Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read together with our consolidated financial statements and the related notes appearing elsewhere in this Quarterly Report on Form 10-Q, as well as our audited consolidated financial statements and related notes and the section titled "Management's Discussion and Analysis of Financial Condition and included in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission ("SEC") on March 31, 2026.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q ("Form 10-Q") contains forward-looking statements that involve substantial risks and uncertainties within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. All statements other than statements of historical facts contained in this Form 10-Q, including statements regarding the Company's future financial position, business strategy and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "targets," "projects," "contemplates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of these terms or other similar expressions.

Forward-looking statements involve a number of risks, uncertainties and assumptions, and actual results or events may differ materially from those projected or implied in those statements. Important factors that could cause such differences include, but are not limited to:

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the Company's financial conditions and results of operations;

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the development of our estimated proved undeveloped reserves;

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the Company's reserves estimates;

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the timing of acquisition, financing, construction and development of new projects;

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the Company's ability to raise financing in the future;

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changes in public acceptance and support of renewable energy development and projects;

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the company's ability to obtain necessary regulatory and governmental permits and approvals;

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the effects of competition;

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the Company's ability to identify, acquire, develop and operate renewable natural gas facilities;

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governmental incentives for renewable energy generation;

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the demand for renewable energy not being sustained;

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political, economic and other uncertainties, including those related to the European Union's ("EU") clean energy transition;

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changes in environmental laws and regulations;

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disruptions in the supply chain, fluctuation in price of product inputs, and market conditions and global and economic factors beyond the Company's control;

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the Company's success in retaining or recruiting, or changes required in, its officers, key employees or directors;

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the effect of legal, tax and regulatory changes; and

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we may be subject to liabilities and losses that may not be covered by insurance.

For a more detailed discussion of these and other factors that may affect our business and that could cause the actual results to differ materially from those anticipated in forward-looking statements, see "Risk Factors" in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025, and Part II, Item 1A "Risk Factors" and elsewhere in this Quarterly Report on Form 10-Q.

Overview

We are a natural gas resource developer focused on delivering critical natural gas supplies to Europe through both onshore conventional natural gas exploration and renewable natural gas development in Italy. We have several conventional natural gas discoveries including the Longanesi field, located in the Po Valley in Northern Italy, which is one of Italy's largest modern gas discoveries. We retain a 33.5% working interest in the Longanesi field with our working interest partner, and operator, Padana. We acquired our working interest in the Longanesi field through a 2016 transaction with Enel Spa. We also retain wholly owned concessions, permits, and pending applications on other exploration and development prospects across Italy which are supported by proprietary modern 3D seismic imaging.

Our recent drilling and exploration activities involve the drilling and testing of three Longanesi development wells (during 2022 and 2023) as well as the re-completion of two original discovery wells. We had no drilling activity during the three and six months ended June 30, 2026 or 2025. We had no other exploratory or development drilling during the three and six months ended June 30, 2026 or 2025. Our Longanesi, Trava and Gradizza wells were classified by DeGolyer and MacNaughton as proved undeveloped reserves as such wells had not yet started production as of December 31, 2025 and require future investments to install production facilities prior to being fully completed and producible. However, as noted in the section titled "Recent Developments" below, we achieved first production from the Longanesi field in 2025.

In 2023, we launched a renewable natural gas development business focused on bringing to market carbon-negative renewable natural gas derived from animal and agricultural waste. We currently generate revenue from electricity sales from two renewable natural gas assets.

The Transactions

On December 13, 2024, we consummated the previously announced business combination pursuant to the Merger Agreement, dated June 4, 2024, by and among Swiftmerge, HoldCo, Swiftmerge Merger Sub LLC, a Delaware limited liability company and wholly-owned subsidiary of HoldCo, and AleAnna Energy. Pursuant to the terms of the Merger Agreement, on December 13, 2024, Swiftmerge migrated to and domesticated as a Delaware corporation in accordance with Section 388 of the Delaware General Corporation Law, as amended, and the Companies Act (As Revised) of the Cayman Islands and changed its name to AleAnna, Inc. The transactions contemplated by the Merger Agreement are collectively referred to herein as the "Business Combination."

The Business Combination was accounted for as a common control transaction with respect to AleAnna Energy which is akin to a reverse recapitalization. This conclusion was based on the fact that Nautilus Resources LLC ("Nautilus") had a controlling financial interest in AleAnna Energy prior to the Business Combination and has a controlling financial interest in AleAnna, which includes AleAnna Energy as a wholly owned subsidiary. The net assets of Swiftmerge are stated at their historical carrying amounts with no goodwill or intangible assets recognized in accordance with the accounting principles generally accepted in the United States of America ("U.S. GAAP" or "GAAP"). The Business Combination with respect to AleAnna Energy was not treated as a change in control primarily due to Nautilus receiving the controlling voting stake in AleAnna and the ability of Nautilus to nominate the full board of directors and management of AleAnna.

Under a reverse recapitalization, Swiftmerge is treated as the "acquired" company for financial reporting purposes. Accordingly, for accounting purposes, the Business Combination is treated as the equivalent of AleAnna Energy issuing stock for the net assets of Swiftmerge, accompanied by a recapitalization.

We incurred $9.5 million in transaction costs related to the Business Combination. Approximately $0.6 million of these costs were recorded as a reduction to additional paid-in capital, up to the amount of cash proceeds received in the transaction. Of the remaining $8.9 million, approximately $0.5 million represented prepaid directors and officers insurance premiums that were recorded to other assets in the consolidated balance sheet, and $8.4 million represented legal, accounting, consulting and advisory fees which were recorded as Business Combination transaction expenses in the consolidated statement of operations and comprehensive income (loss).

Recent Developments

Gradizza Concession

During the third quarter of 2025, we reached an agreement with the Emilia Romagna Region (the "Intesa") in support of our pending application for a production concession related to the Gradizza field. The second application was approved in January 2026. These approvals represent a significant milestone required prior to first production.

We hold a 100% working interest in the Gradizza field and will serve as operator.

During the six months ended June 30, 2026, we commenced construction activities at the Gradizza field development project. We believe this represents a significant milestone in the advancement of our Italian conventional natural gas portfolio. Gradizza is expected to become our first wholly owned and operated production asset and reflects our strategy of increasing exposure to operated assets with long-term production potential. The commencement of construction follows the completion of key permitting and development activities, marking the transition of the project from the planning and authorization phase into execution. We believe the advancement of the Gradizza field further strengthens our portfolio of producing and development-stage assets and supports our objective of creating long-term value through the development of strategically positioned domestic natural gas resources.

Production at Longanesi

On March 13, 2025, we achieved a key milestone with the first production from our working interest in five wells in the Longanesi field. The Longanesi field reached sustained maximum production during the second quarter of 2025. We began recognizing revenue and related expenses, including depreciation and depletion, associated with Longanesi production in the second quarter of 2025.

In connection with the Longanesi start-up in May 2025, we issued a $3.1 million bank guarantee to secure its contingent consideration obligation to Enel. The guarantee required $1.2 million in cash collateral, which was classified as restricted cash as of June 30, 2026. The collateral may be used to satisfy the contingent consideration liability as payments become due.

During the six months ended June 30, 2026 construction activities continued on the permanent production facility for the Longanesi concession, which is being developed together with our joint venture partner and operator, Società Padana Energia S.r.l. The transition from the existing temporary production facilities to permanent production infrastructure represents an important milestone in the maturation of the concession and is expected to support our long-term development. Upon completion, the permanent facility is expected to improve production operations and provide a stronger foundation for the continued development of one of the Company's core assets.

Key Factors Affecting our Performance, Prospects and Future Results

We believe that our performance and future success depend on a number of factors that present significant opportunities for us but also pose risks and challenges, including competition from other carbon-based and non-carbon-based fuel producers, regulatory hurdles posed by the Italian government, and other factors. We believe the factors described below are key to our success.

Continued Development of Conventional Natural Gas Projects

As previously discussed, we and Padana achieved first production of the five wells in the Longanesi field in March 2025 through use of a temporary processing facility. The permanent processing facility is expected to be constructed over the remainder of 2026 and early 2027.

We believe our achieving production of the Longanesi field was a key milestone that will fuel our potential growth. We also have potentially viable discoveries in our Gradizza and Trava fields that are expected to achieve first production in the future.

Key Components of Results of Operations

We are an early-stage company, and our historical results may not be indicative of our future results. Accordingly, the drivers of our future financial results, as well as the components of such results, may not be comparable to our historical results of operations or our future results of operations.

Revenue

During the three and six months ended June 30, 2026, we generated approximately $10.2 million and $19.6 million of total revenue, comprised of $9.5 million and $18.4 million of revenue from our Conventional segment and $0.7 million and $1.2 million of revenue from our Renewable segment.

During the three and six months ended June 30, 2026, revenue from our Conventional segment was comprised of sales of our share of natural gas from the Longanesi field. During the three and six months ended June 30, 2026, revenue from our Renewable segment was comprised of electricity sales at two renewable natural gas assets acquired in July 2024 (the "Casalino" and "Campopiano" plants). The plant assets are fully permitted for production of electricity through conversion of crop and animal waste bio feedstocks. The plant assets are currently biomethane to electricity conversion assets. It is our intention to begin upgrading the sites to refine biomethane into renewable natural gas through upgrading units. Following the upgrade process to transition the assets to biomethane to renewable natural gas conversion, we expect to sell renewable natural gas to customer(s) by trucking or piping the renewable natural gas to the interstate pipeline system (SNAM). Until the plant assets are upgraded, we will actively source bio feedstocks for the assets in order to produce biomethane which will be processed through reciprocating generators in order to generate electricity which is then sold onto the grid through a metered interconnection. Casalino and Campopiano derive revenues from the sale of such electricity to the local state-owned electrical utility (Gestore dei Servizi Energetici SpA or "GSE"). Energy generation revenue is recognized as the electricity generated by the Casalino and Campopiano assets is delivered to GSE. Revenues are based on actual output and "on-the-spot" predetermined prices for small renewable energy producers.

Expenses

General and Administrative (G&A) Expense

G&A expenses consist of compensation costs for personnel in executive, finance, accounting, and other administrative functions, including share-based compensation expenses. G&A expenses also include legal fees, professional fees paid for accounting, auditing and consulting services, and insurance costs. As a newly public company, we expect that we will incur higher G&A expenses for public company costs such as compliance with the regulations of the Securities and Exchange Commission (the "SEC") and the Nasdaq Capital Market.

Cost of Revenues

Cost of revenues consists of gas tariffs and royalties, as well as rent expense related to the conventional gas business, and biofeedstock purchased by the RNG Subsidiaries. This feedstock fuels the anaerobic digesters ("ADs"), which produce natural gas that is then converted to electricity and sold onto the grid.

Lease Operating Expenses

Lease operating expenses reflect ongoing costs related to the Longanesi field which commenced production in the second quarter of 2025. Such costs are passed down to us by the Longanesi field operator, Padana, and include accrued royalties payable to the Italian government, pipeline fees, repairs and maintenance, and other field-related costs.

Depreciation and Depletion

Depreciation includes expense related to the Casalino and Campopiano renewable plant assets, which is recorded on a straight-line basis over the estimated useful lives of the assets. It also includes depreciation of lease and well equipment at the Longanesi field, which is calculated using the units-of-production method based on estimated proved developed reserves.

Depletion reflects the systematic allocation of the capitalized costs of our natural gas properties over the estimated proved developed reserves on a units-of-production basis. These costs include acquisition, exploration, and development expenditures associated with the Longanesi field. Depletion expense fluctuates based on production volumes and changes in our reserve estimates.

Income Tax Effects

Our income tax consequences have been reflected in our consolidated financial statements in accordance with ASC 740, Income Taxes.

We are also subject to a Valued-Added Tax ("VAT"), a broadly-based consumption tax assessed on the value added to goods and services. VAT generally applies to most goods and services bought and sold within the EU. In certain cases, including cross-border sales to business customers and sales of biogas within Italy, we are not required to collect VAT on revenues. To date, we have incurred higher VAT on purchases (input VAT) than we have collected on sales (output VAT), resulting in a net VAT refund receivable. As of June 30, 2026 and December 31, 2025, we had VAT receivables of $8.5 million and $9.6 million, respectively. Under Italian tax law, VAT receivables may be used to offset other tax liabilities, including payroll taxes, income taxes, and other taxes payable to the Italian government.

Operations

Our net income attributable to common stockholders was $2.4 million and $4.4 million for the three and six months ended June 30, 2026, as compared to net income attributable to common stockholders of $0.3 million and net loss of $1.7 million for the same periods in 2025. As of June 30, 2026 and December 31, 2025, we had an accumulated deficit of $184.8 million and $189.2 million, respectively. The majority of these accumulated losses stem from costs associated with the Longanesi field drilling and development, including asset impairments from previous years, as well as seismic imaging, exploratory costs for other conventional natural gas prospects, and general and administrative expenses. The accumulated deficits also include historical deemed dividends to the redemption value of AleAnna Energy's previous Class 1 Preferred Units exchanged for Class A and Class C common stock in connection with the Business Combination based on the redemption features of those units and the related accounting requirements. We expect to continue to incur substantial expenses related to our operations, exploration, and development activities, including pre-commercialization efforts as we continue our development of, and seek regulatory approval for, our discoveries and exploration prospects. We achieved quarterly net income for the first time during the second quarter of 2025 and have continued to generate net income for the six months ended June 30, 2026.

Results of Operations

Comparison of the three and six months ended June 30, 2026 and 2025 is as follows:

		For the Three Months Ended June 30,								Dollar				Percentage
		2026				2025				Change				Change
Revenue		$	10,215,119			$	4,030,410			$	6,184,709				153	%
Operating expenses:
Cost of revenues		$	1,467,135			$	301,521			$	1,165,614				387	%
Lease operating expense			1,828,081				1,094,407				733,674				67	%
General and administrative			4,062,501				1,790,053				2,272,448				127	%
Depreciation and depletion			881,978				229,430				652,548				284	%
Accretion of asset retirement obligation			62,151				31,696				30,455				96	%
Total operating expenses		$	8,301,846			$	3,447,107			$	4,854,739				141	%
Operating income			1,913,273				583,303				1,329,970				228	%
Other income:
Interest and other income			148,439				154,031				(5,592	)			-4	%
Total other income			148,439				154,031				(5,592	)			-4	%
Income before income taxes			2,061,712				737,334				1,324,378				180	%
Income tax benefit (expense)			1,737,236				(92,671	)			1,829,907				-1975	%
Net income			3,798,948				644,663				3,154,285				489	%
Net (income) attributable to noncontrolling interests			(1,441,359	)			(295,720	)			(1,145,639	)			387	%
Net income attributable to Class A Common stockholders		$	2,357,589			$	348,943			$	2,008,646				576	%
Other comprehensive income (loss)
Currency translation adjustment			(310,197	)			2,941,883				(3,252,080	)			-111	%
Comprehensive income			3,488,751				3,586,547				(97,796	)			-3	%
Comprehensive (income) attributable to noncontrolling interests			(1,320,206	)			(1,444,733	)			124,527				-9	%
Total comprehensive income attributable to Class A Common stockholders		$	2,168,545			$	2,141,814			$	26,731				1	%

		For the Six Months Ended June 30,								Dollar				Percentage
		2026				2025				Change				Change
Revenues		$	19,558,636			$	4,675,010			$	14,883,626				318	%
Operating expenses:
Cost of revenues		$	3,018,130			$	1,139,916			$	1,878,214				165	%
Lease operating expense			3,143,185				1,094,407				2,048,778				187	%
General and administrative			6,278,074				5,114,898				1,163,176				23	%
Depreciation and depletion			2,060,430				302,536				1,757,894				581	%
Accretion and remeasurement of asset retirement obligation			(551,537	)			65,201				(616,738	)			-946	%
Total operating expenses			13,948,282				7,716,958				6,231,324				81	%
Operating income (loss)			5,610,354				(3,041,948	)			8,652,302				284	%
Other income:
Interest and other income			288,276				391,636				(103,360	)			-26	%
Total other income			288,276				391,636				(103,360	)			-26	%
Income (loss) before income taxes			5,898,630				(2,650,312	)			8,548,942				323	%
Income tax benefit (expense)			1,299,839				(44,395	)			1,344,234				3028	%
Net income (loss)			7,198,469				(2,694,707	)			9,893,176				367	%
Net (income) loss attributable to noncontrolling interests			(2,767,011	)			1,037,511				(3,804,522	)			-367	%
Net income (loss) attributable to Class A Common stockholders		$	4,431,458			$	(1,657,196	)		$	6,088,654				367	%
Other comprehensive (loss) income
Currency translation adjustment			(1,381,850	)			4,081,186				(5,463,036	)			-134	%
Comprehensive income			5,816,619				1,386,480				4,430,139				320	%
Comprehensive (income) attributable to noncontrolling interests			(2,227,301	)			(556,481	)			(1,670,820	)			300	%
Total comprehensive income attributable to Class A Common stockholders		$	3,589,318			$	829,999			$	2,759,319				332	%

Revenues and Cost of Revenues

During the three and six months ended June 30, 2026, our revenue was earned primarily through sales of our share of natural gas production from the Longanesi field and, to a lesser extent, from electricity generation and sales at the Casalino and Campopiano renewable natural gas plants. Cost of revenues from sales of electricity consists of feedstock costs, direct labor and overhead necessary to produce Renewable Natural Gas ("RNG") and generate electricity. Cost of revenues from sales of natural gas consists of gas tariffs and royalties, as well as rent expense.

Total revenues increased by $6.2 million and $14.9 million, or 153% and 318%, for the three and six months ended June 30, 2026 to $10.2 million and $19.6 million compared to $4.0 million and $4.7 million for the three and six months ended June 30, 2025. The increase was primarily attributable to a full period of production in the current periods from the five wells at the Longanesi field, which achieved first production in March 2025.

Cost of revenues increased by $1.2 and $1.9 million, or 387% and 165% to $1.5 and $3.0 million for the three and six months ended June 30, 2026, compared to $0.3 million and $1.1 million for the three and six months ended June 30, 2025, driven by increased production costs from the Longanesi field.

Lease Operating Expenses

Lease operating expense was $1.8 million and $3.1 million for the three and six months ended June 30, 2026, compared to $1.1 million for both the three and six months ended June 30, 2025. Due to the Longanesi field achieving first production in March 2025, the 2025 periods reflect lease operating costs for only a partial period, whereas the 2026 periods reflect a full quarter and six months of costs associated with sustained production.

General and Administrative (G&A) Expenses

General and administrative expenses consist of salaries and benefits, outside professional services including legal, human resources, audit and accounting services, and development stage expenses, as well as costs associated with the implementation and maintenance of financial reporting and enterprise systems. We expect to continue to incur expenses to support operations as a public company, including expenses related to existing and future compliance with rules and regulations of the SEC and the Nasdaq, insurance expenses, investor relations, audit fees, professional services and general overhead and administrative costs.

General and administrative expenses increased $1.7 million or 127% and $1.2 million or 25% for the three and six months ended June 30, 2026, compared to same periods in 2025. The increase was primarily due to stock compensation expense, higher headcount and professional fees as we continue to build out the finance, accounting, and other functions needed to operate as a public company and technology costs.

Depreciation and Depletion

Depreciation and depletion increased by $0.7 million and $1.8 million, or 284% and 581% to $0.9 million and $2.1 million for the three and six months ended June 30, 2026, compared to $0.2 million and $0.3 million for the three and six months ended June 30, 2025. The increase was driven by depletion associated with higher production volumes at the Longanesi field, consistent with the increase in revenue.

Accretion and remeasurement of asset retirement obligation

The decrease in expense from the prior-year period is primarily due to favorable income statement impact of $0.6 million from a downward remeasurement of the ARO based on revised technical assessments of decommissioning cost and timing for certain wells. See Note 8 to the condensed consolidated financial statements for further details.

Interest and Other Income

Interest and other income primarily includes interest earned on cash and cash equivalents. Interest and other income decreased by a negligible amount and $0.1 million or 4% and 26% to $0.1 million and $0.3 million during the three and six months ended June 30, 2026 compared to $0.2 million and $0.4 million the same periods in 2025.

Currency Translation Adjustment

For the purpose of presenting consolidated financial statements, the assets and liabilities of our Euro operations are translated to USD at the exchange rate on the reporting date. The income and expenses are translated using average exchange rates. Foreign currency differences that arise on translation for consolidated purposes are recognized as a currency translation adjustment in other comprehensive loss on the consolidated statements of operations and comprehensive loss.

The currency translation adjustment decreased by $3.3 million and $5.5 million for the three and six months ended June 30, 2026 compared to the same periods in 2025. The decrease was primarily driven by fluctuations of the exchange rates between the Euro and the U.S. Dollar as well as the level of our Euro-denominated activities. The spot rate weakened from December 31, 2025 to June 30, 2026, and the average exchange rates were higher during the 2026 periods, resulting in negative currency translation adjustments relative to the 2025 periods.

Non-GAAP Financial Measures

In addition to amounts presented in accordance with accounting principles generally accepted in the United States ("GAAP"), we also present certain supplemental non-GAAP financial measures. We believe that the presentation of non-GAAP financial measures provides both management and investors with a greater understanding of our operating results and trends in addition to the results measured in accordance with GAAP and provides greater comparability across time periods. These measures should not be considered a substitute to GAAP basis measures, nor should they be viewed as a substitute for operating results determined in accordance with GAAP. The non-GAAP financial measures do not have any standardized meaning and are therefore unlikely to be comparable to similarly titled measures used by other companies. In compliance with GAAP, our non-GAAP measures are reconciled to net income, the most directly comparable GAAP performance measure.

EBITDA and Adjusted EBITDA

EBITDA is a supplemental non-GAAP financial measure defined as net income (loss) adjusted for interest and other income, income taxes, depreciation and depletion. Our definition of Adjusted EBITDA differs from EBITDA because we further adjust non-GAAP EBITDA for stock-based compensation expense and the remeasurement of asset retirement obligations, and other one-off activity, when applicable. The purpose of presenting Adjusted EBITDA is to adjust for items that we do not believe represent the operations of the core business such as transactions expenses, share-based compensation, and other non-recurring costs.

The following table is a reconciliation of net income to EBITDA and Adjusted EBITDA:

		Three Months Ended June 30,
		2026				2025
Net Income		$	3,798,948			$	644,663
Add (deduct):
Interest			(148,439	)			(154,031	)
Tax (benefit) expense			(1,737,236	)			92,671
Depreciation and depletion			881,978				229,430
EBITDA		$	2,795,251			$	812,733
Add:
Stock compensation expense			1,347,671				-
Adjusted EBITDA		$	4,142,922			$	812,733

		Six Months Ended June 30,
		2026				2025
Net Income (loss)		$	7,198,469			$	(2,694,707	)
Add (deduct):
Interest and other income			(288,276	)			(391,636	)
Tax (benefit) expense			(1,299,839	)			44,395
Depreciation and depletion			2,060,430				302,536
EBITDA		$	7,670,784			$	(2,739,412	)
Add (deduct):
Remeasurement of asset retirement obligation			(639,575	)			-
Stock compensation expense			1,398,702				-
Adjusted EBITDA		$	8,429,911			$	(2,739,412	)

Segment Results

We have two operating segments, each of which also qualifies as a reportable segment, based on the manner in which our chief operating decision maker ("CODM"), our Chief Executive Officer, reviews financial information to assess performance and allocate resources. The Conventional segment consists of the natural gas exploration and production activities conducted by AleAnna Italia. The primary product of this segment is conventional natural gas produced from onshore exploration and development in Italy. The Renewable segment consists of the RNG and electricity production activities conducted by AleAnna Renewable and the RNG Subsidiaries. The segment's primary output is electricity generated from RNG derived from animal and agricultural waste.

Selected financial information by segment is presented in the tables below:

		Three Months Ended June 30, 2026
		Unaudited
		Conventional				Renewable				Total
Revenues		$	9,470,440			$	744,679			$	10,215,119
Segment Operating Expenses			4,555,363				1,069,393				5,624,756
Segment Operating Income		$	4,915,077			$	(324,714	)		$	4,590,363
Add: Depreciation and Depletion			787,818				94,160				881,978
Segment EBITDA (Non-GAAP)		$	5,702,895			$	(230,554	)		$	5,472,341

		Three Months Ended June 30, 2025
		Unaudited
		Conventional				Renewable				Total
Revenues		$	3,315,788			$	714,622			$	4,030,410
Segment Operating Expenses			2,444,645				413,059				2,857,704
Segment Operating Income		$	871,143			$	301,563			$	1,172,706
Add: Depreciation and Depletion			135,454				93,976				229,430
Segment EBITDA (Non-GAAP)		$	1,006,597			$	395,539			$	1,402,136

		Six months ended June 30, 2026
		Unaudited
		Conventional				Renewable				Total
Revenues		$	18,392,077			$	1,166,559			$	19,558,636
Segment Operating Expenses			8,325,799				2,066,196			$	10,391,995
Segment Operating Income		$	10,066,278			$	(899,637	)		$	9,166,641
Add: Depreciation and Depletion			1,872,052				188,378				2,060,430
Segment EBITDA (Non-GAAP)		$	11,938,330			$	(711,259	)		$	11,227,071

		Six Months Ended June 30, 2025
		Unaudited
		Conventional				Renewable				Total
Revenues		$	3,315,788				1,359,222			$	4,675,010
Segment Operating Expenses			3,164,932				2,339,063			$	5,503,995
Segment Operating Income		$	150,856				(979,841	)		$	(828,985	)
Add: Depreciation and Depletion			135,455				167,081				302,536
Segment EBITDA (Non-GAAP)		$	286,311			$	(812,760	)		$	(526,449	)

Conventional segment revenue increased $6.2 million for the three months ended June 30, 2026 and $15.1 million for the six months ended June 30, 2026, as compared to the same periods in 2025, driven by production from the Longanesi field, which began commercial operation in the second quarter of 2025. The prior-year periods reflect minimal revenue, as substantially all natural gas development costs were capitalized rather than expensed before Longanesi began production.

Renewable segment revenue was relatively consistent for the three months ended June 30, 2026 but declined $193k, or 14%, for the six months ended June 30, 2026, as compared to the prior year. The Renewable segment operating loss narrowed slightly for the six months ended June 30, 2026 compared to the prior year, reflecting lower segment operating expenses that more than offset the decrease in revenue.

Liquidity, Capital Resources and Operations

We have begun generating revenue from our operations. We had an accumulated deficit of $184.8 million as of June 30, 2026. We had $32.6 million in unrestricted cash and cash equivalents as of June 30, 2026 and generated cash flows from operations of $7.1 million for the six months ended June 30, 2026. Management believes that existing cash on hand, together with expected cash flows from operations, will be sufficient to meet the Company's operating expenses and support continued growth for at least the next 12 months.

The Company's continuing operations, as intended, are dependent upon its ability to generate cash flows or obtain additional financing. In addition, we are exploring Resource Backed Loan ("RBL") financing, renewable natural gas project loan products and other financing arrangements with several financial institutions; however, there is no guarantee that such financing will be available to us. As a normal part of our business, depending on market conditions, we may from time to time consider opportunities to issue equity or debt securities to raise additional capital. Changes in our operating plans, lower than anticipated revenues, increased expenses, acquisitions or other events may cause us to seek additional debt or equity financing in future periods. The current high-interest rate environment adds additional risk and expense to the issuance of debt securities or loan arrangements to fund capital investment. There can be no guarantee that financing will be available on acceptable terms or at all.

We are constructing a permanent processing facility at our Longanesi site, which we expect to complete during the remainder of 2026 and into early 2027. We expect to fund these capital requirements, together with our other capital needs, through a combination of cash on hand, cash flows from operations and, if necessary, borrowings under financing arrangements.

Presently, Padana is the operator of the Longanesi field under a Unitized Operating Agreement, and other companies in the future may operate some of the properties in which we have an interest. The failure of an operator of our wells or joint venture participant to adequately perform operations, an operator's breach of the applicable agreements or an operator's failure to act in ways that are in our best interest could reduce our production and revenues.

To mitigate operator risks, we monitor the operational risks, credit risk, financial position and liquidity of Padana. Operational risks are monitored and acted on through: (i) periodic meetings with Padana, through a formal committee known as the "Technical Committee", to examine upcoming activities and discuss questions and concerns, (ii) through the receipt and analysis of daily reports, (iii) through requesting unscheduled calls with Padana where areas of concern are identified, and (iv) through occasional site visits. Further, Padana's credit risk, financial position, and liquidity are periodically evaluated through review of the financial condition of Padana's parent organization, Gas Plus S.p.A., which is a publicly-traded company on the Italian Stock Exchange (Euronext Milan). We are able to continuously monitor financial health of Gas Plus S.p.A. through exchange-required public disclosures, including half-annual and annual financial statements, corporate presentations, and press releases.

Cash Flows

The following table includes our cash flow data for the six months ended June 30, 2026 and 2025:

		2026				2025
Consolidated Statement of Cash Flows Data:
Net cash provided by (used in) operating activities		$	7,086,750			$	(2,559,585	)
Net cash used in investing activities		$	(5,903,944	)		$	(3,377,728	)
Net cash provided by (used in) financing activities		$	(1,082	)		$	1,143,652

Cash flows from operating activities

Net cash provided by operating activities increased by $10.5 million for the six months ended June 30, 2026, compared to the same period in 2025. The increase was primarily driven by an $9.6 million improvement in net income, from a net loss of $2.7 million to net income of $7.2 million, due to a full six months of production from the Longanesi field compared to a partial period in 2025.

Cash flows from investing activities

Cash used in investing activities increased by $2.5 million for the six months ended June 30, 2026, compared to the same period in 2025. Investing activities in both periods consisted primarily of additions to our conventional natural gas properties related to continued development at the Longanesi field, and to a lesser extent, additions to our renewable natural gas properties. The increase in the current period primarily reflects continued construction of the permanent processing facility at Longanesi.

Cash flows from financing activities

Cash used in financing activities during the six months ended June 30, 2026 reflects tax payments made related to net share settlements of PSUs. Cash provided by financing activities during the six months ended June 30, 2025 reflects proceeds from cash exercises of our Public Warrants which did not occur in the current period.

Contractual Obligations and Other Commitments

Contingent Consideration Liability

In connection with our purchase of our 33.5% working interest in the Longanesi field, consideration paid included €7 million cash and up to €24 million of deferred consideration payable upon production of the Longanesi field. The deferred consideration is payable based on a formulaic calculation which is predominantly dependent on sales volumes and spot natural gas prices during the first 12 years of production (the "Earn-Out Period"). There will be no deferred consideration due if Longanesi is not developed and no deferred consideration due if average annual gas prices are less than €3.65/Mcf over the Earn-Out Period. Upon first production, we were also required to issue a bank guarantee of €3 million secured by cash collateral of €1 million related to the contingent consideration liability which was classified as restricted cash as of June 30, 2026. The cash collateral may be used to satisfy the contingent consideration liability as payments become due.

We recognized a liability for the contingent consideration in accounting for the asset acquisition in accordance with ASC 450, Contingencies ("contingent consideration liability"). As of June 30, 2026 and December 31, 2025, the total contingent consideration liability was recorded at $27.4 million and $28.2 million, respectively, with $11.8 million and $11.6 million being classified as a short-term and $15.5 million and $16.7 million being classified as a long-term liability for the same respective periods.

Emerging Growth Company Accounting Election

Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect not to take advantage of the extended transition period and comply with the requirements that apply to non-emerging growth companies, and any such election to not take advantage of the extended transition period is irrevocable. We expect to be an emerging growth company at least through 2026.

Critical Accounting Policies and Estimates

Our critical accounting policies and estimates are described in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes to those policies during the six months ended June 30, 2026.