申報類型：10-Q（季度報告）｜截至 2026 年 3 月 31 日季度｜公司：New Era Energy & Digital, Inc.（股票代碼：NUAI / NUAIW）

UNITED STATES

SECURITIES AND EXCHANGE
COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark one)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2026

 

Or.

 

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from                    to

 

Commission File Number: 001-42433

 

NEW ERA ENERGY & DIGITAL, INC.

(Exact name of registrant
as specified in its charter)

 

 Nevada   99-3749880
 State or other jurisdiction of   (I.R.S. Employer
 incorporation or organization   Identification No.)
 

 

 200 N. Loraine Street, Suite 1324   
 Midland, TX   79701
 (Address of principal executive offices)   (Zip Code)
 

 

(432) 695-6997

(Registrant’s telephone
number, including area code)

 

Not Applicable

(Former name or former address,
if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act:

 

 Title of each class   Trading Symbol(s)   Name of each exchange on which registered
 Common Stock   NUAI   The Nasdaq Stock Market LLC
 Warrants   NUAIW   The Nasdaq Stock Market LLC
 

 

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically
every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T(§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large
accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company”
in Rule 12b-2 of the Exchange Act.

 

 Large accelerated filer ☐ Accelerated filer ☐

 Non-accelerated filer ☒ Smaller reporting company ☒

 Emerging growth company ☒

 

If an emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant
to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act): Yes ☐ No ☒

 

As of May 12, 2026, the registrant had 101,465,286 shares of common
stock issued and 101,290,928 shares of common stock outstanding.

 

 

 

 

 
 

 

 

NEW ERA ENERGY & DIGITAL, INC.

INDEX TO FINANCIAL STATEMENTS

 

 
  
 PAGE

 
 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
 ii

 
 PART 1 – FINANCIAL INFORMATION
  

 
 Item 1. Financial Statements (Unaudited)
  

 
 Condensed Consolidated Balance Sheets as of March 31, 2026 (Unaudited) and December 31, 2025
 1

 
 Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2026 and 2025 (Unaudited)
 2

 
 Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2026 and 2025 (Unaudited)
 3

 
 Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2026 and 2025 (Unaudited)
 4

 
 Notes to Condensed Consolidated Financial Statements (Unaudited)
 5

 
 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
 30

 
 Item 3. Quantitative and Qualitative Disclosures about Market Risk
 47

 
 Item 4. Control and Procedures
 47

 
 PART II – OTHER INFORMATION
  

 
 Item 1. Legal Proceedings
 48

 
 Item 1A. Risk Factors
 49

 
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 49

 
 Item 3. Defaults Upon Senior Securities
 49

 
 Item 4. Mine Safety Disclosures
 49

 
 Item 5. Other Information
 49

 
 Item 6. Exhibits
 49

 
 SIGNATURES
 51

 

 

 
i

 
 

 

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q (this “Report”) contains
“forward-looking statements.” Forward-looking statements reflect the current view about future events. When used in this prospectus,
the words “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,”
“plan” or the negative of these terms and similar expressions, as they relate to us or our management, identify forward-looking
statements. Such statements, include, but are not limited to, statements contained in this Report relating to our business strategy, our
future operating results and liquidity and capital resources outlook. Forward-looking statements are based on our current expectations
and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future,
they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ
materially from those contemplated by the forward-looking statements. They are neither statements of historical fact nor guarantees of
assurance of future performance. We caution you therefore against relying on any of these forward-looking statements. Important factors
that could cause actual results to differ materially from those in the forward-looking statements include, without limitation:

 

●our ability to construct, develop, lease and maintain our flagship project;

 

●our ability to access adequate project financing, commercial borrowings and debt and equity capital markets to fund our significant
anticipated capital expenditures;

 

●the impact of supply chain disruptions, labor availability, raw materials and input commodity costs and availability, and manufacturing
and transportation;

 

●general business and economic conditions;

 

●environmental history, remediation, and associated risks;

 

●our ability to obtain and renew leases with our tenants on terms favorable to us, and manage our growth, business, financial results
and results of operations;

 

●our ability to respond to price fluctuations and rapidly changing technology;

 

●the impact of tariffs and global trade disruptions on us and our tenants;

 

●changes in political conditions, geopolitical turmoil, political instability, civil disturbances, and restrictive governmental actions;

 

●the degree and nature of our competition;

 

●our failure to generate sufficient cash flows to service indebtedness;

 

●our expectations regarding the anticipated timeline of our cash, cash equivalents and short-term investments, future financial performance
and our ability to continue as a going concern;

 

●material negative changes in the creditworthiness and the ability of our tenants to meet their contractual obligations;

 

●increases and volatility in interest rates;

 

●increased power, labor, equipment procurement, shipping, refurbishment or construction costs;

 

●a failure of our information technology systems, systems conversions and integrations, cybersecurity attacks or a breach of our information
security systems, networks or processes;

 

●our inability to obtain and/or maintain necessary government or other required consents or permits;

 

●changes in, or the failure or inability to comply with, local, state, federal and applicable international laws and regulations, including
related to taxation, real estate and zoning laws, and increases in real property tax rates;

 

●the impact of any financial, accounting, legal or regulatory issues or litigation that may affect us; and

 

●additional factors discussed in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis
of Financial Condition and Results of Operations”.

 

Should one or more of these risks or uncertainties materialize, or
should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated,
expected, intended or planned.

 

Factors or events that could cause our actual results to differ may
emerge from time to time, and it is not possible for us to predict all of them. We cannot guarantee future results, levels of activity,
performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend
to update any of the forward-looking statements to conform these statements to actual results.

 

 
ii

 
 

 

 

NEW ERA ENERGY & DIGITAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 
   
 March 31,
 2026  
 December 31,
 2025 

 
 ASSETS 
    
   

 
 Current Assets 
    
   

 
 Cash and cash equivalents 
 $2,224,771  
 $1,202,728 

 
 Accounts receivable, net 
  1,611,540  
  941,068 

 
 Prepaid expenses and other current assets 
  1,075,195  
  891,700 

 
 Related party receivable 
  -
  
  2,551,932 

 
 Restricted investments 
  1,396,295  
  1,384,708 

 
 Total Current Assets 
  6,307,801  
  6,972,136 

 
   
     
    

 
 Oil and natural gas properties, net 
  3,244,002  
  3,296,958 

 
 Property and equipment, net 
  833,980  
  116,774 

 
 Land 
  76,038,742  
  -
 

 
 Investment in Joint Venture 
  -
  
  3,631,005 

 
 Prepaid - non-current 
  60,000  
  120,000 

 
 Total Assets 
  86,484,525  
  14,136,873 

 
   
     
    

 
 LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) 
     
    

 
 Current Liabilities 
     
    

 
 Accounts payable 
  1,332,492  
  1,277,187 

 
 Accrued liabilities 
  2,207,647  
  691,159 

 
 Excise taxes payable 
  1,428,307  
  1,402,934 

 
 Withholding taxes payable 
  -
  
  800,018 

 
 Due to related parties 
  5,000,000  
  165,000 

 
 Note payable 
  3,347,500  
  -
 

 
 Convertible note, net of discount – current 
  49,188,936  
  -
 

 
 Asset retirement obligation – current 
  500,000  
  -
 

 
 Embedded derivative liability 
  1,157,916  
  -
 

 
 Other liabilities – current 
  96,242  
  90,740 

 
 Total Current Liabilities 
  64,259,040  
  4,427,038 

 
   
     
    

 
 Asset retirement obligation 
  12,127,122  
  12,319,132 

 
 Total Liabilities 
  76,386,162  
  16,746,170 

 
   
     
    

 
 Commitments and Contingencies (Note 11) 
   
  
   
 

 
   
     
    

 
 Stockholders’ Equity (Deficit) 
     
    

 
 Preferred stock, $0.0001 par value, 5,000,000 shares authorized, none issued or outstanding as of March 31, 2026 and December 31, 2025 
  -
  
  -
 

 
 Common stock, $0.0001 par value, 245,000,000 shares authorized, 61,430,296 issued and 61,255,938 outstanding at March 31, 2026; 53,623,529 issued and 53,449,171 outstanding at December 31, 2025 
  6,146  
  5,366 

 
 Treasury stock, 174,358 shares at March 31, 2026 and December 31, 2025 
  (17) 
  (17)

 
 Additional Paid-in Capital 
  62,442,164  
  40,743,397 

 
 Accumulated deficit 
  (52,349,930) 
  (43,358,043)

 
 Total Stockholders’ Equity (Deficit) 
  10,098,363  
  (2,609,297)

 
 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) 
  86,484,525  
  14,136,873 

 

 

The accompanying notes are an integral part
of these unaudited condensed consolidated financial statements.

 

 
1

 
 

 

 

NEW ERA ENERGY & DIGITAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND
2025

(UNAUDITED)

 

 
   
 For the Three Months Ended 
 March 31, 

 
   
 2026  
 2025 

 
 Revenues, net 
    
   

 
 Natural gas and product sales, net 
 $802,353  
 $326,455 

 
 Total revenues, net 
  802,353  
  326,455 

 
   
     
    

 
 Costs and expenses 
     
    

 
 Lease operating expenses 
  296,053  
  260,480 

 
 Impairment expense 
  375,000  
  -
 

 
 Depletion, depreciation, amortization, and accretion 
  374,860  
  198,409 

 
 General and administrative expenses 
  7,364,387  
  1,936,654 

 
 Total costs and expenses 
  8,410,300  
  2,395,543 

 
   
     
    

 
 Loss from operations 
  (7,607,947) 
  (2,069,088)

 
   
     
    

 
 Other income (expenses) 
     
    

 
 Interest income 
  11,586  
  15,380 

 
 Interest expense 
  (1,708,220) 
  (1,442,122)

 
 Change in fair value of derivative asset 
  -
  
  (15,403)

 
 Change in fair value of derivative liability 
  312,694  
  190,977 

 
 Total other income (expenses) 
  (1,383,940) 
  (1,251,168)

 
   
     
    

 
 Loss before income taxes 
  (8,991,887) 
  (3,320,256)

 
   
     
    

 
 Income tax provision 
  -
  
  -
 

 
 Net loss 
  (8,991,887) 
  (3,320,256)

 
   
     
    

 
 Net loss per share - basic and diluted 
 $(0.16) 
 $(0.24)

 
 Weighted average number of common shares outstanding, basic and diluted 
  55,582,934  
  13,860,763 

 

 

The accompanying notes are an integral part
of these unaudited condensed consolidated financial statements.

 

 
2

 
 

 

 

NEW ERA ENERGY & DIGITAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES
IN STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND
2025

(UNAUDITED)

 

 
   
    
    
    
    
    
    
 Total 

 
   
 Common Stock  
 Treasury Stock  
 Additional

Paid-in  
 Accumulated  
 Stockholders’

Equity 

 
   
 Shares  
 Amount  
 Shares  
 Amount  
 Capital  
 Deficit  
 (Deficit) 

 
 Balance - January 1, 2026 
  53,623,529  
 $5,366  
  (174,358) 
 $(17) 
 $40,743,397  
 $(43,358,043) 
 $(2,609,297)

 
 Shares issued for the acquisition of TCDC 
  2,091,351  
  209  
  -  
  -
  
  8,490,676  
  -
  
  8,490,885 

 
 Common shares issued for services 
  31,564  
  3  
  -  
  -
  
  1,894,128  
  -
  
  1,894,131 

 
 Warrants exercised 
  5,674,000  
  567  
  -  
  -
  
  11,347,433  
  -
  
  11,348,000 

 
 Options exercised 
  9,852  
  1  
  -  
  -
  
  (33,470) 
  -
  
  (33,469)

 
 Net loss 
  -  
  -
  
  -  
  -
  
  -
  
  (8,991,887) 
  (8,991,887)

 
 Balance - March 31, 2026 
  61,430,296  
 $6,146  
  (174,358) 
 $(17) 
 $62,442,164  
 $(52,349,930) 
 $10,098,363 

 

 

 
   
    
    
    
    
    
    
 Total 

 
   
 Common Stock  
 Treasury Stock  
 Additional

Paid-in  
 Accumulated  
 Stockholders’

Equity 

 
   
 Shares  
 Amount  
 Shares  
 Amount  
 Capital  
 Deficit  
 (Deficit) 

 
 Balance - January 1, 2025 
  13,165,152  
 $1,318  
  (174,358) 
 $(17) 
 $11,722,100  
 $(13,772,239) 
 $(2,048,838)

 
 Sale of common stock 
  835,000  
  84  
  -  
  -
  
  2,198,359  
  -
  
  2,198,443 

 
 Common shares issued for services 
  125,000  
  12  
  -  
  -
  
  423,738  
  -
  
  423,750 

 
 Net loss 
  -  
  -
  
  -  
  -
  
  -
  
  (3,320,256) 
  (3,320,256)

 
 Balance - March 31, 2025 
  14,125,152  
 $1,414  
  (174,358) 
 $(17) 
 $14,344,197  
 $(17,092,495) 
 $(2,746,901)

 

 

The accompanying notes are an integral part
of these unaudited condensed consolidated financial statements.

 

 
3

 
 

 

 

NEW ERA ENERGY & DIGITAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND
2025

(UNAUDITED)

 

 
   
 For the Three Months Ended 
 March 31, 

 
   
 2026  
 2025 

 
 CASH FLOWS FROM OPERATING ACTIVITIES 
    
   

 
 Net loss 
 $(8,991,887) 
 $(3,320,256)

 
 Adjustments to reconcile net loss to net cash used in operating activities: 
     
    

 
 Depletion, depreciation, amortization, and accretion 
  374,860  
  198,409 

 
 Change in fair value of derivative asset 
  -
  
  15,403 

 
 Change in fair value of derivative liability 
  (312,694) 
  (190,977)

 
 Impairment of long-lived assets 
  375,000  
  -
 

 
 Amortization of debt discount and debt issuance costs 
  659,546  
  1,160,447 

 
 Accrued interest on note payable and other current liabilities 
  -
  
  42,515 

 
 Interest income on investments and notes receivable 
  (11,586) 
  (15,380)

 
 Stock based compensation 
  1,729,138  
  -
 

 
 Changes in operating assets and liabilities: 
     
    

 
 Accounts receivable 
  (670,472) 
  (320,869)

 
 Prepaid and other current assets 
  (123,496) 
  89,675 

 
 Accounts payable 
  55,302  
  (602,384)

 
 Accrued liabilities 
  1,452,978  
  84,905 

 
 Excise tax payable 
  25,373  
  -
 

 
 Withholding tax payable 
  (800,018) 
  -
 

 
 Due to related parties 
  (165,000) 
  14,185 

 
 Other liabilities - current 
  5,502  
  14,133 

 
 CASH USED IN OPERATING ACTIVITIES 
  (6,397,454) 
  (2,830,194)

 
   
     
    

 
 CASH FLOWS FROM INVESTING ACTIVITIES 
     
    

 
 Purchase of land 
  (1,000,000) 
  -
 

 
 Purchase of member interest, net of cash acquired 
  (4,819,385) 
  -
 

 
 Payments related to project assignment rights 
  (375,000) 
  -
 

 
 Investment in property, plant and equipment, net 
  (286,050) 
  (677,547)

 
 CASH USED IN INVESTING ACTIVITIES 
  (6,480,435) 
  (677,547)

 
   
     
    

 
 CASH FLOWS FROM FINANCING ACTIVITIES 
     
    

 
 Proceeds from exercise of warrants 
  11,348,000  
  -
 

 
 Issuance of common stock 
  -
  
  2,198,443 

 
 Proceeds from convertible note, net of transaction costs 
  -
  
  2,790,000 

 
 Repayment on convertible note 
  -
  
  (1,416,667)

 
 Debt issuance costs 
  -
  
  (84,183)

 
 Proceeds from related party receivable 
  2,551,932  
  -
 

 
 CASH PROVIDED BY FINANCING ACTIVITIES 
  13,899,932  
  3,487,593 

 
   
     
    

 
 Change in cash and cash equivalents 
  1,022,043  
  (20,148)

 
 Cash and cash equivalents, beginning of year 
  1,202,728  
  1,053,744 

 
 Cash and cash equivalents, end of year 
 $2,224,771  
 $1,033,596 

 
   
     
    

 
 SUPPLEMENTAL CASH FLOW DISCLOSURES: 
     
    

 
 Cash paid for interest 
  64,356  
  260,093 

 
   
     
    

 
 SUPPLEMENTAL DISCLOSURES: 
     
    

 
 Related party note issued as part of consideration for asset acquisition 
  5,000,000  
  -
 

 
 Convertible debt issued as part of consideration for asset acquisition 
  50,000,000  
  -
 

 
 Common stock issued as part of consideration for asset acquisition 
  8,490,885  
  -
 

 
 Equity method investment in joint venture reclassified upon consolidation 
  3,631,005  
  -
 

 
 Acquisition of assets through issuance of note payable 
  3,347,500  
  -
 

 
 Value of shares withheld for taxes upon exercise of stock options 
  33,470  
  -
 

 
 Initial recognition of derivative liability associated with convertible debt 
  1,470,610  
  -
 

 

 

The accompanying notes are an integral part
of these unaudited condensed consolidated financial statements.

 

 
4

 
 

 

 

NEW ERA ENERGY & DIGITAL, INC.

Notes to Unaudited Condensed Consolidated Financial
Statements

 

NOTE 1. ORGANIZATION AND BASIS OF PRESENTATION

 

Organization and Nature of Operations

 

New Era Energy & Digital, Inc. (the “Company”, “we,”,
“us,” or “our”, “NUAI”), formerly known as Roth CH Holdings, Inc. (“Roth V”), is a Nevada
corporation. The Company was formed on February 6, 2023, through a Reorganization Agreement and Plan Share Exchange (the “Agreement”)
with Solis Partners, LLC (“Solis Partners”) as described further in the paragraph below. The Company’s initial operations
included the exploration, development, and production of helium, natural gas, oil, and natural gas liquids (“NGLs”). The Company’s
producing oil and gas assets and non-producing acreage are primarily located in Chaves County, New Mexico. The Company also owns overriding
royalty interests located in Howard County, Texas.

 

On February 6, 2023, the Company entered into the Agreement with Solis
Partners. Immediately prior to February 6, 2023, the Company was authorized to issue 190 million shares of common stock with a par value
of $0.001 per share and 10 million shares of preferred stock with a par value of $0.001 per share. Subject to the terms of the Agreement,
all issued and outstanding member interests in Solis Partners were automatically converted and exchanged for 5 million shares of the Company’s
common stock, par value $0.0001 per share (“common stock”).

 

The Company’s wholly owned subsidiary Solis Partners is a Texas
limited liability company. Solis Partners owns and operates the Company’s producing oil and gas assets and non-producing acreage.
The Company’s wholly owned subsidiary NEH Midstream LLC (“NEH Midstream”) is a Texas limited liability company, formed
August 4, 2023. NEH Midstream previously entered into helium offtake and tolling agreements which expired during 2025. NEH Midstream is
also the owner of an in-construction natural gas processing facility.

 

On December 6, 2024, the Company completed the business combination
(the “Business Combination”) contemplated by the Business Combination and Plan of Organization dated January 3, 2024 (the “Business
Combination Agreement”) (as amended on June 5, 2024, August 8, 2024, September 11, 2024 and September 30, 2024, the “BCA”),
by and among Roth CH Acquisition V Co. (“ROCL”), Roth CH V Merger Sub Corp., a Delaware corporation and a wholly-owned subsidiary
of ROCL (“Merger Sub”), and NUAI.

 

The Business Combination was accounted for as a reverse recapitalization
in accordance with Generally Accepted Accounting Principles in the United States of America. Under this method of
accounting, although ROCL acquired the outstanding equity in NUAI in the Business Combination, ROCL is treated as the “acquired
company” and NUAI was treated as the accounting acquirer for financial statement purposes. Accordingly, the Business Combination
was treated as the equivalent of NUAI issuing stock for the net assets of ROCL, accompanied by a recapitalization. The net assets of ROCL
are stated at historical cost, with no goodwill or other intangible assets recorded.

 

Furthermore, the historical financial statements of NUAI became the
historical financial statements of the Company upon the consummation of the merger. As a result, the financial statements included in
this Quarterly Report reflect (i) the historical operating results of NUAI prior to the merger; (ii) the combined results of ROCL and
NUAI following the close of the merger; (iii) the assets and liabilities of NUAI at their historical cost and (iv) NUAI’s equity
structure for all periods presented, as affected by the recapitalization presentation after completion of the merger.

 

On August 11, 2025, the Company’s Board of Directors approved
an amendment to the Company’s Articles of Incorporation to change the Company’s name from New Era Helium Inc. to New Era Energy
& Digital, Inc. effective as of August 13, 2025. In connection with the name change, the Company’s trading symbol was changed
from “NEH” to “NUAI” for common stock and “NEHCW” to “NUAIW” for warrants on August 13,
2025. The name change became effective upon the filing of a Certificate of Amendment with the Secretary of State of the State of Nevada.

 

The Company is a vertically-integrated developer and operator of next-generation
digital infrastructure and integrated power assets accelerating speed-to-power for advanced artificial intelligence (“AI”)
hyperscalers. In the second half of 2025, we executed a strategic pivot from our legacy natural gas operations to focus exclusively on
developing data center campuses where power, land, and connectivity can be assembled and delivered on accelerated timelines. Our mission
is to deliver speed-to-power by converging behind-the-meter power flexibility with data center development capabilities. Our primary strategy
is to aggregate and entitle “Powered Land” and to develop “Powered Shells” and build-to-suit assets in power-advantaged
markets, beginning with the Permian Basin, which benefits from energy abundance, regulatory clarity, and fiber connectivity.

 

We are initially focused on our flagship project, Texas Critical Data
Centers LLC (“TCDC”), a 438-acre campus in Ector County, Texas, designed to support over 1 gigawatt (“GW”) of
potential compute capacity through phased development, with projected power delivery beginning as early as the end of 2027. We believe
our proximity to major natural gas pipelines, fiber networks and CO2 pipelines will provide us with the ability to serve our customers
lower transmission costs and best-in-class uptime for purposes of reliably generating AI compute to capitalize on the AI revolution. We
intend to execute through partnering across engineering, construction, procurement, power generation and sustainability with a world-class
developer partner to provide our hyperscaler tenants with certainty of execution and speed-to-power.

 

 
5

 
 

 

 

Basis of Presentation

 

The accompanying condensed consolidated financial statements of the
Company as of March 31, 2026 and December 31, 2025, have been prepared in accordance with GAAP issued by the Financial Accounting Standards
Board (“FASB”). The accompanying condensed consolidated financial statements reflect all adjustments including normal recurring
adjustments, which, in the opinion of management, are necessary to present fairly the financial position, results of operations, and cash
flows for the periods presented. References to GAAP issued by the FASB in these accompanying notes to the condensed consolidated financial
statements are to the FASB Accounting Standards Codification (“ASC”).

 

Emerging Growth Company

 

Section 102(b)(1) of the Jumpstart Our Business Startups Act
(“JOBS Act”) exempts emerging growth companies from being required to comply with new or revised financial accounting
standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do
not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”))
are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt
out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such
election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when
a standard is issued or revised and it has different applications dates for public or private companies, the Company as an emerging
growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard, until such
time the Company is no longer considered to be an emerging growth company. At times, the Company may elect to early adopt a new or
revised standard.

 

Risks and Uncertainties

 

As a producer of helium, natural gas, NGLs and oil, the Company’s
revenue, profitability, and future growth are substantially dependent upon the prevailing and future prices for helium, natural gas, NGLs
and oil, which are dependent upon numerous factors beyond its control such as economic, political, and regulatory developments and competition
from other energy sources. The energy markets have historically been very volatile, and there can be no assurance that the prices for
helium, natural gas, NGLs or oil will not be subject to wide fluctuations in the future. A substantial or extended decline in prices for
helium, natural gas, NGLs and oil could have a material adverse effect on the Company’s financial position, results of operations,
cash flows, the quantities of natural gas, helium, NGL and oil reserves that may be economically produced and the Company’s access
to capital.

 

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation and Principles of Consolidation

 

The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with GAAP for interim financial information and in accordance with the instructions to
Form 10-Q. The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly
owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The unaudited condensed
financial statements have been prepared on the same basis as the Company’s annual financial statements for the year ended
December 31, 2025. Certain information or footnote disclosures normally included in the unaudited condensed financial statements
prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim
financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of
financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed
financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation
of the financial position, operating results and cash flows for the periods presented.

 

The accompanying unaudited condensed consolidated financial statements
should be read in conjunction with the Company’s audited financial statements included in the Company’s annual report on Form
10-K, as filed with the SEC on March 13, 2026. The interim results for the three months ended March 31, 2026 are not necessarily indicative
of the results to be expected for the period ended December 31, 2026 or for any future periods.

 

Segments

 

ASC Topic 280, Segment Reporting, establishes standards for companies
to report in their financial statement information about operating segments, products, services, geographic areas, and major customers.
Operating segments are defined as components of an enterprise that engage in business activities from which they may recognize revenues
and incur expenses, and for which separate financial information is available that is regularly evaluated by the Company’s chief
operating decision maker (“CODM”) in deciding how to allocate resources and assess performance.

 

The Company’s CODM has been identified as the Chief Executive
Officer, who reviews total assets and income (loss) from operations of the Company on a consolidated basis to make decisions regarding
resource allocation and financial performance assessment.

 

Management evaluated the Company’s segment reporting conclusion
following the acquisition of the remaining interests in TCDC. Management considered that TCDC represents a significant strategic initiative
of the Company and comprises a substantial portion of the Company’s consolidated asset base following the acquisition. However,
although discrete financial information related to TCDC exists for accounting and legal entity reporting purposes, the CODM does not regularly
review standalone operating results or discrete measures of financial performance for purposes of assessing performance and allocating
resources in the manner contemplated by ASC 280. During the period, TCDC remained in the development stage and had not yet commenced revenue-generating
operations.

 

 
6

 
 

 

 

Accordingly, management determined that the Company operates as a
single operating and reportable segment. The Company’s management team allocates capital resources and evaluates financial performance
on a consolidated basis as a single enterprise.

 

Functional and reporting currency

 

The functional and reporting currency of the Company is the United
States dollar.

 

Liquidity and Going Concern

 

The Company recorded a net loss of $8,991,887 for the three months
ended March 31, 2026, and net loss of $3,320,256 for the three months ended March 31, 2025. As of March 31, 2026, the Company had a working
capital deficit of $57,951,239 and a cash balance of $2,224,771.

 

Historically, the Company’s primary sources of liquidity have
been cash received from oil, natural gas, and product sales, contributions from members, and borrowings. Management’s assessment
of the entity’s ability to continue as a going concern involves making a judgement, at a particular point in time, about inherently
uncertain future outcomes of events or conditions.

 

Any judgment about the future is based on information available at
the time at which the judgment is made. Subsequent events may result in outcomes that are inconsistent with judgments that were reasonable
at the time they were made. Management has taken into account the following:

 

a.The Company’s financial position; and

 

b.The risks facing the Company that could impact liquidity
and capital adequacy.

 

The Company’s future capital requirements will depend on many
factors, including its rate of revenue growth and the timing and extent of expenditures to support sales, marketing, and infrastructure
development. The Company currently expects to require approximately $73.7 million over the next twelve months, including up to $50.0 million
payable by June 30, 2026 related to outstanding financing arrangements. The Company also expects to incur approximately $10.0 million
in general and administrative expenses and approximately $3.9 million of other costs. Upon execution of binding term sheets or definitive
agreements with data center users, these expected costs may increase materially.

 

Since inception, the Company’s primary sources of liquidity have
included operating cash flows, capital contributions, and borrowings.

 

Subsequent to March 31, 2026, the Company strengthened its liquidity
position through a combination of debt and equity financings. On April 8, 2026, TCDC, the Company’s wholly owned subsidiary, entered
into a senior secured term loan facility providing for borrowings of up to $290.0 million, including an initial committed tranche of $20.0
million, which was fully funded on April 13, 2026. In addition, on April 10, 2026, the Company completed an underwritten public offering,
resulting in net proceeds of approximately $93.4 million. In connection with the underwritten public offering, the underwriters exercised
their option to purchase additional shares of common stock, resulting in additional net proceeds of approximately $14 million. The Company
used the proceeds from the offering to repay outstanding borrowings under its senior secured convertible promissory note, and intends
to use any remaining proceeds for general corporate purposes.

 

Access to additional amounts under the term loan facility beyond the
initial committed tranche is subject to lender approval and the satisfaction of certain conditions.

 

As a result, in connection with the Company’s assessment of going
concern considerations in accordance with FASB Accounting Standards Update (“ASU”) 2014-15, Disclosures of Uncertainties
about an Entity’s Ability to Continue as a Going Concern, management has determined that the Company’s liquidity condition
raises substantial doubt about the Company’s ability to continue as a going concern through the twelve months following the issuance
date of the May 15, 2026 consolidated financial statements. The condensed consolidated financial statements do not include any adjustments
relating to the recovery of recorded assets or the classification of liabilities that might result should we be unable to continue as
a going concern.

 

Use of Estimates

 

The preparation of financial statements in conformity with GAAP requires
management to make estimates, judgements and assumptions that affect the reported amounts of assets and liabilities, certain disclosures
at the date of the consolidated financial statements, as well as the reported amounts of expenses during the reporting period. Significant
estimates affecting the condensed consolidated financial statements have been prepared on the basis of the most current and best available
information. The estimates and assumptions include but are not limited to inputs used to calculate asset retirement obligations (“AROs”)
(Note 8), the estimate of proved natural gas, oil, and natural gas liquids reserves and related present value estimates of future net
cash flows therefrom (Note 5), and inputs used to calculate the value of common shares issued for services (Note 15). These estimates
and assumptions are based on management’s best estimates and judgements. However, actual results from the resolution of such estimates
and assumptions may vary from those used in the preparation of the financial statements.

 

Cash and Cash Equivalents

 

The Company considers all highly liquid instruments purchased with
an original maturity date of three months or less to be cash equivalents. As of March 31, 2026 and December 31, 2025, the Company did
not hold any cash equivalents other than cash on deposit.

 

 
7

 
 

 

 

Restricted Investments

 

Restricted investments related to Certificates of Deposit (“CDs”)
held at West Texas National Bank. These CDs are used as collateral for operating and plugging bonds for the New Mexico Oil Conservation
Division, New Mexico State Land Office, and the Bureau of Land Management.

 

Receivables and Allowance for Expected Losses

 

The Company’s receivables result primarily from the sale of
natural gas and NGLs as well as billings to joint interest owners for properties in which the Company serves as the operator. Receivables
from product sales are generally due within 30 to 60 days after the last day of each production month and do not bear any interest. Receivables
associated with joint interest billings are regularly reviewed by management for collectability, and they establish or adjust an allowance
for expected losses as necessary. The Company determines its allowance for each type of receivable by considering a number of factors,
including the length of time accounts receivable are past due, the Company’s previous loss history, the debtor’s current ability
to pay its obligation to the Company, the condition of the general economy and the industry as a whole.

 

 
   
 March 31,

 2026  
 December 31, 

2025 

 
 Natural gas and NGL sales 
 $794,648  
 $207,760 

 
 Joint interest accounts receivable 
  891,016  
  806,694 

 
 Other accounts receivable 
  139,727  
  140,465 

 
 Less allowance for expected losses 
  (213,851) 
  (213,851)

 
 Total Accounts Receivable, net 
 $1,611,540  
 $941,068 

 

 

The beginning accounts receivable balance at January 1, 2025 was $851,304.

 

A summary of changes in the allowance for credit losses for the three
months ended March 31, 2026 is as follows. There was no allowance for credit losses for the three months ended March 31, 2025:

 

 
   
 Allowance for 

Credit Losses 

 
 Beginning balance 
 $213,851 

 
 Provision for expected credit losses 
  -
 

 
 Write-offs 
  -
 

 
 Recoveries 
  -
 

 
 Ending balance 
 $213,851 

 

 

Provision for expected credit losses is recorded within general and
administrative expenses in the consolidated statements of operations. During the three months ended March 31, 2026 and 2025, the Company
did not write off any accounts receivables. In addition to the above, $185,808 is recorded as an allowance for credit losses on the related
party receivable as of March 31, 2026.

 

Prepaid Expenses

 

The Company includes in prepaid expenses payments made in advance for
goods or services for which the Company will receive a future benefit. Prepaid expenses are recorded at cost and are expensed over the
period in which the benefit is realized.

 

Property, Plant and Equipment

 

Property, plant and equipment are stated at cost, less accumulated
depreciation. Betterments, renewals, and extraordinary repairs that materially extend the useful life of the asset are capitalized; other
repairs and maintenance charges are expensed as incurred. The Company includes in property, plant and equipment the processing plant under
construction, computer equipment, furniture and fixtures, and leasehold improvements.

 

Depreciation and amortization expense is calculated using the straight-line
method over the estimated useful lives of the related assets, which results in depreciation and amortization being incurred evenly over
the life of an asset. Fully depreciated assets are retained in property and accumulated depreciation accounts until they are removed from
service.

 

 
8

 
 

 

 

Management performs ongoing evaluations of the estimated useful lives
of the property and equipment for depreciation purposes. Management periodically reviews long-lived assets, other than oil and gas property,
for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable.
The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of
the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its carrying amount.
The Company recorded an impairment charge of $375,000 related to a partially completed plant during the three months ended March 31, 2026.
No impairment charges were recorded during the three months ended March 31, 2025.

 

Oil and Gas Properties

 

The Company follows the full cost accounting method to account for
oil and natural gas properties, whereby costs incurred in the acquisition, exploration and development of oil and gas reserves are capitalized.
Such costs include lease acquisition, geological and geophysical activities, rentals on nonproducing leases, drilling, completing and
equipping of oil and gas wells, administrative costs directly attributable to those activities and asset retirement costs. Disposition
of oil and gas properties are accounted for as a reduction of capitalized costs, with no gain or loss recognized unless such adjustment
would significantly alter the relationship between capital costs and proved reserves of oil and gas, in which case the gain or loss is
recognized to operations.

 

The capitalized costs of oil and gas properties, plus estimated future
development costs relating to proved reserves and excluding unevaluated and unproved properties, are amortized as depletion expense using
the units-of-production method based on estimated proved recoverable oil and gas reserves.

 

The costs associated with unevaluated and unproved properties, initially
excluded from the amortization base, relate to unproved leasehold acreage, wells and production facilities in progress and wells pending
determination of the existence of proved reserves, together with capitalized interest costs for these projects. Unproved leasehold costs
are transferred to the amortization base with the costs of drilling the related well once a determination of the existence of proved reserves
has been made or upon impairment of a lease. Costs associated with wells in progress and completed wells that have yet to be evaluated
are transferred to the amortization base once a determination is made whether or not proved reserves can be assigned to the property.
Costs of dry wells are transferred to the amortization base immediately upon determination that the well is unsuccessful.

 

Under full cost accounting rules for each cost center, capitalized
costs of evaluated oil and gas properties, including asset retirement costs, less accumulated amortization and related deferred income
taxes, may not exceed an amount (the “cost ceiling”) equal to the sum of (a) the present value of future net cash flows from
estimated production of proved oil and gas reserves, based on current prices and operating conditions, discounted at ten percent (10%),
plus (b) the cost of properties not being amortized, plus (c) the lower of cost or estimated fair value of any unproved properties included
in the costs being amortized, less (d) any income tax effects related to differences between the book and tax basis of the properties
involved. If capitalized costs exceed this limit, the excess is charged to operations. For purposes of the ceiling test calculation, current
prices are defined as the un-weighted arithmetic average of the first day of the month price for each month within the 12-month period
prior to the end of the reporting period. Prices are adjusted for basis or location differentials. Unless sales contracts specify otherwise,
prices are held constant for the productive life of each well. Similarly, current costs are assumed to remain constant over the entire
calculation period.

 

Given the volatility of oil and gas prices, it is reasonably possible
that the estimate of discounted future net cash flows from proved oil and gas reserves could change in the near term. If oil and gas prices
decline in the future, even if only for a short period of time, it is possible that impairments of oil and gas properties could occur.
In addition, it is reasonably possible that impairments could occur if costs are incurred in excess of any increases in the present value
of future net cash flows from proved oil and gas reserves, or if properties are sold for proceeds less than the discounted present value
of the related proved oil and gas reserves. The Company recorded no ceiling test impairment for the three months ended March 31, 2026,
and March 31, 2025.

 

Accounts Payable and Accrued Liabilities

 

The Company’s payables and accrued liabilities result primarily
from the operation of its oil and natural gas properties as well as the administration of the Company. For properties in which the Company
is operator, the Company pays 100% of most operating costs, then bills the non-operating partners for their share of the costs. The Company
records the Company’s share of these costs in its consolidated statements of operations. Accounts payables are generally due within
30 days of receipt of the invoices by the Company and do not bear any interest. The table below represents the accounts payable and accrued
liabilities recorded in the Company’s consolidated balance sheets.

 

 
   
 March 31,

 2026  
 December 31, 

2025 

 
 Trade payable 
 $543,905  
 $535,958 

 
 Suspense payable 
  788,587  
  741,229 

 
 Total accounts payable 
 $1,332,492  
 $1,277,187 

 
   
     
    

 
 Total accrued liabilities 
 $2,207,647  
 $691,159 

 

 

 
9

 
 

 

 

Asset retirement obligations

 

The Company records a liability for AROs associated with its oil and
gas wells when the well has been completed. The ARO is recorded at its estimated fair value, measured by the expected future cash outflows
required to satisfy the abandonment and restoration discounted at our credit-adjusted risk-free interest rate. The corresponding cost
is capitalized as an asset and included in the carrying amount of oil and gas properties and is depleted over the useful life of the properties.
Subsequently, the ARO liability is accreted to its then-present value.

 

Inherent in the fair value calculation of an ARO are numerous assumptions
and judgments including the ultimate settlement amounts, inflation factors, credit adjusted discount rates, timing of settlement, and
changes in the legal, regulatory, environmental, and political environments. To the extent future revisions to these assumptions impact
the fair value of the existing ARO liability, a corresponding adjustment is made to the oil and gas property balance. Settlements greater
than or less than amounts accrued as ARO are recorded as a gain or loss upon settlement. This gain or loss is recorded to the oil and
gas property balance.

 

Financial Instruments and Concentrations of Risk

 

Financial instruments that potentially subject the Company to a concentration
of credit risk consist of cash and cash equivalents and accounts receivables. The Company maintains its cash in accounts with major financial
institutions within the United States. The Company’s cash balances can, at times, exceed amounts insured by the Federal Deposit
Insurance Corporation. The Company places its cash with high credit quality financial institutions. The Company has not experienced any
losses in these accounts and believes it is not exposed to any significant credit risk.

 

The Company is subject to credit risk resulting from the concentration
of its oil, natural gas and NGL receivables with significant purchasers. For the three months ending March 31, 2026, the Company had
no oil sales. A separate purchaser accounted for all of the Company’s natural gas and NGL revenues for the nine months ending March
31, 2026, and 2025. For the three months ending March 31, 2025, one purchaser accounted for all of the Company’s oil sales revenues.
The Company does not require collateral. While the Company believes its recorded receivables will be collected, in the event of default
the Company will follow normal collection procedures. The Company does not believe the loss of the purchaser would materially impact
its operating results as oil, natural gas and NGLs are fungible products with a well-established market and numerous purchasers.

 

Revenue recognition

 

The Company records revenue in accordance with ASC 606, Revenue from
Contracts with Customers (“ASC 606”) which uses a five-step model that requires entities to exercise judgment when considering
the terms of the contract(s) which includes (i) identifying the contract(s) with the customer, (ii) identifying the separate performance
obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to the separate performance
obligations, and (v) recognizing revenue as each performance obligation is satisfied.

 

Revenue from contracts with customers

 

The Company recognizes revenue when it satisfies a performance obligation
by transferring control over a product to a customer or the processor of the product. Revenue is measured based on the consideration the
Company expects to receive in exchange for those products.

 

 
10

 
 

 

 

Performance obligations and significant judgments

 

The Company sold oil and natural gas products in the United States
through a sing