MABWE MINERALS INC.

This Form 10-Q contains forward-looking statements which are subject to risks, uncertainties, and assumptions that are difficult to predict. All statements in this Form 10-Q, other than statements of historical fact, are forward-looking statements. The forward-looking statements include statements, among other things, concerning our business strategy, including anticipated trends and developments in and management plans for our business and the markets in which we operate and plan to operate; future financial results, operating results, revenues, gross profit, operating expenses, products, projected costs, and capital expenditures; research and development (“RandD”) programs; sales and marketing initiatives; and competition. In some cases, you can identify these statements by forward-looking words, such as “estimate,” “expect,” “anticipate,” “project,” “plan,” “intend,” “believe,” “forecast,” “foresee,” “likely,” “may,” “should,” “goal,” “target,” “might,” “will,” “could,” “predict,” and “continue,” the negative or plural of these words, and other comparable terminology. Our forward-looking statements are only predictions based on our current expectations and our projections about future events. All forward-looking statements included in this Form 10-Q are based upon information available to us as of the filing date of this Form 10-Q. You should not place undue reliance on these forward-looking statements. We undertake no obligation to update any of these forward-looking statements for any reason. These forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance, or achievements to differ materially from those expressed or implied by these statements. These factors include the matters discussed elsewhere in this Form 10-Q. You are cautioned that any such forward-looking statements are not guarantees of future performance and that a number of risks and uncertainties could cause actual results to differ materially from those anticipated in the forward-looking statements. Such risks and uncertainties include, but are not limited to:

Since the acquisition of Applied Photonics, LLC occurred on September 30, 2015, there has been no revenues recorded, but pre-acquisition, Applied Photonics had revenues and the policy is as follows: The Company uses the percentage-of-completion method using actual costs incurred over total estimated costs to complete a project (including module costs) for construction contracts that do not include land or land rights and thus are accounted for under ASC 605, as basic accounting policy, unless we cannot make reasonably dependable estimates of the costs to complete the contract, in which case we would use the completed contract method. We periodically revise our contract cost and profit estimates and we immediately recognize any losses that we identify on such contracts. Such estimates include significant judgment. Incurred costs include all direct materials, costs for Laser modules, labor, subcontractor costs, and those indirect costs related to contract performance, such as indirect labor, supplies, and tools. We recognize direct material costs and costs for Laser modules as incurred costs when the direct materials and Laser modules have been installed. When construction contracts or other agreements specify that title to direct materials and Laser modules transfers to the customer before installation has been performed, we defer revenue and associated costs and recognize revenue once those materials are installed and have met all other revenue recognition requirements. We consider direct materials to be installed when they are permanently attached or fitted to the Laser power systems as required by engineering designs.

Fonon is expanding its product portfolio of laser based systems and entering a new long-term growth market in Subtractive Manufacturing Laser Material Processing Equipment (SM) and adding a line of metal Additive Manufacturing (AM) Systems or 3D Direct Metal Laser Sintering (DMLS) equipment. Metal AM is growing at a fast pace spurring the world’s current economy. Much of this growth is due to the advancement of metal AM to support a wide range of applications from prototypes to part production in aerospace, defense, automotive, energy and medical industries. The same industries the company has supported for more than 25 years through its Value Chain business model that includes the widest range of additive and subtractive material processing systems in the market covering 80% of all market applications including marking, engraving and cutting systems as well as subassemblies and components.

Although UID marking and tracking are mandatory requirements for government and defense contractors, marking requirements have many in the commercial sector opting to stay ahead of the curve by implementing marking and tracking systems. Presently, direct part marking (“DPM”) for serviceability is a requirement in the medical, aerospace and automotive markets. UID marks provide standardization to the manufacturer’s tracking needs for safety concerns. Using Fonon’s Fiber Laser technology allows them to permanently mark and track equipment’s viability and specifications. Currently, 43% of global industrial lasers are used for marking and engraving. An estimated 18,000 units of marking and engraving were sold in 2013. With direct part marking for safety rapidly becoming an industry standard, it is estimated that this number should increase rapidly by 2013. The DPM industry provides a $1.2 billion opportunity for an average price of $65,000 per system.

High Power Fiber Laser Cutting Systems- Market Trend - In 2015, approximately 5,000 high-power laser metal-cutting systems were sold globally. The high-power laser metal-cutting industry shows a $2.5 billion opportunity with an average price per unit of $500,000. High power Fiber Lasers are quickly gaining ground over their competition, Nd: YAG and CO2. Laser cutting systems have several advantages compared to alternative cutting technologies. Laser cutting is based on the digital media generated by AutoCad or other engineering design programs. It is fast, precise and can be used to cut complex contours on 2D or 3D materials. The high power Fiber Laser will make sheet metal, particular highly reflective metals (like copper, brass, aluminum) cutting with CO₂ lasers obsolete in the coming years. This will place many competitors scrambling to supply Fiber Laser systems. To capitalize on this opportunity Fonon produced the Titan™ Series to compete directly with CO2 lasers in the sheet metal fabricating industry and is currently receiving requests. This market presents a very lucrative opportunity in the next 5 years, as Fiber Laser systems overtake CO2 and YAG systems. With the recent introduction of the Titan FLS Series into the market place we have seen a huge demand for a Fiber Laser solution, proving that the market is looking for a more economical cutting method.

Globally, the sheet metal cutting market in 2015 consisted of China and Asia at 43%, followed by Europe at 38%, North America at 17%, and finally Australia and Brazil making up 2%. The largest projected growth will be seen in China and Europe. North America is estimated to have steady growth over the next 3 years. This provides a multi-billion dollar opportunity in the total replacement of CO2 and YAG systems for sheet metal cutting as Fiber Lasers superiority is released (David Belforte Editor in Chief of Industrial Laser Solutions).