·	our anticipated needs for working capital;

	·	our ability to secure financing;

	·	the possibility that actual capital costs, operating costs, production, and economic returns may differ significantly from those that we have anticipated;

	·	the financial model for our proposed projects has not been tested and may not be successful;

	·	changing attitudes about environmental risks;

	·	substantial regulation of our projects;

	·	rapidly changing regulatory schemes and enforcement of those regulations in the United States and abroad;

	·	the impact of tariffs on the cost of constructing our projects;

	·	financial, technical, managerial, and sales risks that may make us unsuccessful;

	·	our exposure to political and legal risks in developing or emerging markets where we propose to locate our plants;

	·	technological advances that may render our technologies obsolete; and

	·	operational problems, natural events or catastrophes, casualty loss, or other events that may impair the commercial operation of our projects.

The forward-looking information is based on present circumstances and on our predictions respecting events that have not occurred, that may not occur, or that may occur with different consequences from those now assumed or anticipated. Actual events or results may differ materially from those discussed in forward-looking statements because of various factors, including the risks outlined under “Risk Factors,” and matters described in this report generally. The forward-looking statements included in this report are made only as of the date of this report.

Table of Contents

PART I

ITEM 1. BUSINESS

Overview

We use our proprietary technology to develop designs for renewable energy systems, primarily for Ocean Thermal Energy Conversion (“OTEC”), Seawater Air Conditioning (“SWAC”), and Lake Source Cooling (“LSC”) systems. Our geographical markets are tropical and subtropical regions of the world for OTEC, SWAC, and LSC, and worldwide markets for SWAC and LSC. We also intend to develop projects for renewable power generation, desalinated water production, and air conditioning using our proprietary technologies designed to extract energy from the temperature differences between warm surface water and cold deep water. In addition, our projects provide ancillary products such as potable/bottled water and high-profit aquaculture, mariculture, and agriculture opportunities. To date, we have not completed any projects, however we are present developing a project in the South Pacific under a contract with the U.S. Department of Defense.

Our Business

We develop projects for renewable power generation, desalinated water production, and air conditioning using proprietary intellectual property designed and developed by our own oceanographers, engineers, and marine scientists. Plants using our technologies are designed to extract energy from the temperature difference between warm surface ocean water and cold deep seawater at a depth of approximately 3,000 feet. We believe these technologies provide practical solutions to the fundamental human needs for sustainable, affordable energy; desalinated water for domestic, agricultural, and aquaculture uses; and cooling, all without the use of fossil fuels.

	·	Ocean Thermal Energy Conversion, known in the industry as “OTEC,” power plants are designed to produce electricity. In addition, some of the seawater running through an OTEC plant can be desalinated efficiently, producing fresh water for agriculture and human consumption.

	·	Seawater Air Conditioning, known in its industry as SWAC, plants are designed to use cold water from ocean depths to provide air conditioning for large commercial buildings or other facilities. This same technology can also use deep cold water from lakes, known as Lake Source Cooling or LSC.

Both OTEC and SWAC/LSC systems can be engineered to produce desalinated water for potable, agricultural, and fish farming/aquaculture uses.

We expect to use our technology to develop OTEC and SWAC/LSC systems for various applications for potential customers in tropical and subtropical regions, the U.S. Department of Defense, and the U.S. Department of Agriculture. We hope to one day facilitate the development of sustainable living communities by creating an ecologically sustainable “OTEC EcoVillage” powered by 100% fossil-fuel-free electricity.

Through our Small Business Innovation Research credentials, we continue to discuss opportunities to design, build, own, and operate an OTEC system producing base-load sustainable electricity and desalinated water without using fossil fuels to do so. We already have under development an OTEC plant for a Naval Support Facility in the South Pacific as a part of our Small Business Innovation Research program.

Our Vision

Our vision is to bring our technologies to tropical and subtropical regions where approximately three billion people live. Our market includes 68 countries and 29 territories with suitable sea depth, shore configuration, and need. We plan to be the first company in the world to design and build a commercial-scale OTEC plant. Our initial markets and potential projects include several U.S. Department of Defense bases in Asia Pacific and other regions where energy independence is crucial. Currently, we have projects in the planning and development stages with the U.S. Department of Defense, the Ministry of Earth Sciences at the Government of India, and an Engineering Company from France.

Table of Contents

Our Technology

OTEC is a self-sustaining energy source, with no supplemental power required to generate continuous (24/7) electricity. It works by converting heat from the sun, which has warmed ocean surface water, into electric power, and then completing the process by cooling the plant with cold water from deep in the ocean. The cold water can also be used for very efficient air conditioning and desalinated to produce fresh water. OTEC has worked in test settings with a natural temperature gradient of 20 degrees Celsius or greater in the ocean. We believe OTEC can deliver sustainable electricity in tropical and subtropical regions of the world at rates approximately 20-40% lower than typical costs for electricity produced by fossil fuels in those markets.

Technology advancements have significantly reduced the capital costs of OTEC to make it competitive compared to traditional energy sources. Technology improvements include larger diameter seawater pipes manufactured with improved materials, increased pumping capabilities from OTEC depths, better understanding of material requirements in the deep ocean environment, more experience in deep water pipeline and cable installation techniques, and more accurate sea bottom mapping technology, which is required for platform positioning and pipe installation. The cold-water pipes at a demonstration site in Hawaii have been in continuous operation for over 20 years, and the technology has undergone significant improvements since the Hawaiian installation. Our Senior OTEC Scientist, Dr. Luis Vega, was the Program Manager for the Department of Energy-funded demonstration OTEC system designed and built at the Natural Energy Laboratory of the Hawaii Authority.

We estimate that a small OTEC plant that delivers 10 megawatts (MWs) per hour would currently cost approximately $250 million. This is the plant size that we typically propose for our initial target markets to meet 20% or more of their current demand for electricity and a large portion of their need for fresh drinking water and agricultural water, although discussions with the U.S. Department of Defense have included OTEC plants of various sizes.

Finally, we believe the decreasing supply and increasing cost of fossil-fuel-based energy has intensified the search for renewable alternatives. Renewable energy sources, although traditionally more expensive than comparable fossil-fuel plants, have many advantages, including increased national energy security, decreased carbon emissions, and compliance with renewable energy mandates and air quality regulations. We believe these market forces will continue and potentially increase. Renewable energy sources may be attractive in remote islands where shipping costs and limited economies of scale substantially increase fossil-fuel-based energy. Many islands contain strategic military bases with high-energy demands that we believe would greatly benefit from a less expensive, reliable source of energy that is produced locally, such as OTEC.

SWAC/LSC is a process that uses cold water from locations such as the ocean or deep lakes to provide the cooling capacity to replace traditional electrical chillers in an air conditioning system. SWAC/LSC applications can reduce the energy consumption of a traditional air-conditioning system by as much as 90%. Even when the capital cost amortization of building a typically sized SWAC/LSC system providing 9,800 tons of cooling are taken into account, SWAC/LSC may save the customer approximately 25-40% when compared to conventional systems. Cooling systems using seawater or groundwater for large commercial structures are in use at numerous locations developed and operated by others worldwide, including Bora Bora (Intercontinental Hotel), Finland (Google Data Center); Cornell University, NY; Stockholm, Sweden; and the City of Toronto, Canada.

How Our Technology Works

OTEC uses the natural temperature difference between cooler deep ocean water at a depth of approximately 3,000 feet and warmer shallow or surface water to create energy. An OTEC plant project involves installing about six-foot diameter, deep-ocean intake pipes (which can readily be purchased), together with surface water pipes, to bring seawater onshore. OTEC uses a heat pump cycle to generate power. In this application, an array of heat exchangers transfers the warm ocean surface water as an energy source to vaporize a liquid in a closed loop, driving a turbine, which in turn drives a generator to produce electricity. The cold deep ocean water provides the required temperature to condense vapor back into a liquid, thus completing the thermodynamic cycle, which is constantly and continuously repeated. The working fluid is typically ammonia, as it has a low boiling point. Its high hydrogen density makes ammonia a very promising green energy storage and distribution media. Among practical fuels, ammonia has the highest hydrogen density, including hydrogen itself, in either its low temperature, or cryogenic, and compressed forms. Moreover, since the ammonia molecule is free of carbon atoms (unlike many other practical fuels), combustion of ammonia does not result in any carbon dioxide emissions. The fact that ammonia is already a widely produced and used commodity with well-established distribution and handling procedures allows for its use as an alternative fuel. This same general principle is used in steam turbines, internal combustion engines, and, in reverse, refrigerators. Rather than using heat energy from the burning of fossil fuels, OTEC power draws on temperature differences of the ocean caused by the sun’s warming of the ocean’s surface, providing an unlimited and free source of energy.

Table of Contents

OTEC and SWAC/LSC infrastructure offers a modular design that facilitates adding components to satisfy customer requirements and access to a sufficient supply of cold water. These components include reverse-osmosis desalination plants to produce drinkable water, bottling plants to commercialize the drinkable water, and off-take solutions for aquaculture uses (such as fish farms), which benefit from the enhanced nutrient content of deep ocean water. A further advantage of a modular design is that, depending on the patterns of electricity demand and output of the OTEC plant, a desalination plant can be run using the excess electricity capacity.

Currently, OTEC requires a minimum temperature difference of approximately 20 degrees Celsius to operate, with each degree greater than this increasing output by approximately 10-15%. OTEC has potential applications in tropical and subtropical zones and is particularly well suited for tropical islands and coastal areas with proximate access to both cold deep water and warm surface water. Data from the National Renewable Energy Laboratory of the U.S. Department of Energy website indicated that at least 68 countries and 29 territories around the globe appear to meet these criteria.

SWAC/LSC is a significantly more cost-effective and environmentally friendly way to implement air-conditioning using cold water sourced from lakes or, analogous with OTEC, deep ocean water, rather than from an electric chiller. Comparing Federal Energy Management Program engineering efficiency requirements of approximately 0.94 kilowatts of electricity per ton of cooling capacity with our own engineering estimates of 0.09 kilowatts of electricity per ton of cooling capacity, as calculated by DCO Energy, our engineering, procurement, and construction partner, we estimate that SWAC/LSC systems can reduce electricity consumption by up to 80-90% over conventional systems. Therefore, we believe energy reductions may make SWAC/LSC systems well-suited for large structures, such as office complexes, medical centers, resorts, data centers, airports, and shopping malls. We believe that other SWAC/LSC plants we may develop will likely achieve similar efficiencies. There are examples of proven successful SWAC/LSC systems in use, including a large 79,000-ton system used to cool buildings in the downtown area of the City of Toronto, Canada; a SWAC system in Google’s data center in Finland that uses waters from the Baltic Sea to keep servers cool; and a system with more than 18,000 tons of cooling in operation at Cornell University, Ithaca, New York.

OTEC Versus Other Energy Sources

The construction costs of power plants using any technology are much higher in remote locations, such as tropical islands, than on the mainland of the United States, principally due to the need to transport materials, components, and other construction supplies and labor unavailable locally. There are also considerations that make those other technologies less attractive in those areas. We believe the consistency of OTEC during its life provides clear advantages over other power-generation technologies in the tropical and subtropical markets because its base-load power (available at all times and not subject to fluctuations throughout the day) is an important asset to the small transmission grid, which is typical in these regions.

Table of Contents

Combined-cycle natural gas plants typically need to be capable of generating several hundred MWs to attain the lower-cost, per-kilowatt installed values that make the plant economically feasible. Tropical locations do not have large enough grids and market demand to make that plant size reasonable. Further, tropical locations frequently do not have domestic fuel supplies, requiring fuel to be imported. In order to import natural gas, it must be liquefied for shipment and then vaporized at the location. There are initial cost and public safety concerns with such facilities. In addition, gas-fired plants emit undesirable nitrogen oxide, carbon dioxide, and volatile organic compounds.

Solar applications continue to increase as the cost and effectiveness of photovoltaic panels improve. However, we estimate that the cost to install solar panels in tropical regions remains high. Beyond the issues with shipping and labor costs that all construction must overcome, the design and building code requirements are more stringent in storm-prone areas, which are subject to potential wind damage from hurricanes, earthquakes, and typhoons, than are typically encountered in mainland nontropical installations. Support structures must be more substantial in order to hold the solar panels in place in case of hurricane-force winds. Solar power, like wind power, places substantial stress on an electrical grid. Since the input of both of these sources is subject to weather conditions, they cannot be considered reliable suppliers of power, and back-up capacity is necessary. Further, instantaneous changes in output due to sporadic cloud cover create transient power flow to the grid and difficulties in maintaining proper voltages and stability. OTEC is a stabilizing source to the grid, providing constant and predictable power, and has no emissions. The ability of OTEC to provide constant, continuous power is a large benefit as compared to any of the other renewable options available.

OTEC’s power price, determined almost entirely by the amortization of its initial cost, is a protection against inflation and rising interest rates, which greatly affect coal and oil. Customers in our target markets currently pay significantly more for power from coal and oil-fueled power plants than comparable populations. Additionally, imported fuels are subject to price volatility, which directly impacts the cost of electricity and adds operating risk during a plant's life. The fuel handling to allow for shipping, storage, and local transport is expensive, a potential source of damaging fuel spills, and a basis for environmental concerns. Fossil-fuel plants create pollution, emit carbon dioxide, and are visually unappealing, which is of particular concern in tropical areas renowned for their clear, pristine air and beauty. We believe that an OTEC plant can reduce power costs for these markets by up to 40%, compared to their current electrical costs, and when revenues from fresh drinking water, aquaculture, and agriculture production are considered, the justification is even more compelling.

Overview of the Market and the Feasibility of OTEC in Current Market Conditions

We believe that OTEC is now an economically, technologically, and environmentally competitive power source, especially for developing or emerging countries in certain tropical and subtropical regions contiguous to oceans. Our natural target markets are communities in countries around the Caribbean, Asia, and the Pacific. These locations are typically characterized by limited infrastructure, high energy costs, mostly imported or expensively generated electricity, and frequent significant fresh water and food shortages. These are serious limitations on economic development, which we believe our OTEC technology can address.

The National Oceanic and Atmospheric Administration (NOAA) reports that the development of OTEC technology has promise in tropical areas, where year-round temperature differences between the deep cold and warm surface waters are greater than 20 degrees Celsius (36 degrees Fahrenheit). This energy technology also has the potential to generate potable water, hydrogen, and ammonia. Cold water from the OTEC process can be used to benefit commercial products, such as air conditioning and aquaculture.

Over the past 15 years, there have been substantial changes in many areas that have now made the commercialization of OTEC a reality, influenced by the frequently changing and unpredictable price of oil and the effects of climate change leading to violent weather patterns and drought conditions around the world.

Facts like these have increased attention and interest in OTEC in the commercial sector and among candidates. With OTEC power, customers can decouple the price of electricity from the price of oil, combat the effects of climate change, and reduce greenhouse gases escaping into the atmosphere.

Table of Contents

According to the U.S. Energy Information Administration (“EIA”), renewable energy can play an important role in U.S. energy security and in reducing greenhouse gas emissions. Using renewable energy can help to reduce energy imports and reduce fossil fuel use, which is the largest source of U.S. carbon dioxide emissions.

As the Army optimizes the use of fuel, water, electricity, and other resources, we increase our resilience while saving taxpayer dollars and reducing our impact on the planet. The Army will mitigate and adapt to climate change, and in doing so gain a strategic advantage, especially as we continue to outpace our near-peer competitors.

We believe the ongoing concerns about environmental issues and the price instability of fossil-fuel prices are motivation for increased commercial interest in OTEC, renewed activity in the commercial sector, and increased interest among communities and agencies that recognize the potential benefits of this technology, including the U.S. Department of Defense and U.S. Department of the Interior territories.

Political instability, especially in Eastern Europe and the Middle East proved that fossil-fuel-producing regions and oil price volatility have exposed the criticality of energy security and independence for all countries. The need to have tighter control of domestic energy requirements is a matter of increasing international concern. Continued reliance on other countries (particularly those in oil-producing regions) is no longer a favorable option. We believe these considerations will continue to drive renewable research and commercialization efforts that promote technologies with global potential to replace fossil-fuel-based energy systems and benefit from base-load capabilities like OTEC.

Our current management team has led the development of the business since 2010 and has advanced the technology and understanding of OTEC and SWAC/LSC to worldwide markets. These efforts have helped us establish a marketplace for our technology and an understanding of the importance of designing, building, and operating a commercial-grade OTEC system.

Our Competition

We compete in the development, construction, and operation of OTEC and SWAC/LSC plants with other operators that develop similar facilities powered by other energy sources, primarily oil, natural gas, nuclear energy, and solar power. These traditional energy sources have well-established infrastructures for production, delivery, and supply, with well-known commercial terms, and are currently less costly to construct than an OTEC system. In developing our OTEC and SWAC/LSC plants, we will need to satisfy our customers that these technologies are sound and economical, which may be a challenge until and unless we have an established, successful operating history. The energy industry is dominated by an array of companies of all sizes that have proven technologies and well-established fuel sources from a number of suppliers.

We expect that we will encounter increasing competition for OTEC and SWAC/LSC plants. Other firms with greater financial and technical resources are focusing on the commercialization of these technologies. Our competitors may benefit from collaborative relationships with countries, including a large number of Caribbean nations, that now have renewable-energy standards and are looking at ways to reduce their carbon footprints, decouple the price of electricity from the volatile price of oil, and increase energy security. Other competitors may have advantageous relationships with authorities such as Hawaii, U.S. territories, and the U.S. Department of Defense, which are looking at OTEC as a possible source of renewable energy and water for drinking, fish farming, and agriculture.

We cannot assure that we will be able to compete effectively as the industry grows and becomes more established and as OTEC and SWAC/LSC plants become more accepted as viable and economic energy solutions.

We believe competition in this industry is and will be based on technical soundness and viability, the economics of plant outputs as compared to other energy sources, developmental reputation and expertise, financial capability, and ability to develop relationships with potential customers. All these factors are outside our control.

Our Operational Strategy and Economic Models

We have developed economic models of costs and potential revenue structures that we will seek to implement as we develop OTEC and SWAC/LSC projects.

Table of Contents

OTEC Projects

The estimated construction costs for a 20-MW plant are approximately $445 million with hard costs of approximately $301 million for the power system and platform construction and piping, which make up 68% of the total. The remaining 32% consists of other construction costs and the deployment of the cold-water pipe and soft costs of approximately $144 million for design, permits and licensing, environmental impact assessment, bathymetry, contractor fees, and insurance.

Once operational, the capacity factor, which is the projected percent of time that a power system will be fully operational, considering maintenance, inspections, and estimated unforeseen events, is expected to be 95% annually. This factor is used in our financial calculations, which means the plant will not be generating revenue for 5% of the year. Most fossil-fuel plants have capacity factors around 90%, as a result of the major maintenance for high-temperature boilers, fossil-fuel feed in systems, safety inspections, cleaning, etc. The normal maintenance cycle for the pumps, turbine, and generators used in the OTEC plant is typically every five years. This includes the cleaning of the heat exchangers and installation of new seals.

We anticipate that project returns will be comprised of two components. First, as the project developer, we will seek a lump-sum payment as a development fee at the time of closing the project financing for each project. These payments will be allocated toward reimbursement of development costs and perhaps a financial return at the early stage of each project. The development fee will vary, but initially we will seek a fee of approximately 3% of the project cost, payable upon closing the project financing. Second, we will retain a percentage of equity in the project, with a goal to retain a minimum of 51% of the equity in any OTEC project in order to participate in operating revenues.

We will seek revenue from OTEC plants from contract pricing charged on an energy-only price per kWh or on the basis of a generating capacity payment priced per kilowatt per month and an energy usage price per kilowatt-hour (“kWh”). In many of the countries of the world where we intend to build OTEC and SWAC/LSC plants, potable water is in short supply. In some locations, water is considered the more important commodity. Depending on where the plant is built, in addition to revenue from power generation, supplying water for drinking, fish farming, and agriculture would significantly increase plant revenue.

We cannot guarantee that we will be able to maintain the revenue points noted above, that any fees received will offset development costs incurred to date, or that any operating plant will generate revenue.

SWAC/LSC Projects

The estimated construction costs for a SWAC/LSC plant are approximately $150 million, with hard costs of approximately $91 million for piping and installation, which make up 60% of the total. The remaining 40% consists of the pump house, central utility plant (CUP), mechanical and engineering equipment, design, and other contingency costs and soft costs of approximately $59 million for the CUP license, permits, environmental impact assessment, bathymetry, and insurance.

Under our economic model, we will seek revenue at two stages of the project. First, as the project developer, we will seek a lump-sum payment of a development fee equal to approximately 3% of the project cost at the time of closing the project financing for each project. These payments would provide us with income at the early stage of each project. The second component of project returns is based upon the percentage of equity we will retain in the project.

Table of Contents

SWAC/LSC contract revenue will be based typically on three charges:

	·	Fixed Price–this is based upon the capital costs of the project paid over the term of the debt and with the intention of covering the costs of debt.

	·	Operation and Maintenance–this payment covers the cost of the labor and fixed overhead needed to run the SWAC/LSC system, as well as any traditional chiller plant operating to fulfill back-up or peak-load requirements.

	·	Chilled Water Payment–this is a variable charge based on the actual chilled water use and chilled water generated both by the SWAC/LSC and conventional system at the agreed upon conversion factors of kilowatt/ton and current electricity costs in U.S. dollars per kWh.

We plan to structure project financing with the goal of retaining 100% of the equity in any SWAC/LSC project. We cannot guarantee that we will recover project development costs or realize a financial return over the life of the project.

Our Project Timeline

We have not yet constructed or placed into operation any OTEC or SWAC/LSC plants. However, based on our planning process and development experience, we estimate that it will take approximately two years or more, depending on local conditions, including regulatory and permitting requirements, to take a project from a preliminary memorandum of understanding with a potential power or other product purchaser to completion and commencement of operation.

Our Construction and Components

Once we have designed the system, we will review the design with our engineering, procurement, and construction partners to maximize the the likelihood that the project can be delivered according to plan and on budget. We expect our construction contracts to be at a fixed price and to include penalties if the construction timetable is missed.

In our systems, the two most important components are heat exchangers and deep-water intake pipes. Although there are multiple providers of each of these components, the supply of the best components comes from just a few companies globally. We expect to source our deep-water intake pipes from pipe manufacturing companies in the U.S. and Norway, the only companies we know of that make pipes of sufficient quality, strength, and diameter (2.5 meters) to support our planned OTEC plants.

We will also need high quality, large heat exchangers for our systems; heat exchangers represent a large percentage of the projected costs of our OTEC and SWAC/LSC systems and account for a significant portion of the complexity inherent in commercial OTEC and SWAC/LSC designs.

Other major components, such as ammonia turbines, generators, and pumps, are manufactured by several multinational companies, including General Electric and Siemens.

Our Operations

For OTEC electricity-generating facilities, we intend to enter into 20- to 30-year power purchase agreements, or PPAs, pursuant to which the project would supply fixed-price, baseload electricity to satisfy the minimum demand of the purchaser’s customers. This PPA structure allows customers to plan and budget their energy costs over the life of the contract. For our SWAC/LSC systems, we intend to enter into 20- to 30-year energy service agreements, or ESAs, to supply minimum quantities of chilled water for use in a customer’s air conditioning system.

We anticipate that operations of OTEC and SWAC/LSC plants will be subcontracted to third parties that will take responsibility for ensuring the efficient operation of the plants. These arrangements may reduce our exposure to operational risk, although they may also reduce our financial return if actual operating costs are less than the subcontract payments. We cannot assure that any OTEC and SWAC/LSC plants will permit the PPAs and ESAs to yield minimum target internal rates of return. Our first projects are likely to have lower returns than subsequent projects. Variances in internal rates of return may occur due to a range of factors, including availability and structure of project financing and localized issues such as taxes, some of which may be outside of our control.

We expect our OTEC contract pricing will be charged either on an energy-only price per kWh or on the basis of a capacity payment priced per kilowatt per month and an energy usage price per kWh. We cannot guarantee that this pricing will enable us to recoup our funding and project costs and allow us to earn a profit.

Table of Contents

We continue to review other contracting opportunities that will help commercialize OTEC technology. There can be no assurance we will be able to obtain the terms outlined above.

Marketing Strategies

Our marketing and sales efforts are managed and directed by our chairman and chief executive officer, Jeremy P. Feakins, who has 40 years’ experience of senior-level sales in both commercial and governmental markets. Our marketing campaign has focused on educating potential customers concerning the economic, environmental, and other benefits of OTEC and SWAC/LSC through personal contacts, industry interactions, our website, and social media channels.

Our target markets are comprised of large institutional customers that typically include governments, utilities, large resorts, hospitals, educational institutions, and municipalities. We market to them directly through personal meetings and contact by our chief executive officer and other key team members. We also make extensive use of centers of influence, either to heighten awareness of our products in the minds of key customers’ decision-makers or to secure face-to-face meetings and preliminary agreements between our customers and our chief executive officer.

Sales cycles in our business are extraordinarily long and complex and often involve multiple meetings with the governmental, regulatory, electric utility, and corporate entities. Therefore, we cannot predict when or if any projects we currently have under development will progress to a signed contract or operational phase and generate revenue. We do not expect sales to be seasonal or cyclical.

Material Regulation

Our business and products are subject to material regulation. However, because we contemplate offering our products and services in different countries, the specific nature of the regulatory requirements will be wholly dependent on the nation where the project will be located and the national, state, and local regulations that apply at that location. In all cases, we expect the level of regulation will be material and will require significant permitting and ongoing compliance during the life of the project.

The most significant regulations will likely be environmental and will include mitigating possible adverse effects during both the construction and operational phases of the project. However, we believe that the limited plant site disturbance of both SWAC/LSC and OTEC projects, together with the significantly lower emissions that result from these projects as compared to fossil-fuel electrical generation, will make compliance with all such regulation manageable in the normal course.

The second most significant regulations will likely involve coordination with existing infrastructure. We believe compliance with this type of regulation is a routine civil engineering coordination process that exists for all new buildings and infrastructure projects of all types. Again, we believe that the design of both SWAC/LSC and OTEC projects can readily be modified to avoid interference with existing infrastructure in most cases.

Facilities

Our principal executive offices are located at. 3675 Market Street, Suite 200, Philadelphia PA 19104. We also maintain a small office in Lancaster, PA, pursuant to a lease with a company controlled by our chief executive officer. Our telephone number at that address is (717) 299-1344.

Intellectual Property

We use or intend to employ in the performance of our material contracts, intellectual property rights in relation to the design and development of OTEC plants. Our intellectual property rights can be categorized broadly as proprietary know-how, technical databases, and trade secrets comprising concept designs, plant design, and economic models. Additionally, we have received approval from the U.S. Patent and Trademark Office for the trademark TOO DEEP® for use with the provision of desalinated deep ocean water for consumption.

Table of Contents

We may apply for patents for components of our intellectual property for OTEC and SWAC/LSC systems, including novel or new methodologies for cold-water piping, heat exchanges, and computer-aided design programs. We cannot guarantee that any patents we seek will be granted.

Our intellectual property has been developed by our employees and is protected under employee agreements confirming that the rights in the inventions and developments made by the employees are our property. Confidential information is protected by nondisclosure agreements that we have entered into with prospective partners or other third parties with which we do business.

We have not received any notification from third parties that our processes or designs infringe any third-party rights, and we are not aware of any valid and enforceable third-party intellectual property rights that infringe our intellectual property rights. Currently, to our knowledge no company has a patent for OTEC technology.

Employees

We currently have two full-time employees, one officer and one Engineering Program Manager. Our employees do not have collective bargaining agreements, and we have not experienced work interruptions or strikes. We supplement our employed workforce with various outsourced consulting services.

History

Tetridyn Solutions, Inc. was incorporated in Nevada on May 22, 2006. TetriDyn provided technology and data integration solutions to to businesses. In May 2017, Tetridyn changed its name to Ocean Thermal Energy Corporation and merged with and acquired Ocean Thermal Energy Corporation, a Delaware corporation formed in 2006. Since then, we have focused on developing OTEC and SWAC/LSC technology.

ITEM 1A. RISK FACTORS

Investing in our common stock involves a high degree of risk. Investors should carefully consider the risks described below, as well as the other information in this report, including our financial statements and the related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” before deciding whether to invest in our common stock. The occurrence of any of the events or developments described below could harm our business, financial condition, operating results, and growth prospects. In such an event, the market price of our common stock could decline, and investors may lose all or part of their investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations.

Risks Related to Our Financial Condition

Our auditors have raised doubts about our ability to continue as a going concern.

The report of our auditors on our consolidated financial statements for the years ended December 31, 2024 and 2023, as well as for prior years, contains an explanatory paragraph raising substantial doubt about our ability to continue as a going concern.

Table of Contents

We have no current project that will generate revenues in the near future.

None of our projects is at a stage of development that will allow them to generate revenues in the near future. Our project development cycles are expected to be relatively long, extending over several years as we identify a potential project site, complete negotiations with third parties, complete permitting, obtain financing, complete construction, and place a plant into service. We expect to receive a development fee of approximately 3% of the project cost from our projects, payable upon the close of project financing. Operating revenues from projects are expected to be received when the plant has been built and placed into operation. We are currently under contract with the U.S. Army through Johnson Controls Government Systems to provide detailed engineering designs and financial analyses for an OTEC system at a remote military installation in the Pacific. This contract, valued at approximately $3.6 million, focuses on developing a comprehensive Basis of Design to enable the Army to evaluate OTEC as a long-term, sustainable source of renewable energy and desalinated water. Upon completion of this phase, we anticipate that our work may lead to discussions with the U.S. Army regarding a potential Power Purchase Agreement (“PPA”), under which the Army would purchase power and water from a proposed OTEC facility for a period of 25 to 30 years. However, there can be no assurance that such a PPA or similar arrangement will be negotiated or executed. Until such time as we begin to generate revenues from this or other projects, we expect to continue to rely on external sources of capital to fund our operations.

We will require substantial amounts of additional capital from external sources.

We do not have any current source of revenues or sufficient cash or other liquid resources to fund our planned activities until we begin receiving development fees from new contracts. Accordingly, as in the past, we will need substantial amounts of capital from external sources to fund day-to-day operations and project development. We have no arrangements or commitment for such capital. We plan to continue our practice of seeking external capital through the sale of debt or equity, although we cannot guarantee that such efforts will be successful. Any new investments will dilute the interests of the current stockholders. Further, new investors may require preferential financial returns, security, voting rights, or other preferences that will be superior to the rights of the holders of common stock. Alternatively, as project development advances, we may be required to sell all or a portion of our interest in one or more projects, which could reduce our retained financial interest and potential return.

Risks Related to Our Business

Our efforts to develop OTEC and SWAC/LSC plants are subject to many financial, technical, managerial, and sales risks that may make us unsuccessful.

We incur substantial upfront costs that we may not recover developing a new project that ultimately we may not build, operate, or sell. The identification of suitable locations, the investigation of the applicable regulatory and economic framework, the identification of potential purchasers, the completion of preliminary engineering and planning, and the funding of related administrative and support costs ordinarily require several years to complete before we determine to further develop or abandon a project. Each of these steps is fraught with risks and uncertainties, such as:

	·	limited market due to low demand, existing competitive energy sources, low power costs, or the absence of large potential output purchasers;

	·	a regulatory scheme suggesting that the development and operation of a plant would be subject to excessively stringent utility regulations or environmental requirements, burdensome zoning or permitting practices and requirements, or similar factors;

	·	shortage of suitable onshore locations, lack of available cold water with near-shore accessibility, sea wave and current conditions, and exposure to hurricanes, typhoons, earthquakes, or similar extreme events;

	·	the unavailability of favorable tax or other incentives or excessively stringent applicable incentive requirements;

	·	the high cost and potential regulatory difficulties in integrating into new markets;

	·	the possibility that new markets may be limited or unstable or our exposure to competition from other sources of existing or potentially new energy sources;

	·	difficulties in negotiating power purchase agreements (PPAs) with potential customers, including in some instances, the necessity to assist in the formation of a power purchasing group; and

	·	the need to educate the market as well as investors regarding the reliability and economical and environmental benefits of ocean thermal technologies.

Table of Contents

We cannot assure that we will be able to overcome these risks as we initiate the development of a project. We may incur substantial costs in advancing a project through the early stages, only to conclude eventually that the project is not economically or technically feasible, in which case we may be unable to recover the costs that we have then incurred. When we elect to proceed with a project, we may continue to incur substantial costs and be unable to complete the development, sell the project, or otherwise recover our investment. Even when a project is developed, constructed, and placed into operation, we cannot guarantee that we will be able to operate at a profit sufficient to recover our total investment.

We are dependent on the performance of counterparties to our agreements.

Our projects are and will be complex, with a number of agreements among several parties that purchase plant outputs; provide financing; complete design, construction, and other services; design and perform regulatory compliance; and fulfill other requirements. The failure of any participant in one of our projects due to its own management, financial, operating, or other deficiencies, all of which may be outside our control, can materially and adversely affect our operations and financial results. In circumstances in which we are not the prime developer of a large-scale project involving many components in addition to our OTEC, SWAC/LSC, or other systems, we would have little ability to address problems resulting from performance failures by others or implement project-wide remedial measures. The foregoing is illustrated in our Baha Mar project, which is now on hold, and may never resume, because of contract performance and financing disputes by others.

Russia’s military intervention in Ukraine and the international community’s response have created substantial political and economic disruption, uncertainty, and risk.

Russia’s military intervention in Ukraine in late February 2022, Ukraine’s widespread resistance, and the NATO-led and United States coordinated economic, financial, communications, and other sanctions imposed by other countries have created significant political and economic world uncertainty. There is significant risk of expanded military confrontation between Russia and other countries, possibly including the United States. Current and likely additional international sanctions against Russia may contribute to higher costs, particularly for petroleum-based products. These actions, responses, and consequences that cannot now be predicted or controlled may contribute to worldwide economic reversals. In these circumstances, our efforts to commercialize our technology may be delayed or otherwise negatively impacted.

Ongoing world economic, currency-exchange, energy-price, contagious disease, and political circumstances adversely affect our project development activities.

Recent and ongoing world events outside of our control or influence adversely affect our development activities. Economic uncertainties have resulted in the unpredictable availability of credit, debt, and equity financing; volatile interest rates; currency exchange-rate fluctuations that add risk to international projects; restrictions on the availability of borrowing; concerns respecting inflation and deflation; economic turmoil resulting from unpredictable political events and tensions in the Middle East and other international relations; substantial reductions in hydrocarbon energy prices and the impact of such declines on the cost of energy generally; shifts in the economic feasibility of competitive energy sources; and similar factors. These adverse factors frequently have a particularly intense effect on emerging markets and developing countries, which we believe provide the greatest opportunity for the development of our projects. The possibility that principal energy prices will continue at current or even lower levels, which could reduce the projected cost at which power could be generated by hydrocarbon-fueled power plants, could make our relatively higher-cost plants less competitive. These emerging and developing markets are particularly vulnerable to the negative impacts of these adverse circumstances. The economic feasibility of alternative energy, including the process we develop and propose to operate, as compared to hydrocarbon energy is adversely affected as the prices for hydrocarbon fuels decline. Accordingly, possible continuing low hydrocarbon prices may retard the potential increase in the economic feasibility of alternative energy. Crude oil prices have remained volatile in recent years, fluctuating generally between approximately $70 and $90 per barrel as of 2025. While these levels are higher than the lows experienced several years ago, they remain below the historical peaks of over $100 per barrel. Sustained periods of relatively moderate oil prices can reduce the perceived economic advantage of alternative and renewable energy technologies, potentially slowing investment and development activity in the sector. Although we believe that the global emphasis on energy security, decarbonization, and climate resilience continues to drive long-term demand for sustainable solutions such as OTEC, extended intervals of lower fossil-fuel prices may adversely affect investor interest, the availability of government incentives, and the pace of commercialization for emerging renewable technologies. Our ability to develop and operate alternative energy plants and our ability to generate revenue will be adversely affected by continuing, relatively soft hydrocarbon energy prices. Further, alternative energy development may be adversely affected by uncertainty in hydrocarbon prices or public expectations that hydrocarbon prices may continue to decline.

Table of Contents

We require substantial amounts of capital for all phases of our proposed activities.

We require substantial amounts of capital to fund efforts to identify, research, preliminarily engineer, permit, and design our projects and to negotiate PPAs for them. These costs may not be recovered, because we may not elect to complete the development of the project or because the development and operation of the project are not successful. We will rely on external capital to fund our operations, and we cannot assure that such capital will be available. Our efforts to access capital markets will be limited, particularly at the outset, because we have not yet developed and placed into operation our first plant. Accordingly, we expect that we will have to provide the potential for a significant economic return for the initial capital we obtain, which will likely dilute the interests of our existing stockholders. We expect that each project that we are able to fully develop, construct, and place into operation will require several stages and levels of debt and equity financing. For example, we expect that a 20-MW OTEC plant may require total capital expenditures of approximately $445 million, consisting of $365 million in project debt financing and $80 million in equity. We cannot assure that we will be able to obtain financing. If obtained, such financing may be on terms that we will retain only a minority financial interest in the completed project and its operations. Our inability to obtain required financing for any activity or project could have a material adverse effect on our activities and operations.

We are reliant on our key executives and personnel.

Our business, development, and prospects are highly dependent upon the continued services and performance of our directors and other key personnel, on whom we rely for experience, technical skills, and commercial relationships. We believe that the loss of services for any reason of any existing key executives, or failure to attract and retain necessary personnel, could have a material adverse impact on our business, development, financial condition, results of operations, and prospects. Although we have entered into employment agreements with our key executives, we may not be able to retain them. We do not maintain key-man life insurance on any of our executive employees.

Our projects will be subject to substantial regulations and policies that may adversely affect our ability to develop projects, and any changes in the applicable regulatory schemes may adversely affect projects that we are constructing or have constructed and are operating.

Our projects likely will be significant commercial or industrial enterprises in each of their locations and, as such, will be subject to numerous environmental, health and safety, antidiscrimination, and similar laws and regulations in each of the jurisdictions governing our locations. These laws and regulations will require our projects to obtain and maintain permits and approvals; complete environmental impact assessments or statements prior to construction; and review processes and operations to implement environmental, health and safety, antidiscrimination, and other programs and procedures to control risks associated with our operations.

Environmental health and safety laws, regulations, and permit requirements applicable to any specific project at the time of construction may change or become more stringent during the life of the operation. Any such changes could require that our projects incur substantial additional costs, alter their operations, or limit or curtail their operations in order to comply, which would have a material adverse effect on our operations. We may not be able to pass on any additional costs that we incur to our power purchasers, particularly in those cases in which we sell power pursuant to a long-term, fixed-price agreement.

Table of Contents

The financial model for our proposed projects has not been tested and may not be successful.

We are proposing a financial model for the development of individual projects that includes development financing provided by us, construction financing provided by equity investors in the specific projects, and project debt financing; the payment of a development fee to us at the time of construction; and continuing equity participation by us throughout the plant’s operation. We have not used this model in the financing or completion of any plant, and we cannot assure that the financial model and, therefore, the anticipated financial return to us will be acceptable to those that might provide the requisite external capital.

We may need to revise extensively our financing structure for each project, and we cannot assure that any restructured proposal would not substantially reduce our financial return or increase our risk. The financial, investment, and credit community are generally unfamiliar with OTEC and SWAC/LSC projects, which will adversely affect our financing efforts. We have no existing relationships with potential sources of debt or equity capital, and any financing sources that we may develop may be inadequate to support the anticipated capital needs of our business. Our efforts to obtain financing may be adversely affected by the fact that our projects will likely be located in developing or emerging markets. Our inability to obtain financing may force us to abandon projects in which we have invested substantial costs, which we may be unable to recover. The process of identifying new sources of debt and equity financing and agreeing on all relevant business and legal terms could be lengthy and could require us to limit the rate at which we can develop projects or reduce our financial return.

We may be exposed to political and legal risks in the developing or emerging markets in which we propose to locate plants.

Many of the markets that may be suitable for a potential OTEC or SWAC/LSC plant are located in emerging or developing countries that may have evolving and untested regulatory and legal environments for large-scale, international, commercial enterprises. Further, political instability, regime change, or other factors may increase uncertainty and instability, which in turn may adversely affect our ability to secure necessary regulatory approvals and obtain required project financing, which increases related costs and reduces our financial return. Any changes in applicable laws and regulations, including any governmental incentives, environmental requirements or restrictions, safety requirements, and similar matters, and the risk or likelihood of such a change could adversely affect the availability and cost of financing. Further, in some jurisdictions, applicable legal requirements may not have been fully tested and are still being developed in the face of modern international commercial transactions and environmental requirements, which may lead to changes in interpretation or application that may be adverse to us. Our expectations regarding the size of the potential OTEC and SWAC/LSC markets and the number of possible suitable locations may not be accurate.

Our business plan and models are based on our identification of potential suitable locations for OTEC or SWAC/LSC plants based on a preliminary evaluation of public information respecting demographic data, current power-generation costs, and local seafloor contours and seawater temperatures, which may be inaccurate. Any material inaccuracy could substantially reduce the total market available to us for plant development.

We may be unable to arrange or complete future construction projects on time, within expected budgets, or without interruption due to materials availability and disruptions in supply, labor, or other factors. If any project reaches the point at which we undertake construction, such construction may be subject to actual prices higher than the amount budgeted, the limited or delayed availability of components or materials, shortages or interruptions of labor or materials, or similar circumstances. In the case we have insufficient budget flexibility to pay increased construction costs, corresponding delays could result in delayed construction, completion, and the commencement of operations.

Emerging markets are often associated with growth rates that may not be sustainable and may be accompanied by periods of high inflation. Rising inflation or related government monetary and economic policies in certain project jurisdictions may affect our ability to obtain external financing and reduce our ability to implement our expansion strategy. We can give no assurances that a local government will not implement general or project-specific measures to tighten external financing standards, or that if any such measure is implemented, it will not adversely affect our future operating results and profitability.

Table of Contents

We are subject to changing attitudes about environmental risks.

Our projects may face opposition from environmental groups that may oppose our development, construction, or operation of OTEC or SWAC/LSC plants. Each project is expected to have different environmental issues, especially as many of our projects are based in different settings having a wide range of environmental standards. We intend to solicit input from environmental organizations and activists early in our design process for our projects in an effort to consider appropriately these organizations’ recommendations in order to mitigate subsequent conflict or opposition, but we cannot assure that such outreach will be effective in all cases, and if it is not, opposition to our projects could increase our cost and adversely affect the results of our operations.

We may be unable to find land suitable for our projects.

Each project site requires land of differing characteristics to permit the cost-effective construction of OTEC or SWAC/LSC plants, and suitable land may not always be available. Even if available, such land may be difficult to obtain in a timely or cost-effective manner. For example, we would prefer to place OTEC power systems and facilities as close to the ocean as possible. We hope to mitigate this risk by using land owned by local governments, rather than private individuals or entities, as targeting local governments with favorable energy policies or mandates should reduce land rights risks. Our inability to secure appropriate land at a reasonable cost may render certain of our future projects economically unfeasible.

We have a limited number of suppliers for certain materials, which could increase our costs or delay completion of projects.

In our systems, the two most important components are heat exchangers and deep-water intake pipes. Although there are multiple providers of each of these components, the supply of the best components comes from just a few companies globally. Should these resources become unavailable for any reason or too costly, we would be required to seek alternative suppliers. The products from such suppliers could be of a lower quality or more costly, in any event requiring us to expend additional monies or time to complete our projects as planned. This could result in financial penalties or other costs to us.

There may be greater cost in building OTEC plants that generate over 10 MWs of electricity.

In order to successfully obtain debt financing for OTEC facilities, we must find engineering, procurement, and construction contractors willing to enter into fixed-price contracts at a pricing that is economically viable for us. Based on our preliminary discussions, we believe that engineering, procurement, and construction contractors may be willing to consider fixed-price arrangements for up to 10-MW OTEC facilities, but we have not yet discussed performance risk guarantees for OTEC plants greater than 10 MWs. The cost of construction for larger OTEC power systems may vary considerably, and these variances could include increased costs for construction, design, and component procurement. As we gain more experience, we may improve upon efficiencies and accuracy in pricing. Failure to procure engineering, procurement, and construction contractors willing to perform fixed-price contracts on facilities that produce more than 10 MWs may have a material adverse effect on our operations.

Technological advances may render our technologies, products, and services obsolete.

We operate in a fast-moving sector in which innovative forms of power generation and new energy sources are continuously being researched. New technologies may be able to provide power, coolant, desalinated seawater, or other outputs at a lower cost, including amortization of capital costs, or with less environmental impact. We will remain subject to these risks for the useful life of our projects, which could extend for 20 years or more. Any such technological improvements could render our projects obsolete.

We may not successfully manage growth.

We intend to continue to develop the projects in our pipeline of opportunities and to construct and operate plants as we deem warranted and as we are able to finance. This is an ambitious growth strategy. Our growth and future success will depend on the successful completion of the expansion strategies and the sufficiency of demand for our energy products. The execution of our expansion strategies may also place a strain on our managerial, operational, and financial reserves. Should we fail to effectively implement such expansion strategies or should there be insufficient demand for our products and services, our business operations, financial performance, and prospects would be adversely affected.

Table of Contents

There will likely be a single or limited number of power purchasers from each plant, so we will be dependent on their economic viability and stability and continued operations.

We expect that any plant that we operate will provide power, cooling, desalinated water, or other products to a few or a limited number of key power purchasers that will use the power for specific commercial enterprises, such as resorts, manufacturing or processing plants, or similar large-scale operations. Accordingly, our ability to sell power and other outputs will be dependent on the economic viability of these purchasers. If one or more key purchasers were to fail, we would be required to obtain alternative purchasers for our power and other outputs, and there may be no or a limited number of alternative purchasers in the merging and developing markets where we anticipate our plants may be located. Accordingly, a failure of an output purchaser may result in the failure of our power plant project. We do not anticipate that we will be able to obtain insurance on acceptable terms to protect us against such a loss. Further, our project output purchasers may not comply with contractual payment obligations or may otherwise fail to perform their contracts, and they may have greater economic bargaining power and negotiating leverage as we seek to enforce our contractual rights. To the extent that any of our project power purchasers are, or are controlled by, governmental entities, our projects may also be subject to legislative, administrative, or other political action or policies that impair their contractual performance. Any failure of any key power purchasers to meet their contractual obligations for any reason could have a material adverse effect on our business and operations.

Operational problems, natural events or catastrophes, casualty loss, or other events may impair the commercial operation of our projects.

Once we have successfully launched projects, our ability to meet our delivery obligations under power-generation contracts, as well as our ability to meet economic projections, will depend on our ability to maintain the efficient working order of our plants. Severe weather, natural disasters, accidents, failure of significant equipment components, inability to obtain replacement parts, failure of power transmission facilities, or other catastrophes or occurrences could materially interrupt our activities and consequently reduce our economic return. Since all our plants will be located on the shore within close proximity to deep-ocean or lake water, our plants will be subject to extraordinary natural occurrences, such as wave surges from hurricanes or typhoons, tsunamis, earthquakes, and other events, over which we will have absolutely no control. We cannot assure that we can obtain sufficient insurance to protect us from all risks resulting from such catastrophes. Further, we cannot assure that any design features or operating policies that we may use will mitigate the risks to which our plants may be exposed. Any threatened or actual events could expose us to plant shutdowns, substantial repairs, interruptions of operations, damage to our power purchasers, and similar events that could require us to incur substantial costs and significantly impair our revenues and results of operations. Because of the size and cost of major components of our power plants, we typically will not inventory spare components, so that any substantial damage may require that we await the custom manufacture and delivery of such items, which may involve substantial delays.

We may be adversely affected by climate change.

Climate change may result in changes in ocean currents and water temperatures that could have a material adverse effect on our results of operations. These changes may require additional capital costs or impair the efficiency of our operations. Significant changes may render any plant inefficient and uneconomical.

Insurance to cover anticipated risks may become more expensive.

There are no known commercial OTEC and SWAC/LSC plants in operation, so the nature and cost of insurance is difficult to predict. Insurance costs may substantially exceed the costs forecast during the planning process or budgeted during actual operations. We cannot assure that adequate insurance coverage will be available to protect us against all risks or that any related costs will be economical. Accordingly, if we are unable or cannot afford to purchase insurance against specific risks, our projects may be fully exposed to those risks, which also could have a material adverse effect on the viability of any affected plant.

Table of Contents

Risks Related to Our International Operations

Certain risks of loss arise from our need to conduct transactions in foreign currencies.

Our business activities outside the United States and its territories may be conducted in foreign currencies. In the future, our capital costs and financial results may be affected by fluctuations in exchange rates between the applicable currency and the dollar. Other currencies used by us may not be convertible at satisfactory rates. In addition, the official conversion rates between a particular foreign currency and the U.S. dollar may not accurately reflect the relative value of goods and services available or required in other countries. Further, inflation may lead to the devaluation of such other currencies.

Foreign governmental entities may have the authority to alter the terms of our rights or agreements if we do not comply with the terms and obligations indicated in such agreements.

Pursuant to the laws in some jurisdictions in which we may develop or operate plants, foreign governmental entities may have the authority to alter the terms of our contractual or financial rights or override the terms of privately negotiated agreements. In extreme circumstances, some foreign governments have taken the step of confiscating private property on the assertion that such action is necessary in the public interest of the country. If this were to occur, we may not be compensated fairly or at all. We cannot assure that we have complied, and will comply, with all the terms and obligations imposed on us under all foreign laws to which one or more of our operations and assets may be subject.

Our operations will require our compliance with the Foreign Corrupt Practices Act.

We must conduct our activities in or related to foreign companies in compliance with the U.S. Foreign Corrupt Practices Act, or FCPA, and similar anti-bribery laws that generally prohibit companies and their intermediaries from making improper payments to foreign government officials for the purpose of obtaining or retaining business. Enforcement officials interpret the FCPA’s prohibition on improper payments to government officials to apply to officials of state-owned enterprises, including state-owned enterprises with which we may develop or operate projects or to which we may sell plant outputs. While our employees and agents are required to acknowledge and comply with these laws, we cannot assure that our internal policies and procedures will always protect us from violations of these laws, despite our commitment to legal compliance and corporate ethics. The occurrence or allegation of these activities may adversely affect our business, performance, prospects, value, financial condition, reputation, and results of operations.

Our competitors may not be subject to laws similar to the FCPA, which may give them an advantage in negotiating with underdeveloped countries and the government agencies.

Our competitors outside the United States may not be subject to anti-bribery or corruption laws as encompassing or stringent as the U.S. laws to which we are subject, which may place us at a competitive disadvantage.

We may encounter difficulties repatriating income from foreign jurisdictions.

As we develop and place plants into operation, we intend to enter into revenue-generating agreements in which we are paid only in U.S. dollars directly to our U.S. banks or through countries in which repatriation of the funds to our U.S. accounts is unrestricted. However, situations could arise in which we agree to accept payment in foreign jurisdictions and for which restrictions make it difficult or costly to transfer these funds to our U.S. accounts. In this event, we could incur costs and expenses from our U.S. assets for which we cannot recover income directly. This could require us to obtain additional working capital from other sources, which may not be readily available, resulting in increased costs and decreased profits, if any.

Table of Contents

Risks Related to Our Common Stock

Our common stock is thinly traded, and there is no guarantee of the prices at which the shares will trade.

Our common stock is quoted on the OTC Expert Market operated by the OTC Markets Group, Inc., under the ticker symbol “CPWR.” Not being listed on an established securities exchange has an adverse effect on the liquidity of our common stock, not only in terms of the number of shares that can be bought and sold at a given price, but also through delays in the timing of transactions and reduction in security analysts’ and the media’s coverage of our company. This may result in lower prices for our common stock than might otherwise be obtained and could also result in a larger spread between the bid and asked prices for our common stock. Historically, our common stock has been thinly traded, and there is no guarantee of the prices at which the shares will trade or of the ability of stockholders to sell their shares without having an adverse effect on market prices.

We have never paid dividends on our common stock, and we do not anticipate paying any dividends in the foreseeable future.

We have not paid dividends on our common stock to date, and we do not expect to be in a position to pay dividends in the foreseeable future. Our ability to pay dividends depends on our ability to successfully develop our OTEC business and generate revenue from future operations. Further, our initial earnings, if any, will likely be retained to finance our growth. Any future dividends will depend upon our earnings, our then-existing financial requirements, and other factors and will be at the discretion of our board of directors.

Because our common stock is a “penny stock,” it may be difficult to sell shares of our common stock at times and prices that are acceptable.

Our common stock is a “penny stock.” Broker-dealers that sell penny stocks must provide purchasers of these stocks with a standardized risk disclosure document prepared by the SEC. This document provides information about penny stocks and the nature and level of risks involved in investing in the penny stock market. A broker must also give a purchaser, orally or in writing, bid and offer quotations and information regarding broker and salesperson compensation, make a written determination that the penny stock is a suitable investment for the purchaser, and obtain the purchaser’s written agreement to the purchase. The penny stock rules may make it difficult for investors to sell their shares of our common stock. Because of these rules, many brokers choose not to participate in penny stock transactions and there is less trading in penny stocks. Accordingly, investors may not always be able to resell shares of our common stock publicly at times and prices that they feel are appropriate.

In addition to the “penny stock” rules described above, the Financial Industry Regulatory Authority (known as “FINRA”) has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative, low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives, and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative, low-priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit an investor’s ability to buy and sell our stock and have an adverse effect on the market for our shares.

We have failed to make timely filings with the SEC, and the liquidity of our stock has suffered.

We did not timely file our annual report for 2024 and our quarterly reports for the first and second quarters of 2025. As a result, the OTC has identified the Company as delinquent in its SEC filings and our stock is only eligible to trade for unsolicited orders. We are currently in the process of making our delinquent filings but cannot guarantee that we will be able to do so or that if we do, that we will remain current in our filings, which would limit the public information available about the Company and negatively impact the liquidity and trading price of our stock.

Investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock may be negatively affected.

As a public reporting company, we are subject to the Sarbanes-Oxley Act of 2002 as well as to the information and reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and other federal securities laws. As a result, we incur significant legal, accounting, and other expenses, including costs associated with our public company reporting requirements and corporate governance requirements. As an example of public reporting company requirements, we evaluate the effectiveness of disclosure controls and procedures and of our internal control over financing reporting to allow management to report on such controls.

Table of Contents

Our management concluded that our internal control over financial reporting was not effective as of December 31, 2024, due to a failure to maintain an effective control environment, failure of segregation of duties, failure of entity-level controls, and our sole executive’s access to cash.

If significant deficiencies or other material weaknesses are identified in our internal control over financial reporting that we cannot remediate in a timely manner, investors and others may lose confidence in the reliability of our financial statements. This would likely have an adverse effect on the trading price of our common stock and our ability to secure any necessary additional equity or debt financing.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 1C. CYBERSECURITY

Risk Management and Strategy

We store and transmit data, including sensitive and nonpublic data regarding our company, employees, and counterparties. Given our limited size, resources and operations, we believe we have appropriate processes in place, as well as appropriate physical and administrative controls, to allow oversight and identification of cybersecurity threats to our operations. The Company depends on the proper functioning, availability, and security of its information systems, including financial, data processing, communications, and operating systems. Several information systems are software applications provided by third parties. Using a combination in-house expertise and third party providers, we monitor risks through routine security assessments and implementation of enhancements to security measures used to protect our systems and data.

Like many companies, we might be subjected to attempts by unauthorized actors to disrupt our operations, access our data, or otherwise cause damage to our technology infrastructure, including through the use of phishing, malware, and other attack vectors.

In addition, we are subject to cybersecurity risk in connection with vendors we use. For example, a weakness in vendor systems or software products that we use in the operation of our business may provide a mechanism for a cyber threat actor to access our systems or information through trusted paths. Recent global supply chain security incidents such as compromises of reputable software update services are illustrative of this type of occurrence.

To date, we have not been materially affected by cybersecurity incidents and believe our risk to such a threat is comparatively low.

Governance

Our board of directors is responsible for the oversight of risks related to cybersecurity threats. Management communicates with the board of directors on a regular basis regarding cybersecurity efforts through risk reporting and the development and testing of procedures and exercises for responding to both internal and external cyber threats. We believe our board of directors is capable of addressing the full spectrum of potential risks to us, estimating the likelihood of such an occurrence, and predicting the potential financial impact of each risk, for the purpose of prioritizing risks, including the risk of a cybersecurity threat. Because of the relatively small size of our board, we have not formed a board committee responsible for cybersecurity matters, which are instead addressed by our board as a whole.

Given our limited resources, we believe we have appropriate processes in place, as well as appropriate physical and administrative controls, to allow oversight and identification of cybersecurity threats to our operations.

Table of Contents

ITEM 2. PROPERTIES

Our principal executive offices are located at. 3675 Market Street, Suite 200, Philadelphia, Pennsylvania 19104, where we lease fully-furnished and customizable office space from a third party. We also maintain a small office in Lancaster, Pennsylvania, pursuant to a lease with a company controlled by our chief executive officer. Our telephone number at that address is (717) 299-1344.

ITEM 3. LEGAL PROCEEDINGS

From time to time, we are involved in legal proceedings and regulatory proceedings arising from operations. We establish reserves for specific liabilities in connection with legal actions that management deems to be probable and estimable.

On May 4, 2018, we reached a settlement of the claims at issue in Ocean Thermal Energy Corp. v. Robert Coe, et al., Case No. 2:17-cv-02343SHL-cgc, before the United States District Court for the Western District of Tennessee. Between May 30 and July 19, 2018, we received three payments totaling $100,000 from the defendants. On August 8, 2018, an $8 million judgment was entered against the defendants and in our favor. On May 28, 2019, we further settled the claims at issue with two of the defendants, Brett M. Regal and his company, Trade Base Sales, Inc. (“Regal Debtors”), for $17,500,000, bringing the combined judgment and settlement amount owed to us is $25,500,000. On July 1, 2019, the United States District Judge for the Central District of California (case number: 2:19-cv-05299-VAP-JPR), approved our stipulated application for an order permitting us to levy on property and appointing a receiver to carry out the levy on Regal Debtors’ property, such that it may be sold (subject to further order of the court approving and confirming such sales), to satisfy the $25,500,000 settlement and judgment amounts in our favor. On August 15, 2019, the court-appointed receiver notified the court that he had taken custody, possession, and control of certain gemstone and mineral specimens, known as the “Ophir Collection” and 350,000 pounds of unrefined gold and other precious metal bearing ore. By order of the court, the receiver was given the authority to assign, sell, and transfer the debtor property. The proceeds of any sales will be used to satisfy the judgment and settlement agreement, receivership’s reasonable costs and fees, as well as any other claims as determined by the court. Various parties have come forward asserting ownership and priority lien rights to the property. In our ongoing efforts to collect the $25,500,000 judgment obtained, a third party has intervened in our case in the Central District of California (case number: 2:19-cv-05299-VAP-JPR), asserting that it is the rightful owner of the “Ophir Collection” of gems and mineral specimens that is now in possession of the court-appointed receiver. On February 25, 2022, all parties who have appeared in this case stipulated to dismiss all pending claims while leaving the receivership established by the court in place. On the same date, the court ordered that upon a successful sale of the Ophir Collection, the net proceeds shall be distributed in accordance with the terms of the January 3, 2022, confidential settlement between the parties. This matter is ongoing, and we understand that the receiver is attempting to liquidate the assets of the defendants.

On May 21, 2019, Theodore T. Herman filed a complaint against us in Theodore T. Herman v. Ocean Thermal Energy Corporation, Case No. CI-19-04780, in the Court of Common Pleas of Lancaster County, Pennsylvania, asserting that he is entitled to payment on the $290,000 promissory note described in our financial statements under Note 4: Convertible Notes and Notes Payable. On July 1, 2019, we filed preliminary objections to the complaint, and subsequently filed an answer and new matter on August 20, 2019, to which the plaintiff filed a reply on September 9, 2019. Herman has not pursued this action since 2020, and on October 7, 2025, the court terminated the case with prejudice for failure to prosecute.

On August 22, 2018, Fugro USA Maine, Inc. (“Fugro”), filed suit against us in Fugro USA Marine, Inc. v. Ocean Thermal Energy Corp., Cause No. 2018-56396, in the District Court for Harris County, TX, 165th Judicial District, seeking approximately $500,000 allegedly owed for engineering services provided. On June 23, 2020, a settlement was reached under which we would pay Fugro $375,000 by June 30, 2021. We were unable to pay the remaining balance and therefore entered into a second amendment to the settlement agreement extending the deadline for full payment, with 18% interest per annum, to December 31, 2021. We will continue to make regular monthly payments to Fugro of $10,000 per month, until the balance owed has been paid. We have recorded the amount of accrued legal settlement as of December 31, 2024. We have repaid $260,000, and the balance at December 31, 2024, was $115,000, with accrued interest of $72,542 at December 31, 2024.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

Table of Contents

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our common stock is quoted on the OTC Expert Market operated by the OTC Markets Group, Inc., under the ticker symbol “CPWR.” Because we are delinquent in our SEC filings, our shares are only eligible to trade for unsolicited customer orders, not proprietary broker-dealer quotations. The following table sets forth, for the periods indicated, the range of high and low closing prices of our common stock per quarter as reported by the OTC Markets. All quoted prices reflect interdealer prices without retail mark-up, mark-down, or commission, adjusted to account for past stock splits, and may not necessarily represent actual transactions:

	Low		High
Year Ended December 31, 2024
Fourth Quarter	$	.0.0001	$	0.0100
Third Quarter	$	0.0012	$	0.0110
Second Quarter	$	0.0062	$	0.0333
First Quarter	$	0.0062	$	0.0350

Year Ended December 31, 2023
Fourth Quarter	$	0.006	$	0.015
Third Quarter	$	0.001	$	0.015
Second Quarter	$	0.006	$	0.017
First Quarter	$	0.006	$	0.010

On September 30, 2025, the closing price per share of our common stock as quoted on the OTC marketplace was $0.0016. As of September 30, 2025, there were approximately 1,470 stockholders of record of our common stock.

Dividends

We have not paid or declared any cash dividends since our inception and do not intend to declare or pay any such dividends in the foreseeable future. Our ability to pay cash dividends is subject to limitations imposed by state law.

Equity Compensation Plan

We do not have any securities authorized under equity compensation plans.

Recent Sales of Unregistered Securities

During November and December 2024, we sold an aggregate of 14 convertible note units for $70,000. Each unit was sold for $5,000 and consists of one convertible promissory note in the amount of $5,000 and one warrant to purchase 5,000 shares of the Company’s common stock at an exercise price of $0.01 per share. The notes bear interest at the rate of 10% per year, compounded annually, and are due on January 4, 2027 (the “Maturity Date”). The notes will be converted into common stock of the Company automatically upon the Maturity Date at the lower of (a) $0.10 per share, or (b) 90% of the market price of the Company’s common stock, which is the average closing price of the Company’s shares on the ten trading days immediately preceding the date of conversion. However, if the United States Army has issued a contract for the supply of sustainable power and water from a Company-designed and built OTEC system prior to the Maturity Date, then within five business days of issuance of the contract the Notes will automatically be converted, depending on the amount of Notes purchased by each holder.

Table of Contents

The convertible notes and warrants were issued in reliance on the exemption from registration provided in Section 4(a)(2) of the Securities Act of 1933, as amended, for transactions not involving any public offering. In each case, the investor is an “accredited investor,” as that term is defined in Rule 501(a) of Regulation D, and confirmed the foregoing and acknowledged, in writing, that the securities were acquired and will be held for investment. No underwriter participated in the offer and sale of these securities, and no commission or other remuneration was paid or given directly or indirectly in connection therewith.

ITEM 6. [RESERVED]

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and operating results should be read together with our financial statements and related notes included elsewhere in this report. This discussion and analysis and other parts of this report contain forward-looking statements based upon current beliefs, plans, and expectations that involve risks, uncertainties, and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” or in other parts of this report. Our fiscal quarters end on March 31, June 30, September 30, and December 31, and our current fiscal year ended on December 31, 2024.

Overview

We develop projects for renewable power generation, desalinated water production, and air conditioning using our proprietary technologies designed to extract energy from the temperature differences between warm surface water and cold deep water. In addition, our projects provide the opportunity for ancillary products such as potable/bottled water and high-profit aquaculture, mariculture, and agriculture processes.

We currently have limited sources of revenue and depend primarily on external funding for operations. We cannot assure that such funding will be available or, if available, can be obtained on acceptable or favorable terms.

Our operating expenses consist principally of expenses associated with the development of our projects until we determine that a particular project is feasible. Salaries and wages consist primarily of employee salaries and wages, payroll taxes, and health insurance. Our professional fees are related to consulting, engineering, legal, investor relations, outside accounting, and auditing expenses. General and administrative expenses include travel, insurance, rent, marketing, and miscellaneous office expenses. The interest expense includes interest and discounts related to our loans and notes payable.

Results of Operations

Comparison of Years Ended December 31, 2024 and 2023

During the year ended December 31, 2024, we had salaries and compensation of $925,553, compared to salaries and wages of $888,790 during the same period for 2023, an increase of 4.1%, primarily driven by increased activity and consultants for engineering and contract development.

During the years ended December 31, 2024 and 2023, we recorded professional fees of $534,789 and $473,467, respectively, an increase of 13.0%. During the first quarter of 2024, our professional fees increased as the Company began pursuing completing its securities filings, continued development of existing projects, and identifying potential customers and marketing new projects.

General and administrative expenses were $116,268 during the year ended December 31, 2024, compared to $138,048 for the same period in 2023, a decrease of 15.8% due to multiple factors including cost cutting efforts by management.

Table of Contents

Our interest expense was $2,504,722 for the year ended December 31, 2024, compared to $2,278,347 for the same period of the previous year, an increase of 9.9% due to an increase in debt and higher interest rates on defaulted notes.

Our amortization of debt discount and loan fee expenses was $2,245 for the year ended December 31, 2024, compared to $88,540 for the previous year. The decrease is due to full amortization of discount on debt that became due during the periods.

Our operations used net cash of $562,627 in 2024, as compared to $669,463 in the prior year. The decrease in cash used was primarily the result of an increase in the change in accounts payable and accrued expenses partially offset by an increase in loss, after adjusting for noncash activities.

Financing activities provided cash of $463,620 for our operations during the year ended December 31, 2024, as compared to providing cash of $783,208 in the prior year. During 2024, we received cash proceeds from the sale of preferred stock and convertible notes payable. We also repaid working capital advances from related parties and made repayments of notes payable. During 2023, we received cash proceeds from the sale of preferred stock and working capital advances from related parties. We also made repayments of notes payable during the period.

Liquidity and Capital Resources

At December 31, 2024, our principal source of liquidity consisted of $16,147 of cash, as compared to $115,149 of cash at December 31, 2023. At December 31, 2024, we had negative working capital (current assets minus current liabilities) of $44,535,784. In addition, our stockholders’ deficit was $44,551,904 at December 31, 2024, compared to stockholders’ deficit of $43,931,991 at the end of 2023. We are exploring external funding alternatives, as our current cash is insufficient to fund operations for the next 12 months.

Our consolidated financial statements have been prepared assuming we will continue as a going concern. We have experienced recurring losses from operations and have an accumulated deficit. Our ability to continue our operations as a going concern is dependent on the success of management’s plans, which include the raising of capital through debt and/or equity markets until such time that revenue provided by operations is sufficient to fund working capital requirements. We will require additional funding to finance the growth of our current and expected future operations as well as to achieve our strategic objectives The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

We have no significant contractual obligations or commercial commitments not reflected on our balance sheet as of this date.

Critical Accounting Policies and Estimates

We have identified the policies outlined below as critical to our business operations and an understanding of our results of operations. The list is not intended to be a comprehensive list of our accounting policies. In many cases, the accounting treatment of a particular transaction is specifically dictated by accounting principles generally accepted in the United States, with no need for management’s judgment in their application. The impact and any associated risks related to these policies on our business operations is discussed throughout Management’s Discussion and Analysis of Financial Condition and Results of Operations when such policies affect our reported and expected financial results. For a detailed discussion on the application of these and other accounting policies, see the notes to our consolidated financial statements for the year ended December 31, 2024. Note that our preparation of the consolidated financial statements requires us to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of our consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. We cannot assure that actual results will not differ from those estimates.

Table of Contents

Income Taxes

We use the liability method of accounting for income taxes. Under the liability method, deferred tax assets and liabilities are determined based on temporary differences between financial reporting and tax bases of assets and liabilities and on the amount of operating loss carry-forwards and are measured using the enacted tax rates and laws that will be in effect when the temporary differences and carry-forwards are expected to reverse. An allowance against deferred tax assets is recorded when it is more likely than not that such tax benefits will not be realized.

Fair Value of Derivative Liability

We identified conversion features embedded within convertible debt issued. We have determined that the features associated with the embedded conversion option should be accounted for at fair value as a derivative liability. We have elected to account for these instruments together with fixed conversion price instruments as derivative liabilities as we cannot determine if a sufficient number of shares would be available to settle all potential future conversion transactions. We value the derivative liabilities using the Black-Scholes option valuation model. The derivative liabilities are valued at each reporting date and the change in fair value is reflected as change in fair value of derivative liability.

Contingencies

In the normal course of business, we are subject to contingencies, including legal proceedings and claims arising out of our business that relate to a wide range of matters, such as government investigations and tax matters. We recognize a liability for such contingency if we determine it is probable that a loss has occurred and a reasonable estimate of the loss can be made. We may consider many factors in making these assessments including historical and the specific facts and circumstances of each matter.

Recent Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2024-04, “Debt with Conversion and Other Options (Subtopic 470-20).” This ASU clarifies the requirements related to accounting for the settlement of a debt instrument as an induced conversion. An induced conversion is when a Company induces debt holders to convert their debt into equity shares under changed terms and involved additional consideration. The amendments in this Update are effective for all entities for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted for all entities that have adopted the amendments in ASU 2020-06. The Company is still evaluating the impact of the adoption of this ASU.

In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40).” This ASU requires entities to disaggregate any relevant expense caption presented on the face of the income statement within continuing operations into the following required natural expense categories within the footnotes, as applicable: (1) purchases of inventory, (2) employee compensation, (3) depreciation, (4) intangible asset amortization, and (5) DD&A recognized as part of oil- and gas-producing activities or other depletion expenses. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The Company is still evaluating the impact of the adoption of this ASU.

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which requires a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and to provide in interim periods all disclosures about reportable segment’s profit or loss and assets that are currently required annually. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted this ASU on July 1, 2024. The adoption of this ASU had no impact on the Company’s condensed consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which enhances the transparency and decision usefulness of income tax disclosures by requiring; (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. ASU 2023-09 is effective for fiscal years beginning after December 15, 2025, with early adoption permitted. These amendments are to be applied prospectively, with retrospective application permitted. The Company is currently evaluating the impact this standard will have on its condensed consolidated financial statements.

Table of Contents

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Our consolidated financial statements, including the Report of Independent Registered Public Accounting Firm on our consolidated financial statements, are included beginning on page F-1 of this report, which are incorporated herein by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

On May 7, 2024, the board of directors of the Company approved the dismissal of BF Borgers CPA PC (“BF Borgers”) as the Company’s independent registered public accounting firm.

The reports of BF Borgers on the Company’s consolidated financial statements for the fiscal years ended December 31, 2023, and December 31, 2022, did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope, or accounting principles other than an explanatory paragraph relating to the Company’s ability to continue as a going concern.

During the fiscal years ended December 31, 2023, and December 31, 2022, and through May 7, 2024, the date of termination, there were no “disagreements” with BF Borgers on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements if not resolved to the satisfaction of BF Borgers would have caused BF Borgers to make reference thereto in its reports on the consolidated financial statement for such years. During the fiscal years ended December 31, 2023, and December 31, 2022, and through May 7, 2024, there have been no “reportable events” (as defined in Item 304(a)(1)(iv) and Item 304(a)(1)(v) of Registration S-K), except for the identified material weaknesses in its internal control over financial reporting as disclosed in the Company’s Annual Report on Form 10-K.

On February 21, 2024, the Company’s board of directors approved the retention of Victor Mokuolu, CPA PLLC (“VMCPA”) as the Company’s independent registered public accounting firm.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed by us, in the reports that we file or submit to the SEC under the Exchange Act, is recorded, processed, summarized, and reported within the periods specified by the SEC’s rules and forms, and that information is accumulated and communicated to our management, including our principal executive and principal financial officer (whom we refer to in this periodic report as our Certifying Officer), as appropriate to allow timely decisions regarding required disclosure. Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our management evaluated, with the participation of our Certifying Officer, the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of December 31, 2024, pursuant to Rule 13a-15(b) under the Exchange Act. Based upon that evaluation, our Certifying Officer concluded that, as of December 31, 2024, our disclosure controls and procedures were not effective to provide reasonable assurance because certain deficiencies involving internal controls constituted material weaknesses, as discussed below. The material weaknesses identified did not result in the restatement of any previously reported financial statements or any other related financial disclosure, and management does not believe that the material weaknesses had any effect on the accuracy of our financial statements for the current reporting period.

Table of Contents

Limitations on Effectiveness of Controls

A system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the system will meet its objectives. The design of a control system is based, in part, upon the benefits of the control system relative to its costs. Control systems can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. In addition, over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Also, the design of any control system is based in part upon assumptions about the likelihood of future events.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the fiscal quarter ended December 31, 2024, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. We have assessed the effectiveness of those internal controls as of December 31, 2024, using the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) Internal Control—Integrated Framework (2013) as a basis for our assessment.

Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance respecting financial statement preparation and presentation. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.

A material weakness in internal controls is a deficiency in internal control, or combination of control deficiencies, that adversely affects our ability to initiate, authorize, record, process, or report external financial data reliably in accordance with accounting principles generally accepted in the United States of America such that there is more than a remote likelihood that a material misstatement of our annual or interim financial statements that is more than inconsequential will not be prevented or detected.

Based on our evaluation of internal control over financial reporting, our management concluded that our internal control over financial reporting was not effective as of December 31, 2024 as a result of the following material weaknesses identified by management:

	·	*Control Environment* - We did not maintain an effective control environment for internal control over financial reporting.

	·	*Segregation of Duties* - As a result of limited resources and staff, we did not maintain proper segregation of incompatible duties (ie, our chief executive officer also serves as our chief financial officer). The effect of the lack of segregation of duties potentially affects multiple processes and procedures.

	·	*Entity Level Controls* - We failed to maintain certain entity-level controls as defined by the 2013 framework issued by COSO. Specifically, our lack of staff does not allow us to effectively maintain a sufficient number of adequately trained personnel necessary to anticipate and identify risks critical to financial reporting. There is a risk that a material misstatement of the financial statements could be caused, or at least not be detected in a timely manner, due to lack of adequate staff with such expertise.

	·	*Access to Cash -* One executive had the ability to transfer from our bank accounts.

Table of Contents

These weaknesses are continuing. Management and the board of directors are aware of these weaknesses that result because of limited resources and staff. Management has begun the process of formally documenting our key processes as a starting point for improved internal control over financial reporting. Efforts to fully implement the processes we have designed have been put on hold due to limited resources, but we anticipate a renewed focus on this effort in the future. Due to our limited financial and managerial resources, we cannot assure when we will be able to implement effective internal controls over financial reporting.

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the SEC that permit us to provide only management’s report in this annual report.

ITEM 9B. OTHER INFORMATION

None.

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

None

Table of Contents

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The following table sets forth the names, ages, and positions of our executive officers and directors as of December 31, 2024:

Name	Age	Position
Jeremy P. Feakins	71	Chairman of the Board, Chief Executive Officer, Chief Financial Officer and Secretary/Treasurer
Peter H. Wolfson	60	Director
Antoinette K. Hempstead	60	Director

Jeremy P. Feakins has served as chairman of our board and our chief executive officer, chief financial officer, and secretary/treasurer since March 2015. Mr. Feakins has over 40 years of experience as an entrepreneur and investor, having founded two technology-based companies. Between 1990 and 2006, Mr. Feakins was the chairman and chief executive officer of Medical Technology & Innovations, Inc. (MTI), a developer and manufacturer of a microprocessor-based, vision-screening device and other medical devices located in Lancaster, Pennsylvania. In 1996, he managed the public listing of MTI on the over-the-counter markets and subsequently structured the sale of the rights to MTI’s vision-screening product to a major international eyewear company. Between 1998 and 2006, he was a managing member of Growth Capital Resources LLC, a venture capital company located in Lancaster, Pennsylvania, where he successfully managed the public listings for four small companies on the over-the-counter market. Between 2005 and 2008, he served as executive vice chairman and member of the board of directors of Caspian International Oil Corporation (OTC: COIC), an oil exploration and services company located in Houston, Te, and Almaty, . Kazakhstan where he managed its public listing. Since 2008, Mr. Feakins has been the chairman and managing partner of the JPF Venture Fund 1, LP, a venture capital company located in Lancaster, Pennsylvania, focused on companies involved with humanitarian and/or sustainability projects. Since 2014, Mr. Feakins has been chairman and chief executive officer of JPF Venture Group, Inc., which provides strategic and operational business assistance to start-up, early-stage, and middle-market high-growth businesses and is a principal stockholder of our stock. Mr. Feakins graduated from the Defence College of Logistics and Personnel Administration, Shrivenham, United Kingdom, and served seven years in the British Royal Navy. He is a member of the Institute of Directors in the United Kingdom and the British American Business Council in the United States. Based on his background in the technology industry and his financial and management background, the board of directors has concluded that Mr. Feakins is qualified to serve as a director.

Table of Contents

Peter Wolfson has served as one of our directors since March 2015. Mr. Wolfson is a qualified commercial pilot and has been actively flying with Delta Airlines, a major U.S.-owned international airline company, since 1996. In addition, Mr. Wolfson is the founder and currently involved as president, and chief executive officer of Hans Construction, a developer and builder of upscale homes located in Lancaster, Pennsylvania, organized in 2005. He also has 10 years’ experience as a financial consultant with a subsidiary of Mass Mutual, developing financial strategies and tax planning. He holds a Bachelor of Science degree in Science, Technology, and Business from Embry Riddle Aeronautical University and Edison State College. Based on his financial background, the board of directors has concluded that Mr. Wolfson is qualified to serve as director.

Antoinette Knapp Hempstead was appointed as a director in February 2017. Prior to that, Ms. Hempstead served as our chief executive officer and president from April 2013 until March 2015 and as our deputy chief executive officer and vice president from August 2002 until March 2015. Currently, she is an IT Project Management Professional for Hexcel Corporation, an international carbon fiber manufacturing company. Ms. Hempstead has over 30 years’ experience in management, software management, software development, and finance. Ms. Hempstead has also served as adjunct faculty for University of Idaho where she taught Computer Science courses. Ms. Hempstead has a Master of Science degree in Computer Science from the University of Idaho and a Bachelor of Science degree in Applied Mathematics from the University of Idaho. Ms. Hempstead provides experience in software development and project management, as well as experience in financial statement preparation and regulatory reporting, to our board of directors. Based on her technical background, the board of directors has concluded that Ms. Hempstead is qualified to serve as a director.

Family Relationships

There are no family relationships between any director and executive officer.

Involvement in Certain Legal Proceedings

During the past 10 years, none of our directors and executive officers has been involved in any of the events described in Item 401(f) of Regulation S-K.

Shareholder Nominations to the Board

Our board of directors, acting as the nominating committee, will consider shareholder nominations to the board of directors.

Committees of the Board

We currently do not have nominating, compensation, or audit committees or committees performing similar functions, and we do not have a written nominating, compensation, or audit committee charter. Our board of directors believes that it is not necessary to have these committees, at this time, because the directors can adequately perform the functions of such committees.

Code of Ethics

We have adopted a code of ethics and business conduct that applies to our directors, advisory board members and officers (including our chief executive and financial officers). Our code of ethics is reasonably designed to deter wrongdoing and to promote: (1) honest and ethical conduct; (2) full and accurate disclosure in reports that we file with the SEC; (3) compliance with applicable governmental laws, rules and regulations; (4) the prompt internal reporting of violations of the code to our chief compliance officer; and (5) accountability for adherence to the code. Our code of ethics is filed as an exhibit to this annual report.

Table of Contents

Insider Trading Arrangements and Policies

We have adopted an insider trading policy that governs the ability of our directors, officers and employees to purchase, sell or dispose of stock or other securities of the Company. Under the policy, our board members and executive officers are only permitted to trade in our stock during prescribed “open window” periods and generally only after obtaining pre-clearance for the transaction. Our insider trading policy is filed as an exhibit to this annual report. None of our directors or executive officers traded our shares or related securities, or entered into an arrangement to trade our securities, in fiscal 2024.

ITEM 11. EXECUTIVE COMPENSATION

The following table sets forth, for the fiscal years ended December 31, 2024 and 2023, the dollar value of all cash and noncash compensation earned by Jeremy P. Feakins, our principal executive officer, or PEO, and our only executive officer in 2024 and 2023:


										Non-Equity		Non-Qualified		All
										Incentive		Deferred		Other
	Year Ended	Salary(1)		Bonus		Stock Awards		Option Awards		Plan Compensation		Compensation Earnings		Compensation(2)		Total
Name and Principal Position	December 31,	$		$		$		$		$		$		$		$
Jeremy P. Feakins	2024		587,748		-		-		-		-		-		23,598		611,346
Principal Executive Officer
Principal Financial Officer	2023		568,422		-		-		-		-		-		25,991		594,413

(1)	For the fiscal years ended December 31, 2024 and 2023, all of Mr. Feakins’ salary was accrued, but unpaid.
(2)	Represents health care premiums of $9,918 in 2024 and $12,311 in 2023, and an automobile allowance of $13,680 in both years.

Narrative Disclosure to Summary Compensation Table

On January 1, 2011, we entered into a five-year employment agreement with Mr. Feakins to serve as our chief executive officer. The employment agreement provides for successive one-year term renewals unless it is expressly cancelled by either party 100 days prior to the end of the term. Under the agreement, Mr. Feakins will receive an annual salary of $350,000, a car allowance of $12,000, and company-paid health insurance. The agreement also provides for bonuses equal to one times Mr. Feakins’ annual salary plus 500,000 shares of common stock for each additional project that generates $25 million or more revenue to us. Mr. Feakins is entitled to receive severance pay in the lesser amount of three years’ salary or 100% of the remaining salary if the remaining term is less than three years. In addition to any severance pay, Mr. Feakins is entitled to an additional change in control payment equal to three times his annual salary if, in connection with a “change in control” (as defined in the agreement), Mr. Feakins terminates his employment with the Company or the Company terminates him. On June 3, 2019, we issued 1,000,000 shares of Series C Preferred Stock to Mr. Feakins, with a fair value of $69,277, to compensate him for his performance.

Effective June 9, 2022, we entered into a second addendum to Mr. Feakins’ employment contract. Among other provisions, the addendum extends the employment agreement through December 31, 2025, and increases the annual salary to $454,738 from $388,220.

Effective January 1, 2023, the board of directors approved an increase in Mr. Feakins’ annual salary for 2023 to $568,422 from $454,738. Pursuant to the terms of the contract and board of director approval, Mr. Feakins’ annual salary was increased to $587,748 for 2024. Mr. Feakins has agreed to defer payment to permit the Company to conserve cash.

Outstanding Equity Awards at Fiscal Year-End

No stock option awards were outstanding as of December 31, 2024, for any executive officer.

Table of Contents

Director Compensation

For the 2024, our non-employee directors earned the following:

Name	Fees Earned or Paid in Cash ($)		Stock Awards ($)		Option Awards ($)		Non-Equity Incentive Plan Compensation ($)		Non-Qualified Deferred Compensation Earnings ($)		All Other Compensation ($)		Total ($)
Antoinette Hempstead		40,000		-		-		-		-		-		40,000

Peter H. Wolfson		40,000		-		-		-		-		-		40,000

All 2024 director fees were accrued but unpaid at December 31, 2024, and through October 24, 2025.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth, as of September 30, 2025, the name and shareholdings of: each person that owns of record, or was known by us to own beneficially, 5% or more of the common stock currently outstanding; each of our named executive officers and director; and the shareholdings of all executive officers and directors as a group. Unless indicated otherwise in the footnotes, each person named below has, to the best of our knowledge, sole voting and investment power with respect to all shares of common stock shown as beneficially owned by each person:

					Common
					Stock
			Voting		Underlying
	Common		Preferred		Convertible				Percent of
Name and Address of Beneficial Owner(1)	Stock		Stock⁽³⁾⁽⁴⁾		Securities		Total		Class⁽²⁾
Directors and Named Executive Officers:
Jeremy Feakins ⁽⁴⁾		7,253,374		102,200,000		10,919,075		120,372,449		39.7	%
Antoinette Hempstead ⁽⁵⁾		114,925		-		1,000,000		1,114,925	*
Peter H. Wolfson ⁽⁶⁾		1,396,442		-		2,903,179		4,299,621		2.2	%
All directors and executive officers as a group (3 persons)		8,764,741		102,200,000		14,822,254		125,786,995		41.0	%

5% Shareholders
Michael D. Stauch ⁽⁷⁾		-		40,800,000		4,250,000		45,050,000		19.2	%
Paula Vitz ⁽⁸⁾		1,144,749		13,400,000		812,500		15,357,249		7.5	%
Joseph Layman ⁽⁹⁾		1,987,128		8,000,000		1,875,000		11,862,128		5.9	%
Gil Lyons ⁽¹⁰⁾		1,000,000		11,200,000		-		12,200,000		6.1	%

* Less than 1%

(1)	3675 Market Street, Suite 200, Philadelphia PA 19104, is the address for all stockholders in the table.

(2)	Based on 190,012,124 shares of common stock issued and outstanding as of September 30, 2025.

(3)	Each share of Series D Preferred stock is convertible into 200,000 shares of common stock. Each share of Series D Preferred Stock votes with common stock on an as-if converted basis

(4)	Includes 6,888,943 shares of common stock owned of record by Jeremy P. Feakins and 364,431 shares of common stock owned of record by JPF Venture Group, Inc., which is an investment entity that is majority-owned and controlled by Mr. Feakins and, as such, is deemed to be beneficially owned by him. Also includes 5,000,000 shares of our common stock issuable upon conversion of preferred stock within 60 days from September 30, 2025, and 5,919,075 shares of our common stock issuable upon conversion of notes within 60 days from September 30, 2025. Also includes 511 shares of Series D Preferred Stock, which is convertible into 102,200,000 shares of common stock (but not within 60 days of September 30, 2025) and votes with common stock on an as-if converted basis.

Table of Contents

(5)	Includes 226 shares of common stock owned of record by Antoinette Hempstead and 114,699 shares of common stock owned of record by A.R. Hempstead Revocable Trust, which is owned and controlled by Ms. Hempstead and, as such, is deemed to be beneficially owned by her. Also includes 1,000,000 shares of our common stock issuable upon conversion of preferred stock within 60 days from September 30, 2025.

(6)	Includes 1,000,000 shares of our common stock issuable upon conversion of preferred stock within 60 days from September 30, 2025, and 1,903,179 shares of our common stock issuable upon conversion of notes within 60 days from September 30, 2025.

(7)	Includes 4,250,000 shares of our common stock issuable upon conversion of notes within 60 days from September 30, 2025. Also includes 204 shares of Series D Preferred Stock, which is convertible into 40,800,000 shares of common stock (but not within 60 days of September 30, 2025) and votes with common stock on an as-if converted basis.

(8)	Includes 312,500 shares of our common stock issuable upon conversion of preferred stock within 60 days from September 30, 2025, and 500,000 shares of our common stock issuable upon conversion of notes within 60 days from September 30, 2025. Also includes 67 shares of Series D Preferred Stock, which is convertible into 13,400,000 shares of common stock (but not within 60 days of September 30, 2025) and votes with common stock on an as-if converted basis.

(9)	Includes 625,000 shares of our common stock issuable upon conversion of preferred stock within 60 days from September 30, 2025, and 1,250,000 shares of our common stock issuable upon conversion of notes within 60 days from September 30, 2025. Also includes 40 shares of Series D Preferred Stock, which is convertible into 8,000,000 shares of common stock (but not within 60 days of September 30, 2025) and votes with common stock on an as-if converted basis.
(10)	Includes 56 shares of Series D Preferred Stock, which is convertible into 11,200,000 shares of common stock (but not within 60 days of September 30, 2025) and votes with common stock on an as-if converted basis.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED PERSONS, AND DIRECTOR INDEPENDENCE

Related-Party Transactions

Through May 31, 2023, we incurred monthly rent of $10,000 to a company controlled by our chief executive officer under an operating lease agreement. The lease was for a one-year term and, unless either party gave to the other written notice of termination, the term would renew for a further period of one year, and so on from year to year until terminated by either party. The lease was terminated on May 31, 2023. For the year ended December 31, 2023, rent expense pursuant to this lease was $50,000. At December 31, 2024 and 2023, we had a payable to the entity of $0 and $10,000, respectively.

In May 2023, we entered into a month-to-month agreement with a company controlled by our chief executive officer for shared use of an office and facilities in Lancaster, Pennsylvania. For the years ended December 31, 2024 and 2023, rent expense was $15,200 and $8,000, respectively.

For the years ended December 31, 2024 and 2023, we recorded charges incurred to a company controlled by our chief executive officer for reimbursement of accounting and administrative services provided to us by an employee of that company. For the years ended December 31, 2024 and 2023, we recorded expense of $135,378 and $119,508, respectively, to this company. At December 31, 2024 and 2023 we had a payable to the entity of $24,200 and $16,493, respectively.

From time to time, we enter into loans and notes payable with related parties. Refer to Note 4 for details on notes payable and convertible notes payable to related parties.

Accrued interest on related-party notes was $1,142,539 and $920,439 at December 31, 2024 and 2023, respectively.

Table of Contents

During the year ended December 31, 2023, we issued 500 shares of Series D Preferred Stock to Jeremy P. Feakins & Associates, LLC, an investment entity owned by our chief executive officer Jeremy Feakins upon conversion of $35,303 of notes and $964,697 of related accrued interest.

During the year ended December 31, 2024, we repaid $1,080 in net working capital advances from OZFund, Inc., a company controlled by Mr. Feakins. During the year ended December 31, 2023, we received $5,000 in net working capital advances from Epaphus Global Energy LLC, a company controlled by Mr. Feakins, and repaid $1,292 in net working capital advances from OZFund .

During 2022, an aggregate of 847,262 shares of common stock were borrowed from our chief executive officer to enable conversions of $15,000 of notes and $1,946 of related accrued interest. We have accrued a liability for the shares to be reissued to our chief executive officer in the amount of $11,014, the fair value of the shares on the date of conversion. The replacement shares have not been issued at December 31, 2024.

Director Independence

Peter Wolfson and Antoinette Hempstead are independent directors under Nasdaq Rule 5605. In determining his independence, we considered unpaid loans that Mr. Wolfson has made to the Company and concluded that they do not impact his independence. Our code of ethics requires board approval of any transaction between the Company and our directors or officers that presents a conflict of interest. Our board’s policy is that any transaction with a director, officer or other party related to the Company must be reviewed and approved by our board members who are not interested in the transaction. Although our board does not have a formal written policy governing the procedure and standard of review, our board will only approve a related party transaction if the board believes that the transaction is in the best interest of the Company and its shareholders.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Principal Accountant Fees and Services

The following table summarizes the approximate aggregate fees billed to us or expected to be billed to us by Victor Mokuolu, CPA PLLC our independent registered public accounting firm for our 2024 and 2023 fiscal years, and to BF Borgers CPA PC for 2023:

	Year Ended December 31,
	2024		2023
Audit Fees (1)	$	97,500	$	117,000
Tax fees		-		-
Total Fees	$	97,500	$	117,000

_______________

(1)

Includes fees for: (i) audits of our consolidated financial statements for the fiscal years ended December 31, 2024 and 2023; (ii) review of our interim period financial statements for fiscal years 2024 and 2023; and (iii) fees related to services normally provided by the accountant in connection with statutory and regulatory filings or engagements.

Audit and Non-Audit Service Preapproval Policy

In accordance with the requirements of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated thereunder, our board of directors has adopted an informal approval policy that it believes will result in an effective and efficient procedure to preapprove services performed by the independent registered public accounting firm. All services provided by our auditors to the Company in 2024 and 2023 were approved in advance by our board of directors.

Table of Contents

Audit Services. Audit services include the annual financial statement audit (including quarterly reviews) and other procedures required to be performed by the independent registered public accounting firm to be able to form an opinion on our consolidated financial statements. The board of directors preapproves specified annual audit services engagement terms and fees and other specified audit fees. All other audit services must be specifically preapproved by the board of directors. The board of directors monitors the audit services engagement and may approve, if necessary, any changes in terms, conditions, and fees resulting from changes in audit scope or other items.

Audit-Related Services. Audit-related services are assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements, which historically have been provided to us by the independent registered public accounting firm and are consistent with the SEC’s rules on auditor independence. The board of directors has approved specified audit-related services within preapproved fee levels. All other audit-related services must be preapproved by the board of directors.

Tax Services. The board of directors preapproves specified tax services that it believes would not impair the independence of the independent registered public accounting firm and that are consistent with SEC’s rules and guidance. The board of directors must specifically approve all other tax services.

All Other Services. Other services are services provided by the independent registered public accounting firm that do not fall within the established audit, audit-related, and tax services categories. The board of directors preapproves specified other services that do not fall within any of the specified prohibited categories of services.

Procedures. All proposals for services to be provided by the independent registered public accounting firm, which must include a detailed description of the services to be rendered and the amount of corresponding fees, are submitted to the chairman of the board of directors and the chief financial officer. The chief financial officer authorizes services that have been preapproved by the board of directors. The chief financial officer submits requests or applications to provide services that have not been preapproved by the board of directors, which must include an affirmation by the chief financial officer and the independent registered public accounting firm that the request or application is consistent with the SEC’s rules on auditor independence, to the board of directors (or its chair or any of its other members pursuant to delegated authority) for approval.

Table of Contents

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)	The following financial statements are filed as part of this report:

		Page

Audited Consolidated Financial Statements for the Years Ended December 31, 2024 and 2023:
Report of Victor Mokuolu, CPA PLLC, Independent Registered Public Accounting Firm (PCAOB ID# 6771)		F-2
Consolidated Balance Sheets as of December 31, 2024 and 2023		F-4
Consolidated Statements of Operations for the Years Ended December 31, 2024 and 2023		F-5
Consolidated Statements of Changes in Stockholders’ Deficiency Years Ended December 31, 2024 and 2023		F-6
Consolidated Statements of Cash Flows for the Years Ended December 31, 2024 and 2023		F-7
Notes to the Consolidated Financial Statements		F-8

Table of Contents

(b)	The following exhibits are filed as part of this report:

Exhibit Number*	Title of Document	Location

Item 3	Articles of Incorporation and Bylaws
3.01	Articles of Incorporation of TetriDyn Solutions, Inc., dated May 15, 2006	Incorporated by reference from the Current Report on Form 8-K filed June 7, 2006
3.02	Bylaws	Incorporated by reference from the Current Report on Form 8-K filed June 7, 2006
3.03	Designation of Rights, Privileges, and Preferences of Series A Preferred Stock	Incorporated by reference from the Annual Report on Form 10-K for the year ended December 31, 2009, filed March 31, 2010
3.04	Certificate of Change Pursuant to NRS 78.209 of TetriDyn Solutions, Inc., filed with the Nevada Secretary of State on December 6, 2016	Incorporated by reference from the Current Report on Form 8-K filed December 12, 2016
3.05	Certificate of Correction of TetriDyn Solutions, Inc., filed with the Nevada Secretary of State on December 15, 2016	Incorporated by reference from the Current Report on Form 8-K filed December 12, 2016
3.06	Certificate of Amendment to Articles of Incorporation dated May 8, 2018	Incorporated by reference from the Current Report on Form 8-K filed May 12, 2018
3.07	Certificate of Designation filed with the Nevada Secretary of State on June 6, 2019	Incorporated by reference from the Quarterly Report for the quarter ended June 30, 2019, filed August 13, 2019
3.08	Certificate of Amendment to Designation (Series D Convertible Preferred Stock) filed June 12, 2023	Incorporated by reference from the Current Report on Form 8-K filed June 15, 2023
Item 4	Instruments Defining the Rights of Security Holders, including indentures
4.01	Specimen Stock Certificate	Incorporated by reference from the Registration Statement on Form S-8 filed August 25, 2018
Item 10	Material Contracts
10.07	Loan Agreement between TetriDyn Solutions, Inc., and Southeast Idaho Council of Governments, Inc., together with related promissory notes, dated December 23, 2009	Incorporated by reference from the Annual Report on Form 10-K for the year ended December 31, 2009, filed March 31, 2010
10.18	Consolidated Promissory Note for $394,350 dated December 31, 2014	Incorporated by reference from the Current Report on Form 8-K filed June 8, 2015
10.25	Promissory Note dated February 25, 2016	Incorporated by reference from the Current Report on Form 8-K filed March 1, 2016
10.26	Promissory Note dated November 23, 2015	Incorporated by reference from the Annual Report on Form 10-K for the year ended December 31, 2015, filed March 30, 2016
10.29	Promissory Note dated October 20, 2016	Incorporated by reference from the Current Report on Form 8-K filed October 20, 2016
10.30	Promissory Note dated May 20, 2016	Incorporated by reference from the Current Report on Form 8-K filed May 24, 2016

Table of Contents

10.31	Amendment to Convertible Promissory Notes dated February 24, 2018	Incorporated by reference from the Current Report on Form 8-K filed March 2, 2018
10.32	Agreement and Plan of Merger between TetriDyn Solutions, Inc. and Ocean Thermal Energy Corporation dated March 1, 2018	Incorporated by reference from the Current Report on Form 8-K filed March 10, 2018
10.36	Note and Warrant Purchase Agreement dated December 28, 2018	Incorporated by reference from the Current Report on Form 8-K filed January 3, 2018
10.37	Form of Unsecured Promissory Note	Incorporated by reference from the Current Report on Form 8-K filed January 3, 2018
10.38	Form of Unsecured Common Stock Purchase Warrant	Incorporated by reference from the Current Report on Form 8-K filed January 3, 2018
10.42	Securities Purchase Agreement dated February 16, 2018, between Ocean Thermal Energy Corporation and L2 Capital, LLC	Incorporated by reference from the Current Report on Form 8-K filed February 23, 2018
10.43	Senior Secured Promissory Note dated February 16, 2018, issued to L2 Capital, LLC	Incorporated by reference from the Current Report on Form 8-K filed February 23, 2018
10.44	Security Agreement dated February 16, 2018, between Ocean Thermal Energy Corporation and L2 Capital, LLC	Incorporated by reference from the Current Report on Form 8-K filed February 23, 2018
10.45	Common Stock Purchase Warrant dated February 16, 2018, issued to L2 Capital, LLC	Incorporated by reference from the Current Report on Form 8-K filed February 23, 2018
10.46	Common Stock Purchase Warrant dated February 16, 2018, issued to Craft Capital Management, LLC	Incorporated by reference from the Current Report on Form 8-K filed February 23, 2018
10.47	Lease Agreement between Ocean Thermal Energy Corporation and Queen Street Development Partners 1, LP, as amended	Incorporated by reference from the Annual Report for the year ended December 31, 2018, filed March 22, 2019
10.48	Employment Agreement with Jeremy P. Feakins dated January 1, 2011**	Incorporated by reference from the Annual Report for the year ended December 31, 2018, filed March 22, 2019
10.49	Loan Agreement, Promissory Note, and Warrant to Purchase up to 3,295,761 Shares of Common Stock between Ocean Thermal Energy Corporation and DCO Energy, LLC, dated February 10, 2012, including Forbearance and Loan Extension Agreement dated April 1, 2016	Incorporated by reference from the Annual Report for the year ended December 31, 2018, filed March 22, 2019
10.50	Form of Loan Agreement, Promissory Note (Series B), Security Agreement, and Warrant (with related schedule) [2013]	Incorporated by reference from the Annual Report for the year ended December 31, 2018, filed March 22, 2019
10.51	Promissory Note for $290,000 payable to Theodore Herman dated December 31, 2013	Incorporated by reference from the Annual Report for the year ended December 31, 2018, filed March 22, 2019
10.52	Loan Agreement, Promissory Note, and Warrant to Purchase up to 12,912,500 Shares of Common Stock between Ocean Thermal Energy Corporation and Jeremy P. Feakins & Associates, LLC, dated April 1, 2014, including Forbearance and Loan Extension Agreement (Revised and Reformed) dated April 1, 2016	Incorporated by reference from the Annual Report for the year ended December 31, 2018, filed March 22, 2019
10.53	Loan Agreement, Promissory Note, and Warrant to Purchase up to 200,000 Shares of Common Stock between Ocean Thermal Energy Corporation and Mart Inn, Inc., dated December 22, 2014	Incorporated by reference from the Annual Report for the year ended December 31, 2018, filed March 22, 2019

Table of Contents

10.54	Loan Agreement, Promissory Note, and Warrant to Purchase up to 100,000 Shares of Common Stock between Ocean Thermal Energy Corporation and James G. Garner, Jr., dated December 26, 2014	Incorporated by reference from the Annual Report for the year ended December 31, 2018, filed March 22, 2019
10.55	Promissory Note dated April 17, 2015, with extensions	Incorporated by reference from the Annual Report for the year ended December 31, 2018, filed March 22, 2019
10.56	Promissory Note dated October 20, 2016, to Peter Wolfson	Incorporated by reference from the Current Report on Form 8-K filed October 20, 2016.
10.57	Promissory Note dated December 21, 2016, to JPF Venture Group	Incorporated by reference from the Annual Report for the year ended December 31, 2018, filed March 22, 2019
10.58	Promissory Note dated March 9, 2018, to Jeremy P. Feakins & Associates, LLC	Incorporated by reference from the Annual Report for the year ended December 31, 2018, filed March 22, 2019
10.59	Loan Agreement and Promissory Note with JPF Venture Group, Inc., dated November 6, 2018	Incorporated by reference from the Annual Report for the year ended December 31, 2018, filed March 22, 2019
10.60	Form of Bridge Loan, Warrant, and Promissory Note for December 2018, together with schedule of investors	Incorporated by reference from the Annual Report for the year ended December 31, 2018, filed March 22, 2019.
10.61	Replacement Convertible Promissory Note to L2 Capital, LLC, dated December 14, 2018	Incorporated by reference from the Annual Report for the year ended December 31, 2018, filed March 22, 2019
10.62	Form of Loan Agreement made January 2, 2019, between Ocean Thermal Energy Corporation and the lenders identified on the scheduled attached thereto	Incorporated by reference from the Annual Report for the year ended December 31, 2019, filed March 20, 2020
10.63	Form of Convertible Loan Agreement with a maturity date of October 31, 2021, between Ocean Thermal Energy Corporation and the lenders identified on the scheduled attached thereto	Incorporated by reference from the Annual Report for the year ended December 31, 2019, filed March 20, 2020
10.64	Form of Convertible Loan Agreement with a maturity date of December 31, 2022, between Ocean Thermal Energy Corporation and the lenders identified on the scheduled attached thereto	Incorporated by reference from the Annual Report for the year ended December 31, 2019, filed March 20, 2020
10.65	Stock Purchase Agreement between Ocean Thermal Energy Corporation and Epaphus Global Energy, LLC, dated August 23, 2022, and executed August 25, 2022	Incorporated by reference from the Current Report on Form 8-K filed August 29, 2022.
10.66	Addendum to Chief Executive Officer Employment Agreement Effective June 9, 2022	Incorporated by reference from the Quarterly Report for the quarter ended September 30, 2022, filed November 8, 2022
10.67	Philadelphia lease agreement	This filing
10.68	Grant Street, Lancaster PA lease agreement	This filing

Table of Contents

10.69	Professional Services Agreement with Johnson Controls Government Services, LLC, executed January 7, 2025, effective as of December 17, 2024	Incorporated by reference from the Current Report on Form 8-K filed January 14, 2025.

Item 14	Code of Ethics
14.01	Ocean Thermal Energy Corporation Code of Ethics and Business Conduct	This filing
Item 19	Insider Trading Policies and Procedures
19.01	Ocean Thermal Energy Corporation Insider Trading Policy	This filing
Item 21	Subsidiaries of the Registrant
21.01	Schedule of Subsidiaries	Incorporated by reference from Post-Effective Amendment No. 1/A to the Registration Statement on Form S-1 (Amendment No. 1) filed January 10, 2019
Item 31	Rule 13a-14(a)/15d-14(a) Certifications
31.01	Certification of Principal Executive and Principal Financial Officer Pursuant to Rule 13a-14	This filing
Item 32	Section 1350 Certifications
32.01	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	This filing
Item 101	Interactive Data Files***
101.INS	XBRL Instance Document	This filing
101.SCH	XBRL Taxonomy Extension Schema	This filing
101.CAL	XBRL Taxonomy Extension Calculation Linkbase	This filing
101.DEF	XBRL Taxonomy Extension Definition Linkbase	This filing
101.LAB	XBRL Taxonomy Extension Label Linkbase	This filing
101.PRE	XBRL Taxonomy Extension Presentation Linkbase	This filing

___________________________

*	All exhibits are numbered with the number preceding the decimal indicating the applicable SEC reference number in Item 601 and the number following the decimal indicating the sequence of the particular document. Omitted numbers in the sequence refer to documents previously filed as an exhibit.
**	Identifies each management contract or compensatory plan or arrangement required to be filed as an exhibit, as required by Item 15(a)(3) of Form 10-K.
***	The XBRL related information in Exhibit 101 will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section and will not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as will be expressly set forth by specific reference in such filing or document.

Table of Contents

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	OCEAN THERMAL ENERGY CORPORATION

Dated: October 24, 2025	By:	/s/ Jeremy P. Feakins
		Jeremy P. Feakins
		Principal Executive Officer and
		Principal Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Name	Title	Date

/s/ Jeremy P. Feakins	Director, Chief Executive Officer and Chief	October 24, 2025
Jeremy P. Feakins	Financial Officer (Principal Executive Officer and Principal Financial Officer)

/s/ Peter Wolfson	Director	October 24, 2025
Peter Wolfson

/s/ Antoinette K. Hempstead	Director	October 24, 2025
Antoinette K. Hempstead

Table of Contents

SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT

TO SECTION 15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED

SECURITIES PURSUANT TO SECTION 12 OF THE ACT

We will furnish to the SEC, at the same time that it is sent to stockholders, any proxy or information statement that we send to our stockholders in connection with any annual stockholders’ meeting.

OCEAN THERMAL ENERGY CORPORATION

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

AND

CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024 and 2023

Report of Victor Mokuolu CPA PLLC, Independent Registered Public Accounting Firm (PCAOB ID# 6771)		F-2

Consolidated Balance Sheets as of December 31, 2024 and December 31, 2023		F-4

Consolidated Statements of Operations for the Years Ended December 31, 2024 and 2023		F-5

Consolidated Statements of Stockholders’ Deficiency for the Years Ended December 31, 2024 and 2023		F-6

Consolidated Statements of Cash Flows for the Years Ended December 31, 2024 and 2023		F-7

Notes to Consolidated Financial Statements		F-8

F-1

Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and

Board of Directors of Ocean Thermal Energy Corporation

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Ocean Thermal Energy Corporation and Subsidiary (the “Company”) as of December 31, 2024, and December 31, 2023, and the related consolidated statements of operations, changes in stockholders’ deficit, and cash flows, for the years then ended, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and December 31, 2023, and the results of its operations and its cash flows for the years ended December 31, 2024, and December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Substantial Doubt about the Company's ability to continue as a Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As of December 31, 2024, and December 31, 2023, the Company had a net loss of $1,185,163, and $9,264,217, respectively. An accumulated deficit of $107,266,496 and $106,081,333 for the years ending December 31, 2024, and December 31, 2023, respectively. The Company has not established revenue to cover its operating costs for the next twelve (12) months. The Company’s ability to continue as a going concern is dependent on its ability to increase sales and obtain external funding for the projects under development. These factors raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

F-2

Table of Contents

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provides a reasonable basis for our opinion.

Critical audit matter

The critical audit matter communicated below is a matter arising from the current audit of the financial statements that was communicated or required to be communicated to the Board of Directors and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

An audit of these elements is especially challenging and requires auditor judgment due to the nature and extent of audit effort required to address these matters, including the extent of specialized skill or knowledge needed.

Accounting for Warrants issued in connection with Notes Payable

As described in Notes 5, Derivative Liabilities, the Company issued prefunded warrants for the purchase of the Company’s common stock. The fair market value of the Warrants were recorded as a derivative liability. The assigned value of the warrants along with loan fees and broker fees was recorded as deferred financing costs and will be recorded as a discount to the note, amortized straight line over the life of the Promissory Note.

The Company determined that this is an asset in accordance with the guidance exception in ASC 470-20-25-2 (the “ASC”) which indicates the ASC does not apply when warrants are issued to obtain a line of credit rather than in connection with the issuance of a debt instrument. Issuing warrants to obtain a line of credit is equivalent to paying a loan commitment or access fee (equivalent to the fair value of the warrant). As such, these costs meet the definition of an asset. This exception applies, even if the line is fully drawn down at inception. The Company recorded a derivative liability of $9,423,915 as of December 31, 2024. For the years ended December 31, 2024 and 2023, the Company recognized a gain of $2,868,111 and a loss of $5,409,047, respectively, from the change in fair value of the derivative liability.

Our audit procedures included, but were not limited to (1) a review of the assumptions by management and the guidance from the ASC (2) the derivative calculations, underlying assumptions to arrive at fair value, initial recognition and subsequent measurement at the balance sheet date (3) the fair value model employed in the derivative calculations (4) evaluation of whether the note exception from the ASC is applicable in the Company’s case (5) the ability of the Company to realize the asset value and (6) the method of amortization.


We have served as the Company’s auditor since 2025.
Houston, Texas

October 24, 2025

PCAOB ID: 6771

F-3

Table of Contents

OCEAN THERMAL ENERGY CORPORATION AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2024 AND 2023

	December 31, 2024			December 31, 2023
ASSETS
Current Assets
Cash	$	16,142		$	115,149
Prepaid expenses		5,000			5,000
Total Current Assets		21,142			120,149

Total Assets	$	21,142		$	120,149

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities
Accounts payable and accrued expense	$	26,473,157		$	22,954,452
Notes payable - related party		2,304,170			2,304,170
Convertible notes payable - related party, net		117,500			117,500
Notes payable		3,638,131			3,639,431
Convertible note payable, net		2,539,665			2,570,412
Advances payable - related party, net		60,388			61,468
Derivative liability		9,423,915			12,404,707
Total Current Liabilities		44,556,926			44,052,140

Convertible notes payable		16,120			-
Total Liabilities		44,573,046			44,052,140

Commitments and contingencies (See Note 8)		-			-

Stockholders' deficit
Preferred Stock, Series B, $0.001par value; 1,250,000 shares authorized, 518,750 and 518,750 shares issued and outstanding, as of December 31, 2024 and December 31, 2023, respectively		519			519
Preferred Stock, Series C, $0.001 par value; 2,700,000 shares authorized, 2,300,000 and 2,300,000 shares issued and outstanding, as of December 31, 2024 and December 31, 2023, respectively		2,300			2,300
Preferred Stock, Series D, $0.001 par value; 1,400 shares authorized, 1,400 and 1,202 shares issued and outstanding, as of December 31, 2024 and December 31, 2023, respectively		1			1
Common stock, $0.001 par value; 200,000,000 shares authorized, 190,012,124 and 184,370,469 shares issued and outstanding, as of December 31, 2024 and December 31, 2023, respectively		190,013			184,371
Additional paid-in capital		62,521,759			61,962,151
Accumulated deficit		(107,266,496	)		(106,081,333	)
Total Stockholders' Deficit		(44,551,904	)		(43,931,991	)

Total Liabilities and Stockholders' Deficit	$	21,142		$	120,149

The accompanying notes are an integral part of these consolidated financial statements.

F-4

Table of Contents

OCEAN THERMAL ENERGY CORPORATION AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

	2024			2023
Operating Expenses
Salaries and compensation	$	925,553		$	888,790
Professional fees		534,789			473,467
General and administrative		116,268			138,048
Total Operating Expenses		1,576,610			1,500,305

Loss from Operations		(1,576,610	)		(1,500,305	)

Other Income (Expense)
Service income		-			12,000
Interest expense, net		(2,504,722	)		(2,278,347	)
Amortization of debt discount		(2,245	)		(88,540	)
Change in fair value of derivative liability		2,868,111			(5,409,047	)
Gain on conversion of debt		30,303			22
Total Other Income (Expense)		391,447			(7,763,912	)

Loss Before Income Taxes		(1,185,163	)		(9,264,217	)

Provision for Income Taxes		-			-

Net Loss	$	(1,185,163	)	$	(9,264,217	)

Net Loss per Common Share Basic and Diluted	$	(0.01	)	$	(0.05	)

Weighted Average Number of Common Shares Outstanding		188,717,318			184,370,469

The accompanying notes are an integral part of these consolidated financial statements.

F-5

Table of Contents

OCEAN THERMAL ENERGY CORPORATION AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

	Preferred Stock				Common Stock				Additional					Total
	Number of		Par		Number of		Par		Paid-in		Accumulated			Stockholders’
	Shares		Value		Shares		Value		Capital		Deficit			Deficit
Balance December 31, 2022		2,819,028	$	2,819		184,370,469	$	184,371	$	60,110,402	$	(96,496,618	)	$	(36,199,026	)
Prior year accrued interest adjustment		-		-		-		-		-		(320,498	)		(320,498	)
Stock based compensation		-		-		-				3,750		-			3,750
Series D Preferred Stock issued for cash		393		-		-		-		786,000		-			786,000
Series D Preferred Stock issued for conversion of notes and interest		531		1		-		-		1,061,999		-			1,062,000
Net Loss		-		-		-		-		-		(9,264,217	)		(9,264,217	)
Balance December 31, 2023		2,819,952		2,820		184,370,469		184,371		61,962,151		(106,081,333	)		(43,931,991	)
Common stock issued for conversion of note		-		-		5,641,655		5,642		163,608		-			169,250
Series D Preferred Stock issued for cash		198		-		-		-		396,000		-			396,000
Net Loss		-		-		-		-		-		(1,185,163	)		(1,185,163	)
Balance December 31, 2024		2,820,150	$	2,820		190,012,124	$	190,013	$	62,521,759	$	(107,266,496	)	$	(44,551,904	)

The accompanying notes are an integral part of these consolidated financial statements.

F-6

Table of Contents

OCEAN THERMAL ENERGY CORPORATION AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOW

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

	2024			2023
Cash Flows From Operating Activities:
Net loss	$	(1,185,163	)	$	(9,264,217	)
Adjustments to reconcile net loss to net cash used in operating activities:
Change in fair value of derivative liability		(2,868,111	)		5,409,047
Amortization of debt discount		2,245			88,540
Gain on conversion of debt		(30,303	)		(22	)
Stock based compensation		-			3,750
Changes in assets and liabilities:
Accounts payable and accrued expenses		3,518,705			3,093,439
Net Cash Used In Operating Activities		(562,627	)		(669,463	)

Cash Flows From Financing Activities:
Proceeds from sale of preferred stock		396,000			786,000
Proceeds from convertible notes		70,000			-
Advances (repayments) from related parties		(1,080	)		3,708
Repayment of notes payable		(1,300	)		(6,500	)
Net Cash Provided by Financing Activities		463,620			783,208

Net increase (decrease) in cash		(99,007	)		113,745
Cash at beginning of year		115,149			1,404
Cash at End of Year	$	16,142		$	115,149

Supplemental disclosure of cash flow information
Cash paid for interest expense	$	63,753		$	5,000
Cash paid for income taxes	$	-		$	-

Supplemental disclosure of non-cash investing and financing activities:
Initial value of derivative liability	$	56,125		$	-
Common stock issued upon conversion of note	$	169,250		$	-
Note payable converted to common stock	$	30,747		$	-
Derivative liability extinguished upon conversion on note payable	$	168,806		$	2,602
Convertible notes payable and accrued interest converted into preferred stock	$	-		$	59,420
Related party note payable and accrued interest converted into preferred stock	$	-		$	1,000,000

The accompanying notes are an integral part of these consolidated financial statements.

F-7

Table of Contents

OCEAN THERMAL ENERGY CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

NOTE 1 – NATURE OF BUSINESS AND BASIS OF PRESENTATION

Ocean Thermal Energy Corporation (“OTEC” “Company” “us” “we”) is designing ocean thermal energy conversion power plants, seawater air conditioning and lake water air conditioning (“SWAC/LSC”) plants for large commercial properties, utilities, and municipalities. We believe these technologies provide practical solutions to mankind’s three oldest and most fundamental needs: clean drinking water, plentiful food, and sustainable, affordable energy without the use of fossil fuels. The Company plans to provide a clean technology that continuously extracts energy from the temperature differentials between warm surface ocean water and cold deep seawater. In addition to producing electricity, our technology can efficiently desalinate seawater producing thousands of cubic meters of fresh water every day for use in agriculture and human consumption. This cold, deep, nutrient-rich water can also be used to cool buildings and for fish farming or aquaculture.

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary OCEES International Inc. (“OCEES”). Intercompany balances and transactions have been eliminated in consolidation.

During the course of preparing the Company’s interim financial statements for the year ended December 31, 2024, the Company determined that a noncash accrual relating to default interest on certain notes payable was not properly reflected in the historical financial statements. Management evaluated this immaterial misstatement using the guidance provided by the SEC’s Staff Accounting Bulletin No. 99 (“SAB 99”) and determined that the misstatement was immaterial to the historical financial statements. The Company has recorded the additional accrued interest as of January 1, 2023, through an adjustment of $320,498 to accumulated deficit and accounts payable and accrued expenses in the accompanying consolidated balance sheets. This adjustment reflects default interest rates for periods prior to December 31, 2022. Additionally, for the year ended December 31, 2023, default interest of $22,435 has been recorded to give effect to this additional default interest.

Use of Estimates

In preparing financial statements in conformity with GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates. Significant estimates include the assumptions used in the valuation of equity-based transactions, valuation of derivative liabilities, and valuation of deferred tax assets.

Cash and Cash Equivalents

We consider all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. We had no cash equivalents at December 31, 2024 and 2023.

Income Taxes

Our ability to use our net operating loss carryforwards may be substantially limited due to ownership change limitations that may have occurred or that could occur in the future, as required by Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), as well as similar state provisions. These ownership changes may limit the amount of net operating loss that can be utilized annually to offset future taxable income and tax, respectively. In general, an “ownership change” as defined by Section 382 of the Code results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50.0% of the outstanding stock of a company by certain stockholders or public groups.

We have not completed a study to assess whether an ownership change has occurred or whether there have been multiple ownership changes since we became a “loss corporation” under the definition of Section 382. If we have experienced an ownership change, utilization of the net operating loss carryforwards would be subject to an annual limitation under Section 382 of the Code, which is determined by first multiplying the value of our stock at the time of the ownership change by the applicable long-term, tax-exempt rate, and then could be subject to additional adjustments, as required. Any limitation may result in expiration of a portion of the net operating loss carryforwards before utilization. Further, until a study is completed and any limitation known, no positions related to limitations are being considered as an uncertain tax position or disclosed as an unrecognized tax benefit. Any carryforwards that expire prior to utilization as a result of such limitations will be removed from deferred tax assets with a corresponding reduction of the valuation allowance. Due to the existence of the valuation allowance, it is not expected that any possible limitation will have an impact on our results of operations or financial position.

Business Segments

We operate in one segment and, therefore, segment information is not presented.

F-8

Table of Contents

Fair Value

Financial Accounting Standards Board Accounting Standard Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures, defines fair value, establishes a framework for measuring fair value under GAAP, and enhances disclosures about fair value measurements. ASC 820 describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value, which are the following:

	·	Level 1-Pricing inputs are quoted prices available in active markets for identical assets or liabilities as of the reporting date.
	·	Level 2-Pricing inputs are quoted for similar assets or inputs that are observable, either directly or indirectly, for substantially the full term through corroboration with observable market data. Level 2 includes assets or liabilities valued at quoted prices adjusted for legal or contractual restrictions specific to these investments.
	·	Level 3-Pricing inputs are unobservable for the assets or liabilities; that is, the inputs reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability.

Management believes the carrying amounts of the short-term financial instruments, including cash and cash equivalents, prepaid expenses, accounts payable, accrued liabilities, notes payable, and other liabilities, reflected in the accompanying balance sheets, approximate fair value at December 31, 2024 and December 31, 2023, due to the relatively short-term nature of these instruments.

We accounted for derivative liability at fair value on a recurring basis under Level 3 at December 31, 2024 and 2023 (see Note 5).

Concentrations

Cash, cash equivalents, and restricted cash are deposited with major financial institutions, and at times, such balances with any one financial institution may be in excess of FDIC-insured limits. As of December 31, 2024 and 2023, no balances exceeded FDIC-insured limits.

Loss per Share

Basic loss per share is calculated by dividing our net loss available to common shareholders by the weighted average number of common shares during the period. Diluted loss per share is calculated by dividing our net loss by the diluted weighted average number of shares outstanding during the period. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity.

The following potentially dilutive securities have been excluded from the computation of diluted weighted average shares outstanding as of December 31, 2024 and 2023, as they would be anti-dilutive:

	Years Ended December 31,
	2024		2023
Shares underlying options and warrants outstanding		570,000		500,000
Shares underlying convertible notes outstanding		94,698,644,699		1,269,873,927
Shares underlying convertible preferred stock outstanding		16,687,500		16,687,500
		94,715,902,199		1,287,061,427

Revenue Recognition

We account for our revenue in accordance with Accounting Standard Update 2014-09, Revenue from Contracts with Customers (Topic 606), which requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services.

Recent Accounting Pronouncements

In November 2024, the FASB issued Accounting Standards Update (ASU) 2024-04 - Debt with Conversion and Other Options (Subtopic 470-20). This ASU clarifies the requirements related to accounting for the settlement of a debt instrument as an induced conversion. An induced conversion is when a Company induces debt holders to convert their debt into equity shares under changed terms and involved additional consideration. The amendments in this Update are effective for all entities for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted for all entities that have adopted the amendments in ASU 2020-06. The Company is still evaluating the impact of the adoption of this ASU.

In November 2024, the FASB issued ASU 2024-03 - Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40). This ASU requires entities to disaggregate any relevant expense caption presented on the face of the income statement within continuing operations into the following required natural expense categories within the footnotes, as applicable: (1) purchases of inventory, (2) employee compensation, (3) depreciation, (4) intangible asset amortization, and (5) DD&A recognized as part of oil- and gas-producing activities or other depletion expenses. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The Company is still evaluating the impact of the adoption of this ASU.

F-9

The Company currently believes there are no other issued and not yet effective accounting standards that are materially relevant to our consolidated financial statements.

NOTE 3 – GOING CONCERN

The accompanying audited consolidated financial statements have been prepared on the assumption that we will continue as a going concern. As reflected in the accompanying consolidated financial statements, we had a net loss of $1,185,163 and used $562,627 of cash in operating activities for the year ended December 31, 2024. We had a working capital deficiency of $44,535,784 and a stockholders’ deficiency of $44,551,904 as of December 31, 2024. These factors raise substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent on our ability to increase sales and obtain external funding for our projects under development. We continue to apply for grant funding from the U.S. Department of Energy. Our applications focus on desalinated water, ammonia, and hydrogen production from an OTEC facility. The financial statements do not include any adjustments that may result from the outcome of this uncertainty.

NOTE 4 – CONVERTIBLE NOTES AND NOTES PAYABLE

During November and December 2024, we sold an aggregate of $70,000 of convertible note units. Each unit costs $5,000 and consists of one convertible promissory note in the amount of $5,000 and one warrant to purchase 5,000 shares of the Company’s common stock at an exercise price of $0.01 per share. The Notes bear interest at the rate of 10% per year, compounded annually, and are due on January 4, 2027 (the “Maturity Date”). The Notes will be converted into common stock of the Company automatically upon the Maturity Date at the lower of (a) $0.10 per share, or (b) 90% of the Market Price, which shall be the average closing price of the Company’s common stock on the ten trading days immediately preceding the date of conversion. However, if the United States Army has issued a contract for the supply of sustainable power and water from the Company-designed and built ocean thermal energy system prior to the Maturity Date, within five business days the Notes will automatically be converted depending on the amount of Notes purchased by each holder.

During the year ended December 31, 2024, $30,747 of notes was converted into 5,641,655 shares of common stock.

During the year ended December 31, 2023, $35,303 of related party notes and $964,697 of related accrued interest were converted into 500 shares of Series D Preferred Stock.

During the year ended December 31, 2023, $46,750 of notes and $12,670 of related accrued interest were converted into 31 shares of Series D Preferred Stock.

The following convertible notes and notes payable were outstanding at December 31, 2024:

Date of	Maturity		Interest			In	Original		Principal at December 31,		Discount at December 31,		Carrying Amount at December 31,		Related Party				Non Related Party
Issuance	Date		Rate			Default	Principal		2024		2024		2024		Current		Long-Term		Current		Long-Term
12/01/07	09/01/15			7.00	%	Yes		125,000		85,821		-		85,821		-		-		85,821		-
09/25/09	10/25/11			5.00	%	Yes		50,000		50,000		-		50,000		-		-		50,000		-
12/23/09	12/23/14			7.00	%	Yes		100,000		77,031		-		77,031		-		-		77,031		-
12/23/09	12/23/14			7.00	%	Yes		25,000		21,400		-		21,400		-		-		21,400		-
12/23/09	12/23/14			7.00	%	Yes		25,000		21,390		-		21,390		-		-		21,390		-
02/03/12	12/31/19			10.00	%	Yes		1,000,000		1,000,000		-		1,000,000		-		-		1,000,000		-
08/15/13	10/31/23			13.00	%	Yes		158,334		158,334		-		158,334		-		-		158,334		-
12/31/13	12/31/15			8.00	%	Yes		290,000		130,000		-		130,000		-		-		130,000		-
04/01/14	12/31/18			10.00	%	Yes		2,265,000		1,067,197		-		1,067,197		1,067,197		-		-		-
12/22/14	03/31/15			22.00	%*	Yes		200,000		200,000		-		200,000		-		-		200,000		-
12/26/14	12/26/15			22.00	%*	Yes		100,000		100,000		-		100,000		-		-		100,000		-
03/12/15		(1)		6.00	%	No		394,380		394,380		-		394,380		394,380		-		-		-
04/07/15	04/07/18			20.00	%	Yes		50,000		50,000		-		50,000		-		-		50,000		-
11/23/15		(1)		6.00	%	No		50,000		50,000		-		50,000		50,000		-		-		-
02/25/16		(1)		6.00	%	No		50,000		50,000		-		50,000		50,000		-		-		-
05/20/16		(1)		6.00	%	No		50,000		50,000		-		50,000		50,000		-		-		-
10/20/16		(1)		6.00	%	No		37,500		12,500		-		12,500		12,500		-		-		-
10/20/16		(1)		6.00	%	No		12,500		12,500		-		12,500		12,500		-		-		-
12/21/16		(1)		6.00	%	No		25,000		25,000		-		25,000		25,000		-		-		-
03/09/17		(1)		10.00	%	No		200,000		177,000		-		177,000		177,000		-		-		-
07/13/17	07/13/19			6.00	%	Yes		25,000		25,000		-		25,000		-		-		25,000		-
07/18/17	07/18/19			6.00	%	Yes		25,000		25,000		-		25,000		-		-		25,000		-
07/26/17	07/26/19			6.00	%	Yes		15,000		15,000		-		15,000		-		-		15,000		-
12/20/17		(2)		20.00	%	Yes		979,156		859,156		-		859,156		-		-		859,156		-
11/06/17	12/31/18			10.00	%	Yes		646,568		543,093		-		543,093		543,093		-		-		-
02/19/18		(3)		18.00	%*	Yes		629,451		1,161,136		-		1,161,136		-		-		1,161,136		-
09/19/18	09/28/21			6.00	%	Yes		10,000		10,000		-		10,000		-		-		10,000		-
12/14/18	12/22/18			24.00	%*	Yes		474,759		547,328		-		547,328		-		-		547,328		-
01/02/19		(4)		17.00	%	No		310,000		310,000		-		310,000		10,000		-		300,000		-
08/14/19	10/31/2021			8.00	%	Yes		26,200		26,200		-		26,200		-		-		26,200		-
(5)	10/31/2021			8.00	%	Yes		105,000		40,000		-		40,000		5,000		-		35,000		-
(6)	01/02/22			8.00	%	Yes		296,750		225,000		-		225,000		15,000		-		210,000		-
(8)	05/12/22			8.00	%	Yes		15,000		15,000		-		15,000		-		-		15,000		-
(9)	09/01/22			8.00	%	Yes		170,000		155,000		-		155,000		-		-		155,000		-
(10)	08/30/23			8.00	%	No		285,000		280,000		-		280,000		5,000		-		275,000		-
(11)	11/30/23			8.00	%	No		5,000		5,000		-		5,000		5,000		-		-		-
(12)	1/4/27			10.00		No		70,000		70,000		53,880		16,120		-		-		-		16,120
(7)		(7)		10.00	%	No		625,000		625,000		-		625,000		-		-		625,000		-
							$	9,920,598	$	8,669,466	$	53,880	$	8,615,586	$	2,421,670	$	-	$	6,177,796	$	16,120

(1)	Maturity date is 90 days after demand.

F-10

Table of Contents

(2)	Bridge loans were issued at dates between December 2017 and May 2018. Principal is due on the earlier of 18 months from the anniversary date or the completion of L2 financing with gross proceeds of a minimum of $1.5 million.
(3)	L2 - Note was drawn down in five tranches between 02/16/18 and 05/02/18.
(4)	Loans were issued from 01/02/19 to 03/23/19. Principal and interest are due when funds are received from the litigation between Ocean Thermal Energy Corporation vs. Robert Coe, et al.
(5)	Notes were issued between 10/14/19 and 11/05/19. The notes bear an interest rate of 8% and mature 10/31/21. They can be converted into 250,000 shares of common stock. They can be converted when the stock closing price reaches $1 or on the maturity, whichever occurs first.
(6)	Notes were issued between 12/09/19 and 11/25/20. The notes bear an interest rate of 8% and mature 01/02/22. They can be converted into 250,000 shares of common stock. They can be converted when the stock closing price reaches $1 or on the maturity, whichever occurs first.
(7)	Notes were issued between 11/02/20 and 03/18/21. The notes bear an interest rate of 10%. Repayment will be made as follows: (i) the principal and interest within five business days following our receipt of $25.5 million from the Robert Coe, et al. Phase One Litigation; and (ii) the additional payment within five business days following our actual receipt of any funds from the Robert Coe, et al, Phase Two Litigation, less legal fees accrued up to that date. Payment will be made as such funds are actually received by us and after deductions of accrued legal fees up to that date.
(8)	Notes were issued between 05/14/20 and 08/11/20. The notes bear an interest rate of 8% and mature 05/12/22. They can be converted into 250,000 shares of common stock. They can be converted when the stock closing price reaches $1 or on the maturity, whichever occurs first.
(9)	Notes were issued in November 2020 and during the first two quarters of 2021. The notes bear an interest rate of 8% and mature 09/01/22. They can be converted into 250,000 shares of common stock. They can be converted when the stock closing price reaches $1 or on the maturity, whichever occurs first.
(10)	Notes were issued during the third quarter of 2021. The notes bear an interest rate of 8% and mature 08/30/23. They can be converted into 250,000 shares of common stock. They can be converted when the stock closing price reaches $1 or on the maturity, whichever occurs first.
(11)	Note was issued during November of 2021. The note bears an interest rate of 8% and matures 11/30/23. It can be converted into 250,000 shares of common stock. It can be converted when the stock closing price reaches $1 or on the maturity, whichever occurs first.
(12)	Notes were issued during November and December of 2024. The Notes bear interest at the rate of 10% per year, compounded annually, and are due on January 4, 2027. The Notes will be converted into common stock of the Company automatically upon the Maturity Date at the lower of (a) $0.10 per share, or (b) 90% of the Market Price, which shall be the average closing price of the Company’s common stock on the ten trading days immediately preceding the date of conversion. However, if the United States Army has issued a contract for the supply of sustainable power and water from the Company-designed and built ocean thermal energy system prior to the Maturity Date, within five business days the Notes will automatically be converted depending on amount of Notes purchased by each holder.
*	Default interest rate.

F-11

Table of Contents

The following convertible notes and notes payable were outstanding at December 31, 2023:

Date of	Maturity	Interest			In	Original		Principal at December 31,		Discount at December 31,		Carrying Amount at December 31,		Related Party				Non Related Party
Issuance	Date	Rate			Default	Principal		2023		2023		2023		Current		Long-Term		Current		Long-Term
12/01/07	09/01/15		7.00	%	Yes		125,000		85,821		-		85,821		-		-		85,821		-
09/25/09	10/25/11		5.00	%	Yes		50,000		50,000		-		50,000		-		-		50,000		-
12/23/09	12/23/14		7.00	%	Yes		100,000		78,053		-		78,053		-		-		78,053		-
12/23/09	12/23/14		7.00	%	Yes		25,000		21,539		-		21,539		-		-		21,539		-
12/23/09	12/23/14		7.00	%	Yes		25,000		21,529		-		21,529		-		-		21,529		-
02/03/12	12/31/19		10.00	%	Yes		1,000,000		1,000,000		-		1,000,000		-		-		1,000,000		-
08/15/13	10/31/23		13.00	%	Yes		158,334		158,334		-		158,334		-		-		158,334		-
12/31/13	12/31/15		8.00	%	Yes		290,000		130,000		-		130,000		-		-		130,000		-
04/01/14	12/31/18		10.00	%	Yes		2,265,000		1,067,197		-		1,067,197		1,067,197		-		-		-
12/22/14	03/31/15		22.00	%*	Yes		200,000		200,000		-		200,000		-		-		200,000		-
12/26/14	12/26/15		22.00	%*	Yes		100,000		100,000		-		100,000		-		-		100,000		-
03/12/15	(1)		6.00	%	No		394,380		394,380		-		394,380		394,380		-		-		-
04/07/15	04/07/18		20.00	%	Yes		50,000		50,000		-		50,000		-		-		50,000		-
11/23/15	(1)		6.00	%	No		50,000		50,000		-		50,000		50,000		-		-		-
02/25/16	(1)		6.00	%	No		50,000		50,000		-		50,000		50,000		-		-		-
05/20/16	(1)		6.00	%	No		50,000		50,000		-		50,000		50,000		-		-		-
10/20/16	(1)		6.00	%	No		37,500		12,500		-		12,500		12,500		-		-		-
10/20/16	(1)		6.00	%	No		12,500		12,500		-		12,500		12,500		-		-		-
12/21/16	(1)		6.00	%	No		25,000		25,000		-		25,000		25,000		-		-		-
03/09/17	(1)		10.00	%	No		200,000		177,000		-		177,000		177,000		-		-		-
07/13/17	07/13/19		6.00	%	Yes		25,000		25,000		-		25,000		-		-		25,000		-
07/18/17	07/18/19		6.00	%	Yes		25,000		25,000		-		25,000		-		-		25,000		-
07/26/17	07/26/19		6.00	%	Yes		15,000		15,000		-		15,000		-		-		15,000		-
12/20/17	(2)		20.00	%	Yes		979,156		859,156		-		859,156		-		-		859,156		-
11/06/17	12/31/18		10.00	%	Yes		646,568		543,093		-		543,093		543,093		-		-		-
02/19/18	(3)		18.00	%*	Yes		629,451		1,161,136		-		1,161,136		-		-		1,161,136		-
09/19/18	09/28/21		6.00	%	Yes		10,000		10,000		-		10,000		-		-		10,000		-
12/14/18	12/22/18		24.00	%*	Yes		474,759		578,075		-		578,075		-		-		578,075		-
01/02/19	(4)		17.00	%	No		310,000		310,000		-		310,000		10,000		-		300,000		-
08/14/19	10/31/2021		8.00	%	Yes		26,200		26,200		-		26,200		-		-		26,200		-
(5)	10/31/2021		8.00	%	Yes		105,000		40,000		-		40,000		5,000		-		35,000		-
(6)	01/02/22		8.00	%	Yes		296,750		225,000		-		225,000		15,000		-		210,000		-
(8)	05/12/22		8.00	%	Yes		15,000		15,000		-		15,000		-		-		15,000		-
(9)	09/01/22		8.00	%	Yes		170,000		155,000		-		155,000		-		-		155,000		-
(10)	08/30/23		8.00	%	No		285,000		280,000		-		280,000		5,000		-		275,000		-
(11)	11/30/23		8.00	%	No		5,000		5,000		-		5,000		5,000		-		-		-
(7)	(7)		10.00	%	No		625,000		625,000		-		625,000		-		-		625,000		-
						$	9,850,598	$	8,631,513	$	-	$	8,631,513	$	2,421,670	$	-	$	6,209,843	$	-

(1)	Maturity date is 90 days after demand.

F-12

Table of Contents

(2)	Bridge loans were issued at dates between December 2017 and May 2018. Principal is due on the earlier of 18 months from the anniversary date or the completion of L2 financing with gross proceeds of a minimum of $1.5 million.
(3)	L2 - Note was drawn down in five tranches between 02/16/18 and 05/02/18.
(4)	Loans were issued from 01/02/19 to 03/23/19. Principal and interest are due when funds are received from the litigation between Ocean Thermal Energy Corporation vs. Robert Coe, et al.
(5)	Notes were issued between 10/14/19 and 11/05/19. The notes bear an interest rate of 8% and mature 10/31/21. They can be converted into 250,000 shares of common stock. They can be converted when the stock closing price reaches $1 or on the maturity, whichever occurs first.
(6)	Notes were issued between 12/09/19 and 11/25/20. The notes bear an interest rate of 8% and mature 01/02/22. They can be converted into 250,000 shares of common stock. They can be converted when the stock closing price reaches $1 or on the maturity, whichever occurs first.
(7)	Notes were issued between 11/02/20 and 03/18/21. The notes bear an interest rate of 10%. Repayment will be made as follows: (i) the principal and interest within five business days following our receipt of $25.5 million from the Robert Coe, et al. Phase One Litigation; and (ii) the additional payment within five business days following our actual receipt of any funds from the Robert Coe, et al. Phase Two Litigation, less legal fees accrued up to that date. Payment will be made as such funds are actually received by us and after deductions of accrued legal fees up to that date.
(8)	Notes were issued between 05/14/20 and 08/11/20. The notes bear an interest rate of 8% and mature 05/12/22. They can be converted into 250,000 shares of common stock. They can be converted when the stock closing price reaches $1 or on the maturity, whichever occurs first.
(9)	Notes were issued in November 2020 and during the first two quarters of 2021. The notes bear an interest rate of 8% and mature 09/01/22. They can be converted into 250,000 shares of common stock. They can be converted when the stock closing price reaches $1 or on the maturity, whichever occurs first.
(10)	Notes were issued during the third quarter of 2021. The notes bear an interest rate of 8% and mature 08/30/23. They can be converted into 250,000 shares of common stock. They can be converted when the stock closing price reaches $1 or on the maturity, whichever occurs first.
(11)	Note was issued during November of 2021. The note bears an interest rate of 8% and matures 11/30/23. It can be converted into 250,000 shares of common stock. It can be converted when the stock closing price reaches $1 or on the maturity, whichever occurs first.
*	Default interest rate.

NOTE 5 – DERIVATIVE LIABILITY

We measure the fair value of our assets and liabilities under the guidance of ASC 820, Fair Value Measurements and Disclosures, which defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and expands disclosures about fair value measurements. ASC 820 does not require any new fair value measurements, but its provisions apply to all other accounting pronouncements that require or permit fair value measurement.

Following is a description of the valuation methodologies used to determine the fair value of our financial liabilities, including the general classification of such instruments pursuant to the valuation hierarchy:

Fair Value at

December 31,

Quoted market prices

for identical

assets/liabilities

(Level 1)

Significant other

observable inputs

(Level 2)

Significant

unobservable inputs

(Level 3)

Derivative Liability, December 31, 2024

9,423,915

Derivative Liability, December 31, 2023

12,404,707

The reconciliation of the derivative liability for the years ended December 31, 2024 and 2023 is as follows:

	For the Years Ended December 31
	2024			2023
Derivative liability as of January 1	$	12,404,707		$	6,998,262
Addition to derivative instruments		56,125			-
Derivative liability extinguished upon conversion of notes payable		(168,806	)		(2,602	)
Change in fair value of derivative liability		(2,868,111	)		5,409,047
Derivative liability as of December 31	$	9,423,915		$	12,404,707

F-13

The fair value of the derivative liability was estimated using the Black-Scholes option-valuation model. The fair values at the remeasurement dates for our derivative liabilities were based upon the following management assumptions:

	For the Years Ended December 31
	2024			2023
Expected dividends		0	%		0	%
Expected volatility	118%-912%			319%-545%
Risk free interest rate	4.07%-5.48%			4.79%-5.4%
Expected term (in years)	0.25– 5.1 years			0.25– 1 year

The fair value at the remeasurement date is equal to the carrying value on the balance sheet.

NOTE 6 – STOCKHOLDERS’ DEFICIT

Common Stock

During the year ended December 31, 2024, we issued 5,641,655 shares of common stock upon conversion of $30,747 of convertible notes payable.

There were no common stock transactions during the year ended December 31, 2023.

Preferred Stock

On December 31, 2021, our board of directors approved a resolution authorizing the withdrawal of the certificate of designation of our Series A preferred stock. No shares were outstanding at the time of withdrawal.

On June 6, 2023, the board of directors agreed to amend the Certificate of Designation to authorize an additional 400 Series D Convertible Preferred Shares. On June 9, 2023, the Series D Convertible Preferred Stockholders approved that increase by majority written consent and the amendment was filed with the Nevada Secretary of State on June 12, 2023.

Series B Preferred Stock – We are authorized to issue 1,250,000 shares of Series B Preferred Stock with a par value of $0.001. These shares will not have voting rights alongside the common stock and each share of Series B Preferred Stock will be convertible into ten shares of our common stock. As of December 31, 2023 and 2022, 518,750 shares of Series B Preferred Stock have been issued.

Series C Preferred Stock – We are authorized to issue 2,700,000 shares of Series C Preferred Stock with a par value of $0.001. These shares are a one-time grant and will have voting rights alongside the common stock. Each share of Series C Preferred Stock will be convertible into five shares of our common stock. As of December 31, 2023 and 2022, 2,300,000 shares of Series C Preferred Stock have been issued.

Series D Preferred Stock (authorized December 31, 2021) – We are authorized to issue 1,400 shares of Series D Preferred Stock with a par value of $0.001. These shares will have voting rights alongside the common stock and each share of Series D Preferred Stock will be convertible into 200,000 shares of our common stock as set forth in the certificate of designation. Each share of Series D Preferred Stock shall be converted automatically upon the effectiveness of a registration statement registering the resale of the common stock to be issued upon the conversion of the Series D Preferred Stock, or at any time following a merger or consolidation of the Corporation with or into an unaffiliated entity or the sale of all or substantially all of the assets of the Corporation to an unaffiliated third party, at the election of the holder. As of December 31, 2023 and 2022, 1,202 and 278 shares of Series D Preferred Stock have been issued.

During the year ended December 31, 2024, we issued 198 shares of Series D Preferred Stock for cash proceeds of $396,000.

During the year ended December 31, 2023, we issued 393 shares of Series D Preferred Stock for cash proceeds of $786,000.

During the year ended December 31, 2023, we issued 500 shares of Series D Preferred Stock to a related party upon conversion of $35,303 of notes and $964,697 of related accrued interest.

During the year ended December 31, 2023, we issued 31 shares of Series D Preferred Stock upon conversion of $46,750 of notes and $12,670 of related accrued interest.

Warrants and Options

The following table summarizes all options and warrants outstanding and exercisable for the years ended December 31, 2024 and 2023:

	Number of			Weighted Average
	Warrants			Exercise Price
Balance at December 31, 2022		125,073		$	0.13
Granted		500,000			0.01
Exercised		(125,073	)		0.13
Forfeited/expired		-			-
Balance at December 31, 2023		500,000		$	0.01
Granted		70,000			0.01
Exercised		-			-
Forfeited/expired		-			-
Balance at December 31, 2024		570,000		$	0.01
Exercisable at December 31, 2024		570,000		$	0.01

F-14

Table of Contents

During November 2023 we issued a common stock purchase option to a consultant to purchase 500,000 shares of common stock. The option has an exercise price of $0.01 per share and expires in 10 years. We have valued the option at $3,750 using the Black-Sholes option-valuation model using the following assumptions: expected dividends of 0%, expected volatility of 301%, expected life of 10 years, and risk-free interest rate of 4.63%.

No warrants were exercised during the years ended December 31, 2024 and 2023.

NOTE 7 – INCOME TAX

Our ability to use our net operating loss carryforwards may be substantially limited due to ownership change limitations that may have occurred or that could occur in the future, as required by Section 382 of the Code, as well as similar state provisions. These ownership changes may limit the amount of net operating loss that can be utilized annually to offset future taxable income and tax, respectively. In general, an “ownership change” as defined by Section 382 of the Code results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50.0% of the outstanding stock of a company by certain stockholders or public groups.

We have not completed a study to assess whether an ownership change has occurred or whether there have been multiple ownership changes since we became a “loss corporation” under the definition of Section 382. If we have experienced an ownership change, utilization of the net operating loss carryforwards would be subject to an annual limitation under Section 382 of the Code, which is determined by first multiplying the value of our stock at the time of the ownership change by the applicable long-term, tax-exempt rate, and then could be subject to additional adjustments, as required. Any limitation may result in expiration of a portion of the net operating loss carryforwards before utilization. Further, until a study is completed, and any limitation known, no positions related to limitations are being considered as an uncertain tax position or disclosed as an unrecognized tax benefit. Any carryforwards that expire prior to utilization as a result of such limitations will be removed from deferred tax assets with a corresponding reduction of the valuation allowance. Due to the existence of the valuation allowance, it is not expected that any possible limitation will have an impact on our results of operations or financial position.

The actual tax benefit differs from the expected tax benefit for the years ended December 31, 2024 and 2023 (computed by applying the U.S. federal corporate tax rate of 21% to income before taxes), as follows:

	2024			2023
Statutory federal income tax rate		(21.0	)%		(21.0	)%
State income taxes, net of federal benefits		(7.9	)%		(7.9	)%
Non-deductible items		(79.5	)%		17.2	%
Valuation allowance		108.4	%		11.7	%
Effective income tax rate		-	%		-	%

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets and liabilities are as follows:

	For the Years Ended December 31
	2024			2023
Impairment	$	2,358,860		$	2,358,860
Accrued Compensation		1,951,296			1,731,367
Operating loss carryforwards		12,735,913			11,776,337
Gross deferred tax assets		17,046,069			15,866,564
Valuation allowance		(17,046,069	)		(15,866,564	)
Net deferred income tax asset	$	-		$	-

We have net operating loss carryforwards for income tax purposes of approximately $20.9 million that are available to be offset against future income through 2037. We have net operating loss carryforwards of approximately $23.2 million that can be used indefinitely subject to limitations. The tax benefits relating to all timing differences have been fully reserved for in the valuation allowance account due to the substantial losses incurred through December 31, 2024. The change in the valuation allowance for the years ended December 31, 2024 and 2023, was an increase of $1.18 million and $1.09 million, respectively.

NOTE 8 – COMMITMENTS AND CONTINGENCIES

From time to time, the Company may be involved in legal proceedings and regulatory proceedings arising from its operations. Management established reserves for specific liabilities in connection with legal actions that management deems to be probable and estimable. Certain lawsuits, claims and proceedings are described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. While the outcome of litigation cannot be predicted with certainty, and some of these lawsuits, claims or proceedings may be determined adversely to the Company, management does not believe that the disposition of any such pending matters is likely to have a material adverse effect on the Company’s financial condition or operation, although the resolution in any reporting period of one or more of these matters could have a material adverse effect on the Company’s results of operations for that period.

F-15

Table of Contents

Litigation

On May 21, 2019, Theodore T. Herman filed a complaint against us in Theodore T. Herman v. Ocean Thermal Energy Corporation, Case No. CI-19-04780, in the Court of Common Pleas of Lancaster County, Pennsylvania, asserting that he is entitled to payment on the promissory note described in Note 4: Convertible Notes and Notes Payable. On July 1, 2019, we filed preliminary objections to the complaint, and subsequently filed an answer and new matter on August 20, 2019, to which the plaintiff filed a reply on September 9, 2019. Herman has not pursued this action since 2020, and on October 7, 2025, the court terminated the case with prejudice for failure to prosecute.

On August 22, 2018, Fugro USA Maine, Inc. (“Fugro”), filed suit against us in Fugro USA Marine, Inc. v. Ocean Thermal Energy Corp., Cause No. 2018-56396, in the District Court for Harris County, TX, 165th Judicial District, seeking approximately $500,000 allegedly owed for engineering services provided. On June 23, 2020, a settlement was reached under which we would pay Fugro $375,000 by June 30, 2021. We were unable to pay the remaining balance and therefore entered into a second amendment to the settlement agreement extending the deadline for full payment, with 18% interest per annum, to December 31, 2021. We will continue to make regular monthly payments to Fugro of $10,000 per month, until the balance owed has been paid. We have recorded the amount of accrued legal settlement as of December 31, 2024. We have repaid $260,000 and the balance at December 31, 2024 was $115,000, with accrued interest of $93,299 at December 31, 2024.

Agreement to Sell Subsidiary

On August 25, 2022, we entered into a Stock Purchase Agreement to sell OCEES to Epaphus Global Energy, LLC (“Epaphus”). Epaphus is controlled by Jeremy Feakins, our Chief Executive Officer and a director. The transaction was approved unanimously by our directors who do not have an interest in the transaction.

In exchange for the sale of OCEES, we will receive:

	•	$1,000,000 in the form of canceled amounts owed by us to certain individuals, including Mr. Feakins, who have assigned their right to receive those payments to Epaphus;
	•	$75,000 in cash per month for 12 months following the date of the purchase agreement; and
	•	70% of the net profit of any currently contemplated project to build an ocean thermal energy conversion power plants entered into by OCEES.

Under the terms of the purchase agreement, Epaphus has the unilateral right to return OCEES to us and receive a full refund of all portions of the purchase price paid as of the return of OCEES at any time for year following the date of the purchase agreement.

By mutual consent of the parties, the purchase agreement has not closed as of December 31, 2024, or through the date of filing of this report. As a result, it has not been reflected in these financial statements.

NOTE 9 – EMPLOYMENT AGREEMENTS

On January 1, 2011, we entered into a five-year employment agreement with our chief executive officer, which provides for successive one-year term renewals unless it is expressly cancelled by either party 100 days prior to the end of the term. Under the agreement, our chief executive officer will receive an annual salary of $350,000, a car allowance of $12,000, and company-paid health insurance. The agreement also provides for bonuses equal to one times his annual salary plus 500,000 shares of common stock for each additional project that generates $25 million or more in revenue to us. Our chief executive officer is entitled to receive severance pay in the lesser amount of three years’ salary or 100% of the remaining salary if the remaining term is less than three years. On September 15, 2017, an addendum was added to the employment agreement stating that effective June 30, 2017, his salary will be increased to $388,220 per year; that he will receive interest at a rate of 8% on his accrued unpaid wages; and that the term of employment agreement is extended for an additional five years. Effective June 9, 2022, we entered into a second addendum to the employment contract. Among other provisions, the addendum extends the employment agreement through December 31, 2025 and increases the annual salary to $454,738 from $388,220. The agreement also provides for annual increases based on increases in the US Bureau of Labor Statistics Consumer Price Index.

Effective January 1, 2023, the board of directors approved an increase in the chief executive officer’s annual salary for 2023 to $568,422 from $454,738. Effective, January 1, 2024, the annual salary was increased to $587,748, based on the increase in the Consumer Price Index.

NOTE 10 – RELATED-PARTY TRANSACTIONS

Through May 31, 2023, we incurred monthly rent of $10,000 to a company controlled by our chief executive officer under an operating lease agreement. The lease was for a one-year term and, unless either party gave to the other written notice of termination, the term would renew for a further period of one year, and so on from year to year until terminated by either party. The lease was terminated on May 31, 2023. For the year ended December 31, 2023 rent expense pursuant to this lease was $50,000 and $120,000, respectively. At December 31, 2024 and 2023, we had a payable to the entity of $0 and $10,000, respectively.

F-16

Table of Contents

In May 2023, we entered into a month-to-month agreement with a company controlled by our chief executive officer for shared use of an office and facilities. For the years ended December 31, 2024 and 2023, rent expense was $15,200 and $8,000, respectively.

From time to time, we enter into loans and notes payable with related parties. Refer to Note 4 for details on notes payable and convertible notes payable to related parties.

Accrued interest on related-party notes was $1,142,539 and $920,439 at December 31, 2024 and 2023, respectively.

During the year ended December 31, 2023, we issued 500 shares of Series D Preferred Stock to a related party upon conversion of $35,303 of notes and $964,697 of related accrued interest.

During the year ended December 31, 2024, we repaid $1,080 in net working capital advances from related parties. During the year ended December 31, 2023, we received $3,708 in net working capital advances from related parties.

NOTE 11 – SUBSEQUENT EVENTS

During January and February 2025, we sold an additional $55,000 of convertible note units, with the same terms as sold in November and December, 2024, as described in Note 4.

During 2025, we entered into stock purchase agreements with a number of investors. The investors agreed to purchase 16,375,000 shares of common stock, and we received aggregate proceeds of $242,500. To date, no shares of common stock have been issued pursuant to these agreements.

In January 2025, the Company, as a subcontractor to Johnson Controls Government Systems, received a contract award to provide engineering designs and feasibility analysis for an Ocean Thermal Energy Conversion (OTEC) power system at U.S. Army Garrison – Kwajalein Atoll. The scope of work includes technical assessments and design studies for a 17.2 MW OTEC facility coupled with desalinated water production. The contract is valued at approximately $3.6 million and represents a significant milestone in advancing the commercialization of OTEC technology. Upon completion of this phase, the Company anticipates discussions with the U.S. Army regarding a potential long-term Power Purchase Agreement for system deployment.

F- 17

Ocean Thermal Energy Corp 10-K