Environmental Waste International : EWI MDA-December 2023

……because the environment matters

MANAGEMENT'S DISCUSSION AND ANALYSIS

FISCAL 2023

INTRODUCTION

This Management's Discussion and Analysis ("MD&A") of the financial conditions and results of operations of Environmental Waste International Inc. and its subsidiaries (the "Company" or "EWI") should be read in conjunction with EWI's audited consolidated financial statements and notes as at and for the years ended December 31, 2023 and 2022.

The Company's audited consolidated financial statements and the financial information contained in the MD&A are prepared in accordance with the International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and interpretations of the IFRS Interpretation Committees.

Results are reported in Canadian dollars unless otherwise noted.

Information contained herein is presented as of April 29, 2024, unless otherwise indicated. These audited consolidated financial statements were approved for issuance by the Board of Directors on April 29, 2024.

Further information about the Company and its operations can be obtained from the offices of the Company or on SEDAR at www.sedarplus.ca

Management Responsibility for Financial Reporting

The Company's management is responsible for the presentation and preparation of the annual consolidated financial statements and MD&A. The MD&A has been prepared in accordance with the requirements of securities regulators under National Instrument 51-102 of the Canadian Securities Administrators.

The annual consolidated financial statements and information contained in the MD&A necessarily include amounts based on informed judgements and estimates of expected effects of current events and transactions with appropriate consideration to materiality. In addition, in preparing the financial information we must interpret the requirements described above, make determinations as to the relevancy of information to be included, and make estimates and assumptions that affect reported information. The MD&A also includes information regarding the impact of current transactions and events, sources of liquidity and capital resources, and risks and uncertainties. Actual results in the future may differ materially from the present judgements and estimates.

2023 REPORT	MANAGEMENT'S DISCUSSION & ANALYSIS	EWI.CA
	YEAR ENDED DECEMBER 31, 2023

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OUR BUSINESS

EWI is a cleantech company developing systems, specializing in the application of its patented microwave processes. Its predominant focus is transforming End-of-Life tires ("EOL") into valuable by-products which are sustainable and are part of the circular economy.

The Company researches, designs, develops, sells, and maintains efficient advanced systems based on its patented techniques: Reverse PolymerizationTM ; Microwave Delivery System and Hybrid Microwave Process.

Governments and industries worldwide recognize the need for cleantech companies to provide a sustainable process for the treatment or recycling of tires and other waste rubber products in an eco-efficient manner.

In addition to tires, EWI has designed solutions for the safe disposal, recycling and/or recapture of sustainable by-products for Liquid Biological Waste Systems; Food Waste; Medical Waste and Animal Waste.

The Company is listed on the TSX Venture Exchange ('TSXV") trading under the symbol EWS.V. The Company's head office address is 1751 Wentworth Street, Unit 1, Whitby Ontario, L1N 8R6

2023 REPORT	MANAGEMENT'S DISCUSSION & ANALYSIS	EWI.CA
	YEAR ENDED DECEMBER 31, 2023

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OUR TECHNOLOGY

Reverse Polymerization (RP) is the basis for EWI's processes, it is the reduction of organic material through the application of microwave energy in an oxygen-depleted atmosphere. Microwave energy is absorbed by the organic material, causing rotation of inter-molecular bonds, leading to the generation and emission of narrowband infrared energy. The narrow band infrared energy is re-absorbed by surrounding material, increasing the amount of energy in the bonds until the bonds break. The breaking of the bonds results in the conversion of complex organic compounds into simpler compounds of lower molecular weight without undergoing oxidation.

The RP process involves the direct application of high-energy microwave energy, utilizing its patented Microwave Delivery System (MDS), to break down materials into simpler chemical components. It is unique and can be differentiated from other processes based on three key characteristics:

1. Application of microwave energy occurs in an oxygen depleted environment, preventing oxidation of the waste.
2. Reaction occurs at low chamber temperatures of 150º C to 450º C, depending on the application.
3. Control of the process is precise as the microwave energy is focused and the energy input is variable, allowing the desired amount of energy input per unit mass of waste to be applied.

Through research, EWI has been able to improve the RP process with the addition of radiant heating. This is known as the Hybrid Microwave Process (HMP). HMP uses the syn gas produced by the process to preheat the infeed and maintain the process tunnel temperature. It also heats the solid materials exiting the process and prevents the absorption of process gases on this material. Reverse Polymerization, and HMP are not incineration. Incineration is an oxidation process that occurs at higher temperatures. Oxidation of organic waste materials can lead to the formation of undesirable by-products such as dioxins or furans.

Incineration and pyrolysis, have less control of their reactions compared to the RP and HMP process and therefore lack the ability to control the composition and quality of the end-products. This has major implications in the EOL tire application and is one of the reasons that EWI's HMP creates high-qualityproducts from tires. The products can be used to make new tires, and other rubber products completing the circular economy.

Reverse Polymerization (RP) is the basis for EWI's processes, it is the reduction of organic material through the application of microwave energy in an oxygen-depleted atmosphere. Microwave energy is absorbed by the

2023 REPORT	MANAGEMENT'S DISCUSSION & ANALYSIS	EWI.CA
	YEAR ENDED DECEMBER 31, 2023

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organic material, causing rotation of inter-molecular bonds, leading to the generation and emission of narrowband infrared energy. The narrow band infrared energy is re-absorbed by surrounding material, increasing the amount of energy in the bonds until the bonds break. The breaking of the bonds results in the conversion of complex organic compounds into simpler compounds of lower molecular weight without undergoing oxidation.

CORPORATE MISSION

The Company's mission is to provide sustainable solutions for the rubber and plastic industries by processing EOL tires and scrap rubber in a way that dramatically reduces greenhouse gas, while producing a high return on invested capital without the need for a tipping fee or carbon tax.

The Company is currently focused on the commercialization of its technology for the recycling of EOL tires and other rubber waste. The Company's HMP process reduces EOL tires into basic commodities in an environmentally safe manner: recovered carbon black (rCB), oil, steel and hydrocarbon vapours. The rCB is recycled back into rubber compounding for tire production, other rubber products and new plastic products. It is estimated by 2030 the major tire manufacturers will require over 1 million tonnes of rCB to meet their target of 50% sustainable products in tires. In addition, rCB is used as a colour concentrate in plastics, pigments, coatings and paints, among many other applications. Syngas provides a significant percentage of the power required to run the plant or can be sold to the power grid. Oil and steel are sold as commodities. All the products are sustainable and are part of the circular economy.

Our Market

Tire stockpiles and landfills, many of which are massive, exist all over the world. Rubber, including tires, is one of the last major commodities without a meaningful recycling option. Once established, these landfills are long term since rubber biodegrades very slowly. Almost 5.5 million tires are scrapped each day. Approximately 2 billion EOL tires become available worldwide annually and this number continues to grow.

Reclaimed Carbon Black (rCB) represents 40% of each EOL tire recycled by EWI. rCB can be used as a supplement or partial replacement for virgin carbon black (vCB) in rubber, plastic, and many other products. Virgin (vCB) is a commodity with a huge market, more than 13.5 million tonnes of carbon black are sold every year and demand is growing. Currently, demand slightly exceeds supply and prices are continuing to rise. The Company has a number of significant relationships in various parts of the world including Canada, the EU, Australia and Asia. The vCB industry is coming under increased pressure from governments and environmental groups, as production of the product is a significant greenhouse gas emitter.

Currently the large tire manufacturers are targeting 50% sustainability in new tires by 2030, they will require over one million tonnes of rCB to attain this goal. Their long-term targets are 100% sustainability by 2050, which would require a minimum of over two million tonnes of rCB. Currently production of rCB is estimated to be roughly 100,000 tonnes.

Environment, Social and Governance ("ESG")

Most rubber manufacturers have a significant issue with their production waste. In many cases, landfill or incineration are the only options for thousands of tonnes of this waste. EWI believes it has the only technology that can deal with this difficult waste stream, especially where raw (green) rubber is intermingled with steel. The Company is seeing interest from rubber manufacturers to deal with their sustainability issues. Bridgestone and Michelin made a joint announcement in November 2022 indicating a need for large quantities of rCB to meet their stated sustainability goals by 2030.

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ESG initiatives and projects have become a focus for corporations, governments, regulators, and investors. EWI is well positioned as it integrates ESG in its business practices. The Company's tire recycling technology provides a practical solution to one of the world's biggest environmental challenges, and our corporate strategy of building and selling plants provides an opportunity to make a difference in the fight against climate change. As worldwide ESG commitments evolve into action, EWI is prepared for the significant changes the economy is undergoing. Management and directors of the Company have a fiduciary responsibility to its shareholders to contribute towards a more sustainable world and protect our future and the environment, not only because it is the right thing to do, but because it is also good business.

The Company has protected its intellectual property. It has patented its Reverse PolymerizationTM Process and has filed additional patents for the Hybrid Microwave Process. In addition to these patents, the Company has a great deal of technical and management expertise in its engineering team.

MANAGEMENT OBJECTIVES AND RECENT DEVELOPMENTS

Sault Ste. Marie Plant Commercial Upgrade

Our pilot facility in Sault Ste. Marie is being designed to commercially process 20 tonnes of EOL tires /day, producing rCB, syngas, oil and steel. The rCB will be combined with recycled plastic producing plastic black master batch that will be marketed throughout North America. Black masterbatch is the base component in all black plastic products, from garbage bags to planters to car dashboards. The Company has begun the engineering necessary to complete the upgrade of its full-scale pilot plant and has dismantled the current microwave line to make way for the new line. Operational data and testing from EWI's full-scale pilot plant has led to developments in the process, increasing throughput and reducing energy consumption. The commissioning of the plant in Sault Ste. Marie is still more than a year away.

By-ProductQualityEWI continues to improve the quality of products recovered from its tire process and to work with end users to develop products that meet their requirements.

Patents

Additional patents have been filed for the Hybrid Microwave Process (MHP) in the US, Canada, Europe and China. The initial patent in the US (US Patent Number: 11,920,004 B2) has been granted, it is anticipated that the additional countries will grant the patent in the near future.

Long-Term Financing

Long-term financing for the upgrade to the commercial facility and operational funds is ongoing with our investment bankers. To date we have had discussions with a number of groups who have shown interest. EWI will continue these discussions until the financing goals have been met. An agreement for a private placement with proceeds of $670,000 was signed on April 12, 2024. Subsequent investments in conjunction with the round are expected to close in May 2024.

New Chief Executive Officer

On August 18, 2023, Ms. Kelli Harrington was appointed President and CEO of the Company and issued 1,000,000 restricted stock units ("RSUs") under the Company's omnibus incentive plan. The RSUs vest over 3 years in accordance with the plan.

2023 REPORT	MANAGEMENT'S DISCUSSION & ANALYSIS	EWI.CA
	YEAR ENDED DECEMBER 31, 2023

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SELECTED ANNUAL FINANCIAL INFORMATION

	Year ended	Year ended	Year ended
(Canadian $)	December 31 2023	December 31 2022	December 31 2021
Revenues	-	-	112,489
Operating loss	(1,686,239)	(2,151,058)	(1,956,963)
Net loss	(1,860,727)	(2,291,291)	(1,314,921)
Net loss per share - basic	(0.01)	(0.01)	(0.01)
and diluted
(Canadian $)	At December 31 2023	At December 31 2022	At December 31 2021
Total assets	3,056,212	2,784,099	2,665,553
Total liabilities	5,760,982	5,161,055	4,002,568
Total shareholders deficit	(2,704,770)	(2,376,956)	(1,337,015)

During 2023, the Company continued to focus on commercial opportunities to deploy its reverse polymerization process. Management has successfully raised short-term financing through both equity and debt for working capital purposes and continues to work towards its long-term financing goals.

Operating loss includes expenses pertaining to engineering design, expenses for technology development, costs of maintaining the plant in Sault Ste Marie, compensation and people costs, office expenses for the Whitby location, professional and consulting fees and public company costs to maintain our listing on the Toronto Venture Stock Exchange.

Net loss includes other income, finance costs, foreign exchange gains or losses as well as a non-cash accounting item in 2022 for gain on revaluation of derivative liability of $90,214.

GOING CONCERN ASSUMPTION

The financial information contained in this MD&A are derived from the audited consolidated financial statements which have been prepared on a basis that assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. These financial statements do not reflect any adjustments that may be necessary should the Company be unable to continue as a going concern. The Company incurred a net loss during the year ended December 31, 2023, of $1,860,727 (Year ended December 31, 2022 - $2,291,291) and, as at that date, had working capital deficiency for of $4,643,205 (December 31, 2022

• $4,034,579) and a cumulative deficit of $70,400,079 (December 31, 2022 - $68,572,139).

2023 REPORT	MANAGEMENT'S DISCUSSION & ANALYSIS	EWI.CA
	YEAR ENDED DECEMBER 31, 2023

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Recurring sources of revenue have not yet proven to be sufficient as the commercialization of the Company's core technology is at an early stage and the Company has not yet achieved a level of profitability and positive cash flows. While the Company has been successful in raising additional financing and extending the repayment terms for deferred compensation, it will require additional financing to enable it to continue operations. In the absence of additional financing, the Company is not expected to have sufficient funds to meet its obligations. Management continues to monitor cash needs and is considering various alternatives to raise additional financing. There can be no assurances that the Company will be able to secure the necessary financing to enable it to continue as a going concern. The factors noted above indicate the existence of a material uncertainty that may cast significant doubt on the ability of the Company to continue as a going concern. If the going concern basis is not appropriate, material adjustments may be necessary to the carrying amounts and/or classification of assets and liabilities.

DISCUSSION OF RESULTS

	December 31	December 31
(Canadian $)	2023	2022
Revenues	-	-
Expenses
Technology development	356,082	496,233
Plant operations	94,657	121,863
Selling, makreting and administration	874,389	987,750
Stock based compensation	248,228	430,559
Depreciation and amortization	112,883	114,653
Total expenses	1,686,239	2,151,058
Operating loss	(1,686,239)	(2,151,058)
Other income (expenses)
Other income	82,500	-
Finance costs	(260,467)	(204,781)
Foreign exchange gain (loss)	3,479	(25,666)
Change in fair value of derivative	-	90,214
Net loss	(1,860,727)	(2,291,291)

Expenses

The Company classifies its operating expenses into three functions to reflect how it currently manages its business, technology development, plant operations and general and administration. Technology development costs include costs associated with all design and engineering and maintenance activities including compensation and people costs, contractor fees, third party engineering consulting fees, and development costs. Plant operations costs include all costs associated with the plant in Sault Ste Marie such as utility, insurance, property taxes, repairs and maintenance and plant manager salary. Selling, marketing and administration costs include all head office expenses relating to the location in Whitby, Ontario, people and compensation and people costs, professional fees, consulting fees and public company costs to maintain our listing on the TSXV.

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	YEAR ENDED DECEMBER 31, 2023

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The Company has started upgrading the plant in Sault Ste Marie to a commercial production facility. All expenses relating to the upgrade are classified as assets under construction as part of property and equipment on the statement of financial position. These costs include both third party fees and internal engineering salaries allocated to the Sault Ste Marie project. For the year ended December 31, 2023, a total of $393,658 was capitalized to construction in progress compared to $529,762 in fiscal 2022.

Year ended December 31, 2023

Technology development

Technology development costs include costs associated with all design and engineering and maintenance activities including compensation and people costs, contractor fees, third party engineering consulting fees, and development costs. In 2023 technology development costs of $356,082 were lower than 2022 costs of $496,233. The decrease of $140,151 is primarily due to lower costs towards the end of the year, as well as lower third-party consulting fees relating to the Sault Ste Marie upgrade project, as activities were deferred to preserve cash.

Plant operations

Plant operations costs include all costs associated with the plant in Sault Ste Marie such as utility, insurance, property taxes, repairs and maintenance and plant manager salary. Plant operations costs of $94,657 in 2023 were lower than $121,863 in 2022 by $27,206 due lower insurance costs and lower salary costs in Q4 2023.

Selling, marketing and administration

Selling, marketing and administration costs during 2023, were $874,389 compared to $987,750 in 2022, as outlined in the table below:

	December 31	December 31
(Canadian $)	2023	2022
Selling, Marketing and Administration
Compensation and people	333,351	230,642
Office and general	112,765	113,661
Professional and consulting fees	206,547	273,854
Public company costs	194,229	336,906
Travel, sales and marketing	27,496	32,687
	874,389	987,750

Compensation and people costs of $333,351 in 2023 were $102,709 higher than $230,642 in 2022 due to the hiring of a new Chief Executive Officer in August 2023 and an interim CFO role for all of 2023 versus only part of 2022. Office and general costs of $112,765 were consistent with $113,661 in 2022. Professional and consulting fees of $206,547 in 2023 were $67,307 lower than $273,854 in 2022. The primary reason for the decrease is due to lower consulting fees incurred this year with the goal of preserving cash as management focuses on long term financing options. In 2022, the Company spent money on investor relations consultants and financial advisory consultants which were not incurred this year. Public company costs of $194,229 in 2023 were lower than $336,906 in 2022 due to less corporate transactions and legal fees associated with public company matters. Travel, sales and marketing costs of $27,496 in 2023 were $5,191 lower than $32,687 incurred in 2022 as travel was limited in 2023 compared to last year.

2023 REPORT	MANAGEMENT'S DISCUSSION & ANALYSIS	EWI.CA
	YEAR ENDED DECEMBER 31, 2023

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Stock-based compensation

$248,228 in 2023 was $182,331 lower than $430,559 in 2022 due to the vesting of options awarded at a lower price in 2022 vesting in 2023 compared to options awarded at a higher price in 2021 vesting in 2022, resulting in lower expense as the expense is recorded on vesting of options.

Depreciation and amortization

$112,883 in 2023, was slightly lower than $114,653 in 2022. Depreciation is on property and equipment while amortization is on the right of use lease asset. Depreciation is not yet recorded on assets under construction representing the capitalized costs associated with the upgrade of the Sault Ste. Marie plant as it is not yet in use.

Other income

Other income of $82,500 represents the favorable settlement in 2023 of a claim relating from a scientific research and development tax credit pertaining to prior years.

Finance costs

$260,467 in 2023 was $55,686 higher than $204,781 in 2022 primarily due to interest on promissory notes issued during the second half of fiscal 2022 and 2023.

Foreign exchange loss

$3,479 gain 2023, compared to $25,666 loss in 2022 which is due to the strengthening of the Canadian dollar compared to the US dollar which results from holding US cash balances in both 2023 and 2022 as well as debt in US dollars.

Gain on change in fair value of a derivative

The $90,214 gain in 2022 represents the revaluing of a derivative liability at May 4, 2022 from December 31, 2021. This derivative liability related to warrants that were attached to a convertible loan, which expired on May 4, 2022.

Net loss

Net loss of ($1,860,727) in 2023 compared to net loss of ($2,291,291) in 2022. The net loss in 2023 is $430,564 lower than in 2022. This lower loss can be explained by lower technology development expenses, plant operations costs and SG&A and lower stock compensation expense as well as the inclusion of $82,500 other income, partially offset by higher financings costs.

2023 REPORT	MANAGEMENT'S DISCUSSION & ANALYSIS	EWI.CA
	YEAR ENDED DECEMBER 31, 2023
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