Abundia Global Impact : Amendment to Annual Report (Form 10-K/A)
AGIG
Published on 05/13/2026 at 09:06 am EDT
Abundia Global Impact Group, Inc. (the "Company") is filing this Amendment No. 1 (the "Amendment") to its Annual Report on Form 10-K for the fiscal year ended December 31, 2025, which was originally filed with the U.S. Securities and Exchange Commission (the "Commission") on March 23, 2026 (the "Original 10-K"), for the purpose of amending the Report of Independent Registered Public Accounting Firm of CBIZ CPAs P.C. on the Company's financial statements as of and for the year ended December 31, 2025 (the "Original Audit Report") included in Item 8 and Item 15 of the Original 10-K. The only change to the Original Audit Report is to add an additional paragraph regarding "Critical Audit Matters", which was inadvertently omitted by CBIZ CPAs P.C. from the Original Audit Report. The Original Audit Report, as amended (the "Amended Audit Report"), appears on page F-2 of this Amendment along with the Financial Statements and Notes to the Financial Statements, which remain otherwise unchanged from those contained in the Original 10-K.
In accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended, this Amendment also includes currently dated certifications from the Company's principal executive officer and principal financial officer, as required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002. As required by the rules of the Commission, this Amendment sets forth an amended "Item 15. Exhibits, Financial Statement Schedules" in its entirety, which includes the currently dated certifications of the Company's principal executive officer and principal financial officer as Exhibits 31.1, 31.2, 32.1 and 32.2 as well as a currently dated Exhibit 23.1, the consent of CBIZ CPAs P.C., the Company's independent registered public accounting firm, with respect to this Amendment. This Amendment does not otherwise update any exhibits contained in the Original 10-K.
Except as described above, no other changes have been made to the Original 10-K. The Original 10-K continues to be as of the dates described in the Original 10-K, and the Company has not updated the disclosures contained therein to reflect any events that occurred subsequent to such dates. Accordingly, this Amendment should be read in conjunction with the Company's filings made with the Commission subsequent to the filing of the Original 10-K, as information in such filings may update or supersede certain information contained in this Amendment.
TABLE OF CONTENTS
PART II
The information required by this Item 8 is set forth in our financial statements included in Part IV, Item 15 of this Amendment No. 1 to our Annual Report on Form 10-K.
PART IV
1. Financial statements. See "Index to Financial Statements" on page F-1 of this Report.
2. Exhibits
Exhibit
Number
Filed
Herewith
Certificate of Amendment to the Certificate of Incorporation of the Registrant, effective June 13, 2013
DEF 14A
04/23/13
A
Certificate of Amendment to the Certificate of Incorporation of the Registrant, effective May 22, 2025
S-1
07/31/25
3.6
Certificate of Amendment to the Certificate of Incorporation of the Registrant, effective December 5, 2025
Second Amended and Restated Bylaws of the Registrant, effective December 5, 2025
Description of the Registrant's Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934
4.2
8-K
09/20/19
10.3
4.3
8-K
06/18/25
4.1
Form of Senior Secured Convertible Note, dated July 10, 2025
8-K
4.7
02/23/26
4.1
Form of Stock Option Award Agreement*
Service Agreement, effective November 1, 2024, by and between Abundia Global Impact Group LLC and Port House Consultants Limited*
10-Q
08/15/25
10.8
Employment Agreement, effective November 1, 2024, by and between Abundia Global Impact Group (Ireland) Limited and Lucie Harwood*
10-Q
08/15/25
10.9
Service Agreement, effective November 1, 2024, by and between Abundia Global Impact Group, LLC and Blockbox LLC*
10-Q
08/15/25
10.10
Securities Purchase Agreement, dated January 22, 2025, between the Company, and the purchasers thereto
Placement Agency Agreement dated January 22, 2025, between Univest Securities, LLC and the Company
01/23/25
Share Exchange Agreement dated February 20, 2025, between the Company, Abundia Financial, LLC, and Bower Family Holdings, LLC
Securities Purchase Agreement, dated June 17, 2025, between the Company and the purchaser thereto
8-K
06/18/25
10.1
Placement Agency Agreement, dated June 17, 2025, between Univest Securities, LLC and the Company
8-K
06/18/25
10.2
19.1
X
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
/s/ Edward Gillespie
/s/ Robert J. Bailey
/s/ Martha Crawford
/s/ Peter Longo
Peter Longo
ABUNDIA GLOBAL IMPACT GROUP, INC.
(Formerly Houston American Energy Corp)
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors of
Abundia Global Impact Group, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheet of Abundia Global Impact Group, Inc. (the "Company") as of December 31, 2025 , the related consolidated statements of operations and comprehensive loss, changes in shareholders' equity (deficit) and cash flows for the year ended December 31, 2025, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 , and the results of its operations and its cash flows for the year ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America .
Explanatory Paragraph - Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 2, the Company has a significant working capital deficiency, has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provide a reasonable basis for our opinion.
Critical Audit Matters
Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.
/s/ CBIZ CPAs P.C.
CBIZ CPAs P.C.
We have served as the Company's auditor since 2025.
Houston, Texas
March 23, 2026
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Abundia Global Impact Group LLC
Opinion on the Consolidated Financial Statements
We have audited, before the effects of the adjustments to retrospectively apply the change in accounting described in Note 4 and Note 5, the accompanying consolidated balance sheet of Abundia Global Impact Group LLC (the "Company") as of December 31, 2024, the related consolidated statements of operations and comprehensive loss, changes in members' equity and cash flows for the year ended December 31, 2024, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements, before the effects of the adjustments to retrospectively apply the change in accounting described in Note 4 and Note 5, present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.
We were not engaged to audit, review, or apply any procedures to the adjustments to retrospectively apply the change in accounting described in Note 4 and Note 5, and, accordingly, we do not express an opinion or any other form of assurance about whether such adjustments are appropriate and have been properly applied. The adjustments were audited by other auditors.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures to respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.
/s/ Baker Tilly US, LLP
Houston, Texas
February 24, 2025
We served as the Company's auditor from 2020 to 2024.
ABUNDIA GLOBAL IMPACT GROUP, INC.
(Formerly Houston American Energy Corp.)
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2025 AND 2024
115,133
The accompanying notes are an integral part of these consolidated financial statements.
ABUNDIA GLOBAL IMPACT GROUP, INC.
(Formerly Houston American Energy Corp.)
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024
The accompanying notes are an integral part of these consolidated financial statements.
ABUNDIA GLOBAL IMPACT GROUP, INC.
(Formerly Houston American Energy Corp.)
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024
Accumulated
The accompanying notes are an integral part of these consolidated financial statements.
ABUNDIA GLOBAL IMPACT GROUP, INC.
(Formerly Houston American Energy Corp.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024
113,760
-
(101,765
-
The accompanying notes are an integral part of these consolidated financial statements.
ABUNDIA GLOBAL IMPACT GROUP, INC.
(Formerly Houston American Energy Corp.)
Notes to Consolidated Financial Statements
NOTE 1 - DESCRIPTION OF BUSINESS AND ORGANIZATION
On July 1, 2025, Abundia Global Impact Group, Inc. (formerly Houston American Energy Corp.), a Delaware corporation (the "Company"), acquired all of the outstanding units of Abundia Global Impact Group, LLC, a Delaware limited liability company ("AGIG"), as described below (the "Share Exchange"). Prior to the Share Exchange, the Company operated as an independent oil and gas company, which had previously focused on the development, exploration, exploitation, acquisition, and production of natural gas and crude oil properties, with its principal properties and operations located in the U.S. Permian Basin and additional properties in the Louisiana U.S. Gulf Coast region. The Company intends to continue to maintain its legacy oil and gas assets as well as the AGIG business. The Company intends to continue both businesses in order to keep its revenue streams diversified, however, all capital investment and management focus will be on the AGIG recycling and renewables business rather than the legacy oil and gas business of Houston American Energy Corp. ("HUSA").
After the Share Exchange, the Company primarily operates as a technology solutions company in the recycling and renewable energy, environmental change, fuels and chemicals sectors. The Company, through its now wholly owned subsidiary, AGIG, is focused on using waste products to decarbonize the energy, fuels and chemicals sector by providing renewable or recycled alternatives. AGIG uses a combination of proprietary, licensed and commercialized technologies to produce a complete process that turns waste plastics and biomass into crude or drop-in alternatives to fossil derived energy, fuels and chemicals. AGIG's holistic approach has brought together the complete commercial chain with feedstocks, technology, a diverse management team, and world class off-take partners for the growing suite of products in place.
NOTE 2 - GOING CONCERN
The Company's consolidated financial statements are prepared following accounting principles generally accepted in the United States of America, ("GAAP") which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. The Company has an accumulated deficit of $46,055,127 as of December 31, 2025. For the year ended December 31, 2025, the Company's legacy HUSA business generated $410,632 from oil and gas related activities, and AGIG received grant income of $737,811. The term of the Company's grant ended effective March 31, 2025, and no further grant income is anticipated at this time. For the year ended December 31, 2025, the Company reported a net loss of $29,460,935 and negative working capital of $1,043785. No assurances can be given that the Company's share price or that the volume of shares traded will be sufficient for the Company to be able to draw down sufficient funds under its ELOC Agreement to fund the Company's working capital needs to implement its business plan or that the Company will be able to successfully negotiate extensions to the terms of its current borrowings. As a result, there is substantial doubt about the Company's ability to continue as a going concern within one year after the date the consolidated financial statements are issued.
NOTE 3 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
The preparation of the Company's consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts and related disclosures.
As previously disclosed, on February 20, 2025, the Company entered into a share exchange agreement, as amended by that certain amendment to the share exchange agreement, dated as of June 27, 2025 (the "Share Exchange Agreement"), with Abundia Financial, LLC, a Delaware limited liability company ("Abundia Financial"), and Bower Family Holdings, LLC, a North Carolina limited liability company ("BFH", and together with Abundia Financial, the "AGIG Unitholders"). The AGIG Unitholders were the record and beneficial owners of all the issued and outstanding units of AGIG. On July 1, 2025, as contemplated by the Share Exchange Agreement, the Company acquired all of the outstanding units of AGIG from the AGIG Unitholders in exchange for issuing to the AGIG Unitholders an aggregate of 31,778,032 shares of the Company's common stock, which equaled 94% of the sum of the Company's aggregate issued and outstanding common stock at the time of the closing of such transaction and certain shares of common stock to be issued pursuant to a future Company equity incentive plan.
For accounting purposes, the Share Exchange is treated as a reverse acquisition, with AGIG as the surviving entity. As such, the historical financial statements of the accounting acquirer, AGIG, became the historical consolidated financial statements of the Company. Accordingly, references to the "Company" solely in the consolidated financial statements, and these accompanying notes refer to AGIG unless the context indicates otherwise.
See the discussion of the Share Exchange Agreement at Note 4 - Acquisition.
Reverse Stock Split
On June 6, 2025. the Company effected a 1-for-10 reverse stock split (the "Reverse Stock Split") of all outstanding shares of its common stock, $0.0001 par value per share ("Common Stock").
All Common Stock, warrants, options and per share amounts set forth herein are presented to give retroactive effect to the Reverse Split for all periods presented.
Use of Estimates
In preparing financial statements, management makes informed judgments and estimates that affect the reported amounts of assets and liabilities as of the date of the financial statements and affect the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management reviews its estimates, including those related to such potential matters as litigation, environmental liabilities, income taxes, and determination of proved reserves of oil and gas and asset retirement obligations ("ARO"). Changes in facts and circumstances may result in revised estimates, and actual results may differ from these estimates.
Consolidation
These consolidated financial statements include the financial statements of the Company and the following subsidiary companies from the date of their formation or incorporation:
The accompanying consolidated financial statements include all accounts of the Company and its subsidiaries.
All significant intercompany balances and transactions have been eliminated in consolidation.
Reclassification
Certain prior period amounts have been reclassified to conform to the current period presentation. Such reclassifications are for presentation purposes only and have no effect on the Company's net income or financial position in any of the periods presented.
Segment Reporting
Under the terms of Financial Accounting Standards Board (the "FASB") Accounting Standards Codification ("ASC") 280, Segment Reporting, operating segments are defined as components of an entity for which separate discrete information is available for evaluation by the chief operating decision maker ("CODM"), or decision-making group, in deciding how to allocate resources and assess performance. Based on this guidance, the Company's segment structure now reflects the Company's two operating and reporting segments; legacy oil and gas ("O&G") operations and its newly added emerging renewables initiatives ("Renewables"). See Note 5 - Segment Reporting below.
Business Combinations
For acquisitions meeting the definition of a business combination, the acquisition method of accounting is used. The consideration transferred for the acquired business is allocated to the assets acquired and liabilities assumed based on their fair values at the date of acquisition, including identifiable intangible assets. Any excess of the amount paid over the estimated fair values of the identifiable net assets acquired is allocated to goodwill. Acquisition-related costs, such as professional fees, are excluded from the consideration transferred and are expensed as incurred. The Company uses its best estimates and assumptions to assign fair value to the tangible and intangible assets acquired, and liabilities assumed at the acquisition date. The Company's estimates are inherently uncertain and subject to refinement. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to goodwill. In addition, uncertain tax positions, tax-related valuation allowances, and pre-acquisition contingencies are initially recorded in connection with a business combination as of the acquisition date.
Foreign Currency Translation and Transaction Gains and Losses
The Company has functional currencies in Euros, US Dollars and British Pounds Sterling and its reporting currency is the US Dollar. Management has adopted ASC 830-20, "Foreign Currency Matters - Foreign Currency Transactions". All assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. For revenues and expenses, the weighted average exchange rate for the period is used. Gains and losses arising on translation of foreign currency denominated transactions are included in other comprehensive losses.
Foreign currency transactions are initially recorded in the reporting currency (US Dollars) using the spot exchange rate (the exchange rate at that specific date). When the transaction is finally settled (paid or received in cash), the actual exchange rate on the settlement date is used. A final realized gain or loss is calculated based on the difference between the value at the initial transaction date and the settlement date. This realized gain or loss is recognized as foreign currency gain (loss) in the statements of operations.
Related Party Transactions
A related party is generally defined as (i) any person that holds 10% or more of our shares of common stock and all other voting equity securities, including such person's immediate families, (ii) our management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with us, or (iv) anyone who can significantly influence our financial and operating decisions. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. See Note 12 - Notes and Convertible Notes Payable for details of related party transactions during the years ended December 31, 2025, and 2024.
Cash and Cash Equivalents
Cash represents cash deposits held at financial institutions. Cash equivalents include short-term highly liquid investments of sufficient credit quality that are readily convertible to known amounts of cash and have original maturities of three months or less. Cash equivalents are held for meeting short-term liquidity requirements, rather than for investment purposes. Cash and cash equivalents are held at major financial institutions and are subject to credit risk to the extent they exceed government deposit insurance limits in the country in which they are located. The Company has not experienced any losses to date on depository accounts.
Accounts Receivable, net
Accounts receivable are recorded at their net realizable values.
Allowance for Accounts Receivable
The Company's ability to collect outstanding receivables is critical to its operating performance and cashflows. Accounts receivables are stated at an amount management expects to collect from outstanding balances. The Company extends credit in the normal course of business. The Company regularly reviews outstanding receivables and when the Company determines that a party may not be able to make required payments, a charge to bad debt expense in the period of determination is made. Though the Company's bad debts have not historically been significant, the Company could experience increased bad debt expenses should a financial downturn occur. The Company updated its impairment model to utilize a forward-looking current expected credit losses ("CECL") model in place of the incurred loss methodology for financial instruments measured at amortized cost, primarily including its accounts receivable and contract asset. In relation to available-for-sale ("AFS") debt securities, the guidance eliminates the concept of "other-than-temporary" impairment and instead focuses on determining whether any impairment is a result of a credit loss or other factors. The adoption of ASC 326 did not have a material impact on our audited consolidated financial statements as of the adoption date.
Prepaid Expenses
Prepaid expenses consist of amounts paid in advance for goods or services received in future periods.
Other Current Assets
Other current assets consist of a refundable deposit related to a feasibility study for a potential real estate acquisition, a refundable deposit related to a potential business acquisition and a receivable from the Irish government for recoverable value-added tax ("VAT") incurred on expenses.
Fair Value Measurement
The Company records its financial assets and liabilities at fair value. The accounting standard for fair value provides a framework for measuring fair value, clarifies the definition of fair value, and expands disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting standard establishes a three-tier hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:
Level 1 - inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.
Level 3 - inputs are unobservable inputs based on the Company's assumptions used to measure assets and liabilities at fair value.
A financial asset or liabilities classification within the hierarchy is determined based on the lowest level of input that is significant to the fair value measurement. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability.
Property and Equipment
Land
Land is initially recorded at its purchase price plus any directly attributable costs. Land is considered to have an indefinite life and so no depreciation is recorded.
Land is subject to review for impairment only when specific triggering events or changes in circumstances indicate that its carrying amount might not be recoverable.
Oil and Gas Assets
The Company uses the full cost method of accounting for oil and gas property acquisition, exploration and development activities. Under this method, all productive and nonproductive costs incurred in connection with the exploration for and development of oil and gas reserves are capitalized. Capitalized costs include lease acquisition, geological and geophysical work, delay rentals, costs of drilling, completing and equipping successful and unsuccessful oil and gas wells and related internal costs that can be directly identified with acquisition, exploration and development activities, but does not include any cost related to production, general corporate overhead or similar activities. Gain or loss on the sale or other disposition of oil and gas properties is not recognized unless significant amounts of oil and gas reserves are involved.
The capitalized costs of oil and gas properties, plus estimated future development costs relating to proved reserves, are amortized on a units-of-production method over the estimated productive life of the reserves. Unevaluated oil and gas properties are excluded from this calculation. The capitalized oil and gas property costs, less accumulated amortization, are limited to an amount (the ceiling limitation) equal to the sum of: (a) the present value of estimated future net revenues from the projected production of proved oil and gas reserves, calculated using a 12-month average first-day-of-month price, adjusted for differentials (such prices are held constant throughout the life of the properties) and a discount factor of 10%; (b) the cost of unproved and unevaluated properties excluded from the costs being amortized; (c) the lower of cost or estimated fair value of unproved properties included in the costs being amortized; and (d) related income tax effects. Costs in excess of this ceiling are charged to proved properties impairment expense.
Construction in Progress
Construction in progress ("CIP") represents costs incurred for property and equipment that are not yet complete nor ready for their intended use. CIP includes direct costs of construction or acquisition, including materials, labor, and contracted services.
Assets are transferred from CIP to the appropriate property and equipment category when the asset is substantially complete and ready for its intended use. Once placed in service, the assets are depreciated over their estimated useful lives using the straight-line method.
CIP is not depreciated until the related assets are placed in service.
The Company evaluates CIP projects for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. During the years ended December 31, 2025, and 2024, no impairment charges were recognized related to CIP.
Property and Equipment
All other property and equipment are recorded at cost, less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Additions and major replacements or betterments are added to the assets at cost. Maintenance and repair costs and minor replacements are charged to expense when incurred.
Goodwill
Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in a business combination. In accordance with ASC 350, Intangibles-Goodwill and Other, the Company assigns goodwill to reporting units based on the reporting units expected to benefit from the business combination. The Company evaluates its reporting units periodically, including when changes to operating segments occur. When reporting units are redefined, goodwill is reallocated to the affected reporting units using a relatively fair value approach.
Goodwill is considered to have an indefinite useful life and is not amortized. Consistent with the requirements of ASC 350, the Company tests goodwill and other indefinite-lived intangible assets for impairment annually as of October 1, or more frequently if events or changes in circumstances indicate that impairment may exist. As a first step, the Company assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If this qualitative assessment indicates that impairment is more likely than not, the Company performs a quantitative impairment test by comparing the fair value of the reporting unit with its carrying amount. If the carrying amount exceeds fair value, the Company recognizes an impairment loss in the statement of operations equal to the excess.
Technology Licenses
Payments in connection with license agreements that are to be applied against future license fees are capitalized as other assets pending the commencement of fee generating operations under the license agreements. When fee generating operations under the license agreements commence, the payments will be applied against the balance of fees due and payable. In the event of fee generating operations under the license agreements fail to occur, the payments will be expensed as abortive transaction costs.
Capitalized Patent Costs
Patent costs, including legal fees associated with the creation of intellectual property and patent registration costs, are capitalized as incurred. These costs are amortized over the estimated useful life of the patent commencing from the date the patent has been granted. Costs incurred in respect of patent applications which are abandoned before a patent has been granted are expensed at the date of abandonment. Annual registration fees on patents which have been granted are expensed in the year in which they are incurred.
Impairment of Long-Lived Assets
Oil and Gas Assets
Under the full cost method of accounting, the Company is required to perform a ceiling test each quarter. The test determines a limit, or ceiling, on the net book value of the oil and natural gas properties. Net capitalized costs are limited to the lower of unamortized cost net of deferred income taxes, or the cost center ceiling.
During the years ended December 31, 2025, the Company reviewed its long-lived assets for impairment and determined an impairment amount of $431,900 was required based on the full cost ceiling test.
Non-Oil and Gas Assets
The Company reviews long-lived assets for impairment in accordance with ASC 360, "Property, Plant, and Equipment," whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. These events or changes in circumstances include, but are not limited to, significant underperformance relative to historical or projected future operating results, significant changes in the manner of use of the acquired assets or the strategy for the overall business, significant negative industry or economic trends. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the asset group to the estimated undiscounted cash flows over the estimated remaining useful life of the primary asset included in the asset group. If the asset group is not recoverable, the impairment loss is calculated as the excess of the carrying value over the fair value.
Leases
The Company accounts for leases in accordance with ASC 842. The Company determines whether a contract is a lease at contract inception or for a modified contract at the modification date. At inception or modification, the Company recognizes right-of-use ("ROU") assets and related lease liabilities on the balance sheet for all leases greater than one year in duration. Lease liabilities and their corresponding ROU assets are initially measured at the present value of the unpaid lease payments as of the lease commencement date. If the lease contains a renewal and/or termination option, the exercise of the option is included in the term of the lease if the Company is reasonably certain that a renewal or termination option will be exercised. As the Company's leases do not provide an implicit rate, the Company uses an estimated incremental borrowing rate ("IBR") based on the information available at the commencement date of the respective lease to determine the present value of future payments. The IBR is determined by estimating what it would cost the Company to borrow a collateralized amount equal to the total lease payments over the lease term based on the contractual terms of the lease and the location of the leased asset.
Operating lease payments are recognized as an expense on a straight-line basis over the lease term in equal amounts of rent expense attributed to each period during the term of the lease, regardless of when actual payments are made. This generally results in rent expense in excess of cash payments during the early years of a lease and rent expense less than cash payments in later years. The difference between rent expense recognized and actual rental payments is typically represented as the spread between the ROU asset and lease liability.
The Company's facilities operating leases have lease and non-lease fixed cost components, which we have elected to account for as one single lease component in calculating the present value of minimum lease payments. Variable lease and non-lease cost components are expensed as incurred.
The Company does not recognize ROU assets and lease liabilities for short-term leases that have an initial lease term of 12 months or less. The Company recognizes the lease payments associated with short-term leases as an expense on a straight-line basis over the lease term.
Equity Line of Credit ("ELOC")
The Company accounts for its Equity Line of Credit (the "ELOC") facility as a derivative financial asset in accordance with ASC 815, Derivatives and Hedging. The ELOC does not meet the "fixed-for-fixed" criterion for equity classification, nor does it meet the criteria for liability classification under ASC 480. As such, The ELOC is measured at fair value, with changes in fair value recognized in earnings. The Company's ELOC is structured as a put option under the Common Stock Purchase Agreement and the initial fair value of the ELOC is de minimis due to near or at-market pricing. The Company analyzed the terms of the ELOC Agreement and concluded that the put option had de minimis value as of December 31, 2025.
Commitment shares issued in connection with the ELOC are accounted for as an issuance of equity in accordance with ASC 505, Equity and treated as a day one expense as prescribed by ASC 825. Transaction costs related to the ELOC are expensed as incurred in accordance with ASC 825, Financial Instruments. See Note 18 - Capital Stock below for further details.
Convertible Note
The Company has evaluated the accounting treatment for the AGIG Convertible Note (as defined in Note 12 - Notes and Convertible Note Payable) issued on November 7, 2022, for $5,000,000 and concluded that it did not meet the criteria for classification as an ASC 480 liability. Management classified the AGIG Convertible Note as current and non-current liabilities on the balance sheet upon issuance, measured at their carrying amounts.
Management identified certain embedded features within the AGIG Convertible Note and determined that both the contingent conversion option (i.e., conversion upon event of default) and the non-contingent conversion option (i.e., conversion at any time after the AGIG Convertible Note issuance date) should be analyzed as one feature with a contingency and various adjustments. The conversion features were evaluated under the indexation guidance within ASC 815-40-15 and management determined that the conversion option qualifies to be classified in shareholders' equity at issuance as if they were freestanding shares of common stock. Therefore, the conversion options are not required to be bifurcated from the host contract and are accounted for as derivative financial instruments at issuance.
All other embedded derivative features are considered clearly and closely related and do not require separate bifurcation pursuant to ASC 815.
Issuance costs and any lender fees were presented as a reduction to the carrying balance of the Convertible Note and amortized over its expected life, which corresponds to the contractual term. See Note 12 - Notes and Convertible Notes below for further details.
Derivative Instruments
The Company evaluates its convertible promissory note, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with Topic 480 of the FASB ASC and Topic 815 of the FASB ASC. The result of this accounting treatment is that the fair value of the embedded derivative, if required to be bifurcated, is marked-to-market at each balance sheet date and recorded as a liability. The change in fair value is recorded in the consolidated statements of operations as a component of other income or expense.
Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date, and then that fair value is reclassified to equity.
In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument.
The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date. Derivative instrument liabilities will be classified in the balance sheet as current or non-current based on whether net-cash settlement of the derivative instrument is expected within 12 months of the balance sheet date.
Warrants
Warrants are accounted in accordance with the guidance contained in ASC 815-40-15-7D. The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant's specific terms and applicable authoritative guidance in FASB ASC 480, Distinguishing Liabilities from Equity ("ASC 480") and ASC 815, Derivatives and Hedging ("ASC 815"). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company's own common stock and whether the warrant holders could potentially require "net cash settlement" in a circumstance outside of the Company's control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.
For issued or modified warrants that meet all the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter.
The relative fair value of the warrants issued in conjunction with the convertible note has been treated as a debt discount with an offsetting credit to warrant liabilities. The debt discount related to the warrant issuances is being accreted to interest expense over the term of the note.
Commitments and Contingencies
In the normal course of business, the Company is subject to loss contingencies, such as legal proceedings and claims arising out of its business, that cover a wide range of matters, including, among others, customer disputes, government investigations and tax matters. An accrual for a loss of contingency is recognized when it is probable that an asset had been impaired, or a liability had been incurred and the amount of loss can be reasonably estimated.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to a concentration of credit risk include cash, cash equivalents (if any) and any marketable securities (if any). The Company had cash deposits of $4,420,990 in excess of the FDIC's current insured limit on interest bearing accounts of $250,000 as of December 31, 2025. The Company has not experienced any losses on its deposits of cash and cash equivalents.
Income Taxes
The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, the Company determines deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.
The Company recognizes deferred tax assets to the extent that the Company believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If the Company determines that it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.
The Company records uncertain tax positions on the basis of a two-step process in which: (i) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position, and (ii) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more likely than not to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense.
Asset Retirement Obligations
For the Company, ARO represent the systematic, monthly accretion and depreciation of future abandonment costs of tangible assets such as platforms, wells, service assets, pipelines, and other facilities. The fair value of a liability for an asset's retirement obligation is recorded in the period in which it is incurred if a reasonable estimate of fair value can be made, and that the corresponding cost is capitalized as part of the carrying amount of the related long-lived asset. The liability is accreted to its then present value each period, and the capitalized cost is depreciated over the useful life of the related asset. If the liability is settled for an amount other than the recorded amount, an adjustment is made to the full cost pool, with no gain or loss recognized, unless the adjustment would significantly alter the relationship between capitalized costs and proved reserves. Although the Company's policy with respect to ARO is to assign depleted wells to a salvager for the assumption of abandonment obligations before the wells have reached their economic limits, the Company has estimated its future ARO obligation with respect to its operations. The ARO assets, which are carried on the balance sheet as part of the full cost pool, have been included in our amortization base for the purposes of calculating depreciation, depletion and amortization expense. For the purposes of calculating the ceiling test, the future cash outflows associated with settling the ARO liability have been included in the computation of the discounted present value of estimated future net revenues. ARO are classified as Level 3 (unobservable inputs) fair value measurements
Revenue Recognition
The Company's revenue is comprised principally of revenue from exploration and production activities. The Company's oil is sold primarily to marketers, gatherers, and refiners. Natural gas is sold primarily to interstate and intrastate natural-gas pipelines, direct end-users, industrial users, local distribution companies, and natural-gas marketers. Natural gas liquids ("NGLs"), are sold primarily to direct end-users, refiners, and marketers. Payment is generally received from the customer in the month following delivery.
Contracts with customers have varying terms, including spot sales or month-to-month contracts, contracts with a finite term, and life-of-field contracts where all production from a well or group of wells is sold to one or more customers. The Company recognizes sales revenues for oil, natural gas, and NGLs based on the amount of each product sold to a customer when control transfers to the customer. Generally, control transfers at the time of delivery to the customer at a pipeline interconnect, the tailgate of a processing facility, or as a tanker lifting is completed. Revenue is measured based on the contract price, which may be index-based or fixed, and may include adjustments for market differentials and downstream costs incurred by the customer, including gathering, transportation, and fuel costs.
Revenues are recognized for the sale of the Company's net share of production volumes.
The Company estimated the revenue and related expenses for two US wells for the month of December 2025. Using actual oil production results for the month, the Company used historical lease operating expenses and average price per BBL from prior months to calculate these estimates. No gas or NGL related revenue or expenses are included in the estimate.
Research and Development
In accordance with ASC 730, Research and Development, the Company follows the policy of expensing its third-party research and development consulting costs in the period in which they are incurred. The Company incurred research and development expenses of $752,287 and $ 1,651,170, respectively, during the years ended December 31, 2025, and 2024.
Accounting for Share-Based Compensation
The Company recognizes the cost resulting from all share-based compensation arrangements, including stock options, restricted stock awards and restricted stock units that the Company grants under its equity incentive plan in its consolidated financial statements based on their grant date fair value. The expense is recognized over the requisite service period or performance period of the award. Awards with a graded vesting period based on service are expensed on a straight-line basis for the entire award. Awards with performance-based vesting conditions, which require the achievement of a specific company's financial performance goal at the end of the performance period and required service period, are recognized over the performance period. Each reporting period, the Company reassesses the probability of achieving the respective performance goal. If the goals are not expected to be met, no compensation cost is recognized and any previously recognized amount recorded is reversed. If the award contains market-based vesting conditions, the compensation cost is based on the grant date fair value and expected achievement of market condition and is not subsequently reversed if it is later determined that the condition is not likely to be met or is expected to be lower than initially expected.
The grant date fair value of stock options is based on the Black-Scholes Option Pricing Model (the "Black-Scholes Model"). The Black-Scholes Model requires judgmental assumptions including volatility and expected term, both based on historical experience. The risk-free interest rate is based on U.S. Treasury interest rates whose term is consistent with the expected term of the option. The Company determines the assumptions used in the valuation of option awards as of the date of grant. Differences in the expected stock price of volatility, expected term or risk-free interest rate may necessitate distinct valuation assumptions at those grant dates. As such, the Company may use different assumptions for options granted throughout the year.
The grant date of fair value of restricted stock and restricted stock units is based on the closing price of the underlying stock on the date of the grant.
The Company has elected to reduce share-based compensation expense for forfeitures as the forfeitures occur since the Company does not have historical data or other factors to appropriately estimate the expected employee terminations and to evaluate whether particular groups of employees have significantly different forfeiture expectations.
Grant Income and Government Grant Receivable
In the absence of comprehensive recognition and measurement guidance within the scope of authoritative GAAP for the government grant that the Company has been awarded, in accordance with guidance in ASC 832 "Government Assistance", the Company has accounted for the grant it has received from the government by analogy using the terms of IAS 20, Accounting for Government Grants and Disclosures of Government Accounting Assistance. The Company receives funding under a government grant which reimburses the Company for certain qualifying research and development and related expenditures. Grant funding for research and development received under grant agreements where there is no obligation to repay grant funds is recognized as grant income in the period during which the related qualifying expenses are incurred, provided that the grants are fully approved by the granting agencies and the conditions under which the grants were provided have been met. Grant income recognized upon incurring qualifying expenses in advance of receipt of grant funding is recorded in the consolidated balance sheet as government grants receivable.
Interest Expense
Total interest expense, including accrued interest expense and debt discount amortization, is presented as a single line item within Other Income (Expense) on the Consolidated Statements of Operations
Earnings (Loss) per Share
Basic earnings (loss) per share is computed by dividing net loss available to common shareholders by the weighted average common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue shares of common stock were exercised or converted. In periods in which the Company reports a net loss, dilutive securities are excluded from the calculation of diluted net loss per share amounts as the effect would be anti-dilutive. See Note 22 - Loss Per Share Common Share below.
Recent Accounting Pronouncements
Adopted Standards
In December 2023, the FASB issued Accounting Standards Update ("ASU") 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disaggregated information about a reporting entity's effective tax rate reconciliation, as well as information related to income taxes paid to enhance the transparency and decision usefulness of income tax disclosures. This ASU is effective for the annual period ended December 31, 2025 and should be applied on a prospective basis with the option to apply the standard retrospectively. Early adoption is permitted. On January 1, 2025, the Company adopted the provisions of ASU 2023-09 on a prospective basis, and the required disclosures have been included in this Annual Report on Form 10-K for the year ended December 31, 2025. The adoption of ASU 2023-09 did not have a material impact on the Company's financial statements included in this Annual Report on Form 10-K but did result in additional disclosures in the income tax footnote.
In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810) -Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity, which requires an entity involved in an acquisition transaction effected primarily by exchanging equity interests when the legal acquiree is a VIE that meets the definition of a business to consider the factors in paragraphs 805-10-55-12 through 55-15 to determine which entity is the accounting acquirer. ASU 2025-03 applies to all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. The Company has evaluated the impact of this guidance on its consolidated financial statements and has elected for early adoption on a proactive basis commencing January 1, 2025, as permitted by the guidance. The impact is reflected in the consolidated financial statements.
Not Yet Adopted Standards
In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ("ASU 2024-03"). ASU 2024-03 requires additional disclosure of specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. ASU 2024-03 may be applied prospectively with the option for retrospective application for all prior periods presented. The Company is currently evaluating the impact of adopting this guidance on the Company's current financial position, results of operations, or financial statement disclosures.
In May 2025, the FASB issued ASU 2025-04, Compensation-Stock Compensation (Topic 718) and Revenues from Contracts with Customers (Topic 606)-Clarifications to Share-Based Consideration Payable to a Customer. The amendments in this ASU revise the master glossary definition of the term performance condition for share-based consideration payable to a customer. Further, the amendments in this ASU clarify that share-based consideration encompasses the same instruments as share-based payment arrangements, but the grantee does not need to be a supplier of goods or services to the grantor. Finally, the amendments in this ASU clarify that a grantor should not apply the guidance in Topic 606 on constraining estimates of variable consideration to share-based consideration payable to a customer. The amendments in this ASU are effective for all entities for annual reporting periods (including interim reporting periods within annual reporting periods) beginning after December 15, 2026, with updates to be applied on a retrospective or modified retrospective basis Early adoption is permitted for all entities. The Company is currently evaluating the impact of ASU 2025-04 on its consolidated financial statements.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments-Credit Losses (Topic 326). The amendments in this ASU provide that in developing reasonable and supportable forecasts as part of estimating expected credit losses, all entities may elect a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. The amendments in this ASU are effective for all entities for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods with updates to be applied on a prospective basis. The Company is currently evaluating the impact of ASU 2025-05 on its consolidated financial statements.
In December 2025, the FASB issued ASU No. 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities. The ASU establishes authoritative guidance in GAAP about accounting for government grants received by business entities, clarifies the appropriate accounting, in an effort to reduce diversity in practice, and increase consistency of application across business entities. The ASU is effective for annual reporting periods beginning after December 15, 2028, and interim reporting periods within those annual reporting periods. Adoption of this ASU may be applied on a modified prospective approach, a modified retrospective approach, or a retrospective approach. Early adoption is permitted. We are currently evaluating the provisions of this ASU and do not expect this ASU to have a material impact on our consolidated financial statements.
In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. The ASU clarifies interim disclosure requirements and the applicability of Topic 270. The objective of the amendments is to provide further clarity about the current interim disclosure requirements. The ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Adoption of this ASU can be applied by either a prospective or a retrospective approach. Early adoption is permitted. We are currently evaluating the provisions of this ASU and do not expect this ASU to have a material impact on our consolidated financial statements.
In December 2025, the FASB issued ASU No. 2025-12, Codification Improvements. The ASU addresses thirty-three items, representing the changes to the Codification that (1) clarify, (2) correct errors, or (3) make minor improvements. Generally, the amendments in this Update are not intended to result in significant changes for most entities. The ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2026. The adoption method of this ASU may vary, on an issue-by-issue basis. Early adoption is permitted. We are currently evaluating the provisions of this ASU and do not expect this ASU to have a material impact on our consolidated financial statements.
NOTE 4 - ACQUISITION
On July 1, 2025, as contemplated by the Share Exchange Agreement, the Company acquired all of the outstanding units of AGIG LLC from the AGIG Unitholders in exchange for issuing to the AGIG Unitholders an aggregate of 31,778,032 shares of common stock, which was equal to 94% of the sum of (a) the aggregate issued and outstanding Common Stock at the time of the Closing, plus (b) all Common Stock approved for issuance by the Company under a future equity incentive plan at the time of the Closing. Total consideration transferred was $21.7 million.
The Share Exchange was accounted for as a reverse acquisition in accordance with GAAP within ASC Topic 805, Business Combinations ("ASC 805"), whereby AGIG LLC, the legal acquiree, is considered the accounting acquirer and AGIG, the legal acquirer, is treated as the acquired company for financial reporting purposes. AGIG LLC was considered the accounting acquirer as its controlling shareholder, Abundia Financial, will hold approximately 84.9% of the issued and outstanding common stock and was deemed a controlling shareholder of the Company following the Share Exchange.
We recorded the assets acquired and liabilities assumed at their respective fair values as of the closing date of the Share Exchange. The preliminary purchase price allocations were comprised of the components presented below, which represent the preliminary determination of the fair value of the assets acquired and liabilities assumed, with the excess of the purchase price over the fair value of net identifiable assets acquired recorded to goodwill. The final determination of the fair value of certain assets and liabilities and the allocation of goodwill to reporting units will be completed within the measurement period in accordance with FASB ASC Topic 805.
The preliminary purchase price allocation is as follows:
Goodwill resulting from the Share Exchange reflects the benefits expected to be gained from the Company's public company status and governance infrastructure which will enable the Company to gain access to public sources of capital that can then be used in the deployment and development of their suite of technologies that will assist in the evolution of fuel, chemical and waste markets, providing commercial alternatives and sustainable products.
The goodwill arising on the Share Exchange is not deductible for tax purposes.
The Company incurred $13,081,201 of acquisition-related expenses related to the transaction during the year ended December 31, 2025, $12,390,253 of this was a success fee paid by the controlling shareholder on behalf of the Company, the remaining $690,948 of acquisition-related expenses are included in general and administrative expenses.
The operating results of the Company's legacy business were included in the consolidated results of operations from the date of the Share Exchange. The consolidated financial statements for the year ended December 31, 2025 include revenues and net loss of $410,632 million and $20,152,734, respectively, for the period from the closing date of the Share Exchange through December 31, 2025.
The following unaudited pro forma financial information presents the combined results of operations for the Company and AGIG for the years December 31, 2025, and 2024, respectively. The unaudited condensed consolidated pro forma results of operations are as follows:
The unaudited pro forma combined financial information presented above has been prepared from historical financial statements that have been adjusted to give effect to the transaction as though it had occurred on January 1, 2024 and includes adjustments for acquisition and other transaction costs. The unaudited pro forma financial information is not intended to reflect the actual results of operations that would have occurred if the transaction had occurred on January 1, 2024, nor is it indicative of future operating results.
NOTE 5 - SEGMENT REPORTING
Upon completion of the Share Exchange, the Company re-evaluated its reporting segments. The Company's determination of reporting segments was made on the basis of its operations, products, and the economic characteristics of each of its operating segments and corresponds to the manner in which its Chief Operating Decision Maker ("CODM") reviews and evaluates performance to make decisions about resources to be allocated to the segment. As a result, the Company's segment structure has been reassessed and now reflects the Company's legacy O&G operations as well as its newly added emerging renewables initiatives ("Renewables").
The O&G segment generates revenue from oil and gas operations whereas Renewables is in the pre-revenue stage, primarily incurring research and development and start-up costs associated with its development of scalable technologies for converting plastic and biomass waste into renewable fuels and chemicals. The CODM is a committee including the Company's Chief Executive Officer, Chief Operating Officer, and Chief Financial Officer.
The Company measures and evaluates its reportable segments based on their respective adjusted net income (loss), general and administrative expenses, research and development costs, and professional fees. The Company excludes certain corporate-related expenses and certain transactions or adjustments that the CODM considers to be non-operational, such as changes in fair value of warrant liabilities, restructuring charges, interest expense and income and amounts related to depreciation, depletion and amortization expense. Although these amounts are excluded, they are included in reported Loss before income taxes within the accompanying audited consolidated statements of operations and are included in the reconciliation below. The CODM uses segment adjusted net loss in the budget and forecasting process and to monitor budgets versus actual results, which are used in assessing the performance of the reportable segments and to allocate resources across the reportable segments. The balance sheet is presented on a consolidated basis, as the CODM does not use segment specific asset or liability information, including fixed assets, to assess performance. As a result, segment asset and liability details are disclosed at the aggregate level.
A reconciliation of net loss for the reportable segments to the applicable line items within the accompanying consolidated statements of operations is as follows.
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NOTE 6 - OIL AND GAS REVENUE
The following table disaggregates revenue by significant product type for the years ended December 31, 2025, and 2024:
Year Ended
December 31,
Oil and gas revenues for the legacy HUSA business have been included in the statement of operations from July 1, 2025. See Note 4 - Acquisition above.
There were no significant contract liabilities or transaction price allocations to any remaining performance obligations as of December 31, 2025, or 2024.
NOTE 7 - GRANT INCOME
Grant income relates to a grant awarded by the UK government to the Company's UK subsidiary, Abundia Biomass-to-Liquids Ltd, under its Advance Fuel Fund competition for the development of sustainable aviation fuel production plants in the UK. The total grant amount awarded was £4,484,431 ($5,400,000) and was delivered as a reclaim for eligible project-related expenditure paid each quarter.
The grant reimbursed the Company for pre-approved eligible project research and development costs, related professional fees and general and administrative costs. These costs were included in the Company's operating expenses in the Company's consolidated statements of operations. The eligible expenses for reimbursement also include a 20% mark up on certain related administrative and staff costs.
During the years ended December 31, 2025, and 2024, the Company incurred $737,811 and $2,545,783, respectively, in expenditure eligible for reimbursement which has been recognized as grant income in other income in the consolidated statements of operations.
The Company received reimbursement of $943,235 and $2,340,359, respectively during the years ended December 31, 2025, and 2024.
There was a balance of the grant receivable of $0 and $205,424, respectively, as of December 31, 2025, and 2024.
The term of the grant was completed on March 31, 2025, and no further grant income is expected at this time.
NOTE 8 - PROPERTY AND EQUIPMENT
Land
On July 11, 2025, the Company completed the purchase of a 25-acre site at the Cedar Port Industrial Park ("The Cedar Port Property") located in Baytown, Texas from TGS Cedar Port Partners ("TGS"), a Texas limited partnership, for a total purchase price of $8,576,854.
The Company plans to construct its first plastics recycling plant at the location, transforming plastic waste into pyrolysis oil. The strategically located site will be the foundation for a U.S. innovation hub dedicated to developing recycling, renewable and circular technologies supported by the industrial park's robust infrastructure.
As land is considered to have an indefinite life, no depreciation has been recognized in respect of this asset
Oil and gas properties
Substantially, all of the Company's oil and gas properties are located in Texas.
During the years ended December 31, 2025, and 2024, the Company recorded depletion expense of $192,311 and $0, respectively.
During the years ended December 31, 2025, and 2024, the Company recorded impairment expense of $431,900 and $0, respectively which related to the Company's O&G segment.
Construction in Progress
During the year ended December 31, 2025, the Company commenced the construction of its first plastics recycling plant on its property in Baytown, Texas, transforming plastic waste into pyrolysis oil. CIP of $630,830 and $nil was recorded for the years ended December 31, 2025 and 2024, respectively.
No depreciation is recognized while assets are under construction.
NOTE 9 - GOODWILL
As described in Note 4 - Acquisition above, goodwill was recognized in connection with the Share Exchange on July 1, 2025. The carrying value of goodwill at December 31, 2025 and December 31, 2024, was $13.0 million and $0 million, respectively. There were no changes to the carrying value of goodwill from July 1, through December 31, 2025. The Company has two reporting units for goodwill purposes: (1) HUSA, representing legacy O&Gs operations, and (2) AGIG, representing renewable energy operations.
No impairment charges were recognized for the year ended December 31, 2025.
The table below summarizes the changes in goodwill from January 1, 2025 through December 31, 2025.
NOTE 10 - TECHNOLOGY LICENCES
Plastic Recycling
Effective September 24, 2021, AGIG Plastics to Liquids LLC, a wholly owned subsidiary of AGIG, entered into a technology license and service agreement with, an unrelated third party that has developed the technology to transform plastic waste into petrochemical products, which can be further refined into fuels, waxes, and new plastic production. The purpose of the license agreement was to permit AGIG to utilize this technology in its plastics recycling plants. An initial non-refundable deposit of $500,000 was paid in respect of this agreement during the year ended December 31, 2022, which has been capitalized and is creditable against future license fees. A further non-refundable deposit of $500,000 was paid in respect of this agreement during the year ended December 31, 2023, which has also been capitalized and is creditable against future license fees. During the year ended December 31, 2025, a further $1,005,025 was paid in connection with this license as a result of the Company commencing the construction of its first plastics recycling plant at its Baytown, Texas facility. As of December 31, 2025 and 2024, the total non-refundable deposit that had been paid in respect of this agreement was $2,005,025 and $1,000,000, respectively. Further ongoing license fees become due and payable indefinitely as plants are built and commissioned.
Effective December 31, 2025 and 2024, upon assessment of this license, it was determined that no impairment was required in respect of this license.
Biomass Conversion
Effective May 11, 2022, AGIG entered into a Services Agreement with a third-party manufacturer. The purpose of the Services Agreement is for the third party to manufacture and sell to AGIG the units required for the pyrolysis process used in our biomass to energy, fuels and chemicals process. At times through the terms of the agreement, the Company may be requested to provide payments at the request of the third party to fund costs associated with the agreement utilizing a cost-plus fixed fee method. These payments are applied to the initial deposit of the Services Agreement. During the year ended December 31, 2023, $240,000 was paid in additional deposits in respect of this agreement. As of December 31, 2024 and 2023, the total non-refundable deposits that had been paid in respect of this agreement was $1,115,000. The Services Agreement has an indefinite term. In connection with the Services Agreement, the Company entered into a separate License Agreement with the third-party manufacturer. The License Agreement provides the Company with a defined number of units of the Licensor's intellectual property and the proprietary rights know-how to the successful assembly, installation and operation of the units. The effective date of the agreement is the earlier of (i) an event of default, (ii) an intellectual property transfer amongst the parties, and (iii) a force majeure termination. In an event of default, the Company acquires the proprietary, patent-protected, clean energy system if the third-party manufacturer defaults on the Services Agreement for cash considerations.
Effective December 31, 2025, upon assessment of this license, it was determined that due to obtaining further information about the effectiveness of the technology of the License in question, the Company now does not intend to use the technology going forward. Accordingly, management determined that this license deposit no longer had any future economic benefit as there were no expected future cash flows, no alternative use, and no marketability for sale or transfer. The Company therefore wrote off $1,115,000 at December 31, 2025 representing the full carrying value of this License. The impairment was recognized in operating expenses as impairment of technology licenses in the Company's consolidated statements of operations and related to the Company's Renewables segment.
Development Agreement
Effective November 23, 2022, AGIG entered into a Development, Collaboration & License Agreement ("DCLA") agreement with a third-party technology company. Under the term the DCLA, which has an initial term of 3 years, both parties entered into a Joint Development Project with both parties being entitled to license each other's existing intellectual property. During the year ended December 31, 2022, AGIG paid a $1 million collaboration fee to support the development of the project, which is creditable against future license payments under the terms of DCLA.
Effective December 31, 2024, upon assessment of this license, it was determined that based on the receipt of further information about the effectiveness of the technology of the License in question, the Company now does not intend to use the technology going forward. Accordingly, management determined that this license deposit no longer had any future economic benefit as there were no expected future cash flows, no alternative use, and no marketability for sale or transfer. The Company therefore wrote off $1,000,000 at December 31, 2024 representing the full carrying value of this License. The impairment was recognized in operating expenses as impairment of technology license in the Company's consolidated statements of operations.
NOTE 11 - CAPITALIZED PATENT COSTS
The Company has applied for a number of patents and a trademark relating to its proposed business plan. During the years ended December 31, 2025, and 2024, 3 and 7 patent applications, respectively, were granted.
Accumulated Amortization
During the years ended December 31, 2025 and 2024, the Company recognized amortization expense in respect of granted patents of $16,442 and $14,305, respectively.
During the years ended December 31, 2025 and 2024, the Company wrote off legal fees incurred of abandoned patent applications of $112,125 and $nil, respectively.
As of December 31, 2025, expected amortization expense for granted patents for the next five years thereafter are as follows:
NOTE 12 - NOTES AND CONVERTIBLE NOTE PAYABLE
NOTE AND CONVERTIBLE NOTES PAYABLE DUE WITHIN 1 YEAR
As of December 31, 2025, and 2024, the weighted average interest rate on the Company's notes and convertible notes payable was 7.2% and 8%, respectively.
Future annual repayment of notes - related party, convertible notes and accrued interest as of December 31, 2025 is as follows:
AGIG Convertible Note Payable
Effective November 7, 2022, AGIG LLC issued a $5,000,000 convertible promissory note (the "AGIG Convertible Note") with an interest rate of 8%. Repayment or conversion of this note into equity securities of AGIG LLC occurs as follows (a) repayment at the Maturity date of November 7, 2023, or (b) at the lender's sole option, conversion of the outstanding principal and interest into equity securities of AGIG LLC, upon the closing of a private offering of AGIG LLC, equity securities ("Next Round Funding"). If the lender exercises its option to convert the AGIG Convertible Note into equity securities, the AGIG Convertible Note is convertible into a variable number of equity securities at the same price paid by investors in the Next Round Funding to satisfy the outstanding AGIG Convertible Note balance. The Company had the option to extend the maturity date of the AGIG Convertible Note by 12 months with the mutual consent of the lender. On September 29, 2025, the maturity date on the AGIG convertible note payable was extended to January 1, 2027. The classification of the debt as due in more than year reflects this extension.
During the years ended December 31, 2025, and 2024, the Company recognized interest expense of $400,000 in both years. As of December 31, 2025, and 2024, the balance of the outstanding AGIG Convertible Note, together with accrued interest was $6,260,274 and $5,860,274, respectively. As of December 31, 2025, and 2024, the effective annual interest yield on the AGIG Convertible Note was 8%.
BFH AGIG Note Payable - Related Party
Effective February 28, 2025, BFH (a related party) advanced $885,000 to the Company by way of a note payable. The note payable is interest-free, due and payable in full on or before the 120th day following the date of funding (the "Maturity Date") and was collateralized by the grant receivable from the UK government's Advance Fuel Fund. The Company was required to repay the note payable in tranches before the Maturity Date from grant reimbursement funds received by the Company under its grant receivable, $450,000 was repaid on the note before the maturity date. Effective August 14, 2025, the related party lender waived the default under the terms of the note payable and extended the term of the note payable until such reasonable time that the Company has adequate cash on hand to repay the note.
3i HUSA Convertible Note
On July 10, 2025, the Company entered into a securities purchase agreement with an institutional investor ("3i"), pursuant to which the Company issued a senior secured convertible note in the original principal amount of $5,434,783 (the "3i HUSA Convertible Note") with 8.0% original issue discount and received $5,000,000 in cash. The Company used the net proceeds from the 3i HUSA Convertible Note, together with cash on hand, to finance the acquisition of a 25-acre site in Baytown, Texas.
During the year ended December 31, 2025, the Company made prepayments on the 3i HUSA Convertible Note using proceeds from its equity line of credit, registered direct offerings, and proceeds from the issuance of debt to Bower Family Holdings, LLC ("BFH"), a related party. The Company fully extinguished the remaining principal balance of the 3i HUSA Convertible Note during the fourth quarter of 2025. Total cash payments made during the year ended December 31, 2025 amounted to $5,994,139.
As a result of these prepayments and the extinguishment of the debt, the Company recognized a total loss on debt extinguishment of $880,379 in the consolidated statements of operations for the year ended December 31, 2025. This loss consisted of the write-off of unamortized debt discount of $321,023 and prepayment premiums of $559,356.
During the year ended December 31, 2025, the Company recognized interest expense of $225,600 related to the 3i HUSA Convertible Note, which included $113,760 attributable to the amortization of the debt discount.
BFH HUSA Note Payable - Related Party
On November 12, 2025, in exchange for BFH (a related party) paying $3,500,000 to prepay, on behalf of the Company, a portion of the 3i HUSA Convertible Note per contractual terms of the 3i HUSA Convertible Note, the Company issued to BFH a new senior secured note in the original principal amount of $3,500,000 (the "BFH HUSA Note").
The BFH HUSA Note bears interest at 7.0% per annum and has a stated maturity date 12 months from the date of issuance, unless earlier prepaid in accordance with its terms. Repayment is required to be made in cash on the maturity date. While any portion of the BFH HUSA Note is outstanding, if the Company carries out any subsequent placements, the Company would be required to first use 40.0% of the net proceeds to repay 105% of the outstanding balance of the BFH HUSA Note in cash plus accrued and unpaid charges (if any). Accumulated interest is required to be paid in cash on a quarterly basis.
In the event of a change of control, the Company is required to prepay 100.0% of the aggregate outstanding amount of the BFH HUSA Note plus the make-whole amount in cash upon closing of the change of control transaction. The BFH HUSA Note is subject to customary Events of Default. In the event of a default, interest will accrue at the lesser of 18.0% per annum or the maximum legal rate.
The BFH HUSA Note is secured by a first-priority lien on the land acquired by the Company in Baytown, Texas. The lien established under this agreement is pari passu in priority with any existing debt obligations.
During the year ended December 31, 2025, the Company accrued interest payable of $33,562 in respect of this loan.
As of December 31, 2025, the balance of the outstanding BFH HUSA Note, together with accrued interest, was $3,533,562 and the effective annual interest yield on this note was 7%.
NOTE 13 - LEASES
Effective August 27, 2025, the Company entered into a triple net lease for approximately 1,413 square feet of office space in Houston, Texas. The lease commenced October 1, 2025, and expires on February 28, 2031.
The Company has elected the practical expedient under ASC 842 not to separate lease and non-lease components for its office facility lease. The Company's facility lease is a triple-net lease under which the non-lease components, consisting of operating expense reimbursements, are variable in nature and are expensed as incurred. Only fixed lease payments are included in the measurement of the lease liability and right-of-use asset.
Under the terms of the lease, all of the non-lease components are variable in nature, not fixed. The triple net operating expense reimbursements (tenant's proportionate share of real estate taxes, insurance, CAM, etc.) are estimated monthly at approximately $1,983, but that amount is subject to periodic adjustment and annual true-up to actual landlord costs. Because these amounts fluctuate based on actual costs rather than being fixed in the agreement or tied to a stated index at commencement, they are variable payments excluded from lease payments under ASC 842-10-30-6 and are expensed as incurred. The parking obligation is similarly variable as the lease states the rate is "such amounts as may be charged by Landlord from time to time." As a result, the only amounts included in the lease liability and ROU asset measurement are the fixed base rent payments ($3,768 escalating to $4,160), reflecting an initial 5-month abatement period.
The Company's operating ROU asset and lease liability in respect of this property was as follows:
As of December 31, 2025
Cash paid during the year for amounts included in the measurement of lease liabilities is as follows:
Future annual minimum under non-cancellable operating leases as of December 31, 2025, are as follows:
NOTE 14 - ASSET RETIREMENT OBLIGATIONS
The following table presents changes in the Company's ARO during each of the years ended December 31, 2025, and 2024:
NOTE 15 - WARRANT LIABILITIES
Effective November 7, 2022, AGIG issued the $5,000,000AGIG Convertible Note. As part of the funding agreement the Company agreed that, in the event of a Next Round Funding, the Company would issue a warrant with a term of 5 years to the lender to purchase $5,000,000 worth of the securities issued in the Next Round Funding with an exercise price equivalent to 80% of the price paid by investors in the Next Round Funding.
The Company evaluated the warrants as either equity-classified or liability-classified instruments based on an assessment of the specific terms of the warrants and applicable authoritative guidance from ASC 480 and ASC 815-40. The Company determined the warrants failed the indexation guidance under ASC 815-40, as they contain provisions that provide note holders with rights to a variable number of shares based on future financing terms. Specifically, should AGIG, undertake a Next Round Funding before the maturity date, the note holder will receive equity warrants to purchase securities issued in the Next Round Funding at an aggregate value of $5,000,000, with an exercise price equal to 80% of the price paid by investors in the offering. This embedded feature represents a deemed redemption feature due to the substantial premium received by the note holder. As a result, the Company concluded that the redemption features require bifurcation from the convertible note and subsequent accounting as a freestanding warrant liability in accordance with ASC 815-40. The warrants had a fair value of $1,866,243 on issuance and were classified as liabilities with a corresponding decrease to the AGIG Convertible Note outstanding balance of $5,000,000 as a discount resulting in Debt Net of Discount Balance of $3,133,757. This discount was recognized over the initial one-year term of the AGIG Convertible Note as interest expense to par using the effective interest method as noted above. The effective interest rate was 42.10%. The debt discount had been fully amortized during the financial year ended December 31, 2025
Accordingly, pursuant to ASC 815-40, the Company recorded the fair value of the warrants as a liability upon issuance and marked to market each reporting period in the Company's consolidated statement of operations until their exercise or expiration.
The estimated fair value of the warrants was calculated using the Black Scholes model with the assumptions set out below, weighted for management's estimate of the probability of a Next Round Funding being completed and discounted back to the valuation date using estimated venture capital rates of return.
The completion of the Share Exchange on July 1, 2025, has allowed the Company to access capital markets as evidenced in the Equity Line of Credit Agreements and Convertible Note. Consequently, effective June 30, 2025, AGIG estimated the ongoing probability of the occurrence of a Next Round Funding as remote and accordingly the estimated fair value of the warrants was determined to be $0 on an ongoing basis.
AGIG Plastics to Liquids LLC
Effective September 24, 2021, AGIG Plastics to Liquids LLC, a wholly owned subsidiary of AGIG, entered into a technology license and services agreement with a third-party technology provider. As part of the agreement, AGIG Plastics to Liquids LLC issued a warrant to the licensor to acquire the number of membership units in AGIG Plastics to Liquids LLC equivalent to 1.5% of its fully diluted capitalization. The warrant has an exercise price of $0.01 per membership unit, a term of 10 years and is exercisable in the event of a change of control or public listing of AGIG Plastics to Liquids LLC or its parent.
The Company evaluated the warrants as either equity-classified or liability-classified instruments based on an assessment of the specific terms of the warrants and applicable authoritative guidance from ASC 480 and ASC 815-40. The Company determined the warrants failed the indexation guidance under ASC 815-40, as they contain provisions that provide note holders with rights to a variable number of shares. Accordingly, pursuant to ASC 815-40, the Company recorded the fair value of the warrants as a liability upon issuance and marked to market each reporting period in the Company's consolidated statements of operations until their exercise or expiration. However, no fair value has been assigned to these warrants as AGIG Plastics to Liquids LLC has no equity, no planned operations, and consequently only nominal projected value.
Effective July 1, 2025, upon the completion of the Share Exchange, this warrant became exercisable and membership units representing 1.5% of AGIG Plastics to Liquids LLC fully diluted capitalization were issued to the warrant holder.
NOTE 16 - FAIR VALUE MEASUREMENTS
The carrying amounts of financial assets and liabilities, such as cash and cash equivalents, government grant receivables, prepaid expenses and other current assets, accounts payable and accrued expenses approximate fair value given the short-term nature of these instruments.
The carrying amounts of the Company's notes payable approximate their fair values as they bear prevailing market interest rates.
Recurring Fair Value Measurements
The fair value of financial instruments measured on a recurring basis as of December 31, 2025 and 2024 consisted of the following:
Total
December 31, 2025
Total
December 31, 2024
The changes in the fair value of the warrant liabilities for the years ended December 31, 2025 and 2024 are summarized as follows:
Non-recurring Fair Value Measurements
Certain assets, including long-lived assets and certain financial instruments, are measured at fair value on a non-recurring basis if it is determined that impairment indicators are present using Level 3 inputs.
During the year ended December 31, 2025 and 2024, the Company recorded impairments of $1,115,000 and $1,000,000, respectively, related to technology license.
During the year ended December 31, 2025, the Company recorded impairments of $431,900 related to its oil and gas properties.
NOTE 17 - COMMITMENTS AND CONTINGENCIES
From time to time, the Company may become involved in various legal disputes in the normal course of business. While management cannot predict the outcome of these proceedings with certainty, management does not believe that an adverse result in any pending legal or regulatory proceeding, individually or in the aggregate, would be material to the Company's financial position, results of operations or cash flows. Management is not aware of any adversarial legal proceedings against the Company during the years ended December 31, 2025 and 2024 or pending as at December 31, 2025.
From time to time, in the normal course of its operations, the Company is subject to litigation of matters and claims. Litigation can be expensive and disruptive to normal business operations. Moreover, the results of complex legal proceedings are difficult to predict, and the Company's view of these matters may change in the future as the litigation and events related thereto unfold. The Company expenses legal fees as incurred. The Company records a liability for contingent losses when it is both probable that a liability has been incurred, and the amount of the loss is known. An unfavorable outcome to any legal matter, if material, could have an adverse effect on the Company's operations or its financial position, liquidity or results of operations.
NOTE 18 - CAPITAL STOCK
Reverse Stock Split
On June 6, 2025. the Company effected a 1-for-10 reverse stock split (the "Reverse Stock Split") of all outstanding shares of its Common Stock, $0.0001 par value per share.
All Common Stock, warrants, options and per share amounts set forth herein are presented to give retroactive effect to the Reverse Split for all periods presented.
Capital Contributions
During the years ended December 31, 2025 and 2024, the Company's controlling shareholder, made capital contributions of $941,375 and $2,395,100, respectively. These cash contributions were made to support the working capital need of the Company and were made prior to the completion of the Share Exchange.
In connection with the Share Exchange described in Note 4 Acquisition above, the Company incurred a success fee of $12,390,253. This fee was paid by the Company's controlling shareholder using shares of the Company's Common Stock that was owned by the controlling shareholder and is therefore treated as a capital contribution.
ELOC Agreement
On July 10, 2025, the Company entered into the ELOC Agreement with an institutional investor ("ELOC Investor"), providing for a 24-month committed equity financing facility, pursuant to which the ELOC Investor has committed to purchase, at the Company's direction in its sole discretion, up to an aggregate of $100,000,000 of Common Stock, subject to certain limitations set forth in the ELOC Agreement.
The purchase price per share is equal to 96% of the lowest daily volume-weighted average price during a specified measurement period following each purchase notice. The Company may issue up to 10,000,000 shares of Common Stock (exclusive of the commitment shares issued pursuant to the ELOC Agreement described below) under the ELOC, subject to a (i) 9.99% beneficial ownership cap, and (ii) a 19.99% exchange cap, unless shareholder approval is obtained or sales are made at or above the minimum price as defined by NYSE American rules.
As consideration for the ELOC Investors commitment, the Company agreed to issue a total of 300,000 shares of Common Stock as a commitment fee, consisting of 156,000 shares of Common Stock issued at closing and 144,000 shares of Common Stock issued upon the effectiveness of the registration statement registering all shares of Common Stock issuable pursuant to the ELOC. The value of these shares at the time of issue was $3,342,000. This amount has been recognized in the statement of operations for the year ended December 31, 2025. The Company also entered into a registration rights agreement requiring it to file and maintain an effective resale registration statement for such shares issued under the ELOC.
The ELOC Agreement may be terminated by the Company at any time after commencement, provided the commitment fee and legal fees have been paid. The agreement automatically terminates upon the earlier of (i) full drawdown, (ii) expiration of the 24-month term, (iii) delisting, or (iv) bankruptcy events.
During the year ended December 31, 2025, the Company issued 646,149 shares of Common Stock under the ELOC Agreement, for total gross proceeds of $3,925,972.
The Company engaged Univest Securities LLC as a placement agent and agreed to pay a cash fee equal to 1.5% of the gross funding amount for each drawdown.
Shares Issued for Cash Consideration
On November 21, 2025, the Company completed a registered direct offering with certain investors, issuing 2,285,715 shares of its Common Stock at $3.50 per share for net cash consideration of $7,368,902.
NOTE 19 - EQUITY COMPENSATION
Prior to the Share Exchange, the Company had no equity incentive plans in place.
Effective July 1, 2025, upon the completion of the Share Exchange, the legacy HUSA entity had the following equity incentive plans in place:
The Houston American Energy Corp. 2008 Equity Incentive Plan (the "2008 Plan"). The terms of the 2008 Plan, as amended in 2012 and 2013, allowed for the issuance of up to 48,000 shares of the Company's common stock pursuant to the grant of stock options and restricted stock. This plan has now expired.
The Houston American Energy Corp. 2017 Equity Incentive Plan (the "2017 Plan"). The terms of the 2017 Plan allow for the issuance of up to 40,000 shares of the Company's common stock pursuant to the grant of stock options and restricted stock. Persons eligible to participate in the Plans are key employees, consultants and directors of the Company.
The Houston American Energy 2021 Equity Incentive Plan (the "2021 Plan" and, together with the 2008 Plan and the 2017 Plan, the "Plans"). allows for the issuance of up to 50,000 shares of the Company's common stock pursuant to the grant of stock options and restricted stock. Persons eligible to participate in the Plans are key employees, consultants and directors of the Company
Effective October 9, 2025, the Company adopted the Houston American Energy Corp. 2025 Equity Incentive Plan (the "2025 Plan"). The terms of the 2025 Plan allow for the issuance of up to 750,000 shares of the Company's common stock pursuant to the grant of stock options, stock appreciation rights, restricted stock awards, restricted stock units and other stock-based awards. Persons eligible to participate in the 2025 Plan are key employees, consultants and directors of the Company.
As of December 31, 2025, there were 630,000 shares of common stock available for issuance pursuant to future stock or option grants under the 2025 Plan and no further shares of common stock available for issuance pursuant to future stock or option grants under the 2017 and 2021 Plans.
Stock Options Issued and Outstanding
Option activity under the legacy HUSA Equity Plans since the Share Exchange is presented in the table below:
A summary of non-vested non-qualified stock options activity under the legacy HUSA Equity Plans since the Share Exchange is presented in the table below:
The aggregate intrinsic value for the stock options outstanding and exercisable as of December 31, 2025, was zero because these options were out of the money on December 31, 2025.
As of December 31, 2025, there was $9,039 of unrecognized stock-based compensation expense related to non-vested stock options.
Share awards
Effective June 27, 2025, the HUSA Board of Directors approved the issuance of 120,000 shares of Common Stock to the legacy executive officers, directors and employees of HUSA, subject to shareholder approval. Effective September 8, 2025, the share issuance was approved by written consent of the Company's controlling shareholder and the Company recognized stock-based compensation of $786,000 which has been recognized in general and administrative expenses in its statement of operations based on the Company's closing share price of $6.55 at the date of approval.
Accrued Stock Bonuses
During the year ended December 31, 2025, the Company accrued $553,230 in general and administrative expenses in its statement of operations in respect of stock bonuses to be paid to directors and certain consultants for their work for the Company during the course of the year. As the bonuses were not finalized or communicated to the individuals concerned prior to the year end, no issuance of stock was recorded prior to the end of the year.
Restricted Stock / Option Awards
Effective August 1, 2025, the Board authorized the issuance of $80,000 of restricted stock or options awards to four directors as part of their annual compensation and a further $60,000 of restricted stock or options awards to two of these four directors as a signing on fee. The restricted stock or options awards were to vest over a 12-month period and were subject to the approval of the 2025 Plan. As the approval of the 2025 Plan by the Company's controlling shareholder was considered to be perfunctory, the Company began accruing for the compensation expense associated with these awards over their 12-month vesting period on a straight-line basis commencing August 1, 2025. As of December 31, 2025, stock compensation of $183,333 had been recognized in respect of these restricted stock or options awards and there was a balance of $256,667 unvested stock compensation to be recognized through July 31, 2026. The terms of the awards were not finalized prior to December 31, 2025
NOTE 20 - WARRANTS ACCOUNTED FOR AS EQUITY
Bridge Loan Warrants
As part of the Share Exchange, the Company acquired a number of warrants that had been issued in conjunction with a bridge loan in the Company before the Share Exchange occurred. Such warrants are exercisable, for a period of ten years, expiring September 18, 2029, to purchase an aggregate of 9,440 shares of Common Stock of the Company at $24.63 per share.
Placement Warrants
On November 21, 2025, the Company completed a registered direct offering with certain investors, issuing 2,285,715 shares of its Common Stock at $3.50 per share. In connection with the offering, the Company engaged A.G.P./Alliance Global Partners (the "Placement Agent") to act as exclusive Placement Agent in connection with the offering. Pursuant to the Placement Agent Agreement, in addition to a fixed fee based on gross proceeds, the Placement Agent was issued a common stock purchase warrant to purchase 2.0% of the securities sold at an exercise price of 110% of the offering price (the Common Stock Purchase Warrant"), which resulted in a Common Stock Purchase Warrant exercisable for 45,714 shares of the Company's Common Stock. The Common Stock Purchase Warrant is exercisable at any time, has a five (5)-year term and an exercise price of $3.85 per share. The Common Stock Purchase Warrant has an aggregate fair value of $63,542 that was determined using the Black-Scholes pricing model with the following assumptions: 57% volatility, risk free interest rate of 3.59%, an expected life of five years and no dividend. The aggregate fair market value of the Common Stock Purchase Warrant was recorded as an offset to gross proceeds of the Offering and an increase to additional paid-in capital.
A summary of warrant activity and related information for the years ended December 31, 2025 and 2024 is presented below:
The aggregate intrinsic value for the warrants outstanding and exercisable as of December 31, 2025 was zero because these warrants were out of the money on December 31, 2025.
NOTE 21 - NONCONTROLLING INTEREST IN CONSOLIDATED SUBSIDIARIES
Abundia Biomass to Liquids Ltd
From the date of its formation, Abundia Biomass to Liquids Ltd was owned 77.5% by the Company and 22.5% by a former officer of the Company.
Effective October 26, 2025, the noncontrolling interest in Abundia Biomass to Liquids Ltd was cancelled with the consent of the former officer of the Company as part of his separation agreement with the Company.
In accordance with ASC 810-10-45-23, upon the termination of the noncontrolling interest, the $33,599 balance of the accumulated deficit relating to the noncontrolling interest was transferred to additional paid in capital.
AGIG Plastics to Liquids LLC
From the date of its formation Abundia Plastics to Liquids LLC was owned 100% by the Company.
Effective July 1, 2025, following the Share Exchange, a warrant issued to one of our technology providers vested and was exercised resulting in the technology provider becoming a 1.5% interest holder in Abundia Plastics to Liquids LLC.
Since formation, Abundia Plastics to Liquids LLC has not recognized any income or incurred any expenses and has had no net assets.
Accordingly, the non-controlling interest in Abundia Plastics to Liquids LLC has no value at this time.
NOTE 22 - LOSS PER COMMON SHARE
Loss per common share-basic is calculated by dividing net loss by the weighted average number of shares of Common Stock outstanding during the period. Net loss per common share-diluted assumes the conversion of all potentially dilutive securities and is calculated by dividing net loss by the sum of the weighted average number of shares of common stock, as defined above, outstanding plus potentially dilutive securities. Net income per common share-diluted considers the impact of potentially dilutive securities. In periods in which the Company reports a net loss, dilutive securities are excluded from the calculation of diluted net loss per share amounts as the effect would be anti-dilutive.
The dilutive effect of convertible securities is calculated using the "if-converted method." Under the if-converted method, securities are assumed to be converted at the beginning of the period, and the resulting shares of common stock are included in the denominator of the diluted calculation for the entire period being presented.
The Company analyzed the potential dilutive effect of all its agreements; however, for periods presented, the Company reported a net loss. As a result, all potentially dilutive securities were anti-dilutive and therefore excluded from the computation of diluted net loss per share.
The calculation of loss per common share for the periods indicated below were as follows:
For the years ended December 31, 2025, and 2024, the following warrants and options to purchase shares of common stock were excluded from the computation of diluted net loss per common share, as the inclusion of such shares would be anti-dilutive:
NOTE 23 - INCOME TAXES
Prior to the Share Exchange effective July 1, 2025, the Company was taxed in the US as a partnership for federal and state tax purposes with all tax benefits or liabilities of its operations passing through to its members. Accordingly, the Company itself did not recognize any tax benefits or liabilities in its financial statements in respect of its operations. Subsequent to the Share Exchange, effective July 1, 2025, the Company is a taxable corporation.
During the years ended December 31, 2025 and 2024, the Company's net loss before income taxes of $29,460,935 and $3,621,948, respectively, includes a US component of loss from operations before income taxes of $27,819,707 and $3,081,772, respectively. It also includes a foreign component comprised of loss from operations before income taxes of $1,641,228 and $540,176 respectively.
A reconciliation of the federal statutory rate of 21% to the effective tax rate for income from continuing operations before income taxes is as follows in accordance with the prospective adoption of ASU 2023-09, which became effective in the year ended December 31, 2025.
The tax effects of the temporary differences between financial statement income and taxable income are recognized as a deferred tax asset and liabilities. Significant components of the deferred tax asset and liability as of December 31, 2025 and 2024 are set out below.
919,816
As of December 31, 2025, the Company had federal net operating loss carryforwards of $36,715,325 and foreign net operating loss carryforwards of $5,009,092. There was no benefit or expense for income taxes recorded on NOLs during the year ended December 31, 2025, due to the valuation allowance. The Company's federal net operating loss carryforwards will begin to expire in the tax years ending December 31, 2032, and the foreign losses can be carried forward indefinitely.
The Company establishes a valuation allowance, if based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Tax benefits of operating losses and other deferred tax assets are evaluated on an ongoing basis, including a review of historical and projected future operating results, the eligible carryforward period, and other circumstances. As a result of this evaluation, the Company has established a valuation allowance against its net deferred tax asset.
As of December 31, 2025, the Company did not have any gross unrecognized tax benefits which would have an impact on the Company's effective income tax rate, if recognized.
NOTE 24-GEOGRAPHICAL INFORMATION
The Company currently only has operations in the United States. Revenues for the years ended December 31, 2025 and 2024 and long-lived assets as of December 31, 2025 and 2024 are presented below:
NOTE 25 - SUBSEQUENT EVENTS
Share Issuances
During the period from December 31, 2025, through the date of issuance of these consolidated financial statements, the Company has issued 868,000 shares of Common Stock under the ELOC Agreement, for total gross proceeds of $2,569,097.
On February 23, 2026, the Company closed a registered direct offering pursuant to a securities purchase agreement, dated February 19, 2026. In connection with such offering, the Company issued 4,134,175 shares of Common Stock and pre-funded warrants to purchase up to 1,800,543 shares of Common Stock at an exercise price of $0.001 per share. These warrants were exercised on March 17, 2026. The offering generated gross proceeds of approximately $20.0 million, before deducting placement of agent fees and related offering costs.
Disputed Fees
On February 24, 2026, A.G.P. / Alliance Global Partners asserted it was allegedly owed fees in the amount of $1.4 million in connection with a registered direct offering of the Company's Common Stock consummated on February 23, 2026, involving a certain investor which A.G.P. has claimed is subject to compensation under tail fee rights, pursuant to a Placement Agency Agreement, dated November 19, 2025 between the Company and A.G.P. The Company disputes such claim, and A.G.P. has not threatened litigation at this time. The Company believes the claim will most likely be settled outside of litigation and views the possibility of litigation as remote, although no assurances can be given in this regard. The amount of any potential settlement cannot be reasonably estimated at this time.
NOTE 26-SUPPLEMENTAL INFORMATION ON OIL AND GAS EXPLORATION, DEVELOPMENT AND PRODUCTION ACTIVITIES (UNAUDITED)
This footnote provides unaudited information required by FASB ASC Topic 932, Extractive Activities-Oil and Gas.
Geographical Data
The following table shows the Company's oil and gas revenues and lease operating expenses incurred in the United States from the date of the Share Exchange through December 31, 2025:
2025
2024
Capital Costs
Capitalized costs and accumulated depletion relating to the Company's oil and gas producing activities as of December 31, 2025, all of which are onshore properties located in the United States are summarized below:
Amortization Rate
The amortization rate per unit based on barrel of oil equivalents was $13.39 for the United States for the year ended December 31, 2025.
Reserve Information and Related Standardized Measure of Discounted Future Net Cash Flows
The unaudited supplemental information on oil and gas exploration and production activities has been presented in accordance with reserve estimation and disclosures rules issued by the SEC in 2008. Under those rules, average first-day-of-the-month price during the 12-month period before the end of the year are used when estimating whether reserve quantities are economical to produce. This same 12-month average price is also used in calculating the aggregate amount of (and changes in) future cash inflows related to the standardized measure of discounted future net cash flows. The rules also allow for the use of reliable technology to estimate proved oil and gas reserves if those technologies have been demonstrated to result in reliable conclusions about reserve volumes. The supplemental unaudited presentation of proved reserve quantities and related standardized measure of discounted future net cash flows provides estimates only and does not purport to reflect realizable values or fair market values of the Company's reserves. Volumes reported for proved reserves are based on reasonable estimates. These estimates are consistent with current knowledge of the characteristics and production history of the reserves. The Company emphasizes that reserve estimates are inherently imprecise and that estimates of new discoveries are more imprecise than those of producing oil and gas properties. Accordingly, significant changes to these estimates can be expected as future information becomes available.
Proved reserves are those estimated reserves of crude oil (including condensate and natural gas liquids) and natural gas that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. Proved developed reserves are those expected to be recovered through existing wells, equipment, and operating methods.
The reserve estimates set forth below were prepared by Russell K. Hall and Associates, Inc. ("R.K. Hall"), utilizing reserve definitions and pricing requirements prescribed by the SEC. R.K. Hall is an independent professional engineering firm specializing in the technical and financial evaluation of oil and gas assets. R.K. Hall's report was conducted under the direction of Russell K. Hall, founder and President of R.K. Hall. Mr. Hall holds a BS in Mechanical Engineering from the University of Oklahoma and is a registered professional engineer with more than 30 years of experience in reserve evaluation services. R.K. Hall and their respective employees have no interest in the Company and were objective in determining the results of the Company's reserves.
Total estimated proved developed, proved non-producing, and undeveloped reserves by product type and the changes therein are set forth below for the years indicated.
As of December 31, 2025, the Company had no proved undeveloped ("PUD") reserves and no reserves outside of the United States.
The standardized measure of discounted future net cash flows relating to proved oil and gas reserves is computed using average first-day-of the-month prices for oil and gas during the preceding 12-month period (with consideration of price changes only to the extent provided by contractual arrangements), applied to the estimated future production of proved oil and gas reserves, less estimated future expenditures (based on year-end costs) to be incurred in developing and producing the proved reserves, less estimated related future income tax expenses (based on year-end statutory tax rates, with consideration of future tax rates already legislated), and assuming continuation of existing economic conditions. Future income tax expenses give effect to permanent differences and tax credits but do not reflect the impact of continuing operations including property acquisitions and exploration. The estimated future cash flows are then discounted using a rate of ten percent a year to reflect the estimated timing of the future cash flows.
Standardized measure of discounted future net cash flows at December 31, 2025:
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Abundia Global Impact Group Inc. published this content on May 13, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 13, 2026 at 13:05 UTC.