{"url_path":"/sec/wast/10-k/2026/item-3","section_key":"item-3","section_title":"Item 3 LEGAL PROCEEDINGS**","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-07-14","source_url":"https://www.sec.gov/Archives/edgar/data/1515139/0001493152-26-033196-index.html","accession_number":"0001493152-26-033196","cik":"0001515139","ticker":"WAST","issuer_name":"WASTE ENERGY CORP.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1515139/0001493152-26-033196-index.html","primary_entity_key":"0001515139","primary_entity_name":"WASTE ENERGY CORP."},"word_count":593,"has_tables":true,"body_markdown":"**ITEM\n3. LEGAL PROCEEDINGS**\n\n \n\n*LarCo\nHoldings, LLC Litigation*\n\n* *\n\nOn July 31, 2024, LarCo Holdings, LLC (“LarCo”) filed a\ncomplaint in the Superior Court of the State of Arizona, Maricopa County (Case No. CV2024-020438), against the Company; a vendor of the\nCompany (the “Vendor”); certain current and former executives and affiliates of the Vendor and of the Company’s predecessor\nentities, and their spouses; and other defendants. The claims arise from a 2019 private loan transaction between LarCo and the Vendor,\nto which the Company was not a party.\n\n \n\nIn\nconnection with that loan, the Company executed an acknowledgment pursuant to which it agreed that, if the Company collected on a specific\ncustomer invoice in the amount of $752,500 that had been pledged as collateral for the Vendor loan, the Company would remit the proceeds\nof that collection to LarCo to be applied against the loan. The Company has never collected on the specified customer invoice, and the\nCompany’s commitment to remit funds to LarCo was conditional upon such collection. Accordingly, the Company believes it has no independent\npayment obligation to LarCo under the acknowledgment.\n\n \n\nOn June 13, 2025, judgment on the loan was entered\nin LarCo’s favor against the Vendor and a former executive of the Company’s predecessor, and on September 17, 2025, an amended\njudgment was entered against those parties in the approximate amount of $1.57 million. The Company was not a party to, and has no liability\nunder, that judgment.\n\n \n\nOn January 15, 2026, LarCo filed a First Verified\nAmended Complaint (the “Amended Complaint”) asserting claims against the Company for breach of contract, breach of the implied\ncovenant of good faith and fair dealing, negligent misrepresentation, fraud-based claims, conversion, unjust enrichment, and aiding and\nabetting. As against the Company, the Amended Complaint seeks, among other things, $752,500 in respect of the pledged invoice; joint and\nseveral liability for the approximately $1.57 million judgment previously entered against the co-defendants described above; $1,875,000\nasserted against all defendants in respect of certain pledged shares; punitive damages; and attorneys’ fees and costs.\n\n \n\nIn addition, LarCo has asserted purported rights,\nas a judgment creditor of the Vendor and a former executive of the Company’s predecessor, against amounts allegedly owed by the\nCompany to such parties. The Company disputes that it owes any amounts subject to such claims, disputes the validity and enforceability\nof the asserted rights as against the Company, and has formally responded accordingly. No resolution of that assertion has been reached\nas of the date of this Annual Report.\n\n \n\nWe believe the claims asserted against\nus are without merit, dispute the factual premises of the fraud-related allegations, and intend to defend the matter vigorously, including\nthrough dispositive motions. We are evaluating all rights, remedies, claims, and counterclaims available to it arising from this\nmatter and reserves all such rights.\n\n \n\nManagement has determined that a loss related\nto this matter is not probable and that the amount or range of any reasonably possible loss cannot be estimated at this time, principally\nbecause dispositive motions directed at the claims that would define any such range remain to be adjudicated and the damages theories\nasserted are disputed. Accordingly, the Company has not recorded a loss contingency in respect of this matter as of December 31, 2025.\n\n \n\n*Other\nProceedings*\n\n* *\n\nFrom\ntime to time, the Company may be party to or threatened with other litigation arising in the ordinary course of business. Other than\nas described above, management is not aware of any pending or threatened legal proceedings that are expected to have a material adverse\neffect on the Company."}