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Item 1A. Risk Factors

2026-03-12 compared with 2025-03-31 · 1164 added, 385 removed, 39 unchanged (98% of the section changed)

1 unchanged sentence

Investing in our securities involves risks.

Before you make a decision to buy our securities, in addition to the risks and uncertainties discussed above under “Cautionary Note Regarding Forward-Looking Statements,” you should carefully consider the specific risks set forth herein.

If any of these risks actually occur, it may materially harm our business, financial condition, liquidity and results of operations.

As a result, the market price of our securities could decline, and you could lose all or part of your investment.

Additionally, the risks and uncertainties described in this Report are not the only risks and uncertainties that we face.

We may face additional risks and uncertainties that are not presently known to us, or that we currently deem immaterial, which may also impair our business, prospects, financial condition or operating results.

The following discussion should be read in conjunction with our financial statements and the financial statements of the Company and notes to the financial statements included herein.

Unless the context otherwise requires, all references in this section to “we,” “us,” or “our” refers to the Company and its subsidiaries.

Before you make a decision to buy our securities, in addition to the risks and uncertainties discussed above under “Cautionary Note

Regarding Forward-Looking Statements,” you should carefully consider the specific risks set forth herein.

If any of these risks

actually occur, it may materially harm our business, financial condition, liquidity and results of operations.

As a result, the market

price of our securities could decline, and you could lose all or part of your investment.

Additionally, the risks and uncertainties described

in this Report are not the only risks and uncertainties that we face.

We may face additional risks and uncertainties that are not presently

known to us, or that we currently deem immaterial, which may also impair our business, prospects, financial condition or operating results.

The following discussion should be read in conjunction with our financial statements and the financial statements of the Company and notes

to the financial statements included herein.

Unless the context otherwise requires, all

references in this section to “we,” “us,” or “our” refers to the Company and its subsidiaries.

Risks Related to Our Business

We have a short operating history, which makes it difficult to evaluate our business and future prospects.

We have been in existence only since February of 2023.

We have encountered, and will continue to encounter, risks and difficulties frequently experienced by growing companies in rapidly changing industries, including those related to:

● market acceptance of our current and future products and services;

● changing regulatory environments and costs associated with compliance in the helium supply chain;

● our ability to compete with other companies in the helium industry;

● our ability to effectively market our products and services and attract new customers;

● the amount and timing of expenses, particularly sales and marketing expenses, related to the maintenance and expansion of our business, operations and infrastructure;

● our ability to control costs, including our expenses;

● our ability to manage organic growth;

● general economic conditions and events.

If we do not manage these risks successfully, our business and financial performance will be adversely affected.

We cannot assure the completed construction and commencement of operations of the Pecos Slope Plant, and even after such operations, we may not be able to generate adequate revenue to operate profitably and/or to continue as a going concern.

To date, we have provided natural gas from our reserves to a third-party processor to extract helium which does not currently generate revenue for NEH under existing contractual arrangements.

Construction of the Pecos Slope Plant is currently underway, but there is no guarantee that such construction will be completed or that we can successfully commence operations.

Furthermore, we cannot assure that we can achieve expected production rates and cost reductions even after the successful completion and operation of the Pecos Slope Plant.

In the future, our capital expenses and operational expenses may increase due to expected increased sales, operational costs, and general and administrative costs and, therefore, our operating losses may continue or even increase after operations of the Pecos Slope Plant.

Furthermore, to the extent that we are successful in increasing our customer base, we will also incur increased expenses because costs associated with generating and supporting agreements with customers are generally incurred up front, while revenue is generally recognized ratably over the term of the relationship.

We may not reach profitability in the near future or at any specific time in the future.

If and when our operations do become profitable, we may not be able to sustain profitability.

We cannot assure that we can raise enough capital to successfully develop our Pecos Slope Plant, which will adversely affect our ability to earn revenue and jeopardize our delivery of helium pursuant to existing contracts.

To successfully develop our Pecos Slope field, we will require estimated additional capital of $45.0 million.

The current cost of building, installing and commissioning of our Pecos Slope Plant will be approximately $20 million, of which we have already advanced $3.7 million to start construction.

Furthermore, we will need to install new trunk lines and a new gathering system in addition to upgrading portions of the gathering system that currently exists in the field at an estimated cost of $10.0 million.

Production enhancement from existing wellbore workovers in addition to drilling new wells will help maximize throughput volumes to the Pecos Slope Plant with the company budgeting between $13.0 - $15.0 million for these expenditures.

There is no assurance that we will secure this capital, which could result in delays in realizing revenues from our helium production as well as eventually jeopardize our delivery of helium pursuant to our current helium off-take agreements.

The manner in which we secure this additional capital is uncertain.

It may be in the form of (i) debt, which could create liens against the current assets of the Company, (ii) equity, which could create additional dilution for current and future shareholders of the Company or (iii) a combination of debt and equity, which could have the combined effects described above.

Scientific and technological changes may impact the demand for helium.

Science and technology are continuously and rapidly evolving.

Helium has broad applications, including in the MRI, semiconductor, welding, aerospace and fiber optics sectors, amongst others.

However, scientific and technological changes may affect end user demand for helium.

For instance, the MRI field has been the leader in helium usage for a number of years, as helium is used for cooling superconducting magnets in MRI machines.

However, the latest generation of MRI magnets consumes helium at markedly lower levels.

We cannot control the pace of scientific and technological developments and subsequently the changes in demand for helium brought about by these developments.

Technological advancement may drive down demand for helium amongst end users in certain industries that may not adequately be replaced by demand in other industries.

For instance, electronics is expected to replace MRI as the leading of helium application, but there is no guarantee that the electronics sector’s demand for helium will adequately compensate for the MRI industry’s decline in helium demand.

Furthermore, although helium has unique chemical properties that make it irreplaceable in many applications, additional substitutes for helium may be discovered, or existing substitutes for helium may become more prominent as scientific research develops.

As science and technology continue to evolve, helium demand may drop in certain fields, which may decrease demand for helium and negatively impact our financial performance.

Global health crises or catastrophes and other unforeseen or unavoidable events or market conditions may dampen demand for helium and negatively impact our financial performance.

Historically, the global helium market has had periods of supply and demand imbalances brought on by a variety of unanticipated and unpredictable events.

For instance, sales and demand for helium dropped significantly following the outbreak of the COVID-19 pandemic, due to economic lockdown and supply chain disruptions.

Similar global health crises may occur in the future which could drive down the demand for helium and may negatively affect our financial performance.

We cannot control global events or market factors which affect the demand for and supply of helium, which in turn affect the market prices for helium.

Therefore, our financial performance may be negatively impacted by events which we may not foresee or adequately prepare for.

Helium demand in certain applications is somewhat elastic.

Helium demand is somewhat elastic, meaning that helium demand for certain applications is sensitive to increases in price.

This elasticity manifests itself as substitution of other gases for helium, increase investment in helium recycling or technological change that reduces helium consumption.

Therefore, significant increases in helium prices could adversely impact our financial performance over the longer term by reducing demand.

Increases in extraction and production costs or disruptions in our natural gas supplies could materially and adversely impact our business.

We may experience increases in extraction and production costs or an interruption in the supply of natural gas from our reserves.

Any such increase or supply interruption could materially and negatively impact our business, prospects, financial condition and operating results by affecting the volume of helium we provide to our clients and subsequently sales.

Various market conditions such as inflationary pressures could increase the costs in extraction and production of helium from our natural gas reserves and could adversely affect our business and operating results.

Such price increases will also increase our operating costs, and could reduce our margins if we cannot recoup the increased costs through increased prices for our helium supply.

Our costs of operations may exceed estimates due to factors outside of our control, such as labor shortages or external price increases, and we may be unable to pass those costs to our customers, which would negatively impact our financial results.

We depend on our employees and operations teams to assist in distributing helium to our clients.

We rely on access to a competitive, local labor supply, including skilled and unskilled positions, to operate our business consistently and reliably.

Any labor shortage and/or any disruption in our ability to hire workers may negatively impact our operations and financial condition.

If we experience a sustained labor shortage, we may need to increase wages to attract workers, which would increase our costs of production.

Furthermore, if our operating costs increased, including due to inflationary pressures, we may be unable to pass those increased costs on to our customers.

If we are unable to do so, our gross margin will decline, and our financial results will be negatively impacted.

A delayed commencement date or other events could result in an early termination of certain of our material contracts.

We have entered into the Contract for Sale and Purchase of Liquid Helium (the “Liquid Helium Agreement”), with Air Life Gases USA, Inc.

(“AirLife”) that has a term of 10 years from the date on which the first container of liquid helium is filled at the tolling facility for the helium buyer (the “Liquid Helium Commencement Date”).

We have also entered into the Helium Tolling Agreement (the “Helium Tolling Agreement”) with Keyes Helium Company (“KHC”) dated September 1, 2023, pursuant to which we would receive tolling services with respect to our crude helium and such crude helium would be purified and liquified by KHC into liquid helium and filled into containers.

The Helium Tolling Agreement has a term of 5 years from the date on which we commence deliveries of gaseous helium to the third-party tolling facility (the “Tolling Commencement Date”).

If the Liquid Helium Commencement Date has not occurred by November 30, 2025, AirLife has the right to terminate the Liquid Helium Agreement.

The Liquid Helium Agreement can also be terminated prior to the end of the term if helium deliveries are less than 6,000,000 standard cubic feet during any 12 consecutive month period, due to a force majeure event, a material breach of the agreement by either party, or financial insolvency.

Similarly, because the Helium Tolling Commencement Date has not occurred by September 30, 2024 due to delays in securing financing for our purchase of the Pecos Slope Plant KHC has the right to terminate the Helium Tolling Agreement.

We also agreed to sell fifty percent (50%) of the gaseous helium generated monthly at the Pecos Slope Plant to Matheson, pursuant to the Gaseous Helium Agreement.

If the Commencement Date as defined in the Gaseous Helium Agreement does not occur by July 1, 2025, Matheson Agreement has the right to terminate the Gaseous Helium Agreement.

The Commencement Date as defined in the Gaseous Helium Agreement depends on the completion and beginning of operations of our Pecos Slope Plant.

Based on the current stage of the development and construction of its Pecos Slope Plant and the advice of the engineering consultants, NEH’s management believes that it is unlikely that we will be able to secure funding, complete construction of the helium extraction plant and commence helium deliveries prior to July 1, 2025, while management believes it is possible that it will occur prior to November 30, 2025.

While it is possible that AirLife and KHC could terminate the abovementioned agreements in such situations, we believe that it is more likely that AirLife and KHC would try to renegotiate the agreement on terms that are less favorable for NEH.

In the event of early termination, we would attempt to secure replacement agreements with price, terms and conditions reflecting then current market conditions.

There is a possibility that we may not be able to secure replacement agreements or that that such replacement agreements will be on less favorable terms than the current agreements.

If we are not able to develop an alternate production plan if our Pecos Slope Plant is not ready to operate by the required deadlines, or if we are not able to secure replacement agreements at attractive prices and conditions, our business and operating results could be adversely affected.

In addition, the Liquid Helium Agreement and the Gaseous Helium Agreement have a mechanism of price reopener negotiations, with a scheduled price reopener negotiation at the end of the fifth year, and an unscheduled price reopener negotiation that may be requested by either party, on one occasion each, at any time after the end of the third year.

Depending on market conditions, the price reopener negotiation mechanism may result in prices that less advantageous to us, in which case our business and operating results could be adversely affected.

We have proved and probable reserves and areas that we decide to explore may not yield helium in commercial quantities or quality, or at all.

We have proved and probable reserves of helium.

We have identified prospects based on available seismic and geological information that indicates the potential presence of helium.

However, the areas we decide to explore may not yield helium in commercial quantities or quality, or at all.

Most of our current prospects are in various stages of evaluation that will require substantial additional seismic data reprocessing and interpretation.

Even when properly used and interpreted, two-dimensional and three-dimensional seismic data and visualization techniques are only tools used to assist geoscientists in identifying subsurface structures and helium indicators and do not enable the interpreter to know whether helium is, in fact, present in those structures.

We do not know if any of our prospects will contain helium in sufficient quantities or quality to recover exploration costs or to be economically viable.

Even if helium is found on our prospects in commercial quantities, construction costs of infrastructure, including pipelines and transportation costs may prevent the prospects from being economically viable.

We may terminate our extraction program for a prospect if data, information, studies and previous reports indicate that the possible development of our prospect is not commercially viable and, therefore, does not merit further investment.

If a significant number of our prospects do not prove to be commercially viable, we will be materially adversely affected.

The Appraisal Report included in this Report involves a significant degree of uncertainty and are based on projections that may not prove to be accurate.

The Appraisal Report included in this Report includes projections that are based on assumptions and current expectations relating to future events and financial trends.

The reserves were estimated using a combination of the production performance, volumetric and analogy methods, in each case as we considered to be appropriate and necessary.

All reserve estimates represent our best judgment and the best judgment of MKM Engineering based on data available at the time of preparation and assumptions as to future economic and regulatory conditions.

The process of estimated reserves is complex and requires significant judgment and decisions based on available geological, geophysical, engineering and economic data.

These estimates may change substantially as additional data from ongoing development activities and production performance becomes available and as economic conditions impacting helium and gas prices and costs.

We cannot assure you that the projections in the Appraisal Reports will prove to be accurate.

These projections were prepared for the narrow purpose of illustrating, under certain limited and simplified assumptions, our resources and costs.

In addition, because of the subjective judgments and inherent uncertainties of projections and because the projections are based on a number of assumptions that are subject to significant uncertainties and contingencies beyond our control, there can be no assurance that the projections or conclusions derived therefrom will be realized.

The possibility of not finding reserves is an intrinsic risk of our business.

Accordingly, you may lose some or all of your investment, particularly to the extent that these projections or conclusions are not ultimately realized.

We may need to raise capital in the future, which may not be available on favorable terms, if at all, and which may cause dilution to our stockholders, restrict our operations or adversely affect our ability to operate and continue our business.

There is no guarantee that we will successfully raise capital.

We may need to raise capital in the future.

We are in the process of securing a project financing arrangement to fund construction of the Pecos Slope Plant.

The successful construction and commencement of the Pecos Slope Plant and therefore financing for the Pecos Slope Plant will have a significant impact on our future financial performance.

Furthermore, we estimate that our capital requirements during 2025 to be approximately $40 million to $45 million.

However, if we need to raise additional capital in the future for any reason, we cannot be certain that we will be able to obtain additional financing on favorable terms, if at all, and any additional financings may result in additional dilution to holders of the common stock.

For instance, debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions such as incurring additional debt, expending capital, or declaring dividends, or which impose financial covenants on us that limit our ability to achieve our business objectives.

Additionally, if we enter into secured debt arrangements, we could be required to dispose of material assets or operations to meet our debt service and other obligations, which could negatively impact the business or cause the business to be discontinued.

If we need additional capital and cannot raise it on acceptable terms, we may not be able to meet our business objectives, our stock price may fall and you may lose some or all of your investment.

We have a material weakness in our internal control over financial reporting, which, if left unremedied, could materially and adversely affect the market price of our stock.

As of the date of this Report, we have not maintained effective controls over the control environment, including our internal control over financial reporting.

We are a small company with few employees in our accounting and finance department.

Although we utilize third parties to assist in the performance of certain accounting and tax related functions, we may still lack the ability to have adequate segregation of duties in the financial statement preparation process.

In addition, we have not adequately evaluated and tested controls over the control environment, including our disclosure controls and our internal controls over financial reporting.

Since these entity level controls have a pervasive effect across the organization, management has determined that these circumstances constitute a material weakness.

If we are unable to remediate this material weakness as a newly public company, our financial reporting may not be reliable, and the market price of our stock may be adversely affected.

Our performance may be negatively impacted by general and regional economic volatility or an economic downturn.

An overall decline in economic activity could adversely impact our business and financial results.

For instance, the economic disruption caused by the COVID-19 pandemic significantly reduced the global demand for helium.

Economic uncertainty may reduce end user spending on products which incorporate helium, and therefore reduce the demand for the helium we source and produce.

Inadequate demand for our helium could result in decreased revenue and worsen our financial performance.

Our business may be adversely affected by the departure of members of our management team, Board of Directors, and key employees.

Our success depends, in large part, on the continued contributions of Will Gray, our Chief Executive Officer and Chairman, our Board of Directors, and other key personnel.

Although we have employment agreements in place for our executive officers, we cannot assure you that they will remain with us for a specified period.

We recently transitioned our primary business

focus from helium exploration to digital infrastructure and we may not be able to effectively execute our business strategy.

In July 2025, we rebranded as New Era Energy & Digital, Inc.

subsequently realigned our primary business focus on digital infrastructure and data center development.

This strategic pivot represents

a fundamental change in our business model.

While we are experienced as an asset developer, we have less operating history as a data center

developer and there are risks and uncertainties associated with implementing this new line of business.

We may invest significant time

and resources in our attempts to implement this new line of business, which may never generate returns or generate sufficient returns

to yield a profit.

Failure to successfully execute our business strategy, (including our 4-phase development model:

Site Selection, Development,

Execution, and Revenue) could adversely affect our business, financial condition or results of operations.

We are a development-stage company and our

new business strategy has no operating history or historical revenue, and we face execution risk across all major components of our business.

We were recently formed and are currently in the early stages of developing

our digital infrastructure and data center projects.

We have not generated any revenue to date from this strategic pivot and do not expect

to do so until the first subleases of our data centers and delivery of behind-the-meter energy commence, which we expect will not occur

until at least the end of 2027.

Given our early stage of development, it is difficult to predict what results we might ultimately achieve.

The uncertainty of a rapidly changing marketplace and ongoing global supply challenges have created a volatile and challenging business

climate, which may continue to negatively impact our customers and their spending and investment decisions.

Our business model depends

on, among other things, our ability to construct, permit, finance, and operate digital infrastructure and data centers.

We may not be

able to generate the level of revenue necessary to achieve and maintain sustainable profitability and a failure to maintain and grow our

revenue volumes would adversely affect our business, financial condition and operating results.

We do not currently have sufficient working

capital to fund our planned operations for the next twelve months.

There is uncertainty regarding our ability to raise additional capital

and as such, there is substantial doubt regarding our ability to continue as a going concern.

Our audited financial statements have been prepared

under the assumption that we would continue as a going concern.

However, we have concluded that there is substantial doubt about our ability

to continue as a going concern, because without additional sources of funding, our cash and cash equivalents at December 31, 2025 is not

sufficient for us to fund our working capital needs for the next twelve months after the date that the audited financial statements included

in this Annual Report on Form 10-K are issued.

Management’s plans concerning these matters, including raising additional capital,

are described in “ Management’s Discussion and Analysis of Financial Condition and Results of Operation .” We continue

to evaluate options to further finance our operating cash needs, however, we cannot guarantee that we will be able to obtain any or sufficient

additional funding or that such funding, if available, will be obtainable on terms satisfactory to us.

If we are unable to raise capital

in the near term or on attractive terms, we could be forced to delay our data center projects, or even curtail or cease operations.

We have not yet constructed our facilities

or entered into any binding contracts with any tenants, and there is no guarantee that we will be able to do so in the future.

commercial operating history makes it difficult to evaluate our prospects, the risks and challenges we may encounter and our total potential

addressable market.

Any delays or setbacks we may experience could have a material adverse effect on our business, financial condition

and results of operations, and could harm our reputation.

Our business plan to construct and operate data

centers depends on, among other things, our ability to negotiate and enter into binding agreements with potential tenants to lease our

If no potential near-term tenant enters into such binding agreement with us, the construction and operation of our data centers

could be significantly delayed.

Such delays would result in delays in revenue and could hinder our ability to gain market traction with

other potential tenants.

As a result of our limited commercial operating

history and ongoing changes in our new and evolving industry, including evolving demand for the types of products and services we offer

and the potential development of technologies that may prove more efficient or effective for our intended use, our ability to forecast

our future results of operations and plan for and model future growth is limited and subject to a number of uncertainties.

our internal estimates relating to the size of our total addressable market may not be correct.

In addition, our expectations with respect

to our total potential addressable market may differ from those of third parties, including investors or securities analysts.

There can be no assurance that we will not experience

operational or process failures and other problems during the construction or operation of our data center projects.

Any failures or setbacks,

particularly in the initial phases of our data center projects, could harm our reputation, our ability to attract tenants, and adversely

effect our business and financial condition.

We will require significant additional capital

to construct and complete our TCDC’s primary site in Ector County, and we may not be able to secure such financing on time with

acceptable terms, or at all, which could cause delays in our construction, lead to inadequate liquidity and increase overall costs.

The capital expenditures we expect to incur as

we complete the development of our first project will be significant.

Additional capital may not be available in the amounts required,

or on favorable terms.

In addition, if any adverse findings are discovered at any stage during the course of our development of the project

that would render part of, or all of, the project site to be unsuitable or we discover flaws that may decrease the value of the project

site as collateral for purposes of any financing, then we may not be able to obtain the financing necessary to construct the project on

favorable terms, or at all.

Delays in construction beyond the estimated development

period could increase the cost of completion beyond the amounts that we estimate and beyond the then-available proceeds from rent

payments from our tenants we expect to receive, which could require us to obtain additional sources of financing to fund our operations

until our project is fully completed (which could cause further delays).

Moreover, many factors (including factors beyond our control)

could result in a disparity between liquidity sources and cash needs, including factors such as construction delays and breaches of agreements.

Our ability to obtain financing that may be needed

to provide additional funding will depend, in part, on factors beyond our control and there can be no assurances that funding will be

available to us on commercial terms or at all.

Accordingly, we may not be able to obtain financing on terms that are acceptable to us,

Even if we are able to obtain financing, we may have to accept terms that are disadvantageous to us or that may have an adverse

impact on our business plan and the viability of the relevant project.

The failure to obtain any necessary additional funding could cause

any or all of our projects to be delayed or not be completed.

Any delays in construction could prevent us from commencing operations when

we anticipate and could prevent us from realizing anticipated cash flows, all of which could have a material adverse effect on our business,

contracts, financial condition, operating results, cash flow, financing requirements, liquidity, prospects and the price of our common

Technological advances or disruptive innovations,

specifically advancements in AI, may outpace our development cycle, and we are exposed to technology obsolescence across all major asset

The AI and compute infrastructure industries are

rapidly evolving.

We have been and will continue to be dependent on innovations in technology offerings by our vendors, as well as the

adoption of those innovations by tenants.

Breakthroughs in chip design, immersion cooling, energy storage, or synthetic power generation

could materially reduce the competitive edge of our offerings.

Tenants may delay spending while they evaluate any new technologies or

may choose providers with more current infrastructure.

The rapid pace of innovation in semiconductor design, AI model architecture, power

electronics, and battery storage means that capital investments in one generation of infrastructure may be made obsolete before full monetization

If new technologies require materially different site layouts, interconnect systems, or energy delivery formats, portions

of our developed capacity may become outdated or require costly retrofits.

Emerging AI technologies, such as demonstrated

by Hangzhou DeepSeek Artificial Intelligence Basic Technology Research Co., Ltd., may allow for complex AI operations to be executed with

significantly less computing power than is currently required.

If AI developers are able to achieve the same or better performance outcomes

with more energy-efficient, cost-effective, or less resource-intensive technologies, they may adjust their need for large-scale, high

capacity power solutions.

This shift could have an adverse effect on our business, results of operations, and financial condition.

continuously monitor industry trends and invest in innovation to mitigate these risks.

However, there is no assurance that we will be

able to anticipate or respond effectively to such changes, which could have an adverse effect on our business, results of operations,

and financial condition.

We will be dependent on third-party manufacturing

and supply chain relationships to build and operate our facilities.

Our reliance on third parties and suppliers involves certain risks

that may result in increased costs, delays, and loss of revenue.

We do not have the resources to build our own

facilities, and we extensively rely on third parties for materials for our business.

As a result, we are subject to risks associated with

these third parties, including:

insufficient capacity available to meet our demand on time;

inability of our suppliers to obtain the equipment or replacement parts necessary to fully operate our facilities or expand available manufacturing capacity;

inadequate manufacturing yields and excessive costs;

inability of these third parties to obtain an adequate supply of raw materials;

extended lead times on supplies used in the building and operation of our facilities;

limited warranties on products supplied to us;

potential increases in prices (including the cost of freight and potential or increased tariffs).

Our industry has experienced the effects of manufacturing

capacity constraints.

Uncertainty regarding the effects and duration of global hostilities, including the Russia-Ukraine war and ongoing conflicts in the Middle

East, and related international sanctions and restrictions have impacted

supply chains for manufacturers.

These supply challenges have impacted, and may continue to impact, our ability to fully satisfy the necessary

supplies, resources and products required by our business and our data center projects.

In some cases, our requirements may represent

a small portion of the total production or business of our third-party suppliers.

We cannot provide any assurance that our external partners

will devote the necessary resources to our business and when requested by us.

Each of these events could increase our costs, lower our

gross margin, delay the construction and delivery of our projects, and cause us to hold more inventories, or materially impact our ability

to deliver our products on time.

We depend on third-party vendors, contractors,

and consultants to support our business.

From licensing and permitting to design, procurement,

construction, and operations, we depend on a complex ecosystem of third-party providers to execute our development roadmap.

These parties

include, among others, engineering firms, construction managers, legal advisors, fiber network providers, and control system integrators.

If any such party experiences delays, disputes, or insolvency, or we lose our license or use rights to critical third-party technology,

it could materially adversely impact the timing of delivery, cost, or quality of our infrastructure solution and our ability to attract

We intend to enter into a joint venture

with a development partner to operate our flagship site.

While we expect to have the ability to influence certain business decisions affecting

the joint venture, the success of our investment in the joint venture will depend in large part on the development partner’s operation

of the joint venture.

Our use of a joint venture structure to develop

and operate our flagship site limits our control, reduces our distributions, and exposes us to additional partner, governance, financing,

construction, and operational risks, any of which could adversely affect our business, results of operations, financial condition, and

We will not have sole control over key decisions

regarding development, construction, financing, leasing, operations, major capital expenditures, and potential asset sales.

Many of these

matters will require the consent of our partner or approval under joint venture governance procedures, which may delay decision-making

or prevent us from taking actions that we believe are in our best interests.

If the joint venture agreement provides for shared governance

or minority consent rights, we could be subject to deadlocks that require dispute resolution mechanisms, which may be costly, time-consuming,

and disruptive.

Additionally, our development partner may have

different business objectives, return expectations, investment horizons, tax considerations, or other considerations that differ from

If our partner experiences financial distress, becomes insolvent, fails to meet its obligations, or otherwise breaches the joint

venture agreement, the project could be delayed, incur significantly higher costs, face contractor or lender disputes, or require us to

provide additional capital or assume management responsibilities on short notice.

Conflicts of interest may arise if our partner pursues

other opportunities, competes for tenants or contractors, or allocates personnel and resources across multiple projects.

Additionally, we may not be required to consolidate

the joint venture for accounting purposes, which could reduce the transparency of the project’s assets, liabilities, revenues, and

expenses in our financial statements.

Our share of the joint venture’s results may be recognized under the equity method, which

may introduce timing differences, reduce comparability, and increase earnings volatility.

We could also be required to recognize impairments

if the carrying value of our investment is not recoverable.

Additionally, we intend to rely on material additional

equity investments from a development partner in order to support financing efforts.

To the extent our partner is unable to make such

investments in sufficient amounts or at all, our creditworthiness may decrease substantially, and we may be unable to obtain financing

on acceptable terms or at all.

If any of the foregoing risks materialize, our

investment in the joint venture could underperform, we could incur losses or impairment charges, and our business, results of operations,

financial condition, and cash flows could be materially adversely affected.

Our business operations rely heavily on

securing agreements with suppliers for essential materials, equipment, and components which will be used to construct our data center

The execution, termination, expiration, or failure

to renew agreements with our suppliers, whether due to unforeseen circumstances, including, but not limited to, supplier insolvency and

regulatory changes, pose significant risks to our supply chain.

In the event that such agreements are not successfully maintained or replaced,

we may encounter difficulties sourcing required materials and components for our data center projects, leading to deployment delays, increased

costs, or an inability to meet tenant demand.

Any interruption or inability to maintain relationships with current and future suppliers,

or failure to secure materials from alternative suppliers could adversely impact our business operations, financial performance, and reputation.

We will need to hire additional skilled

employees as we grow and scale up our data center projects, and there is no assurance we will be successful in recruiting, hiring, and

training the personnel we need.

There is no assurance that we will be successful

in recruiting, hiring, training, and retaining the personnel we need.

If we are unable to hire the personnel we need, our ability to achieve

our aggressive growth and development milestones could be adversely affected.

We operate in a highly competitive industry,

which could reduce our growth opportunities, revenue and operating results .

The data center market is highly competitive and

rapidly evolving.

Some of our competitors are larger and possess greater financial, marketing, distribution, personnel and other resources

than we possess.

In addition, our focus on digital infrastructure introduces unique risks due to the high concentration of demand among

a small number of potential hyperscaler tenants.

We cannot assure that we can successfully maintain a competitive position against these

third parties, and if so, our financial performance will be negatively impacted.

AI and Large-scale Language Model, or LLM,

infrastructure requirements are changing faster than conventional infrastructure can be developed.

The compute requirements for AI training and inference

are scaling exponentially, with current models now requiring tens of megawatts per training cycle and high-throughput, ultra-low latency

interconnects between GPUs, memory storage, and cooling systems.

If our infrastructure design—particularly with respect to power

delivery and cooling configurations—does not keep pace with the technical standards demanded by these workloads, our facilities

may be underutilized or obsolete before full occupancy.

Furthermore, the advantage of our data center projects may be eroded over time

if competitors offer modular or prefabricated solutions with faster time-to-power and we may lose prospective tenants to faster-moving

We may not be able to obtain sufficient

water resources for our operations, which could materially impair our operations or impact our ability to expand our operations.

Our operations require significant quantities

of water for cooling, steam generation and other processes.

The availability of adequate water supplies is essential to the operations

and expansion of our project site.

Prolonged droughts, changes in precipitation patterns, increased competition for water resources or

the implementation of a more stringent regulatory regime regarding water rights and water usage (or changes to such regulatory regime)

could limit our ability to obtain sufficient water for our project.

If we are unable to secure the necessary water resources, we could

be forced to limit our operations.

Additionally, increased cost of obtaining and treating water or compliance with other environmental

regulations related to water could adversely affect our financial conditions and results of operations.

We may face physical site risks, including

severe weather events, environmental conditions, or other disasters which could result in an interruption of our operations, a delay in

the completion of our data center projects, higher construction costs and the deferral of the dates on which we could receive revenue,

all of which could adversely affect us.

Severe weather, including winter storms, can be

destructive, causing construction delays, outages and property damage that require incurring additional expenses.

A major weather or geological

event affecting our future infrastructure could impair the safety or reliability of our data center projects.

Furthermore, our operations

could be adversely affected, and our physical facilities could be at risk of damage, should global climate conditions produce, among other

conditions, unusual variations in temperature and weather patterns, resulting in more intense, frequent and severe weather events or abnormal

levels of precipitation.

In addition, site access or operation could be affected by new environmental protections or public opposition.

Any failure of our physical infrastructure,

or acts of theft or vandalism to our physical infrastructure, could lead to significant costs and disruptions that could reduce our revenue

and harm our business reputation and financial results.

Our business depends on providing tenants with

highly reliable solutions.

We must safehouse our tenants’ infrastructure and equipment located in our facilities.

Our facilities

could be subject to break-ins, sabotage and intentional acts of vandalism causing potential disruptions.

Some of our systems may not be

fully redundant, and our disaster recovery planning cannot account for all eventualities.

Any problems at our facilities and/or cloud

infrastructure could result in lengthy interruptions in our service and our business operations.

There can be no assurance that any security

or other operational measures that we or our third-party service providers or vendors have implemented will be effective against any of

the foregoing threats or issues.

The offerings we will provide in each of our facilities

are subject to failure resulting from numerous factors, including:

equipment failure;

physical, electronic and cybersecurity breaches;

fire, earthquake, hurricane, flood, tornado and other natural disasters;

extreme temperatures;

water damage;

terrorist acts;

theft, sabotage and vandalism;

failure of business partners who provide our resale products.

Problems at one or more of our facilities, whether

or not within our control, could result in service interruptions or significant equipment damage.

Because our facilities may be critical

to many of our tenants’ businesses, service interruptions or significant equipment damage in our facilities could also result in

lost profits or other indirect or consequential damages to our tenants.

We cannot guarantee that a court would enforce any contractual

limitations on our liability in the event that one of our tenants brings a lawsuit against us as a result of a problem at one of our facilities.

In addition, any loss of service, equipment damage

or inability to meet our service level commitment obligations could reduce the confidence of our tenants and could consequently impair

our ability to obtain and retain tenants, which would adversely affect both our ability to generate revenues and our operating results.

Furthermore, we are dependent upon energy providers,

Internet service providers, telecommunications carriers and other operators, some of which have experienced significant system failures

and electrical outages in the past.

Our tenants may in the future experience difficulties due to system failures unrelated to our systems

and offerings.

If, for any reason, these providers fail to provide the required services, our business, financial condition and results

of operations could be materially and adversely impacted.

Our business may be adversely affected by

the departure of members of our management team, Board, and key employees.

Our success depends, in large part, on the continued

contributions of Will Gray, our Chief Executive Officer and Chairman, Charles Nelson, our President and Chief Operating Officer, our Board,

and other key personnel.

Although we have employment agreements in place for our executive officers, we cannot assure you that they will

remain with us for a specified period.

Although we have additional personnel that contribute to our business, the loss of Mr.

Gray, our Board of Directors, and other key personnel could harm our ability to implement our business strategy and respond to the rapidly changing market conditions in which we operate.

Furthermore, the Company does not have key person life insurance policies in place and must bear sole financial risk of their departures.

If we are unable to attract, train and retain qualified personnel, we may not be able to effectively execute our business strategy.

Our future success depends on our ability to attract, retain and motivate qualified personnel, including our management, operational, finance and administration personnel.

We do not know whether we will be able to hire sufficient workers for these positions to meet our production goals or, if hired, retain all of these personnel as we continue to pursue our business strategy.

Nelson, our Board, and other key personnel could harm our ability to implement our business strategy and respond to the rapidly changing

market conditions in which we operate.

Furthermore, the Company does not have key person life insurance policies in place and must bear

sole financial risk of their departures.

Certain of our executive officers and directors

have significant duties with, and spend significant time serving, entities that may compete with us in seeking business opportunities

and, accordingly, may have conflicts of interest in allocating time or pursuing business opportunities.

Certain of our executive officers and directors,

who are responsible for managing the direction of our operations, hold positions of responsibility with other entities that are in our

These executive officers and directors may become aware of business opportunities that may be appropriate for presentation to

us as well as to the other entities with which they are or may become affiliated.

Due to these existing and potential future affiliations,

they may present potential business opportunities to other entities prior to presenting them to us, which could cause additional conflicts

They may also decide that certain opportunities are more appropriate for other entities with which they are affiliated, and

as a result, they may elect not to present those opportunities to us.

These conflicts may not be resolved in our favor.

If we are unable to attract, train and retain

qualified personnel, we may not be able to effectively execute our business strategy.

Our future success depends on our ability to attract,

retain and motivate qualified personnel, including our management, operational, finance and administration personnel.

We do not know whether

we will be able to hire sufficient workers for these positions to meet our production goals or, if hired, retain all of these personnel

as we continue to pursue our business strategy.

Furthermore, we do not have key person life insurance policies on such individuals.

The loss of the services of one or more of our key employees, or our inability to attract, retain and motivate qualified personnel could have a material adverse effect on our business, financial condition and operating results.

We may implement new lines of business or further diversify our revenue sources within existing lines of business, but we cannot assure that such diversification efforts will be successful.

As an early-stage company, we may implement new lines of business at any time.

Aside from helium production, we currently plan on diversifying our resources through trading MPCs and pursuing energy transition opportunities.

However, we cannot assure that such plans for diversification will ever materialize.

Additionally, there are risks and uncertainties associated with implementing new lines of businesses to diversify our revenue sources.

We may invest significant time and resources in our attempts to implement new lines of business or further diversify revenue sources, which may never generate returns or generate sufficient returns to yield a profit.

As a result, our business, financial condition or results of operations may be adversely affected by such unsuccessful efforts.

Damage to our reputation could negatively impact our business, financial condition and results of operations.

Our reputation is critical to our business and success in existing markets, and will be critical to our success as we continue to develop our business.

Any incident that damages our credibility or reputation could damage our business.

We may be adversely affected by any negative publicity, regardless of its accuracy.

Also, there has been a marked increase in the use of social media platforms and similar devices, including blogs, social media websites and other forms of internet-based communications that provide individuals with access to a broad audience of interested persons.

The availability of information on social media platforms is virtually immediate as is its impact.

Information posted may be adverse to our interests or may be inaccurate, each of which may harm our performance, prospects or business.

The harm may be immediate and may disseminate rapidly and broadly, without affording us an opportunity for redress or correction.

We operate within highly competitive industries, and cannot guarantee that we can or will maintain a robust financial position, relative to our competitors, in order to become profitable.

The helium exploration and production industry is highly competitive.

We face competition with respect to the helium we source and produce, and will face competition with respect to participants who enter the same market in the future.

Recent years have witnessed an unprecedented number of startup companies entering this market, and we believe there is an opportunity for acquisitions that would enable us to scale our business.

We intend to participate in mergers and acquisitions activities after we develop a sufficient financial foundation, but there is no guarantee that we will be able to successfully enter into acquisition arrangements or successfully scale our business.

A number of our competitors also have greater financial resources than we do.

These third parties compete with us in securing clientele for their helium and gas.

We cannot assure that we can successfully maintain a competitive position against these third parties, and if so, our financial performance will be negatively impacted.

Our business and operations may experience rapid growth.

If we fail to manage our growth, our business and operating results could be adversely affected and we may have to incur significant expenditures to address the additional operational and control requirements of such growth.

We may experience rapid growth in our sales and operations, which may place significant demands on our management, operational, and financial infrastructure.

If we fail to manage this growth, our reputation and operating results could be negatively impacted.

Improvements to the Company’s operational, financial, and management controls, as well as its reporting systems and procedures, will

have to be implemented to manage such growth.

However, these improvements may require significant capital expenditures and management resources, and we cannot ensure that monetary and human resources expended to manage growth will yield financial returns.

Furthermore, if such improvements are not implemented successfully, our ability to manage potential growth could be impaired and additional expenditures may have to be made to address such impairments.

Investors should consider the possibility of the Company’s rapid growth as well as the adverse impact that may result of such growth is not managed successfully.

Volatility in and disruption to the global economic environment, including the impact of an economic recession, trade protectionism and tariffs, and changes in the regulatory and business environments in which we operate may have a material adverse effect on our business, results of operations and financial condition.

Geopolitical risks, supply chain, labor and energy constraints and inflation have caused and may continue to cause volatility in and disruption to the global economic environment.

Future changes in the regulatory and business environments in which we operate, including increased geopolitical risks, trade protectionism and tariffs, may adversely affect our ability to sell our products or source materials needed to produce our products.

Furthermore, financial instability or bankruptcy at any of our suppliers or customers could disrupt our ability to produce our products and impair our ability to collect receivables, any or all of which may have a material adverse effect on our business, results of operations and financial condition.

In addition, some of our customers and suppliers may experience serious cash flow problems and, thus, may find it difficult to obtain financing, if financing is available at all.

As a result, our customers’ need for and ability to purchase our products or services may decrease, and our suppliers may increase their prices, reduce their output or change their terms of sale.

Any inability of customers to pay us for our products and services, or any demands by suppliers for different payment terms, may materially and adversely affect our results of operations and financial condition.

Furthermore, our suppliers may not be successful in generating sufficient sales or securing alternate financing arrangements, and therefore may no longer be able to supply goods and services to us.

In that event, we would need to find alternate sources for these goods and services, and there is no assurance we would be able to find such alternate sources on favorable terms, if at all.

Any such disruption in our supply chain could adversely affect our ability to manufacture and deliver our products on a timely basis, and thereby affect our results of operations.

We are subject to cybersecurity risks to operational systems, security systems, or infrastructure owned by us or third-party vendors or suppliers.

We are at risk for interruptions, outages, and compromises to the confidentiality, integrity or availability of:

(i) operational systems, including information technology, business, financial, accounting, product development, data processing, or manufacturing processes, owned by us or our third-party vendors or suppliers;

loss of the services of one or more of our key employees, or our inability to attract, retain and motivate qualified personnel could have

a material adverse effect on our business, financial condition and operating results.

We have a material weakness in our internal

control over financial reporting, which, if left unremedied, could materially and adversely affect the market price of our stock.

As of the date of this Report, we have not maintained

effective controls over the control environment, including our internal control over financial reporting.

We are a small company with

few employees in our accounting and finance department.

Although we utilize third parties to assist in the performance of certain accounting

and tax related functions, we may still lack the ability to have adequate segregation of duties in the financial statement preparation

In addition, we have not adequately evaluated and tested controls over the control environment, including our disclosure controls

and our internal controls over financial reporting.

Since these entity level controls have a pervasive effect across the organization,

management has determined that these circumstances constitute a material weakness.

If we are unable to remediate this material weakness

as a newly public company, our financial reporting may not be reliable, and the market price of our stock may be adversely affected.

We are subject to cybersecurity risks to

operational systems, security systems, or infrastructure owned by us or third-party vendors or suppliers.

We are at risk for interruptions, outages, and

compromises to the confidentiality, integrity or availability of:

(i) operational systems, including information technology, business,

financial, accounting, product development, data processing, or manufacturing processes, owned by us or our third-party vendors or suppliers;

(ii) facility security systems, owned by us or our third-party vendors, customers or suppliers;

and/or (iii) vehicle propulsion control modules or other in-product technology, owned by us, our customers or our third-party vendors or suppliers.

Such cyber incidents could materially disrupt operational systems (for example, through the deployment of ransomware);

result in loss of intellectual property, trade secrets or other proprietary or competitively sensitive information;

compromise personally identifiable information of employees, customers, suppliers, or others;

and/or (iii) vehicle propulsion control

modules or other in-product technology, owned by us, our customers or our third-party vendors or suppliers.

Such cyber incidents could

materially disrupt operational systems (for example, through the deployment of ransomware);

result in loss of intellectual property, trade

secrets or other proprietary or competitively sensitive information;

compromise personally identifiable information of employees, customers,

suppliers, or others;

jeopardize the security of our facilities;

and/or affect the performance of vehicle propulsion control modules or other in-product technology.

A cyber incident could be caused by malicious insiders or by third parties using sophisticated, targeted methods to circumvent firewalls, encryption, and other security defenses, including hacking, fraud, trickery, or other forms of deception, such as social engineering and phishing, or due to human or technological error, such as misconfigurations, “bugs,” or vulnerabilities in software or hardware used by us or others.

The techniques used by threat actors change frequently and may be difficult to detect for long periods of time.

Cyberattacks are expected to accelerate on a global basis in frequency and magnitude as threat actors are increasingly using tools – including artificial intelligence – to evade detection and even remove forensic evidence.

As a result, we may be unable to detect, investigate, remediate or recover from future cyberattacks or other incidents, or to avoid a materially adverse impact to our systems, information or business.

In addition, remote or hybrid working arrangements at our Company, our customers and many third-party providers increase cybersecurity risks due to the challenges associated with managing remote computing assets and the nature of security vulnerabilities that are present in many non-corporate and home networks.

A significant cyber incident could impact our production capability, harm our reputation and business relationships, impact our competitive position (including compromising our intellectual property assets), and subject us to regulatory actions or litigation and fines and/or penalties, including pursuant to evolving global privacy and security regulations and laws, as well as significant investigative, restoration or remediation costs and/or increased compliance costs.

and/or affect the performance of vehicle propulsion control modules or

other in-product technology.

A cyber incident could be caused by malicious insiders or by third parties using sophisticated, targeted

methods to circumvent firewalls, encryption, and other security defenses, including hacking, fraud, trickery, or other forms of deception,

such as social engineering and phishing, or due to human or technological error, such as misconfigurations, “bugs,” or vulnerabilities

in software or hardware used by us or others.

The techniques used by threat actors change frequently

and may be difficult to detect for long periods of time.

Cyberattacks are expected to accelerate on a global basis in frequency and magnitude

as threat actors are increasingly using tools - including artificial intelligence - to evade detection and even remove forensic evidence.

As a result, we may be unable to detect, investigate, remediate or recover from future cyberattacks or other incidents, or to avoid a

materially adverse impact to our systems, information or business.

In addition, remote or hybrid working arrangements at our Company,

our customers and many third-party providers increase cybersecurity risks due to the challenges associated with managing remote computing

assets and the nature of security vulnerabilities that are present in many non-corporate and home networks.

A significant cyber incident could impact our

production capability, harm our reputation and business relationships, impact our competitive position (including compromising our intellectual

property assets), and subject us to regulatory actions or litigation and fines and/or penalties, including pursuant to evolving global

privacy and security regulations and laws, as well as significant investigative, restoration or remediation costs and/or increased compliance

Any of the foregoing could materially affect our business, results of operations and financial condition.

There is no guarantee that our measures to prevent, detect and mitigate these threats, including employee and key third-party partner education, monitoring of networks and systems, and maintenance of backup and protective systems, will be successful in preventing or mitigating a cyber incident.

In addition, in many jurisdictions, we are subject to privacy and data protection laws and regulations.

There is no guarantee

that our measures to prevent, detect and mitigate these threats, including employee and key third-party partner education, monitoring

of networks and systems, and maintenance of backup and protective systems, will be successful in preventing or mitigating a cyber incident.

In addition, in many jurisdictions, we are subject

to privacy and data protection laws and regulations.

These laws and regulations are changing rapidly and becoming increasingly complex.

The interpretation and application of data protection laws in the U.S., Europe, and elsewhere are uncertain, evolving and may be inconsistent across jurisdictions.

Our failure to comply with these laws and regulations could result in legal liability, significant regulator penalties and fines, or impair our reputation in the marketplace.]

We operate in an intensely competitive business environment.

We may not be as successful as our competitors incorporating artificial intelligence (“AI”) into our business or adapting to a rapidly changing marketplace.

Our competitors may be larger, more diversified, better funded, and have access to more advanced technology, including AI.

These competitive advantages may enable our competition to innovate better and more quickly, to compete more effectively on quality and price, causing us to lose business and profitability.

Burgeoning interest in AI may increase our competition and disrupt our business model.

AI may lower barriers to entry in our industry and we may be unable to effectively compete with the products or services offered by new competitors.

AI-related changes to the products and services on offer may affect our customers’ expectations, requirements, or tastes in ways we cannot adequately anticipate or adapt to, causing our business to lose sales, market share, or the ability to operate profitably and sustainably.

The interpretation and application of data protection laws in the U.S., Europe, and elsewhere are uncertain, evolving and may be inconsistent

across jurisdictions.

Our failure to comply with these laws and regulations could result in legal liability, significant regulator penalties

and fines, or impair our reputation in the marketplace.

Risks Related to Regulatory Compliance

We face uncertainty and costly compliance with government regulations.

United States rules and regulations affecting the oil and gas industry and helium production, transportation, and processing is under constant review for amendment or expansion.

Such rules include environmental, health and safety laws such as the Clean Air Act, the Resource Conservation and Recovery Act, the Safe Drinking Water Act, the Clean Water Act, the Pipeline and Hazardous Materials Safety Administration rules, the Emergency Planning and Community Right-to-Know Act, the Occupational Health and Safety Act, and the National Environmental Policy Act, amongst others (and their state counterparts).

In addition, numerous departments, governmental entities, and agencies (federal, state, local, and tribunal) are authorized by statue to issue, and have issued, rules and regulations applicable to our industry.

Such rules and regulations, among other things, require permits and may prevent certain activities or increase fees related to our industry.

The scale of infrastructure planned at our

data center projects will require extensive permitting, interconnection, and third-party coordination.

The scope of infrastructure for our data center

projects necessitates cooperation with dozens of agencies, vendors, and contractors.

A delay or dispute with any one of these counterparties

or regulators could cascade into project-wide impacts.

Coordinating these layers in parallel, with differing regulatory timelines, creates

real risk for budget overruns or missed commercial operation dates.

We face uncertainty and costly compliance

with government regulations.

Our business is subject to extensive, evolving,

and increasingly stringent federal, state, and local laws and regulations.

Changes in laws and regulations can occur and these changes

can be difficult to predict.

New laws or regulations, or more stringent enforcement of existing laws or regulations, could adversely affect

our business, financial condition and results of operations.

In particular, our operations in Texas, including

our TCDC project, are subject to evolving regulations, including Senate Bill 6 (“SB 6”), which may increase our costs and

operational complexity.

SB 6 imposes new requirements on “large load” customers (defined as facilities drawing 75 megawatts

(“MW”) or more).

Under SB 6, we may be required, among other things, to share in the costs of transmission upgrades, which

were previously socialized across the rate base.

While we plan to utilize behind-the-meter generation to mitigate these risks, any regulatory

restriction on our ability to interconnect with the Electric Reliability Council of Texas grid could limit our ultimate grid redundancy

and make our campus less attractive to hyperscale tenants.

We may be subject to opposition from environmental

groups, litigation, or reputational campaigns, which could delay permitting or reduce site flexibility.

Certain types of energy projects (and their associated

infrastructure) in the United States frequently face opposition from non-governmental organizations, environmental advocacy coalitions,

and some local stakeholders.

These groups may challenge proceedings, file administrative appeals, or initiate litigation under various

environmental laws, including NEPA, the Clean Water Act, or the Endangered Species Act, as well as challenge government activities granting

required environmental permits.

Even unsuccessful litigation can delay project timelines, increase legal costs, and discourage investors

Furthermore, reputational campaigns in media or

political venues—particularly those focused on water usage, emissions from backup gas infrastructure, or perceived AI overreach—may

generate public controversy that slows permitting or discourages tenant commitments.

In addition, future phases of our data center

projects may interact with environmental and public stakeholder processes.

Any local opposition or environmental group litigation could

restrict our ability to expand or require costly mitigation efforts.

Risks Related to Financing

We will require significant additional capital

to construct and complete our data center projects, and we may not be able to secure such financing on time with acceptable terms, or

at all, which could cause delays in our construction, lead to inadequate liquidity and increase overall costs.

The capital expenditures we expect to incur as

we complete the development of our data center projects will be significant.

We currently estimate that the total capital expenditures

we will incur to complete the development of our data center projects could exceed $15 billion in the aggregate.

Additional capital may not be available in the

amounts required, or on favorable terms.

In addition, if any adverse findings are discovered at any stage during the course of our development

of our data center projects that would render part of, or all of, our data center projects to be unsuitable or we discover flaws that

may decrease the value of our data center projects as collateral for purposes of any financing, then we may not be able to obtain the

financing necessary to construct our data center projects on favorable terms, or at all.

Furthermore, any adverse changes in power demand

that affect the competitiveness of our data center projects or any failure on our part to obtain or comply with necessary permits or approvals

may also hinder our ability to obtain necessary additional capital or financing.

Delays in the construction of our data center

projects beyond the estimated development period could increase the cost of completion beyond the amounts that we estimate and beyond

the then-available proceeds from rent payments from our tenants we expect to receive, which could require us to obtain additional sources

of financing to fund our operations until our data center projects are fully completed (which could cause further delays).

Moreover, many

factors (including factors beyond our control) could result in a disparity between liquidity sources and cash needs, including factors

such as construction delays and breaches of agreements.

Our ability to obtain financing that may be needed

to provide additional funding will depend, in part, on factors beyond our control and there can be no assurances that funding will be

available to us on commercial terms or at all.

Even if we are able to obtain financing, we may have to accept terms that are disadvantageous

to us or that may have an adverse impact on our business plan and the viability of the relevant project.

The failure to obtain any necessary

additional funding could cause any or all of our data center projects to be delayed or not be completed.

Any delays in construction could

prevent us from commencing operations when we anticipate and could prevent us from realizing anticipated cash flows, all of which could

have a material adverse effect on our business, contracts, financial condition, operating results, cash flow, financing requirements,

liquidity, prospects and the price of our common stock.

We may be subject to credit risks.

Credit risk includes the risk that our customers

will not pay their bills, which may lead to a reduction in liquidity and an increase in bad debt expense.

Credit risk is comprised of

numerous factors including the price of products and services provided, the overall economy and local economies in the geographic areas

we serve, including local unemployment rates.

Credit risk also includes the risk that various

counterparties that owe us money or product will breach their obligations.

Should the counterparties to these arrangements fail to perform,

we may be forced to enter into alternative arrangements.

In that event, our financial results could be adversely affected and we could

incur losses.

One alternative available to address counterparty

credit risk is to transact on liquid commodity exchanges.

The credit risk is then socialized through the exchange central clearinghouse

While exchanges do remove counterparty credit risk, all participants are subject to margin requirements, which create an additional

need for liquidity to post margin as exchange positions change value daily.

The Dodd-Frank Wall Street Reform and Consumer Protection

Act requires broad clearing of financial swap transactions through a central counterparty, which could lead to additional margin requirements

that would impact our liquidity.

We may at times have direct credit exposure in

our short-term wholesale and commodity trading activity to various financial institutions trading for their own accounts or issuing collateral

support on behalf of other counterparties.

We may also have some indirect credit exposure due to participation in organized markets in

which any credit losses are socialized to all market participants.

Risks Related to Tenant Concentration and Leasing

Our near-term revenue may be heavily concentrated

among a small number of anchor tenants.

Our development strategy will initially be dependent

on securing long-term, take-or-pay lease agreements with a limited number of AI hyperscale tenants.

While we have engaged in discussions

with potential lessees, we have not executed binding lease agreements as of the date hereof.

If these parties delay or decline to execute

long-term leases, or if terms become unfavorable, it could materially impact our ability to generate revenue and meet financial obligations

associated with site development and energy infrastructure.

Failure of any major tenant to perform under

its lease could result in material financial losses.

Once executed, our leases are expected to include

long-term, take-or-pay structures, under which tenants are obligated to pay base rent and service fees regardless of usage.

a tenant defaults, restructures, or declares bankruptcy, we may be unable to enforce full lease payment obligations, particularly if our

rights as lessor are contested or if operational performance requirements are not met.

Given the scale of infrastructure allocated per

tenant, any lease disruption could significantly impair site-level cash flow and cause valuation write-downs on real estate or energy

Our leases may include operational covenants

that create performance liability.

Certain tenant agreements may require us to maintain

continuous availability of power, cooling, and security infrastructure at service levels that match hyperscale standards (e.g., 99.999%

uptime, tiered failover, dedicated thermal recovery).

Failure to meet these conditions—due to delays in licensing, gas turbine failures,

water shortages, or other force majeure events—could trigger contractual penalties, rent abatements, or early termination rights.

These provisions could materially increase our liability exposure even if subleases are nominally long-term and fixed-rate.

Tenant consolidation or vertical integration

could reduce long-term leasing demand.

We face risks related to industry consolidation

and tenant vertical integration.

Major hyperscalers are increasingly seeking to build and own their own infrastructure, including energy

generation assets and fully integrated data campuses.

If these companies successfully verticalize their power generation and real estate

strategies, demand for third-party infrastructure platforms such as ours may decline.

In addition, consolidation within the AI sector

could result in tenant concentration risk or create new infrastructure monopolies that exclude new entrants like us.

This trend may limit

our ability to renew leases at market rates or expand existing tenant footprints as intended.

We may be required to offer lease concessions

or capital subsidies to secure long-term tenants.

As competition for AI-aligned tenants increases,

we may need to provide infrastructure rebates, tenant improvement allowances, or direct capital support for high-density power configurations,

cooling corridors, or private substations.

These concessions may reduce net effective rent and extend payback periods, particularly in

earlier phases of the development where site-wide utilities and redundancy are still being constructed.

We may not achieve tenant adoption at the

pace or pricing levels required for financial viability.

Although we are actively negotiating with prospective

tenants, there is no guarantee these entities will execute leases with us or maintain full occupancy under our pricing assumptions.

Additionally,

tenants often have significant bargaining power and may demand capital support, infrastructure rebates, or operational guarantees that

may increase our costs or reduce our profitability.

A failure to achieve tenant adoption at an adequate pace and at assumed pricing levels

may have a material adverse impact on our business prospects, financial condition, results of operations and cash flows.

If we fail to meet certain milestones in any of

our leases, including delivery of schematic design documents, delivery of design development documents and construction documents, early

access completion, and substantial completion and final completion of the construction of Powered Shells by certain specified deadlines,

the tenants may be entitled to substantial liquidated damages that would have a material adverse effect on the financial position and

liquidity of the Company.

In addition, the tenants may terminate their lease agreements and we may be obligated to repay amounts equal

to or in excess of any and all accrued rent credits and other amounts advanced to us in the form of any prepayments or reimbursements,

which amounts would be significant.

Any such termination and required repayments would likely lead to our insolvency.

Our ability to complete the project milestones

is subject to substantial risks, many of which are out of our control.

Similar projects have frequently experienced time delays and cost

overruns in construction and development as a result of the occurrence of various of these risks, and no assurance can be given that we

will not experience similar events, any of which could have a material adverse effect on our business prospects, financial condition,

results of operations and cash flows.

Risks Related to Our Governance and Operating

Some members of our management team have

limited experience in operating a public company.

Some members of our management team, including

our executive officers, have limited experience in the management of a publicly traded company.

Their limited experience in dealing with

the increasingly complex laws pertaining to public companies could be a significant disadvantage in that it is likely that an increasing

amount of their time may be devoted to these activities, which will result in less time being devoted to our business’ management

We may need to add additional personnel with the appropriate level of knowledge, experience, and training in the accounting

policies, practices or internal controls over financial reporting to maintain what is required of public companies in the United States.

The development and implementation of the standards and controls necessary for us to maintain the level of accounting standards required

of a public company in the United States may require greater costs than expected.

We could be required to expand our employee base and

hire additional employees and advisors to support our operations as a public company, which will increase our operating costs in future

We are subject to outstanding litigation

filed by the State of New Mexico, which could result in substantial legal fees or damages and may divert management ’ s

time and attention from our business.

On December 23, 2025, the State of New Mexico

and the Oil Conservation Division of the Energy, Minerals and Natural Resources Department of the State of New Mexico filed a civil complaint

in the First Judicial District Court of the State of New Mexico (the “New Mexico Litigation”) alleging, among other things,

that we engaged in a fraudulent scheme to acquire oil and gas wells in the State of New Mexico and discharge associated environmental

liabilities on the State of New Mexico and its taxpayers.

We may incur significant legal and other fees

and costs to resolve the New Mexico Litigation.

In addition, monitoring and defending against such litigation is time-consuming for management

and detracts from our ability to fully focus our internal resources on our business activities.

We are not currently able to estimate

the possible cost to us from the New Mexico Litigation, as this matter is currently at an early stage and we cannot be certain how long

it may take to resolve this matter or the possible amount of any damages that we may be required to pay.

We could, in the future, incur

an adverse judgment or enter into a settlement for monetary damages as a result of the New Mexico Litigation.

During the pendency of our

litigation, we may be unable to consummate our contemplated sale of legacy natural gas assets.

If the New Mexico Litigation results in

the payment of substantial damages by us or our ability to monetize existing assets, it could adversely effect our business, financial

condition or results of operations.

Risks Related to Market Conditions and Macroeconomic

Adverse macroeconomic conditions could impair

our ability to raise capital or complete development phases.

The success of our data center projects depends

on continued access to both equity and project-level debt to fund real estate, energy, and infrastructure development.

In the event of

economic downturns, financial market volatility, interest rate increases, or reduced investor risk appetite—particularly for real

asset or infrastructure investments—we may be unable to secure sufficient capital on acceptable terms or at all.

This could result

in construction delays, contract renegotiations, or asset impairments, any of which would have a material adverse effect on our business,

results of operations and cash flows.

Cost overruns and inflationary pressures

could materially increase development and operating costs and impact our capital budget and profitability.

The construction of our data center projects is

expected to span multiple years and include capital-intensive civil, electrical, and mechanical engineering work.

The prices of steel,

concrete, turbine components, piping systems, data center racks, and high-voltage equipment have experienced material inflation in recent

Similarly, prices for imported materials, equipment and supplies used in our business may also be negatively impacted by tariff

policy, which can be inflationary.

If inflation or tariffs affect labor rates, raw materials (e.g., steel, concrete), or specialized equipment,

our project budgets may increase significantly.

Our project budget may escalate due to engineering rework, licensing scope changes, and

schedule slippage.

Similarly, labor costs for skilled construction workers, electricians, and qualified engineers continue to rise.

If inflation persists or accelerates, the cost

to complete our data center projects may exceed our estimates, reducing return on investment and increasing reliance on additional capital

While we have incorporated contingency planning into our baseline financial models, these provisions may not be sufficient to

cover real-time market variability.

Unexpected inflation or commodity price shocks may necessitate budget revisions or additional capital

Changes in U.S.

trade policy, including

the imposition of tariffs and the resulting consequences, may have a material adverse impact on our business and results of operations.

The United States government has indicated its

intent to adopt a new approach to trade policy and in some cases to renegotiate, or potentially terminate, certain existing bilateral

or multi-lateral trade agreements.

It has also initiated or is considering the imposition of tariffs on certain foreign goods and products.

Changes in United States trade policy have resulted in many United States trading partners adopting responsive trade policies, and additional

responsive trade policies could be adopted in the future.

These measures could materially increase the costs we incur in developing, deploying

and maintaining our reactors, gas turbines and other long-lead time components.

We will depend on a limited number of suppliers,

including suppliers of our gas turbines and other long-lead time system components that may be manufactured oversees, to provide us, directly

or through other suppliers, with items such as equipment for the construction and development of our data center projects, other components

and raw materials.

Tariffs on such components would increase our costs to the extent those components are imported into the United States.

While a certain portion of the increased costs may be absorbed by certain suppliers, some suppliers may struggle to absorb the increased

costs, especially over the long term, potentially leading to supply disruptions or cost pass-throughs to us, which may lead to an increase

in our expenditures.

Any shortage, delay or component price change from these suppliers, including as a result of changes in exchange

rates, taxes or tariffs, could result in sales and installation delays, cancellations and loss of market share.

If there are substantial

tariffs imposed by the United States on countries from which we import certain of our key products, we may not be able to pass the cost

through to our tenants.

We cannot predict future trade policy or the terms

of any renegotiated trade agreements and their impact on our business.

The adoption and expansion of trade restrictions, the occurrence

of a trade war, or other governmental action related to tariffs or trade agreements or policies has the potential to adversely impact

demand for our products, our costs, our tenants, our suppliers, and the United States economy, which in turn could adversely impact our

business, financial condition and results of operations.

Our attempts to mitigate potential disruptions to our supply chain and offset

procurement and operational cost pressures, such as through alternative sourcing and/or increases in the selling prices of some of our

products, may not be successful.

To the extent that cost increases result in significant increases in our expenditures, or if our price

increases are not sufficient to offset these increased costs adequately or in a timely manner, and/or if our revenues decrease, our business,

financial condition or operating results may be adversely affected.

Interest rate fluctuations may increase

our cost of capital and reduce profitability.

Our data center projects will utilize a mix of

fixed and variable rate financing instruments.

Increases in benchmark interest rates, lender spreads, or risk premiums for long-duration

infrastructure projects may increase debt service costs, reduce debt availability, or constrain financial flexibility.

Rising rates may

also reduce the relative attractiveness of our common equity to yield-seeking investors, limiting the success of this offering or future

follow-on financings.

Shifts in federal, state, or local policy

may affect permitting, taxation, or infrastructure incentives.

Our development strategy is currently supported

by a policy environment that encourages energy innovation, U.S.-based manufacturing, and advanced infrastructure deployment.

changes in political leadership or budget priorities at the federal or state level could result in the rollback of tax credits, delays

in Department of Energy funding programs, or new environmental permitting requirements.

At the state level, changes in law or interpretation

regarding water rights, transmission access, or land use could materially adversely impact the ability of our data center projects to

expand or conduct business any of which could materially adversely affect our business.

Sustainability expectations may evolve in

ways that affect project costs or tenant commitments.

Sustainability

expectations—particularly around carbon neutrality and sustainable water use—may continue to evolve.

In the future, certain

institutional investors or tenants may require additional certifications, climate audits, or supply chain transparency that increase

compliance costs.

Failure to meet such expectations could limit tenant participation, equity investment, or long-term valuation.

applicable tax laws and regulations or exposure to additional income tax liabilities could adversely affect our business, operating results

financial condition and cash flows.

We are subject

to various complex and evolving U.S.

federal, state and local tax laws.

federal, state and local tax laws, policies, statutes, rules,

regulations or ordinances could be interpreted, changed, modified or applied adversely to us, in each case, possibly with retroactive

From time to time, U.S.

federal and state level legislation has been proposed that would, if enacted into law, make significant

changes to tax laws.

Any change or modification of current tax laws, any significant variance in our interpretation of current tax laws

or a successful challenge of one or more of our tax positions by the U.S.

Internal Revenue Service or other tax authorities could increase

our future tax liabilities and adversely affect our business, operating results, financial condition and cash flows.

Risks Relating to Our Legacy Assets

The Appraisal Report included in this Report

involves a significant degree of uncertainty and are based on projections that may not prove to be accurate.

The Appraisal Report included in this Report includes

projections that are based on assumptions and current expectations relating to future events and financial trends.

The reserves were estimated

using a combination of the production performance, volumetric and analogy methods, in each case as we considered to be appropriate and

All reserve estimates represent our best judgment and the best judgment of MKM Engineering based on data available at the time

of preparation and assumptions as to future economic and regulatory conditions.

The process of estimated reserves is complex and requires

significant judgment and decisions based on available geological, geophysical, engineering and economic data.

These estimates may change

substantially as additional data from ongoing development activities and production performance becomes available and as economic conditions

impacting helium and gas prices and costs.

We cannot assure you that the projections in the

Appraisal Report will prove to be accurate.

These projections were prepared for the narrow purpose of illustrating, under certain limited

and simplified assumptions, our resources and costs.

In addition, because of the subjective judgments and inherent uncertainties of projections

and because the projections are based on a number of assumptions that are subject to significant uncertainties and contingencies beyond

our control, there can be no assurance that the projections or conclusions derived therefrom will be realized.

The possibility of not

finding reserves is an intrinsic risk of our business.

Accordingly, you may lose some or all of your investment, particularly to the extent

that these projections or conclusions are not ultimately realized.

We face uncertainty and costly compliance

with government regulations with respect to our Legacy Assets.

United States rules and regulations affecting

the oil and gas industry and helium production, transportation, and processing is under constant review for amendment or expansion.

rules include environmental, health and safety laws such as the Clean Air Act, the Resource Conservation and Recovery Act, the Safe Drinking

Water Act, the Clean Water Act, the Pipeline and Hazardous Materials Safety Administration rules, the Emergency Planning and Community

Right-to-Know Act, the Occupational Health and Safety Act, and NEPA, amongst others (and their state counterparts).

In addition, numerous

departments, governmental entities, and agencies (federal, state, local, and tribunal) are authorized by statue to issue, and have issued,

rules and regulations applicable to our industry.

Such rules and regulations, among other things, require permits and may prevent certain

activities or increase fees related to our industry.

Compliance with applicable laws and any state or local statute is critical.

Although we believe that we are in compliance with applicable statutes, there can be no assurance that, should the relevant regulatory authorities amend their guidelines or impose more stringent interpretations of current laws or regulations, we would be able to comply with these new guidelines.

We are unable to predict the nature of such future laws, regulations, interpretations or applications, nor can we predict what effect additional governmental regulations or administrative orders, when and if promulgated, would have on our business in the future.

These regulations could, however, require the reformation of our products to meet new standards, market withdrawal or discontinuation of certain products not able to be reformulated.

Additionally, the adoption of new regulations or changes in the interpretations of existing regulations may result in significant compliance costs or diversion of resources from our revenue-generating activities, resulting in decreased profitability.

Our failure to comply with these current and new regulations could lead to the imposition of significant penalties or claims, limit the production or marketing of any non-compliant products or advertising and could negatively impact our financial performance.

We operate on federal and state lands, which have rules and regulations related to our business and require us to pay royalties, which may adversely affect our operations.

The operation of our wells on federal and state lands are subject to additional regulations under the Bureau of Land Management, an agency within the United States Department of the Interior responsible for administering U.S.

federal lands (the “BLM”), the New Mexico Oil Conservation Division, (the “NMOCD”), as well as the New Mexico State Land office(“NMSLO”).

Although we are currently operating these leases on these lands and expect to be able to continue such production, additional delays, costs, and restrictions may be added to these leases in the future by these agencies.

we believe that we are in compliance with applicable statutes, there can be no assurance that, should the relevant regulatory authorities

amend their guidelines or impose more stringent interpretations of current laws or regulations, we would be able to comply with these

new guidelines.

We are unable to predict the nature of such future laws, regulations, interpretations or applications, nor can we predict

what effect additional governmental regulations or administrative orders, when and if promulgated, would have on our business in the future.

These regulations could, however, require the reformation of our products to meet new standards, market withdrawal or discontinuation

of certain products not able to be reformulated.

Additionally, the adoption of new regulations or changes in the interpretations of existing

regulations may result in significant compliance costs or diversion of resources from our revenue-generating activities, resulting in

decreased profitability.

Our failure to comply with these current and new regulations could lead to the imposition of significant penalties

or claims, limit the production or marketing of any non-compliant products or advertising and could negatively impact our financial performance.

We operate on federal and state lands, which

have rules and regulations related to our business and require us to pay royalties, which may adversely affect our operations.

The operation of our wells on federal and state

lands are subject to additional regulations under the Bureau of Land Management, an agency within the United States Department of the

Interior responsible for administering U.S.

federal lands (the “BLM”), the New Mexico Oil Conservation Division, (the “NMOCD”),

as well as the New Mexico State Land office (“NMSLO”).

Although we are currently operating these leases on these lands and

expect to be able to continue such production, additional delays, costs, and restrictions may be added to these leases in the future by

these agencies.

For example, we began legally operating eighteen State leases assigned to us by another entity in September of 2020.

However, the NMSLO did not transfer these leases into our name initially.

the NMSLO did not transfer these leases into our name initially.

This finally occurred on February 1, 2023.

The Company is currently in negotiations with the BLM to determine the royalty rate at which the Company will compensate the BLM for helium produced on the BLM’s federal land.

government requires an established royalty rate prior to any helium production pursuant to the BLM’s arrangements with NEH.

The BLM does not prohibit NEH from producing helium due to the U.S.

Government’s stance on its involvement in helium as further defined in the Helium Stewardship Act of 2013, but does require an established royalty rate prior to any helium production.

Based on discussions with the BLM and royalty rates applied to other helium producers, we estimate that the royalties that BLM will charge us will be approximately 12.5% of the gross proceeds for refined gaseous helium, or 10% for refined liquid helium gross proceeds from third-party sales, but we cannot assure you that the actual royalty rates charged from us will be those mentioned above.

In addition, we have had issues related to maintenance of roads and meter calibrations on our federal properties.

In addition, the BLM requires bonds for rights-of-way, which could be of large amounts.

There have been a number of executive and temporary orders and policy changes recently that address broad ranging issues on governmental lands including climate change, oil and gas activities, infrastructure requirements, and environmental justice initiatives.

Many of these are in various stages of rulemaking process and may have the ability to add costs or limit or curtail our oil and gas (including helium) production on these properties.

Helium produced from wells leased on federal lands is owned by the federal government.

Federal laws and guidance provide a process for negotiating a “Contract for Extraction and Sale of Federal Helium.” The federal government is in the process of revising the guidance.

We cannot predict the form the new guidance will take.

Although we expect a successful negotiation of a contract, we cannot guarantee it in the face of the coming new guidance, which has not yet been issued.

New regulations regarding greenhouse and other gases have increased in recent years, which may adversely affect the business.

Local, state, federal and international regulatory bodies have been issuing many rules regarding greenhouse gas (GHG) emissions and climate change in recent years.

Over the past three years we have seen the Inflation Reduction Act of 2022, which imposes emission charges for certain oil and gas facilities that exceed certain emissions;

Environmental Protection Agency rules relating to GHGs and volatile organic compounds from covered sources;

and New Mexico’s recent ozone precursor rules that nearly eliminate any natural gas flaring and cover methane.

In December 2023, the U.S.

Environmental Protection Agency issued its final rules for reducing emissions of methane and other harmful air pollution from oil and natural gas operations, which sets rigorous standards including in relation to eliminating routine flaring of natural from new oil wells and provides for stronger oversight by the agency.

In addition, the EPA issued changes to the natural gas system rules with additional proposals in May 2024.

The United Nations Framework Convention on Climate Change will be meeting again in the fourth quarter of this year (COP30).

New Mexico issued an executive order based on COP28 climate change agreements and others may be issued as COP continues.

Regulations are currently in flux with the new administration in the U.S.

The new administration has initiated the U.S.’s withdrawal from the Paris Agreement and signaled the aim to modify current regulations.

We believe that we will be able to comply with the rules currently known and passed, there can be no assurance, however, that should the relevant regulatory authorities amend their guidelines or impose more stringent interpretations of the current laws or regulations, that we would be able to comply with these requirements.

We are unable to predict the nature of such future laws, regulations, interpretations, or applications, nor can we predict what affect additional governmental regulations or administrative orders, when and if promulgated, would have on our business in the future.

If we are restricted or lack access to waste wells, we may be prevented from operating some or all of our wells, which generate the helium.

Our business is subject to many rules and regulations regarding the storage, handling, and disposal of waste and the remediation of environmental pollution.

These laws, and their implementing rules, require minimization of pollution, monitoring, reporting, recordkeeping requirements, and other operational constraints.

New Mexico has been particularly active in the regulation of produced water.

Over the past two years, New Mexico has issued new regulations regarding permit conditions, oversight, and enforcement related to injection wells used for disposal of produced water.

New Mexico also has a produced water research consortium looking at issues related to this area.

In addition, new potential rules are expected in New Mexico on reuse and recycling and a website has been set up to monitor activity with regards to this.

Seismic activity induced by injection wells also are limiting the amount of material that can be disposed of in the well or limiting the ability to obtain new wells.

New Mexico placed stricter rules on injection wells after seismic activity in New Mexico.

Currently, our liquid wastewater from our oil and gas wells is disposed of in an injection well on a site that we once operated.

We have the contractual right to continue the use of that disposal well, the LL&E B Federal #5 API 30-005-63751, until June 30, 2025.

Once this expiration date occurs, the company will work with the existing owner of the LL&# B to contract for the disposal of certain volumes at commercial rates.

Additionally, other 3rd party disposal facilities exist within the Pecos Slope providing the company options as to its water disposal needs.

Ideally, the company will work with certain regulatory agencies regarding the possibility of converting existing gas wells that are classified as non-economic due to reservoir depletion and convert the well for the purpose of disposing of produced water is one possible solution to add disposal capacity but there is no assurance that either State or Federal Regulatory Agencies would approve such a conversion.

The inability to dispose of our produced wastewater at the existing site or at other sites in the future could limit or curtail our ability to operate our oil and gas wells, which produce the helium for our new helium facility.

If we own, operate, or acquire lands which release materials into the environment, we may be required to remediate such lands, which can be extremely costly.

We will be operating properties, such as oil and gas wells, compression units and pipelines, that have the potential to release regulated materials into the environment.

New Mexico passed rules clarifying the prohibitions on releases and remediation in 2021.

Although we are not aware of any remediation for which we may be responsible at this time and we implement spill prevention plans, it is possible with future operation or with the acquisition of new lands, compressors, wells, and pipelines may have had releases subject to

such requirements and subject to costly remediation.

Regulations also require the pugging and abandonment of wells, removal of production facilities, and other restorative actions by current former operators, including corporate successors of former operations.

The Company is currently in negotiations with

the BLM to determine the royalty rate at which the Company will compensate the BLM for helium produced on the BLM’s federal land.

government requires an established royalty rate prior to any helium production pursuant to the BLM’s arrangements with

The BLM does not prohibit NUAI from producing helium due to the U.S.

Government’s stance on its involvement in helium as further

defined in the Helium Stewardship Act of 2013, but does require an established royalty rate prior to any helium production.

Based on discussions

with the BLM and royalty rates applied to other helium producers, we estimate that the royalties that BLM will charge us will be approximately

12.5% of the gross proceeds for refined gaseous helium, or 10% for refined liquid helium gross proceeds from third-party sales, but we

cannot assure you that the actual royalty rates charged from us will be those mentioned above.

In addition, we have had issues related to maintenance

of roads and meter calibrations on our federal properties.

In addition, the BLM requires bonds for rights-of-way, which could be of large

There have been a number of executive and temporary orders and policy changes recently that address broad ranging issues on governmental

lands including climate change, oil and gas activities, infrastructure requirements, and environmental justice initiatives.

Many of these

are in various stages of rulemaking process and may have the ability to add costs or limit or curtail our oil and gas (including helium)

production on these properties.

Helium produced from wells leased on federal lands

is owned by the federal government.

Federal laws and guidance provide a process for negotiating a “Contract for Extraction and Sale

of Federal Helium.” The federal government is in the process of revising the guidance.

We cannot predict the form the new guidance

Although we expect a successful negotiation of a contract, we cannot guarantee it in the face of the coming new guidance, which

has not yet been issued.

If we are restricted or lack access to waste

wells, we may be prevented from operating some or all of our wells, which generate the helium.

Our business is subject to many rules and regulations

regarding the storage, handling, and disposal of waste and the remediation of environmental pollution.

These laws, and their implementing

rules, require minimization of pollution, monitoring, reporting, recordkeeping requirements, and other operational constraints.

has been particularly active in the regulation of produced water.

Over the past two years, New Mexico has issued new regulations regarding

permit conditions, oversight, and enforcement related to injection wells used for disposal of produced water.

New Mexico also has a produced

water research consortium looking at issues related to this area.

In addition, new potential rules are expected in New Mexico on reuse

and recycling and a website has been set up to monitor activity with regards to this.

Seismic activity induced by injection wells also

are limiting the amount of material that can be disposed of in the well or limiting the ability to obtain new wells.

New Mexico placed

stricter rules on injection wells after seismic activity in New Mexico.

Currently, our liquid wastewater from our oil and gas wells is

disposed of in an injection well on a site that we once operated.

We have the contractual right to continue the use of that disposal well,

the LL&E B Federal #5 API 30-005-63751, until June 30, 2025.

Once this expiration date occurs, the company will work with the existing

owner of the LL&E B to contract for the disposal of certain volumes at commercial rates.

Additionally, other 3rd party disposal facilities

exist within the Pecos Slope providing the company options as to its water disposal needs.

Ideally, the company will work with certain

regulatory agencies regarding the possibility of converting existing gas wells that are classified as non-economic due to reservoir depletion

and convert the well for the purpose of disposing of produced water is one possible solution to add disposal capacity but there is no

assurance that either State or Federal Regulatory Agencies would approve such a conversion.

The inability to dispose of our produced wastewater

at the existing site or at other sites in the future could limit or curtail our ability to operate our oil and gas wells.

If we own, operate, or acquire lands which

release materials into the environment, we may be required to remediate such lands, which can be extremely costly.

We will be operating properties, such as oil and

gas wells, compression units and pipelines, that have the potential to release regulated materials into the environment.

New Mexico passed

rules clarifying the prohibitions on releases and remediation in 2021.

Although we are not aware of any remediation for which we may be

responsible at this time and we implement spill prevention plans, it is possible with future operation or with the acquisition of new

lands, compressors, wells, and pipelines may have had releases subject to such requirements and subject to costly remediation.

also require the pugging and abandonment of wells, removal of production facilities, and other restorative actions by current former operators,

including corporate successors of former operations.

We are actively involved in plugging a few of our wells.

The cost of future abandonment and plugging will depend on well activity and authorizations and cannot be predicted at this time.

If our operations affect waters of the United States or endangered species, additional permits or authorizations may be needed, which could delay, hinder, or prevent new activities.

We currently do not expect to operate in areas impacting waters of the United States (WOTUS), which would increase regulation, reporting, and potential need for permits from the U.S.

The cost of future abandonment

and plugging will depend on well activity and authorizations and cannot be predicted at this time.

If our operations affect waters of the United

States or endangered species, additional permits or authorizations may be needed, which could delay, hinder, or prevent new activities.

We currently do not expect to operate in areas

impacting waters of the United States (“WOTUS”), which would increase regulation, reporting, and potential need for permits

from the U.S.

Army Corps of Engineers.

The definition of WOTUS has been in flux since the definition was vacated by the federal district court in 2021.

The definition of WOTUS has been in flux since the definition was vacated by the federal district

court in 2021.

In 2023, the Supreme Court ruled on this issue.

In response, the Environmental Protection Agency amended its definition to comport with the ruling.

In response, the Environmental Protection Agency amended its definition

to comport with the ruling.

It is using the new definition in some states (New Mexico is included) and using the old definition in others.

We currently believe that this new rule will not impact our operations, but the acquisition of new properties could be impacted, and it also is not yet known how this rule will be used in practice because it is so new.

Fish & Wildlife Service has rescinded, revised, or reinstated a number of wildlife-related regulations that relate to protection of endangered species and their habitats.

Last year, regulations were proposed that make it harder to remove species, increase protection for threatened species, and remove the use of economic assessments when determining whether to list a species.

We currently do not expect these rules will have an effect on our operations, but we cannot predict the impact on our operations in the future (such as areas and land that we subsequent acquire) or the addition of species and what impact potential changes in these rules will have on our operations.

Potential impacts could be costly, delay, and prevent some operations.

We will need to obtain permits for construction and operation of the Pecos Slope Plant.

The cost, time, and outcome of seeking such permits is uncertain and could result in additional costs, delays and the inability to obtain the authorizations needed for the Pecos Slope Plant.

We will need to obtain permits and authorizations for the Pecos Slope Plant.

A New Mexico minor General Construction Air Permit (GCP) must be prepared, submitted, and approved prior to any beginning any physical construction at the site.

A New Mexico/U.S.

Environmental Protection Agency stormwater Construction General Permit, including a stormwater pollution prevention plan, threatened and endangered species review, and historic properties review is required prior to commencing any site activities.

Registration and compliance with expected hazardous waste generation, and other environmental matters is required as discussed above.

Although we believe we will be able to secure and be in compliance with the necessary authorizations and will implement an environmental compliance system to track these issues, we cannot guarantee the time, anticipated cost, or outcome of these requirements.

If we fail to obtain a required permit, we will not be able to construct or operate the Pecos Slope Plant.

Legislation, regulation, and other government actions and shifting customer and consumer preferences and other private efforts related to greenhouse gas (GHG) emissions and climate change could continue to increase our operational costs and reduce demand for our helium products, resulting in a material adverse effect on the Company’s results of operations and financial condition.

We have experienced and may be further challenged by increases in the impacts of international and domestic legislation, regulation, or other government actions relating to GHG emissions (e.g., carbon dioxide and methane) and climate change.

International agreements and national, regional, and state legislation and regulatory measures that aim to directly or indirectly limit or reduce GHG emissions are in various stages of implementation.

Legislation, regulation, and other government actions related to GHG emissions and climate change could reduce demand for our helium products and/or continue to increase our operational costs and reduce its return on investment.

The Paris Agreement went into effect in November 2016, and a number of countries have adopted and may adopt additional policies intended to meet their Paris Agreement goals.

Globally, multiple jurisdictions are considering adopting or are in the process of implementing laws or regulations to directly regulate GHG emissions through a carbon tax, a cap-and-trade program, performance standards or other mechanisms, or to attempt to indirectly advance reduction of GHG emissions through restrictive permitting, procurement standards, trade barriers, minimum renewable usage requirements, financing standards, standards or requirements for environmental benefit claims, increased GHG reporting and climate-related disclosure requirements, or tax advantages or other incentives to promote the use of alternative energy, fuel sources or lower-carbon technologies.

Similar to any significant changes in the regulatory environment, climate change-related legislation, regulation, or other government actions may curtail profitability in oil & gas, helium and lower carbon businesses, as well as render the extraction of our helium resources economically infeasible.

In particular, GHG emissions-related legislation, regulations, and other government actions, and shifting customer and consumer preferences and other private efforts aimed at reducing GHG emissions may result in increased and substantial capital, compliance, operating, and maintenance costs and could, among other things, reduce demand for hydrocarbons and

our helium products;

increase demand for lower carbon products and alternative energy sources;

We currently believe that this new rule will not impact our operations, but the acquisition of new properties could be impacted, and it

also is not yet known how this rule will be used in practice because it is so new.

Fish & Wildlife Service has rescinded,

revised, or reinstated a number of wildlife-related regulations that relate to protection of endangered species and their habitats.

year, regulations were proposed that make it harder to remove species, increase protection for threatened species, and remove the use

of economic assessments when determining whether to list a species.

We currently do not expect these rules will have an effect on our

operations, but we cannot predict the impact on our operations in the future (such as areas and land that we subsequent acquire) or the

addition of species and what impact potential changes in these rules will have on our operations.

Potential impacts could be costly, delay,

and prevent some operations.

Legislation, regulation, and other government

actions and shifting customer and consumer preferences and other private efforts related to greenhouse gas (GHG) emissions and climate

change could continue to increase our operational costs and reduce demand for our helium products, resulting in a material adverse effect

on the Company’s results of operations and financial condition.

We have experienced and may be further challenged by increases in

the impacts of international and domestic legislation, regulation, or other government actions relating to GHG emissions (e.g., carbon

dioxide and methane) and climate change.

International agreements and national, regional, and state legislation and regulatory measures

that aim to directly or indirectly limit or reduce GHG emissions are in various stages of implementation.

Legislation, regulation, and other government

actions related to GHG emissions and climate change could reduce demand for our helium products and/or continue to increase our operational

costs and reduce its return on investment.

The Paris Agreement went into effect in November 2016, and a number of countries have adopted

and may adopt additional policies intended to meet their Paris Agreement goals.

Globally, multiple jurisdictions are considering adopting

or are in the process of implementing laws or regulations to directly regulate GHG emissions through a carbon tax, a cap-and-trade program,

performance standards or other mechanisms, or to attempt to indirectly advance reduction of GHG emissions through restrictive permitting,

procurement standards, trade barriers, minimum renewable usage requirements, financing standards, standards or requirements for environmental

benefit claims, increased GHG reporting and climate-related disclosure requirements, or tax advantages or other incentives to promote

the use of alternative energy, fuel sources or lower-carbon technologies.

Similar to any significant changes in the regulatory

environment, climate change-related legislation, regulation, or other government actions may curtail profitability in oil & gas, helium

and lower carbon businesses, as well as render the extraction of our helium resources economically infeasible.

In particular, GHG emissions-related

legislation, regulations, and other government actions, and shifting customer and consumer preferences and other private efforts aimed

at reducing GHG emissions may result in increased and substantial capital, compliance, operating, and maintenance costs and could, among

other things, reduce demand for hydrocarbons and our helium products;

increase demand for lower carbon products and alternative energy

make the Company’s products more expensive;

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and adversely affect the Company’s sales volumes, revenues, margins and reputation.

For example, some jurisdictions are in various stages of design, adoption, and implementation of policies and programs that cap emissions and/or require short-, medium-, and long-term GHG reductions by operators at the asset or facility level, which may not be technologically feasible, or which could require significant capital expenditure, increase costs of or limit production, result in impairment of assets and limit our ability to cost-effectively reduce GHG emissions across its global portfolio.

some jurisdictions are in various stages of design, adoption, and implementation of policies and programs that cap emissions and/or require

short-, medium-, and long-term GHG reductions by operators at the asset or facility level, which may not be technologically feasible,

or which could require significant capital expenditure, increase costs of or limit production, result in impairment of assets and limit

our ability to cost-effectively reduce GHG emissions across its global portfolio.

The ultimate effect of international agreements;

national, regional, and state legislation and regulation;

and government and private actions related to GHG emissions and climate change on the company’s financial performance, and the timing of these effects, will depend on a number of factors.

Such factors include, among others, the sectors covered, the GHG emissions reductions required, standardized carbon accounting, the extent to which we would be able to receive, generate, or purchase credits, the price and availability of credits and the extent to which we are able to recover, or continue to recover, the costs incurred through the pricing of our products in the competitive marketplace.

Further, the ultimate impact of GHG emissions and climate change-related agreements, legislation, regulation, and government actions on our financial performance is highly uncertain because the Company is unable to predict with certainty, for a multitude of individual jurisdictions, the outcome of political decision-making processes, including the actual laws and regulations enacted, the variables and trade-offs that inevitably occur in connection with such processes, and market conditions, including the responses of consumers to such changes.

and government and private actions related to GHG emissions and climate change

on the company’s financial performance, and the timing of these effects, will depend on a number of factors.

Such factors include,

among others, the sectors covered, the GHG emissions reductions required, standardized carbon accounting, the extent to which we would

be able to receive, generate, or purchase credits, the price and availability of credits and the extent to which we are able to recover,

or continue to recover, the costs incurred through the pricing of our products in the competitive marketplace.

Further, the ultimate impact

of GHG emissions and climate change-related agreements, legislation, regulation, and government actions on our financial performance is

highly uncertain because the Company is unable to predict with certainty, for a multitude of individual jurisdictions, the outcome of

political decision-making processes, including the actual laws and regulations enacted, the variables and trade-offs that inevitably occur

in connection with such processes, and market conditions, including the responses of consumers to such changes.

As a result of our remaining oil and gas

leases, we are subject to environmental, health and safety laws and regulations that may expose us to significant liabilities for penalties,

damages or costs of remediation or compliance.

We and our leased oil and gas operations and properties

are subject to laws and regulations governing health and safety, the discharge of pollutants into the environment or otherwise relating

to health, safety and environmental protection requirements in the locations where we operate.

These laws and regulations may impose numerous

obligations that are applicable to us, including acquisition of a permit or other approval before conducting regulated activities;

on the types, quantities and concentrations of materials that can be released into the environment;

limitation or prohibition of operating

activities in environmentally sensitive areas;

imposition of specific health and safety standards addressing worker protection from work

related health and safety risks;

imposition of certain zoning, building code and energy-efficiency standards for the sites at which we

and imposition of significant liabilities for pollution, including investigation, remedial and clean-up costs.

Failure to comply

with these requirements may expose us to fines, penalties and/or interruptions in our operations, among other sanctions, that could have

a material adverse effect on our financial position, results of operations and cash flows.

Certain environmental laws may impose strict,

joint and several liabilities for costs required to clean up and restore sites where hazardous substances have been disposed of or otherwise

related into the environment, including at current or former properties owned, leased, or operated by us or at offsite disposal facilities,

even under circumstances where the hazardous substances were released by prior owners or operators, or the activities conducted and from

which a release emanated complied with applicable law.

Failure to obtain, secure renewal of, or maintain, permits or the imposition of

further restrictions of our existing permits could have a material adverse effect on our business.

The regulatory and legislative developments

related to climate change may materially adversely affect our reputation, business, results of operations and financial position.

A number of governments have enacted, or are contemplating

legislative or regulatory changes, in response to climate change and its potential impacts.

Such legislation and/or increased regulation

regarding climate change could restrict our operations and impose significant costs on us and our suppliers, including costs related to

increased energy requirements, capital equipment, environmental monitoring and reporting and other costs to comply with such regulations.

Given the current uncertainty around climate change-related legislation and regulations, we cannot predict how this will affect our financial

condition, operating performance, and ability to compete.

Furthermore, even without such regulation, increased awareness and any adverse

publicity in the global marketplace about potential contribution to climate change by us or other companies in our industry could harm

our reputation.

Any of the foregoing could have a material adverse effect on our financial position, results of operations, and ultimate

Risks Relating to the Ownership of our Securities.

The price of our securities may be volatile.

Fluctuations in the price of our securities could contribute to the loss of all or part of your investment.

If an active market for our securities develops and continues, the trading price of our securities following could be volatile and subject to wide fluctuations in response to various factors, some of which are beyond our control.

Any of the factors listed below could have a material adverse effect on your investment in our securities, which may trade at prices significantly below the price you paid for them.

In such circumstances, the trading price of our securities may not recover and may experience a further decline.

Factors affecting the trading price of our securities may include:

Fluctuations in the price of our securities could

contribute to the loss of all or part of your investment.

If an active market for our securities develops and continues, the trading price

of our securities following could be volatile and subject to wide fluctuations in response to various factors, some of which are beyond

Any of the factors listed below could have a material adverse effect on your investment in our securities, which may trade

at prices significantly below the price you paid for them.

In such circumstances, the trading price of our securities may not recover

and may experience a further decline.

Factors affecting the trading price of our securities

actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us;

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general economic and political conditions such as recessions, changes in interest rates, changes in fuel prices, international currency fluctuations and acts of war or terrorism.

Broad market and industry factors may materially harm the market price of our securities irrespective of our operating performance.

The stock market in general, and Nasdaq specifically, have experienced extreme volatility that has often been unrelated to the operating performance of particular companies.

As a result of this volatility, you may not be able to sell your securities at or above the price at which they were acquired.

A loss of investor confidence in the market for the stocks of other companies which investors perceive to be similar to us could depress our stock price regardless of our business, prospects, financial conditions or results of operations.

A decline in the market price of our securities also could adversely affect our ability to issue additional securities and our ability to obtain additional financing in the future.

Future resales of common stock may cause the market price of our securities to drop significantly, even if our business is doing well.

There are certain stockholders that have trading restrictions from December 6, 2024 and ending six months following that date;

provided, that if (i) the closing price of the our Common Stock equals or exceeds $15.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period beginning 75 days following December 6, 2024 and (ii) all shares of Common Stock issued in certain transaction financing investments have been registered for resale pursuant to an effective registration statement or are otherwise freely tradeable, then twenty-five percent (25%) of the shares shall be released from the lock-up.

Following the expiration of such lockups, the stockholders will not be restricted from selling shares of our Common Stock other than by applicable securities laws.

As such, sales of a substantial number of shares of Common Stock in the public market could occur at any time.

These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could have the effect of increasing the volatility in the market price for the Common Stock or the market price of the Common Stock could decline if the holders of currently restricted shares sell them or are perceived by the market as intending to sell them.

If we fail to maintain proper and effective internal controls over financial reporting, our ability to produce accurate and timely financial statements could be impaired, investors may lose confidence in our financial reporting and the trading price of the Common Stock may decline.

Effective internal controls over financial reporting are necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed to prevent fraud.

Any failure to implement required new or improved controls, or difficulties encountered in their implementation could cause us to fail to meet its reporting obligations.

In addition, any testing by us conducted in connection with Section 404 of the Sarbanes-Oxley Act (“Section 404”) or any subsequent testing by our independent registered public accounting firm, may reveal deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses or that may require prospective or retroactive changes to our financial statements or identify other areas for further attention or improvement.

Inferior internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our stock.

For as long as we are an emerging growth company, our independent registered public accounting firm will not be required to attest to the effectiveness of its internal controls over financial reporting pursuant to Section 404.

An independent assessment of the effectiveness of our internal controls over financial reporting could detect problems that our management’s assessment might not detect.

Undetected material weaknesses in our internal controls over financial reporting could lead to restatements of our consolidated financial statements and require us to incur the expense of remediation.

If we are not able to comply with the requirements of Section 404 in a timely manner or we are unable to maintain proper and effective internal controls over financial reporting may not be able to produce timely and accurate consolidated financial statements.

As a result, our investors could lose confidence in its reported financial information, the market price of our stock could decline and we could be subject to sanctions or investigations by the SEC or other regulatory authorities.

We may not be able to continue to satisfy listing requirements of Nasdaq to maintain a listing of our common stock.

Our common stock is currently listed on Nasdaq and we must meet certain financial and liquidity criteria to maintain such listing.

If we violate the maintenance requirements for continued listing of our common stock, our common stock may be delisted.

On March 4, 2025, we received a letter from Nasdaq (the “Notice”) which notified us that, for 30 consecutive business days, the Company’s market value of listed securities (“MVLS”) closed below the $50,000,000 MVLS threshold required for continued listing on the Nasdaq Global Market under Nasdaq Listing Rule 5450(b)(2)(A) (the “MVLS Rule”).

In accordance with Nasdaq Listing Rule 5810(c)(3)(C), the Company has 180 calendar days, or until September 2, 2025 (the “MVLS Compliance Period”), to regain compliance with the MVLS Rule.

The Notice notes that, to regain compliance, the Company’s MVLS must close at or above $50,000,000 for a minimum of ten consecutive business days during the MVLS Compliance Period.

The Notice further notes that if the Company is unable to satisfy the MVLS requirement prior to such date, the Company may be eligible to transfer the listing of its securities to The Nasdaq Capital Market (provided that the Company then satisfies the requirements for continued listing on that market).

If the Company does not regain compliance by the end of the MVLS Compliance Period, Nasdaq staff will provide written notice to the Company that its securities are subject to delisting.

At that time, the Company may appeal any such delisting determination to a hearings panel.

The Notice has no immediate effect on the listing or trading of the Company’s common stock on the Nasdaq Global Market.

The Company intends to actively monitor the Company’s MVLS between now and September 2, 2025, and may, if appropriate, evaluate available options to resolve the deficiencies and regain compliance with the MVLS Rule.

While the Company is exercising diligent efforts to maintain the listing of its securities on Nasdaq, there can be no assurance that the Company will be able to regain or maintain compliance with Nasdaq listing standards.

If securities analysts do not publish research or reports about us, or if they issue unfavorable commentary about us or our industry or downgrade our common stock, the price of our common stock could decline.

The trading market for our common stock will depend in part on the research and reports that third-party securities analysts publish about us and the industries in which we operate.

We may be unable or slow to attract research coverage and if one or more analysts cease coverage of us, the price and trading volume of our securities would likely be negatively impacted.

If any of the analysts that may cover us change their recommendation regarding our securities adversely, or provide more favorable relative recommendations about our competitors, the price of our securities would likely decline.

If any analyst that may cover us ceases covering us or fails to regularly publish reports on us, we could lose visibility in the financial markets, which could cause the price or trading volume of our securities to decline.

Moreover, if one or more of the analysts who cover us downgrades our common stock, or if our reporting results do not meet their expectations, the market price of our common stock could decline.

All of our outstanding warrants will become exercisable for Common Stock, which would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders.

Our outstanding warrants will become exercisable in accordance with the terms of the respective warrant agreements governing those securities.

To the extent such warrants are exercised, additional shares of Common Stock will be issued, which will result in dilution to the holders of Common Stock and increase the number of shares eligible for resale in the public market.

Sales of substantial numbers of such shares in the public market or the fact that such warrants may be exercised could adversely affect the market price of Common Stock.

All agreements governing our outstanding warrants contain exclusive forum clauses, which could limit a warrant holder’s ability to obtain a favorable judicial forum for disputes arising under the applicable warrant agreement.

The warrant agreement for the Tradeable Warrants provides that, subject to applicable law, (i) any action, proceeding or claim against us or the warrant agent arising out of or relating in any way to the Warrant Agreement, including under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and (ii) that we irrevocably submit to such jurisdiction, which jurisdiction shall be the exclusive forum for any such action, proceeding or claim.

We will waive any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.

Notwithstanding the foregoing, these provisions of the Warrant Agreement will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive forum.

Any person or entity purchasing or otherwise acquiring any interest in any of the warrants shall be deemed to have notice of and to have consented to the forum provisions in the Warrant Agreement.

If any action, the subject matter of which is within the scope of the forum provisions of the Warrant Agreement, is filed in a court other than a court of the State of New York or the United States District Court for the Southern District of New York (a “foreign action”) in the name of any holder of the warrants, such holder shall be deemed to have consented to:

(x) the personal jurisdiction of the state and federal courts located in the State of New York in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”), and (y) having service of process made upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.

Similarly, the Warrants contain provisions stating that the construction, validity, interpretation and performance of the Warrants are governed by the laws of the State of Nevada and that the Company submits to the exclusive jurisdiction of the state and federal courts sitting in Clark County, Nevada, or the adjudication of any dispute under the Warrants or in connection with any transaction contemplated by the Warrants.

These choice of forum provisions may limit a warrant holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us, which may discourage such lawsuits.

Alternatively, if a court were to find these provisions inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and Board.

Your unexpired Tradeable Warrants may be redeemed prior to their exercise at a time that may be disadvantageous to you, thereby making your warrants worthless.

We have the ability to redeem outstanding Tradeable Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per Tradeable Warrant, provided that the last reported sales price of the Common Stock equals or exceeds $18.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like) on each of twenty (20) trading days within any thirty (30) trading day period commencing after the warrants become exercisable and ending on the third trading day prior to the date on which notice of redemption is given and provided that there is an effective registration statement covering the shares of Common Stock issuable upon exercise of the Tradeable Warrants, and a current prospectus relating thereto, available throughout the 30-day redemption we have elected to require the exercise of the Tradeable Warrants on a cashless basis.

If and when the Tradeable Warrants become redeemable, we may not exercise such redemption right if the issuance of shares of the Common Stock upon exercise of the Tradeable Warrants is not exempt from registration or qualification under applicable state blue sky laws or we are unable to effect such registration or qualification.

Redemption of the outstanding Tradeable Warrants could force you to:

(i) exercise your Tradeable Warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so;

(ii) sell your warrants at the then-current market price when you might otherwise wish to hold your Tradeable Warrants;

or (iii) accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than the market value of your Tradeable Warrants.

Unresolved Staﬀ Comments.

Cybersecurity.

Risk Management and Strategy

The Company relies heavily on its information systems, and the availability and integrity of these systems is essential to conducting its business and operations.

As a producer of oil and natural gas, the Company faces various security threats, including cybersecurity threats, to gain unauthorized access to its sensitive information or to render its information or systems unusable, and threats to the security of its facilities and infrastructure or third-party facilities and infrastructure, such as gathering and processing and other facilities, and pipelines.

This risk may be heightened as a result of an increased remote working environment, similar to the one created by the COVID-19 outbreak in 2020.

The potential for such security threats subjects its operations to increased risks that could have a material adverse effect on its business, financial condition, results of operations and cash flows.

As the Company implements various procedures and controls to monitor and mitigate such security threats and to increase security for its information, systems, facilities and infrastructure it may result in increased costs.

Moreover, there can be no assurance that such procedures and controls will be sufficient to prevent security breaches from occurring.

If any of these security breaches were to occur, they could lead to losses of, or damage to, sensitive information or facilities, infrastructure and systems essential to its business and operations, as well as data corruption, communication interruptions or other disruptions to its operations, which, in turn, could have a material adverse effect on its business, financial position, results of operations and cash flows.

The Company is in the process of developing an information security program to address risks from cybersecurity threats.

Management plans to engage a reputable third party with the appropriate expertise in IT and cybersecurity to develop these programs.

The Company may not be able to fully, continuously, and effectively implement appropriate security controls as intended.

In addition, security controls, no matter how well designed or implemented, may only mitigate and not fully eliminate risks.

And events, when detected by security tools or third parties, may not always be immediately understood or acted upon.

Our Board is responsible for the oversight of cybersecurity risk management.

The Board may assign this oversight a committee of the Board.

The Company’s senior leadership is responsible for developing appropriate cybersecurity programs, including as may be required by applicable law or regulation.

During this process, these individuals may utilize third parties with the appropriate expertise in IT and cybersecurity to develop these programs .

Broad market and industry factors may materially

harm the market price of our securities irrespective of our operating performance.

The stock market in general, and Nasdaq specifically,

have experienced extreme volatility that has often been unrelated to the operating performance of particular companies.

As a result of

this volatility, you may not be able to sell your securities at or above the price at which they were acquired.

A loss of investor confidence

in the market for the stocks of other companies which investors perceive to be similar to us could depress our stock price regardless

of our business, prospects, financial conditions or results of operations.

A decline in the market price of our securities also could

adversely affect our ability to issue additional securities and our ability to obtain additional financing in the future.

Future resales of common stock may cause

the market price of our securities to drop significantly, even if our business is doing well.

There are certain stockholders that have trading

restrictions from December 6, 2024 and ending six months following that date;

provided, that if (i) the closing price of the our Common

Stock equals or exceeds $15.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) for any

20 trading days within any 30-trading day period beginning 75 days following December 6, 2024 and (ii) all shares of Common Stock issued

in certain transaction financing investments have been registered for resale pursuant to an effective registration statement or are otherwise

freely tradeable, then twenty-five percent (25%) of the shares shall be released from the lock-up.

Following the expiration of such lockups, the

stockholders will not be restricted from selling shares of our Common Stock other than by applicable securities laws.

As such, sales of

a substantial number of shares of Common Stock in the public market could occur at any time.

These sales, or the perception in the market

that the holders of a large number of shares intend to sell shares, could have the effect of increasing the volatility in the market price

for the Common Stock or the market price of the Common Stock could decline if the holders of currently restricted shares sell them or

are perceived by the market as intending to sell them.

If we fail to maintain proper and effective

internal controls over financial reporting, our ability to produce accurate and timely financial statements could be impaired, investors

may lose confidence in our financial reporting and the trading price of the Common Stock may decline.

Effective internal controls over financial reporting

are necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed

to prevent fraud.

Any failure to implement required new or improved controls, or difficulties encountered in their implementation could

cause us to fail to meet its reporting obligations.

In addition, any testing by us conducted in connection with Section 404 of the Sarbanes-Oxley

Act (“Section 404”) or any subsequent testing by our independent registered public accounting firm, may reveal deficiencies

in our internal controls over financial reporting that are deemed to be material weaknesses or that may require prospective or retroactive

changes to our financial statements or identify other areas for further attention or improvement.

Inferior internal controls could also

cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our

For as long as we are an emerging growth company,

our independent registered public accounting firm will not be required to attest to the effectiveness of its internal controls over financial

reporting pursuant to Section 404.

An independent assessment of the effectiveness of our internal controls over financial reporting could

detect problems that our management’s assessment might not detect.

Undetected material weaknesses in our internal controls over

financial reporting could lead to restatements of our consolidated financial statements and require us to incur the expense of remediation.

If we are not able to comply with the requirements

of Section 404 in a timely manner or we are unable to maintain proper and effective internal controls over financial reporting may not

be able to produce timely and accurate consolidated financial statements.

As a result, our investors could lose confidence in its reported

financial information, the market price of our stock could decline and we could be subject to sanctions or investigations by the SEC or

other regulatory authorities.

We may not be able to continue to satisfy

listing requirements of Nasdaq to maintain a listing of our common stock.

Our common stock is currently listed on Nasdaq

and we must meet certain financial and liquidity criteria to maintain such listing.

If we violate the maintenance requirements for continued

listing of our common stock, our common stock may be delisted.

On March 4, 2025, the Company received a letter

from Nasdaq which notified the Company that, for 30 consecutive business days, the Company’s market value of listed securities (“MVLS”)

closed below the $50 million MVLS threshold required for continued listing on the Nasdaq Global Market under Nasdaq Listing Rule 5450(b)(2)(A)

(the “MVLS Rule”).

On October 10, 2025, Nasdaq notified the Company

that it had cured the deficiency under the MVLS Rule, and the Company is now in compliance with all applicable continued listing standards.

The Company continues to monitor its market value of listed securities (“MVLS”) to ensure ongoing compliance with Nasdaq requirements

and remains committed to maintaining the listing of its securities on The Nasdaq Stock Market.

However, there can be no assurance that

the Company will continue to meet all of Nasdaq’s listing standards, that it will avoid future notices of deficiency, or that Nasdaq

will not take further listing action.

If securities analysts do not publish research

or reports about us, or if they issue unfavorable commentary about us or our industry or downgrade our common stock, the price of our

common stock could decline.

The trading market for our common stock will depend

in part on the research and reports that third-party securities analysts publish about us and the industries in which we operate.

be unable or slow to attract research coverage and if one or more analysts cease coverage of us, the price and trading volume of our securities

would likely be negatively impacted.

If any of the analysts that may cover us change their recommendation regarding our securities adversely,

or provide more favorable relative recommendations about our competitors, the price of our securities would likely decline.

If any analyst

that may cover us ceases covering us or fails to regularly publish reports on us, we could lose visibility in the financial markets, which

could cause the price or trading volume of our securities to decline.

Moreover, if one or more of the analysts who cover us downgrades

our common stock, or if our reporting results do not meet their expectations, the market price of our common stock could decline.

All of our outstanding warrants will become

exercisable for Common Stock, which would increase the number of shares eligible for future resale in the public market and result in

dilution to our stockholders.

Our outstanding Tradeable Warrants (as defined

herein) will become exercisable in accordance with the terms of the respective warrant agreements governing those securities.

To the extent

such Tradeable Warrants are exercised, additional shares of Common Stock will be issued, which will result in dilution to the holders

of Common Stock and increase the number of shares eligible for resale in the public market.

Sales of substantial numbers of such shares

in the public market or the fact that such Tradeable Warrants may be exercised could adversely affect the market price of Common Stock.

In addition, on February 1, 2026, the Company

entered into an Amended and Restated Consent and Waiver (the “Amended Waiver”) with ATW AI Infrastructure LLC (the “Investor”)

pursuant to which the Investor agreed to partially waive the anti-dilution provisions of the First Tranche Warrant and Second Tranche

Warrant (the “Investor Warrants”) such that the exercise prices of the First Tranche Warrant and Second Tranche Warrant were

each adjusted down solely to $2.00.

As a result of the anti-dilution adjustments in the Investor Warrants, as modified by the Amended

Waiver, the number of shares of Common Stock of the Company issuable pursuant to the First Tranche Warrant total 5.5 million shares and

the number of shares of Common Stock issuable pursuant to the Second Tranche Warrant total 10.7 million shares.

As of the Record Date,

3,084,600 Investor Warrants have been exercised for shares of Common Stock.

The issuance of Common Stock to SharonAI,

will increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders.

we may not be able to satisfy our payment obligations to SharonAI, Inc.

On January 16, 2026, we acquired SharonAI, Inc.’s

(“SharonAI”) equity interests in TCDC pursuant to the Membership Interest Purchase Agreement (the “SharonAI Purchase

Agreement”), dated as of January 16, 2026, by and between the Company and SharonAI, for an aggregate purchase price of $70 million,

of which (a) $10 million is payable in cash, (b) $10 million is payable in equity securities to be issued in connection with the Company’s

next equity financing transaction, and (c) $50 million is payable in the form of a senior secured convertible promissory note (the “Convertible

The entirety of the acquisition consideration is subject to a 19.99% ownership cap.

The Convertible Note matures on June 30, 2026

and has an interest rate of 10% per annum payable on the maturity date in cash.

The Convertible Note is secured by the Company’s

ownership in TCDC and the assets of TCDC.

SharonAI may convert 20% of the Convertible Note into shares of the Company’s Common Stock

at a conversion price equal to the 30-day volume-weighted average price of the Common Stock prior to the conversion date.

The conversion

price for the Convertible Note has a floor of 20% of the market price on the closing date of the Purchase Agreement.

Based on the closing

share price of $4.33 on January 16, 2026, the maximum number of shares of Common Stock issuable pursuant to the Convertible Note, assuming

a floor price of $0.87, is approximately 11.5 million shares, which, together with the $10 million payable in equity securities in the

Company’s next equity financing transaction, would result in significant dilution to our stockholders.

Additionally, if we do not obtain stockholder

approval to issue Common Stock in connection with the SharonAI Purchase Agreement, we would not be able to pay the portion of the acquisition

consideration that is due and payable in shares of Common Stock to the extent such issuances would equal or exceed the 20% share ownership

limitation imposed by Nasdaq (the “Share Cap”).

In such event, the SharonAI Purchase Agreement requires us to satisfy the

remaining payment in cash in an amount equal to the difference between (i) the fair market value of the securities that SharonAI would

have been issued but for the Share Cap, minus (ii) the fair market value of all of the securities that actually were issued to SharonAI.

It is possible that we would need to raise additional funding if we are required to make such payments in cash.

Such additional funding

may not be available to us on acceptable terms, or at all, and we may be subject to certain contractual restrictions on raising capital.

In the event we are unable to raise the cash required to make such payments, we could default on the Convertible Note and all amounts

owed thereunder may become due and payable.

We may sell additional equity or debt securities

which may result in dilution to our stockholders.

We expect that significant additional capital

will be needed in the future to continue our planned operations and we may seek additional funding through a combination of equity offerings

and debt financings.

On January 23, 2026, we filed a shelf registration statement on Form S-3 (File No.

333-292892) with the SEC, which

was declared effective on January 30, 2026 (the “Registration Statement”).

The Registration Statement, which includes a base

prospectus, allows us at any time to offer any combination of securities described in the prospectus in one or more offerings in an aggregate

amount of up to $350 million.

The Registration Statement is intended to provide us flexibility to conduct registered sales of our securities,

subject to market conditions and our future capital needs.

Any sale or issuance of securities pursuant to the Registration Statement or

otherwise may result in dilution to our stockholders and may cause the market price of our stock to decline.

All agreements governing our outstanding

Tradeable Warrants contain exclusive forum clauses, which could limit a warrant holder’s ability to obtain a favorable judicial

forum for disputes arising under the applicable warrant agreement.

The Warrant Agreement, dated November 30, 2021,

by and between the Company and Continental Stock Transfer & Trust Company, LLC (the “Warrant Agreement”) for the Tradeable

Warrants provides that, subject to applicable law, (i) any action, proceeding or claim against us or the warrant agent arising out of

or relating in any way to the Warrant Agreement, including under the Securities Act, will be brought and enforced in the courts of the

State of New York or the United States District Court for the Southern District of New York, and (ii) that we irrevocably submit to such

jurisdiction, which jurisdiction shall be the exclusive forum for any such action, proceeding or claim.

We will waive any objection to

such exclusive jurisdiction and that such courts represent an inconvenient forum.

Notwithstanding the foregoing, these provisions

of the Warrant Agreement will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim

for which the federal district courts of the United States of America are the sole and exclusive forum.

Any person or entity purchasing

or otherwise acquiring any interest in any of the Tradeable Warrants shall be deemed to have notice of and to have consented to the forum

provisions in the Warrant Agreement.

If any action, the subject matter of which is within the scope of the forum provisions of the Warrant

Agreement, is filed in a court other than a court of the State of New York or the United States District Court for the Southern District

of New York (a “foreign action”) in the name of any holder of the Tradeable Warrants, such holder shall be deemed to have

consented to:

(x) the personal jurisdiction of the state and federal courts located in the State of New York in connection with any action

brought in any such court to enforce the forum provisions (an “enforcement action”), and (y) having service of process made

upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign action as agent

for such warrant holder.

Similarly, the Tradeable Warrants contain provisions

stating that the construction, validity, interpretation and performance of the Tradeable Warrants are governed by the laws of the State

of Nevada and that the Company submits to the exclusive jurisdiction of the state and federal courts sitting in Clark County, Nevada,

or the adjudication of any dispute under the Tradeable Warrants or in connection with any transaction contemplated by the Tradeable Warrants.

These choice of forum provisions may limit a warrant

holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us, which may discourage such lawsuits.

Alternatively, if a court were to find these provisions inapplicable or unenforceable with respect to one or more of the specified types

of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially

and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of

our management and Board.

Your unexpired Tradeable Warrants may be

redeemed prior to their exercise at a time that may be disadvantageous to you, thereby making your Tradeable Warrants worthless.

We have the ability to redeem outstanding Tradeable

Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the last

reported sales price of the Common Stock equals or exceeds $18.00 per share (as adjusted for share splits, share dividends, rights issuances,

subdivisions, reorganizations, recapitalizations and the like) on each of twenty (20) trading days within any thirty (30) trading day

period commencing after the Tradeable Warrants become exercisable and ending on the third trading day prior to the date on which notice

of redemption is given and provided that there is an effective registration statement covering the shares of Common Stock issuable upon

exercise of the Tradeable Warrants, and a current prospectus relating thereto, available throughout the 30-day redemption we have elected

to require the exercise of the Tradeable Warrants on a cashless basis.

If and when the Tradeable Warrants become redeemable, we may not

exercise such redemption right if the issuance of shares of the Common Stock upon exercise of the Tradeable Warrants is not exempt from

registration or qualification under applicable state blue sky laws or we are unable to effect such registration or qualification.

of the outstanding Tradeable Warrants could force you to:

(i) exercise your Tradeable Warrants and pay the exercise price therefor at

a time when it may be disadvantageous for you to do so;

(ii) sell your Tradeable Warrants at the then-current market price when you might

otherwise wish to hold your Tradeable Warrants;

or (iii) accept the nominal redemption price which, at the time the outstanding Tradeable

Warrants are called for redemption, is likely to be substantially less than the market value of your Tradeable Warrants.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors