UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-K
(Mark
One)
☒ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the Fiscal Year Ended December 31, 2025
☐TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the transition period from
to
Commission
File No. 001-32955
ABUNDIA
GLOBAL IMPACT GROUP, INC.
(Exact
name of registrant as specified in its charter)
1300
Post Oak Blvd, Suite 1305
Houston,
Texas77056
(Address
of principal executive offices)(Zip code)
Registrant’s
telephone number, including area code: (713)322-8818
Securities
registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol Name of each exchange on which registered
Common Stock, $0.001 par value per share AGIG NYSE American
Securities
registered pursuant to Section 12(g) of the Act:
None
(Title
of Class)
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes ☐ No ☒
Indicate
by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2)
has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files). Yes ☒ No ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company or an emerging growth company. See definition of “accelerated filer,” “large accelerated filer,” “smaller
reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒
Smaller reporting company ☒ Emerging growth company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report. ☐
If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements ☐
Indicate
by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant’s executive officers during the relevant recovery period pursuant to o § 240.10D-1(b). ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The
aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant on June 30, 2025 (the
last business day of the second quarter of the registrant’s most recently completed fiscal year), based on the closing price
of the registrant’s common stock on that date, was $17,898,445.
Shares of common stock held by each executive officer and director and by each person known by the registrant to own 10% or more of
the outstanding common stock on such date have been excluded from this computation in that such persons may be deemed to be
affiliates. The determination of affiliate status is not necessarily conclusive.
The
number of shares of the registrant’s common stock, par value $0.001 per share, outstanding as of March 19, 2026 was 43,720,999.
DOCUMENTS
INCORPORATED BY REFERENCE
Portions
of the registrant’s definitive proxy statement for the 2026 annual meeting of its stockholders (to be filed with the United States
Securities and Exchange Commission (“SEC”) under Regulation 14A promulgated under the Securities Exchange Act of 1934, as
amended, within 120 days after the end of the registrant’s fiscal year) will be, upon filing, incorporated by reference into Part
III of this Annual Report on Form 10-K for the registrant’s fiscal year ended December 31, 2025.
TABLE
OF CONTENTS
Page
PART I
Item 1. Business 4
Item 1A. Risk Factors 9
Item 1B. Unresolved Staff Comments 34
Item 1C. Cybersecurity 34
Item 2. Properties 34
Item 3. Legal Proceedings 34
Item 4. Mine Safety Disclosures 34
PART II
Item 6. Reserved 36
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 42
Item 8. Financial Statements and Supplementary Data 42
Item 9A. Controls and Procedures 43
Item 9B. Other Information 43
Item 9C Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 43
PART III
Item 10. Directors, Executive Officers, and Corporate Governance 44
Item 11. Executive Compensation 44
Item 14. Principal Accountant Fees and Services 44
PART IV
Item 15. Exhibit and Financial Statement Schedules 45
SIGNATURES 49
FORWARD-LOOKING
STATEMENTS
This
Annual Report on Form 10-K for our fiscal year ended December 31, 2025 (this “Report”) contains forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements discuss matters that are not
historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,”
“believe,” “estimate,” “intend,” “could,” “should,” “would,”
“may,” “seek,” “plan,” “might,” “will,” “expect,” “predict,”
“project,” “forecast,” “potential,” “continue,” negatives thereof or similar expressions.
These
forwarding-looking statements include, without limitation, statements regarding our expectations and beliefs about the market and
industry, our goals, plans, and expectations regarding our activities and results in the recycling and renewable energy sector and
the oil and gas sector, our intentions and strategies regarding the formation of strategic relationships, our beliefs regarding the
future success of our strategy, our expectations and beliefs regarding competition, competitors, the basis of competition and our
ability to compete, our beliefs and expectations regarding our ability to hire and retain personnel, our beliefs regarding period to
period results of operations, our expectations regarding revenues, our expectations regarding future growth and financial
performance, our beliefs and expectations regarding the adequacy of our facilities, and our beliefs and expectations regarding our
financial position, ability to finance operations and growth and the amount of financing necessary to support operations. Many of
those factors are outside of our control and these forward-looking statements are subject to risks and uncertainties that could
cause actual results and events to differ materially from expected and historical results. See “Item 1A. Risk Factors”
of this Report for a discussion of such risks and uncertainties. These and other factors could cause results to differ materially
from those expressed in the estimates made by the independent parties and by us. Except to the extent required by law, we undertake no obligation to update such forward-looking statements to reflect events or circumstances occurring after the date of
this Report.
From time to time, forward-looking
statements also are included in our other periodic reports on Forms 10-Q and 8-K, in our press releases, in our presentations, on our
website and in other materials released to the public. Any or all of the forward-looking statements included in this Report and in any
other reports or public statements made by us are not guarantees of future performance and may turn out to be inaccurate. These forward-looking
statements represent our intentions, plans, expectations, assumptions, and beliefs about future events and are subject to risks, uncertainties,
and other factors. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might
not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance
on these forward-looking statements, which speak only as of the date of this Report. All subsequent written and oral forward-looking statements
concerning other matters addressed in this Report and attributable to us or any person acting on our behalf are expressly qualified in
their entirety by the cautionary statements contained or referred to in this Report.
As
used in this Report, unless the context otherwise requires, the terms “we”, “our”, “us”, “the
Company” and “AGIG” refer to Abundia Global Impact Group, Inc., a Delaware corporation.
PART
I
Item 1. Business
General
On
July 1, 2025, Abundia Global Impact Group, Inc. (formerly Houston American Energy Corp.), a Delaware corporation
(“AGIG”, the “Company,” “we,” “us,” or “our”), acquired all of the
outstanding units of Abundia Global Impact Group LLC (“AGIG LLC”) through a share exchange transaction. Prior to the
transaction, the Company, as Houston American Energy Corp. (“HUSA”), operated as a small independent oil and gas company focused on
the exploration and production of crude oil and natural gas primarily in the Permian Basin and the U.S. Gulf Coast
region.
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.
Following
the transaction, the Company now primarily operates as a low carbon energy solutions company through AGIG LLC. The Company also continues
to hold its legacy oil and gas assets, which remain in operation and generate revenue. The legacy oil and gas business is reported as
a separate operating segment and is not considered material to the Company’s ongoing operations. The Company does not intend to
allocate additional capital or management resources to the legacy oil and gas assets beyond what is required for compliance, reporting
and maintenance of existing operations.
Low-Carbon
Energy Business
The
Company, through AGIG LLC, is engaged in the development and commercialization of low carbon fuels and renewable chemical products derived
from waste plastics and biomass feedstocks. The Company’s business model is focused on utilizing licensed and proprietary process
technologies to convert waste materials into hydrocarbon products that are compatible with existing refining, distribution, and end user
infrastructure.
The
Company is in the development and precommercial stage and has not yet commenced sustained commercial scale production. The Company’s
ability to achieve commercial operations is dependent on, among other things, securing additional capital, completing engineering and
permitting, constructing production facilities, and successfully commissioning planned operations.
Products
and End Markets
The
Company intends to produce renewable and low carbon products for established fuel and chemical markets, including:
● sustainable aviation fuel; and
● renewable naphtha and other chemical feedstocks.
The
Company’s products are designed to be “drop-in” compatible with conventional fuels and chemical infrastructure, subject
to regulatory approvals and product qualification requirements. Final product offerings and sales volumes will depend on successful facility
development, feedstock availability, regulatory approvals, and customer demand.
Technology
Platform
Feedstock
Conversion
The
Company’s technology platforms are designed to process two principal waste feedstocks:
These
technologies are licensed from third parties and have been demonstrated at various commercial or pilot scale facilities operated by licensors
or partners.
Upgrading
and Refining
Intermediate
products produced through pyrolysis are intended to be upgraded through hydrotreating and related processes to achieve finished fuel
and chemical specifications. The Company utilizes a combination of internally developed processes and third-party licensed upgrading
technologies. Ongoing pilot scale testing and product validation activities are required prior to full commercial deployment.
Modular
Facility Design
The
Company’s facilities are designed around standardized, modular units intended to support phased construction and potential replication.
While management believes this approach may improve capital efficiency and scalability, no assurance can be given that such benefits
will be achieved.
Facilities
Cedar
Port Renewable Energy Complex
In
July 2025, the Company acquired a 25-acre industrial site located within the Cedar Port Industrial Park in Baytown, Texas. The site is
intended to serve as the Company’s primary development and operational hub and includes planned waste plastics to fuels and chemicals
production capacity and an innovation and technology development center.
The
site is located within the U.S. Gulf Coast energy corridor and offers access to existing marine, rail, pipeline and roadway infrastructure.
The Company expects to require additional construction, permitting and capital investment prior to commencing commercial operations at
the site.
Commercialization
and Development Status
As
of December 31, 2025, the Company remained in the development stage. Key activities completed or underway include:
● entry into technology licensing and service agreements;
● pilot scale testing and validation of upgrading pathways.
The
Company expects to continue to incur operating losses and capital expenditures as it advances development efforts. There can be no assurance
that the Company will achieve commercial production or profitability.
Marketing
At
December 31, 2025, we had contractual agreements in place in Europe to sell crude pyrolysis oil derived from plastics produced from our
first future site in Europe. We intend to market our products to fuel distributors, refiners, airlines, marine fuel customers and chemical manufacturers. Commercial
sales are expected to depend on successful facility completion, product qualification and regulatory compliance.
We had no contractual agreements to sell our gas and oil production and all production was sold on spot
markets.
Human
Capital
As
of December 31, 2025, we had two full-time employees and no part-time employees. The employees are not covered by a collective
bargaining agreement, and we do not anticipate that any of our future employees will be covered by such agreements.
Competition
The
waste to liquid fuel market is relatively new and competition is still developing. Large early-stage markets, such as Europe, require
early engagement across verticals and customers to gain market share, and ongoing effort to scale channels, installers, teams and processes.
In addition, there are multiple competitors worldwide with limited funding, which could cause poor experiences, hampering overall adoption
or trust in any particular provider.
Furthermore,
our current or potential competitors may be acquired by third parties with greater available resources. As a result, competitors may
be able to respond more quickly and effectively than the Company to new or changing opportunities, technologies, standards or customer
requirements and may have the ability to initiate or withstand substantial price competition. In addition, competitors may in the future
establish cooperative relationships with vendors of complementary products, technologies, or services to increase the availability of
their solutions in the marketplace. This competition may also materialize in the form of costly intellectual property disputes or litigation.
New
competitors or alliances may emerge in the future that have greater market share, more widely adopted proprietary technologies,
greater marketing expertise and greater financial resources, which could put us at a competitive disadvantage. Future competitors
could also be better positioned to serve certain segments of our current or future target markets, which could create price
pressure. In light of these factors, even if our offerings are more effective and of higher quality than those of its competitors,
current or potential customers may accept our competitors’ solutions. If the Company fails to adapt to changing market
conditions or fails to continue to compete successfully with current or new competitors, our growth will be limited, which would
adversely affect business and results of operations.
Regulatory
Matters
Environmental
Regulation
Various
federal, state and local laws and regulations relating to the protection of the environment, including the discharge of materials into
the environment, may affect our exploration, development and production operations and the costs of those operations. These laws and
regulations, among other things, govern the amounts and types of substances that may be released into the environment, the issuance of
permits to conduct exploration, drilling and production operations, the discharge and disposition of generated waste materials and waste
management, the reclamation and abandonment of wells, sites and facilities, financial assurance and the remediation of contaminated sites.
These laws and regulations may impose substantial liabilities for noncompliance and for any contamination resulting from our operations
and may require the suspension or cessation of operations in affected areas.
Environmental,
health and safety regulations applicable to our planned facility in Baytown, Texas are administered through a combination of federal,
state and local regulatory programs and may also be enforced through private rights of action. Our operations are expected to be subject
to extensive and evolving requirements under, among others, the Clean Air Act (“CAA”), the Clean Water Act (“CWA”),
the Resource Conservation and Recovery Act (“RCRA”), the Comprehensive Environmental Response, Compensation and Liability
Act (“CERCLA”), the Toxic Substances Control Act (“TSCA”), and the Emergency Planning and Community Right-to-Know
Act (“EPCRA”), as well as implementing regulations and comparable state and local requirements. These laws and regulations
govern, among other things, air emissions; wastewater and stormwater discharges; spill prevention and response; the generation, storage,
characterization, transport and disposal of solid and hazardous wastes; chemical management, reporting and community right-to-know obligations;
and investigation and remediation of contaminated sites.
In
Texas, the Texas Commission on Environmental Quality is the primary agency responsible for implementing and enforcing
key air and water quality programs, including the issuance of air authorizations and permits and the administration of certain water
discharge and industrial stormwater requirements. The Baytown facility is expected to be located within the Houston-Galveston-Brazoria
ozone severe nonattainment area, which can impose more stringent permitting and control obligations than would apply
in an attainment area. We are designing the facility with the objective of operating as a minor source for purposes of air permitting
(i.e., maintaining potential emissions below thresholds that would otherwise trigger more stringent major source and operating permit
requirements). Despite this design intent, final permitting applicability and source classification will depend on, among other things,
final equipment selection and configuration, enforceable permit limits, operating parameters, aggregation of emission units, and applicable
regulatory interpretations. If our actual or potential emissions, as ultimately authorized, were to exceed applicable thresholds, or
if regulators were to require different assumptions or controls, we could become subject to additional permitting, control, monitoring
and reporting requirements, which could increase costs, delay startup, or impose operational constraints.
We
also expect to be subject to federal and state spill prevention and response requirements. For example, depending on the type and quantity
of oil stored on site and site-specific conditions, we may be required to prepare, maintain and implement a Spill Prevention, Control,
and Countermeasure plan designed to prevent discharges of oil into navigable waters or adjoining shorelines.
Compliance
with environmental and related regulatory requirements may require significant capital expenditures and operating costs, including costs
associated with engineering controls, monitoring, recordkeeping, reporting, training, inspections, and waste management. These laws and
regulations may impose substantial liabilities for noncompliance and for any contamination resulting from our operations, including administrative,
civil or criminal penalties, injunctive relief, permit modification, suspension or revocation, and requirements to investigate and remediate
contamination. In addition, certain environmental statutes provide for citizen suits and other private rights of action, which could
result in litigation, delay, or additional compliance costs. Changes in environmental laws and regulations, evolving interpretations
and enforcement practices, the timing and outcome of permitting processes, and the availability and cost of compliance measures are subject
to uncertainty and could be material to our business, results of operations, cash flows and financial condition.
The
environmental laws and regulations applicable to our U.S. operations include, among others, the following United States federal laws
and regulations:
● CAA, and its amendments, which govern air emissions;
● CWA, which governs discharges into waters of the United States;
● RCRA, which governs the management of solid waste;
● EPCRA, which requires reporting of toxic chemical inventories;
The
ultimate financial impact of these environmental laws and regulations is neither clearly known nor easily determined as new standards
are enacted and new interpretations of existing standards are rendered. Environmental laws and regulations are expected to have an increasing
impact on our operations. In addition, any non-compliance with such laws could subject us to material administrative, civil or criminal
penalties, or other liabilities. Potential permitting costs are variable and directly associated with the type of facility and its geographic
location. Costs, for example, may be incurred for air emission permits, spill contingency requirements, and discharge or injection permits.
These costs are considered a normal, recurring cost of our ongoing operations and not an extraordinary cost of compliance with government
regulations.
Climate Change Legislation and Greenhouse Gas Regulation
Federal, state and local laws
and regulations continue to address concerns about the environmental and climatic effects of greenhouse gas (“GHG”) emissions.
These effects are widely referred to as “climate change.” Historically, following its December 2009 endangerment finding regarding
GHG emissions, the Environmental Protection Agency (the “EPA”) began regulating sources of GHG emissions under the federal
CAA, including through reporting, permitting, and technology-based requirements applicable to stationary sources. On August 1, 2025, the EPA published a proposed rule to rescind the 2009 greenhouse gas endangerment finding which
concluded that greenhouse gases endanger public health and welfare. On February 12, 2026,
the EPA finalized a rule rescinding the 2009 endangerment finding, which had served as the legal basis for regulating GHG emissions from
new motor vehicles and engines under CAA Section 202(a). With the rescission, the EPA no longer has statutory authority to prescribe federal
GHG emission standards for motor vehicles, and all such standards have been repealed. The rescission does not, however, directly alter
existing GHG-related permitting or reporting requirements for stationary sources, including oil and gas production facilities, which remain
subject to other federal, state, and local regulatory programs.
We
continue to monitor evolving federal climate-related policies, as well as state and regional initiatives that may impose additional GHG-related
obligations on our operations.
Moreover, the U.S. Congress has
considered establishing a cap-and-trade program to reduce U.S. emissions of greenhouse gases. Under past proposals, the EPA would issue
or sell a capped and steadily declining number of tradable emissions allowances to certain major sources of greenhouse gas emissions so
that such sources could continue to emit greenhouse gases into the atmosphere. These allowances would be expected to escalate significantly
in cost over time. The net effect of such legislation, if ever adopted, would be to impose increasing costs on the combustion of carbon-based
fuels such as crude oil, refined petroleum products, and natural gas. In addition, while the prospect for such cap-and-trade legislation
by the U.S. Congress remains uncertain, several states have adopted, or are in the process of adopting, similar cap-and-trade programs.
As a low-carbon
energy solutions company, the debate on climate change is relevant to our operations because the regulatory response is designed to increase
demand for, and use of, our products, as alternative forms of energy. We cannot presently predict the ultimate impact of existing or future
climate change initiatives on our Company or our industry.
Regulation
of Oil and Gas Production, Sales and Transportation
The
oil and gas industry is subject to regulation by numerous national, state and local governmental agencies and departments. Compliance
with these regulations is often difficult and costly, and noncompliance could result in substantial penalties and risks. Most jurisdictions
in which we operate also have statutes, rules, regulations or guidelines governing the conservation of natural resources, including the
unitization or pooling of oil and gas properties, minimum well spacing, plugging and abandonment of wells and the establishment of maximum
rates of production from oil and gas wells. Some jurisdictions also require the filing of drilling and operating permits, bonds and reports.
The failure to comply with these statutes, rules and regulations could result in the imposition of fines and penalties and the suspension
or cessation of operations in affected areas.
Hydraulic
Fracturing Regulation
Hydraulic
fracturing, or “fracking”, is a common practice used to stimulate production of oil and natural gas from tight
formations, including shales. Fracking involves the injection of fluids-usually consisting mostly of water but typically including small
amounts of chemical additives-as well as sand into a well under high pressure in order to create fractures in the rock that allow oil
or gas to flow more freely to the wellbore.
Except
as applies to federal lands, fracking generally is exempt from regulation under many federal environmental rules and is generally regulated
at the state level.
For
example, in Texas, the Texas Railroad Commission administers regulations related to oil and gas operations, including regulations pertaining
to protection of water resources in connection with those operations. The Texas Legislature adopted new legislation requiring oil and
gas operators to publicly disclose the chemicals used in the hydraulic fracturing process, effective as of September 1, 2011. The Texas
Railroad Commission has adopted rules and regulations implementing this legislation that apply to all wells for which the Railroad Commission
issues an initial drilling permit after February 1, 2012. This law requires that the well operator disclose the list of chemical ingredients
subject to the requirements of the federal Occupational Safety and Health Act (“OSHA”) for disclosure on an internet website
and also file the list of chemicals with the Texas Railroad Commission with the well completion report. The total volume of water used
to hydraulically fracture a well must also be disclosed to the public and filed with the Texas Railroad Commission.
Website Access to Reports
Our
website address is www.abundiaimpact.com. We make available, free of charge on our website, our annual report on Form 10-K, quarterly
reports on Form 10-Q and current reports on Form 8-K, and all amendments to these reports as soon as reasonably practicable after such
material is electronically filed with, or furnished to, the SEC. Information contained on our website is not incorporated by reference
into this Report and you should not consider information contained on our website as part of this Report.
Risk
Factor Summary
Our
business is subject to a number of risks that if realized could materially affect our business, prospects, operating results and financial
conditions. These risks are discussed more fully in the “Risk Factors” section of this Report. These risks include the following:
Item 1A. Risk Factors
Our
business activities and the value of our securities are subject to significant hazards and risks, including those described below. If
any such events should occur, our business, financial condition, liquidity and/or results of operations could be materially harmed,
and holders and purchasers of our securities could lose part or all of their investments.
These disclosures reflect the
Company’s beliefs and opinions as to factors that could materially and adversely affect the Company and its securities in the future.
References to past events are provided by way of example only and are not intended to be a complete listing or a representation as to
whether or not such factors have occurred in the past or their likelihood of occurring in the future.
Company
and Business Risks
The
report of the independent registered public accounting firm on our 2025 and 2024 financial statements contains a going concern qualification.
The
report of the independent registered public accounting firm covering our consolidated financial statements for the years ended December
31, 2025 and 2024 stated that certain factors, including that we have suffered recurring losses from operations and have an accumulated
deficit at December 31, 2025, raised substantial doubt as to our ability to continue as a going concern. Because we are not yet producing
sufficient revenue to sustain our operating costs, we are dependent upon raising capital to continue our business. If we are unable to
raise capital, we may be unable to continue as a going concern.
The
Company has incurred losses and anticipates continuing to incur losses while it commercializes and scales its business.
The
Company has incurred net losses since its inception, including net losses of $29,460,935 for the year ended December 31, 2025 and net losses of $3,621,948 for the year ended December 31, 2024. The
Company believes that it will continue to incur operating and net losses in the future while it grows, including following its
initial generation of revenues from the sale of its products, which may occur later than expected or not at all. We do not expect to
be profitable for the foreseeable future as we invest in our business, build capacity and ramp up operations, and cannot assure you
that it will ever achieve or be able to maintain profitability in the future. Even if we are able to successfully develop our
products and attract customers, there can be no assurance that we will be financially successful. For example, as the Company
expands its product portfolio and expands internationally, it will need to manage costs effectively to sell those products at its
expected margins. Failure to become profitable would materially and adversely affect the value of your investment. If the Company is
ever to achieve profitability, it will be dependent upon the successful development and commercial introduction and acceptance of
its products
The
Company has identified material weaknesses in its internal control over financial reporting.
We have identified material weaknesses
in our internal controls over financial reporting with regard to the assessment of the formal control environment and control activities.
We have not performed a risk assessment in relation to segregation of duties, or for the risk that the financial statements may be materially
misstated.
In addition, we have identified
a material weakness in our internal controls over financial reporting related to accounting for significant and non-standard transactions.
This weakness could result in errors or misstatements in our financial statements, which may not be detected in a timely manner. To note,
we filed a restatement of our previously issued financial statements on the interim financial statements included in the Quarterly Report
on Form 10-Q for the quarterly period ended September 30, 2025. We are actively working to remediate this weakness by enhancing our control
environment and implementing more robust procedures for the review and approval of such transactions.
Due to our limited
resources, we may not be able to effectively manage our operations, which may result in weaknesses in our infrastructure, risks
that we may not be able to comply with legal and regulatory requirements, and loss of employees and reduced productivity among
remaining employees. For example, our limited resources and workforce reduction may negatively impact our efforts, which could
result in unexpected costs and expenses and have a material adverse effect on our business, financial condition and prospects.
The existence of these material
weaknesses could adversely affect our ability to accurately report our financial condition and results of operations. It may also impact
investor confidence, potentially leading to a decline in our stock price and increased scrutiny from regulatory authorities.
Financial
results could vary significantly from quarter to quarter and may be subject to macroeconomic influences, and its projections may differ
materially from actual results.
The
Company’s operating results could vary significantly from quarter to quarter due to a variety of factors, many of which are outside
of its control. As a result, comparing our operating results on a period-to-period basis may not be meaningful. In addition, we may not
be able to predict our future revenues or results of operations. We base our current and future expense levels on our internal research
and development plans and forecasts, and our operating costs vary to the extent of our research and development and the planning for
additional products. As a result, we may incur significant or unanticipated expenses associated with the research and development efforts
of the products under our development. In addition to other risk factors discussed in this section, factors that may contribute to the
variability of our quarterly results include:
● use of available cash resources;
● the popularity of new products, and products released in prior periods;
● changes by our competitors;
● our success in entering new geographic markets;
● the timing of compensation expense associated with equity compensation grants.
As
a result of these and other factors, our quarterly and annual operating results could be materially adversely affected. Moreover, our
operating results may not meet the expectations of research analysts or investors, in which case the price of our common stock could
decrease significantly.
Requirement
for substantial additional financing to fund operations and complete the development and commercialization of technologies that may not
be done on favorable terms.
We
expect our expenses to increase in connection with our ongoing activities. We also expect to incur significant commercialization expenses
related to product manufacturing, marketing, sales and distribution. We cannot reasonably estimate the actual amounts necessary to successfully
complete the development and commercialization of our products. If we are unable to raise capital when needed or on attractive terms,
we could be forced to delay, reduce or eliminate research and development programs or any future commercialization efforts.
We
could use our capital resources sooner than currently expected. Our operating plans and other demands on our cash resources may change
as a result of many factors currently unknown, and we may need to seek additional funds sooner than planned, through public or private
equity or debt financings or other capital sources, including potentially government funding, collaborations, licenses and other similar
arrangements. In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe
we have sufficient funds for current or future operating plans. Attempting to secure additional financing may divert the Company’s
management from day-to-day activities, which may adversely affect its ability to develop products.
Future
capital requirements will depend on many factors, including:
In
addition, our products may not achieve commercial success. Accordingly, we will need to continue to rely on additional financing to achieve
our business objectives. Adequate additional financing may not be available on acceptable terms, or at all.
The
Company’s technology may not be successful in developing commercial products.
The
Company and its potential future collaborators may spend many years and dedicate significant financial and other resources to developing
its technology that may never be successfully commercialized. Its technology may never become successfully commercialized for, among
others, any of the following reasons:
● competitors may launch competing or more effective technology;
● our technology may not be commercially successful;
If
any of these things were to occur, it could have an adverse effect on our ability to raise additional capital, execute its business plan,
or remain in business.
If
we are unable to manage growth and expand operations successfully, our reputation and brand may be damaged, and the business and results
of operations may be harmed.
We
expect rapid growth and the number of facilities from which we operate to increase in the future. Our ability to effectively manage anticipated
growth and expansion of our operations will require us to do, among other things, the following:
These
enhancements and improvements will require significant capital expenditures and allocation of valuable management and employee resources.
Furthermore, the Company’s growth has placed and will continue to place a strain on its operational, financial, and management
infrastructure. Our future financial performance and our ability to execute on our business plan will depend, in part, on our ability
to effectively manage any future growth and expansion. There are no guarantees we will be able to do so in an efficient or timely manner,
or at all. The Company’s failure to effectively manage growth and expansion could have a material adverse effect on its business,
results of operations, financial condition, prospects, reputation and brands, including impairing its ability to perform to its customers’
expectations.
Competing
in a competitive industry and failure to successfully compete with other companies in its industry may have a material adverse effect
on the business.
The
biomass to liquid fuel market is relatively new, and competition is still developing. Large early-stage markets, such as Europe, require
early engagement across verticals and customers to gain market share, and ongoing effort to scale channels, installers, teams and processes.
In addition, there are multiple competitors worldwide with limited funding, which could cause poor experiences, hampering overall adoption
or trust in any particular provider.
Furthermore,
our current or potential competitors may be acquired by third parties with greater available resources. As a result, competitors may
be able to respond more quickly and effectively than us to new or changing opportunities, technologies, standards or customer requirements
and may have the ability to initiate or withstand substantial price competition. In addition, competitors may in the future establish
cooperative relationships with vendors of complementary products, technologies, or services to increase the availability of their solutions
in the marketplace. This competition may also materialize in the form of costly intellectual property disputes or litigation.
New
competitors or alliances may emerge in the future that have greater market share, more widely adopted proprietary technologies, greater
marketing expertise and greater financial resources, which could put the Company at a competitive disadvantage. Future competitors could
also be better positioned to serve certain segments of our current or future target markets, which could create price pressure. In light
of these factors, even if our offerings are more effective and of higher quality than those of our competitors, current or potential customers
may accept our competitors’ solutions instead of ours. If we fail to adapt to changing market conditions or continue to compete
successfully with current or new competitors, our growth will be limited, which would adversely affect the business and results of operations.
The
Company expects to rely on a limited number of industry partners for a significant portion of its near-term revenue.
Our
ability to successfully enter into, maintain and manage partnering arrangements will be critical factors to the success of our business
and growth. We rely heavily and expect to continue to rely heavily on such arrangements. We have limited or no control over the amount
or timing of resources that any third party commits to negotiating a partnering arrangement with it or, if negotiated and entered into,
the timing or the number of resources that a third party will commit to its projects. Any third party with which we are in negotiations
may experience a change of policy or priorities and may discontinue negotiations with us. Any of our industry partners may fail to perform
their obligations as expected. These industry partners may breach or terminate their agreements with us or otherwise fail to conduct
their partnering activities successfully and in a timely manner. Further, our industry partners may not develop commercially viable products
arising out of our partnering arrangements or devote sufficient resources to the development, manufacture, marketing, and/or sale of our
products. Moreover, disagreements with an industry partner regarding strategic direction, economics of the relationship between partners
and our intellectual property or other matters could develop, and any such conflict could reduce our ability to enter into future partnering
agreements and negatively impact our relationships with one or more existing industry partners. Any of these events could delay our anticipated
timelines, prevent the successful development and commercialization of our products, negatively impact our financial results, and prevent
us from ever achieving or sustaining profitability. Moreover, these negative consequences could be augmented in the event that we are
forced to seek replacement partners, particularly for those whose plant locations would have allowed favorable relevant feedstock
acquisition costs.
Partnering
opportunities could be harmed and the anticipated timelines could be delayed if:
Additionally,
because we have entered into exclusive arrangements with industry partners, other potential partners in our industry may choose to compete
against us, rather than partnering with us. This may limit our partnering opportunities and harm our business and prospects. Moreover,
our business could be negatively impacted if any of our industry partners undergo a change of control or assigns the rights or obligations
under any of its agreements. If any of our industry partners were to assign these agreements to our competitors or to a third party who
is not willing to work with us on the same terms or commit the same resources as the current industry partner, our business and prospects
could be adversely affected.
The
Company and its industry partners have a limited operating history utilizing its technology and different feedstocks, which may make
it difficult to evaluate its future viability and predict its future performance.
Our
operations to date have been limited to financing and staffing the Company and developing our technology platforms. Consequently,
predictions about our future success or viability may not be as accurate as they could be if we had a longer history of successfully
developing and commercializing products. Factors relating to our business that may contribute to these fluctuations include the following:
● delays in receipt of anticipated purchase orders;
● performance of independent distributors;
● our ability to obtain further regulatory clearances or approvals;
● customer response to the introduction of new product offerings; and
● fluctuations in foreign currency.
Governmental
programs designed to incentivize the production and consumption of low carbon fuels and carbon capture and utilization, may be implemented
in a way that does not include our products or could be repealed, curtailed or otherwise changed, which would have a material adverse
effect on our business and financial condition.
The
Company and other participants in the alternative energy and fuel industry rely on governmental programs requiring or incentivizing the
consumption of low carbon fuels. Renewable fuel has historically been more expensive to produce than fossil-based fuel, and these governmental
programs support a market for biomass-based fuel that might not otherwise exist. If any of these governmental incentives are repealed,
curtailed, or otherwise changed, we would likely see a decrease in demand for low carbon fuels and reduced revenue. If we are unable
to effectively respond to governmental changes in a cost-efficient manner, we may fail to achieve the financial results it expects or
that financial analysts and investors expect, and our business, prospects, financial condition, and operating results may be adversely
affected.
Products
produced by the Company’s process technologies compete with or are intended to displace comparable products produced using fossil
resources. The market prices for these alternatively produced products and commodities are subject to volatility and there is a limited
amount of referenceable market data.
We
believe that there are a number of trends affecting our industry, including significant volatility in the price of the fossil-fuel feedstocks
used to produce nearly all intermediate and basic chemicals, dramatic swings in earnings and difficulty in forecasting future performance;
the increased availability of natural gas, especially in North America, and the growing spread between the price of crude oil and natural
gas; the chemical industry increasingly building large-scale manufacturing facilities; and increasing interest in the environmental
consequences of product purchases. While our business may be positively affected by these trends, our results may also be favorably or
unfavorably impacted by these and other trends that affect demand and pricing for intermediate and basic chemicals, including, among
others, changes in feedstock availability and pricing, developments in our industry and among our competitors, and changes in consumer
preferences and demand. Our failure to effectively manage these trends could have a material adverse effect on our business, results
of operations, financial condition, prospects, reputation and brands, including impairing our ability to perform to customers’
expectations. Additionally, we must often rely on our own market research to forecast sales, as detailed forecasts are not generally
obtainable from other sources at this early stage of the industry. Market research and projections by the Company of estimated total
retail sales, demographics, demand, and similar consumer research are based on assumptions from limited and unreliable market data, and
generally represent the personal opinions of its management team. A failure in the demand for our products to materialize as a result