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CleanGo Innovations Inc. Management Reports 2026
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Management Reports
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CLEANGO INNOVATIONS INC.
Management Discussion & Analysis
For the years ended
December 31, 2025, and 2024
April 14, 2026
CleanGo Innovations Inc.
Management Discussion & Analysis
For the years ended December 31, 2025 and 2024
The following Management's Discussion and Analysis ("MD&A"), prepared as of April 14, 2026, should be read in conjunction with the consolidated financial statements and notes for the year ended December 31, 2025 and 2024 of CleanGo Innovations Inc. (the "Company" or "CleanGo"). The referenced consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). All dollar amounts are expressed in Canadian dollars unless otherwise indicated.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
The information provided in this MD&A, including information incorporated by reference, may contain "forward-looking statements" about the Company. In addition, the Company may make or approve certain statements in future filings with Canadian securities regulatory authorities, in press releases, or in oral or written presentations by representatives of the Company that are not statements of historical fact and may also constitute forward-looking statements. All statements, other than statements of historical fact, made by the Company that address activities, events or developments that the Company expects or anticipates will or may occur in the future are forward-looking statements, including, but not limited to, statements preceded by, followed by or that include words such as "may", "will", "would", "could", "should", "believes", "estimates", "projects", "potential", "expects", "plans", "intends", "anticipates", "targeted", "continues", "forecasts", "designed", "goal", or the negative of those words or other similar or comparable words. Such statements reflect our current views with respect to future events and are subject to risks and uncertainties and are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Company, are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Many factors could cause our actual results, performance or achievements to be materially different from any future results, performance, or achievements that may be expressed or implied by such forward-looking statements. In making the forward-looking statements included in this MD&A, the Company has made various material assumptions, including, but not limited to: (i) receiving patents on its proprietary product formulation; (ii) obtaining enough customers to create market; (iii) general business and economic conditions; (iv) the availability of financing on reasonable terms; (v) the Company's ability to attract and retain skilled staff; (vi) market competition; (vii) the products and technology offered by the Company's competitors; and (viii) the Company's ability to protect proprietary rights.
In evaluating forward-looking statements, current and prospective shareholders should specifically consider various factors, including the risks outlined below under the heading "Financial Instruments and Risks". Should one or more of these risks or uncertainties, or a risk that is not currently known to us materialize, or should assumptions underlying those forward-looking statements prove incorrect, actual results may vary materially from those described herein. These forward-looking statements are made as of the date of this MD&A and we do not intend, and do not assume any obligation, to update these forward-looking statements, except as required by applicable securities laws. Investors are cautioned that forward-looking statements are not guarantees of future performance and are inherently uncertain. Accordingly, investors are cautioned not to put undue reliance on forward-looking statements.
OVERVIEW AND OUTLOOK
CleanGo Innovations Inc. was incorporated as CDN Bventures Ltd. on October 30, 2014, under the Business Corporations Act (British Columbia). On August 27, 2021, the Company began trading on the Canadian Securities Exchange ("Exchange") under the symbol "CGII". The Company's principal business activity is to manufacture and sell cleaning and disinfecting and descaling solutions using a proprietary formulation which is non-toxic, biodegradable and uses no harsh chemicals to provide a green solution to buyers.
Significant Events
In 2014, the Company obtained an exclusive worldwide licensing agreement from Emporium Group S.A., a related company owned by the inventor and patent holder to utilize the proprietary solution to sell cleaning, disinfecting and descaling products.
Recent global issues, including the ongoing tariff uncertainty in the global marketplace and the 2022 Russian invasion of Ukraine have adversely affected workplaces, economies, supply chains, and financial markets globally. It is not possible for the Company to predict the duration or magnitude of the adverse results of these issues and their effects on the Company's business or results of operations this time.
CleanGo Innovations Inc.
Management Discussion & Analysis
For the years ended December 31, 2025 and 2024
We generally believe that our performance and future success depend on a number of factors that present significant opportunities for us. These factors are also subject to a number of inherent risks and challenges, some of which are discussed below in the Financial Instruments and Risks section of this MD&A.
On November 20, 2020, the Company entered into an Arrangement Agreement (the "Arrangement") with CleanGo GreenGo under which a reverse acquisition transaction (the "Transaction" or "RTO") would be completed.
In late 2020, the Company was issued a Drug Identification Number ("DIN") for each of the Industrial and Total Purpose sprays and is actively pursuing DINs for its wipes and fogging lines. The DIN number has strategic importance as it enables the Company to make disinfecting claims on its label, as opposed to sanitizing claims only. Further, the product kills the human coronavirus, and numerous others, in a 10-minute standard exposure test.
On August 27, 2021, the Company closed an arm's length business combination whereby the Company acquired all of the issued and outstanding common shares of CleanGo GreenGo. Upon closing, former CleanGo GreenGo shareholders held approximately 54% of the outstanding shares of the Company; accordingly, the Transaction is considered to be a reverse take-over transaction under which CleanGo GreenGo is identified as the accounting acquirer. Concurrently, a non-brokered $1.0 million private placement occurred resulting in SoftLab9 issuing 2.5 million units priced at $0.40 per unit which was comprised of 1 common share and 1/2 of a share purchase warrant, with each warrant convertible into a common share at $0.70 per share.
On September 22, 2021, the Company received a DIN number from Health Canada for its plant-based, hand cream topical that has the same efficacy as 70% alcohol-based hand sanitizer. This represents the fourth Health Canada approval for CleanGo in 2021.
On January 6, 2022, CleanGo announced its wholly owned subsidiary CleanGo GreenGo has received Green Seal Certification of its compliance with industry leading GS-8 standards for its three-flagship cleaning and disinfecting products: CleanGo GreenGo Total Purpose, Fabric and Carpet & Industrial cleaners. CleanGo GreenGo's products met Green Seal's stringent standard for household use cleaning products. Green Seal requires products to be made from renewable material and sets strict sustainability criteria covering everything from raw materials to production to packaging. The cleaners were screened for carcinogens, reproductive toxins, mutagens, phthalates, parabens, and any other toxic ingredients that don't belong near adults, children or pets. Only the safest, most responsible, and most effective products achievable today are able to meet this standard.
On April 26, 2022, CleanGo announced that they have begun the steps to relocate the primary manufacturing facility to the Houston, Texas area. The Board of Directors opted to adopt the initiative as a reaction to the growing demand in large Industrial based orders and to fine tune the distribution pipeline. Currently CleanGo GreenGo a wholly owned subsidiary of CleanGo Innovations Inc. has a manufacturing facility located in Calgary, Alberta Canada and a third-party manufacturing facility located in Los Angeles, California. The decision to relocate the manufacturing, distribution, and warehousing under one roof in Texas is economically sound. Further to this CleanGo will integrate ISO & GMP certifications into the new facility eliminating the requirement of third party blending and packaging services. These certifications will aid in the ability to offer our bottling and manufacturing services to our white label and private clients.
On September 13, 2022, CleanGo announced the creation of two new proprietary products. The two new products are a Foaming/Sanitizing Toilet Bowl Cleaner and a New Gel Total Purpose Solution.
On June 14, 2023, the company received a purchase order from Oleum Partners LLC. for 14,000 Litres of CleanGo's Proprietary Oil and Gas formulation to deploy in a well located just outside of the Dallas, Fort Worth area of Texas.
On August 16, 2023, CleanGo reported that after the introduction of the CS-100 Enhanced Oil Recovery Solution to the well located in the North Texas area of Denton (just outside of Fort Worth) has resulted in the production of oil for the first time since the new reservoir was completed. After 8 days the reservoir that failed to produce hydrocarbons prior to the treatment started to produce both oil and gas. The CG-100 proprietary solution was successful in turning a previously damaged formation into a viable and economic reservoir.
On January 24, 2024, CleanGo announced the development of a new cleaning product temporarily named, 'CDP'. This innovative product is believed to be a unique offering in the industrial cleaning landscape with its proprietary formula and eco-friendly approach.
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CleanGo Innovations Inc.
Management Discussion & Analysis
For the years ended December 31, 2025 and 2024
On February 1, 2024, CleanGo announced a strategic alliance with Bottle n Pak Texas and is confident that this collaboration with BOTTLE N Pak Texas will significantly improve its cash flow, Bottle n' Pak Texas specializes in servicing a market segment that requires lower Minimum Order Quantities (MOQs), thus catering to smaller companies.
On March 26, 2024, CleanGo obtained DTC eligibility for their US electronic clearing.
On April 3, 2024, CleanGo and Indioquimica S.A. completed a strategic supplier agreement to expand CleanGo's products into South America. As part of the agreement, Indioquimica S.A. will represent and showcase CleanGo's breakthrough product, CG-100, at the Argentina Oil & Gas (AOG) Patagonia 2024 Expo in Neuquén, Argentina.
On October 1, 2024, CleanGo was spotlighted by Green Seal, a globally recognized non-profit organization dedicated to certifying products that meet the highest standards of environmental responsibility and performance. Green Seal certification is one of the most coveted badges in the industry, signifying that products have undergone rigorous testing and comply with strict criteria for environmental safety, non-toxicity, and effectiveness
Also on October 1, 2024, CleanGo announced a new distribution agreement with Spare My Change Marketing, Inc., based in Farmingdale, NY. This partnership will strategically expand CleanGo's retail and commercial sales across new markets, enhancing brand visibility and access to CleanGo's eco-friendly product lineup. Spare My Change Marketing, Inc. will leverage its extensive network to drive growth, allowing CleanGo to reach a broader audience of environmentally conscious consumers and businesses.
On January 21, 2025, CleanGo announced the formation of Kubera Black Technologies Inc., a wholly owned subsidiary poised to become a driving force in the business development and incubation of high-growth, innovative companies across diverse sectors. The establishment of Kubera Black addresses a critical global need for startup capital and fills a void in the rapidly expanding innovation sector, particularly in areas often overlooked by traditional financing and private equity. With a focus on identifying and nurturing promising ventures, Kubera Black is strategically positioned to capitalize on untapped market opportunities.
On May 8, 2025, CleanGo announced a strategic distribution agreement with Heavy Equipment Maintenance & Trading ("H.E.M.T") to facilitate CleanGo's innovative and environmentally responsible CG-100 product throughout Oman. Oman's influential role in the global oil and gas sector, coupled with H.E.M.T.'s extensive network and established relationships with all the major companies, provides a powerful international platform for the CG-100.
On March 27, 2026, the Company announced it has entered into a definitive Stock Purchase Agreement to acquire a 49% equity stake in AgritechBC Solutions Inc. a Canadian Controlled Private Company. This transaction aligns CleanGo's green solutions and capital markets expertise with a global reach for AgritechBC's proprietary, nature-based technologies to address the escalating global demand for organic environmental restoration. The acquisition focuses on a suite of exclusive intellectual property that represents a paradigm shift in environmental science. AgritechBC's technologies, including MycoSet™, BioIngress™, and PhytoCentra™, these products are developed on a foundation of solid, natural, and scientifically proven processes. Unlike traditional chemical treatments, these solutions are truly organic, utilizing natural mechanisms to manage landfill waste and remediate contaminated industrial sites, oil leases without introducing synthetic toxins into the ecosystem.
SELECTED FINANCIAL INFORMATION
The following is a summary of selected financial information of the Company for the years ended December 31, 2025, and 2024.
| 2025 | 2024 | |
|---|---|---|
| For the year ended December 31 | $ | $ |
| Total revenues | 151,680 | 209,037 |
| Cost of sales | (93,541) | (120,930) |
| Gross margin | 58,139 | 88,107 |
| Net loss | (1,461,538) | (970,016) |
| Net loss per share - basic and diluted* | (0.23) | (0.20) |
| * No exercise or conversion is assumed during the periods in which a loss is incurred, as the effect is anti-dilutive. | ||
| 2025 | 2024 | |
| As the year ended December 31 | $ | $ |
| Total assets | 288,762 | 366,465 |
| Long term liabilities | - | - |
| Working capital deficit | (1,040,339) | (1,319,113) |
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CleanGo Innovations Inc.
Management Discussion & Analysis
For the years ended December 31, 2025 and 2024
The decline in revenues for the year ended December 31, 2025 was due to our long time distribution partner in Canada had an unusually slow year, resulting in fewer sales for CleanGo GreenGo.
The change in operating loss for the year ended December 31, 2025 was due to increased stock based compensation ($779,232 in 2025 compared to $80,556 in 2024) which was partially offset by decreases in selling, general and administrative expenses ($579,122 in 2025 compared to $715,661 in 2024), interest expense ($85,395 in 2025 compared to $188,124 in 2024) and amortization expense ($88,588 in 2025 compared to $138,543 in 2024.)
Total assets decreased by $77,703 ($288,762 as at December 31, 2025 compared to $366,465 as at December 31, 2024) due to the termination of the office lease in June 2025.
DISCUSSION OF OPERATIONS
Going Concern
The consolidated financial statements have been prepared on a going concern basis, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. Should the Company be unable to continue as a going concern, it may be unable to realize the carrying value of its assets and to meet its liabilities as they become due. For the year ended December 31, 2025, the Company had a net loss of $1,461,538 (2024 - $970,016) an accumulated deficit of $13,552,158 (2024 - $12,090,620) and expects to incur further losses in the development of its business, all of which casts significant doubt about the Company's ability to continue as a going concern. The continued operations of the Company are dependent on its ability to obtain additional financing until it can produce revenues sufficient to cover its costs. Management is of the opinion that sufficient working capital will be obtained from external financing to meet the Company's liabilities and commitments as they become due, although there is a risk that additional financing will not be available on a timely basis or on terms acceptable to the Company. These events and conditions indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. Should the Company not be able to continue as a going concern, adjustments to the recorded amount and classifications of assets, liabilities and expenses will be required. Such adjustments could be material. Management also monitors recent developments in relation to global tariffs and currently does not anticipate any material impacts on the financial position of the Company.
In an effort to address the elevated going concern risk during the year ended December 31, 2025 and subsequent the Company has:
(i) Reduced general and administrative expenses and;
(ii) Continued to seek equity financing to enable the Company to support ongoing operations.
LIQUIDITY AND CAPITAL RESOURCES
As at December 31, 2025, the Company's capital is composed of cash, shareholders' deficit, and loans from related parties. The Company's primary objectives, when managing its capital, are to maintain adequate levels of funding to support operations of the Company and to maintain corporate and administrative functions. The Company defines capital as cash and equity, consisting of the issued common stock. The Company had cash of $87,022 as at December 31, 2025 (December 31, 2024 - $101,335), and the Company had a working capital deficit of $1,040,339 as at December 31, 2025, ($1,319,113 as at December 31, 2024.)
During the year ended December 31, 2025, cash used in operations decreased by $190,644 ($166,744 for the year ended December 31, 2025 compared to $357,388 for the year ended December 31, 2024) mainly due to an increase in accounts payable and accrued liabilities. Cash from financing activities decreased slightly for the year ended December 31, 2025 largely due to the timing of the receipt of cash for the May 2025 private placement.
The Company manages its capital structure in a manner that provides sufficient funding for operational and capital expenditure activities. Funds are secured through revenues or equity capital raised by means of private placements. There can be no assurances that the Company will be able to obtain debt or equity capital in the case of working capital deficits. The Company is not subject to any externally imposed capital requirements. If additional funds are required, the Company plans to raise additional
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CleanGo Innovations Inc.
Management Discussion & Analysis
For the years ended December 31, 2025 and 2024
capital primarily through the private placement of its equity securities. Under such circumstances, there is no assurance that the Company will be able to obtain further funds required for the Company's continued working capital requirements. There were no changes to the Company's approach to capital management during the year ended December 31,2025.
SUMMARY OF ANNUAL RESULTS
| For the year ended December 31, | 2025 | 2024 | 2023 |
|---|---|---|---|
| $ | $ | $ | |
| Net loss | (1,461,538) | (970,016) | (738,665) |
| Basic and diluted loss per share* | (0.23) | (0.20) | (0.23) |
| Total assets | 288,762 | 366,465 | 842,354 |
| Working capital deficiency | (1,040,339) | (1,319,113) | (575,465) |
- No exercise or conversion is assumed during the periods in which a loss is incurred, as the effect is anti-dilutive.
SHARE CAPITAL
The Company has authorized unlimited common shares without par value.
During the year ended December 31, 2025:
- The Company issued 545,000 common shares for the redemption of the April 26 convertible debenture with an exercise price of $0.375 per share.
- The Company issued 883,742 common share units at a price of $0.35 per unit for gross proceeds of $309,309. Each unit consisted of 1 common share of the Company and ½ share purchase warrant, with an exercise price of $0.50 and an expiry date of May 28, 2027. The warrants were valued at $99,099 using the relative fair value method.
- The Company issued 694,845 common shares to settle debts of $243,196 for various consulting agreements. The shares were valued at $0.35 per share.
- The Company issued 184,333 common shares for the redemption of the June 26, 2023 convertible debenture with an exercise price of $0.375 per share.
- The Company issued 9,375 shares for the exercise of 9,375 options with an exercise price of $0.40, for gross proceeds of $3,750
During the year ended December 31, 2024:
- The Company issued 10,000 shares at a price of $0.90 per share for the redemption of warrants.
- The Company issued 302,934 shares for the exercise of 250,000 warrants with an exercise price of $0.40, 17,798 options with an exercise price of $0.40 and 35,136 options with an exercise price of $0.35.
CONVERTIBLE NOTES
On April 26, 2023, and June 26, 2023, the Company closed the first and second tranche of a non-brokered private placement of convertible note units of the Company respectively of convertible notes in multiples of $1,000 of principal and 2,500 common share purchase warrants per $1,000 of principal.
The note bore interest at a rate of 1.5% per month and principal and accrued interest is repayable in common shares of the Company at a conversion price of $0.375 per share at maturity 24 months from the date of issuance or at the time of earlier conversion at the option of either the noteholder or the Company. If the noteholder elected to convert within the first year, the payment of interest will be waived. Each Warrant entitled the holder to acquire one common share of the Company at an exercise price of $0.40 per share for a period of two years from issuance.
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CleanGo Innovations Inc.
Management Discussion & Analysis
For the years ended December 31, 2025 and 2024
First Tranche
In connection with the First Tranche, the Company issued a note with a principal value of $150,000 and 375,000 warrants for gross proceeds of $150,000. During the year ended December 31, 2025, the note was converted into 545,000 common shares of the Company.
| Balance December 31, 2023 | $ 118,288 |
|---|---|
| Accrued Interest | 27,000 |
| Accretion of convertible note | 31,810 |
| Balance December 31, 2024 | $ 177,098 |
| Accrued Interest | 8,700 |
| Accretion of convertible note (Note 9) | 12,164 |
| Conversion to common shares | (197,962) |
| Balance December 31, 2025 | $ - |
Second Tranche
In connection with the Second Tranche, the Company issued a note with a principal value of $50,000 and 125,000 Warrants for gross proceeds of $50,000. During the year ended December 31, 2025, the note was converted into 184,333 common shares of the Company.
| Balance December 31, 2023 | $ 37,425 |
|---|---|
| Accrued Interest | 9,000 |
| Accretion of convertible note (Note 9) | 10,150 |
| Balance December 31, 2024 | $ 56,575 |
| Accrued Interest | 4,950 |
| Accretion of convertible note (Note 9) | 6,021 |
| Conversion to common shares | (67,546) |
| Balance December 31, 2025 | $ - |
RELATED PARTY TRANSACTIONS AND MANAGEMENT AND BOARD COMPENSATION
Key management personnel include those persons having authority and responsibility for planning, directing and controlling the activities of the Company as a whole. The Company has determined that key management personnel consist of executive and non-executive members of the Company's Board of Directors and corporate officers. Related party transactions are in the normal course of operations and initially measured at fair value. Amounts due to or from related parties are non-interest bearing, due on demand and unsecured, unless specified. The following related party transactions represent amounts incurred during the year ended December 31:
| For the year ended December 31, | 2025 | 2024 |
|---|---|---|
| Consulting fees | $ 270,792 | $ 229,410 |
| Stock-based compensation | - | 64,796 |
| $ 270,792 | $ 294,206 |
CleanGo Innovations Inc.
Management Discussion & Analysis
For the years ended December 31, 2025 and 2024
Summary of amounts payable to related parties:
| December 31, 2025 | December 31, 2024 | ||
|---|---|---|---|
| Directors and officers | $ | 567,952 | $ 488,507 |
| Companies owned by directors | 143,360 | 135,705 | |
| Promissory notes | 356,570 | 298,764 | |
| $ | 1,067,882 | $ 922,976 |
The amounts due to directors and management originated from expenses and consulting fees incurred by the directors and management on the behalf of the Company. One of the payables to the Company owned by directors of $143,360 (December 31, 2024 - $135,705) is related to the acquisition of a worldwide licensing agreement in 2014.
The promissory notes were issued on September 15, 2023, to settle $253,000 and $32,982 (USD $24,000) in accounts payable owed to the CEO in exchange of these notes. These notes were unsecured with interest at 3% per annum and matured on December 31, 2024. The fair value of the promissory notes was estimated using an interest rate specific to the counterparty.
At initial recognition, the estimated debt discount of $83,153 was recorded as contributory premium and credited to contributed surplus. In January 2025, the CEO agreed to extend the notes for an additional twelve-month term with interest accrued at prime plus 5% per annum. During the year ended December 31, 2025, the Company recorded interest expenses of $29,421 (2024 - $11,168) related to these notes.
During the year ended December 31, 2025, the Company signed a twelve-month lease commencing on June 1, 2025, with the CEO to lease warehouse space for USD $2,500 per month. During the year ended December 31, 2025, the Company recorded rent expense of $24,459 ($17,500 USD) which is included in the consolidated statement of loss and comprehensive loss.
OFF-BALANCE SHEET ARRANGEMENTS
The Company has not entered into any off-balance sheet arrangements.
FINANCIAL INSTRUMENTS AND RISKS
a) Fair value risk
Financial instruments recorded at fair value on the consolidated statements of financial position are classified using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of the fair value hierarchy are as follows:
- Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities;
- Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly (i.e., as prices) or indirectly (i.e., derived from prices); and
- Level 3: Inputs that are not based on observable market data
Cash, trade receivables, other receivables, accounts payable and accrued liabilities and related party payables approximate their fair value due to their short-term maturities. Fair value of the Government loan approximate carrying value due to the effective interest rate used in the calculation of the carrying value.
b) Market risk
CleanGo Innovations Inc.
Management Discussion & Analysis
For the years ended December 31, 2025 and 2024
Market risk is the risk that the fair value or future cash flows from a financial instrument will fluctuate because of changes in market prices or prevailing conditions. Market risk comprises two main types of risk: currency risk and interest rate risk and are disclosed as follows:
(i) Currency risk
Currency risk is the risk of change in profit or loss that arises from fluctuations of foreign exchange rates and the degree of volatility of these rates. The Company undertakes sales and purchase transactions in foreign currencies and is therefore subject to gains and losses due to fluctuations in foreign currency exchange rates. The Company does not use derivative instruments to reduce its exposure to foreign currency risk.
The consolidated statements of financial position include the following amounts with respect to financial assets and liabilities for which cash flows are originally denominated in US dollars:
| December 31, 2025 | December 31, 2024 | ||
|---|---|---|---|
| Cash | $ | 5,772 | $ 22,559 |
| Trade receivables | 118 | - | |
| Inventory | 27,538 | 58,422 | |
| Prepaids and deposits | 1,597 | 15,283 | |
| Accounts payable and accrued liabilities | (168,376) | (34,717) | |
| Related party payables | (143,360) | (222,702) | |
| Promissory note | $ | (36,737) | $ (35,882) |
As at December 31, 2025, if a shift in foreign currency exchange rates of 10% were to occur, the foreign exchange gain or loss on the Company's net monetary assets could change by approximately $31,345 (December 31, 2024 - $31,539) due to the fluctuation, and this would be recorded in the consolidated statements of loss and comprehensive loss.
(ii) Interest rate risk
Interest rate risk is the risk that future cash flows will fluctuate as a result of changes in market interest rates. The Company believes it has minimal exposure to risks associated with the effects of fluctuations in the prevailing levels of market interest rates as the majority of its loans have fixed interest rates. The only loans that have a variable interest rate are due to a related party and can be renegotiated if interest rates change significantly.
c) Credit risk
Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations.
All the Company's cash is held through a Canadian and American chartered bank and accordingly, the Company's exposure to credit risk is considered to be limited. The Company's trade receivables exposure to credit risk is considered to be limited.
The Company's trade accounts receivables consists of amounts due from various customers. The maximum exposure to credit risk is equal to the carrying value of accounts receivable. The business models of the Company's respective segments require analysis of credit risk specific to each business line. The Company's historic rate of bad debts is low.
The Company applies the simplified approach to providing for expected credit losses ("ECL") prescribed by IFRS 9, which permits the use of the lifetime expected loss provision for all trade receivables. To measure the ECL, trade receivables are assessed primarily on days past due combined with the Company's knowledge of past bad debts.
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CleanGo Innovations Inc.
Management Discussion & Analysis
For the years ended December 31, 2025 and 2024
d) Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. At December 31, 2025, the Company's cash balance of $87,022 (December 31, 2024 - $101,335) is unable to settle current liabilities of $1,284,863 (December 31, 2024 - $1,563,665). The Company manages its liquidity risk by attempting to maintain sufficient cash balances to enable settlement of transactions on the due date. Due to the working capital deficiency, the Company will need to seek further sources of cashflows through increased revenue and/or additional equity or debt financings.
ADDITIONAL RISK FACTORS
For a detailed description of risk factors associated with the Company, refer to the "Risk Factors" section of the Company's Listing Application, which is available on SEDAR+ at www.sedarplus.ca.
Business Operational Risks
Competition
The Company faces significant competition in the chemical space as it is occupied by highly competitive multinational suppliers. Competitors that can reverse engineer the product or change components identified in the patent. Competition may result in pricing pressures, reduced profit margins or lost market share or a failure to grow the Company's market share, any of which could substantially harm its business and results of operations. The Company competes directly against wholesalers and direct retailers of products, including large, diversified chemical companies with substantial market share and established companies expanding their production lines. Many of the Company's competitors have significant competitive advantages, including longer operating histories, larger and broader customer bases, more established relationships with a broader set of suppliers, greater brand recognition and greater financial, research and development, marketing, distribution and other resources than the Company does. The Company's competitors may be able to achieve and maintain brand awareness and market share more quickly and effectively than it. The Company's competitors may also be able to increase sales in their new and existing markets faster than it does by emphasizing different distribution channels than it does.
Economic Conditions and Consumer Spending
In the chemical space, the Company's customer base consists of national and international retailers, independent stores, and boutiques. The success of the Company is dependent on customers perpetually replenishing their distribution channels with the Company's merchandise, as well as ongoing commitments and purchase orders. The Company's ability to achieve the expected volume and price points of sales indirectly depends on the retailer's continuous ability to sell the Company's products to their end-use consumers. The retail chemical industry is highly sensitive to adverse economic factors, such as consumer debt levels, interest rates, social media reviews, consumer preferences and unemployment rates. Adverse economic conditions can have a negative impact on the volume of sales and gross margins that the Company expects to achieve in the retail industry. Further, the loss of a key client could materially affect future revenues and profitability.
Key Personnel
The senior officers of the Company are critical to its success. In the event of the departure of a senior officer, the Company believes it will be successful in attracting and retaining qualified successors but there can be no assurance of such success. Recruiting qualified personnel as the Company grows is critical to its success. As the Company's business activities grow, it will require additional key financial, administrative and technical personnel as well as additional operations staff. If the Company is not successful in attracting and retaining qualified personnel, the efficiency of its operations could be affected, which could have an adverse impact on the Company's future cash flows, earnings, results of operations and financial condition.
Intellectual Property
The Company believes that its trademarks, patents and regulatory registrations are important to its competitive position. A substantial element of the Company's marketing strategy involves the creation of brand awareness in respect of its trademarks and patented products. The success of the Company will depend, in part, on its ability to maintain proprietary protection over its
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CleanGo Innovations Inc.
Management Discussion & Analysis
For the years ended December 31, 2025 and 2024
intellectual property and operate without infringing the proprietary rights of third parties. Despite precautions, it may be possible for a third party to copy or otherwise obtain and use the Company's technologies without authorization. There can be no assurance that any steps taken by the Company will prevent misappropriation of its intellectual property. In addition, intellectual property protection may be unavailable or limited in some foreign jurisdictions where laws or law enforcement practices may not offer the same level of intellectual property protection as the United States or Canada, and it may be more difficult for the Company to successfully register its intellectual property or challenge the use of its intellectual property by other parties in these jurisdictions. If the Company fails to protect and maintain its intellectual property rights, the value of its brands could be diminished, and the Company's competitive position may suffer.
If any of the Company's intellectual property is successfully challenged, the Company could be forced to rebrand or re-engineer its products, which could result in loss of brand recognition and could require the Company to devote resources to new product development and advertising and marketing of new brands, and the Company's competitive position may suffer, which could have a material adverse effect on its financial condition.
Litigation may be necessary to protect and enforce the Company's intellectual property rights, or to defend against claims brought by third parties. Although the Company is not aware of any current claims, the Company's products may, or may in the future be claimed to violate intellectual property rights of third parties. Although the Company cannot currently estimate the likely outcome of any intellectual property-related claims or lawsuits, any such litigation or claims brought by or against the Company could result in substantial costs and diversion of resources, which could have an adverse effect on the Company's business, financial condition and results of operations. If disputes arise in the future, the Company may not be able to successfully resolve these types of conflicts to its satisfaction.
Government Regulation, Regulatory Approvals and Compliance with Laws
Cross border shipments involved in international trade may be hindered should the Federal Government elect to impose shipping restrictions. As the Company formulates on both sides of the Canada/USA border, with third party supply chains sourced locally, this risk is minimized.
The Company has established DIN numbers, as stated earlier and approvals must be maintained, as required, by Health Canada and US FDA. Labelling shall be maintained to Federal requirements on both sides of the border. With the Company having Health Canada and FDA approvals for its product line, there is risk of the approvals being revoked, but management believes the risk to be negligible.
The Company has maintained compliance with regulators since inception and it will continue to maintain regulatory compliance with governing law into the future.
Trading Price Volatility
The market price of the Company Shares could be subject to significant fluctuations which could materially reduce the market price of the Company Shares regardless of the Company's operating performance. In addition to the other risk factors described in this section of the Listing Statement, such factors include actual or anticipated changes or fluctuations in operating results, adverse market reaction to any indebtedness the Company may incur or securities it may issue in the future, litigation or regulatory action, significant acquisitions, business combinations or other strategic actions or capital commitments by or involving the Company or its competitors, recruitment or departure of key personnel and investors' general perception and reactions to the Company's public disclosure and filings. In addition, broad market and industry factors may harm the market price of the Company Shares. As a result, the market price of the Company Shares may fluctuate based upon factors external to the Company and that may have little or nothing to do with the Company, including expectations of market analysts, positive or negative recommendations or withdrawal of research coverage by analysts, publication of research reports or news stories about the Company, competitors or the industry and changes in general political, economic, industry and market conditions and trends.
Equity financing
The issuance of a substantial number of the Company Shares in the public market could occur at any time. These sales, or the market perception that the holders of a large number of the Company Shares intend to sell the Company Shares, could significantly reduce the market price of the Company Shares and the market price could decline. The Company cannot predict the effect, if any, that future public sales of these securities or the availability of these securities for sale will have on the market price of the Company Shares. If the market price of the Company Shares was to drop as a result, this might impede the Company's ability to raise additional capital and might cause remaining shareholders to lose all or part of their investments.
10
CleanGo Innovations Inc.
Management Discussion & Analysis
For the years ended December 31, 2025 and 2024
Dilution
The Company will be authorized to issue an unlimited number of the Company Shares or other securities for such consideration and on such terms and conditions as may be established by the Company, without the approval of the Company Shareholders. In addition, it is currently anticipated that the Company will be required to conduct additional equity financings to develop the business of the Company as currently planned by the Company and envisioned by management of the Company. Any further issuance of the Company Shares pursuant to such equity financings may further dilute the interests of existing shareholders.
OUTSTANDING SHARE DATA
As of December 31, 2025 and April 14, 2026, the company currently had the following issued and outstanding:
| December 31, 2025 | April 14, 2026 | |
|---|---|---|
| Common shares | 7,314,656 | 8,000,879 |
| Warrants | 3,267,436 | 3,267,436 |
| Options | 399,011 | 399,011 |
| Total | 10,981,103 | 11,667,326 |
Subsequent to the year ended December 31, 2025, the Company issued 686,223 common shares to settle debts of $308,801 for various consulting agreements. The shares were valued at $0.45 per share.
OUTSTANDING WARRANTS DATA
The following table reflects the stock options issued and outstanding as at December 31, 2025
| Grant Date | Expiry Date | Exercise Price | Remaining Contractual Life (years) | Number of Warrants Outstanding |
|---|---|---|---|---|
| April 26, 2023 | April 26, 2026(1) | $ 0.40 | 0.32 | 375,000 |
| June 6, 2023 | June 6, 2026(1) | $ 0.40 | 0.43 | 500,000 |
| June 26, 2023 | June 26, 2026(1) | $ 0.40 | 0.48 | 125,000 |
| December 22, 2023 | December 22, 2026 | $ 0.90 | 0.98 | 825,564 |
| May 28, 2025 | May 28, 2027 | $ 0.50 | 1.41 | 441,872 |
| August 27, 2025 | August 27, 2027 | $ 0.54 | 1.65 | 1,000,000 |
| $ 0.58 | 1.06 | 3,267,436 |
OUTSTANDING OPTIONS DATA
The following table reflects the stock options issued and outstanding as at December 31, 2025
| Grant Date | Expiry Date | Exercise Price | Remaining Contractual Life (years) | Number of options outstanding |
|---|---|---|---|---|
| May 16, 2023 | May 16, 2028 | $ 0.40 | 2.38 | 65,258 |
| July 11, 2023 | July 11, 2028 | $ 0.35 | 2.53 | 140,628 |
| November 18, 2024 | November 18, 2029 | $ 0.40 | 3.88 | 193,125 |
| 3.16 | 399,011 |