Blue Gold : Annual Report for Fiscal Year Ending December 31, 2025 (Form 20-F)

Published: 2026-04-29 06:21:08 ET BGL

Published on 04/29/2026 at 06:21 am EDT

OPERATING AND FINANCIAL REVIEW AND PROSPECTS

This Item 5.-Operating and Financial Review and Prospects should be read in conjunction with our consolidated financial statements for the years ended December 31, 2025 and 2024 and the notes thereto and other information included elsewhere in this Annual Report. This discussion includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may," "should," "could," "would," "expect," "plan," "anticipate," "believe," "estimate," "continue," or the negative of such terms or other similar expressions. Such statements include, but are not limited to, possible business combinations and the financing thereof and related matters, as well as all other statements other than statements of historical fact included herein. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other SEC filings. Factors that could cause or contribute to those differences include, but are not limited to, those identified below and those discussed in the sections titled "Risk Factors" and "Cautionary Note Regarding Forward-Looking Statements" included elsewhere in this Annual Report. Additionally, our historical results are not necessarily indicative of the results that may be expected in any future period. Amounts are presented in U.S. dollars.

Unless the context otherwise requires, references in this Item 5.-Operating and Financial Review and Prospects to "we," "us," and "our" generally refer to Blue Gold Holdings Limited prior to the Business Combination or Blue Gold Limited from and after the Business Combination.

BUSINESS OVERVIEW

Blue Gold Limited (the "Company" or "BGL"), a Cayman Islands exempted company limited by shares, is a gold exploration, development and mining company that tokenizes gold to enable fractional gold ownership. This is delivered through two divisions: a Mining Division focused on the acquisition, development, and operation of long-life gold assets; and a Digital Division responsible for gold trading and the issuance of its gold-backed token, the Standard Gold Coin ("SGC"). The Digital Division is also responsible for creating various tools that enable holders to make use of their SGC ("Electronic Transaction Application" or "ETA"), delivering a 'Mine-to-Wallet' product and service.

The Company has one wholly owned subsidiary, Blue Gold (Cayman) Limited ("BGCL"). BGCL has two wholly owned subsidiaries: Blue Gold Holdings Limited ("BGHL"), an England and Wales private limited liability company formed on November 9, 2023 to develop, finance, license, and operate gold mines in Ghana and elsewhere, and Blue Goldmine FZCO ("BGFZCO"), incorporated in the United Arab Emirates on November 26, 2025 to undertake gold trading activities. BGHL has two wholly owned subsidiaries: Blue Gold Digital Limited ("BGD"), an Ireland company incorporated on December 12, 2025 to develop financial technology products, and Blue Gold Bogoso Prestea Ltd. ("BGBPL"), a company incorporated in Ghana on January 26, 2024 to acquire the Bogoso Prestea mine. BGD has two wholly owned subsidiaries: BlueGold One LLC ("BGO") and Standard Gold Statutory Trust Company ("SGST"), both formed in the State of Wyoming, United States of America, on November 12, 2025 and December 9, 2025, respectively, to undertake the development and launch of the Company's digital business.

RECENT DEVELOPMENTS

Recent events impacting our business are as follows:

Business Combination

On June 25, 2025 (the "Closing Date"), BGL consummated the previously announced business combination pursuant to the Second Amended and Restated Business Combination Agreement, dated as of June 12, 2024, and further amended on November 7, 2024, January 8, 2025, March 28, 2025, April 30, 2025, May 8, 2025 and June 10, 2025, by and among the Company, Perception and BGHL (the "BCA").

For accounting purposes, the Business Combination was treated as the equivalent of a capital transaction in which BGHL issued stock for the net assets of PC4. The net assets of PC4 were stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination are those of BGHL.

Following the Business Combination, BGL's Class A ordinary shares and Warrants are traded on The Nasdaq Stock Market LLC ("Nasdaq") under the symbols "BGL" and "BGLWW", respectively.

Termination of Mining Leases

On April 2, 2025, BGHL served a notice of arbitration on the Republic of Ghana to commence international arbitration proceedings against the Republic of Ghana pursuant to Article 10 of the Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Republic of Ghana for the Promotion and Protection of Investments, signed in Accra on March 22, 1989 and entered into force on October 25, 1991 ("UK-Ghana BIT"). On June 6, 2025, the Republic of Ghana submitted its response to the notice of arbitration, in which it contested jurisdiction, disputed the validity and merits of BGL's claims, agreed to have a three-person tribunal hear the dispute, and for the tribunal to be , administered by an arbitral institution (the Permanent Court of Arbitration in The Hague). On December 8, 2025, a three-person tribunal was constituted. On February 19, 2026, the arbitral tribunal and parties to the arbitration attended an inaugural procedural conference, which focused on establishing the procedural framework of the arbitration.

Pending the resolution of the dispute, BGHL has been advised by Kimathi & Partners, Corporate Attorneys ("Kimathi & Partners"), its legal counsel in Ghana, that pursuant to Section 27(5) of the Mining Act, the mineral right, its term and area held in the Bogoso Prestea Mine at the time of the Commission Notice, shall continue without diminution until thirty days after the resolution of the dispute.

On January 27, 2025, the Company filed an Application For Contempt of Court with The High Court of Justice (Commercial Division) (the "High Court") alleging that the Interim Management Committee's ("IMC") continued control, possession, and management of the Bogoso Prestea Mines and engagement with Heath Goldfields Limited for the purposes of handing over the Bogoso Prestea Mines to Heath Goldfields Limited was in violation of the judicial review application and injunction application that were served upon them, thus contemptuous.

On February 10, 2025, the EOCO dismissed its preliminary investigation into the transactions between Heath Goldfields and the Minerals Commission following allegations of falsification of official documents due to insufficient evidence.

On March 20, 2025, the High Court dismissed Heath Goldfields Limited's application to strike the Company's judicial review application as without merit. The High Court also dismissed the Company's judicial review application to quash the decision of the Minister of Lands and Natural Resources and stated that the Company and FGR did not properly invoke the jurisdiction of the Court.

On July 5, 2025, the Ministry of Lands and Natural Resources issued a stop work notice to Heath Goldfields on the Bogoso-Prestea Mine, giving them 120 days to remedy all breaches and carry out essential services.

On November 18, 2025, the Supreme Court of Ghana dismissed an application for an order for certiorari filed by FGRBPL and BGBPL. The ruling was not on the merits of the Company's claim, but rather responding to a procedural question about whether the High Court had properly denied itself jurisdiction to consider the first application for judicial review before it.

On December 30, 2025, Heath Goldfields released a public statement claiming that the Minerals Commission and Environmental Protection Authority have issued operating permits for the Bogoso Prestea Mine to them.

On January 12, 2026, the High Court upheld a preliminary legal objection filed by the Attorney-General against the injunction application pending the determination of the Human Rights Application. The High Court was of the view that an order for injunction was not necessary and accordingly struck out the injunction application.

On February 23, 2026, the Company announced that it has withdrawn its suits pending before the Courts of Ghana to concentrate its legal efforts and resources on the ongoing international arbitration proceedings.

In the event the arbitration outcome or the outcome of any other actions is favorable to the Company, successful mine development, infrastructure construction, and mineral production will be dependent on obtaining all necessary consents, approvals, licenses, and funding for a successful design, construction, and operation of efficient mining, processing, and transportation facilities. No assurance can be given that we will be able to resolve the lease dispute or obtain all necessary consents, approvals licenses, and funding in a timely manner, or at all. If the outcome of the arbitration is unfavorable, it will adversely affect the value of BGL's business. Delays or difficulties in obtaining a favorable arbitration outcome or in obtaining other approvals, consents, licensing or funding may interfere with future mining operations or plans of BGL, which will materially impact our business and financial position in the future.

Due to the uncertainty surrounding the outcome of the lease dispute with the Government of Ghana, and the possibility that the mining leases may not be returned to BGBPL, there is a material uncertainty that BGL will be able to undertake its business plan to restart the Bogoso Prestea mine. If the Company is not successful with its arbitration proceedings with the Republic of Ghana, the leases may be relinquished, which will reduce the mineral rights value reflected in BGL's balance sheet to zero.

Shareholder Actions

On July 28, 2025, RCF VII Sponsors LLC, the former sponsor of Perception Capital Corp. IV, and S&R Capital Ltd. (together, "Plaintiffs") filed an originating summons against the Company in the Grand Court of the Cayman Islands (the "Court"). Plaintiffs seek a declaration that the Class A ordinary shares received in exchange for Perception shares are unrestricted shares, as such term is defined in the Company's Memorandum and Articles of Association (the "Pending Action"). The Company believes this claim has no merit and intends to vigorously defend against it. This claim poses a reasonable possibility of loss to the Company, but the Company is unable to reasonably estimate an amount or range of reasonably possible loss at this time.

On August 29, 2025, the Company filed a Form 6-K to provide its notice and proxy statement related to the extraordinary general meeting of shareholders (the "EGM") that was scheduled to be held on September 8, 2025. Subsequently, the Plaintiffs filed an application for an interim injunction with the Court (the "Injunction Proceeding") to prevent the Company from holding such EGM. The Injunction Proceeding was brought before the Court ex parte by the Plaintiffs.

On September 5, 2025, the Court issued an interim injunction in favor of the Plaintiffs. On September 10, 2025, the Company filed a Form 6-K disclosing that the directors of the Company have determined to postpone the EGM indefinitely. Following a hearing on September 22 and 23, 2025, the Court ordered the conversion of the originating summons proceedings to a writ action and gave directions for the exchange of full pleadings and further evidence, leading to a trial of preliminary issues which was heard on November 20 and 21, 2025. In addition, at this hearing, the Court also heard arguments from the parties in relation to whether to continue, discharge or vary the injunction. At the end of the hearing, the Court reserved judgment and the Company is currently awaiting the Court's judgment.

Convertible Note Purchase Agreements

The June 2024 Notes

On June 16, 2024, BGHL executed $2,500,000 of convertible secured interest-bearing loan notes, as amended and restated by an amendment and restatement deed, dated June 26, 2024, with a redemption date of December 14, 2024 (the "Notes"), to fund working capital needs. BGHL recorded the Note liability at its fixed monetary amount on the issuance date and recognised interest expense over the outstanding period of the Notes. In July 2024, $350,000 of the Notes were redeemed and subsequently reissued. On January 10, 2025, the Notes were amended and restated to extend the redemption date from December 14, 2024 to June 14, 2025; increase the fixed interest rate from 15% to 30% of the principal amount of the Notes repaid or redeemed and decrease the conversion rate to $0.40 per share. Under the amended terms, no interest was payable on any Notes that were converted. On June 20, 2025, the noteholders converted their Notes into shares, accepting 6,182,122 shares issued by BC2 (as converted to 555,781 shares of the Company), with a corresponding intercompany loan being put in place owing by BGHL to BC2 (see Note 16). As a result of the conversion, total interest expense of $766,585 previously recognized was reversed as the noteholders had no right to interest if they opted to convert. At December 31, 2025, and 2024, the balance of the Notes was $0 and $2,472,848, respectively.

June and July 2025 Notes

During the year ended December 31, 2025, BGHL undertook a fundraising in the form of convertible notes (the "June Notes"),

In July 2025, the Company entered into several additional convertible note purchase agreements raising an aggregate amount of approximately $0.4 million (the "July Notes"). Both the June Notes and the July Notes automatically converted into the Company's Class A ordinary shares 30 days following the listing of such shares on Nasdaq (the "Listing") at a conversion price of $17.69 per share (less the Applicable Discount). The "Applicable Discount" was 40% discount for investments made prior to the Listing and 20% discount for investments made following the Listing. An aggregate of $2,614,318 was raised from the June and July Notes.

The June and July 2025 Notes are classified and accounted for as a financial liability which was measured at fair value on a recurring basis under ASC 480-10. At December 31, 2025, the balance of the June Notes and the July Notes was $0.

The PC4 Convertible Note

Prior to the close of the Business Combination, PC4 incurred certain legal fees related to the Business Combination in the aggregate amount of $770,000. Upon the close of the Business Combination, PC4 entered into a convertible note agreement (the "PC4 Convertible Note") with the legal firm with respect to the total amount owed, and this obligation was assumed by the Company at the close of the Business Combination. The PC4 Convertible Note carried an interest rate of 12% per annum and 18% on any overdue unpaid principal. For the year ended December 31, 2025, total interest expense of $35,452 was paid by the Company on the PC4 Convertible Note and included in interest expense on the consolidated statements of operations and other comprehensive loss. The balance of $770,000 was repaid during the year ended December 31, 2025. At December 31, 2025, $0 was due and payable under the note.

Senior Convertible Notes

On August 29, 2025, the Company entered into a Securities Purchase Agreement (the "August Note SPA") with 3i, LP ("3i") authorizing a new series of senior convertible notes in the principal amount of up to $5,434,783 (the "Senior Convertible Notes") and warrants to purchase up to an aggregate of 215,299 Class A ordinary shares. On September 3, 2025, the Company sold a Senior Convertible Note in the principal amount of $3,804,348 at an original issue discount of 8% (the "First Note") and 150,709 warrants (the "First Warrant"), for an aggregate purchase price of $3,500,000. On November 12, 2025, the Company issued to 3i an additional Senior Convertible Note in the principal amount of $1,630,435, at an 8% discount (the "Second Note" and, together with the First Note, the "Existing Notes"), and 64,590 additional warrants (the "Second Warrant" and, together with the First Warrant, the "Existing Warrants"), for an aggregate purchase price of $1,500,000. The Senior Convertible Notes bear interest at a rate of 7% per annum, increasing to 12% upon an event of default (as defined in the Senior Convertible Notes). The Senior Convertible Notes are convertible into Class A ordinary shares at a conversion price of $13.51 per share, subject to certain adjustments.

On December 1, 2025, the Company entered into a letter agreement (the "Letter Agreement") with 3i pursuant to which the Company and 3i agreed that, in lieu of the payment in cash of the first installment amount of $1,017,663 (the "First Installment") due on December 3, 2025, 3i will have the right to convert the entire First Installment, or any portion thereof, at its option, into Class A ordinary shares at a conversion price equal to 93% of the lowest volume weighted average price ("VWAP") for the five (5) Trading Day (as defined in the August Note SPA) period prior to the date of 3i's applicable conversion notice.

The Senior Convertible Notes are classified as liabilities under ASC 480-10 and measured at fair value on a recurring basis, with changes in fair value recognized in earnings each reporting period. At December 31, 2025, the fair value of the Senior Convertible Notes was $3,468,563, with a principal balance of $4,577,763 and unamortized debt issuance costs of $434,783. During the year ended December 31, 2025, the Company converted a balance of $917,016 of Senior Convertible Notes (inclusive of $857,020 principal and $59,996 of interest) into 321,189 Class A ordinary shares. Also on August 29, 2025, the Company entered into a Registration Rights Agreement with 3i providing for the registration of the Class A ordinary shares issuable upon conversion of the Senior Convertible Notes and exercise of the related warrants.

On January 23, 2026, the Company entered into an Omnibus Amendment to Securities Purchase Agreement and Senior Convertible Notes with 3i (the "Omnibus Amendment") to amend each of the August Note SPA, Existing Notes and the Existing Warrants.

Pursuant to the Omnibus Amendment, beginning January 23, 2026, subject to an existing event of default, 3i agreed that neither it nor any of its affiliates will sell or otherwise dispose of certain shares on any Trading Day in an amount that exceeds the greater of (i) ten percent (10%) of the aggregate daily trading volume of the Company's Class A ordinary shares reported on its principal market and (ii) $10,000 per Trading Day through February 15, 2026 and $40,000 per Trading Day thereafter.

The Omnibus Amendment amended the conversion price mechanics of the Existing Notes such that the conversion price was fixed at $3.00 through February 15, 2026, and currently equals the lower of (i) 93% of the lowest VWAP during the three (3) Trading Days immediately preceding a Conversion Notice (subject to a $0.50 floor price) and (ii) $10.00, in each case as adjusted for customary equity events. The Omnibus Amendment additionally amended the events of default to clarify that a failure to pay principal, make-whole amounts, interest, late charges or other amounts (other than installment amounts) when due constitutes an event of default if not cured within ten (10) Trading Days, applicable solely to unpaid interest and late charges. Further, the Omnibus Amendment provides 3i with a five (5) Trading Day election period following receipt of a Company optional redemption notice to convert all or any portion of the conversion amount, with any conversion amount reducing the applicable redemption amount. In addition, the Omnibus Amendment modifies the installment payment provisions to require cash payment of installment amounts (the "Installment Amounts") only on installment dates on or prior to January 1, 2026 (unless converted). After January 1, 2026, no Installment Amounts shall become payable or owed by the Company, other than the maturity date.

Finally, the Omnibus Amendment amends the exercise price of the Existing Warrants to $0.01.

Concurrently with the Omnibus Amendment, on January 23, 2026, the Company issued to 3i (i) a senior convertible note in the principal amount of $1,630,435 (the "January Note") and (ii) a warrant to purchase 64,590 Class A ordinary shares (the "January Warrant").

The January Note matures on January 23, 2027 and is convertible into Class A ordinary shares pursuant to the same conversion mechanics of the Existing Notes. The January Note contains the same terms and conditions as the Existing Notes, including certain negative covenants, as well as standard and customary events of default.

The January Warrant is exercisable for up to an aggregate of 64,590 Class A ordinary shares at a price of $0.01 per share (the "January Warrant Exercise Price"). The January Warrant may be exercised during the period that commenced on January 23, 2026 and ends on January 23, 2031. The January Warrant Exercise Price is subject to customary adjustments for stock dividends, stock splits, and issuances of additional Class A ordinary shares.

Pursuant to the terms of the January Note and the January Warrant, the Company shall not effect a conversion of any portion of the January Note or an exercise of the January Warrant, to the extent that after giving effect to such conversion or exercise, as applicable, 3i would beneficially own in excess of 4.99% (or, at the option of 3i, 9.99%) of the Class A ordinary shares of the Company outstanding immediately after giving effect to such conversion.

Ordinary Share Purchase Agreement

On August 29, 2025, the Company entered into an Ordinary Share Purchase Agreement (the "Ordinary Share SPA") with Tumim Stone Capital LLC ("Tumim"), pursuant to which the Company may sell up to $75,000,000 of newly issued Class A ordinary shares to Tumim at the Company's option, subject to certain conditions, at a price per share equal to 0.97 multiplied by the lowest daily VWAP of the ordinary shares during the applicable VWAP Purchase Valuation Period (as defined in the Ordinary Share SPA). In consideration for entering into the Ordinary Share SPA, on September 3, 2025, the Company issued to Tumim 69,419 Class A ordinary shares as commitment shares. Also on August 29, 2025, the Company entered into a Registration Rights Agreement with Tumim requiring registration of the VWAP Purchase Shares and the Commitment Shares. In the year ended December 31, 2025, the Company issued 466,631 Class A ordinary shares pursuant to the Ordinary Share SPA.

On November 24, 2025, the parties amended the Ordinary Share SPA to provide that at the Company's option, the Company may sell the VWAP Purchase Shares either (i) at a price per share equal to (x) 0.95, multiplied by (y) the lower of (A) the Closing Sale Price (as defined in the Ordinary Share SPA) on the applicable Trading Day (as defined in the Ordinary Share SPA) and (B) the VWAP on the applicable Trading Day during a one- (1-) day VWAP Purchase Valuation Period (as defined in the Ordinary Share SPA) or (ii) at a price per share equal to (x) 0.97, multiplied by (y) the lowest VWAP of the Class A ordinary shares during a three- (3-) day VWAP Purchase Valuation Period.

Additionally, the VWAP Purchase Maximum Amount (as defined in the Ordinary Share SPA) was amended to mean (a) with respect to a VWAP Purchase made pursuant to Section 3.1 where the VWAP Purchase Valuation Period consists of one (1) Trading Day, such number of Class A ordinary shares equal to the lower of: (i) the product (rounded up or down to the nearest whole number) obtained by multiplying (A) the daily trading volume in the Class A ordinary shares on the Trading Market (or Eligible Market, as applicable) on the applicable VWAP Purchase Exercise Date for such VWAP Purchase by (B) 0.20; and (ii) the quotient obtained by dividing (A) $2,000,000, by (B) the VWAP on the VWAP Purchase Exercise Date, and (b) with respect to a VWAP Purchase made pursuant to Section 3.1 where the VWAP Purchase Valuation Period consists of three (3) Trading Days, such number of Class A ordinary shares equal to the lower of (i) the product (rounded up or down to the nearest whole number) obtained by multiplying (A) the daily trading volume in the Class A ordinary shares on the Trading Market (or Eligible Market, as applicable) on the applicable VWAP Purchase Exercise Date for such VWAP Purchase by (B) 0.40; and (ii) the quotient obtained by dividing (A) $3,000,000, by (B) the VWAP on the VWAP Purchase Exercise Date (in each case to be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction during the applicable period); provided however, that the investor may waive this limit if Form F-3 is being used to register the Registrable Securities (as defined in the Registration Rights Agreement). All capitalized terms not defined in this paragraph shall have the meanings ascribed to them in the Ordinary Share SPA, as amended.

Mampon Gold and Copper Mining Lease

On September 17, 2025, the Company entered into a conditional Agreement for the Purchase of the Mampon Gold and Copper Mining Lease ("Mampon") in Ghana (the "Mampon Purchase Agreement") with FGR Bogoso Prestea Limited ("FGRBPL") to acquire up to a 90% interest in the company that will own Mampon (the "License-Holding Company") located in Ghana's Ashanti Gold Belt. The closing conditions include requirements to comply with Ghana regulations, including the transfer of a 10% ownership interest in the License-Holding Company to the government of Ghana. FGRBPL will receive two payment tranches, as follows:

Loan Facility

On November 4, 2025, the Company entered into a loan agreement (the "City Loan Agreement") with City First Capital Pty Ltd ("City First") that provides for a loan facility in the aggregate principal amount of AUD$100 million, subject to the satisfaction of certain conditions precedent, including resolution of the mining lease dispute. The loan will be used exclusively to restart the Bogoso and Prestea mine, including any associated working capital costs. The loan matures on November 3, 2029 and bears interest at 24% per annum, or AUD$6,000,000, payable quarterly. The Company may elect to repay the loan in whole or in part prior to maturity, subject to a termination fee equal to six months' interest. The City First Loan Agreement was amended on each of November 17, 2025, and December 16, 2025, primarily to extend the deadline for satisfying conditions precedent and to clarify the Establishment Fee. On December 1, 2025, pursuant to the City First Loan Agreement, as amended, the Company issued 250,000 Class A ordinary shares with a fair value of $1,037,500 as the Establishment Fee, recorded as deferred financing on the consolidated balance sheet at December 31, 2025. At December 31, 2025, there were no drawdowns under this facility.

Gold Sale and Purchase Agreement

On December 1, 2025, Blue Goldmine FZCO entered into a Sale and Purchase Agreement (the "Hudson Dunes Agreement") with Hudson Dunes FZCO ("Hudson Dunes"), which establishes a framework under which Hudson Dunes shall make available to Blue Goldmine FZCO, on a call-off basis, up to one million (1,000,000) troy ounces of gold over the duration of the Hudson Dunes Agreement. The purchase price will be determined as a product of the net weight multiplied by the purity and the London Bullion Markets Association (LBMA) Fix. The Hudson Dunes Agreement also provides that Hudson Dunes shall make available to Blue Goldmine FZCO a $100 million secured funding facility to finance purchases under the Hudson Dunes Agreement, with Hudson Dunes receiving 50% of the profit margin generated from onward sale or tokenization of financed gold as repayment. Gold financed under the Hudson Dunes Agreement will be subject to a first ranking lien over the gold in favor of Hudson Dunes.

Entry into Trading Facility Agreement

On December 1, 2025, Blue Goldmine FZCO entered into a $15,000,000 gold trading facility agreement (the "Facility") with Hudson Dunes and BGL as guarantor, to finance the purchase and sale of gold on a transactional and revolving basis. Pursuant to the facility, Blue Goldmine FZCO may use the funds to finance specific gold trades that meet agreed eligibility criteria. The positive margins generated from gold trades will be shared between Blue Goldmine FZCO and Hudson Dunes on a 2:1 basis, whereby two parts will be allocated to Blue Goldmine FZCO and one part will be allocated to Hudson Dunes. The obligations under the Facility are secured by a corporate guarantee provided by BGL. Blue Goldmine FZCO will provide Hudson Dunes a cash collateral of $5 million (the "Cash Collateral Contribution") as a condition to drawing on the Facility. The Facility is available until the earlier of December 31, 2026 and the Facility's earlier termination in accordance with its terms. On January 12, 2026, the Facility was amended to include BGHL as an additional borrower and increase the Facility amount to three times the Cash Collateral Contribution up to a maximum of $15,000,000.

Ritchie Facility Agreement

On January 10, 2026, the Company entered into a facility agreement with Kaela Ritchie (the "Ritchie Facility Agreement") that provides for a drawdown loan facility of up to $2,000,000. The Ritchie Facility Agreement is available for drawdown by the Company for a period of six months from January 9, 2026, with a maximum aggregate drawdown per week of $500,000. Interest accrues at 10% per year on drawn amounts. At maturity, the Company shall repay the balance and interest, provided that the Company may repay the balance at any time prior to maturity without premium or penalty. The facility matures on January 9, 2027.

On March 26, 2026, the Company entered into a second facility agreement with Kaela Ritchie that provides for a drawdown loan facility of up to $2,000,000. The second facility is available for drawdown by the Company for a period of six months with a maximum aggregate drawdown per week of $500,000. Interest will accrue at 10% per year on the drawn amounts. At maturity, the Company shall repay the balance and interest, provided, that, the Company may repay the balance at any time prior to maturity without premium or penalty. The second facility matures on March 26, 2027.

Entry into Securities Purchase Agreement

On February 23, 2026, the Company entered into a Securities Purchase Agreement with Hudson Dunes pursuant to which the Company agreed to issue and sell in a private placement an aggregate of 2,500,000 Class A ordinary shares at a price per share of $4.00, for gross proceeds of $10,000,000. The proceeds will be used for working capital, general corporate purposes and to repay certain debt obligations. As at the date of filing the private placement has not closed.

Amendment of Employment Agreement and Grant of Class A Ordinary Shares

On April 2, 2026, our Board approved, and the Company entered into, an amended employment agreement with our chief executive officer, Andrew Cavaghan (the "Amended Employment Agreement"). In connection with the Amended Employment Agreement, the Compensation Committee of the Board approved grants to Mr. Cavaghan of an aggregate of 2,447,500 Class A ordinary shares (the "April 2026 Grant") under the Company's 2025 Equity Incentive Plan (the "Plan"), in lieu of previously approved cash and stock-based compensation. The April 2026 Grant consists of (i) 2,290,000 restricted Class A ordinary shares, which are subject to time-based and/or performance-based vesting, and (ii) 157,500 unrestricted Class A ordinary shares, in consideration for Mr. Cavaghan's service to the Company. Mr. Cavaghan has entered into a Restricted Stock Grant Agreement and an Unrestricted Stock Grant Agreement with the Company, evidencing the terms and conditions of each such grant, which are subject to all of the terms and conditions of the Plan.

In addition, pursuant to the Amended Employment Agreement, Mr. Cavaghan's cash compensation was reduced to US$1 per annum. Effectiveness of the terms and conditions of the Amended Employment Agreement was retroactive to January 1, 2026.

A. Operating Results

The following table summarizes our financial results for the years ended December 31, 2025 and 2024:

The following table summarizes our financial results for the years ended December 31, 2024 and 2023:

General and Administrative

General and administrative expenses for the year ended December 31, 2025 were $11,928,581 as compared to $9,816,828 for the year ended December 31, 2024. The $9,816,828 increase in general and administrative expenses primarily reflects increases in professional services, including legal and accounting fees, and stock-based compensation expense of $1,162,531 primarily related to the issuance of Class A ordinary shares to consultants during the year, together with increased costs associated with operating as an exchange-listed public company following the closing of the Business Combination in June 2025. For the period from November 9, 2023 (inception) to December 31, 2023, BGL's expenses are associated with accounting, legal and consulting costs related to the Business Combination. BGL expects that its general and administrative expenses will increase in future periods commensurate with the expected growth of its business and increased expenditures associated with its status as an exchange-listed public company.

Merger and Acquisition Expenses

Merger and acquisition expenses for the year ended December 31, 2025 were $2,045,056 as compared to $1,682,391 for the year ended December 31, 2024. The $362,665 increase reflects higher legal and other professional costs related to the Business Combination transaction that closed in June 2025.

Plant Costs

Plant costs for the year ended December 31, 2025 were $484,641 as compared to $6,252,438 for the year ended December 31, 2024. The $5,767,797 decrease in plant costs reflects a significant reduction in BGL's activities at the mine site as a result of the ongoing lease dispute with the Government of Ghana. BGL expects that its plant costs will increase in future periods following resolution of the dispute, commensurate with the expected restart and growth of its mining operations.

Accretion of Asset Retirement Obligation

Accretion of asset retirement obligation for the year ended December 31, 2025 was $1,910,000 as compared to $1,037,000 for the year ended December 31, 2024. The asset retirement obligations totaled $17,833,000 and $13,937,000 at December 31, 2025, and 2024, respectively.

Depreciation

Depreciation for the year ended December 31, 2025 was $54,799 compared to $41,768 for the year ended December 31, 2024. The Company began ownership of property, plant and equipment in May 2024, with assets subject to depreciation from September 2024, resulting in only a partial period of depreciation in 2024.

Interest Income (Expense), Net

Interest income, net, was $255,842 for the year ended December 31, 2025, compared to interest expense, net, of $442,869 for the year ended December 31, 2024. The $698,711 increase in interest income, net is a result of a reversal of interest on June 2024 convertible note due to conversion to equity in lieu of an interest payment and partially offset by additional interest expense.

Day One Loss on Issuance of Convertible Notes

The day one loss on issuance of convertible notes of $1,604,305 for the year ended December 31, 2025 represents the excess of the fair value of the Senior Convertible Notes over the proceeds received on issuance, arising as a result of the variable-rate conversion features of those instruments, which were classified and measured at fair value under ASC 480-10.

Change in Fair Value of Liabilities

The change in fair value of liabilities of $4,470,596 for the year ended December 31, 2025 reflects the aggregate movement in fair value of (i) the 11,500,000 warrants assumed in connection with the Business Combination, which are classified as warrant liabilities under ASC 815-40 and measured at fair value based on the period-end publicly stated closing price, and (ii) the Senior Convertible Notes held at fair value. At December 31, 2025, the fair value of the warrant liabilities was $4,843,800.

Related Party Interest Income (Expense), Net

Related party interest income, net, was $332,222 for the year ended December 31, 2025, compared to related party interest expense, net, of $69,418 for the year ended December 31, 2024. The $401,640 change reflects the change in the net position of related party balances from a net payable in 2024 to a net receivable in 2025.

B. Liquidity and Capital Resources

Since inception, the Company's primary sources of liquidity have been cash flows from advances provided by affiliated entities, share issuances and convertible notes issuances. For the year ended December 31, 2025, the Company reported an operating loss of approximately $16.4 million and negative cash flows from operations of approximately $10.6 million. As of December 31, 2025, the Company had an aggregate cash balance of approximately $0.7 million and a net working capital deficit of approximately $11.9 million.

On August 19, 2024 the Company has entered into a Gold Advance Payment Purchase Agreement ("GAPPA") with Gerald Metals SARL ("Gerald") whereby, subject to satisfying several conditions precedent, Gerald will make advance payments of up to an aggregate of $25,000,000 to fund Bogoso Prestea restart costs. In September 2024, BGBPL signed a Mining Equipment Supply Framework Agreement with Attachy Construction Limited ("Attachy"), whereby Attachy has agreed to procure certain goods and equipment necessary for the restart of the Bogoso Prestea Mine, up to a total value of $8.0 million. BGBPL must repay to Attachy the equipment purchase price plus a mark-up of 30% of such price. Repayment of the purchase price and mark-up amount will commence three months after an equipment purchase and will be repaid over seven equal monthly installments. On November 7, 2024, BGHL received a $345,000 advance from Attachy. On each of October 2, 2024, October 28, 2024 and November 13, 2024, BGHL's subsidiary, BGBPL, received advances in the aggregate amount of $303,000 from Attachy. These advances are non-interest bearing and do not require collateral. The advances are due on demand and, to date, Attachy has not demanded repayment of the advances. On August 29, 2025, the Company entered into an Ordinary Share Purchase Agreement pursuant to which the Company may sell up to $75,000,000 of newly issued Class A ordinary shares (the "VWAP Purchase Shares") to an investor at the Company's option, subject to certain conditions. On November 4, 2025, the Company entered into a Loan Agreement (as amended on November 17, 2025 and December 16, 2025) with City First Capital Pty ("City First") that provides in the aggregate a loan amount of AUD$100 million, subject to the satisfaction of certain conditions precedent, to be used for the restart the Bogoso and Prestea mine. The GAPPA and City First Loan Agreement are both available specifically for the restart of the Bogoso Prestea mine; however, both are subject to satisfying several conditions precedent, including satisfactory due diligence and resolution of the lease dispute with the Government of Ghana. Subsequent to December 31, 2025, the Company entered a $2,000,000 drawdown loan facility with Kaela Ritchie on January 10, 2026, a second $2,000,000 drawdown loan facility with Kaela Ritchie on March 26, 2026, and, on February 23, 2026, a Securities Purchase Agreement with Hudson Dunes for gross proceeds of $10,000,000 through a private placement of 2,500,000 Class A ordinary shares.

The funding of Blue Gold Limited's capital requirements will depend on many factors, including the Company's revenue growth rate, the timing and extent of spending to support further sales and marketing and research and development efforts including growth into new business areas of gold trading and digital gold, the timing and extent of spending on the arbitration proceedings pursuant to the lease dispute with the Government of Ghana, the timing and extent of spending on shareholder litigation proceedings, the timing and extent of spending to support the restart of the Bogoso Prestea Mine, including whether the Bogoso Prestea Mine will restart at all, and further exploration activities. To finance these opportunities and activities, the Company will need to raise additional financing. While there can be no assurances, the Company intends to raise such capital through debt finance, trade finance, offtake finance and/or issuances of additional equity raises such as is available under the Ordinary Share Purchase Agreement. If additional financing is required from outside sources, the Company may not be able to raise it on terms acceptable to the Company or at all. If the Company is unable to raise additional capital when desired, the Company's business, results of operations and financial condition would be materially and adversely affected.

In connection with the Company's assessment of going concern considerations in accordance with Financial Accounting Standard Board's ("FASB") Accounting Standards Update ("ASU") 2014-15, "Disclosures of Uncertainties about an Entity's Ability to Continue as a Going Concern," management has determined that the Company's liquidity condition raises substantial doubt about the Company's ability to continue as a going concern through twelve months from the date these financial statements are available to be issued and the current plans do not alleviate the substantial doubt. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

Cash flows for the year ended December 31, 2025 and 2024

The following table summarizes BGL's cash flows from operating, investing and financing activities for the years ended December 31, 2025 and 2024:

(96,735

Net cash used in operating activities

Net cash used in operating activities was approximately $10.6 million and approximately $6.2 million for the years ended December 31, 2025 and 2024, respectively, primarily consisting of general and administrative expenses, merger and acquisition expenses and plant costs. General and administrative expenses and merger and acquisition expenses increased in 2025 reflecting an increase in costs due to the Business Combination and arbitration costs pursuant to the lease dispute with the government of Ghana.

Net cash used in investing activities

Net cash used in investing activities for the years ended December 31, 2025 and 2024 was approximately $0.1 million and approximately $0.4 million, respectively, related to purchase of computer equipment and investment in intangible assets.

Cash flows provided by financing activities

Net cash provided by financing activities for the years ended December 31, 2025 and 2024 was $11.2 million and $6.7 million, respectively, and was primarily related to proceeds from the issuance and sale of Class A ordinary shares and convertible notes, partially offset by repayment of convertible notes.

C. Research and development, patents and licenses, etc.

None.

D. Trend Information.

None.

E. Critical Accounting Estimates

BGL prepares its consolidated financial statements in accordance with U.S. GAAP, expressed in U.S. dollars. References to U.S. GAAP issued by the FASB are to the FASB Accounting Standards Codification. All significant intercompany balances and transactions have been eliminated in consolidation.

Preparation of consolidated financial statements in conformity with U.S. GAAP requires BGL to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and the accompanying notes. Actual results could materially differ from these estimates. On an ongoing basis, BGL evaluates its estimates, including those relating to fair values, income taxes, and contingent liabilities among others. BGL bases its estimates on assumptions both historical and forward looking that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of its assets and liabilities.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of BGL and its wholly owned subsidiaries. Control over subsidiaries is derived without exception from holding the majority of voting rights in the companies concerned. All significant intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of the accompanying consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts and disclosures of assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting periods. Estimates are adjusted to reflect actual experience when necessary. Significant estimates made by management include, but are not limited to, the legal title to the Bogoso Prestea leases, valuation of convertible loan payables, valuation of warrants, valuation of mineral rights, valuation of royalty liabilities, contingent consideration, reserve volumes and future net revenues associated with mine resources and the asset retirement obligations.

The Life of Mine model ("LoM"), which has been used as the basis for calculating the mineral rights value and the royalty liability value is prepared to a Scoping Study level. The LoM is preliminary in nature and there is a high degree of uncertainty over the assumptions made. The LoM is solely based on Measured and Indicated Resources which are considered too speculative geologically to have economic considerations applied to them that would allow them to be categorized as mineral reserves, and there is no certainty that the LoM will be realized.

Foreign currency translation and transactions

BGL's reporting currency is the U.S. dollar. The functional currency of each entity in the group is the currency of the primary economic environment in which it operates, other than for BGBPL whose functional currency is deemed to be the U.S. Dollar. Transactions in foreign currencies are initially recorded in source currency and converted into the functional currency at the rates of exchange prevailing on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are remeasured into functional currency at the rates of exchange prevailing at the balance sheet date. Non-monetary assets and liabilities are remeasured to the functional currency at exchange rates that prevailed on the date of inception of the transaction.

BGL translates the financial statements from the local (functional) currency into US Dollars using the year or reporting period end or average exchange rates in accordance with the requirements of Accounting Standards Codification subtopic 830-10, Foreign Currency Matters ("ASC 830-10"). Assets and liabilities are translated at exchange rates as of the balance sheet dates. Expenses are translated at average rates in effect for the years presented. Translation gains and losses resulting from re-measurement from functional to reporting currency are recorded in accumulated other comprehensive income or loss as a component of shareholders' deficit.

Gains and losses resulting from transactions denominated in a currency other than the functional currency of the entity are included in general and administrative expenses in the consolidated statements of operations and other comprehensive loss using the average exchange rates in effect during the period.

Property, Plant and Equipment

The value of property, plant and equipment ("PP&E"), including land, buildings and processing equipment, that were acquired as part of the Asset Acquisition are recorded at relative fair value assessed at the time of the acquisition less depreciation. Any additional PP&E acquired, and any expenditures that extend the life of such assets, are recorded at historical cost, including direct acquisition costs less depreciation and impairment losses. Historical cost includes expenditures that are directly attributable to the acquisition of the items. Capital work-in-progress is recorded at cost less impairment losses but is not depreciated until it is in use and transferred into other PP&E classifications.

Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to BGHL and the cost of the item can be measured reliably. All other repairs and maintenance costs are charged to profit or loss during the financial period in which they are incurred.

Depreciation

Depreciation for vehicles and other assets is computed using the straight-line method at rates calculated to depreciate the cost of the assets, less their anticipated residual values, if any, over their estimated useful lives as follows:

An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss.

BGL evaluates the carrying value of PP&E and finite-lived intangible assets whenever a change in circumstances indicates that the net carrying value may not be recoverable from the entity-specific undiscounted future cash flows expected to result from our use of and eventual disposition of a long-lived asset or asset group. Events or circumstances that could trigger an impairment review of a long-lived asset or asset group include, but are not limited to: (i) a significant decrease in the market price of the asset, (ii) a significant adverse change in the extent or manner that the asset is used or in its physical condition, (iii) a significant adverse change in legal factors or in the business climate that could affect the value of the asset, (iv) an accumulation of costs significantly in excess of original expectation for the acquisition or construction of the asset, (v) a current period operating or cash flow loss combined with a history of operating or cash flow losses or a forecast of continuing losses associated with the use of the asset and (vi) a more-likely-than-not expectation that the asset will be sold or disposed of significantly before the end of its previously estimated useful life. If an impairment exists, the net carrying values are reduced to fair values. BGHL estimates the fair values of these long-lived assets by performing a discounted future cash flow analysis for the remaining useful life of the asset, or the remaining useful life of the primary asset in the case of an asset group. An individual asset within an asset group is not impaired below its estimated fair value. There were no impairments recorded as of December 31, 2025 and 2024.

Mineral Rights Impairment and Amortization

Amortization of Mineral Rights ("Mine Properties"), buildings, leasehold land and plant and machinery (collectively the "mineral assets") is provided for using the unit-of-production method with separate calculations made for each mineral resource.

The calculation of the units-of-production rate of amortization could be impacted to the extent that actual production in the future differs from current forecasted production resulting in possible revision to the estimate of total resources to be produced.

The carrying values of the mineral rights are assessed for impairment by management on an annual basis (while under development) or when indicators of impairment exist. BGL compares the carrying value of the mine assets to its estimates of undiscounted future cash flows from the underlying resources. Should management determine that these carrying values cannot be recovered, the carrying value is compared to an estimate of fair value and the unrecoverable amounts are written off against earnings and cannot be subsequently reversed. As of December 31, 2025, as the lease termination and ensuing dispute represented a triggering event, in accordance with ASC 360, BGL compared the undiscounted cash flows of the long-lived asset group to their carrying amounts which determined there was no impairment required.

Mineral Exploration Rights and Costs, Exploration, Evaluation and Development Expenditures

Exploration costs, which include maintenance, development and exploration of mineral claims, are expensed as incurred. When it is determined that a mineral deposit can be economically developed as a result of establishing proven and probable reserves and all regulatory operating permits have been secured, the costs incurred after such determination will be capitalized until the commencement of production and amortized over their useful lives. To date, BGL has not established the commercial feasibility and received the necessary regulatory operating permits for any of its exploration prospects; therefore, all exploration costs are expensed.

Asset Retirement Obligation

BGL follows Financial Accounting Standards Board Accounting Standards Codification ("FASB ASC"), which established a uniform methodology for accounting for estimated reclamation and abandonment costs. FASB ASC 410 requires the fair value of a liability for an asset retirement obligation to be recognized in the period in which the legal obligation associated with the retirement of the long-lived asset is incurred or when acquired. When the liability is initially recorded, the offset is capitalized by increasing the carrying amount of the related long-lived asset. Over time, the liability is accreted to its future value each period and charged to accretion expense, and the initial capitalized cost is amortized over the useful life of the related asset. To settle the liability, the obligation is paid, and to the extent there is a difference between the liability and the amount of cash paid, a gain or loss upon settlement is recorded.

Business Combination and Asset acquisition

BGL applies a screen test to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets to determine whether a transaction should be accounted for as an asset acquisition or business combination.

When an acquisition does not meet the definition of a business combination because either: (i) substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset, or group of similar identified assets, or (ii) the acquired entity does not have an input and a substantive process that together significantly contribute to the ability to create outputs, BGL accounts for the acquisition as an asset acquisition. In an asset acquisition, goodwill is not recognized, but rather, any excess purchase consideration over the fair value of the net assets acquired is allocated on a relative fair value basis to the identifiable net assets as of the acquisition date and any direct acquisition-related transaction costs are capitalized as part of the purchase consideration.

When an acquisition is accounted for as a business combination, BGL recognizes and measures the assets acquired and liabilities assumed based on their estimated fair values at the acquisition date, while transaction and integration costs related to business combinations are expensed as incurred. Any excess of the purchase consideration in excess of the aggregate fair value of the net tangible and intangible assets acquired, if any, is recorded as goodwill. For material acquisitions, BGL engages independent appraisers to assist with the determination of the fair value of assets acquired, liabilities assumed, noncontrolling interest, if any, and goodwill, based on recognized business valuation methodologies. An income, market or cost valuation method may be utilized to estimate the fair value of the assets acquired, liabilities assumed, and noncontrolling interest, if any, in a business combination. The income valuation method represents the present value of future cash flows over the life of the asset using discrete financial forecasts, long-term growth rates, appropriate discount rates, and expected future capital requirements. The market valuation method uses prices paid for a similar asset by other purchasers in the market, normalized for any differences between the assets. The cost valuation method is based on the replacement cost of a comparable asset at the time of the acquisition adjusted for depreciation and economic and functional obsolescence of the asset. The fair value of property, plant and mine development is estimated to include the fair value of asset retirement costs of related long-lived tangible assets. During the measurement period, not to exceed one year from the date of acquisition, BGL may record adjustments to the assets acquired and liabilities assumed, with a corresponding offset to goodwill if new information is obtained related to facts and circumstances that existed as of the acquisition date. After the measurement period, any subsequent adjustments are reflected in the period the adjustment arises.

Fair Value Measurement

As defined in ASC 820, Fair Value Measurements and Disclosures, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date (exit price). BGL utilizes market data or assumptions that market participants would use in pricing an asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. ASC 820 establishes a fair value hierarchy that participants used to measure fair value. The hierarchy gives us the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement). This fair value measurement framework applies at both initial and subsequent measurement. Financial assets and liabilities are recorded based on the inputs to valuation techniques as follows:

Level 1: Quoted prices are available in an active market for identical assets or liabilities as of the reporting data. Active markets are those in which transactions for the assets or liability occur in sufficient frequency and volume to provide information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities.

Level 2: Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Subsequently all these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supposed by observable level at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, option and collar.

Level 3: Pricing inputs includes significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management's best estimate of fair value.

The fair value of cash, prepaid expenses and other current assets, advances to related parties, accounts payable, accrued expenses and other current liabilities, and accounts payable - related parties, net approximates their carrying values due to their relatively short terms to maturity.

Convertible Notes Payable

BGL entered into convertible notes, some of which contain fixed rate conversion features, whereby the outstanding principal and accrued interest may be converted by the holder into Class A ordinary shares at a fixed rate at the time of conversion. This results in a fair value of the convertible note being equal to a fixed monetary amount. BGL records the convertible note liability at its fixed monetary amount on the issuance date and interest expense charged over the outstanding period of the note.

For convertible debt instruments that are not considered liabilities under ASC 480 or ASC 815, the Company applies FASB ASC 470, Debt ("ASC 470"), for the accounting of such instruments, including any premiums or discounts. Debt issuance costs consist primarily of original issue discount (OID) and legal fees. These costs are netted off with the related loan and are being amortized to interest expense over the term of the related debt facilities using effective interest method.

The Company may elect the fair value option for certain financial instruments that meet the required criteria under ASC 825, Financial Instruments. Issuance fees incurred on instruments for which the fair value option was elected are not deferred and are recognized as an expense when incurred in the consolidated statement of operations. The portion of the change in fair value attributable to instrument-specific credit risk, if any, is recognized in other comprehensive income, with the remainder recognized in earnings.

Warrants

The Company reviews the terms of warrants to purchase its Class A ordinary shares to determine whether warrants should be classified as liabilities or within stockholders' deficit in its consolidated balance sheets. In order for a warrant to be classified in stockholders' deficit, the warrant must be (i) indexed to the Company's equity and (ii) meet the conditions for equity classification.

If a warrant does not meet the conditions for stockholders' deficit classification, it is carried on the consolidated balance sheets as a warrant liability measured at fair value, with subsequent changes in the fair value of the warrant recorded in other non-operating losses (gains) in the consolidated statements of operations and other comprehensive loss. If a warrant meets both conditions for equity classification, the warrant is initially recorded, at its relative fair value on the date of issuance, in stockholders' deficit in the consolidated balance sheets, and the amount initially recorded is not subsequently remeasured at fair value.

Disclaimer

Blue Gold Ltd. published this content on April 29, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 29, 2026 at 10:20 UTC.