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Item 1A. Risk Factors

2025-03-06 compared with 2024-03-19 · 905 added, 765 removed, 755 unchanged (69% of the section changed)

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uncertainties not presently known to us or that we currently believe to be immaterial may become material and adversely affect our business.

Related to E&P Assets

Genesis Assets currently have no producing properties and there is no assurance that we will be able to successfully drill producing

If the Genesis Assets are not commercially productive of crude oil or natural gas, any funds spent on exploration and production

of the Genesis Assets are in the pre-production stage and there is no assurance that we will be able to obtain the requisite permits

risk factors can be broadly summarized by the following categories:

Related to our E&P Assets

Related to the Bayswater Acquisition

Related to the Company

Related to the Ownership of our Common Stock

not an exhaustive list, the principal risks that we believe could adversely affect our business, financial condition or results of operations

than the Genesis Bolt-on Assets, the Genesis Assets currently have no producing properties

and there is no assurance that we will be able to successfully drill producing wells.

the Genesis Assets are not commercially productive of crude oil or natural gas, any funds

spent on exploration and production may be lost;

development of our estimated PUD reserves may take longer

and may require higher levels of capital expenditures than we currently anticipate.

our estimated PUD reserves may not ultimately be developed

have a limited history of drilling producing oil and natural gas wells and there can be no

assurance that we will successfully establish oil and natural gas operations or profitably

produce oil, natural gas or NGLs;

natural gas and NGLs prices are highly volatile.

An extended decline in commodity prices

may adversely affect our business, financial condition or results of operations and our ability

to meet our capital expenditure obligations and financial commitments;

plan to develop and operate our existing and future E&P assets will require substantial

additional capital, which we may be unable to raise on acceptable terms or at all in the

have entered into hedging arrangements to hedge a significant portion of oil and natural

gas production and are therefore exposed to fluctuations in the price of oil, natural gas and

NGLs and will be affected by continuing and prolonged declines in such prices.

hedging activities we may engage in may result in financial losses or could reduce our income;

for and producing oil and natural gas wells is a high-risk activity with many uncertainties

that could adversely affect our business, financial condition or results of operations;

intend to pursue the development of our properties in the DJ Basin through horizontal drilling

and completion.

Horizontal development operations can be more operationally challenging and

costly relative to vertical drilling operations;

locations that we decide to drill may not yield oil or natural gas in commercially viable

of our undeveloped leasehold acreage is subject to leases that will expire over the next

several years unless production is established on units containing the acreage;

future results of operations are highly dependent on our ability to find, develop or acquire

additional reserves;

estimated oil, natural gas and NGLs reserves are based on many assumptions that may prove

to be inaccurate.

Any material inaccuracies in the reserve estimates or the underlying assumptions

will materially affect the quantities and present value of our reserves;

will face strong competition from other oil and natural gas companies;

regulation and liability for oil and natural gas operations may adversely affect our business

and results of operations;

of our E&P assets are located in the DJ Basin, making us vulnerable to risks associated

with operating primarily in a single geographic area;

may not consummate the Bayswater Acquisition on the terms currently contemplated, or at all;

do not currently have sufficient funds or committed financing necessary to consummate the

Bayswater Acquisition;

may be unsuccessful in integrating the Bayswater Assets or in realizing all or any part of

the anticipated benefits of the Bayswater Acquisition;

acquisition of a significant portion of Bayswater’s working interests is subject to

third-party consent.

If such third party does not consent or our arrangement with Bayswater

with respect to such working interests pursuant to the Bayswater PSA is challenged, we will

be unable to acquire such working interest as part of the Bayswater Acquisition without any

adjustment to the purchase price and we may have limited recourse against Bayswater;

we are successful in completing the Bayswater Acquisition, our level of indebtedness could

adversely affect our business and financial condition and prevent us from fulfilling our

debt obligations;

a result of the Bayswater Acquisition and the NRO Acquisition, we anticipate that the scope

and size of our assets, operations and business will substantially change.

We cannot provide

assurance that our expansion in size and integration and operation of the Bayswater Assets

and Central Weld Assets will be successful;

expect to incur significant transaction costs in connection with the Bayswater Acquisition,

which may be in excess of those currently anticipated;

Bayswater Acquisition may be completed on different terms from those contained in the Bayswater

market price for our Common Stock following the Bayswater Acquisition, if consummated, may

be affected by factors different from those that historically have affected or currently

affect our Common Stock;

class action and derivative lawsuits may be brought against us in connection with the Bayswater

Acquisition, which could result in substantial costs;

have historically incurred significant losses, and may be unable to generate profitability.

Our ability to successfully operate and expand our business is dependent our ability to raise

additional capital to support our drilling program on our existing assets;

need to manage growth in operations to maximize our potential growth and achieve our expected

Our failure to manage growth can cause a disruption of our operations that may

result in the failure to generate revenues at levels we expect;

depend on the services of a small number of key personnel, and may not be able to operate

and grow our business effectively if we lose their services or are unable to attract qualified

personnel in the future;

● Acquisitions,

joint ventures or similar strategic relationships may disrupt or otherwise have a material

adverse effect on our business and financial results;

may be conflicts of interest between certain of our officers and directors and our non-management

stockholders;

to achieve and maintain effective internal controls in accordance with Section 404 of the

Sarbanes-Oxley Act of 2002 could result in a restatement of our financial statements, cause

investors to lose confidence in our financial statements and our Company and have a material

adverse effect on our business and stock price;

may not be able to use a portion of our net operating loss carryforwards and other tax attributes

to reduce our future U.S.

federal and state income tax obligations, which could adversely

affect our cash flows;

conversion or exercise, as applicable, of the outstanding Series D Preferred Stock, Series

D PIPE Warrants, Series E PIPE Warrants, Exok Warrants, Subordinated Note Warrants, and Merger Options could substantially dilute your investment and adversely affect the market price

of our Common Stock;

Board of Directors has broad discretion to issue additional securities, and in order to raise

sufficient funds to expand our operations, we may have to issue securities at prices which

may result in substantial dilution to our stockholders;

securities or industry analysts do not publish research or reports about our business, if

they adversely change their recommendations regarding our Common Stock or if our operating

results do not meet their expectations, our stock price could decline;

have substantial control over the Company, and they could delay or prevent a change in our

corporate control even if our other stockholders want it to occur;

trading price of our Common Stock has been, and is likely to continue to be, volatile and

could be subject to wide fluctuations in response to various factors, some of which are beyond

sales of our Common Stock, or the perception that such future sales may occur, may cause

our stock price to decline;

have not paid cash dividends in the past and do not expect to pay cash dividends in the foreseeable

Any return on your investment may be limited to increases in the market price of

our Common Stock.

foregoing factors should not be construed as exhaustive.

This summary of risk factors should be read in conjunction with the more detailed

risk factors below.

Related to our E&P Assets

than the Genesis Bolt-on Assets, the Genesis Assets currently have no producing properties and there is no assurance that we will be able to

successfully drill producing wells.

If the Genesis Assets are not commercially productive of crude oil or natural gas, any funds

spent on exploration and production may be lost.

of the Genesis Assets, other than the Genesis Bolt-on Assets, are in the pre-production stage and there is no assurance that we will be able to obtain the requisite permits

to begin drilling or successfully drill producing wells.

The Genesis Assets are not currently connected to the electrical grid or transportation,

The Genesis Assets, other than the Genesis Bolt-on Assets, are not currently connected to the electrical grid or transportation,

nor have we engaged service providers or contractors, necessary for the productive development of the assets and there is no assurance

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or working interests in other property in which we may acquire an interest.

Central Weld Assets currently have both producing and undeveloped properties and there is no assurance that we will be able to further

develop and exploit the producing properties or successfully drill producing wells after closing the NRO Acquisition.

If we are unable

to further develop and exploit the producing properties or drill producing wells, any funds spent on the NRO Acquisition or in the exploration,

development and production of the Central Weld Assets may be lost.

of the Central Weld Assets are producing, permitted properties and certain of the Central Weld Assets are undeveloped.

Even if we are

able to successfully close the NRO Acquisition, there is no assurance that we will be able to further develop and exploit the producing

properties or successfully drill producing wells of the undeveloped properties, and we will be dependent on further developing, exploiting

and establishing sufficient reserves at the Central Weld Assets for additional cash flow and a return of our investment.

If we are unable

to further develop or exploit the Central Weld Assets or if the Central Weld Assets are not economic, all of the funds that we have invested,

or will invest, will be lost.

In addition, the failure of the Central Weld Assets to further produce commercially may make it more difficult

for us to raise additional funds in the form of additional sale of our equity securities or working interests in other property in which

we may acquire an interest.

The development of our estimated PUDs and estimated

possible undeveloped reserves may take longer and may require higher levels of capital expenditures than we currently anticipate.

our estimated PUDs and estimated possible undeveloped reserves may not ultimately be developed or produced.

All of the reserves attributable

to the Genesis Assets are undeveloped and all reserves associated therewith, other than in respect of the Genesis Bolt-on Assets that

were acquired in February 2024, are classified as possible reserves.

Development of proved undeveloped reserves and possible undeveloped

reserves may take longer and require higher levels of capital expenditures than we currently anticipate.

Delays in the development of

our reserves and those that we may ultimately acquire in the NRO Acquisition, increases in costs to drill and develop such reserves, or

decreases in commodity prices will reduce the value of our estimated PUDs, possible undeveloped reserves and future net revenues estimated

for such reserves and may result in some projects becoming uneconomic.

In addition, delays in the development of reserves could require

us to reclassify our PUDs as unproved reserves.

Company has no history of drilling producing oil and gas wells and there can be no assurance that we will successfully establish oil

and gas operations or profitably produce oil, natural gas or NGLs.

Company has not successfully drilled a producing oil and gas well nor successfully produced hydrocarbons, and we have no ongoing drilling

operations or revenues from drilling operations.

Oil and gas exploration and production has a high degree of risk.

The future development

of a significant portion of our properties will require obtaining permits and financing.

As a result, we are subject to all of the risks

associated with establishing new drilling operations and business enterprises, including, among others:

The Central Weld Assets currently have both

producing and undeveloped properties and there is no assurance that we will be able to further develop and exploit the producing properties

or successfully drill producing wells.

If we are unable to further develop and exploit the producing properties or drill producing wells,

any funds spent on the NRO Acquisition or in the exploration, development and production of the Central Weld Assets may be lost.

Certain of the Central Weld Assets are producing, permitted properties

and certain of the Central Weld Assets are undeveloped.

There is no assurance that we will be able to further develop and exploit the

producing properties or successfully drill producing wells of the undeveloped properties, and we will be dependent on further developing,

exploiting and establishing sufficient reserves at the Central Weld Assets for additional cash flow and a return of our investment.

we are unable to further develop or exploit the Central Weld Assets or if the Central Weld Assets are not economic, all of the funds that

we have invested, or will invest, will be lost.

In addition, the failure of the Central Weld Assets to further produce commercially may

make it more difficult for us to raise additional funds in the form of additional sales of our equity securities or working interests

in other property in which we may acquire an interest.

development of our estimated PUD reserves may take longer and may require higher levels of capital

expenditures than we currently anticipate.

Therefore, our estimated PUD reserves may not ultimately

be developed or produced.

of the reserves attributable to the Genesis Assets, other than the Genesis Bolt-on Assets, are undeveloped as of December 31, 2024.

Development of proved undeveloped reserves may take longer and require higher levels of capital

expenditures than we currently anticipate.

Delays in the development of our reserves, increases in costs to drill and develop such

reserves, or decreases in commodity prices will reduce the value of our estimated PUD reserves and future net

revenues estimated for such reserves and may result in some projects becoming uneconomic.

In addition, delays in the development of

reserves could require us to reclassify our PUDs as unproved reserves.

have a limited history of drilling producing oil and natural gas wells and there can be no assurance that we will successfully

establish oil and natural gas operations or profitably produce oil, natural gas or NGLs.

have a limited history of successfully drilling producing oil and natural gas wells and successfully producing hydrocarbons.

Oil and natural gas exploration and production has a high degree of risk.

development of a significant portion of our properties will require obtaining permits and financing.

As a result, we are subject to all

of the risks associated with establishing new drilling operations and business enterprises, including, among others:

need to obtain necessary environmental and other governmental approvals and permits, the timing and conditions of those approvals

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availability and cost of funds to finance the drilling and development of our properties;

timing and cost, which can be considerable, of the supporting infrastructure to our oil and gas drilling operations;

ability to obtain midstream offtake capacity for our future oil and gas production;

timing and cost, which can be considerable, of the supporting infrastructure to our oil and natural gas drilling operations;

ability to obtain midstream offtake capacity for our future oil and natural gas production;

resulting from the development of offsetting properties from other operators in the area;

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no assurance that even if we are able to successfully produce oil, natural gas or NGLs that such production would be economical for commercial

Oil and gas production is dependent upon a number of factors and significantly influenced by the technical skill of our operations

personnel involved.

The commercial viability of our possible future production is also dependent upon a number of factors which are beyond

our control, including the quality of our oil, natural gas and NGLs, commodity prices, government policies and regulation, and environmental

protection requirements.

There is no certainty that the expenditures that have been made and may be made in the future by the Company

related to the acquisition and development of our properties will result in commercially viable production and the Company’s past

and future expenditures may be partially or entirely lost.

we have no operating history related to the exploration and production of oil and gas assets, investors have no basis to evaluate our

ability to operate profitably as an E&P business.

have not generated any revenue in the exploration and production of oil and gas assets to date which, following the Crypto Sale, is our

sole business segment.

We face many of the risks commonly encountered by other new businesses, including the lack of an established operating

history, need for additional capital and personnel, and competition.

There is no assurance that our business will be successful or that

we can ever operate profitably.

We may not be able to effectively manage the demands required of a new business, such that we may be

unable to implement our business plan or achieve profitability.

Oil and natural gas production is dependent upon a number of factors and significantly influenced by the technical skill

of our operations personnel involved.

The commercial viability of our possible future production is also dependent upon a number of factors

which are beyond our control, including the quality of our oil, natural gas and NGLs, commodity prices, government policies and regulation,

and environmental protection requirements.

There is no certainty that the expenditures that have been made and may be made in the future

by us related to the acquisition and development of our properties will result in commercially viable production and our past and future

expenditures may be partially or entirely lost.

we have a limited operating history related to the exploration and production of oil and natural gas assets, investors have no basis to evaluate

our ability to operate profitably as an E&P business.

have generated limited revenue in the exploration and production of oil and natural gas assets to date which, following the Crypto Sale,

is our sole business segment.

We face many of the risks commonly encountered by other new businesses, including the lack of an established

operating history, need for additional capital and personnel, and competition.

There is no assurance that our business will be successful

or that we can ever operate profitably.

We may not be able to effectively manage the demands required of a new business, such that we

may be unable to implement our business plan or achieve profitability.

natural gas and NGLs prices are highly volatile.

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condition or results of operations and our ability to meet our capital expenditure obligations and financial commitments.

the acquisition and development of our existing and future E&P assets, our revenues, profitability and cash flows will depend upon the prices for oil,

natural gas and NGLs.

The prices we may receive for oil, natural gas and NGLs production are volatile and a decrease in prices can materially

and adversely affect our financial results and impede our growth, including our ability to maintain or increase our borrowing capacity,

to repay current or future indebtedness and to obtain additional capital on attractive terms.

Changes in oil, natural gas and NGLs prices

have a significant impact on the amount of oil, natural gas and NGLs that we can produce economically, the value of our reserves and

on our cash flows.

Historically, world-wide oil, natural gas and NGLs prices and markets have been subject to significant change and

may continue to change in the future.

During the year ended December 31, 2023, the average West Texas Intermediate (“WTI”)

spot price was $77.58, as compared to an average price of $94.90 for the year ended December 31, 2022 and $68.16 for the year ended December

The average Henry Hub natural gas spot price during the year ended December 31, 2023, was $2.54 as compared to an average of

$6.42 for the year ended December 31, 2022 and $3.60 for the year ended December 31, 2021.

the acquisition and development of our existing and future E&P assets, our revenues, profitability and cash flows will depend upon

the prices for oil, natural gas and NGLs.

The prices we may receive for oil, natural gas and NGLs production are volatile and a decrease

in prices can materially and adversely affect our financial results and impede our growth, including our ability to maintain or increase

our borrowing capacity, to repay current or future indebtedness and to obtain additional capital on attractive terms.

Changes in oil,

natural gas and NGLs prices have a significant impact on the amount of oil, natural gas and NGLs that we can produce economically, the

value of our reserves and on our cash flows.

Historically, world-wide oil, natural gas and NGLs prices and markets have been subject

to significant change and may continue to change in the future.

During the year ended December 31, 2024, the average West Texas Intermediate spot price was $76.63, as compared to an average price of $77.58 for the year ended December 31, 2023.

The average Henry Hub natural gas spot price during the year ended December 31, 2024 was $2.19, as compared to

an average of $2.53 for the year ended December 31, 2023.

for oil, natural gas and NGLs may fluctuate widely in response to relatively minor changes in supply and demand, market uncertainty and

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exploration, production, development or marketing activities;

governmental regulations, including environmental initiatives and taxation;

governmental regulations, including tariffs, environmental initiatives, and taxation;

domestic and global economic conditions;

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gas and NGLs to minimize emissions of carbon dioxide, a greenhouse gas;

plan to develop and operate our existing and future E&P assets will require substantial additional capital, which we may be unable to raise on acceptable

terms or at all in the future.

we currently expect to develop and operate our existing and future E&P assets utilizing cash flow from operations, we may be unable to do so.

permits and approvals, seismic data, as well as exploration, development and production activities entail considerable costs, and, to

the extent we are unable to fund such costs utilizing cash flow from operations, we may need to raise substantial additional capital,

through future private or public equity offerings, strategic alliances or other alternative arrangements.

plan to develop and operate our existing and future E&P assets will require substantial additional capital, which we may be unable

to raise on acceptable terms or at all in the future.

we currently expect to develop and operate our existing and future E&P assets utilizing cash flow from operations, we may be unable

Obtaining permits and approvals, seismic data, as well as exploration, development and production activities entail considerable

costs, and, to the extent we are unable to fund such costs utilizing cash flow from operations, we may need to raise substantial additional

capital, through future private or public equity offerings, strategic alliances or other alternative arrangements.

future capital requirements will depend on many factors, including:

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cost and timing of governmental approvals and/or concessions;

effects of competition by larger companies operating in the oil and gas industry.

effects of competition by larger companies operating in the oil and natural gas industry.

we raise additional capital through equity financing, the ownership percentage of our existing stockholders would be diluted, and new

investors may demand rights, preferences or privileges senior to those of existing stockholders.

While we do not intend to finance our

operations by relying on debt financing, if we were to raise additional capital through debt financing, the financing may involve covenants

If we were to raise additional capital through debt financing, the financing may involve covenants

that restrict our business activities.

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exploration, development and production activities.

intend to enter into hedging arrangements as we grow our production and therefore we will be exposed to fluctuations in the price of

oil, natural gas and NGLs and will be affected by continuing and prolonged declines in such prices.

Any future hedging activities we

may engage in may result in financial losses or could reduce our income.

natural gas, and NGL prices are volatile.

We intend, in the future, to hedge a significant portion of oil and natural gas production

to reduce our exposure to adverse fluctuations in these prices.

We are currently not hedged and therefore are exposed to price volatility

once we have oil, natural gas and NGL production and may be subject to significant reduction in prices, which would have a material negative

impact on our results of operations.

In the future, we intend to enter into derivative arrangements for a portion of our oil, natural

gas, and NGL production, including swaps, collars and other instruments.

Derivative arrangements would expose us to the risk of financial

loss in some circumstances, including when:

have entered into hedging arrangements to hedge a significant portion of oil and natural gas production and are therefore exposed to

fluctuations in the price of oil, natural gas and NGLs and will be affected by continuing and prolonged declines in such prices.

future hedging activities we may engage in may result in financial losses or could reduce our income.

natural gas, and NGL prices are volatile, therefore, we hedge a significant portion of oil and natural gas production to reduce our exposure

to adverse fluctuations in these prices.

Our current derivative arrangements consist of crude oil and natural gas swaps but we could enter into additional derivative

arrangements including swaps, collars and other instruments.

Derivative arrangements could expose us to the risk of financial loss in

some circumstances, including when:

(i) production is less than the volume covered by the derivative instruments;

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cash payments to counterparties, which could, in certain circumstances, be significant.

for and producing oil and gas wells is a high-risk activity with many uncertainties that could adversely affect our business, financial

condition or results of operations.

oil and gas wells, including development wells, involves numerous risks, including the risk that we may not encounter commercially productive

oil, natural gas and NGLs reserves (including “dry holes”).

We must incur significant expenditures to drill and complete

wells, the costs of which are often uncertain.

It is possible that we will make substantial expenditures on drilling and not discover

reserves in commercially viable quantities.

Specifically, we often are uncertain as to the future cost or timing of drilling, completing

and operating wells, and our drilling operations and those of our third-party operators may be curtailed, delayed or canceled.

of our drilling, completing and operating wells may increase and our results of operations and cash flows from such operations may be

impacted, as a result of a variety of factors, including:

for and producing oil and natural gas wells is a high-risk activity with many uncertainties that could adversely affect our business,

financial condition or results of operations.

oil and natural gas wells, including development wells, involves numerous risks, including the risk that we may not encounter commercially

productive oil, natural gas and NGLs reserves (including “dry holes”).

We must incur significant expenditures to drill and

complete wells, the costs of which are often uncertain.

It is possible that we will make substantial expenditures on drilling and not

discover reserves in commercially viable quantities.

Specifically, we often are uncertain as to the future cost or timing of drilling,

completing and operating wells, and our drilling operations and those of our third-party operators may be curtailed, delayed or canceled.

The cost of our drilling, completing and operating wells may increase and our results of operations and cash flows from such operations

may be impacted, as a result of a variety of factors, including:

drilling conditions;

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Further, as a result

of any of these developments, we could incur material impairments of our oil and gas properties and the value of our undeveloped acreage

could decline in the future.

of any of these developments, we could incur material impairments of our oil and natural gas properties and the value of our undeveloped

acreage could decline in the future.

pad drilling and project development may result in volatility in our operating results.

intend to utilize, and NRO has historically utilized, multi-well pad drilling and project development where practical.

Project development

may involve more than one multi-well pad being drilled and completed at one time in a relatively confined area.

Wells drilled on a pad

or in a project may not be brought into production until all wells on the pad or project are drilled and completed.

Problems affecting

one pad or a single well could adversely affect production from all of the wells on the pad or in the entire project.

As a result, multi-well

pad drilling and project development can cause delays in the scheduled commencement of production, or interruptions in ongoing production.

These delays or interruptions may cause declines or volatility in our operating results due to timing as well as declines in oil and

natural gas prices.

Further, any delay, reduction or curtailment of our development and producing operations, due to operational delays

caused by multi-well pad drilling or project development, or otherwise, could result in the loss of acreage through lease expirations.

intend to utilize multi-well pad drilling and project development where practical.

Project development may involve more than one multi-well

pad being drilled and completed at one time in a relatively confined area.

Wells drilled on a pad or in a project may not be brought

into production until all wells on the pad or project are drilled and completed.

Problems affecting one pad or a single well could adversely

affect production from all of the wells on the pad or in the entire project.

As a result, multi-well pad drilling and project development

can cause delays in the scheduled commencement of production, or interruptions in ongoing production.

These delays or interruptions may

cause declines or volatility in our operating results due to timing as well as declines in oil and natural gas prices.

Further, any delay,

reduction or curtailment of our development and producing operations, due to operational delays caused by multi-well pad drilling or

project development, or otherwise, could result in the loss of acreage through lease expirations.

Additionally,

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not be productive.

of the undeveloped leasehold acreage is subject to leases that will expire over the next several years unless production is established

of our undeveloped leasehold acreage is subject to leases that will expire over the next several years unless production is established

on units containing the acreage.

terms of our oil and gas leases often stipulate that the lease will terminate if not held by production, rentals, or otherwise some

form of an extension payment to extend the term of the lease.

If production in paying quantities is not established on units

containing leases during the next year, then approximately 6,598 net acres of our Initial Genesis Assets will expire in 2024,

approximately 2,567 net acres of our Initial Genesis Assets will expire in 2025 and approximately 14,320 net acres of our Genesis

Assets will expire in 2026 and thereafter.

terms of our oil and natural gas leases often stipulate that the lease will terminate if not held by production, rentals, or otherwise

some form of an extension payment to extend the term of the lease.

If production in paying quantities is not established on units containing

leases during the next year, then approximately 1,451 net acres of our acreage will expire in 2025, approximately 11,640 net acres will expire in 2026, and approximately 4,941

net acres will expire in 2027 and thereafter.

While some expiring leases may contain predetermined extension payments, other expiring

leases will require us to negotiate new leases at the time of lease expiration.

Further, existing leases which are currently held by

production may unexpectedly encounter operational, political, regulatory, or litigation challenges which could result in their

It is possible that market conditions at the time of negotiation could require us to agree to new leases on less

favorable terms to us than the terms of the expired leases or cause us to lose the leases entirely.

If our leases expire, we will

lose our right to develop the related properties.

Further, existing leases which are currently held by production

may unexpectedly encounter operational, political, regulatory, or litigation challenges which could result in their termination.

possible that market conditions at the time of negotiation could require us to agree to new leases on less favorable terms to us than

the terms of the expired leases or cause us to lose the leases entirely.

If our leases expire, we will lose our right to develop the related

future results of operations are highly dependent on our ability to find, develop or acquire additional reserves.

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uncertainties are inherent in estimating quantities of oil, natural gas and NGLs reserves.

The process of estimating oil, natural

gas and NGLs reserves is complex, requiring significant decisions and assumptions in the evaluation of available geological,

engineering and economic data for each reservoir, including assumptions regarding future oil, natural gas and NGLs prices,

subsurface characterization, production levels and operating and development costs.

Our estimates of possible reserves for the

Initial Genesis Assets as of December 31, 2023 were prepared by CG&A.

CG&A conducted a detailed review of the Initial

Genesis Assets for the period covered by its reserve report using information provided by us.

The process of estimating oil, natural gas

and NGLs reserves is complex, requiring significant decisions and assumptions in the evaluation of available geological, engineering

and economic data for each reservoir, including assumptions regarding future oil, natural gas and NGLs prices, subsurface characterization,

production levels and operating and development costs.

Our reserve estimates as of December 31, 2024 were prepared by CG&A.

conducted a detailed review of our assets for the period covered by its reserve report using information provided by us.

time, we may make material changes to reserve estimates taking into account the results of actual drilling, testing and production.

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and the timing of development expenditures may prove to be inaccurate.

Any significant variance in our assumptions and actual results could greatly affect our estimates of reserves, the economically recoverable

quantities of oil, natural gas and NGLs attributable to any particular group of properties, the classifications of reserves based on

risk of non-recovery and estimates of future net cash flows.

As of December 31, 2023 all of our reported reserves and associated future cash

flows are deemed possible.

Estimates of possible reserves, and the future cash flows related to such estimates, are also inherently imprecise

and are more uncertain than estimates of proved and probable reserves, respectively, and the respective future cash flows related to

such estimates, but have not been adjusted for risk due to that uncertainty.

Because of such uncertainty, estimates of possible reserves,

and the future cash flows related to such estimates, may not be comparable to estimates of proved and probable reserves, respectively,

and the respective future cash flows related to such estimates, and should not be summed arithmetically with estimates of either proved

or probable reserves, respectively, and the respective future cash flows related to such estimates.

producing an estimate of the amount of oil, natural gas and NGLs that is recoverable from a particular reservoir, an estimated quantity

of possible reserves is an estimate that might be achieved, but only under more favorable circumstances than are likely.

possible reserves are also continually subject to revisions based on production history, results of additional exploration and development,

price changes and other factors.

When deterministic methods are used, the total quantities ultimately recovered from a project have a

low probability of exceeding proved plus probable plus possible reserves.

Possible reserves may be assigned to areas of a reservoir adjacent

to probable reserve where data control and interpretations of available data are progressively less certain.

Frequently, this will be

in areas where geoscience and engineering data are unable to define clearly the area and vertical limits of commercial production from

the reservoir.

Possible reserves also include incremental quantities associated with a greater percentage of recovery of the hydrocarbons

in place than the recovery quantities assumed for probable reserves.

Possible reserves may be assigned where geoscience and engineering

data identify directly adjacent portions of a reservoir within the same accumulation that may be separated from proved areas by faults

with displacement less than formation thickness or other geological discontinuities and that have not been penetrated by a wellbore,

and we believe that such adjacent portions are in communication with the known (proved) reservoir.

Possible reserves may be assigned

to areas that are structurally higher or lower than the proved area if these areas are in communication with the proved reservoir.

Any significant variance in our assumptions and actual results

could greatly affect our estimates of reserves, the economically recoverable quantities of oil, natural gas and NGLs attributable to

any particular group of properties, the classifications of reserves based on risk of non-recovery and estimates of future net cash flows.

market our oil and natural gas production, we are dependent upon obtaining access to midstream infrastructure, including truck transportation,

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transportation of flammable liquids.

will face strong competition from other oil and gas companies.

will encounter competition from other oil and gas companies in all areas of our operations, including the acquisition of exploratory

will face strong competition from other oil and natural gas companies.

will encounter competition from other oil and natural gas companies in all areas of our operations, including the acquisition of exploratory

prospects and proven properties.

Our competitors include major integrated oil and gas companies and numerous independent oil and gas

companies, individuals and drilling and income programs.

Many of our competitors are large, well-established companies that have been

engaged in the oil and gas business much longer than we have and possess substantially larger operating staffs and greater capital resources

These companies may be able to pay more for exploratory projects and productive oil and gas properties and may be able to

define, evaluate, bid for and purchase a greater number of properties and prospects than our financial or human resources permit.

addition, these companies may be able to expend greater resources on the existing and changing technologies that we believe are and will

be increasingly important to attaining success in the industry.

Such competitors may also be in a better position to secure oilfield

services and equipment on a timely basis or on favorable terms.

These companies may also have a greater ability to continue drilling

activities during periods of low oil and gas prices, such as the current commodity price environment, and to absorb the burden of current

and future governmental regulations and taxation.

We may not be able to conduct our operations, evaluate and select suitable properties

and consummate transactions successfully in this highly competitive environment.

Our competitors include major integrated oil and natural gas companies and numerous independent oil

and natural gas companies, individuals and drilling and income programs.

Many of our competitors are large, well-established companies

that have been engaged in the oil and natural gas business much longer than we have and possess substantially larger operating staffs

and greater capital resources than we do.

These companies may be able to pay more for exploratory projects and productive oil and natural

gas properties and may be able to define, evaluate, bid for and purchase a greater number of properties and prospects than our financial

or human resources permit.

In addition, these companies may be able to expend greater resources on the existing and changing technologies

that we believe are and will be increasingly important to attaining success in the industry.

Such competitors may also be in a better

position to secure oilfield services and equipment on a timely basis or on favorable terms.

These companies may also have a greater ability

to continue drilling activities during periods of low oil and natural gas prices, such as the current commodity price environment, and

to absorb the burden of current and future governmental regulations and taxation.

We may not be able to conduct our operations, evaluate

and select suitable properties and consummate transactions successfully in this highly competitive environment.

regulation and liability for oil and natural gas operations may adversely affect our business and results of operations.

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the costs, manner, and feasibility of our operations by, among other things, requiring us to make significant expenditures in order to

comply and restricting the areas available for oil and gas production.

Failure to comply with these laws and regulations may result in

substantial liabilities to third-parties or governmental entities.

We are also subject to changing and extensive tax laws, the effects

of which cannot be predicted.

The implementation of new, or the modification of existing, laws or regulations, could have a material

adverse effect on us, such as by imposing, penalties, fines and/or fees, taxes and tariffs on carbon that could have the effect of raising

prices to the end user and thereby reducing the demand for our products.

comply and restricting the areas available for oil and natural gas production.

Failure to comply with these laws and regulations may

result in substantial liabilities to third-parties or governmental entities.

We are also subject to changing and extensive tax laws,

the effects of which cannot be predicted.

The implementation of new, or the modification of existing, laws or regulations, could have

a material adverse effect on us, such as by imposing, penalties, fines and/or fees, taxes and tariffs on carbon that could have the effect

of raising prices to the end user and thereby reducing the demand for our products.

of our E&P assets are located in the DJ Basin, making us vulnerable to risks associated with operating primarily in a single geographic

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resulting from extreme weather may not be fully insured.

operations will be subject to federal, state and local laws and regulations related to environmental and natural resources protection

and occupational health and safety, which may expose us to significant costs and liabilities and result in increased costs and additional

operations are subject to federal, state and local laws and regulations related to environmental and natural resources protection and

occupational health and safety, which may expose us to significant costs and liabilities and result in increased costs and additional

operating restrictions or delays.

oil, natural gas and NGLs exploration, production and development operations will be subject to stringent federal, state, local and other

oil, natural gas and NGLs exploration, production and development operations are subject to stringent federal, state, local and other

applicable laws and regulations governing worker health and safety, the release or disposal of materials into the environment or otherwise

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The regulatory burden on the oil

and gas industry increases the cost of doing business in the industry and consequently affects profitability.

and natural gas industry increases the cost of doing business in the industry and consequently affects profitability.

Additionally,

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customers could have a material adverse effect on our business, results of operations and financial condition and reduce demand for our

interest groups generally opposed to the development of oil and gas, and hydraulic fracturing in particular, have from time to time advanced

various options for ballot initiatives aimed at significantly limiting or preventing the development of oil and gas.

For example, following

the failure of several ballot initiatives to restrict oil and gas development, Colorado passed a law in April 2019 (Senate Bill 19-181)

that, among other things, changes the mission of the CECMC from fostering oil and gas development to instead focus on environmental protection,

directs the CECMC and various state agencies to consider new rules imposing stricter environmental controls on the oil and gas industry,

and provides local governments with the authority to promulgate their own regulations on oil and gas development.

Pursuant to this statutory

change, the CECMC has issued new rules relating to the agency’s new mission—formerly “fostering” oil and gas

development, now “regulating” it—including, among other things, increasing oil and gas setbacks to a minimum of 2,000

feet from schools and childcare facilities, prohibiting routine venting and flaring, and increasing wildlife protections.

rules will also address cumulative impacts through a new state regulatory program and will completely revise state permitting procedures.

In May 2023, Colorado passed a law (House Bill 1294) that requires the CECMC to promulgate rules addressing cumulative impacts of oil

and gas operations by April 28, 2024.

CECMC is currently assessing draft rules pursuant to this law, which, if finalized as proposed,

would require regulators to consider cumulative impacts of oil and gas operations in permitting decisions and increase scrutiny on the

project’s proximity to other industrial sites, residential areas and school areas, DI communities, and “cumulatively impacted

communities.” The draft rules would also set GHG emissions intensity targets for oil and gas operators and require regulators to

consider such targets in their cumulative impacts analysis, as well as the potential to restrict operations during the summer in Ozone

Nonattainment Areas.

While the ultimate impact of the new Colorado laws and related rules is currently unknown, these laws or passage

or enactment of other similar legislation could have a material adverse effect on our operations in Colorado.

interest groups generally opposed to the development of oil and natural gas, and hydraulic fracturing in particular, have from time to

time advanced various options for ballot initiatives aimed at significantly limiting or preventing the development of oil and natural

For example, following the failure of several ballot initiatives to restrict oil and natural gas development, Colorado passed a

law in April 2019 (Senate Bill 19-181) that, among other things, changes the mission of the CECMC from fostering oil and natural gas

development to instead focus on environmental protection, directs the CECMC and various state agencies to consider new rules imposing

stricter environmental controls on the oil and natural gas industry, and provides local governments with the authority to promulgate

their own regulations on oil and natural gas development.

Pursuant to this statutory change, the CECMC has issued new rules relating

to the agency’s new mission—formerly “fostering” oil and natural gas development, now “regulating”

it—including, among other things, increasing oil and natural gas setbacks to a minimum of 2,000 feet from schools and childcare

facilities, prohibiting routine venting and flaring, and increasing wildlife protections.

Additional rules will also address cumulative

impacts through a new state regulatory program and will completely revise state permitting procedures.

In May 2023, Colorado passed a

law (House Bill 1294) that requires the CECMC to promulgate rules addressing cumulative impacts of oil and natural gas operations by

April 28, 2024.

CECMC is currently assessing draft rules pursuant to this law, which, if finalized as proposed, would require regulators

to consider cumulative impacts of oil and natural gas operations in permitting decisions and increase scrutiny on the project’s

proximity to other industrial sites, residential areas and school areas, DI communities, and “cumulatively impacted communities.”

The draft rules would also set GHG emissions intensity targets for oil and natural gas operators and require regulators to consider such

targets in their cumulative impacts analysis, as well as the potential to restrict operations during the summer in Ozone Nonattainment

While the ultimate impact of the new Colorado laws and related rules is currently unknown, these laws or passage or enactment

of other similar legislation could have a material adverse effect on our operations in Colorado.

general trend in environmental regulation is to place more restrictions and limitations on activities that may affect the environment.

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have a material adverse effect on our business, financial position, results of operations and prospects.

oil and gas exploration, production, and development activities may be subject to a series of risks related to climate change and energy

transition initiatives.

threat of climate change continues to attract considerable attention in the United States and around the world.

Numerous proposals have

been made and could continue to be made at the international, national, regional and state levels of government to monitor and limit

oil and natural gas exploration, production, and development activities may be subject to a series of risks related to climate change

and energy transition initiatives.

threat of climate change continues to attract considerable attention in the U.S.

and around the world.

Numerous proposals have been

made and could continue to be made at the international, national, regional and state levels of government to monitor and limit

emissions of GHGs.

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regulations that directly limit GHG emissions from certain sources.

President Biden has identified addressing climate change as a priority

under his administration and has issued, and may continue to issue, executive orders related to that goal.

For example, in January 2024,

the Biden administration announced a temporary pause on the U.S.

Department of Energy’s (“DOE”) review of pending applications

for authorization to export LNG to countries that have not entered into free trade agreements (“FTAs”) with the United States

(so-called non-FTA countries) until the DOE updates its underlying analyses for such authorizations using more current data to account

for considerations like potential energy cost increases for consumers and manufacturers or the latest assessment of the impact of GHG

While this pause may not directly impact our exploration, production and development activities, it may affect the demand

for our products, which could have a material adverse effect on our business and financial position.

Former President Biden identified addressing climate change

as a priority under his administration and issued executive orders related to that goal.

example, in January 2024, the Biden administration announced a temporary pause on the U.S.

Department of Energy’s

(“DOE”) review of pending applications for authorization to export LNG to countries that have not entered into free

trade agreements (“FTAs”) with the U.S.

(so-called non-FTA countries) until the DOE updates its underlying

analyses for such authorizations using more current data to account for considerations like potential energy cost increases for

consumers and manufacturers or the latest assessment of the impact of GHG emissions.

While this pause may not directly impact our

exploration, production and development activities, it may affect the demand for our products, which could have a material adverse

effect on our business and financial position.

at the federal level, the EPA has adopted rules that, among other things, establish construction and operating permit reviews for GHG

emissions from certain large stationary sources, require the monitoring and annual reporting of GHG emissions from certain petroleum

and natural gas system sources, and impose new standards reducing methane emissions from oil and gas operations through limitations on

venting and flaring and the implementation of enhanced emission leak detection and repair requirements.

and natural gas system sources, and impose new standards reducing methane emissions from oil and natural gas operations through limitations

on venting and flaring and the implementation of enhanced emission leak detection and repair requirements.

In December 2023 the EPA finalized

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Fines and penalties for violations of these rules can be substantial.

In addition, the

Congress may continue to consider and pass legislation related to the reduction of GHG emissions, including methane and carbon

For example, the IRA, which appropriates significant federal funding for renewable energy initiatives and, for the first

time ever, imposes a fee on GHG emissions from certain facilities, was signed into law in August 2022.

addition, the U.S.

Congress may continue to consider and pass legislation related to the reduction of GHG emissions, including methane

and carbon dioxide.

For example, the IRA, which appropriates significant federal funding for renewable energy initiatives and, for the

first time ever, imposes a fee on GHG emissions from certain facilities, was signed into law in August 2022.

The methane emissions charge

would start in calendar year 2024 at $900 per ton of methane, increase to $1,200 in 2025, and be set at $1,500 for 2026 and each

would start in calendar year 2024 at $900 per ton of methane, increase to $1,200 in 2025, and be set at $1,500 for 2026 and each year

Calculation of the fee is based on certain thresholds established in the IRA.

In January 2024, the EPA issued a proposed

rule to implement the waste emissions charge with a proposed effective date in 2025 for reporting year 2024 emissions.

charge and the incentives for renewable energy infrastructure development could impose additional costs on our operations and

further accelerate the transition of the economy away from the use of oil and natural gas towards lower- or zero-carbon emissions

alternatives.

Furthermore, on March 6, 2024, the SEC finalized a rule requiring the reporting of climate-related risks and financial

impacts, as well as GHG emissions for larger companies.

In January 2024, the EPA issued a proposed rule

to implement the waste emissions charge with a proposed effective date in 2025 for reporting year 2024 emissions.

The methane charge

and the incentives for renewable energy infrastructure development could impose additional costs on our operations and further accelerate

the transition of the economy away from the use of oil and natural gas towards lower- or zero-carbon emissions alternatives.

on March 6, 2024, the SEC finalized a rule requiring the reporting of climate-related risks and financial impacts, as well as GHG emissions

for larger companies.

Compliance dates under the final rule are phased in by registrant category.

Smaller reporting companies will be required to incorporate climate-related disclosures into their filings beginning in fiscal year

Accelerated filers will be required to incorporate the disclosures in fiscal year 2026, as well as disclosure of Scope 1 and 2

GHG emissions, if material, in fiscal year 2028, and limited assurance attestation reports related to the same by fiscal year 2031.

Large accelerated filers will be required to incorporate the disclosures in fiscal year 2025, with Scope 1 and 2 GHG emissions

disclosures, if material, in fiscal year 2026, and attestation reports by fiscal year 2029.

While we are still assessing our

obligations under the rule, complying with such obligations may result in increased costs.

Smaller reporting companies will be

required to incorporate climate-related disclosures into their filings beginning in fiscal year 2027.

Accelerated filers will be required

to incorporate the disclosures in fiscal year 2026, as well as disclosure of Scope 1 and 2 GHG emissions, if material, in fiscal year

2028, and limited assurance attestation reports related to the same by fiscal year 2031.

Large accelerated filers will be required to

incorporate the disclosures in fiscal year 2025, with Scope 1 and 2 GHG emissions disclosures, if material, in fiscal year 2026, and

attestation reports by fiscal year 2029.

While we are still assessing our obligations under the rule, complying with such obligations

may result in increased costs.

have also implemented or are considering implementing laws and regulations that would require climate-related disclosures, which could

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These ongoing regulatory actions and the emissions fee and funding provisions of the IRA could increase

operating costs within the oil and gas industry and accelerate the transition away from fossil fuels, which could in turn adversely affect

our business and results of operations.

the international level, the United Nations-sponsored Paris Agreement, though non-binding, calls for signatory nations to limit their

GHG emissions through individually-determined reduction goals every five years after 2020.

In February 2021, President Biden recommitted

the United States to long-term international goals to reduce emissions, including those under the Paris Agreement.

President Biden announced

in April 2021 a new, more rigorous nationally determined emissions reduction level of 50 to 52 percent from 2005 levels in economy-wide

net GHG emissions by 2030.

Moreover, the international community convenes annually at the Conference of the Parties to negotiate further

pledges and initiatives, such as the Global Methane Pledge (a collective goal to reduce global methane emissions by 30 percent from 2020

levels by 2030).

The impacts of these orders, pledges, agreements and any legislation or regulation promulgated to fulfill the United

States’ commitments under the Paris Agreement or other international agreements cannot be predicted at this time.

In December 2023,

at the 28th Conference of the Parties, the parties signed onto an agreement to transition away from fossil fuels in energy systems and

increase renewable energy capacity, though no timeline for doing so was set.

While non-binding, the agreements coming out of these conferences

could result in increased pressure among financial institutions and various stakeholders to reduce or otherwise impose more stringent

limitations on funding for, and increase potential opposition to, the exploration and production of fossil fuels.

operating costs within the oil and natural gas industry and accelerate the transition away from fossil fuels, which could in turn adversely

affect our business and results of operations.

the international level, the United Nations-sponsored Paris Agreement, though non-binding, calls for signatory nations to limit

their GHG emissions through individually-determined reduction goals every five years after 2020.

In February 2021, former President

Biden recommitted the U.S.

to long-term international goals to reduce emissions, including those under the Paris Agreement.

President Biden announced in April 2021 a new, more rigorous nationally determined emissions reduction level of 50 to 52 percent

from 2005 levels in economy-wide net GHG emissions by 2030.

Moreover, the international community convenes annually at the

Conference of the Parties to negotiate further pledges and initiatives, such as the Global Methane Pledge (a collective goal to

reduce global methane emissions by 30 percent from 2020 levels by 2030).

The impacts of these orders, pledges, agreements and any

legislation or regulation promulgated to fulfill the U.S.’ commitments under the Paris Agreement or other

international agreements cannot be predicted at this time.

In December 2023, at the 28th Conference of the Parties, the parties

signed onto an agreement to transition away from fossil fuels in energy systems and increase renewable energy capacity, though no

timeline for doing so was set.

While non-binding, the agreements coming out of these conferences could result in increased pressure

among financial institutions and various stakeholders to reduce or otherwise impose more stringent limitations on funding for, and

increase potential opposition to, the exploration and production of fossil fuels.

risks are also increasing, as a number of states, municipalities, environmental organizations and other plaintiffs have sought to bring

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ruling in any such case could significantly impact our operations and could have an adverse impact on our financial condition or operations.

are also increasing financial risks for oil and gas producers as certain shareholders, bondholders and lenders may elect in the future

to shift some or all of their investments into non-fossil fuel energy related sectors.

Certain institutional lenders who provide financing

to fossil-fuel energy companies have shifted their investment practices to those that favor “clean” power sources, such as

wind and solar, making those sources more attractive, and some of them may elect not to provide funding for fossil fuel energy companies

in the short or long term.

are also increasing financial risks for oil and natural gas producers as certain shareholders, bondholders and lenders may elect in the

future to shift some or all of their investments into non-fossil fuel energy related sectors.

Certain institutional lenders who provide

financing to fossil-fuel energy companies have shifted their investment practices to those that favor “clean” power sources,

such as wind and solar, making those sources more attractive, and some of them may elect not to provide funding for fossil fuel energy

companies in the short or long term.

Many of the largest U.S.

banks have made “net zero” carbon emission commitments and have announced

that they will be assessing financed emissions across their portfolios and taking steps to quantify and reduce those emissions.

Additionally,

there is also the possibility that financial institutions will be pressured or required to adopt policies that limit funding for fossil

fuel energy companies.

For example, in 2021 the Glasgow Financial Alliance for Net Zero (“GFANZ”) announced that commitments

from over 450 firms across 45 countries had resulted in over $130 trillion in capital committed to net zero goals.

The various sub-alliances

of GFANZ generally require participants to set short-term, sector-specific targets to transition their financing, investing, and/or underwriting

activities to net zero by 2050.

Additionally, there is the possibility that financial institutions will be required to adopt policies

that limit funding for fossil fuel energy companies.

In late 2020, the Federal Reserve joined the Network for Greening the Financial

System, a consortium of financial regulators focused on addressing climate-related risks in the financial sector.

More recently, in November

2021, the Federal Reserve issued a statement in support of the efforts of the Network for Greening the Financial System to identify key

issues and potential solutions for the climate-related challenges most relevant to central banks and supervisory authorities.

2022, the Federal Reserve announced that six of the largest U.S.

largest banks will participate in a pilot climate scenario analysis

exercise, which took place throughout 2023, to enhance the ability of firms and supervisors to measure and manage climate-related financial

While we cannot predict what policies may result from these developments, such efforts could make it more difficult to secure funding

for exploration and production business activities on favorable terms, or at all.

Although there has been recent political support to

counteract these initiatives, these and other developments in the financial sector could lead to some lenders restricting access to capital

for or divesting from certain industries or companies, including the oil and gas sector, or requiring that borrowers take additional

steps to reduce their GHG emissions.

Any material reduction in the capital available to us or our fossil fuel-related customers could

make it more difficult to secure funding for exploration, development, production, transportation, and processing activities, which could

reduce the demand for our products and services.

oil and gas exploration, production, and development activities may be subject to physical risks related to potential climate change

banks have made “net zero” carbon emission commitments and

have announced that they will be assessing financed emissions across their portfolios and taking steps to quantify and reduce those emissions.

Additionally, there is also the possibility that financial institutions will be pressured or required to adopt policies that limit funding

for fossil fuel energy companies.

For example, in 2021 the Glasgow Financial Alliance for Net Zero (“GFANZ”) announced that

commitments from over 450 firms across 45 countries had resulted in over $130 trillion in capital committed to net zero goals.

sub-alliances of GFANZ generally require participants to set short-term, sector-specific targets to transition their financing, investing,

and/or underwriting activities to net zero by 2050.

Additionally, there is the possibility that financial institutions will be required

to adopt policies that limit funding for fossil fuel energy companies.

In late 2020, the Federal Reserve joined the Network for Greening

the Financial System, a consortium of financial regulators focused on addressing climate-related risks in the financial sector.

recently, in November 2021, the Federal Reserve issued a statement in support of the efforts of the Network for Greening the Financial

System to identify key issues and potential solutions for the climate-related challenges most relevant to central banks and supervisory

In September 2022, the Federal Reserve announced that six of the largest U.S.

largest banks will participate in a pilot

climate scenario analysis exercise, which took place throughout 2023, to enhance the ability of firms and supervisors to measure and

manage climate-related financial risk.

While we cannot predict what policies may result from these developments, such efforts could make

it more difficult to secure funding for exploration and production business activities on favorable terms, or at all.

Although there

has been recent political support to counteract these initiatives, these and other developments in the financial sector could lead to

some lenders restricting access to capital for or divesting from certain industries or companies, including the oil and natural gas sector,

or requiring that borrowers take additional steps to reduce their GHG emissions.

Any material reduction in the capital available to us

or our fossil fuel-related customers could make it more difficult to secure funding for exploration, development, production, transportation,

and processing activities, which could reduce the demand for our products and services.

oil and natural gas exploration, production, and development activities may be subject to physical risks related to potential climate

change impacts.

concentrations of GHGs in the Earth’s atmosphere may produce climate changes that could have significant physical effects, such

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operations will include hydraulic fracturing activities.

Hydraulic fracturing is typically regulated by state oil and gas commissions,

Hydraulic fracturing is typically regulated by state oil and natural gas commissions,

but the practice continues to attract considerable public, scientific and governmental attention in certain parts of the country, resulting

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For example, in December 2023, the EPA issued final rules that update new source performance standard requirements

and that will impose more stringent controls on methane and volatile organic compounds emissions from oil and gas development and production

operations, including hydraulic fracturing and other well completion activity.

Additionally, certain federal and state agencies have

evaluated or are evaluating potential impacts of hydraulic fracturing on drinking water sources or seismic events.

These ongoing studies

could spur initiatives to further regulate hydraulic fracturing or otherwise make it more difficult and costly to perform hydraulic fracturing

Any new or more stringent federal, state, local or other applicable legal requirements such as presidential executive orders

or state or local ballot initiatives relating to hydraulic fracturing that impose restrictions, delays or cancellations in areas where

we plan to operate could cause us to incur potentially significant added costs to comply with such requirements or experience delays,

curtailment, or preclusion from the pursuit of exploration, development or production activities.

and that will impose more stringent controls on methane and volatile organic compounds emissions from oil and natural gas development

and production operations, including hydraulic fracturing and other well completion activity.

Additionally, certain federal and state

agencies have evaluated or are evaluating potential impacts of hydraulic fracturing on drinking water sources or seismic events.

ongoing studies could spur initiatives to further regulate hydraulic fracturing or otherwise make it more difficult and costly to perform

hydraulic fracturing activities.

Any new or more stringent federal, state, local or other applicable legal requirements such as presidential

executive orders or state or local ballot initiatives relating to hydraulic fracturing that impose restrictions, delays or cancellations

in areas where we plan to operate could cause us to incur potentially significant added costs to comply with such requirements or experience

delays, curtailment, or preclusion from the pursuit of exploration, development or production activities.

planned oil, natural gas and NGLs exploration and production activities could be adversely impacted by restrictions on our ability to

obtain water or dispose of produced water.

operations will require water for our planned oil and natural gas exploration during drilling and completion activities.

Our access to

water may be limited due to reasons such as prolonged drought, private third party competition for water in localized areas or our inability

operations require water for our planned oil and natural gas exploration during drilling and completion activities.

Our access to water

may be limited due to reasons such as prolonged drought, private third party competition for water in localized areas or our inability

to acquire or maintain water sourcing permits or other rights as well as governmental regulations or restrictions adopted in the future.

For example, the Governor of Colorado recently signed into law HB 1242 which places restrictions on the use of fresh water for oil and

gas operations and requires oil and gas operators to report their water use.

Any difficulty or restriction on locating or contractually

acquiring sufficient amounts of water in an economical manner could adversely impact our planned operations.

natural gas operations and requires oil and natural gas operators to report their water use.

Any difficulty or restriction on locating

or contractually acquiring sufficient amounts of water in an economical manner could adversely impact our planned operations.

Additionally,

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Such designations could require us to

develop mitigation plans to avoid potential adverse effects to protected species and their habitats, and our oil and gas operations may

be delayed, restricted or prohibited in certain locations or during certain seasons, such as breeding and nesting seasons, when those

develop mitigation plans to avoid potential adverse effects to protected species and their habitats, and our oil and natural gas operations

may be delayed, restricted or prohibited in certain locations or during certain seasons, such as breeding and nesting seasons, when those

operations could have an adverse effect on the species.

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tax laws, including certain

federal income tax provisions currently available to oil and gas companies.

Such legislative changes have included, but have

not been limited to, (i) the repeal of the percentage depletion allowance for natural gas and oil properties, (ii) the elimination of

current deductions for intangible drilling and development costs and (iii) an extension of the amortization period for certain geological

federal income tax provisions currently available to oil and natural gas companies.

Such legislative changes have included,

but have not been limited to, (i) the repeal of the percentage depletion allowance for natural gas and oil properties, (ii) the elimination

of current deductions for intangible drilling and development costs and (iii) an extension of the amortization period for certain geological

and geophysical expenditures.

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any additional tax reform legislation, including changes to cost recovery rules, may be developed that also would change the taxation

of oil and gas companies.

It is unclear whether these or similar changes will be enacted in future legislation and, if enacted, how soon

any such changes could take effect.

The passage of any legislation as a result of these proposals or any similar changes in U.S.

income tax laws could eliminate or postpone certain tax deductions that currently are available with respect to oil and gas development

or increase costs, and any such changes could have an adverse effect on our financial position, results of operations and cash flows.

Related to the NRO Acquisition

may not consummate the NRO Acquisition on the terms currently contemplated, or at all.

expect the NRO Acquisition to close in the first half of 2024, but such acquisition is subject to a number of closing conditions.

of some of these conditions is beyond our control.

If these conditions are not satisfied or waived, the NRO Acquisition will not be completed.

Certain of the conditions that remain to be satisfied include, but are not limited to:

accuracy of the representations and warranties of each party (subject to specified materiality standards);

compliance by each party in all material respects with their respective covenants;

no event of Force Majeure or Material Adverse Effect (in each case as defined in the NRO Agreement) shall have occurred, in each

case the result of which is that we are unable to secure satisfactory financing with respect to the NRO Acquisition.

a result, the NRO Acquisition may not close as scheduled, or at all.

Failure to complete the NRO Acquisition, including as a result of

failure to raise sufficient funds, or any delays in completing the NRO Acquisition could have significant adverse impacts on our business,

including the following:

may experience negative reactions from the financial markets, including a negative impact on our stock price;

may experience negative reactions from our current or future customers, distributors, suppliers, vendors, landlords, employees, joint

venture partners and other business partners;

will still be required to pay certain significant costs relating to the NRO Acquisition, such as legal, accounting, advisor and printing

may be unable to recover the Deposit (as defined below) depending on the circumstances of the failure to complete the NRO Acquisition;

may have foregone certain business opportunities, including other acquisitions and other aspects of our development plan, that, absent

the NRO Agreement, may have been pursued;

relating to the NRO Acquisition required and continue to require substantial commitments of time and resources by the Company’s

management, which may have resulted in the distraction of the Company’s management from other aspects of our development plan,

the beginning of the Company’s operations and the pursuit of other business opportunities that could have been beneficial to

that may arise as a result of any termination or delay in completion of the NRO Acquisition for failure to perform the Company’s

obligations under the NRO Agreement.

the NRO Acquisition is not completed, the risks described above may materialize and they may have a material adverse effect on our results

of operations, cash flows, financial position and stock price.

do not currently have sufficient funds or committed financing necessary to consummate the NRO Acquisition and the NRO Agreement does

not include a financing condition.

to the NRO Agreement, we deposited $9.0 million of the Purchase Price (the “Deposit”) into an escrow account on January 11,

Upon closing of the NRO Acquisition, the Deposit will be released to NRO with a corresponding credit to the Purchase Price.

the event the closing has not occurred in accordance with the terms of the NRO Agreement prior to June 17, 2024, and (i) such delay has

not occurred as a result of the failure of NRO to materially perform, when required, any of NRO’s covenants or obligations pursuant

to the NRO Agreement, (ii) all conditions precedent to the obligations of NRO, as set forth in the NRO Agreement, have been satisfied

or have been waived by NRO, and (iii) in our reasonable discretion, there has been no event of Force Majeure or Material Adverse Effect

(each as defined below), such that we are, or will be, unable to secure satisfactory financing with respect to the NRO Acquisition, then

the Deposit is subject to release to NRO, for so long as such foregoing conditions continue on such dates, in $3,000,000 installments

on each of June 17, 2024, July 15, 2024 and August 12, 2024.

In the event closing has not occurred prior to August 15, 2024 as a result

of the failure by us to materially perform any of our covenants or obligations under the NRO Agreement, NRO shall receive the entirety

of the Deposit, which shall be the sole and exclusive remedy available to NRO for any such failure to consummate the closing.

NRO Agreement contains customary representations, warranties, covenants and agreements.

As a condition to closing, we represented that

we will have, by the date of the closing, sufficient cash in immediately available funds with which to pay the cash component of the

Purchase Price and otherwise will be able to consummate the NRO Acquisition and perform our obligations under the NRO Agreement.

terminate the NRO Agreement at any time prior to the closing upon the occurrence of an event of Force Majeure or Material Adverse Effect,

in each case the result of which that we determine, in our reasonable discretion, that we are, or will be, unable to secure satisfactory

financing with respect to the NRO Acquisition.

an impediment to our ability to secure satisfactory financing with respect to the NRO Acquisition to constitute an event of “Force

Majeure,” the impediment must be an unforeseeable circumstance which is beyond the control of us or NRO, or any unavoidable event,

even if foreseeable, as a result of which we or NRO are unable to perform our obligations, in whole or in part, under the NRO Agreement.

Such circumstances include, but are not limited to:

(i) acts of God;

(ii) flood, fire, earthquake or explosion;

(iii) current or future

war, invasion, hostilities (whether war is declared or not), terrorist threats or acts, riots, or other civil unrest;

(iv) actions, embargoes,

or blockades in effect on or after the date of the NRO Agreement;

(v) declared national or regional emergency;

or (vi) epidemic, pandemic

or other similar outbreak or infection.

For such an impediment to constitute a “Material Adverse Effect,” such impediment

must be a change, development, or effect (individually or in the aggregate), whether foreseeable or unforeseeable, which, when taken

as a whole is, or is reasonably likely to be, materially adverse (a) to the business, assets, value, results of operations or conditions

(financial or otherwise) of us or NRO, the Central Weld Assets, or the assets or properties of us or NRO, or (b) to the ability of us

or NRO to perform on a timely basis any material obligation under the NRO Agreement or any agreement, instrument or document entered

into or delivered in connection therewith.

Changes, developments or effects relating to:

(x) the economy in general (including any effects

on the economy arising as a result of acts of terrorism), (y) changes in commodity prices for hydrocarbons or other changes affecting

oil and gas industry generally, or (z) the announcement of the NRO Acquisition, shall not be deemed to constitute a Material

Adverse Effect and shall not be considered in determining whether a Material Adverse Effect has occurred.

Neither any delay in completing

the proposed offering of our common stock, nor our inability, in and of itself, to satisfy our obligations to secure financing for the

NRO Acquisition, will constitute an event constituting a Material Adverse Effect.

expect to fund the transaction through a combination of public and/or private issuances of common stock, cash on hand, and proceeds

from exercises of currently outstanding warrants.

To the extent we are not able to fund the NRO Acquisition on a timely basis, whether due to a failure

to successfully complete a public or private equity offering or otherwise, we may be required to seek alternative financing arrangements,

and such financing may not be available on favorable terms, or at all, and the NRO Acquisition may be delayed or may not occur.

are unable to secure financing and an event of Force Majeure or Material Adverse Effect has not occurred, we will be in breach of the

NRO Agreement, will not receive the benefits of the Central Weld Assets and the Deposit will be released to NRO.

may be unsuccessful in integrating the Central Weld Assets or in realizing all or any part of the anticipated benefits of the NRO Acquisition.

believe that the NRO Acquisition will complement our growth strategy by providing operational and financial scale and increasing free

However, achieving these goals requires, among other things, realization of the targeted synergies expected from the acquisition,

and there can be no assurance that we will be able to successfully integrate the Central Weld Assets or otherwise realize the expected

benefits of the NRO Acquisition.

This growth and the anticipated benefits of the NRO Acquisition may not be realized fully or at all,

or may take longer to realize than expected.

Difficulties in integrating the Central Weld Assets may result in the Company performing

differently than expected, or in operational challenges or failures to realize anticipated efficiencies.

Potential difficulties in realizing

the anticipated benefits of the NRO Acquisition includes, but is not limited to, the following:

of relationships with customers, distributors, suppliers, vendors, landlords, joint venture partners and other business partners

as a result of uncertainty associated with the NRO Acquisition;

integrating our existing business with the Central Weld Assets in a manner that permits us to achieve the full revenue and cost savings

anticipated from the NRO Acquisition;

potential for unexpected costs, delays or challenges that may arise in integrating the Central Weld Assets into our existing business;

on our ability to realize any expected cost savings and operating synergies from the NRO Acquisition;

of oil and natural gas companies.

It is unclear whether these or similar changes will be enacted in future legislation and, if enacted,

how soon any such changes could take effect.

The passage of any legislation as a result of these proposals or any similar changes in

federal income tax laws could eliminate or postpone certain tax deductions that currently are available with respect to oil and

natural gas development or increase costs, and any such changes could have an adverse effect on our financial position, results of operations

and cash flows.

Related to the Bayswater Acquisition

may not consummate the Bayswater Acquisition on the terms currently contemplated, or at all.

may not consummate the Bayswater Acquisition, which is subject to a number of closing conditions.

Satisfaction of some of these conditions

is beyond our control.

If these conditions are not satisfied or waived, the Bayswater Acquisition will not be completed.

Certain of the

conditions that remain to be satisfied include, but are not limited to:

accuracy of the representations and warranties of each party (subject to specified materiality

by each party in all material respects with their respective covenants;

absence of any government order that restrains or prohibits the Bayswater Acquisition;

ability to complete the New Credit Agreement.

a result, the Bayswater Acquisition may not close as scheduled, or at all.

Failure to complete the Bayswater Acquisition or any delays

in completing the Bayswater Acquisition could have significant adverse impacts on our future business, including the following:

will be unable to achieve the expected cash flow, production levels, drilling, operational

efficiencies and other anticipated benefits from the Bayswater Acquisition, which could hinder

our ability to fund our development and drilling plan;

may experience negative reactions from the financial markets, including a negative impact

on our stock price;

may experience negative reactions from our current or future customers, distributors, suppliers,

vendors, landlords, employees, joint venture partners and other business partners;

will still be required to pay certain significant costs relating to the Bayswater Acquisition,

such as legal, accounting, advisor and printing fees;

may have foregone certain business opportunities, including other acquisitions and other

aspects of our development plan, that, absent the Bayswater PSA, may have been pursued;

relating to the Bayswater Acquisition have required and continue to require substantial commitments

of time and resources by our management, which may have resulted in the distraction of our

management from other aspects of our development plan, our operations and the pursuit of

other business opportunities that could have been beneficial to us;

that may arise as a result of any termination or delay in completion of the Bayswater Acquisition

for failure to perform our obligations under the Bayswater PSA.

the Bayswater Acquisition is not completed, the risks described above may materialize and they may have a material adverse effect on

our results of operations, cash flows, financial position and stock price.

do not currently have sufficient funds or committed financing necessary to consummate the Bayswater Acquisition.

intend to fund the Bayswater Acquisition with a combination of cash on hand, borrowings under our New Credit Agreement, and proceeds

from one or more capital markets transactions, subject to market conditions and other factors.

Accordingly, if these financing transactions

are not completed, the consummation of the Bayswater Acquisition may be delayed or may not occur at all.

If these financing transactions

are not completed, we may be required to seek alternative financing arrangements to fund the Bayswater Acquisition, and such financing

may not be available on favorable terms, or at all.

If we are unable to secure the necessary financing to consummate the Bayswater Acquisition,

we will unable to complete the Bayswater Acquisition, and thus, will not receive the anticipated benefits of the Bayswater Assets.

may be unsuccessful in integrating the Bayswater Assets or in realizing all or any part of the anticipated benefits of the Bayswater

believe that the Bayswater Acquisition will complement our growth strategy by providing operational and financial scale and increasing

free cash flow.

However, achieving these goals requires, among other things, realization of the targeted synergies expected from the

Bayswater Acquisition and other recent acquisitions, and there can be no assurance that we will be able to successfully integrate the

Bayswater Assets or other recently acquired assets or otherwise realize the expected benefits of the Bayswater Acquisition or such acquisitions.

This growth and the anticipated benefits of the Bayswater Acquisition may not be realized fully, or at all, or may take longer to realize

than expected.

Difficulties in integrating the Bayswater Assets or other assets may result in the Company performing differently than

expected, or in operational challenges or failures to realize anticipated efficiencies.

Potential difficulties in realizing the anticipated

benefits of the Bayswater Acquisition and other acquisitions include, but are not limited to, the following:

● disruptions

of relationships with customers, distributors, suppliers, vendors, landlords, joint venture

partners and other business partners as a result of uncertainty associated with the Bayswater

● difficulties

integrating our existing assets and business with the Bayswater Assets in a manner that permits

us to achieve the full revenue and cost savings anticipated from the Bayswater Acquisition;

potential for unexpected costs, delays or challenges that may arise in integrating the Bayswater

Assets into our existing assets and business;

● limitations

on our ability to realize any expected cost savings and operating synergies from the Bayswater

● difficulties

integrating vendors and business partners;

of previously unknown liabilities following the NRO Acquisition for which we cannot receive reimbursement under any applicable indemnification

shortfalls at the Company as a result of the diversion of management’s attention to integration efforts;

of previously unknown liabilities following the Bayswater Acquisition for which we cannot

receive reimbursement under any applicable indemnification provisions;

● environmental,

regulatory, permitting and similar matters;

● performance

shortfalls at the Company as a result of the diversion of management’s attention to

integration efforts;

of, or the loss of momentum in, the Company’s ongoing business.

have incurred, and expect to continue to incur, a number of costs associated with completing the NRO Acquisition.

The elimination of

duplicative costs, as well as the realization of other efficiencies related to the integration of the Central Weld Assets, may not initially

offset integration-related costs or achieve a net benefit in the near term, or at all.

cannot assure you that our diligence review of the NRO Acquisition has identified all material risks associated with the transaction.

Additionally, following the consummation of the NRO Acquisition, if certain risks arise, the Company may be required to take write-downs

or write-offs, restructuring and impairment or other charges that could have a significant negative effect on its financial condition,

results of operations and stock price, which could cause you to lose some or all of your investment.

entering into the NRO Agreement, we performed a due diligence review of NRO and its business and operations, including an inspection

of the Central Weld Assets, which we believe to be generally consistent with industry practices;

however, we cannot assure you that our

due diligence review identified all material issues and our assessments of the Central Weld Assets and our estimates are inherently uncertain.

As a result, we may be forced to later write-down or write-off assets, restructure our operations or incur impairment or other charges

that could result in losses.

Even if our due diligence successfully identified certain risks, unexpected risks may arise and previously

known risks may materialize in a manner not consistent with our preliminary risk analysis.

These risks that may not have arisen in the

scope of our due diligence review of NRO, include, but are not limited to, title, production, environmental or other problems.

these charges may be non-cash items and may not have an immediate impact on our liquidity, the fact that we report charges of this nature

could contribute to negative market perceptions about the Company following the completion of the NRO Acquisition or its securities.

In addition, charges of this nature may impair our ability to obtain future financing on favorable terms or at all.

Moreover, the Company

may have limited recourse against NRO for certain risks or liabilities incurred after the consummation of the NRO Acquisition.

any of our stockholders who choose to remain stockholders of the Company following the NRO Acquisition could suffer a reduction in the

value of their shares.

Such stockholders are unlikely to have a remedy for such reduction in value.

may not achieve the perceived benefits of the Crypto Sale and the NRO Acquisition and the market price of our common stock following

these transactions may decline.

market price of our common stock may decline as a result of the Crypto Sale or the NRO Acquisition for a number of reasons, including

if investors react negatively to the prospects of the Company’s business;

the effect of the Crypto Sale or the NRO Acquisition

on the Company’s business and prospects is not consistent with the expectations of our management or of financial or industry analysts;

or the Company does not achieve the perceived benefits of the Crypto Sale or the NRO Acquisition as rapidly or to the extent anticipated

by our management or financial or industry analysts.

expect to incur significant transaction costs in connection with the NRO Acquisition, which may be in excess of those currently anticipated.

have incurred and are expecting to continue to incur a number of non-recurring costs associated with negotiating and completing

the NRO Acquisition, integrating the Central Weld Assets and achieving desired synergies.

These costs have been, and will continue to

be, substantial and, in many cases, will be borne by us whether or not the NRO Acquisition is consummated.

A substantial majority of non-recurring expenses

will consist of transaction costs and include, among others, fees paid to financial, legal, accounting and other advisors.

incur costs related to formulating and implementing integration plans, including facilities and systems consolidation costs.

continue to assess the magnitude of these costs, and additional unanticipated costs may be incurred in connection with the NRO Acquisition

and the integration of the Central Weld Assets.

While we have assumed that a certain level of expenses would be incurred, there are many

factors beyond our control that could affect the total amount or the timing of the expenses.

The elimination of duplicative costs, as

well as the realization of other efficiencies related to the integration of the Central Weld Assets, may not offset integration-related

costs and achieve a net benefit in the near term, or at all.

The costs described above and any unanticipated costs and expenses, many

of which will be borne by us even if the NRO Acquisition is not consummated, could have an adverse effect on our financial condition

and operating results.

NRO Acquisition may be completed on different terms from those contained in the NRO Agreement.

to the completion of the NRO Acquisition, we and NRO may, by mutual agreement, amend or alter the terms of the NRO Agreement, including

with respect to, among other things, the consideration payable by us to NRO or any covenants and agreements with respect to NRO’s

operations during the pendency thereof.

Any such amendments or alterations may have negative consequences to us.

market price for our common stock following the NRO Acquisition, if consummated, may be affected by factors different from those that

historically have affected or currently affect our common stock.

the NRO Acquisition is consummated, our financial position may differ from our financial position before the completion of the NRO Acquisition,

and our results of operations may be affected by some factors that are different from those currently affecting our results of operations

or those currently affecting the results of operations of NRO.

Accordingly, the market price and performance our common stock is likely

to be different from the performance of our common stock in the absence of the NRO Acquisition.

For a discussion of the business of NRO

and important factors to consider in connection with the business, see “ Business—NRO Acquisition .”

class action and derivative lawsuits may be brought against us in connection with the NRO Acquisition, which could result in substantial

have incurred, and expect to continue to incur, a number of costs associated with completing the Bayswater Acquisition and the related

financing transactions.

The elimination of duplicative costs, as well as the realization of other efficiencies related to the integration

of the Bayswater Assets, may not initially offset integration-related costs or achieve a net benefit in the near term, or at all.

acquisition of a significant portion of Bayswater’s working interests is subject to third-party consent.

If such third party does

not consent or our arrangement with Bayswater with respect to such working interests pursuant to the Bayswater PSA is challenged, we

will be unable to acquire such working interest as part of the Bayswater Acquisition without any adjustment to the purchase price and

we may have limited recourse against Bayswater.

acquisition of a significant portion of Bayswater’s working interests is subject to the consent of a third-party operator.

Bayswater have agreed to use commercially reasonable efforts to obtain all required consents with respect to our acquisition of the Bayswater

However, we cannot assure you that we will be able to timely obtain such consent, if at all.

If such third-party operator does

not grant the necessary consent, the Bayswater PSA provides for a contractual arrangement pursuant to which we would be entitled to receive

the economic benefits of such working interests.

However, there can be no assurance that any such arrangement will not be challenged

legally or by a third-party and, thus, that we will actually receive such economic benefits under these circumstances.

The receipt of

this third-party consent is not a closing condition to the Bayswater PSA and, in the event that such consent is not obtained or is challenged,

the Bayswater PSA does not provide that the purchase price will be negatively adjusted.

Moreover, our recourse against Bayswater may

be limited under these circumstances.

Consequently, we may not realize certain of the benefits of such working interests that are intended

to be transferred to us as part of the Bayswater Acquisition and those benefits would be significant.

The inability to transfer these

working interests to us or failure to receive the economic benefits of such working interests, would have a significant adverse effect

on our business, financial condition, results of operations and stock price.

we are successful in completing the Bayswater Acquisition, our level of indebtedness could adversely affect our business and financial

condition and prevent us from fulfilling our debt obligations.

connection with the Bayswater Acquisition, on February 6, 2025, we entered into a commitment letter with Citi, as left lead arranger

and the other joint lead arrangers party thereto, pursuant to which we received commitments, subject to certain conditions, to amend

and restate the Credit Facility Agreement (as amended and restated, the “New Credit Agreement”), to, among other things,

increase the borrowing base to up to $475.0 million as of the closing of the Bayswater Acquisition and extend the maturity date to a

date up to four years after the closing date of the Bayswater Acquisition.

Our Credit Facility Agreement contains, and we expect our

New Credit Agreement will contain, certain covenants limiting our ability to pay dividends, incur indebtedness, grant liens, make

acquisitions, make investments or dispositions, engage in transactions with affiliates and enter into hedging and derivative

arrangements, as well as covenants requiring us to maintain certain financial ratios and tests.

In addition, the borrowing base

under these agreements is, and we expect will continue to be, subject to periodic review by our lenders.

Difficulties in the credit

markets may cause the banks to be more restrictive when redetermining the borrowing base.

indebtedness could adversely affect our business, financial condition, results of operations and cash flows, including, without limitation,

impairing our ability to obtain additional financing for our drilling and development program, potential acquisitions, working capital,

capital expenditures, debt service requirements or other general corporate purposes.

In addition, we will have to use a substantial portion

of our cash flow to pay principal, premium (if any) and interest on our indebtedness when due which will reduce the funds available to

us for other purposes.

Our level of indebtedness will also make us more vulnerable to economic downturns and adverse industry conditions,

and may compromise our ability to capitalize on business opportunities and to react to competitive pressures as compared to our competitors.

cannot assure you that our diligence review of the Bayswater Acquisition has identified all material risks associated with the transaction.

Additionally, following the consummation of the Bayswater Acquisition, if certain risks arise, we may be required to take write-downs

or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition

and results of operations and stock price.

entering into the Bayswater PSA, we performed a due diligence review of Bayswater and the Bayswater Assets, which we believe to be generally

consistent with industry practices.

However, we cannot assure you that our due diligence review identified all material issues and our

assessments of the Bayswater Assets and our estimates are inherently uncertain.

As a result, we may be forced to later write-down or

write-off assets, restructure our operations or incur impairment or other charges that could result in losses.

Even if our due diligence

successfully identified certain risks, unexpected risks may arise and previously known risks may materialize in a manner that is inconsistent

with our preliminary risk analysis.

These risks that may not have arisen in the scope of our due diligence review of the Bayswater Assets,

include, but are not limited to, title, production, environmental or other problems.

Even though these charges may be non-cash items

and may not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market

perceptions about us following the completion of the Bayswater Acquisition or our Common Stock.

In addition, charges of this nature may

impair our ability to obtain future financing on favorable terms or at all.

Moreover, we may have limited recourse against Bayswater

for certain risks or liabilities incurred after the consummation of the Bayswater Acquisition.

Accordingly, our stockholders following

the Bayswater Acquisition could suffer a reduction in the value of their shares of Common Stock, and such stockholders are unlikely to

have a remedy for such reduction in value.

Misrepresentations

made to us by Bayswater in the Bayswater PSA could cause us to incur substantial financial obligations and harm our business.

we were to discover that there were misrepresentations made to us by Bayswater in the Bayswater PSA regarding the Bayswater Assets, we

would explore all possible legal remedies to compensate us for any loss, including our rights to indemnification under the Bayswater

However, there is no assurance that legal remedies would be available or collectible.

If such unknown liabilities exist and we are

not fully indemnified for any loss that we incur as a result thereof, we could incur substantial financial obligations, which could materially

adversely affect our financial condition and harm our business.

a result of the Bayswater Acquisition and the NRO Acquisition, we anticipate that the scope and size of our assets, operations and business

will substantially change.

We cannot provide assurance that our expansion in size and integration and operation of the Bayswater Assets

and Central Weld Assets will be successful.

anticipate that the Bayswater Acquisition and the NRO Acquisition will substantially expand the scope and size of our business by

adding substantial upstream oil, natural gas and NGLs assets and operations to our existing assets and operations.

Bayswater Acquisition and NRO Acquisition, our assets and operations primarily consisted of the Genesis Assets, which as of December

31, 2024, includes approximately 18,100 net leasehold acres in, on and under approximately 31,000 gross undeveloped acres, with 72

fully permitted undeveloped drilling locations and situated in a rural area of northern Weld County, Colorado.

Our recently acquired

Central Weld Assets include approximately 5,640 net leasehold acres in, on and under approximately 6,000 gross acres, 63 approved well

permits and 26 operated horizontal wells as of December 31, 2024.

The Bayswater Assets we expect to acquire in the Bayswater

Acquisition include approximately 24,000 net leasehold acres in, on and under, approximately 27,800 gross acres and 22 fully permitted

proven undeveloped drilling locations.

Although we, Bayswater and NRO operate in many of the same regions of the DJ Basin, Bayswater

and NRO’s operations focus more heavily on drilling and production of oil, natural gas and NGLs which require different

operating strategies and managerial expertise than our current operations and are subject to additional or different regulatory

requirements.

Consequently, we may not be able to successfully integrate the Bayswater Assets and Central Weld Assets into our

existing operations, successfully manage these assets or to realize the expected economic benefits of the Bayswater Acquisition and

NRO Acquisition, which may have a material adverse effect on our business, financial condition and results of operations.

may not achieve the perceived benefits of the Bayswater Acquisition and the market price of our Common Stock following such transaction

market price of our Common Stock may decline as a result of the Bayswater Acquisition for a number of reasons, including if investors

react negatively to the prospects of the Company’s business;

the effect of the Bayswater Acquisition on our business and prospects

is inconsistent with the expectations of our management or of financial or industry analysts;

or we do not achieve the perceived benefits

of the Bayswater Acquisition as rapidly or to the extent anticipated by our management or financial or industry analysts.

reserve, production and other data and estimates with respect to the Bayswater Assets are based primarily on information provided by

We have not yet verified these data and estimates and cannot assure you that actual results will not differ materially.

has represented that the Bayswater Assets contain a specified number of net mineral and gross acres, gross and net wells as well as net

horizontal well locations.

Pro forma production is approximately 27,500 Boe/d and we expect production to increase to approximately 29,000

- 31,000 Boe/d for full year 2025 based on only current proved developed reserves, drilled uncompleted wells, permits, and our expected

development plan, which assumes the completion of the Bayswater Acquisition.

none of the above information about Bayswater has been verified by us or our independent reserve engineers and could prove to be inaccurate,

and in some instances materially so.

We have limited recourse against Bayswater should any of these estimates or other data prove to

be inaccurate.

Likewise, we may not be able to achieve our 2025 production estimates.

We cannot assure you that we will achieve the results

estimated by us with respect to the Bayswater Assets.

expect to incur significant transaction costs in connection with the Bayswater Acquisition, which may be in excess of those currently

have incurred and are expecting to continue to incur a number of non-recurring costs associated with negotiating and completing the Bayswater

Acquisition, integrating the Bayswater Assets and achieving desired synergies.

These costs have been, and will continue to be, substantial

and, in many cases, will be borne by us whether or not the Bayswater Acquisition is consummated.

A substantial majority of non-recurring

expenses will consist of transaction costs and include, among others, fees paid to financial, legal, accounting and other advisors.

will also incur costs related to formulating and implementing integration plans.

We will continue to assess the magnitude of these costs,

and additional unanticipated costs may be incurred in connection with the Bayswater Acquisition and the integration of the Bayswater

While we have assumed that a certain level of expenses would be incurred, there are many factors beyond our control that could

affect the total amount or the timing of such expenses.

The elimination of duplicative costs, as well as the realization of other efficiencies

related to the integration of the Bayswater Assets, may not offset integration-related costs and achieve a net benefit in the near term,

The costs described above and any unanticipated costs and expenses, many of which will be borne by us even if the Bayswater

Acquisition is not consummated, could have an adverse effect on our financial condition and operating results.

Bayswater Acquisition may be completed on different terms from those contained in the Bayswater PSA.

to the completion of the Bayswater Acquisition, we and Bayswater may, by mutual agreement, amend or alter the terms of the Bayswater

PSA, including with respect to, among other things, the consideration payable by us to Bayswater or any covenants or agreements with

respect to the operations of the Bayswater Assets during the pendency thereof.

Any such amendments or alterations may have negative consequences

market price for our Common Stock following the Bayswater Acquisition, if consummated, may be affected by factors different from those

that historically have affected or currently affect our Common Stock.

the Bayswater Acquisition is consummated, our financial position may differ from our financial position before the completion of the

Bayswater Acquisition, and our results of operations may be affected by some factors that are different from those currently affecting

our results of operations or those currently affecting the results of operations of Bayswater, including prices of oil, natural gas and

NGLs, which can be volatile.

Accordingly, the market price and performance our Common Stock is likely to be different from the performance

of our Common Stock in the absence of the Bayswater Acquisition.

class action and derivative lawsuits may be brought against us in connection with the Bayswater Acquisition, which could result in substantial

class action lawsuits and derivative lawsuits are often brought against public companies that have entered into acquisition, merger or

7 unchanged sentences

Our ability to successfully operate and expand

our business is dependent on the consummation of the NRO Acquisition or our ability to raise additional capital to support our drilling

program on our existing assets.

our business is dependent our ability to raise additional capital to support our drilling program on our existing assets.

Historically,

we have relied upon cash from financing activities to fund substantially all of the cash requirements of our activities and have incurred

significant losses and experienced negative cash flow.

For the year ended December 31, 2023, we incurred a net loss of $79.1 million,

and for the year ended December 31, 2022, we incurred a net loss of $0.5 million.

We had stockholders’ equity of $40.2 million

and members’ deficit of $0.4 million as of December 31, 2023 and December 31, 2022, respectively.

Furthermore, we sold all of our

revenue-generating assets in the Crypto Sale.

We do not currently have sufficient capital to consummate the NRO Acquisition or to begin

development activities on any of our existing assets.

As a result, until we are able to raise additional capital to consummate the NRO

Acquisition or enable us to drill wells on our existing properties, we will be unable to generate any revenue.

We cannot predict if we

will be able to raise the necessary capital and, even if we are able to raise sufficient funds to complete the NRO Acquisition or commence

drilling operations and production on our assets, whether such production will be profitable.

We may continue to incur losses for an

indeterminate period of time and may be unable to sustain profitability.

An extended period of losses and negative cash flow may prevent

us from successfully operating and expanding our business.

We may be unable to sustain or increase our profitability on a quarterly or

annual basis.

See “ Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity

we have relied upon cash from financing activities to fund substantially all of the cash requirements of our activities and have

incurred significant losses and experienced negative cash flow.

For the years ended December 31, 2024 and 2023, we incurred a net

loss of $40.9 million and $79.1 million, respectively, and had an accumulated deficit of $119.8 million and $78.9 million as of

December 31, 2024 and 2023, respectively.

We may continue to incur losses for an indeterminate period of time and may be unable to

sustain profitability.

An extended period of losses and negative cash flow may prevent us from successfully operating and expanding

our business.

We may be unable to sustain or increase our profitability on a quarterly or annual basis.

Refer to Part II.

Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity

and Capital Resources .

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may not have sufficient capital to fund our future operations without significant additional capital investments, including the planned

drilling of oil and gas wells.

If adequate additional financing is not available on reasonable terms or at all, we may not be able to

carry out our corporate strategy and we would be forced to modify our business plans (e.g., limit our growth, and/or decrease or eliminate

capital expenditures), any of which may adversely affect our financial condition, results of operations and cash flow.

Such reduction

could materially adversely affect our business and our ability to compete.

There can be no assurance that financing will be available

in a timely manner or in amounts or on terms acceptable to the Company, or at all.

Company’s ability to obtain external financing in the future may be subject to a variety of uncertainties, including its future

financial condition, results of operations, cash flows and the liquidity of international capital and lending markets.

drilling of oil and natural gas wells.

If adequate additional financing is not available on reasonable terms or at all, we may not be

able to carry out our corporate strategy and we would be forced to modify our business plans (e.g., limit our growth, and/or decrease

or eliminate capital expenditures), any of which may adversely affect our financial condition, results of operations and cash flow.

reduction could materially adversely affect our business and our ability to compete.

There can be no assurance that financing will be

available in a timely manner or in amounts or on terms acceptable to us, or at all.

ability to obtain external financing in the future may be subject to a variety of uncertainties, including our future financial

condition, results of operations, cash flows and the liquidity of international capital and lending markets.

We may need to

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we issue could have rights, preferences and privileges superior to those of holders of our common stock.

Any debt financing that we secure

in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters,

including the ability to pay dividends.

This may make it more difficult for us to obtain additional capital and to pursue business opportunities.

A large amount of bank borrowings and other debt may result in a significant increase in interest expense while at the same time exposing

the Company to increased interest rate risks.

See “ Management’s Discussion and Analysis of Financial Condition and Results

of Operations — Liquidity and Capital Resources .”

Any debt financing that we

secure in the future could involve restrictive covenants relating to our capital raising activities and other financial and

operational matters, including the ability to pay dividends.

This may make it more difficult for us to obtain additional capital and

to pursue business opportunities.

A large amount of bank borrowings and other debt may result in a significant increase in interest

expense while at the same time exposing the Company to increased interest rate risks.

Refer to Part II.

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity

and Capital Resources .

may not be able to obtain additional financing on terms favorable to us, if at all.

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basis could adversely affect our ability to operate and grow our business.

performance by members of the Company’s management team may not be indicative of an ability to complete the NRO Acquisition or

of future performance of the Company.

performance and operational experience of our management team and their affiliates is not a guarantee of the Company’s ability

to complete the NRO Acquisition nor, if consummated, a guarantee that the intended benefits of the NRO Acquisition will be achieved or

that we will be able to successfully develop and operate the Genesis Assets.

You should not rely on the historical record of our management

team or their affiliates’ performance as indicative of the future performance of the Company or of an investment in our common

performance by members of the Company’s management team may not be indicative of the future performance of the Company.

performance and operational experience of our management team and their affiliates is not a guarantee that the intended benefits of the NRO Acquisition will be achieved or that we will be able to successfully develop and operate

the Genesis Assets.

You should not rely on the historical record of our management team or their affiliates’ performance as indicative

of the future performance of the Company or of an investment in our common stock.

will rely on key contracts and business relationships, and if our current or future business partners or contracting counterparties fail

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Strategic targets, such as energy related assets, may be at greater risk of future attacks

than other targets in the United States.

than other targets in the U.S..

We depend on digital technology in many areas of our business and operations, including recording

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adverse effect on our business, financial condition and results of operations.

terms of indebtedness we may incur in the future, including our anticipated revolving credit facility, may restrict our future business

and operations.

we currently do not have any long-term debt obligations and our goal is to operate with limited leverage, we intend to enter into a

revolving credit facility primarily to support our hedging activities in connection with the consummation of the NRO Acquisition,

and may incur other indebtedness in the future.

The revolving credit facility may contain covenants limiting our ability to pay

dividends, incur indebtedness, grant liens, make acquisitions, make investments or dispositions, engage in transactions with

affiliates and enter into hedging and derivative arrangements, as well as covenants requiring us to maintain certain financial

ratios and tests.

In addition, the borrowing base under a credit facility may be subject to periodic review by our lenders.

Difficulties in the credit markets may cause the banks to be more restrictive when redetermining the borrowing base.

We can make no

assurances that we will be able to enter into a credit facility.

ability to pay interest and principal on our indebtedness and to satisfy our other obligations will depend on our future operating performance,

our financial condition and the availability of refinancing indebtedness, which will be affected by prevailing economic conditions and

financial, business and other factors, many of which are beyond our control.

We may not be able to generate sufficient cash flows to

pay the interest on our debt and future working capital, and borrowings or equity financing may not be available to pay or refinance

If we are unable to generate sufficient cash flows to satisfy our debt obligations or contractual commitments, or to refinance

our debt on commercially reasonable terms, our business and financial condition could materially and adversely be affected.

The terms of our indebtedness may restrict our future business and operations.

Our Credit Facility contains covenants limiting our ability to pay dividends,

incur indebtedness, grant liens, make acquisitions, make investments or dispositions, engage in transactions with affiliates and enter

into hedging and derivative arrangements, as well as covenants requiring us to maintain certain financial ratios and tests.

the borrowing base under the Credit Facility is subject to periodic review by the lenders.

Difficulties in the credit markets may cause

the banks to be more restrictive when redetermining the borrowing base.

Our ability to pay interest and principal on our indebtedness and to satisfy

our other obligations will depend on our future operating performance, our financial condition and the availability of refinancing indebtedness,

which will be affected by prevailing economic conditions and financial, business and other factors, many of which are beyond our control.

We may not be able to generate sufficient cash flows to pay the interest on our debt and future working capital, and borrowings or equity

financing may not be available to pay or refinance such debt.

If we are unable to generate sufficient cash flows to satisfy our debt obligations

or contractual commitments, or to refinance our debt on commercially reasonable terms, our business and financial condition could materially

and adversely be affected.

Acquisitions,

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or strategic relationships will be accretive to our business overall or will result in profitable operations.

may not realize the full benefit of the Crypto Sale for a variety of reasons, including the inability of the Crypto Purchaser to pay

the Deferred Purchase Price due to a decrease in the price of Bitcoin or the actions of third parties.

January 23, 2024, pursuant to the Crypto Divestiture Agreement, we sold all of our Mining Equipment and related assets for total consideration

of $2 million, including $1 million in cash and $1 million in deferred cash payments, to be paid out of (i) 20% of the net monthly revenues

received by the Crypto Purchaser associated with or otherwise attributable to the Mining Equipment until the aggregate amount of such

payments equals $250,000 and (ii) thereafter, 50% of the net monthly revenues received by the Crypto Purchaser associated with or otherwise

attributable to the Mining Equipment until the aggregate amount of such payments equals $1 million, plus accrued interest.

to the Mining Equipment, we assigned all our rights and obligations under the Atlas MSA to the Crypto Purchaser.

payment of the Deferred Purchase Price is dependent on the revenue generated by the Mining Equipment, we cannot predict the timing of

when we will receive the Deferred Purchase Price, if at all.

Our receipt of the Deferred Purchase Price is subject to numerous risks

outside of our control, including:

market price and liquidity of Bitcoin;

cost of energy;

global Bitcoin network processing hashrate;

and regulations that may adversely affect the use of Bitcoin as a crypto-currency;

actions of third parties, including Atlas.

we no longer have direct exposure to the fluctuation and volatility of Bitcoin prices, we will remain indirectly exposed to such volatility

until the Deferred Purchase Price has been paid in full.

If the market price of Bitcoin decreases to the point where the Crypto Purchaser

does not find it economically feasible to operate the Mining Equipment or if Atlas suspends operations of the Mining Equipment under

the terms of the Atlas MSA, the payment, if any, of the Deferred Purchase Price may be delayed.

Although the Crypto Divestiture Agreement

requires the Crypto Purchaser to operate the Mining Equipment in the ordinary course of business until the Deferred Purchase Price is

paid in full, delays in payment or failure to pay the Deferred Purchase Price due to the economic feasibility of mining Bitcoin or malfeasance

of a third party may result in costly litigation.

In addition, while we have a security interest in the Mining Equipment as collateral

security for the prompt and complete payment and performance in full of the Crypto Purchaser’s obligations under the Crypto Divestiture

Agreement, there can be no assurances that the remedies available to us in respect of such security interest will be sufficient.

risks and uncertainties may have a material adverse effect on our cash flows, business, results of operations and financial condition.

We may not realize the full benefit of the Crypto

Sale for a variety of reasons, including the inability of the Crypto Purchaser to pay the Deferred Purchase Price due to a decrease in

the price of Bitcoin or the actions of third parties.

On January 23, 2024, pursuant to the Crypto Divestiture

Agreement, we sold all of our Mining Equipment and related assets for total consideration of $2.0 million, including $1.0 million in cash

and $1.0 million in deferred cash payments, to be paid out of (i) 20% of the net monthly revenues received by the Crypto Purchaser associated

with or otherwise attributable to the Mining Equipment until the aggregate amount of such payments equals $250,000 and (ii) thereafter,

50% of the net monthly revenues received by the Crypto Purchaser associated with or otherwise attributable to the Mining Equipment until

the aggregate amount of such payments equals $1.0 million, plus accrued interest.

In addition to the Mining Equipment, we assigned all our

rights and obligations under the Atlas MSA to the Crypto Purchaser.

As of December 31, 2024, we have received $0.3 million

of the Deferred Purchase Price.

Since payment of the Deferred Purchase Price is dependent on the revenue generated by the Mining Equipment,

we cannot predict the timing of when we will receive the full Deferred Purchase Price, if at all.

Our receipt of the Deferred Purchase

Price is subject to numerous risks outside of our control, including:

the market price and liquidity

the cost of energy;

the global Bitcoin network

processing hashrate;

laws and regulations that

may adversely affect the use of Bitcoin as a crypto-currency;

the actions of third parties,

including Atlas.

While we no longer have direct exposure to the fluctuation and volatility

of Bitcoin prices, we will remain indirectly exposed to such volatility until the Deferred Purchase Price has been paid in full.

market price of Bitcoin decreases to the point where the Crypto Purchaser does not find it economically feasible to operate the Mining

Equipment or if Atlas suspends operations of the Mining Equipment under the terms of the Atlas MSA, the payment, if any, of the remaining

amount of the Deferred Purchase Price may be delayed.

Although the Crypto Divestiture Agreement requires the Crypto Purchaser to operate

the Mining Equipment in the ordinary course of business until the Deferred Purchase Price is paid in full, delays in payment or failure

to pay the Deferred Purchase Price due to the economic feasibility of mining Bitcoin or malfeasance of a third party may result in costly

In addition, while we have a security interest in the Mining Equipment as collateral security for the prompt and complete

payment and performance in full of the Crypto Purchaser’s obligations under the Crypto Divestiture Agreement, there can be no assurances

that the remedies available to us in respect of such security interest will be sufficient.

These risks and uncertainties may have a material

adverse effect on our cash flows, business, results of operations and financial condition.

Charter provides for indemnification of officers and directors at our expense and limits their liability, which may result in a major

cost to us and harm the interests of our stockholders because corporate resources may be expended for the benefit of officers and/or

Charter and applicable Delaware law provide for the indemnification of our directors and officers against attorney’s fees and other

Second Amended and Restated Certificate of Incorporation (our “Charter”) and applicable Delaware law provide for the indemnification of our directors and officers against attorney’s fees and other

expenses incurred by them in any action to which they become a party arising from their association with or activities on our behalf.

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of interest create the risk that management may have an incentive to act adversely to the interests of other stockholders.

conflict of interest may arise between our officers and directors’ personal pecuniary interests and their fiduciary duty to

our stockholders.

Furthermore, our officers and directors’ own pecuniary interests may not align with their fiduciary duties

to our stockholders.

Edward Kovalik (Chief Executive Officer and Chairman of the Board), Gary C.

Hanna (President and Director) and

Paul Kessler (Director) have certain overriding royalty interests in the Initial Genesis Assets.

To avoid any potential conflict of

interest with certain members of the Board and management owning certain overriding royalty interests under the Initial Genesis

Assets, all of the Company’s drilling programs will be approved by an independent committee of the Board on a quarterly

of interest may arise between our officers and directors’ personal pecuniary interests and their fiduciary duty to our stockholders.

Furthermore, our officers and directors’ own pecuniary interests may not align with their fiduciary duties to our stockholders.

Edward Kovalik (Chief Executive Officer and Chairman of the Board of Directors) and Gary C.

Hanna (President and Director) have certain overriding

royalty interests in the Initial Genesis Assets.

To avoid any potential conflict of interest with certain members of the Board of Directors and management

owning certain overriding royalty interests under the Initial Genesis Assets, all of our drilling programs will be approved by an independent

committee of the Board of Directors on a quarterly basis.

litigation or governmental proceedings could result in material adverse consequences, including judgments or settlements.

time to time, we may be involved in lawsuits, regulatory inquiries, governmental and other legal proceedings, such as title, royalty

or contractual disputes, our oil and gas development activities, environmental liabilities, regulatory compliance matters, personal injury,

property damage and employment litigation, in the ordinary course of our business.

Many of these matters raise difficult and complicated

factual and legal issues and are subject to uncertainties and complexities.

The timing of the final resolutions to these types of matters

is often uncertain.

Additionally, the possible outcomes or resolutions to these matters could include adverse judgments or settlements,

either of which could require substantial payments, adversely affecting our results of operations and liquidity.

Irrespective of the

outcome, legal proceedings or governmental investigations may adversely affect our business due to legal costs, diversion of resources

or contractual disputes, our oil and natural gas development activities, environmental liabilities, regulatory compliance matters, personal

injury, property damage and employment litigation, in the ordinary course of our business.

Many of these matters raise difficult and

complicated factual and legal issues and are subject to uncertainties and complexities.

The timing of the final resolutions to these

types of matters is often uncertain.

Additionally, the possible outcomes or resolutions to these matters could include adverse judgments

or settlements, either of which could require substantial payments, adversely affecting our results of operations and liquidity.

of the outcome, legal proceedings or governmental investigations may adversely affect our business due to legal costs, diversion of resources

and the attention of our management and employees, and other factors.

to the recent listing of our common stock on Nasdaq, we will incur materially increased costs and become subject to additional regulations

and requirements.

to the recent listing of our common stock on Nasdaq, we will incur material legal, accounting and other expenses, including payment of

annual exchange fees, to satisfy the continued listing standards for Nasdaq.

In connection with the listing of our common stock on Nasdaq,

we now must meet certain financial and liquidity criteria to maintain our listing, as well as standards of Board independence, committee

composition and governance and Board diversity, only some of which criteria and standards include time periods to comply after listing.

If we fail to meet any of Nasdaq’s listing standards, our common stock may be delisted.

In addition, our Board may determine that

the cost of maintaining our listing on a national securities exchange outweighs the benefits of such listing.

A delisting of our common

stock from Nasdaq may materially impair our stockholders’ ability to buy and sell our common stock and could have an adverse effect

on the market price of, and the efficiency of the trading market for, our common stock.

The delisting of our common stock could significantly

impair our ability to raise capital and the value of your investment.

to achieve and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 could result in

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we must comply with Section 404 of the Sarbanes Oxley Act of 2002 for our annual reports on Form 10-K, including the requirement to have

our independent registered public accounting firm attest to the effectiveness of our internal controls, unless we continue to be exempt from such

Our independent registered public accounting firm may

issue a report that is adverse in the event it is not satisfied with the level at which our controls are documented, designed, operated

Compliance with these requirements may strain our resources, increase our costs and distract management;

and we may be unable

to comply with these requirements in a timely or cost-effective manner.

our independent registered public accounting firm attest to the effectiveness of our internal controls, unless we continue to be exempt

from such requirement.

Our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied

with the level at which our controls are documented, designed, operated or reviewed.

Compliance with these requirements may strain our

resources, increase our costs and distract management;

and we may be unable to comply with these requirements in a timely or cost-effective

are a “smaller reporting company” and the reduced disclosure requirements applicable to smaller reporting companies may make

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our common stock prices may be more volatile.

Our Charter and Bylaws

designate the state and federal courts located within the State of Delaware as the sole and exclusive forum for certain types of actions

and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial

forum for disputes with us or our directors, officers, employees or agents.

Our Charter and Bylaws provide that, unless we consent in writing to the selection of an alternative forum, the

Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware does not have jurisdiction, the Superior

Court of the State of Delaware, or, if the Superior Court of the State of Delaware does not have jurisdiction, the United States District

Court for the District of Delaware) will be the sole and exclusive forum for (i) any derivative action or proceeding brough t

on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, other employee

or agent or stockholder of the Company to the Company or the Company’s stockholders, (iii) any action against the Company arising

pursuant to any provision of the DGCL or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware,

or (iv) any action against the Company or any director, officer, other employee or agent of the Company asserting a claim governed by

the internal affairs doctrine, including, without limitation, any action to interpret, apply, enforce or determine the validity of the

Charter or the Bylaws, in each such case subject to such court’s having personal jurisdiction over the indispensable parties named

as defendants therein.

Our Charter and Bylaws further provide that, unless we consent in writing to the selection of an alternative forum,

the federal district courts of the United States of America will be the sole and exclusive forum for the resolution of any complaint

asserting a cause of action under the Securities Act.

Our Charter and Bylaws provisions do not apply to complaints asserting a cause

of action under the Exchange Act.

A stockholder may not waive compliance with the federal securities laws and the rules and regulations

Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock will be deemed to have

notice of the provisions of our Charter and Bylaws described in the preceding sentences.

This choice of forum provision may limit a stockholder’s

ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, employees or agents,

which may discourage such lawsuits against us and such persons.

Alternatively, if a court were to find these provisions of our Charter

and Bylaws inapplicable to, or unenforceable in respect of, 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 adversely affect our business, financial

condition or results of operations.

Charter and Bylaws designate the state and federal courts located within the State of Delaware as the sole and exclusive forum for certain

types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain

a favorable judicial forum for disputes with us or our directors, officers, employees or agents.

Charter and Amended and Restated Bylaws (“Bylaws”) provide that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the

State of Delaware (or, if the Court of Chancery of the State of Delaware does not have jurisdiction, the Superior Court of the State

of Delaware, or, if the Superior Court of the State of Delaware does not have jurisdiction, the U.S.

District Court for the

District of Delaware) will be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Company,

(ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, other employee or agent or stockholder

of the Company to the Company or the Company’s stockholders, (iii) any action against the Company arising pursuant to any provision

of the DGCL or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware, or (iv) any action against

the Company or any director, officer, other employee or agent of the Company asserting a claim governed by the internal affairs doctrine,

including, without limitation, any action to interpret, apply, enforce or determine the validity of the Charter or the Bylaws, in each

such case subject to such court’s having personal jurisdiction over the indispensable parties named as defendants therein.

Charter and Bylaws further provide that, unless we consent in writing to the selection of an alternative forum, the federal district

courts of the U.S.

of America will be the sole and exclusive forum for the resolution of any complaint asserting a cause of

action under the Securities Act.

Our Charter and Bylaws provisions do not apply to complaints asserting a cause of action under the Exchange

A stockholder may not waive compliance with the federal securities laws and the rules and regulations thereunder.

Any person or

entity purchasing or otherwise acquiring any interest in shares of our capital stock will be deemed to have notice of the provisions

of our Charter and Bylaws described in the preceding sentences.

This choice of forum provision may limit a stockholder’s ability

to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, employees or agents, which

may discourage such lawsuits against us and such persons.

Alternatively, if a court were to find these provisions of our Charter and

Bylaws inapplicable to, or unenforceable in respect of, 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 adversely affect our business, financial condition or

results of operations.

may not be able to use a portion of our net operating loss carryforwards and other tax attributes to reduce our future U.S.

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affect our cash flows.

Related to Ownership of our Common Stock

conversion or exercise, as applicable, of the outstanding Series D Preferred Stock, Series E Preferred Stock, Series D PIPE Warrants,

Series E PIPE Warrants, Non-Compensatory Options and Exok Warrants could substantially dilute your investment and adversely affect the

market price of our common stock.

of March 13, 2024, the Series D Preferred Stock are convertible into an aggregate of 4,115,426 shares of common stock and the

Series D PIPE Warrants are exercisable for an aggregate of 4,613,028 shares of common stock.

The Series E Preferred Stock are convertible

into an aggregate of 4,000,000 shares of common stock and the Series E PIPE Warrants are exercisable for an aggregate of 8,000,000 shares

of common stock.

The Exok Warrants are exercisable for an aggregate of 670,499 shares of common stock.

In addition, there are outstanding

Non-Compensatory Options to purchase an aggregate of 8,000,000 shares of common stock for $7.14 per share which are only exercisable

if specific production hurdles are achieved, pursuant to amended and restated non-compensatory Option Agreements entered into at the

Merger Effective Time.

addition, sales of a substantial number of shares of common stock issued upon the conversion or exercise, as applicable, of the outstanding

Series E Preferred Stock, Series E PIPE Warrants, Exok Warrants, Series D Preferred Stock, Series D PIPE Warrants, Non-Compensatory Options,

or even the perception that such sales could occur, could adversely affect the market price of our common stock.

The conversion or exercise

of such securities could result in dilution in the interests of our other stockholders and adversely affect the market price of our common

For example, as a result of the Warrant Exercise, the Company issued an additional 2,000,000 shares of common stock to the O’Neill

Trust, resulting in immediate dilution to existing stockholders of approximately 20%.

Board has broad discretion to issue additional securities, and in order to raise sufficient funds to expand our operations, we may have

to issue securities at prices which may result in substantial dilution to our stockholders.

are entitled under our Charter to issue up to 500,000,000 shares of common stock and 50,000,000 shares of preferred stock, although these

amounts may change in the future subject to stockholder approval.

Shares of our preferred stock provide our Board broad authority to

determine voting, dividend, conversion and other rights.

Any additional stock issuances could be made at a price that reflects a discount

or premium to the then-current market price of our common stock.

In addition, in order to raise capital, we may need to issue securities

that are convertible into or exchangeable for a significant amount of our common stock.

Our Board may generally issue those shares of

common stock and preferred stock, or convertible securities to purchase those shares, without further approval by our stockholders.

preferred stock we may issue could have such rights, preferences, privileges and restrictions as may be designated from time-to-time

by our Board, including preferential dividend rights, voting rights, conversion rights, redemption rights and liquidation provisions.

We may also issue additional securities to our directors, officers, employees and consultants as compensatory grants in connection with

their services, both in the form of stand-alone grants or under our stock incentive plans.

The issuance of additional securities may

cause substantial dilution to our stockholders.

Related to the Ownership of our Common Stock

conversion or exercise, as applicable, of the outstanding Series D Preferred Stock, Series D PIPE Warrants, Series E PIPE Warrants,

Exok Warrants, Subordinated Note Warrants, and Merger Options could substantially dilute your investment and adversely

affect the market price of our Common Stock.

Series D preferred stock with a par value of $0.01 and a stated value of $1,000 per share (“Series D Preferred Stock”),

is convertible into shares of Common Stock at a price of $5.00 per share.

At the time of the Series D Preferred Stock issuance, we

also issued Series A warrants (“Series D A Warrants”) to purchase 3,475,250 shares of our Common Stock and Series B

warrants (“Series D B Warrants” and together with the Series D A Warrants, the “Series D PIPE Warrants”) to

purchase 3,475,250 shares of Common Stock (collectively, the “Series D PIPE”).

Additionally, in 2023 we issued 20,000

shares of Series E preferred stock with a par value of $0.01 and a stated value of $1,000 per share (“Series D Preferred Stock”), which are convertible into

shares of Common Stock at a price of $5.00 per share, to Narrogal Nominees Pty Ltd ATF

Gregory K O’Neill Family Trust (the “O’Neill Trust” or the “Series E PIPE Investor”).

E PIPE Investor also received Series A warrants (“Series E A Warrants”) to purchase 4,000,000 shares of Common Stock and

Series B warrants (“Series E B Warrants” and together with the Series E A Warrants, the “Series E PIPE

Warrants”) to purchase 4,000,000 shares of Common Stock (collectively, the “Series E PIPE”).

As of March 1, 2025,

the outstanding shares of Series D Preferred Stock are convertible into an aggregate of 1,196,337 shares of common stock, the Series

D PIPE Warrants are exercisable for an aggregate of 3,215,761 shares of Common Stock, and the Series E PIPE Warrants are exercisable

for an aggregate of 4,000,000 shares of Common Stock.

Additionally,

we have outstanding warrants which were issued in 2023 and provide the right to purchase 670,499 shares of Common Stock at $7.43 per

share (the “Exok Warrants”).

As of March 1, 2025, the Exok Warrants are exercisable for an aggregate of 670,499 shares

of Common Stock and the Subordinated Note Warrants (as defined herein) are exercisable for an aggregate of 570,778 shares of Common

In addition, there are also options outstanding to purchase an aggregate of 8,000,000 shares of Common Stock for $0.25 per

share (the “Merger Options”) which are only exercisable if specific production hurdles are achieved, pursuant to amended

and restated non-compensatory Option Agreements entered into at the effective time of the Merger.

addition, sales of a substantial number of shares of Common Stock issued upon the conversion or exercise, as applicable, of the

outstanding Series D Preferred Stock, Series D PIPE Warrants, Series E PIPE Warrants, Exok Warrants, Subordinated Note Warrants, and

Merger Options, or even the perception that such sales could occur, could adversely affect the market price of our Common Stock.

conversion or exercise of such securities could result in dilution in the interests of our other stockholders and adversely affect

the market price of our Common Stock.

For example, as a result of the exercise of Series D B Warrants on November 13, 2023, we

issued an additional 2,000,000 shares of Common Stock to the

O’Neill Trust, resulting in immediate dilution to existing stockholders of approximately 20%.

Board of Directors has broad discretion to issue additional securities, and in order to raise sufficient funds to expand our

operations, we may have to issue securities at prices which may result in substantial dilution to our

stockholders.

are entitled under our Charter to issue up to 500,000,000 shares of Common Stock and 50,000,000 shares of preferred stock, although

these amounts may change in the future subject to stockholder approval.

Shares of our preferred stock provide our Board of Directors

broad authority to determine voting, dividend, conversion and other rights.

Any additional stock issuances could be made at a price

that reflects a discount or premium to the then-current market price of our Common Stock.

In addition, in order to raise capital, we

may need to issue securities that are convertible into or exchangeable for a significant amount of our Common Stock.

Directors may generally issue those shares of Common Stock and preferred stock, or convertible securities to purchase those shares,

without further approval by our stockholders.

Any preferred stock we may issue could have such rights, preferences, privileges and

restrictions as may be designated from time-to-time by our Board of Directors, including preferential dividend rights, voting rights, conversion

rights, redemption rights and liquidation provisions.

We may also issue additional securities to our directors, officers, employees

and consultants as compensatory grants in connection with their services, both in the form of stand-alone grants or under our stock

incentive plans.

The issuance of additional securities may cause substantial dilution to our stockholders.

securities or industry analysts do not publish research or reports about our business, if they adversely change their recommendations

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want it to occur.

of March 13, 2024, our executive officers and directors, collectively beneficially own approximately 40.51% of our outstanding

shares of common stock and the O’Neill Trust beneficially owns 25% of our outstanding shares of common stock.

These stockholders

are able to exercise significant control over all matters requiring stockholder approval, including the election of directors and approval

of significant corporate transactions.

This could delay or prevent an outside party from acquiring or merging with our Company even if

our other stockholders want it to occur.

This may also limit your ability to influence the Company in other ways.

In addition, certain

investors own significant numbers of convertible securities, that if exercised or converted, could result in ownership of a significant

portion of the outstanding shares of common stock of the Company.

For example, assuming full exercise or conversion, as applicable, of

their respective convertible securities and no exercise or conversion by other security holders, certain holders could acquire a controlling

position in the Company’s common stock.

The exercise or conversion, as applicable, of the Series D Preferred Stock, Series D PIPE

Warrants, Series E Preferred Stock and Series E PIPE Warrants are subject to a beneficial ownership limitation of 4.99% of the outstanding

shares of common stock, which may be increased by the holder upon written notice to the Company, to any specified percentage not in excess

The 9.99% beneficial ownership limitation may only be modified, amended or waived with the written consent of both the Company

and the security holder.

In November 2023, the O’Neill Trust entered into an agreement with the Company pursuant to which it amended

the terms of each of its Series D PIPE Warrants and Series E PIPE Warrants to increase the beneficial ownership limitation from 9.99%

to 25% and gave notice to the Company that it was increasing its beneficial ownership limitation to 25% with respect to each of its remaining

The beneficial ownership limitation on the Series D Preferred Stock and Series E Preferred Stock remains at 4.99%, subject

to increase to 9.99% by O’Neill Trust upon written notice to the Company.

If such beneficial ownership limitation were to be amended

or waived for the O’Neill Trust or other holders, certain holders would be able to convert their preferred shares or warrants for

a significant portion of the outstanding shares of common stock of the Company, and such holders would be able to exercise significant

control over all matters requiring stockholder approval.

See Exhibit 4.5 filed with this Annual Report for more information.

of March 1, 2025, our executive officers and Board of Directors, collectively beneficially own approximately 10% of our outstanding

shares of Common Stock and the O’Neill Trust beneficially owns approximately 45% of our outstanding shares of Common Stock.

These stockholders are able to exercise significant control over all matters requiring stockholder approval, including the election

of directors and approval of significant corporate transactions.

This could delay or prevent an outside party from acquiring or

merging with our Company even if our other stockholders want it to occur.

This may also limit your ability to influence the Company

in other ways.

In addition, certain investors own significant numbers of convertible securities, that if exercised or converted,

could result in ownership of a significant portion of the outstanding shares of our Common Stock.

For example, assuming full

exercise or conversion, as applicable, of their respective convertible securities and no exercise or conversion by other security

holders, certain holders could acquire a controlling position in our Common Stock.

The exercise or conversion, as applicable, of the

Series D Preferred Stock, Series D PIPE Warrants, and Series E PIPE Warrants are subject to a beneficial ownership limitation of

4.99% of the outstanding shares of Common Stock, which may be increased by the holder upon written notice to us, to any specified

percentage not in excess of 9.99%.

The 9.99% beneficial ownership limitation may only be modified, amended or waived with the

written consent of both the Company and the security holder.

In November 2023, the O’Neill Trust entered into an agreement

with us pursuant to which it amended the terms of each of its Series D PIPE Warrants and Series E PIPE Warrants to increase the

beneficial ownership limitation from 9.99% to 25% and gave notice to us that it was increasing its beneficial ownership limitation

to 25% with respect to each of its remaining warrants.

In August 2024, the O’Neill Trust entered into an agreement with us

pursuant to which it, among other things, amended the terms of the Series D Preferred Stock to increase the beneficial ownership

limitation from 9.99% to 49.9% and amended the terms of each of its Series D PIPE Warrants and Series E PIPE Warrants to increase

the beneficial ownership limitation from 25% to 49.9%.

If the beneficial ownership limitations were to be amended or waived for

other holders, certain holders would be able to convert their preferred shares or warrants for a significant portion of the

outstanding shares of our Common Stock, and such holders would be able to exercise significant control over all matters requiring

stockholder approval.

trading price of our Common Stock has been, and is likely to continue to be, volatile and could be subject to wide fluctuations in response

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variations in operating results;

ability to successfully finance and consummate the NRO Acquisition on the anticipated timeline, or at all;

in financial estimates by us or securities analysts who may cover our stock or by our failure to meet the estimates made by securities

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Any decision to declare and pay dividends

in the future will be made at the discretion of the Board and will depend on, among other things, our results of operations, financial

condition, cash requirements, contractual restrictions and other factors that the Board may deem relevant.

in the future will be made at the discretion of the Board of Directors and will depend on, among other things, our results of operations, financial

condition, cash requirements, contractual restrictions and other factors that the Board of Directors may deem relevant.

In addition, our ability to

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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