CO2 Energy Transition Corp. 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA CO2 ENERGY TRANSITION CORP. TABLE OF CONTENTS TO FINANCIAL STATEMENTS Page Index to Financial Statements Report of Independent Registered Public Accounting Firm (PCAOB ID #100) F-2 Balance Sheets F-3 Statements of Operations F-4 Statements of Stockholders’ Deficit F-5 Statements of Cash Flows F-6 Notes to Financial Statements F-7 F- 1 Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of CO2 Energy Transition Corp. Opinion on the Financial Statements We have audited the accompanying balance sheets of CO2 Energy Transition Corp. as of December 31, 2025 and 2024, and the related statements of operations, stockholders’ deficit, and cash flows for the years ended December 31, 2025 and 2024, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of CO2 Energy Transition Corp. as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years ended December 31, 2025 and 2024, in conformity with accounting principles generally accepted in the United States of America. Explanatory Paragraph - Going Concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 1 to the financial statements, the Company is a Special Purpose Acquisition Corporation that was formed for the purpose of completing a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses or entities on or before May 22, 2026. The Company lacks the capital resources that are needed to fund its operations for a reasonable period of time, which is generally considered to be one year from the issuance of the financial statements. These matters raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that may be necessary should the Company be unable to continue as a going concern. Basis for Opinion These financial statements are the responsibility of the entity’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to CO2 Energy Transition Corp. in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. CO2 Energy Transition Corp. is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ WithumSmith+Brown, PC We have served as CO2 Energy Transition Corp's auditor since 2023. New York, NY March 13, 2026 PCAOB ID Number 100 F- 2 CO2 ENERGY TRANSITION CORP. BALANCE SHEETS December 31, 2025 December 31, 2024 ASSETS Current assets Cash $ 287,601 $ 953,069 Prepaid expenses 95,333 220,947 Total Current Assets 382,934 1,174,016 Investments held in Trust Account 72,113,895 69,310,897 TOTAL ASSETS $ 72,496,829 $ 70,484,913 LIABILITIES, COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT Current liabilities Accounts payable and accrued expenses $ 142,278 $ 297,787 Accrued offering costs 75,000 75,000 Income tax payable 576,103 61,039 Working Capital Note – related party 11,730 11,730 Total Current Liabilities 805,111 445,556 Deferred underwriting fee 2,070,000 2,070,000 TOTAL LIABILITIES 2,875,111 2,515,556 Common Stock Subject to Possible Redemption (Note 7) Common stock subject to possible redemption, 6,900,000 shares issued and outstanding at redemption value of $ 10.35 and $ 10.03 per share as of December 31, 2025 and 2024, respectively 71,410,223 69,233,258 STOCKHOLDERS’ DEFICIT Preferred stock, $ 0.0001 par value; 1,000,000 shares authorized; none issued or outstanding at December 31, 2025 and 2024 — — Common stock, $ 0.0001 par value; 40,000,000 shares authorized; 2,685,750 shares issued and outstanding at December 31, 2025 and 2024, respectively (excluding 6,900,000 shares subject to possible redemption) 269 269 Additional paid-in capital — — Accumulated deficit ( 1,788,774 ) ( 1,264,170 ) Total Stockholders’ Deficit ( 1,788,505 ) ( 1,263,901 ) TOTAL LIABILITIES, COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT $ 72,496,829 $ 70,484,913 The accompanying notes are an integral part of the financial statements. F- 3 CO2 ENERGY TRANSITION CORP. STATEMENTS OF OPERATIONS For the Years Ended December 31, 2025 2024 General and administrative costs $ 646,306 $ 246,139 Loss from operations ( 646,306 ) ( 246,139 ) Other (expense) income: Interest expense ( 4,951 ) ( 1,087 ) Interest earned on investments held in Trust Account 2,882,889 310,897 Total other income, net 2,877,938 309,810 Income before provision for income taxes 2,231,632 63,671 Provision for income taxes ( 579,272 ) ( 61,039 ) Net income $ 1,652,360 $ 2,632 Basic weighted average shares outstanding, common stock subject to possible redemption 6,900,000 735,246 Basic and diluted net income per share, common stock subject to possible redemption $ 0.17 $ 0.00 Basic weighted average shares outstanding, non-redeemable common stock 2,685,750 2,073,072 Basic and diluted net income per share, non-redeemable common stock $ 0.17 $ 0.00 The accompanying notes are an integral part of the financial statements. F- 4 CO2 ENERGY TRANSITION CORP. STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT FOR THE YEARS ENDED DECEMBER 31, 2025 AND DECEMBER 31, 2024 Common Stock Additional Paid-in Accumulated Total Stockholders’ Shares Amount Capital Deficit Deficit Balance – January 1, 2024 2,300,000 $ 230 $ 24,770 $ ( 361,845 ) $ ( 336,845 ) Accretion of common stock subject to redemption to redemption amount — — ( 3,511,194 ) ( 904,957 ) ( 4,416,151 ) Sale of 265,000 shares of common stock 265,000 27 2,649,973 — 2,650,000 Fair Value of Public Warrants at issuance — — 207,000 — 207,000 Fair value of representative shares deferred until IPO 120,750 12 77,268 — 77,280 Fair value of rights included in Public units — — 621,000 — 621,000 Allocated value of transaction costs to common stock — — ( 68,817 ) — ( 68,817 ) Net income — — — 2,632 2,632 Balance – December 31, 2024 2,685,750 269 — ( 1,264,170 ) ( 1,263,901 ) Accretion of common stock subject to redemption to redemption amount — — — ( 2,176,965 ) ( 2,176,965 ) Net income — — — 1,652,360 1,652,360 Balance – December 31, 2025 2,685,750 $ 269 $ — $ ( 1,788,774 ) $ ( 1,788,505 ) The accompanying notes are an integral part of the financial statements. F- 5 CO2 ENERGY TRANSITION CORP. STATEMENTS OF CASH FLOWS For the Years Ended December 31, 2025 2024 Cash Flows from Operating Activities: Net income $ 1,652,360 $ 2,632 Adjustments to reconcile net income to net cash used in operating activities: Operating expenses paid on behalf of the Company — 11,050 Interest earned on Investments held in Trust Account ( 2,882,889 ) ( 310,897 ) Changes in operating assets and liabilities: Prepaid expenses 125,614 ( 220,947 ) Accounts payable and accrued expenses ( 155,508 ) 151,534 Income tax payable 515,064 61,039 Net cash used in operating activities ( 745,359 ) ( 305,589 ) Cash Flows from Investing Activities: Investment of cash in Trust Account — ( 69,000,000 ) Cash withdrawn from Trust Account for income and franchise taxes 79,891 — Net cash provided by (used in) investing activities 79,891 ( 69,000,000 ) Cash Flows from Financing Activities: Proceeds from sale of Units, net of underwriting discounts paid — 68,482,500 Proceeds from sale of Private Units — 2,650,000 Proceeds from promissory note - related party — 129,800 Repayment of promissory note - related party — ( 562,000 ) Payment of offering costs — ( 443,754 ) Net cash provided by financing activities — 70,256,546 Net Change in Cash ( 665,468 ) 950,957 Cash – Beginning of period 953,069 2,112 Cash – End of year $ 287,601 $ 953,069 Non-cash investing and financing activities and cash paid for income taxes: Deferred offering costs included in accrued offering costs $ — $ 3,635 Amounts reclassified to promissory note $ 11,730 $ — Cash paid for income taxes $ 64,208 $ — The accompanying notes are an integral part of the financial statements. F- 6 CO2 ENERGY TRANSITION CORP. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2025 NOTE 1. DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS AND GOING CONCERN CO2 Energy Transition Corp. (the “Company”) was incorporated in Delaware on September 30, 2021 . The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”). The Company is not limited to a particular industry or sector for purposes of consummating a Business Combination. While the Company may pursue an initial Business Combination target in any industry or geographic location, the Company intends to focus its search for a target business in the transitional energy sector. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies. As of December 31, 2025, the Company had not commenced any operations. All activity for the period from September 30, 2021 (inception) through December 31, 2025, relates to the Company’s formation, the initial public offering (the “Initial Public Offering”), which is described below and identifying a target company for a Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company generates non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering. The registration statement for the Company’s Initial Public Offering was declared effective on November 12, 2024. On November 22, 2024, the Company consummated the Initial Public Offering of 6,900,000 units, with each unit consisting of one share of our common stock, one redeemable warrant, and one right (the “Units” and, with respect to the shares of common stock included in the Units offered, the “Public Shares”), which includes the full exercise by the underwriters of their over-allotment option in the amount of 900,000 Units, at $ 10.00 per Unit, generating gross proceeds of $ 69,000,000 which is described in Note 3. Each warrant entitles the holder thereof to purchase one share of our common stock at a price of $ 11.50 per share, subject to adjustment as provided herein and each eight rights entitle the holder thereof to receive one share of common stock at the closing of a Business Combination. Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 265,000 units (the “Private Units”) at a price of $ 10.00 per Private Unit in a private placement to the Company’s sponsor, CO2 Energy Transition, LLC (the “Sponsor”), generating gross proceeds of $ 2,650,000 , which is described in Note 4. Each Private Unit consists of one share of our common stock, one redeemable warrant, and one right with respect to the shares of common stock. Each warrant entitles the holder thereof to purchase one share of our common stock at a price of $ 11.50 per share, subject to adjustment and each eight rights entitle the holder thereof to receive one share of common stock at the closing of a Business Combination. Transaction costs amounted to $ 3,423,710 consisting of $ 517,500 of cash underwriting discount, $ 2,070,000 of deferred underwriting fees, $ 77,280 fair value of Representative Shares (as defined in Note 8), and $ 758,930 of other offering costs. On November 22, 2024, in connection with the closing of the Initial Public Offering, the underwriters were entitled to a cash underwriting discount of 0.75 % of the gross proceeds of the Initial Public Offering, or $ 517,500 , which was paid upon the closing of the Initial Public Offering. Additionally, the underwriters were entitled to a deferred underwriting discount of 3.00 % of the gross proceeds of the Initial Public Offering, or $ 2,070,000 , payable upon the closing of an initial Business Combination from the amounts held in the Trust Account, as well as 120,750 representative shares with the fair value of $ 77,280 issued to the underwriters in connection with the closing of the Initial Public Offering. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete one or more initial Business Combinations with one or more operating businesses or assets with a fair market value equal to at least 80 % of the net assets held in the Trust Account (as defined below) (excluding any deferred underwriting discounts). The Company will only complete a Business Combination if the post-transaction company owns or acquires 50 % or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”). F- 7 CO2 ENERGY TRANSITION CORP. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2025 Following the closing of the Initial Public Offering, on November 22, 2024, an amount of $ 69,000,000 ($ 10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Units was placed in a trust account (“Trust Account”), located in the United States and invested only in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting certain conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of (i) the completion of a Business Combination, and (ii) the distribution of the funds held in the Trust Account, as described below. The Company will provide the holders of the outstanding Public Shares (the “Public Stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company. The Public Stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially $ 10.00 per Public Share, plus any pro rata interest then in the Trust Account, net of taxes payable). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants. The Company will only proceed with a Business Combination if the Company seeks stockholder approval, and a majority of the shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by applicable law or stock exchange listing requirements and the Company does not decide to hold a stockholder vote for business or other reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, stockholder approval of the transaction is required by applicable law or stock exchange listing requirements, or the Company decides to obtain stockholder approval for business or other reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks stockholder approval in connection with a Business Combination, the holders of the Company’s shares prior to the Initial Public Offering (the “Initial Stockholders”) have agreed to vote its Founder Shares (as defined in Note 5) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination. Additionally, each Public Stockholder may elect to redeem their Public Shares without voting, and if they do vote, irrespective of whether they vote for or against the proposed transaction. Notwithstanding the foregoing, if the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Certificate of Incorporation will provide that a Public Stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15 % of the Public Shares, without the prior consent of the Company. F- 8 CO2 ENERGY TRANSITION CORP. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2025 The Initial Stockholders have agreed (a) to waive their redemption rights with respect to the Founder Shares and Public Shares held by them in connection with the completion of a Business Combination, (b) to waive their liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within 18 months (or up to 24 months in certain circumstances, discussed below) from the closing of the Initial Public Offering, and (c) not to propose an amendment to the Certificate of Incorporation (i) to modify the substance or timing of the Company’s obligation to allow redemptions in connection with a Business Combination or to redeem 100 % of its Public Shares if the Company does not complete a Business Combination within the Combination Period (as defined below) or (ii) with respect to any other provision relating to stockholders’ rights or pre-business combination activity, unless the Company provides the Public Stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment. However, if the Sponsor acquires Public Shares in or after the Initial Public Offering, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period. If the Board of Directors anticipates that the Company may not be able to consummate an initial business combination by May 22, 2026, the Board of Directors, by resolution, may extend the period of time to consummate an initial Business Combination up to six times, each by an additional one month (for a total of up to 24 months to complete a Business Combination). In order to extend the time available for the Company to consummate an initial Business Combination, our sponsor or its affiliates or designees must deposit into the trust account $ 229,700 ($ 0.0333 per share) on or prior to the date of the applicable deadline, for each one-month extension. The Company will have until 18 months (or up to 24 months if the Company extends the period of time to consummate a Business Combination) from the closing of the Initial Public Offering to complete a Business Combination (the “Combination Period”). If the Company has not completed a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to pay taxes (less up to $ 100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish Public Stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless if the Company fails to complete a Business Combination within the Combination Period. The Initial Stockholders have agreed to waive their liquidation rights with respect to the Founder Shares and shares of common stock part of, and issuable in connection with, the Private Placement Units, if the Company fails to complete a Business Combination within the Combination Period. However, if the Initial Stockholders acquire Public Shares in or after the Initial Public Offering, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period. As of January 16, 2025, the holders of the Units issued in the Company’s Initial Public Offering have the right to elect to separately trade the Public Shares, the Public Warrants and Public Rights included in the Units. No fractional Public Rights will be issued upon separation of the Units and only whole Public Rights will trade. The Public Shares, Public Warrants and Public Rights that are separated will trade on the Nasdaq Global Market (“Nasdaq”) under the symbols “NOEM”, “NOEMW” and “NOEMR,” respectively. Those Units not separated will continue to trade on the Nasdaq under the symbol “NOEMU.” Risks and Uncertainties The United States and global markets have experienced, and may continue to experience, significant volatility and disruption as a result of geopolitical instability, including the ongoing Russia-Ukraine conflict, an escalation of the ongoing Israel-Hamas conflict and broader instability in the Middle East, as well as other existing or emerging geopolitical tensions. In response to the Russia-Ukraine conflict, the North Atlantic Treaty Organization (“NATO”) has deployed additional military forces to eastern Europe, and the United States, the United Kingdom, the European Union and other countries have imposed extensive sanctions and other restrictive measures against Russia, Belarus and related individuals and entities, including restrictions on certain financial institutions and access to global payment systems. Certain countries, including the United States, have also provided, and may continue to provide, military aid or other assistance to Ukraine and to Israel, which may further increase geopolitical tensions among a number of nations. F- 9 CO2 ENERGY TRANSITION CORP. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2025 These conflicts and related developments have heightened global security concerns and have contributed to, and may continue to contribute to, significant volatility in commodity prices (including energy), inflationary pressures, disruptions to global trade routes and supply chains, instability and reduced liquidity in credit and capital markets, heightened interest rates, increased cyberattacks (including state-sponsored or retaliatory cyber activity) and a decrease in willingness of investors to embrace risk. In addition, current and future sanctions, export controls, foreign investment restrictions and other regulatory actions could increase compliance costs, limit business operations or financing alternatives, or adversely affect the ability of companies to engage in cross-border transactions. Although the duration, scope and ultimate impact of these conflicts and related geopolitical developments are highly uncertain and difficult to predict, any escalation, continuation or expansion of these or other geopolitical events could adversely affect global economic conditions and financial markets. Any of these factors, or other negative impacts on the global economy, capital markets or geopolitical conditions, could materially and adversely affect the Company’s ability to identify, negotiate and consummate an initial Business Combination, including by limiting the availability of financing, reducing the number of attractive target businesses, increasing transaction costs, delaying transaction timelines or adversely affecting the operations, valuation or prospects of any target business with which the Company may ultimately consummate, or seek to consummate, an initial Business Combination. Liquidity, Capital Resources and Going Concern As of December 31, 2025, the Company had $ 287,601 in cash and a working capital deficit of $ 422,177 . The Company’s liquidity needs through December 31, 2025, have been satisfied through proceeds from the consummation of the Initial Public Offering on November 22, 2024, as well as the issuance of the $ 1,500,000 promissory note to the Sponsor on April 15, 2025, which was dated March 31, 2025, and borrowings thereunder. The Company withdrew $ 79,891 for payment of income and franchise taxes in 2025. In addition, if the Company is unable to complete a Business Combination by May 22, 2026, unless extended further for up to 6 months, then the Company will cease all operations except for the purpose of liquidating. The Company cannot be assured that its plans to consummate an initial Business Combination will be successful. In connection with the Company’s assessment of going concern considerations in accordance with Accounting Standards Codification (“ASC”) 205-40 “Going Concern,” Management has determined that the potential liquidity shortfall and the mandatory liquidation raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be required to liquidate after May 22, 2026. NOTE 2. SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying financial statements are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC. Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. F- 10 CO2 ENERGY TRANSITION CORP. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2025 Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (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) 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 application 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. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period, difficult or impossible because of the potential differences in accounting standards used. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. As of December 31, 2025 and 2024, the Company had $ 287,601 and $ 953,069 in cash, respectively, and no cash equivalents. Investments in Trust Account As of December 31, 2025 and 2024, the assets held in the Trust Account were held in money market funds which are invested primarily in U.S. government securities. The Company accounts for its investments as trading securities under ASC 320 “Investments—Debt and Equity Securities”, where securities are presented at fair value on the balance sheets. Gains and losses resulting from the change in fair value of investments held in the Trust Account are included in interest earned on investments held in the Trust Account in the statements of operations. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Deposit Insurance Corporation coverage limit of $ 250,000 . Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company’s financial condition, results of operations, and cash flows. F- 11 CO2 ENERGY TRANSITION CORP. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2025 Offering Costs The Company complies with the requirements of the ASC 340-10-S99 and SEC Staff Accounting Bulletin Topic 5A, “Expenses of Offering”. Offering costs consist principally of professional and registration fees that are related to the Initial Public Offering. Financial Accounting Standards Board (“FASB”) ASC 470-20, “Debt with Conversion and Other Options”, addresses the allocation of proceeds from the issuance of convertible debt into its equity and debt components. The Company applies this guidance to allocate Initial Public Offering proceeds from the Units between common stock, warrants, and rights, using the residual method by allocating Initial Public Offering proceeds first to the assigned value of the warrants and rights and then to the common stock. Offering costs allocated to Public Shares were charged to temporary equity, and offering costs allocated to Public Rights, Public Warrants and Private Units were charged to stockholders’ deficit, as Public and Private Rights and Warrants, after management’s evaluation, were accounted for under equity treatment. Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheets, primarily due to its short-term nature. Income Taxes The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company accounts for income taxes under ASC 740, “Income Taxes” (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized. As of December 31, 2025 and 2024, the Company had a full valuation allowance against the deferred tax assets. ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in a company’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition. The Company’s effective tax rate was 26.0 % and 95.9 % for the years ended December 31, 2025, and 2024, respectively. The effective tax rate differs from the statutory tax rate of 21 % due to the valuation allowance on the deferred tax assets. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2025 and 2024. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. F- 12 CO2 ENERGY TRANSITION CORP. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2025 The Company has identified the United States as its only “major” tax jurisdiction. The Company may be subject to potential examination by federal and state taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal and state tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. Net Income per Common Stock Share The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” The Company has two classes of shares outstanding, which are referred to as redeemable common stock and non-redeemable common stock. Income and losses are shared pro rata between the two classes of shares. Net income per common share is calculated by dividing the net income by the weighted average shares of common stock outstanding for the respective period. The calculation of diluted net income does not consider the effect of the warrants underlying the Units sold in the Initial Public Offering (including the consummation of the Over-allotment) and the private placement warrants to purchase an aggregate of 7,165,000 shares of common stock in the calculation of diluted income per share, because their exercise is contingent upon future events. As a result, diluted net income per share is the same as basic net income per share for the three and nine months ended December 31, 2025 and 2024. Accretion associated with the redeemable Class A common stock is excluded from earnings per share as the redemption value approximates fair value. The following table reflects the calculation of basic and diluted net income per common stock share: For the Years Ended December 31, 2025 2024 Redeemable Non-redeemable Redeemable Non-redeemable Basic and diluted net income per common stock share Numerator: Allocation of net income $ 1,189,400 $ 462,961 $ 689 $ 1,943 Denominator: Basic and diluted weighted average common stock outstanding 6,900,000 2,685,750 735,246 2,073,072 Basic and diluted net income per common stock share $ 0.17 $ 0.17 $ 0.00 $ 0.00 Derivative Financial Instruments The Company accounts for derivative financial instruments in accordance with ASC 815, “Derivatives and Hedging”. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value upon issuance and remeasured at each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative financial instruments is evaluated at the end of each reporting period. There were no derivative financial instruments as of December 31, 2025 and 2024. Warrant and Right Instruments The Company accounted for the Public Warrants and Private Warrants and Public Rights and Private Rights issued in connection with the Initial Public Offering and the private placement in accordance with the guidance contained in FASB ASC Topic 815 “Derivatives and Hedging”. Accordingly, the Company evaluated and classified the warrant and right instruments under equity treatment. F- 13 CO2 ENERGY TRANSITION CORP. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2025 Common Stock Subject to Possible Redemption The Public Shares contain a redemption feature which allows for the redemption of such Public Shares in connection with the Company’s liquidation, or if there is a stockholder vote or tender offer in connection with the Company’s initial Business Combination. In accordance with ASC 480-10-S99, the Company classifies Public Shares subject to redemption outside of permanent equity as the redemption provisions are not solely within the control of the Company. The Public Shares sold as part of the Units in the Initial Public Offering were issued with other freestanding instruments (i.e., Public Warrants and Public Rights) and as such, the initial carrying value of Public Shares classified as temporary equity are the allocated proceeds determined in accordance with ASC 470-20. The Company recognizes changes in redemption value immediately as it occurs and will adjust the carrying value of redeemable shares to equal the redemption value at the end of each reporting period. Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption amount value. The change in the carrying value of redeemable shares will result in charges against additional paid-in capital (to the extent available) and accumulated deficit. Accordingly, at December 31, 2025 and 2024, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ deficit section of the Company’s balance sheets, respectively. At December 31, 2025 and 2024, the common stock subject to possible redemption reflected in the balance sheets is reconciled in the following table: Gross proceeds $ 69,000,000 Less: Proceeds allocated to Public Warrants ( 207,000 ) Proceeds allocated to Public Rights ( 621,000 ) Common stock issuance costs ( 3,354,893 ) Plus: Remeasurement of carrying value to redemption value 4,416,151 Common stock subject to possible redemption, December 31, 2024 $ 69,233,258 Plus: Remeasurement of carrying value to redemption value 2,176,965 Common stock subject to possible redemption, December 31, 2025 $ 71,410,223 Recent Accounting Standards Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial statements. NOTE 3. INITIAL PUBLIC OFFERING In the Initial Public Offering which closed on November 22, 2024, the Company sold 6,900,000 Units, at a purchase price of $ 10.00 per Unit, which includes the full exercise by the underwriters of their over-allotment option in the amount of 900,000 Units. Each Unit consists of one share of common stock, one right (“Public Right”) and one redeemable warrant (“Public Warrant”). Each Public Right entitles the holder thereof to receive one-eighth (1/8) of one share of common stock upon the consummation of a Business Combination (see Note 7). Each Public Warrant entitles the holder to purchase one share of common stock at an exercise price of $ 11.50 per share (see Note 7). NOTE 4. PRIVATE PLACEMENT Simultaneously with the closing of the Initial Public Offering, the Sponsor purchased an aggregate of 265,000 Private Units at a price of $ 10.00 per Private Unit, for an aggregate purchase price of $ 2,650,000 in a private placement. Each Private Unit consists of one Private Share, one right (“Private Right”) and one redeemable warrant (“Private Warrant”). Each Private Right entitles the holder thereof to receive one-eighth (1/8) of one share of common stock upon the consummation of a Business Combination (see Note 7). Each whole Private Warrant is exercisable for one share of common stock at a price of $ 11.50 per share, subject to adjustment (see Note 7). The proceeds from the sale of the Private Units were added to the net proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Units held in the Trust Account will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Units and all underlying securities will expire worthless. F- 14 CO2 ENERGY TRANSITION CORP. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2025 NOTE 5. RELATED PARTIES Founder Shares On January 13, 2022, the Sponsor entered into a subscription agreement and paid $ 25,000 to cover certain offering costs of the Company in consideration for 3,593,750 shares of common stock (the “Founder Shares”). In connection with a reduction in the planned size of the Initial Public Offering, the Sponsor amended and restated the subscription agreement on October 10, 2022 to provide for a subscription of 2,300,000 shares of common stock. On December 28, 2022, in connection with a change in the terms of the offering, the Sponsor further amended and restated the subscription agreement to provide for a subscription of 3,066,667 shares of common stock. On December 1, 2023, the Sponsor further amended and restated the subscription agreement to provide for a subscription of 2,300,000 shares of common stock. All shares have been retrospectively presented so that the total Founder Shares issued total 2,300,000 shares of common stock. The Founder Shares included an aggregate of up to 300,000 shares subject to forfeiture to the extent that the underwriters’ over-allotment was not exercised in full, so that the number of Founder Shares would equal, on an as-converted basis, approximately 25 % of the Company’s issued and outstanding common stock after the Initial Public Offering (assuming the Sponsor did not purchase any Public Shares in the Initial Public Offering). At the closing of the Initial Public Offering on November 22, 2024, the underwriters exercised their over-allotment option in full. As such, the 300,000 Founder Shares are no longer subject to forfeiture. The Initial Stockholders have agreed, subject to limited exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier to occur of (A) one year after the completion of a Business Combination and (B) subsequent to a Business Combination, (x) if the last reported sale price of the common stock equals or exceeds $ 12.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30 -trading day period commencing at least 150 days after a Business Combination, or (y) the date on which the Company completes a liquidation, merger, capital stock exchange or other similar transaction that results in all of the Public Stockholders having the right to exchange their shares of common stock for cash, securities or other property. Promissory Note — Related Party On January 8, 2022, the Sponsor issued an unsecured promissory note to the Company (the “Promissory Note”), pursuant to which the Company could borrow up to an aggregate principal amount of $ 400,000 . On February 15, 2023, the Company amended the Promissory Note’s principal amount from $ 400,000 to $ 450,000 . On April 20, 2024, the Company further amended the Promissory Note’s principal amount from $ 450,000 to $ 800,000 . The Promissory Note was non-interest bearing and payable on the earlier of (i) December 31, 2025, or (ii) the consummation of the Initial Public Offering. As of December 31, 2025 and 2024, there was $0 and $ 11,730 outstanding under the Promissory Note, respectively. On November 22, 2024, upon the closing of the Initial Public Offering, the Company repaid the note and borrowings with the exception of $ 11,730 , which was rolled into the Working Capital Note issued by the Company on April 15, 2025, as described below. Working Capital Loans In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $ 1,500,000 of such Working Capital Loans may be convertible into units at a price of $ 10.00 per unit. The units would be identical to the Private Placement Units. As of December 31, 2024, no such Working Capital Loans were outstanding. F- 15 CO2 ENERGY TRANSITION CORP. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2025 On April 15, 2025, the Company entered into a convertible promissory note dated March 31, 2025 (the “Working Capital Note”) with its Sponsor. Pursuant to the Working Capital Note, the Company may request, and in the sole discretion of the Sponsor, the Sponsor may loan the Company, drawdowns of up to an aggregate of $ 1,500,000 in principal from time to time, less $ 11,730 which was advanced prior to the execution of the Working Capital Note, and included as outstanding thereunder, with such amounts to be used for working capital. Amounts owed under the Working Capital Note do not accrue interest and are payable on the earlier of: (i) the effective date of the consummation of the Company’s Business Combination; or (ii) the date that the winding up of the Company is effective (such date, as applicable, the “Maturity Date”), unless accelerated upon the occurrence of an Event of Default (as defined in the Working Capital Note). Amounts outstanding under the Working Capital Note, are convertible, at the option of the Sponsor, into units of the Company (“Working Capital Note Units”), at a conversion price of $ 10.00 per Working Capital Note Unit. The Working Capital Note Units will be identical to the Private Units issued to the Sponsor at the time of the Company’s Initial Public Offering. As of December 31, 2025 and 2024, $ 11,730 and $0 , respectively, was outstanding under the Working Capital Note. Administrative Services Agreement The Company entered into an agreement, commencing on November 12, 2024 through the earlier of consummation of the initial Business Combination and the Company’s liquidation, to pay the Sponsor $ 10,000 per month for office space, utilities, secretarial support and other administrative and consulting services. For the year ended December 31, 2025, the Company had incurred and paid $ 120,000 of administrative services fees. For the year ended December 31, 2024, the Company had incurred and paid $ 3,667 of administrative services fees. The administrative services fees are included in General and administrative costs in the Company’s statements of operations. NOTE 6. COMMITMENTS AND CONTINGENCIES Registration Rights The holders of the Founder Shares, Private Placement Units and any units that may be issued upon conversion of the Working Capital Note (and any common stock issuable upon the exercise of the Private Placement Units and Working Capital Note Units) have rights to require the Company to register any of the securities held by them for resale under the Securities Act pursuant to a registration and stockholder rights agreement signed on the effective date of the Initial Public Offering. These holders are entitled to make up to three demands, excluding short form registration demands, that the Company register such securities for sale under the Securities Act. In addition, these holders have “piggyback” registration rights to include their securities in other registration statements filed by the Company. The registration rights agreement does not contain liquidated damages or other cash settlement provisions resulting from delays in registering the Company’s securities. The Company will bear the expenses incurred in connection with the filing of any such registration statements. F- 16 CO2 ENERGY TRANSITION CORP. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2025 Underwriting Agreement The Company granted the underwriters a 45 -day option from the date of the Initial Public Offering to purchase up to 900,000 additional Units to cover over-allotments, if any, at the Initial Public Offering price less the underwriting discounts and commissions. On November 22, 2024, simultaneously with the closing of the Initial Public Offering, the underwriters elected to fully exercise the over-allotment option to purchase an additional 900,000 Units at a price of $ 10.00 per Unit. The underwriters were entitled to a cash underwriting discount of 0.75 % of the gross proceeds of the Initial Public Offering, or $ 517,500 , which was paid upon the closing of the Initial Public Offering. Additionally, the underwriters are entitled to a deferred underwriting discount of 3.00 % of the gross proceeds of the Initial Public Offering, or $ 2,070,000 , payable upon the closing of an initial Business Combination from the amounts held in the Trust Account, as well as 120,750 representative shares with the fair value of $ 77,280 issued to the underwriters in connection with the closing of the Initial Public Offering. NOTE 7. STOCKHOLDERS’ DEFICIT Preferred Stock — The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $ 0.0001 per share with such designation, rights and preferences as may be determined from time to time by the Company’s board of directors. As of December 31, 2025 and 2024, there were no shares of preferred stock issued and outstanding. Common Stock — The Company is authorized to issue 40,000,000 shares of common stock with a par value of $ 0.0001 per share. Holders of common stock are entitled to one vote for each share. As of December 31, 2025 and 2024, 2,685,750 shares of common stock are issued and outstanding respectively, excluding 6,900,000 shares of common stock subject to possible redemption. Rights — Each holder of a right will receive one-eighth (1/8) of one share of common stock upon consummation of a Business Combination, even if the holder of such right redeemed all shares held by it in connection with a Business Combination. No fractional shares will be issued upon exchange of the rights. No additional consideration will be required to be paid by a holder of rights in order to receive its additional shares upon consummation of a Business Combination as the consideration related thereto has been included in the Unit purchase price paid for by investors in the Initial Public Offering. If the Company enters into a definitive agreement for a Business Combination in which the Company will not be the surviving entity, the definitive agreement will provide for the holders of rights to receive the same per share consideration the holders of the common stock will receive in the transaction on an as-converted into common stock basis and each holder of a right will be required to affirmatively convert its rights in order to receive 1/8 of one share underlying each right (without paying additional consideration). The shares issuable upon exchange of the rights will be freely tradable (except to the extent held by affiliates of the Company). As of December 31, 2025 and 2024, there were 6,900,000 rights related to the Initial Public Offering and 265,000 rights related to Private Units, outstanding. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of rights will not receive any of such funds with respect to their rights, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such rights, and the rights will expire worthless. Further, there are no contractual penalties for failure to deliver securities to the holders of the rights upon consummation of a Business Combination. Additionally, in no event will the Company be required to net cash settle the rights. Accordingly, the rights may expire worthless. Warrants — The Public Warrants were to become exercisable on the later of (a) 30 days after the completion of a Business Combination and (b) 12 months from the closing of the Initial Public Offering, and as such, became exercisable on November 22, 2025. The Public Warrants will expire five years from the completion of a Business Combination or earlier upon redemption or liquidation. F- 17 CO2 ENERGY TRANSITION CORP. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2025 No warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the common stock issuable upon exercise of the warrants and a current prospectus relating to such common stock. Notwithstanding the foregoing, if a registration statement covering the common stock issuable upon exercise of the Public Warrants is not effective within 60 business days following the consummation of a Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available. Once the Public Warrants become exercisable, the Company may redeem the Public Warrants for redemption: ● in whole and not in part; ● at a price of $ 0.01 per Public Warrant; ● upon not less than 30 days ’ prior written notice of redemption to each warrant holder; ● if, and only if, the reported last sale price of the common stock equals or exceeds $ 18.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations), for any 20 trading days within a 30 -trading day period commencing after the warrants become exercisable and ending on the third business day prior to the notice of redemption to warrant holders; and ● if, and only if, there is a current registration statement in effect with respect to the common stock underlying such warrants. If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of shares of common stock issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the Public Warrants will not be adjusted for issuances of common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Rights or Public Warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of Public Warrants will not receive any of such funds with respect to their Public Warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such Public Warrants. Accordingly, the Public Rights and Public Warrants may expire worthless. In addition, if (x) the Company issues additional common stock or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $ 9.20 per share of common stock (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors, and in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60 % of the total equity proceeds, and interest thereon, available for the funding of a Business Combination on the date of the completion of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates a Business Combination (such price, the “Market Value”) is below $ 9.20 per share, the exercise price of the Public Warrants will be adjusted (to the nearest cent) to be equal to 115 % of the greater of the Market Value or the Newly Issued Price, and the $ 18.00 per share redemption trigger price described above will be adjusted (to the nearest cent) to be equal to 180 % of the greater of the Market Value or the Newly Issued Price. F- 18 CO2 ENERGY TRANSITION CORP. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2025 The Private Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Warrants and the common stock issuable upon the exercise of the Private Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants will be exercisable on a cashless basis and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. As of December 31, 2025 and 2024, there were 6,900,000 Public Warrants and 265,000 Private Warrants outstanding. NOTE 8. REPRESENTATIVE SHARES Simultaneously with the closing of the Initial Public Offering on November 22, 2024, the Company issued Kingswood Capital Partners LLC, the representative of the underwriters (“Kingswood”), 120,750 shares of common stock (the “Representative Shares”). The Company estimated the value of the Representative Shares to be $ 77,280 . Kingswood has agreed not to transfer, assign or sell any such shares until the completion of the initial Business Combination. In addition, Kingswood has agreed (i) to waive its redemption rights with respect to such shares in connection with the completion of an initial Business Combination and (ii) to waive its rights to liquidating distributions from the Trust Account with respect to such shares if the Company fails to complete an initial Business Combination within the Combination Period. The Representative Shares have been deemed compensation by FINRA and are therefore subject to a lock-up for a period of 180 days immediately following the effective date of the Initial Public Offering pursuant to Rule 5110(e)(1) of FINRA’s NASD Conduct Rules. Pursuant to FINRA Rule 5110(e)(1), these securities may not be sold, transferred, assigned, pledged or hypothecated or the subject of any hedging, short sale, derivative, put or call transaction that would result in the economic disposition of the securities by any person for a period of 180 days immediately following the effective date of the Initial Public Offering, nor may they be sold, transferred, assigned, pledged or hypothecated for a period of 180 days immediately following the effective date of the Initial Public Offering except to any underwriter and selected dealer participating in the Initial Public Offering and their bona fide officers or partners, registered persons or affiliates or as otherwise permitted under Rule 5110(e)(2), and only if any such transferee agrees to the foregoing lock-up restrictions. NOTE 9. INCOME TAXES The Company’s net deferred tax assets are as follows: December 31, December 31, 2025 2024 Deferred tax assets Net operating loss carryforward $ - $ - Startup Costs 248,509 137,879 Total deferred tax assets 248,509 137,879 Valuation allowance ( 248,509 ) ( 137,879 ) Deferred tax assets, net of allowance $ - $ - The income tax provision for the years ended December 31, 2025 and 2024 consists of the following: December 31, December 31, 2025 2024 Federal Current $ 579,272 $ 61,039 Deferred ( 110,630 ) ( 47,668 ) State Current $ — $ — Deferred — — Change in valuation allowance 110,630 47,668 Income tax provision $ 579,272 $ 61,039 As of December 31, 2025 and 2024, the Company had a total of $0 and $0 , respectively, of U.S. federal net operating loss carryovers available to offset future taxable income. The federal net operating loss can be carried forward indefinitely. F- 19 CO2 ENERGY TRANSITION CORP. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2025 In assessing the realization of the deferred tax assets, management considers whether it is more likely than not that some portion of all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. After consideration of all of the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance. For the years ended December 31, 2025 and 2024, the change in the valuation allowance was $ 110,630 and $ 47,668 respectively. A reconciliation of the federal income tax rate to the Company’s effective tax rate is as follows: December 31, December 31, 2025 2024 Statutory federal income tax rate 21.0 % 21.0 % State taxes, net of federal tax benefit 0.0 % 0.0 % Change in fair value of warrants 0.0 % 0.0 % Change in valuation allowance 5.0 % 74.9 % Income tax provision 26.0 % 95.9 % The Company’s effective tax rates for the periods presented differ from the expected (statutory) rates due to changes in fair value in warrants, transaction costs associated with warrants and the recording of full valuation allowances on deferred tax assets. The Company files income tax returns in the U.S. federal jurisdiction in various state and local jurisdictions and is subject to examination by the various taxing authorities. NOTE 10. FAIR VALUE MEASUREMENTS ASC 820, “Fair Value Measurement,” defines fair value as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Fair value measurements are classified on a three-tier hierarchy as follows: ● Level 1 — defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; ● Level 2 — defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and ● Level 3 — defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. F- 20 CO2 ENERGY TRANSITION CORP. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2025 The following table presents information about the Company’s assets that are measured at fair value on a recurring basis at December 31, 2025 and 2024, indicating the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value: Description Level December 31, 2025 December 31, 2024 Assets: Investments held in Trust Account 1 $ 72,113,895 $ 69,310,897 As of December 31, 2025 and 2024, the assets held in the Trust Account were held in money market funds which are invested primarily in U.S. government securities. The fair value of the Representative Shares was determined using the Monte Carlo Simulation Model. The Representative Shares have been allocated between temporary equity and stockholders’ deficit and will not require remeasurement after issuance. The following table presents the quantitative information regarding market assumptions used in the valuation of the Representative Shares: November 22, 2024 Implied common stock price $ 9.88 Lockup Term (years) 0.5 Probability of De-SPAC and Market Adjustment 7.5 % Discount for Lack of Marketability $ ( 0.10 ) The fair value of Public Rights was determined using the Monte Carlo Simulation Model. The Public Rights have been classified within stockholders’ deficit and will not require remeasurement after issuance. The following table presents the quantitative information regarding market assumptions used in the valuation of the Public Rights: November 22, 2024 Traded price of Unit $ 9.98 Expected Term to De-SPAC (Years) 1.5 Probability of De-SPAC and Market Adjustment 7.5 % Risk-free rate $ 4.45 % Implied common stock price $ 9.88 Fair value per share right $ 0.09 The fair value of the Public Warrants was determined using the Monte Carlo Simulation Model. The Public Warrants have been classified within stockholders’ deficit and will not require remeasurement after issuance. The following table presents the quantitative information regarding market assumptions used in the valuation of the Public Warrants: November 22, 2024 Expected Term to De-SPAC (Years) 1.5 Warrant Term 6.5 Implied common stock price $ 9.88 Exercise price 11.50 Risk-free rate 4.35 % Probability of De-SPAC and Market Adjustment 2.5 % Fair value per share warrant $ 0.03 F- 21 CO2 ENERGY TRANSITION CORP. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2025 NOTE 11. SEGMENT INFORMATION 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 for which separate financial information is available that is regularly evaluated by the Company’s chief operating decision maker (“CODM”), or group, in deciding how to allocate resources and assess performance. The Company’s CODM has been identified as its Chief Financial Officer , who reviews the operating results for the Company as a whole to make decisions about allocating resources and assessing financial performance. Accordingly, management has determined that the Company only has one reportable operating segment. The CODM assesses performance for the single segment and decides how to allocate resources based on net income or loss that also is reported on the statements of operations as net income or loss. The measure of segment assets is reported on the balance sheets as total assets. When evaluating the Company’s performance and making key decisions regarding resource allocation, the CODM reviews several key metrics, which include the following: For the Years Ended December 31, 2025 2024 General and administrative expenses $ 646,306 $ 246,139 Interest earned on the Trust Account $ 2,882,889 $ 310,897 December 31, 2025 December 31, 2024 Cash $ 287,601 $ 953,069 Investments held in Trust Account $ 72,113,895 $ 69,310,897 The CODM reviews interest earned on the Trust Account to measure and monitor stockholders value and determine the most effective strategy of investment with the Trust Account funds while maintaining compliance with the trust agreement. General and administrative expenses are reviewed and monitored by the CODM to manage and forecast cash to ensure enough capital is available to complete a Business Combination within the Business Combination period. The CODM also reviews general and administrative costs to manage, maintain and enforce all contractual agreements to ensure costs are aligned with all agreements and budget. General and administrative costs, as reported on the statements of operations, are the significant segment expenses provided to the CODM on a regular basis. All other segment items included in net income or loss are reported on the statements of operations and described within their respective disclosures. NOTE 12. SUBSEQUENT EVENTS The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements. F- 22 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. None.