The root of our business is manufacturing, turning solid waste into an above ground asset, in other words all that wood, oil, aluminium, copper, iron, cotton and other materials harvested from the planet that we use in consumer items and then throw away when we are done with it can be put back into the economy using automation, robotics, AI, IoT combined with sophisticated hardware, chemical and mechanical knowhow. Our business will do this utilizing advanced sources of sustainable energy, so each plant is autonomous and becomes completely emissions free exemplifying sustainable industry. This is a big undertaking for a start up which is what we are even after existing for fourteen years. Our management discussion and analysis will reflect the capital struggle we have had to get to the point we are now.

We initially transitioned to a sustainability focus in 2008, it took us another 5 years to acquire and settle into our manufacturing role which is discussed in our history. The total focus now of TransAct Energy's business resources over the past 6 years has been bringing a municipal scale (1000 tonnes of municipal solid waste per day or greater) zero-emissions waste optimization plant to market. This involved bringing credibility to the concept and design by engaging third party verification from a globally recognized engineering firms so that the controllers of the waste and financiers of industry would at least give us an audience.

Over the last few years we have been able to secure the components required to bring to fruition the all important first ZEWOPtm, the feedstock (1320 metric tons per day of MSW under a long-term contract), a suitable site (industrial land at least 7 hectares in size, with applicable zoning and no ground contamination), pre-sales of our products (getting commitments out of credible end users) and financing commitments for the complete project. What we have not been able to do yet is get the pre-development capital approximately $20 Million required to satisfy the long-term money, that requires we have a guaranteed EPC contract and the offtake agreements in place. This requires we secure the land, obtain working drawings for tendering the EPC contract, award the EPC and then based on that timeline finalize the offtakes. To obtain the $20 Million, we must constantly find and communicate with potential sources of this money (private funds, hedge funds, venture funds, institutions).

To fund our development stage process, we have raised our operating capital through short-term loans and convertible notes as previously discussed and we will have to continue this practice until we raise the next $24 Million. Over the 14 years we have existed we have accumulated a $12.8 Million deficit, almost half of this can be accounted for in $6.1 Million of interest on less than $400K in what were supposed to be short term loans. The interest associated with these loans was negotiated based on a quick repayment that did not occur. We continue to accrue the interest on its original terms until we can negotiate/repay the same. A large portion of the balance of the deficit can be attributed to compensation whether consultants or employees and will escalate from this point forward as we must enlarge the team as we get closer to completing the predevelopment capital raise. Up to this point we have $3. Million in compensation outstanding. Of the deficit $3.4 Million has been raised through the company's common stock over the past ten years the balance sits as outstanding liabilities primarily the interest and compensation accrual.

The incorporations and the pre-development work are reflected on our balance sheet under current assets and other non-current assets. The engineering, accounting and legal works resulted in some additional accounts payable.

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Financing efforts for the ZEWOPtm in, Mexico although progressing have not resulted in material contracts and as such did not impact on our financial results other than as discussed herein. Market development efforts will not be material and reflected in our financial statements until bona fide' agreements are monetized. The loan agreement for $14 Million entered into on Dec 31, 2020, will not be recorded until received.





Plan of Operation

For the 2021 year the Company's focus is to:

1.Having secured working capital under contract the Company upon receipt in February intends to maintain its accounts payable as current, fund day to day corporate costs through to cash-flow, establish our Global Human Resource, Accounting, Research and Development Center in Ireland, including establishing our corporate management team to facilitate items 3) a. through 3) g which meets the requirements for the balance of our tentative funding commitments.

2.Complete the development of the ZEWOPtm in El Salto (Guadalajara), Mexico as follows.

a.Complete lease/purchase of lands.

b.Secure C-suite executives and Mexico support team.

c.Meet all corporate compliance.

d.Finalize Product Off-take Agreements.

e.Complete working drawings for El Salto ZEWOPtm.

f.Secure all required permits and permissions.

g.Complete EPC contracts and supplier agreements.

h.Site development, construction, and assembly of plant.

3.Finalize second Mexico ZEWOPtm contracts to launch development in 2022.

4.Continue with European market entrance towards end of 2022.





Results of Operations.

Period from January 1, 2020 to December 31, 2020

We generated no revenue from January 1, 2020 to December 31, 2020. For the year ended December 31, 2020 our general administrative expenses were $ 284,056. Currently our general administrative expenses consist primarily of compensation (127%) offset by an expense recovery in legal (31.27%). During 2020 we recorded interest expense of $1,571,015 because of notes payable. Thus, we have reported a net loss of $1,855,071 for the period ended December 31, 2020. Our total net loss from inception on March 15, 2006 through December 31, 2020 was $12,853,876.

Stock-Based Compensation Costs

Stock-based compensation represents 22% of the Company's operating expenses for the fiscal year ended December 31, 2020. The stocks are a part of our annual executive compensation plan, and are issued to obtain, retain and motivate our directors, executives and employees.

Liquidity and Capital Resources

At December 31, 2020, we had total assets of $544,859. Our Current assets are $402,356. We have software at $126 and computers are $26. Current liabilities at December 31, 2020 totaled $10,006,993 they consisted of accounts payable in the amount of $346,035, accrued interest of $6,159,952, compensation payable in the amount of $3,112,396, notes payable net in the amount of $388,610.

We filed a registration statement on Form S-1 with the Securities and Exchange Commission to register up to 2,000,000 shares of common stock for sale at a price of $.25 per share for a total of up to $500,000. The registration statement was declared effective on December 12, 2008. We exceeded the minimum of our offering of $250,000 on or before August 31, 2009 and subsequently closed the offering. We issued a total of 1,102,000 shares under our offering of $0.25 per share to raise a total of $274,398. The funds were used as per the prospectus to cover the offering costs and to secure additional business for our operations.

The Company has relied on short term notes (12 months or less) with a conversion to common stock provision and offshore restricted stock sales to fund its corporate activities over the past year. This has resulted in more shareholders which creates the potential for greater liquidity going forward however it also provides greater dilution of individual holdings.


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The Company has limited capability without significant assets or earnings to raise debt. The development of ZEWOPtm the core business of the Company will rely on debt markets. To attract this capital, the Company will have to secure long term waste supply contracts and long term product sales contracts both from high credit worthy entities. The Company must agree to encumber the assets associated with each ZEWOPtm and all net revenue until the debt is retired. This arrangement will restrict the Company's ability to pay dividends to its shareholders.





Potential Acquisitions

We anticipate acquiring a 19-hectare industrial site in the Greater Guadalajara, Mexico area this year. Going forward we may be required to acquire existing waste supply agreements in order to operate in some cities. We may also elect to acquire some of the technologies we intend on using in order to further protect the intellectual property of our ZEWOPtm.

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations are based upon the financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. Certain accounting policies involve judgments and uncertainties to such an extent that there is reasonable likelihood that materially different amounts could have been reported under different conditions, or if different assumptions had been made. We evaluate our estimates and assumptions on a regular basis. We base our estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for the financial statements.





Cash and Cash Equivalents

The Company considers cash deposits and highly liquid investments to be cash and cash equivalents for financial reporting presentation on the balance sheet and statement of cash flows. The Company subscribes to the accounting standards that define cash equivalents as highly liquid, short-term instruments that are readily convertible to known amounts of cash, which are generally defined investments that have original maturity dates of less than three months.





Contractual Obligations

We have or will have material commitments for the next twelve months that include supporting professionals (including engineers, accountants, lawyers and auditors) and the management compensation agreements. We will require additional capital to meet our liquidity needs. As a result, our independent auditors have expressed substantial doubt about our ability to continue as a going concern. In the past, we have relied on capital contributions from shareholders to supplement operating capital when necessary. We anticipate that we will receive sufficient contributions from shareholders to continue operations for at least the next twelve months. However, there are no agreements or understandings to this effect. We may sell common stock, take loans from officers, directors or shareholders or enter into debt financing agreements.





Need for Additional Financing

We estimate our upcoming operating expenses to increase substantially as we transcend from development stage to operating stage and maybe as much as $24,000,000.00 this year. We do not have any commitments for capital expenditures however we do anticipate entering into commitments to secure acquisitions. We believe we will need additional funds to cover our expenses and acquisitions for the next twelve months. Our need for capital may change dramatically as we pursue our business plan during that period. At present, we have no material understandings, commitments or agreements with respect to the acquisition of any business venture or capital commitments. Further, we cannot assure that we will be successful in consummating business opportunities on favourable terms or we will be able to profitably manage any business opportunities. Should we require additional capital, we may seek additional advances from officers, sell common stock or find other forms of debt financing.

Off Balance Sheet Arrangements

As of December 31, 2020, the Company had one off-balance sheet arrangements, in the form of a $14 Million Loan to the Company that will not be recorded until received in April 2021.

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