ANNA 10-K & 10-Q changes, risk factors and insider trading

Any investment in shares of our Class A Common Stocksecurities involves a high degree of risk. YouThe shouldfollowing carefullyrisks considerand all of theother information containedin herein this Form 10-K or incorporated in this Form 10-K by reference, including our consolidated financial statements and related notes thereto,and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” should be read carefully before decidinginvesting whether to purchase shares ofin our Classsecurities. A Common Stock. However, such risks are not the only ones we face. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect us. If any of the risks described herein materialize, our business, financial condition and results of operations could be materially and adversely affected. In that case, you may lose all or part of your investment. This Form 10-K is qualified in its entirety by these risk factors.

The development of our estimated PUDs may take longer and may require higher levels of capital expendituresexpenditure than we currently anticipate. Therefore, our estimated PUDs may not ultimately be developed or produced.

AllMost of the reserves attributable to our properties are undeveloped. Development of proved undeveloped reserves may take longer and require higher levels of capital expendituresexpenditure than we currently anticipate. Delays in the development of our reserves, increases in costs to drill and develop such reserves, or decreases in commodity prices will reduce the value of our estimated PUDs and future net revenues estimated for such reserves and may result in some projects becoming uneconomic. In addition, delays in the development of reserves could require us to reclassify our PUDs as unproved reserves.

We have drilled and tested certain exploration and development wells, but as of December 31, 2024, we had not successfully converted an exploration well or development well to a producing natural gas well nor successfully produced hydrocarbons, or revenues from drilling operations. We achieved first production of five drilled and tested wells in the Longanesi field in March 2025, following the installation of the temporary processing facility. The permanent processing facility is expected to be constructed over the remainder of 2025 and earlythrough 2026 and commissioned in mid-2026. 2027. Natural gas exploration and production has have a high degree of risk. The future development of a significant portion of our properties will require obtaining permits and may require additional financing. As a result, we are subject to all of the risks associated with establishing new drilling operations and business enterprises, including, among others:

We are a development-stage company. As of December 31, 2024 and December 31, 2023, we have not generated any revenue from our operations other than from sales of electricity from two renewable gas assets that were purchased in July 2024. We face many of the risks commonly encountered by other new businesses, including the lack of an established operating history, need for additional capital and personnel, and competition. There is no assurance that our business will be successful or that we can ever operate profitably.profitably long-term. We may not be able to effectively manage the demands required, such that we may be unable to implement our business plan or achieve profitability.plan.

In 2015, the Italian government published the Law 208/2015 which prohibited research, prospection and exploitation in waters within a 12-mile limit of the Italian Peninsula. Rockhopper Italia S.p.A., Rockhopper Mediterranean Ltd, and Rockhopper Exploration Plc (collectively, “Rockhopper”), was subsequently subsequently denied an application for an offshore production concession which had been pending since 2008. Rockhopper filed a request for arbitration to the International Center for the Settlement of the Investment Disputes (ICSID) against Italian Republic for the latter’s alleged alleged failure to fulfill the legislative and regulatory commitments made in relation to the investments in the Ombrina Mare oil and gas field located off the Italian coast in the Adriatic Sea (ICSID Case no. ARB/17/14). On August 23, 20222022, Italy was ordered to pay compensation compensation to Rockhopper for the breach of its obligations. The Italian Republic sought to annul the award, and the related proceeding is still pending at ICSID for the decision of the “ad hoc Committee”. The Italian Republic also filed a request to continue the stay of the enforcement of the award. On April 24, 20232023, the “ad hoc Committee” issued a decision on the provisional stay of enforcement of the award, providing that the provisional stay of enforcement is set to be lifted once Rockhopper puts in place relevant escrow arrangements. Similarly, our failure to obtain necessary government authorizations or the enactment of a legislative ban on exploration and production could result in indirect expropriation of our investment and assets.

In addition, we may become subject to additional laws or regulations issued by federal or state government bodies, which are subject to influence resulting from frequent changes in political party control or changes to political priorities or policies. We may need to adapt compliance strategies and operationoperations to meet new regulatory requirements, which can be costly and time-consuming.

Natural gas prices are affected by a number of factors beyond our control, including many of which that are unknown and cannot be anticipated, and we cannot predict with certainty future future potential movements in the price for these commodities.

The prices for natural gas in Italy have historically been volatile and have been particularly volatile in recent years. We expect commodity price volatility to continue or increase in the future due to rising macroeconomic uncertainty and geopolitical tensions.

Prolonged low, and/or significant or extended declines in,in natural gas prices may adversely affect our revenues, operating income, cash flows, financial projections, and financial position, particularly if we are unable to control our development costs during periods of lower natural gas prices. Declines in prices could also adversely affect our drilling activities and the amount of natural gas that we can produce economically, which may result in our having to make significant downward adjustments to the value of our assets and could cause us to incur non-cash impairment charges to earnings. Reductions in cash flows from lower commodity prices may require us to incur debt or reduce our capital spending, which could reduce our production and our reserves, negatively affecting our future rate of growth.

Concerns over global economic conditions, stock market volatility, energy costs, geopolitical issues (including continued hostilities between Russia and Ukraine as well as other conflicts, including in the Middle East), inflation and central bank interest rate increasesfluctuations in response thereto, the availability and cost of credit, and slowing of global economic growth and fears of a recession have contributed and may continue to contribute to increased economic uncertainty and diminished expectations for the global economy. Global economic conditions, geopolitical issues and inflation have constrainedand may continue to constrain global and domestic supply chains, which may in the future impact our ability to develop our reserves in accordance with with our drilling and completions schedule. Additionally, global economic conditions have a significant impact on commodity prices and any any stagnation or deterioration in global economic conditions could result in decreased demand and, thus, lower prices for natural gas. Such Such uncertainty could also result in higher natural gas prices, which could potentially result in increased inflation worldwide and could negatively impact demand for natural gas.

Our business is capital intensive. We make and expect to continue to make substantial capital expenditures for the development and acquisition of natural gas reserves, as as well as related infrastructure. If these projects are undertaken, they may not be completed on schedule, at the budgeted cost or at all. all. To date, we have invested approximately and$250m in the initial development of our properties. While we expect to be able to fund our future growth primarily out of cash currently on AleAnna’sour balance sheet, from cash flow from the Longanesi, Trava, and Gradizza developments, and through recycling of cash flow from future developments, we have not generated any revenue from our principal business activities to date and do not have available commitments from debt financing sources. While we are exploring Resource Backed Loan (“RBL”) financing products with several financial institutions, there is no guarantee that such financing will be available to us. We believe that the cash currently on AleAnna’sour balance sheet is sufficient, at a minimum, to cover general and administrative expenses and continue operating our revenue-producing assets through at least the end of the first quarter of 2026. Despite2027.Despite first production at Longanesi being achieved in March 2025 and having adequate cash on hand to cover general and administrative expenses and maintain operations, we may be required to curtail discretionary development efforts on Gradizza, Trava, renewable natural gas asset acquisitions, and other conventional prospects. Lower-than-expected cash flow from or an interruption in operations of Longanesi, combined with delays in development of Gradizza, Trava, renewable natural gas asset acquisitions, and other conventional prospects may lead to a deteriorated financial condition, erode potential value due to delays in our discretionary developments, and adversely affect our results of operations.

To manage our exposure to price price risk, we may in the future enter into derivative arrangements, utilizing commodity derivatives with respect to a portion of our future future production. Such hedges are designed to lock in prices in order to limit volatility and increase the predictability of cash flow. These These transactions may be required to the extent we utilize RBL financing in the future and such limit our potential gains if natural gas prices prices rise above the price established by the hedge, and we may be required to post cash collateral or letters of credit with our hedge counterparties counterparties to the extent our liability under the derivative contract exceeds specified thresholds, which would negatively impact our liquidity. Derivative transactions may expose us to the risk of financial loss in certain circumstances, including instances in which our production is less than expected or an event materially impacts natural gas prices or the relationship between the hedged price index and the natural gas sales price.

Our strategic success and financial results depend on our ability to identify, acquire, develop and operate renewable natural gas plants.

The acquisition of existing renewable natural gas plants or conventional assets involves numerous risks, many of which may be indiscoverableundiscoverable through the due diligence process, including exposure to previously existing liabilities and unanticipated costs associated with the pre-acquisition period; difficulty in integrating the acquired plants into our existing business; and, if the plants are in new markets, the risks of entering markets where we have limited experience, less knowledge of differences in market terms for gas rights agreements and off-take arrangements. While we perform due diligence on prospective acquisitions, we may not be able to discover all potential operational deficiencies in such plants. A failure to achieve the financial returns we expect when we acquire renewable natural gas plants or conventional assets could have a material adverse effect on our ability to implement our growth strategy and, ultimately, our business, financial condition, and results of operations. Risks related to acquiring existing plants, include:

Certain persons, associations and groups could oppose renewable energy plants in general or our plants specifically, citing, for example, misuse of water resources, landscape degradation, land use, food scarcity or price increase and harm to the environment. Moreover, regulation regulations may restrict the development of renewable energy plants in certain areas. Biogas production activities (both conventional natural gas and renewable natural gas) are subject to several environmental laws and regulations. The main environmental legislation governing environmental matters for our renewable natural gas developments is the Consolidated Environmental Act issued by Legislative Decree 152/2006.

As a result, we cannot guarantee that the renewable energy plants we currently plan to develop or, to the extent applicable, are developing, willmay not ultimately be authorized or accepted by the local authorities or the local population. For example, the local population could oppose the construction of a renewable energy plant or infrastructure at the local government level, which could in turn lead to the imposition of more restrictive requirements. This type of negative response may lead to legal, public relations or other challenges that could impede our ability to meet our construction targets, targets, achieve commercial operations for a project on schedule, address the changing needs of our plants over time or generate revenues.

If a significant portion of the local population were to mobilize against a renewable energy plant, it may become difficult, or impossible, for us to obtain or retain the required building permits and authorizations. Moreover, such challenges could result in the cancellation or modification of existing authorizations including,including adoption of additional mitigation requirements or even, in extreme cases, the dismantling of existing renewable energy plants.

A decrease in acceptance of renewable energy plants by local populations, an increase in the number of legal challenges, or an unfavorable outcome of such legal challenges challenges could adversely affect our business, financial condition and results of operations. We may also be subject to labor unavailability due due to multiple simultaneous plants in a geographic region. If we are unable to grow and manage the capacity that we expect from our plants plants in our anticipated timeframes,timeframe, it could adversely affect our business, financial condition and results of operations.

A decline in prices for certain fuels or reduced Italian governmental incentives for renewable energy sources, or renewable natural gas specifically, could also make renewable natural gas less cost-competitive on an overall basis. If the price of alternative energy sources falls, including crude oil, any revenues that we generate from renewable natural gas could decline and we may be unable to produce products that are a commercially viable alternative to alternative energy sources. Further, throughout the central and southern EU (but primarily focused in Italy and Germany), member states’ interest in creating new sources of renewable energy has supported the construction of nearly 10,000 AD’sbiogas and biomethane production facilities over the past 15 years. However, the Italian government’s financial incentives and subsidies supporting these activities are set to expire in JanuaryJune 20252027 absent additional government action,action and are expected to be replaced by attractive biomethane incentives. Such incentives are designed to bring biomethane into the national pipeline transmission system in order to deliver the gas to higher efficiency, utility-scale, natural gas power generation stations. In order to continue biogas operations, the farms are forced to seek a new use for the product, which will be dominated by conversion to biomethane. To support this conversion, the Italian government has implemented a government-backed biomethane floor price through the end of 2039 of €124 per MWh, equivalent to $37.60 per (103ft3). If pricing of alternative energy sources becomes more favorable or the Italian government revises its energy policy to suspend or halt financial support of renewable natural gas, our business, financial condition and results of operations will be adversely affected.

In the renewable natural gas industry, we believe our primary competitors will be other renewable natural gas companies with existing plants and farm owners that either either operate their own renewable natural gas plants or may do so in the future. Increased competition for such plants, equipment, and suppliers suppliers, may increase the price we pay for the acquisition costs for existing plants or the amount we have to pay farm owners in the form of equity interests or feedstock supply contracts, which may have a material adverse effect on our results of operations. We may also find ourselves competing more frequently with farm owners to the extent they decide to develop their own renewable natural gas plants, which would also reduce the number of opportunities for us to develop new renewable natural gas plants. While we anticipate receiving the subsidized floor price for our renewable natural gas, we may also compete with other renewable natural gas developers for production off-take agreements with existing and potential buyers of renewable natural gas.

Farms contain organic material whose decomposition causes the generation of gas consisting primarily of methane, which renewable natural gas plants use to generate renewable renewable natural gas or renewable electricity, and carbon dioxide. The estimation of renewable natural gas production volume ismay be inaccurate and can lead to an inexact process and is dependent on many site-specific conditions, including the estimated annual waste volume, composition of waste, regionalweather climateconditions and the capacity and construction of the farm. Production levels are subject to a number of additional risks, including illness and disease risks in the farm’s agriculture producing the waste feedstock, a failure or wearing out of our or our farm owners’ or operators’ equipment; equipment, an inability to find suitable replacement equipment or parts; parts, lower than expected supply or quality of the project’s source of renewable natural gas and faster than expected diminishment of such renewable natural gas supply;supply, or volume disruption in our fuel supply collection system. As a result, the amount of renewable natural gas actually produced by the farm sites from which our production facilities will collect renewable natural gas or the volume of electricity or renewable natural gas generated from those sites may in the future vary from our initial estimates, and those variations may be material.

While we expect to own the anaerobic digesters and upgrading units and underlying land on the farm sites in which our plants will operate, we will not own the entirety of farm sites and we may only own equipment and enter into surface or easement leases. Therefore, we may depend on contractual relationships with, and the cooperation of, the farm site owners and operators for our operations. We cannot guarantee that we will be able to renew any feedstock supply contracts that expire in the future on commercial terms that are attractive to us or at all,all. and anyAny failure to do so, so, or any other disruption in the relationship with any of the farm operators from whose farm sites our plants reside on, may have a material material adverse effect on our business operations, prospects, financial condition and operational results.

In addition, the ownership interests in the land subject to these easements, leases and rights-of-way may be subject to mortgages securing loans or other liens (such as tax liens) and other easements, lease rights and rights-of-way of third parties that were created prior to our plants’ easements, easements, leases and rights-of-way. As a result, certainsome of our plants’ rights under these easements, leases or rights-of-way may be subject, and subordinate, to the rights of those third parties. In the event we do not own the land underlying our facilities, we may not be able to protect our operating plants against all risks of loss of our rights to use the land on which our plants are located, and any such loss or curtailment of our rights to use the land on which our plants are located and any increase in rent due on such lands could adversely affect our business, financial condition and results of operations.

Our financial performance and and growth strategy depend in part on government policies that support renewable generation and enhance the economic viability of owning renewable renewable natural gas or renewable electric assets. If we are unable to utilize various government incentives to acquire additional renewable assets assets in the future, or the terms of such incentives are revised in a manner that is less favorable to us, we may suffer a material adverse adverse effect on our business, financial condition, results of operations and cash flows.

IncreasedInvestor advocacy groups, certain institutional investors, investment funds and other influential investors have in the past increased attention to climate change, change, circular economy, and other ESG matters, as well as investor and societal expectations regarding voluntary ESG disclosures and consumer consumer expectations regarding sustainability may result in increased costs, reduced demand for our products, or other adverse impacts on our business, results of operations, and financial condition. For example, renewable natural gas faces competition from several other low-carbon low-carbon energy technologies, such as solar or wind energy production, among others. Regulatory bodies may adopt rules that substantially favor favor certain energy alternatives over others, which may not always include renewable natural gas. Additionally, energy generation from the the combustion of renewable natural gas results in GHG emissions. Fines, carbon taxes, or additional infrastructure to control methane emissions emissions at both our conventional and renewable natural gas facilities may increase our costs. As such, certain consumers may elect not to consider renewable natural gas for their renewable energy or other ESG goals. The trend of increased environmental regulation is not linear and can fluctuate depending on the administration and jurisdiction, even within the same country. For example, at the same time, “anti-ESG” sentiment has recently gained momentum with a number of stakeholders, government entities, regulators and lawmakers. The proposal or enactment of anti-ESG legislation, regulation, policies and enforcement priorities may result in increased scrutiny, reputational risk, lawsuits or market access restrictions. We cannot foresee the potential impact and unintended consequences that future executive actions or the changes in enforcement of existing laws, rules, and orders may have on our business. Though we are closely following developments in this area and changes in the regulatory landscape in the United States and other jurisdictions, we cannot predict with precision or quantify how or when challenges may arise and ultimately impact our business.

Our primary operations are in anotherItaly, countrymaking us vulnerable to risks associated with operating in one geographic area and we are subject to political, economic and other uncertainties.

All of our natural gas assets and renewable gas assets are currently located in the country of Italy.Italy Our operations in areas outside the United States are subject to various risks inherent in foreign operations. Thesewith risks may include, among other things:

AleAnna’s businesses are also subject to regulatory risks mainly in Italy’s domestic market. The Italian Regulatory Authority for Energy, Networks and Environment Environment (the “Authority”) is entrusted with certain powers in the matter of natural gas and power pricing. Specifically, the Authority retains a surveillance power on pricing in the natural gas market in Italy and the power to establish selling tariffs for the supply of natural gas to residential and commercial users who are opting for adhering to regulated tariffs until the market is fully opened. Developments in the regulatory framework intended to increase the level of market liquidity or of deregulation or intended to reduce operators’ ability to transfer to customers cost increases in raw materials may negatively affect future sales margins of gas and electricity, operating results, and cash flow.

All of our natural gas and renewable gas properties are located in the country of Italy, making us vulnerable to risks associated with operating in one geographic area.

While we maintain access to acreage across Italy, all of our physical conventional natural gas assets, and most of our permits, are located in the Po Valley in Northern Italy and all of our current renewable natural gas assets are located in the region of Tuscany in Central Italy. As a result of this concentration, concentration, we may be disproportionately exposed to the impact of regional supply and demand factors, delays or interruptions of production from wells in this area caused by governmental regulation, appropriation and banning, processing or transportation capacity constraints, availability availability of equipment, facilities, personnel or services market limitations or interruption of the processing or transportation of natural gas. In addition, the effect of fluctuations on supply and demand may become more pronounced within specific geographic natural gas producing areas, which may cause these conditions to occur with greater frequency or magnify the effects of these conditions. We operate in geographic areas with a constantly evolving political landscape, to the extent regulatory regimes or prohibitions are implemented or return in the areas in which we operate, our business will be disproportionately affected due to our geographic concentration. Due to the concentrated geographic nature of our portfolio of properties, a number of our properties could experience any of the same conditions at the same time, resulting in a relatively greater impact on our results of operations than they might have on other companies that have a more diversified portfolio of properties. Additionally, we do not hold title to our properties in Italy,properties, but hold exploration permits and exploitation concessions granted by the Italian government. Under Italian law, each exploration permit is an exclusive right to explore for hydrocarbons and is subject to two renewals of three years each, being granted after the initial term of six years (article 6, paragraph 4, of Law 9/1991). To the extent we are unable to timely renew or obtain permits, our operations could be delayed or interrupted. Such delays or interruptions could have a material adverse effect on our business, financial condition and results of operations.

We maycurrently expandhave ourglobal operationsoperations, globally,including in Italy, which would subjectsubjects us to additional anti-corruption, anti-bribery, anti-money laundering, trade compliance, economic sanctions and similar laws, and non-compliance with such laws may subject us to criminal or civil liability and harm our business, financial condition and/or results of operations. We may also be subject to governmental export and import controls that could impair our ability to compete in international markets or subject us to liability if we violate the controls.

IfWe wecurrently expandhave ourglobal operationsoperations, globally,including wein wouldItaly, bewhich subjectsubjects to the U.S. Foreign Corrupt Practices Act of 1977, as amended, U.S. domestic bribery laws, and other anti-corruption and anti-money laundering laws in the countries in which we would conduct business. Anti-corruption and anti-bribery anti-bribery laws have been enforced aggressively in recent years and are interpreted broadly to generally prohibit companies, their employees, employees, and their third-party intermediaries from authorizing, offering, or providing, directly or indirectly, improper payments or benefits benefits to recipients in the public or private sector. If we engage in international operations, sales and business with partners and third-party third-party intermediaries to market our products, we may be required to obtain additional permits, licenses, and other regulatory approvals. In In addition, we or our third-party intermediaries may have direct or indirect interactions with officials and employees of government agencies agencies or state-owned or affiliated entities. If third-party intermediaries, or our employees, agents, representatives, contractors, or partners engage in violations while engaging in business on behalf of the Company, we may be subject to criminal or civil liability, even if we do not authorize such activities.

We are exposed to foreign currency currency risk from our foreign operations. A weakening U.S. dollar will have the effect of increasing costs, while a strengthening U.S. dollar will have the effect of reducing operating costs. The exchange rate between the Euro and the U.S. dollar has fluctuated in widely in recent years in response to international political conditions, general economic conditions, theand European sovereign debt crisis and other factors beyond our control. Our financial statements, presented in U.S. dollars, may be affected by foreign currency fluctuations through both translation risk and transaction risk.

We are a holding company and our organizational structure is what is commonly referred to as an Up-C structure, whereby all of the equity interests in AleAnna Energy are held by HoldCo and our sole material asset is our equity interest in HoldCo and we are accordingly dependent upon distributions from HoldCo to pay taxes,taxes and cover our corporate and other overhead expenses.

We are a holding company and have no material assets other than our equity interest in HoldCo. We have no independent means of generating revenue. To the extent that we need funds and HoldCo or its subsidiaries are restricted from making such distributions under applicable law or regulation or under the terms of any financing or other contractual arrangements, or are otherwise unable to provide such funds, it could materially adversely affect our liquidity and financial condition. If HoldCo does not distribute sufficient funds to us to pay our taxes or other liabilities, we may default on contractual obligations or have to borrow additional funds. In the event that we are required to borrow additional funds, funds, it could adversely affect our liquidity and subjectexpose us to additional restrictions imposed by lenders.

If we cannot meet the continued listing requirements of Nasdaq,The Nasdaq Capital Market (“Nasdaq”), Nasdaq may delist our securities.

We have previously identified material weaknesses in our internal control over financial reporting. If we are unable to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report the Company’s financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results, and we may face litigation as a result.

Effective internal controls are necessary to provide reliable financial reports and prevent fraud. AleAnnaWe isare a newlyrelatively new public company that is in the process of adding resources with the appropriate level of experience and technical expertise to oversee AleAnna’sour business processes and controls. AtDespite significant progress made in 2025, at this time, AleAnnawe doesdo not have the necessary business processes and related internal controls formally designed and implemented.

InAs a result, in connection with the preparation of AleAnna’sour financial statements as of and for the yearsyear ended December 31, 20242025, and 2023,our management of AleAnna identified material weaknesses in its internal control over financial reporting as follows:reporting.

We cannot assure you that these measures will remediate the material weaknesses described above. The implementation of these remediation measures is in the early stages progress and will require further validation and testing of the design and operating effectiveness of the Company’s internal controls over a sustained period of financial reporting cycles and, as a result, the timing of when the Company will be able to remediate the material weaknesses is uncertain and the Company may not remediate these material weaknesses during the year ended December 31, 2025.2026. If the steps the Company takes do not remediate the material weaknesses in a timely manner, there could be a reasonable possibility that these control deficiencies or others may result in a material misstatement of its annual or interim financial statements that would not be prevented or detected on a timely basis. This, in turn, could jeopardize the Company’s ability to comply with its reporting obligations, limit its ability to access the capital markets and adversely impact its stock price.

We are required by Section 404 of the Sarbanes-Oxley Act to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting in our second annual report following the completion of the Business Combination.reporting. The process of designing and implementing internal control over financial reporting required to comply with this requirement will be time-consuming, costly and complicated. If during the evaluation and testing process we identify one or more other material weaknesses in our internal control over financial reporting our management will be unable to assert that our internal control over financial reporting is effective. In addition, if we fail to achieve and maintain the adequacy of our internal controls, as such standards are modified, supplemented or amended from time to time, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act.

We do not have extensive experience operating as a public company subject to U.S. federal securities laws and may not be able to adequately develop and implement the governance, compliance, compliance, risk management and control infrastructure and culture required for a public company, including compliance with the Sarbanes-Oxley Act.

We do not have extensive experience operating operating as a public company subject to U.S. federal securities laws. Our officers and directors have limited recent experience in managing a public company subject to U.S. federal securities laws, which makes their ability to comply with applicable laws, rules and regulations uncertain. Our failure to comply with all applicable laws, rules and regulations could subject us to U.S. regulatory scrutiny or sanction, which could harm itsour reputation and share price.

AleAnna has not previously been required to prepare or file periodic or other reports with the SEC or to comply with the other requirements of U.S. federal securities laws. Additionally, AleAnna has not previously been required to establish and maintain the disclosure controls and procedures, and internal control over financial reporting applicable to a public company under U.S. federal securities laws, including the Sarbanes-Oxley Act. We may experience errors, mistakes and lapses in processes and controls, resulting in failure to meet requisite U.S. standards.

AleAnna Energy’s pre-Business Combination equity holders hold the substantial majority of our outstanding Class A Common Stock.Stock as of December 31, 2025. The resale, or expected or potential resale, of a substantial number of our Class A Common Stock in the public market could adversely affect the market price for our Class A Common Stock and make it more difficult for you to sell your Class A Common Stock at times and prices that you feel are appropriate.

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 Form 10-K. The discussion and analysis should also be read together with the section entitled “Business”. This discussion and analysis contains forward-looking statements that reflect our plans, estimates and beliefs that involve risks and uncertainties that may be outside our control. See the section titled “Cautionary Note Regarding Forward-Looking Statements”. As a result of many factors, such as those set forth underin thePart headings 1, Item 1A.“Risk Factors” and elsewhere in this Form 10-K, our actual results may differ materially from those anticipated in these forward-looking statements. Unless the context otherwise requires, all references in this section to “we,” “us,” “our,” “AleAnna,” or the “Company” refer to AleAnna, Inc.

AleAnna is a natural gas resource companydeveloper focused on delivering critical natural gas supplies to Europe through both onshore conventional natural gas exploration and renewable 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. 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 reservoir imaging. In 2021, we launched a renewable natural gas development business focused on bringing to market carbon-negative renewable natural gas derived from animal and agricultural waste.

Planned principal operations have not yet commenced. As of December 31, 2024, although we had generated revenue from electricity sales from two renewable natural gas assets, we had not generated any revenues from our principal business activities to date. Our recent drilling and exploration activities involve the drilling and testing of three Longanesi development wells (during 2022 and 2023) as well as the completionre-completion of two original discovery wells. We had no drilling activity during the yearyears ended December 31, 2024,2025 andor drilled and completed one gross Longanesi development well and worked over and completed one additional Longanesi development well (0.335 net to our interest) during the year ended December 31, 2023.2024. We had no other exploratory or development drilling during years ended December 31, 20242025 or 2023.2024. Our Longanesi, Trava and Gradizza wells were classified by DeGolyer as proved undeveloped reserves as as such wells had not yet started production as of December 31, 20242025 and require future investments to install production pipelines and production facilities prior to being fully completed and producible. FollowingHowever, tie-inas ofnoted these wells andin the installation“Recent ofDevelopments” a temporarysection processing facility,below, we and Padana achieved first production of the five wells in from the Longanesi field in March 2025. The permanent processing facility is expected to be constructed over the remainder of 2025 and early 2026 and commissioned in mid-2026.

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 SPAC 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.

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 loss.income (loss).

In connection with thisthe milestone,Longanesi AleAnnastart-up willin be2025, requiredwe toissued reservea $3.1 million relatedbank guarantee to thesecure our contingent consideration liability dueobligation to EnelEnel. (seeThe Noteguarantee 6).required $1.2 Thesemillion funds willin becash collateral, which is classified as restricted cash inas futureof balanceDecember sheets31, and2025. The collateral may be used to satisfy the contingent consideration liability as payments become due.

On October 29, 2024, we we entered into a gas sale agreement (“GSA”) with Shell Energy Europe LimitedLimited, (“SEEL”),under wherebywhich SEEL became the exclusive buyer of our share of the natural gas produced from the Longanesi field net of (i) any consumption and/or losses incurred in the transport, treatment and compression of gas before delivery; (ii) any volume to be allocated for regulated royalties auctions, if applicable; and (iii) any other volume contractually allocated to other parties before August 31, 2022. Future sales under the GSA are contingent upon the commencement of gas production.

We believe that our performance and future success dependdepends 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 discussed under the section titled “Risk Factors.” We believe the factors described below are key to our success.

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 2025 and early 2026 and commissioned mid 2026.

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

Commencing and Expanding Renewable Natural Gas Operations

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

During the year ended December 31, 2024, we generated approximately $1.4 million of2025, revenue from our Conventional segment was comprised of sales of our share of natural gas from the Longanesi field. During the year ended December 31, 2025, results from the Longanesi field have outperformed expectations, with a stabilized total production rate of approximately 25 to 30 million cubic feet per day (“MMcf/d”), which was achieved ahead of the anticipated 3-month ramp up timeline for this milestone. During the year ended December 31, 2025, 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).system. 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.

Business Combination transaction expenses represent legal, consulting, advisory, accounting and other transaction fees and expenses related to the Business Combination, accounted for as a common control reverse recapitalization, that were expensed in connection with the Business Combination. A portion of the total costs incurred were recorded as a reduction in additional paid-in capital, up to the $0.6 million of proceeds received from the Trust, with costs in excess of funds raised from the Business Combination required to be expensed under U.S. GAAP. Management separated these expenses on its audited consolidated statement of operations for the year ended December 31, 2024 due to the significant and discrete nature of the expenses.

We are also subject to a Valued-Added Tax (“VAT”) which is a broadly-based consumption tax that is assessed toon the value that is added to goods and services. The VAT generally applies to nearly allmost goods and services that are bought and sold within the EU. Italian law allows forIn certain cases, including cross-border sales to business customers and sales of biogas within Italy, we are not required to collect VAT payments toon berevenues. recoveredTo throughdate, ongoing applications for refunds. Wewe have incurred higher VAT input paid (i.e., VAT paid on purchases (input VAT) than the VATwe output collected (i.e., VAThave collected on sales (output VAT), resulting in a net VAT refund receivable. As of December 31, 20242025 and 2023,2024, we we had VAT receivables of $6.6$9.6 million, and $4.4$6.8 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.

Our net lossesincome wereattributable $12.4to the common stockholder was $1.8 million andfor $5.2the year ended December 31, 2025, as compared to net loss attributable to the common stockholder of $167.8 million for the yearssame endedperiod of December 31, 2024 and 2023, respectively.2024. As of December 31, 20242025 and December 31, 2023, 2024, we had an accumulated deficit of $191.0$189.2 million and $146.4$191.0 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. See “Note 10 9— Equity” to the audited condensedconsolidated consolidated financial statements for further details. 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. SinceWe inception, we have incurredachieved net losses annually and do not expect to achieve sustained profitability until 2025. These shares were all exchangedincome for Classthe Afirst and Class C common stocktime in connection with the Business Combination.2025.

Consolidated Results of Operations

ComparisonThe following table shows our consolidated results of operations for the yearyears ended December 31, 20242025 and 20232024:

During the year ended December 31, 31, 2024, all of2025, 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 that were purchased in July 2024.plants. Cost of revenues from sales of electricity consists of feedstock costs, direct labor and overhead necessary to produce RNG and generate electricity. All costCost of revenues from wassales relatedof tonatural thegas RNGconsists assetsof thatgas weretariffs purchasedand inroyalties, 2024.as well as rent expense. See Critical Accounting Policies and Estimates for further details of our revenue recognition accounting policies.

General and administrative expenses (exclusive of Business Combination transaction expenses) increased by $0.6$3.4 million, or 11%,54% to $9.7 million for the year ended December 31, 2024, compared to the year ended December 31, 2023.2025, compared to $6.3 million for the year ended December 31, 2024. The increase was primarily due to increases in legal, audit and consulting fees.fees to support public company operations as well as delivering improved control over our operations.

See “Expenses” above for a description of the Business Combination transaction expenses. These expenses were specific to the Business Combination that closed onin Decemberthe 13,prior 2024,year, with no similar expenses incurred in 2023.2025.

As of December 31, 20242025 and and December 31, 2023,2024, the contingent consideration liability was recorded at $25.0$28.2 million and $26.5$25.0 million, respectively. The estimate of the contingent consideration liability was determined based on inputs including the following as of December 31, 2024 2025 and December 31, 20232024: the intercontinental exchange futures prices for European natural gas, Euro to USD exchange rates of 1.04 1.18 and 1.11,1.04, respectively, and management’s future expected annual Longanesi production. We are required to make formulaic deferred consideration payments effectively equating to 20% to 50% of revenue above certain European natural gas threshold prices. The calculation and timing of such payments are primarily driven by future expected Longanesi production, as modeled by DeGolyer, as well as forward European natural gas prices. While the timing and quantities of expected Longanesi production were unchanged from December 31, 20232024 to December 31, 2024,2025, and we had fully accrued the total capped Euro amount of the liability, average annual European natural gas forward prices declined slightly.

The change in the fair value of derivative liability related to the Class 1 Preferred Units was $0.2 millionzero during the year ended December 31, 2024,2025, compared compared to $0.7$0.2 million during the same period in 2023.2024. The fair value gain recorded during the year ended December 31, 2024 (representing a decrease in the liability) was primarily due to a higher liquidation threshold which was driven by capital contributions made during the first quarter of 2024 through the Class 1 Preferred Units. Part of the change was also driven by a lower estimated business value as of September 30, 2024 compared to December 31, 2023 due to a decline in forward natural gas prices. The derivative liability was reduced from $0.2 million as of December 31, 2023 to zero as of September 30, 2024 and was ultimately derecognized in conjunction with the Business Combination.Combination in the prior year.

For the purposespurpose of presenting 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 income (loss) on the consolidated statements of operations and comprehensive loss.income (loss).

The currency translation adjustment decreased increased by $1.8$5.7 million for the year ended December 31, 20242025 compared to the same period in 2023.2024. This decreaseincrease was dueprimarily to thedriven by fluctuation 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 strengthened from December 31, 2024 to December 31, 2025, and the average exchange rate was higher during 2025, resulting in a larger positive currency translation adjustment relative to the prior period.

There were were no material changes to the risk factors disclosed in “ Part I, Item 1A. Risk Factors” in our Annual Report on Form 10-K for for the year ended December 31, 2025. For more information concerning our risk factors, please refer to “Part I, Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025.

AleAnna isWe 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.Enel Spa. We also retain wholly owned concessions, permits, and pending applications on other exploration and 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 MarchJune 31,30, 2026 or 2025. We had no other exploratory or development drilling during the three and six months ended MarchJune 31,30, 2026 or 2025. Our Longanesi, 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” section below, we achieved first production from the Longanesi field in 2025.

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, SPACSwiftmerge 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 SPACSwiftmerge 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 The Business Combination with respect to AleAnna Energy was not treated as a change in control primarily due to Nautilus receiving the controlling 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, SPAC 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 SPAC, Swiftmerge, accompanied by a recapitalization.

Gradizza Concession – Regional Intesa Approval

During the third quarter of 2025, AleAnnawe reached an agreement with the Emilia Romagna Region (the “Intesa”) in support of itsour 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.

First Production at Longanesi

On March 13, 2025, AleAnnawe achieved a key milestone with the first production from itsour working interest in five wells in the Longanesi field, andfield. theThe Longanesi field reached sustained maximum production during the second quarter of 2025. The CompanyWe 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, AleAnnawe 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 MarchJune 31, 30, 2026. The collateral may be used to satisfy the contingent consideration liability as payments become due.

We believe our achieving first 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.

During the three and six months ended MarchJune 31,30, 2026, we generated approximately $9.3$10.2 million and $19.6 million of total revenue, comprised of $8.9$9.5 million and $18.4 million of revenue from our Conventional segment and $0.4$0.7 million and $1.2 million of revenue from our Renewable segment.

During the three and six months ended MarchJune 31,30, 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 MarchJune 31,30, 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.

G&A expenses consist of compensation costs for personnel in executive, finance, accounting, and other administrative functions.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.

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 MarchJune 31, 30, 2026 and December 31, 2025, we had VAT receivables of $10.4$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.

Our net income attributable to common stockholders was $2.1$2.4 million and $4.4 million for the three and six months ended MarchJune 31, 30, 2026, as compared to net loss income attributable to common stockholderstockholders of $2.0$0.3 million and net loss of $1.7 million for the same period periods in 2025. As of MarchJune 31,30, 2026 and December 31, 2025, we had an accumulated deficit of $187.2$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 2025.2025 Weand expecthave continued to continuegenerate sustainednet profitability.income for the six months ended June 30, 2026.

Comparison of the three and six months ended MarchJune 31,30, 2026 and 2025 is as follows:

During the three and six months ended MarchJune 31,30, 2026, our revenue was earned primarily through sales of our share of natural gas production from from the Longanesi field and, to a lesser extent, from electricity generation and sales at the Casalino and Campopiano renewable natural gas 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 $8.7$6.2 million and $14.9 million, or 1350%,153% and 318%, for the three and six months ended MarchJune 31,30, 2026 to $10.2 $9.3million and $19.6 million compared to $0.7$4.0 million and $4.7 million for the three and six months ended MarchJune 31,30, 2025,2025. The increase was primarily driven byattributable sustainedto a full period of production atin the current periods from the five wells inat the Longanesi field, which beganachieved first production in 2025. Cost of revenues increased by $0.7 million, or 85% to $1.6 million for the three months ended March 31, 2026, compared to $0.8 million for the three months ended March 31, 2025, primarily driven by increased production costs from the Longanesi field.2025.

General and administrative expenses consist of salaries and benefits, outside professional services including legal, human resources, audit and accounting services, and development stage expenses.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 decreasedincreased by $1.1$1.7 million or 33%127% and $1.2 million or 25% for the three and six months ended MarchJune 31,30, 2026, compared to same periods period in 2025. The decreaseincrease was primarily due to decreasesstock incompensation legal,expense, audithigher headcount and consultingprofessional fees.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 increased by $1.1$0.7 million and $1.8 million, or 1512%284% and 581% to $1.2$0.9 million and $2.1 million for the three and six months ended MarchJune 31, 30, 2026, compared to $0.1$0.2 million and $0.3 million for the three and six months ended MarchJune 31,30, 2025. AsThe ofincrease Marchwas 31,driven 2025,by depletion associated with higher production volumes at the Longanesi fieldfield, hadconsistent notwith commencedthe production.increase in revenue.

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 or4% 41%and 26% to $0.1 million and $0.3 million during the three and six months ended MarchJune 31,30, 2026 compared to $0.2 million and $0.4 million the same periodperiods in 2025, primarily due to slightly higher interest earned on larger average cash balances during 2025 period compared to the 2026 period presented.2025.

The currency translation adjustment decreased by $2.2$3.3 million and $5.5 million for the three and six months ended MarchJune 31,30, 2026 compared to the same periodperiods 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 MarchJune 31,30, 2026, and the average exchange rates were higher during the 2026 period,periods, resulting in negative currency translation adjustments relative to the 2025 period.periods.

EBITDA is a supplemental non-GAAP financial measure defined as net income (loss) adjusted for interest and other income, income taxes, depreciation, depletion,depreciation and amortization.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 obligation,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.

We have begun generating revenue from our operations. We had an accumulated deficit of $187.2$184.8 million as of MarchJune 31,30, 2026. We had $31.1$32.6 million in unrestricted cash and cash equivalents as of MarchJune 31,30, 2026 and generated cash flows from operations of $2.9$7.1 million for the threesix months ended MarchJune 31,30, 2026. Management believes that existing cash on hand, together with expected cash cash flows from operations, will be sufficient to meet the Company’s operating expenses and support continued growth for at least the the next 12 months.

The following table includes our cash flow data for the threesix months ended MarchJune 31,30, 2026 and 2025:

Cash generatedNet incash provided by operating activities increased by $4.8$10.5 million for the threesix months ended MarchJune 31,30, 2026, compared to the same period in 2025. ThisThe increase was primarily reflectsdriven cashby an revenues$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, collections on electricity sales receivable from RNG plants, and the timing of payments of accounts payable during the three months ended March 31, 2026field compared to thea same partial period in 2025.

Cash used in investing activities increased by $1.7 $2.5 million for the threesix months ended MarchJune 31,30, 2026, compared to the same period in 2025. InInvesting activities in both periods, investing cash flowsperiods consisted primarily reflectedof additions to our conventional natural gas properties related to continued development ofat the Longanesi wells.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 used in financing activities during the threesix months ended MarchJune 31,30, 2026 reflects tax payments made related to net share settlements of PSUs. Cash provided by financing activities during the threesix months ended MarchJune 31,30, 2025 reflects proceeds from cash exercises of our Public Warrants.Warrants which did not occur in the current period.

In connection 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 MarchJune 31,30, 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 MarchJune 31,30, 2026 and December 31, 2025, the total contingent consideration consideration liability was recorded at $27.6$27.4 million and $28.2 million, respectively, with $11.3$11.8 million and $11.6 million being classified as a short-term and $16.3$15.5 million and $16.7 million being classified as a long-term liability for the same respective periods.