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

Our business involves our entering into various purchase and sale, hedgingsale and other transactions with numerous third parties (commonly referred to as “counterparties”). In such arrangements, we are exposed to the performance and credit risks of our counterparties, including the risk that one or more counterparties fails to perform its obligation to make deliveries of commodities and/or to make payments. These risks may increase during periods of commodity price volatility. Defaults by suppliers and other counterparties may adversely affect our operating results, liquidity and access to financing.

Operation and/or construction of our LNG infrastructure, liquefaction and other facilities involves significant risks.

TheIncluded in our near-term and long-term growth strategy, is the completion of the construction of our proposed Galveston LNG liquefaction facility which will require significant amounts of capital during construction and expansion of energy-related infrastructure, including liquefaction facilities, as well as other future projects, involves numerous operational, regulatory, environmental, political, legal and economic risks beyond our control and may require the expenditure of significant amounts of capital during construction and thereafter. These potential risks include, among other things, the following:

Greenhouse Gases/Climate Change. From time to time, there may be federal and state regulatory and policy initiatives to reduce green house ("GHG") emissions in the United States from a variety of sources. Other federal and state initiatives are being considered or may be considered in the future to address GHG emissions through, for example, United States treaty commitments or other international agreements, direct regulation, a carbon emissions tax, or cap-and-trade programs. For example, the U.S. recommitted to the Paris Agreement, an international treaty with the goal of limiting global warming to below 2 degrees Celsius as compared to pre-industrial levels. The Environmental Protection Agency (“EPA”) has adopted regulations for reporting and controlling GHG emissions from certain air emissions sources under its existing authority under the CAA, and may adopt more stringent regulations in the future. In addition, some states and foreign jurisdictions have individually or in regional cooperation, imposed restrictions on GHG emissions under various policies and approaches, including establishing a cap on emissions, requiring efficiency measures, or providing incentives for pollution reduction, use of renewable energy sources, or use of replacement fuels with lower carbon content.

Over the past several years, changing weather patterns and climatic conditions have added to the unpredictability and frequency of natural disasters in certain parts of the world, including the markets in which we operate and intend to operate, and have created additional uncertainty as to future trends. There is a growing consensusconcern today that climate change increases the frequency and severity of extreme weather events and, in recent years, the frequency of major weather events appears to have increased. We cannot predict whether or to what extent damage that may be caused by natural events, such as severe tropical storms and hurricanes, will affect our operations or the economies in our current or future market areas, but the increased frequency and severity of such weather events could increase the negative impacts to economic conditions in these regions and result in a decline in the value or the destruction of our liquefiersliquefiers, construction in progress and downstream facilities or affect our ability to transport LNG. In particular, if one of the regions in which we operate is impacted by such a natural catastrophe in the future, it could have a material adverse effect on our business. Further, the economies of such impacted areas may require significant time to recover and there is no assurance that a full recovery will occur. Even the threat of a severe weather event could impact our business, financial condition or the price of our common stock.

Technological innovation may render our liquefaction processes obsolete.obsolete or significantly decrease the demand of LNG as a fuel source for our customers.

Environmental, social, and governance (“ESG”) goals, programs, and reporting are increasingly being identified by capital providers and investors as a priority for the energy industry, and access to capital and investors for companies not prioritizing ESG may become increasingly limited.

Spurred by increasing concerns regarding climate change, the energy industry faces growing demand for corporate transparency and a demonstrated commitment to sustainability goals. ESG goals and programs, which typically include extralegal targets related to environmental stewardship, social responsibility and corporate governance, have become an increasinga focus of some investors and shareholders across the industry. While reporting on ESG metrics remains voluntary, access to capital and investors is likely to favor companies with robust ESG programs in place. In addition, if ESG metrics and/or reporting become mandatory, our costs of planning, measuring, monitoring, and reporting on our operations could increase and could have a material adverse effect on our business, contracts, financial condition, operating results, cash flow, liquidity and ability to execute our strategy.

If we are unable to secure additional funding, or if it is only available on terms that we determine are not acceptable, we may be forced to delay, reduce or eliminate parts of our business developmentexpansion efforts, or we may otherwise be unable to fully execute our business plan, and our business, financial condition or results of operations may be adversely affected. Our ability to raise additional capital will depend on financial, economic and market conditions and other factors, many of which are beyond our control. We cannot assure you that such additional funding will be available on acceptable terms, or at all. A variety of factors beyond our control could impact the availability or cost of capital, including domestic or international economic conditions, increases in key benchmark interest rates and/or credit spreads, the adoption of new or amended banking or capital market laws or regulations, the re-pricing of market risks and volatility in capital and financial markets, risks relating to the credit risk of our customers and the jurisdictions in which we operate, as well as general risks, including limitations on investment capital, applicable to the energy sector, which may not be available as needed, or may be available in more limited amounts or on more expensive or otherwise unfavorable terms. In the event any of the lenders under these potential debt instruments were unable to perform on its commitments, we may need to seek replacement financing.

We currently depend upon a limited number of customers. Our near term ability to generate cash is both dependent on the small number of customers’ continued willingness and ability to perform their obligations under their respective contracts. In the event one of our significant customer fails to perform its obligations under their contracts, our operating results, cash flow and liquidity could be materially and adversely affected, even if we were ultimately successful in seeking damages from any of these customers in the event of a breach of the contract. For the year ended December 31, 2024,2025, Carnival Corporation andCorporation, Aggreko Plc and Space Exploration Technologies Corp each accounted for more than 10% of our revenues.

Finally, our customer contracts may contain various termination rights, including, without limitation:

We expect to finance our cash needs through a combination of equity offerings and debt financings. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of common stock holders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of common stockholders. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. We cannot be certain that additional funding will be available on acceptable terms, or at all. If we are unable to raise additional funds when needed, we may be required to delay, limit, reduce or terminate our facility development projects, product development or future commercialization efforts.

Moreover, because we are incorporated in Florida, we are governed by the provisions of Section 607.0901 and 607.0902 of the Florida Business Corporation Act. In general, Section 607.0901 regulates certain transactions between a corporation and an “interested shareholder,” one who beneficially owns more than tenfifteen percent of the corporation’s outstanding voting shares. The statute provides significant protection to minority shareholders by assuring that the transactions covered by the statute are either (a) procedurally fair (i.e., the transaction is approved by disinterested directors or disinterested shareholders) or (b) substantively fair (i.e., result in a fair price to the shareholders).

We hold a 40% interest in BOMAY Electric Industries Company, Ltd. (“BOMAY”), which builds electrical systems for sale in China. The majority partner in this foreign joint venture is Baoji Oilfield Machinery Co., Ltd. (a subsidiary of China National Petroleum Corporation), who owns 51%. The remaining 9% is owned by AA Energies, Inc. Our joint venture, BOMAY, has a finite life that is set to terminate in 2028. The joint venture may be terminated earlier for valid business reasons including force majeure. In the event the joint venture is to be terminated, either party may acquire the other parties’ interests and continue the operations of the joint venture. Additionally, the term of the joint venture may be extended upon agreement of all parties subject to approval from the relevant Chinese authority six months before expiration of the venture. At this time, Stabilis has no indication that the joint venture will not be extended; however, U.S. and Chinese political relations are strained and we can provide no assurance that such an extension will occur. The balance of our investment in BOMAY at December 31, 20242025 was $11.7$11.9 million accounted for using the equity method of accounting and is subject to risk. See Note 76 of the Notes to Consolidated Financial Statements for further discussion orof our investment in BOMAY.

Stabilis Solutions, Inc. and its subsidiaries is an energy transition company that providesprovide turnkey clean energy production, storage, transportation and fueling solutions primarily using liquefied natural gas (“LNG”) to multiple end markets. We have safely delivered over 580 million gallons of LNG through more than 60,000 truck deliveries during our 22 year operating history, which we believe makes us one of the largest and most experienced small-scale LNG providers in North America. We provide LNG solutions to customers in diverse end markets, including aerospace, agriculture, energy, industrial, marine bunkering, mining, oil and gas, pipeline, remote power and utility markets. LNG can be used to deliver natural gas to locations where pipeline service is unavailable, has been interrupted, or needs to be supplemented. LNG can also be used to replace a variety of fuels, including distillate fuel oil, such as diesel and marine gas oil, and propane, among others, to provide environmental and economic benefits. LNG can also be used to deliver natural gas to locations where pipeline service is unavailable, has been interrupted, or needs to be supplemented. Increasingly, LNG is being utilized as a transportation fuel in the marine industry and as a propellant in the private rocket launch sector. Additionally, LNG can be used to generate electrical power for data centers where the data center either does not have adequate access to the electrical grid, a gas pipeline, or as a redundant source of power. We believe that these fuel markets are large and provide significant opportunities for LNG usage. We believe that LNG provides an important balance between environmental sustainability, security and accessibility, and economic viability when compared to both renewables and other traditional hydrocarbon-based fuels and will play a key role in the energy transition.

LNG Production and Sales—Stabilis builds and operates cryogenic natural gas processing facilities, called “liquefiers,” which convert natural gas into LNG through a purification and multiple stage cooling process. We currently own and operate a liquefier that can produce up to 100,000 LNG gallons per day in George West, Texas and a liquefier that can produce up to 30,000 LNG gallons per day in Port Allen, Louisiana. The Company continues to seek expansion of its own liquefaction capacity as described in "Current Events and Expansion Efforts" below. We also purchase LNG from third-party production sources which allows us to support customers in markets where we do not own liquefiers. We make the determination of LNG and transportation supply sources based on the cost of LNG, the transportation cost to deliver to regional customer locations, and the reliability of the supply source. Revenues earned from the production and sales of LNG are included within LNG Product revenue.

Transportation and Logistics Services—Stabilis offers our customers a “virtual natural gas pipeline” by providing turnkey LNG transportation and logistics services in North America. We deliver LNG to our customers’ work sites from both our own production facilities and our network of approximately 31 third-party production sources located throughout North America. We own a fleet of cryogenic trailers to transport and deliver LNG. We also outsource similar equipment and transportation services for LNG from qualified third-party providers as required to support our customer base. Revenues earned from the transportation and logistical services of LNG to our customers are included within LNG Product revenue.

Cryogenic Equipment Rental—Stabilis operates a fleet of over 170 mobile LNG storage and vaporization assets, including: transportation trailers, electric and gas-fired vaporizers, ambient vaporizers, storage tanks, and mobile vehicle fuelers. We also own several stationary storage and regasification assets. We believe this is one of the largest fleets of small-scale LNG equipment in North America. Our fleet consists primarily of trailer-mounted mobile assets, making delivery to and between customer locations more efficient. We deploy these assets on job sites to provide our customers with the equipment required to transport, store, and consume LNG in their operations. Revenues earned from cryogenic equipment rental are included within Rental revenue.

In the third quarter of 2022, Stabilis received authorization from the DOE to export domestically produced LNG to all free trade ("FTA") and non-free trade ("non-FTA") countries, for up to 51.75 billion cubic feet per year (or approximately 1.0 MTPA) of natural gas equivalent. The authorization is for shipments of LNG and is for a term of 28 years with a remaining term of approximately 2625 years under this authorization. AsIn the third quarter of December 31, 2024, the Company has met the initial time requirement to initiate exports to non-FTA countries. In 2024, we delivered LNG to Europe under this authorization. For exports to FTA countries, the Company has five years from the date it received the authorization with which to initiate exportation of LNG.

The DOE authorization received during the third quarter of 2022 supplements the Company's other existing import and export license from the DOE,DOE. whichUnder authorizesthis license, the Company is authorized to import and export LNG from and to Canada and Mexico, via truck. InAdditionally, effective September 2024, wethe deliveredCompany can import LNG, by vessel, from various international sources to any LNG toimport Mexicoterminal underin thisthe authorization.United States.

During the Current Year revenues increaseddecreased $0.2$5.0 million, or 0.2%,6.9%, compared to the Prior Year. The increasedecrease in revenues primarily related to:

Change in unrealized loss (gain) on natural gas derivatives. The Company incurred a gain of $0.3$24 millionthousand on the change in unrealized lossesgain associated with the Company's natural gas derivatives in the Current Year compared to a gain of $0.5$0.3 million in the Prior Year. The gains in both periods were due to offsetting amortization of realized losses as call option volumes expired unexercised. See Note 4 inand the Notes to the Consolidated Financial Statements for a further discussionmaturity of ournatural gas derivatives.

Selling, general and administrative. Selling, general and administrative expense decreasedincreased $1.1$1.4 million, or 8.8%,12.1%, during the Current Year as compared to the Prior YearYear. The increase is primarily dueattributable to decreasedMr. incentiveBallard's compensationseverance related expenses of $2.1 million and personnelhigher costs,office includinglease cost in the Current Year, partially offset by lower stock-based compensation expense.

Depreciation. Depreciation expense in the Current Year decreasedincreased $0.7$0.2 million compared to the Prior Year primarily due to new mobile assets and other capital expenditures in the Current Year. The increase was partially offset by other assets reaching the end of their depreciable lives.

Net Equity Income From Foreign Joint Ventures' Operations. Income from investments in foreign joint ventures decreased by $0.1$0.3 million, or 7.5%,20.6%, in the Current Year compared to the Prior Year primarily due to lower earningsnet inprofits China.from our China joint venture.

Other income (expense). OtherChange in other expense was lower in the Current Year compared to the Prior Year,primarily related to miscellaneous and foreign exchange transactions.

Income tax expense. The Company incurred state and foreign income tax expense of $0.5$0.1 million during the Current Year primarily related to state income taxes owed from operating income and foreign taxes paid in connection with the cash dividend received from our BOMAY joint venture. The Company incurred state income and foreign tax expense of $0.2$0.5 million in the Prior Year. No U.S. federal income tax expense was recorded for the Current Year or Prior Year as the Company had sufficient deferred tax assets to offset any U.S. federal taxes which were fully offset by a change in the Company's valuation allowance on utilized deferred tax assets.

Historically,The ourCompany's principal sources of liquidity in the Current Year have consisted of cash provided by our operations, cash on hand, proceeds received from borrowings under the AmeriState Loan described below and distributions from our BOMAY joint venture. In prior years, the Company also obtained debt financing from MG Finance, a related party, which was paid in full as of December 31, 2023. During 2024, our principal sources of liquidity were cash provided from our operations, our existing cash balances and distributions from our BOMAY joint venture. The Company used cashits flows generated from operationsliquidity to invest in fixed assets and increased working capital to support growth as well as to pay interest and principal amounts outstanding under our debt agreements.

On JuneMarch 9,27, 2023,2025 the Company, along with its subsidiaries, Stabilis LNG Eagle Ford LLC, Stabilis GDS, Inc. and Stabilis LNG Port Allen, LLC (collectively, the “Borrowers”) entered into a three-yearModification loanAgreement agreementto (the “Revolvingexisting CreditLoan Facility”)Agreement with Cadence Bank. TheUnder the Agreement the $10.0 million Revolving Credit Facility providesmaturity fordate was extended to June 9, 2028. Additionally, the Agreement amended the Fixed Charge Coverage Ratio terms primarily related to the inclusion of excess cash. The three-year Revolving Credit Facility, as amended, contains a maximum aggregate amount of $10.0 million, subject to a borrowing base of 80% of eligible accounts receivable. The Company may request an increase in the maximum aggregate amount under the Revolving Credit Facility by up to $5.0 million, subject to the approval of Cadence Bank. All borrowings under the Revolving Credit Facility are secured by the Borrowers’ accounts receivable and deposit accounts. Borrowings under the Revolving Credit Facility incur interest at the Prime Rate published by the Wall Street Journal. Any unused portion is subject to a quarterly unused commitment fee of 0.5% per annum. As of December 31, 2024,2025, no amounts have been drawn under the Revolving Credit Facility. The Revolving Credit Facility matures on June 9, 2026. The Revolving Credit Facility contains various restrictions and covenants. As of December 31, 2024,2025, the Company was in compliance with all its covenants related to the Revolving Credit Facility.

As of December 31, 2024,2025, we had $9.0$7.5 million in cash and cash equivalents on hand and $9.3$8.8 million in outstanding debt (net of debt issuance costs) and lease obligations (of which $2.4$2.3 million is due in 20252026). The Company has total availability under the Revolving Credit Facility and the AmeriState Secured Term Loan Facility of $4.3$2.7 million at December 31, 2024.2025. TheFurther, the Company had made no draw downs on theits Revolving Credit Facility or Secured Term Loan facility during the year ended December 31, 2024. The Company has also filed a shelf registration statement (described below) which provides the Company the flexibility to raise capital to fund working capital requirements, repay debt and/or fund future transactions.2025.

The Company is subject to substantial business risks and uncertainties inherent in the LNG industry and there is no assurance that the Company will be able to generate sufficient cash flows in the future to sustain itself or to support future growth. Management believes the business will generate sufficient cash flows from its operations along with availability under the Company's debt agreements to fund theits ongoing business for the next twelve months. AsWhile we continuebelieve we have sufficient liquidity and capital resources to grow,fund managementour continuesongoing operations and repay our debt, we will require additional capital to evaluatefund our expansion. Our current expansion efforts include the construction of the proposed Galveston LNG liquefaction facility and ramp up of operations to service our multi-year on-site power generation customer at a data center beginning in 2027 which will require construction expenditures, additional financingequipment alternatives,and however,rolling therestock isand nonear-term guaranteeworking thatcapital additionalas financingthe willCompany beramps availableup orits availableoperations atduring terms that would be beneficial to shareholders.2026.

Net cash provided by operating activities totaled $13.7$8.6 million and $6.7$13.7 million for the twelve months ended December 31, 20242025 and 2023,2024, respectively. The increasedecrease in net cash provided by operating activities of $7.0$5.1 million as compared to the Prior Year was primarily attributable to the increasenet loss incurred in netthe income,Current improved collections and reduced payments of accounts payable and accrued liabilitiesYear compared to net income recognized in the Prior Year.

Net cash used in investing activities totaled $8.1$7.7 million and $8.9$8.1 million for the twelve months ended December 31, 20242025 and 2023,2024, respectively. In both the Current Year and the Prior Year, cash used in investing was primarily for investment in growth initiatives. During the Current Year, investments primarily consisted of expansion efforts related to the proposed Galveston LNG liquefaction facility and Jones Act-compliant marine bunkering vessel. In the Prior Year, investments were made for the acquisition of liquefaction assets and their subsequent deployment. During the years ended December 31, 20242025 and 2023,2024, proceeds received from the disposal of assets were $0.8$0.2 million and $1.3$0.8 million, respectively.

Net cash used in financing activities totaled $1.9$2.4 million for the twelve months ended December 31, 20242025 compared to $3.9$1.9 million for 2023.2024. Cash used in financing activities in both years was primarily attributable to the repayment of debt. The decreaseincrease in cash used by financing activities compared to the Prior Year is primarily due to aincreased securedprincipal promissorypayments noteon tothe MGAmeriState Finance that was paid in fullloan in the Current Year compared to Prior Year. No draws on the AmeriState Bank or Revolving Credit Facility were made in the Current Year.

We require cash to fund our operating expenses and working capital requirements, including costs associated with fuel sales, capital expenditures, debt repayments, equipment purchases, maintenance of LNG production facilities, mergers and acquisitions (if any), pursuing market expansion, supporting sales and marketing activities and other general corporate purposes. WhileOur wecurrent believeexpansion weefforts haveinclude sufficientthe liquidityconstruction of the proposed Galveston LNG liquefaction facility and capitalJones resourcesAct-compliant tomarine fundbunkering ourvessel and the ramp up of operations andfor repaythe ourmulti-year debt,on-site wepower generation customer for a data center all beginning in 2027 (discussed below). We may elect to pursue additional financing activities such as refinancing existing debt, obtaining new debt, or debt or equity offerings to provide flexibility with our cash management. Certain of these alternatives may require the consent of current lenders or stockholders, and there is no assurance that we will be able to execute any of these alternatives on acceptable terms or at all. Additionally, the Company may pursue additional expansion activities to increase its liquefaction capabilities. Such an effort, if pursued, would require additional liquidity from other sources either from the sales of debt or equity securities, additional capital investment from new owners or joint venture partners, or any combination of the above. The Company has made no expansion commitments to date. In the event, the Company does pursue expansion in the near term, there is no assurance that the Company will be able to secure additional liquidity on favorable terms or at all.

LNG Product revenues represent the sale of LNG from both produced and purchased sources as well as the transportation performed to deliver the LNG to our customer location. LNG Product revenues are recognized upon delivery of the LNG to the customer, at which point the customer controls the product and the Company has an unconditional right to payment. The Company acts as a principal when using third party transportation companies and therefore recognizes the gross revenue for the supply of LNG. The Company does not differentiate between the revenue from the sale of LNG production and purchased LNG as the criteria for revenue recognition are identical. Some of our contracts contain minimum take-or-pay amounts where a customer has agreed to source a minimum volume of LNG under the contract. Take or pay revenues are only recognized when the customer has failed to take the minimum contracted volumes upon completion of the time period specified within the contract and the Company has the unconditional right to receive payment for the take or pay amount. LNG product sales agreements may include both fixed and variable fees per gallon, but is representative of the stand-alone selling price for LNG at the time the contract was negotiated. We have concluded that the variable LNG fees meet the exception for allocating variable consideration to specific parts of the contract. As such, the variable consideration for these contracts is allocated to each distinct moleculegallon of LNG and recognized when that distinct moleculegallon of LNG is delivered to the customer. Certain of our sales contracts contain provisions that may meet the criteria of a derivative in the event delivery is not made. These contracts are accounted for under the normal purchase normal sales exclusion under U.S. GAAP and are not measured at fair value each reporting period. Our LNG contracts are generally one to 24 months in duration.

Goodwill represents the excess of the cost of an acquired entity over the fair value of the identifiable assets acquired less liabilities assumed. Intangible assets are assets that lack physical substance (excluding financial assets). Goodwill acquired in a business combination and intangible assets with indefinite useful lives are not amortized, and intangible assets with finite useful lives are amortized. Goodwill and intangible assets not subject to amortization are tested for impairment annually or more frequently if events or changes in circumstances indicate the assets carrying value may not be recoverable. We currently test goodwill for impairment annually in the third quarter unless we determine that a triggering event has occurred requiring an earlier test. We completed our annual assessment of goodwill during 20242025 and 2023,2024, and determined no additional impairment of goodwill was warranted.

The Company had certain natural gas derivative instruments as of December 31, 2024. The Company recognizes all of its derivative instruments as either assets or liabilities which are recorded at fair value on its Consolidated Balance Sheet. The accounting for changes in the fair value of a derivative instrument depends on whether it qualifies for and has been designated as a hedge and the type of hedge. The Company did not hold any natural gas derivatives at December 31, 2025; however did have natural gas derivatives at December 31, 2024 and for portions of the year for both 2025 and 2024. The Company has not designated its derivative instruments as hedges under U.S. GAAP and all resulting gains and losses from changes in the fair value of its derivative instruments are included within the Consolidated Statements of Operations. The Company determined the fair value of its natural gas derivatives at December 31, 2024 predominantly from broker quotes and are considered a level 2 fair value measurement. The Company did not enter into any derivative transactions for speculative purposes.

Our operations and financial results are subject to various risks and uncertainties, including those described in the Part I. “Item 1A. Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 5, 2026 (“Form 10-K”), which could adversely affect our business, financial condition, results of operations, cash flows, and the trading price of our common stock. During the threesix months ended MarchJune 31,30, 2026, there have been no material changes in our risk factors disclosed in our 2025 Form 10-K; except for the addition of the following risk factors.

Recent geopolitical developments in the Middle East, including the U.S. conflict with Iran, may contribute to an increase in energy related costs and related market uncertainties. The Company's pricing structure related to LNG product revenues may absorb most, if not all, of potential volatilitiesvolatility associated with the price of natural gas. However, failure to absorb the full impact of any price increases could adversely impact the Company's business and results of operations. The Company continues to monitor the risk associated with the Middle East conflicts.

Financing for the proposed new Galveston LNG liquefaction facility may be based on having firm contractual LNG off-take from the facility prior to closing on the financing. Failure to obtain additional contractual off-take could prevent the Company from being able to finance the project, adversely impacting potential profits, results of operations, cash flows and financial condition. At June 30, 2026, the Company has capitalized $9.4 million of costs related to the proposed new Galveston LNG liquefaction facility and related dedicated Jones Act-compliant LNG bunkering vessel.

LNG Production and Sales—Stabilis builds and operates cryogenic natural gas processing facilities, called “liquefiers,” which convert natural gas into LNG through a purification and multiple stage cooling process. We currently own and operate a liquefier that can produce up to 100,000 LNG gallons per day in George West, Texas and a liquefier that can produce up to 30,000 LNG gallons per day in Port Allen, Louisiana. The Company continues to seek expansion of its own liquefaction capacity as described in "Expanding Markets and Expansion Efforts" below. We also purchase LNG from third-party production sources which allows us to support customers in markets where we do not own liquefiers. We make the determination of LNG supply sources based on the cost of LNG, the transportation cost to deliver to regional customer locations, and the reliability of the supply source. Revenues earned from the production and sales of LNG are included within LNG Productproduct revenue.

In February 2026, the Company executedwas awarded a multi-year take-or-pay contract to supply LNG for behind-the-meter power generation for a world-leading provider of remote and temporary power generation at a data center. LNG deliveries are expected to commence during the first quarter of 2027 and continue through the first quarter of 2029. Total revenue under the initial multi-year term of the contract is estimated to be approximately $200 million. This contract represents the Company’s first contract in support of data center behind-the-meter power generation, consistent with the Company's strategic focus on growing, high-value vertical markets. The Company will receive $25.0 million in advance payments from the customer; of which, $15.0$20.0 million has been received toat date.June 30, 2026 and an additional $5.0 million advance payment was received in the third quarter of 2026. Advance payments will offset a percentage of each future invoice over the term of the contract, until fully offset, at which time the credit will cease. The Company may utilize the advance payments for the purchase of equipment, securing LNG supply and commissioning expenses incurred by the Company specific to the customer project. The portion of the $15.0$20.0 million that has not been utilized related to the customer project has been classified as restricted cash and cash equivalents. The full amount of the advance payment has been presented as deferred revenue on the Company's Condensed Consolidated Balance Sheet at MarchJune 31,30, 2026. See additional discussion in Note 1 and Note 6 of the Company’sNotes to Condensed Consolidated Financial Statements.

Termination of Leased LNG Bunkering Vessel

Recent geopolitical developments in the Middle East, including the U.S. conflict with Iran, may contribute to an increase in energy related costs and related market uncertainties. The Company's customer pricing structure for natural gas is primarily based off a monthly index and may absorb most, if not all, of potential volatilitiesvolatility associated with the price of natural gas; however, there can be no assurance that the Company will not be adversely impacted by resulting energy cost and market uncertainties resulting from the Iran conflict. The Company continues to monitor the developments.

Three Months Ended MarchJune 31,30, 2026 Compared to Three Months Ended MarchJune 31,30, 2025

During the fourth quarter of 2025, two multi-year customer contracts concluded in accordance with their terms. The completed contracts were for temporary remote power in Louisiana, and the Company’s truck-to-vessel LNG marine bunkering services in Galveston, Texas. The two contracts accounted for approximately 19% and 32% of 2025 revenues, respectively. As a result, the firstsecond quarter of 2026 results were lower for the period. The comparative tables below reflect our consolidated operating results for the three months ended MarchJune 31,30, 2026 (the “Current Quarter”) as compared to the three months ended MarchJune 31,30, 2025 (the “Prior Year Quarter”) (unaudited, amounts in thousands, except for percentages).

These decreases were partially offset by increased revenues of $0.4$0.1 million related to: higher average pricing from a favorable customer mix in the Current Quarter compared to the Prior Year Quarter.

Change in unrealized loss on natural gas derivatives. In the Prior Year Quarter, the Company had an unrealized gainloss of $0.1 million on change in unrealized gainloss on natural gas derivatives. The Company had no unrealized gain or loss in the Current Quarter, and did not hold any natural gas derivatives during the Current Quarter.

Selling, general and administrative expenses. Selling, general and administrative expenses decreased $2.1$0.6 million in the Current Quarter compared to the Prior Year Quarter. Mr.The Ballard'sdecrease severanceis related expenses accounted for $2.1 million in the Prior Year Quarter as well as higher compensation expense in the Prior Year Quarterprimarily related to incentivelower compensationsprofessional fees and bonus.compensation expense.

Depreciation. Depreciation expense decreased $0.1 million during the Current Quarter as compared to the Prior Year Quarter primarily due to assets reaching the end of their depreciable lives.lives partially offset by recent acquisitions of fixed assets.

Net equity income from foreign joint venture operations. Equity income from the Company's foreign joint venture decreasedincreased by $0.1$0.2 million in the Current Quarter compared to the Prior Year Quarter due to decreasedincreased net profits by the joint venture.

Interest income. Interest income, net was $25$0.1 thousandmillion in the Current Quarter compared to $21$24 thousand in the Prior Year Quarter. In both periods, interest income, net related to interest earned on the Company's cash balances during the quarter.balances.

Other income (expense). Other expense was $37 thousand during the Current Quarter compared to other income of $12$24 thousand in the Prior Year Quarter related to, in both periods, transactional foreign exchange gains (losses).

Income tax expense (benefit).expense. The Company incurred state and foreign income tax expense of $6$0.1 thousandmillion during the Current Quarter compared to income tax benefit of $0.1$0.2 million during the Prior Year Quarter. Income tax expense (benefit) for the Current Quarter and Prior Year Quarter primarily related to stateforeign incometaxes taxes.incurred on dividends received from the Company's joint venture. No U.S. federal income taxes were recorded for the Current Quarter or Prior Year Quarter as any net U.S. deferred tax assets generated from operating losses or used from operating income were offset by a change in the Company's valuation allowance on net deferred tax assets.

The Company's principal sources of liquidity in the Current Quarter consisted of cash provided by our operations, dividends received from its joint venture, borrowings under its AmeriState loan, cash on hand, and customer advance payments. The Company used its liquidity to invest in fixed assets to support growth, as well as to pay interest and principal amounts outstanding under our debt agreements.

As of MarchJune 31,30, 2026, we had $3.1$4.5 million in unrestricted cash and cash equivalents on hand and $10.6$14.3 million in restricted cash, $29.3$8.2 million in outstanding debt (net of debt issuance costs) and operating lease obligations (of which $12.8$1.6 million is due in the next twelve months). The Company has availability under its debt agreements $3.5of $5.0 million. TheAdditionally, the Company hadhas nosuccessfully drawexited downs onfrom its Revolvingtime Creditcharter Facility or its Secured Term Loan Facility duringof the threeGaribaldi monthssignificantly endedalleviating Marchfuture 31,cash 2026.requirements associated with the time charter.

As of MarchJune 31,30, 2026, the Company was in compliance with all financial covenants under its debt agreements. The Company’s efforts to expand its business include anticipated significant capital expenditures, the successful deployment of a marine bunkering vessel with a time charter,expenditures and a successful financing transaction associated with the proposed Galveston LNG liquefaction facility, all of which are yet to occur. The Company believes it is probable that it will continue to maintain compliance with its covenants, however, in the event the Company is unable to maintain minimum profitability in accordance with its forecast and historical trends, it is reasonably possible that the Company could fail to maintain compliance with its consolidated debt service ratio which, if not cured or waived, would give AmeriState Bank the right to accelerate repayment of outstanding borrowings under the AmeriState Secured Term Loan Facility, which totaled $6.9$7.6 million as of MarchJune 31,30, 2026. Such acceleration could adversely affect our liquidity, our ability to continue expansion efforts and continue normal operations.

Net cash provided by operating activities totaled $12.4$19.5 million for the threesix months ended MarchJune 31,30, 2026 compared to $1.0$5.5 million for the same period in 2025. The increase in net cash provided by operating activities of $11.4$13.9 million as compared to the Prior Year Quarter was attributable to a $15.0$20.0 million of advance paymentpayments received on the multi-year data center power generation contract to begin in the first quarter of 2027. The prepaymentadvance representspayments represent deferred revenue and is classified in restricted cash. TheThese $15.0amounts million cash prepayment waswere partially offset by the higher net loss incurred for the threesix months ended MarchJune 31,30, 2026 compared to the same period in 2025.

Net cash used in investing activities totaled $5.3$7.6 million for the threesix months ended MarchJune 31,30, 2026 compared to $0.3$0.9 million for the threesix months ended MarchJune 31,30, 2025. The increase in net cash used in investing activities in the Current QuarterYear of $5.0$6.7 million was primarily due to cash paid for capital expenditures to support growth.growth including the multi-year data center power generation contract to begin in the first quarter of 2027.

Net cash used in financing activities totaled $0.9$0.5 million for the threesix months ended MarchJune 31,30, 2026, compared to $0.7$1.4 million for the threesix months ended MarchJune 31,30, 2025. The increasedecrease in cash used in financing activities in the Current QuarterYear compared to the Prior Year Quarter is due to additionalproceeds debtreceived payments onunder the AmeriState Loan, paymentLoan of a$1.0 leasemillion purchasepartially optionoffset relatedby toincreased assetloan financepayments leases,in andthe paymentCurrent ofYear additionalunder debtthe issuanceAmeriState cost.Loan.

We require cash to fund our operating expenses and working capital requirements, including costs associated with gas purchases, capital expenditures, debt repayments, equipment purchases, maintenance of LNG production facilities, mergers and acquisitions (if any), pursuing market expansion, supporting sales and marketing activities and other general corporate purposes. WeDuring believethe wesix havemonths sufficientended, liquiditythe Company incurred a net loss of $8.7 million as a result of vessel charter costs and capitalloss resourcesof customer volume as compared to fundprior ourperiods. operationsHowever, the Company anticipates its future profitability and repayoperating ourcash debt.flow to improve due to the following:

Capital expenditures for the threesix months ended MarchJune 31,30, 2026 were $5.3$7.6 million and primarily related to the preliminary work and ordering of long lead time items, related to the Company's proposed new Galveston LNG liquefaction facility and Jones Act-compliant marine bunkering vessel, and its multi-year data center power generation contract. Capital expenditures also related to refurbishments and upgrades to existing assets and rolling stock. Other future capital expenditures will be dependent upon business needs, value-adding investment opportunities, as well as the availability of additional capital at favorable terms which is difficult to predict. At MarchJune 31,30, 2026, the Company had open purchase orders and commitments related to capital expenditures of approximately $3.7$7.0 million and the Company continues to advance the proposed new Galveston LNG liquefaction facility and Jones Act-compliant marine bunkering vessel, and scale for its multi-year data center power generation contract. See additional discussion regarding the Company's potential expansion efforts below.

In February 2026, the Company executedwas awarded a multi-year take-or-paycontract datato centersupply LNG for power generation contract.at a data center. LNG deliveries are expected to commence during the first quarter of 2027 and continue through the first quarter of 2029. The supply agreement will require investment of approximately $25.0 million in capital additions and working capital needed to secure LNG supply and fund the commissioning of the project. The Company received an advance paymentpayments oftotaling $15.0 million during February 2026, and expects an additional $10.0$20.0 million during the next six months.months ended June 30, 2026, and received an additional $5.0 million during the third quarter of 2026.

The Company filed a registration statement on Form S-3 (the "Shelf Registration"), which was declared effective on March 26, 2026. The Shelf Registration is for a period of three years, expiring on March 25, 2029, and permits the Company to issue up to $100.0 million (subject the limitations described below) in either common stock, preferred stock, warrants or a combination of the above. On April 17, the Company filed a prospectus supplement to the Shelf Registration pursuant to which the Company may offer and sell shares of common stock directly to the public “at the market” (the "ATM") as permitted in Rule 415 under the Securities Act pursuant to an Equity Distribution Agreement entered into between the Company and Johnson Rice & Company L.L.C., as sales agent. The Company is subject to General Instruction I.B.6. of Form S-3 that limits the amount of securities that the Company may sell under the Shelf Registration to no more than one-third of the Company’s public float (currently $10.2 million) in any twelve-month period. The Company has made no issuances under the Shelf Registration and related ATM at MarchJune 31,30, 2026.

As of MarchJune 31,30, 2026, we had no transactions that met the definition of off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our consolidated financial position, operating results, liquidity, cash requirements or capital resources.

The discussion and analysis of our financial condition and results of operations are based on our Condensed Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities known to exist at the date of the Condensed Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. We evaluate our estimates on an ongoing basis, based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. There can be no assurance that actual results will not differ from those estimates. There have been no significant changes in the Company's “Critical Accounting Policies and Estimates” during the three and six months ended MarchJune 31,30, 2026 from those disclosed within the Company's Annual Report on Form 10-K for the year ended December 31, 2025 as filed with the SEC on March 5, 2026.