Core Insights - Houston American Energy Corp. (HUSA) has executed a binding Term Sheet with BTG Bioliquids to develop biomass-to-liquid fuels and Sustainable Aviation Fuel (SAF) projects using BTG's fast pyrolysis technology [1][2] - The collaboration aims to convert waste biomass into high-value biofuels and SAF, aligning with HUSA's strategy to create a diversified renewable-fuels platform [2][4] - HUSA's Cedar Port site in Baytown, Texas, will serve as the foundation for the commercial demonstration and future deployment of these technologies [1][3] Company Overview - HUSA is an independent energy company with a diversified portfolio across conventional and renewable sectors, focusing on both oil and gas exploration and renewable energy solutions [4] - The acquisition of Abundia Global Impact Group (AGIG) in July 2025 reflects HUSA's commitment to sustainable energy and positions the company to capitalize on emerging opportunities in renewable fuels [4] Technology and Collaboration - BTG Bioliquids specializes in fast pyrolysis technology, converting up to 70% of dry biomass feedstock into bio-oil, which can be further upgraded into biofuels and SAF [3] - The partnership with BTG Bioliquids is expected to enhance HUSA's capabilities in converting waste into low-carbon fuels, supporting the transition to next-generation industries [2][3]

Core Viewpoint - The share price of Houston American Energy Corp. (HUSA) has experienced a significant decline, attributed to various market factors including falling crude oil prices and company-specific developments [1][3][4]. Group 1: Share Price Movement - Houston American Energy Corp. (HUSA) saw its share price drop by 9.05% from September 26 to October 3, 2025, making it one of the worst-performing energy stocks during that week [1]. - The company's share price has decreased by over 53% since the beginning of 2025 [4]. Group 2: Market Influences - The decline in HUSA's share price is likely linked to a decrease in global crude oil prices, with WTI crude oil futures reaching a four-month low due to increased output from OPEC+ and concerns over a potential US government shutdown [3]. Group 3: Company Developments - On a positive note, HUSA has commenced production from its State Finkle Unit wells and has received its first revenue from these operations [4]. - The company plans to participate in the drilling of six additional wells in June 2024 and has started receiving royalties from production at its initial wells [4].

Core Insights - Houston American Energy Corp. (HUSA) has commenced production from the State Finkle Unit wells and received its first revenue [1][2] - The company plans to transition from an oil and gas exploration firm to a leader in renewable energy, utilizing revenues from traditional operations to support this shift [3] - HUSA holds a 0.0078 working interest in the State Finkle Unit, which is expected to provide ongoing royalty income [3] Company Overview - HUSA is an independent energy company with a diversified portfolio in both conventional and renewable energy sectors [4] - The company has historically focused on oil and natural gas exploration but is actively expanding into high-growth segments, including sustainable fuels [4] - In July 2025, HUSA acquired Abundia Global Impact Group (AGIG), which specializes in converting waste plastics into low-carbon fuels, reflecting its commitment to energy transition technologies [4]

Core Insights - Houston American Energy Corp. (HUSA) has commenced production from the State Finkle Unit wells and received its first revenue [1][2] - The company aims to transition from an oil and gas exploration firm to a leader in renewable energy, utilizing revenues from traditional operations to support this shift [3] Production and Revenue - HUSA announced plans to drill six wells in the State Finkle Unit, each with approximately three-mile laterals, in the Wolfcamp formation, Reeves County, Texas [1] - The company received its first royalties from production at the initial wells in September 2025 [2] Strategic Direction - The CEO of HUSA highlighted that the funds invested in the wells are starting to deliver returns for shareholders, which will help fund the company's transformation into renewable energy [3] - HUSA holds approximately 0.0078 working interest in the State Finkle Unit, which is expected to provide ongoing royalty income over the life of the wells [3] Company Overview - HUSA is an independent energy company with a diversified portfolio across conventional and renewable sectors, historically focused on oil and natural gas exploration and production [4] - In July 2025, HUSA acquired Abundia Global Impact Group (AGIG), which specializes in converting waste plastics into low-carbon fuels, reflecting its commitment to meeting global energy demands through a mix of traditional and alternative energy solutions [4]

Core Viewpoint - Oil and gas stocks are experiencing a strong upward trend, with notable gains in several companies, driven by rising crude oil prices [1] Group 1: Company Performance - Murphy Oil and Houston Energy have both increased by over 7% [1] - Major companies such as BP, ExxonMobil, Total, Eni, and Chevron have all seen gains exceeding 2% [1] Group 2: Market Conditions - As of the report, Brent crude oil has risen by over 1.7%, reaching $67.11 per barrel [1] - WTI crude oil has increased by nearly 2%, now priced at $63.11 per barrel [1]

Core Viewpoint - Houston American Energy Corp. (HUSA) is set to hold its inaugural investor fireside chat on September 17, 2025, to discuss its strategic acquisition of Abundia Global Impact Group and its transformation into a diversified energy platform [1][2]. Company Overview - HUSA is an independent energy company with a diversified portfolio across conventional and renewable sectors, historically focused on oil and natural gas exploration and production [3]. - The company acquired Abundia Global Impact Group in July 2025, which specializes in converting waste plastics into low-carbon fuels and chemical feedstocks [3]. Upcoming Event - The investor fireside chat will feature HUSA's CEO, Ed Gillespie, and Peter Gastreich from Water Tower Research, discussing the company's milestones and growth roadmap [2]. - Investors can register for the event in advance, and it will also be available on HUSA's website [2][3].

Core Viewpoint - Houston American Energy Corp. (HUSA) is hosting its inaugural investor fireside chat on September 17, 2025, to discuss its strategic acquisition of Abundia Global Impact Group and its transformation into a diversified energy platform [1][2] Group 1: Company Overview - HUSA is an independent energy company with a diversified portfolio across conventional and renewable sectors, historically focused on oil and natural gas exploration and production [3] - The company acquired Abundia Global Impact Group in July 2025, which specializes in converting waste plastics into low-carbon fuels and chemical feedstocks [3] Group 2: Investor Engagement - CEO Ed Gillespie will participate in a discussion with Peter Gastreich from Water Tower Research to outline the company's growth roadmap and milestones achieved [2] - The event will be accessible to investors and interested parties through registration and will also be available on HUSA's website [2]

Core Viewpoint - Houston American Energy Corp. (HUSA) has appointed Corvus Construction Company as its design and construction partner for the development of a plastics recycling facility and the Abundia Innovation Center in Baytown, Texas, marking a significant step in HUSA's commitment to renewable energy and low-carbon fuels [1][2][5]. Company Overview - Houston American Energy Corp. is an independent energy company with a diversified portfolio in both conventional and renewable energy sectors, actively expanding into high-growth segments [5]. - The company recently acquired Abundia Global Impact Group, which specializes in converting waste plastics into low-carbon fuels and chemical feedstocks, reflecting its commitment to sustainable energy solutions [5]. Project Details - The Abundia Innovation Center will serve as a platform for validating new technology solutions in the renewable energy sector, while the recycling facility will convert plastic waste into renewable fuels and chemical products [2]. - The project will be executed under a Design-Build Agreement, with Corvus delivering a state-of-the-art research and development facility and an energy-efficient office [2][4]. Partner Profile - Corvus Construction Company is a family-owned general contractor known for its high-quality construction services and a strong reputation in the Houston area [4]. - The company has extensive experience in institutional industrial projects and is recognized for delivering projects ahead of schedule and within budget [4]. Strategic Vision - HUSA aims to be a leader in the low-carbon fuels sector by fostering collaborative innovation through the development of the Abundia Innovation Center and the recycling facility [2][3].

Core Insights - Houston American Energy Corp. (HUSA) and Abundia Global Impact Group (AGIG) have appointed Nexus PMG as the Engineering and Service provider for the development of AGIG's Plastics Recycling Facility and Innovation Hub in Baytown, TX [1][2] - Nexus PMG will provide front-end engineering and project de-risking services, which are expected to accelerate the project's development [2] - The partnership aims to create advanced technology solutions for the renewable energy industry, focusing on reducing plastic waste and advancing decarbonization in fuels and chemicals [3] Company Overview - Houston American Energy Corp. is an independent energy company with a diversified portfolio in both conventional and renewable sectors, actively expanding into high-growth segments [4] - In July 2025, HUSA acquired AGIG, which specializes in converting waste plastics into low-carbon fuels and chemical feedstocks, reflecting HUSA's commitment to sustainable energy solutions [4] - The strategic acquisition positions HUSA to capitalize on emerging opportunities in sustainable fuels and energy transition technologies [4] Nexus PMG Overview - Nexus PMG focuses on providing advisory services to infrastructure investors, delivering technical, operational, and financial diligence on projects aimed at reducing carbon intensity [5] - The firm offers end-to-end services within targeted sectors, including development, preliminary engineering, and operational readiness [5]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Unaudited condensed consolidated financial statements detail financial position, performance, and cash flows, with accompanying notes [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets and shareholders' equity nearly doubled due to cash and new stock issuances, despite increased liabilities | Metric | Dec 31, 2024 | Jun 30, 2025 | Change | | :----- | :----------- | :----------- | :----- | | Total Assets | $4,401,795 | $8,715,938 | +98.0% | | Cash | $2,960,151 | $6,951,006 | +134.8% | | Refundable acquisition deposit | $- | $160,000 | N/A | | Total Liabilities | $195,488 | $304,603 | +55.8% | | Total Shareholders' Equity | $4,206,307 | $8,411,335 | +99.9% | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Net loss significantly increased in **2025** due to higher general and administrative expenses and reduced other income | Metric | 3 Months Ended Jun 30, 2025 | 3 Months Ended Jun 30, 2024 | 6 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2024 | | :----- | :---------------------------- | :---------------------------- | :---------------------------- | :---------------------------- | | Oil and Gas Revenue | $110,557 | $115,805 | $212,902 | $263,490 | | Total Operating Expenses | $1,933,036 | $526,057 | $3,097,364 | $1,081,872 | | Loss from Operations | $(1,822,479) | $(410,252) | $(2,884,462) | $(818,382) | | Total Other Income | $27,639 | $321,167 | $57,139 | $713,597 | | Net Loss | $(1,794,840) | $(89,085) | $(2,827,323) | $(104,785) | | Basic and Diluted Loss per Common Share | $(1.11) | $(0.08) | $(1.81) | $(0.10) | - General and administrative expenses increased significantly due to professional fees related to the acquisition of AGIG[12](index=12&type=chunk)[86](index=86&type=chunk) - Other income decreased substantially as the company received no income in **2025** from Hupecol Meta LLC, an interest relinquished at the end of **2024**[12](index=12&type=chunk)[88](index=88&type=chunk) [Condensed Consolidated Statements of Changes in Shareholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Shareholders%27%20Equity) Shareholders' equity nearly doubled from common stock issuances for cash, offsetting the accumulated deficit | Metric | Dec 31, 2024 | Jun 30, 2025 | Change | | :----- | :----------- | :----------- | :----- | | Total Shareholders' Equity | $4,206,307 | $8,411,335 | +99.9% | | Additional Paid-in Capital | $89,420,107 | $96,451,859 | +7.9% | | Accumulated Deficit | $(85,215,109) | $(88,042,432) | -3.3% | | Shares Issued and Outstanding | 1,308,653 | 1,908,385 | +45.8% | - Issuance of common stock for cash, net, contributed **$3,819,495** in Q1 **2025** and **$3,148,770** in Q2 **2025**, significantly boosting additional paid-in capital[13](index=13&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow became an outflow in **2025** due to professional fees, but significant financing activities led to a net cash increase | Cash Flow Activity | 6 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2024 | | :----------------- | :---------------------------- | :---------------------------- | | Net Cash (Used in) Provided by Operating Activities | $(2,817,410) | $87,803 | | Net Cash Used in Investing Activities | $(160,000) | $(766,216) | | Net Cash Provided by Financing Activities | $6,968,265 | $- | | Increase (Decrease) in Cash | $3,990,855 | $(678,413) | | Cash, End of Period | $6,951,006 | $3,380,769 | - Operating cash flow decreased significantly due to professional fees related to the AGIG acquisition[15](index=15&type=chunk)[90](index=90&type=chunk) - Financing activities provided substantial cash (**$6.97 million**) from the issuance of common stock for cash[15](index=15&type=chunk)[92](index=92&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes provide explanations and disclosures for the unaudited condensed consolidated financial statements and corporate actions [NOTE 1 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES](index=8&type=section&id=NOTE%201%20-%20BASIS%20OF%20PRESENTATION%20AND%20SIGNIFICANT%20ACCOUNTING%20POLICIES) Unaudited GAAP financial statements assume going concern despite an **$88 million** accumulated deficit and funding doubts, operating as a single segment - The company has an accumulated deficit of **$88 million** as of June 30, **2025**, raising substantial doubt about its ability to continue as a going concern[22](index=22&type=chunk)[25](index=25&type=chunk) - The company's ability to continue as a going concern is dependent on drawing down funds from the ELOC Purchase Agreement and developing additional capital sources[26](index=26&type=chunk) - The company manages its business as a single operating and reportable segment[21](index=21&type=chunk) - A **1-for-10** reverse stock split was effected on June 6, **2025**, retroactively adjusted in financial statements[19](index=19&type=chunk) [NOTE 2 - REVENUE FROM CONTRACTS WITH CUSTOMERS](index=11&type=section&id=NOTE%202%20-%20REVENUE%20FROM%20CONTRACTS%20WITH%20CUSTOMERS) Total oil and gas revenue decreased in both periods of **2025** compared to **2024**, primarily due to lower oil sales | Revenue Type | 3 Months Ended Jun 30, 2025 | 3 Months Ended Jun 30, 2024 | 6 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2024 | | :----------- | :---------------------------- | :---------------------------- | :---------------------------- | :---------------------------- | | Oil sales | $84,659 | $102,923 | $151,216 | $205,971 | | Natural gas sales | $2,614 | $(8,248) | $21,041 | $8,068 | | Natural gas liquids sales | $23,284 | $21,130 | $40,646 | $49,452 | | Total revenue | $110,557 | $115,805 | $212,902 | $263,490 | [NOTE 3 - OIL AND GAS PROPERTIES](index=11&type=section&id=NOTE%203%20-%20OIL%20AND%20GAS%20PROPERTIES) Depletion expense increased in **2025** compared to the prior year, with all oil and gas properties located in the United States | Metric | 3 Months Ended Jun 30, 2025 | 3 Months Ended Jun 30, 2024 | 6 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2024 | | :----- | :---------------------------- | :---------------------------- | :---------------------------- | :---------------------------- | | Depletion Expense | $44,804 | $28,107 | $66,689 | $63,085 | - All company properties are located in the United States[38](index=38&type=chunk) [NOTE 4 - STOCK-BASED COMPENSATION EXPENSE](index=11&type=section&id=NOTE%204%20-%20STOCK-BASED%20COMPENSATION%20EXPENSE) Stock-based compensation expense significantly increased in **2025** due to new option grants and stock issuances for services | Metric | 3 Months Ended Jun 30, 2025 | 3 Months Ended Jun 30, 2024 | 6 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2024 | | :----- | :---------------------------- | :---------------------------- | :---------------------------- | :---------------------------- | | Stock-based compensation expense | $50,029 | $12,746 | $64,086 | $63,413 | - The company granted options to its former CEO and a board member in early **2025**, with varying exercise prices and vesting schedules[43](index=43&type=chunk) - As of June 30, **2025**, there was **$82,012** of unrecognized stock-based compensation expense[44](index=44&type=chunk) [NOTE 5 - CAPITAL STOCK](index=12&type=section&id=NOTE%205%20-%20CAPITAL%20STOCK) Common stock outstanding significantly increased through multiple direct offerings in **2025**, raising substantial net proceeds, and a **1-for-10** reverse stock split was effected - The company sold **260,000 shares** in January **2025**, generating approximately **$3.8 million** in net proceeds[47](index=47&type=chunk) - In June **2025**, the company sold **174,100 shares** and **49,662 pre-funded warrants**, yielding about **$2.1 million** in net proceeds[48](index=48&type=chunk) - An additional **81,629 shares** were sold in June **2025**, bringing in approximately **$1.1 million** in net proceeds[49](index=49&type=chunk) - A **1-for-10** reverse stock split was effected on June 6, **2025**, reducing outstanding shares from approximately **15.7 million** to **1.6 million**[53](index=53&type=chunk) [NOTE 6 - EARNINGS PER COMMON SHARE](index=14&type=section&id=NOTE%206%20-%20EARNINGS%20PER%20COMMON%20SHARE) Basic and diluted net losses per common share significantly increased in **2025**, driven by higher net losses and more shares outstanding | Metric | 3 Months Ended Jun 30, 2025 | 3 Months Ended Jun 30, 2024 | 6 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2024 | | :----- | :---------------------------- | :---------------------------- | :---------------------------- | :---------------------------- | | Net Loss | $(1,794,840) | $(89,085) | $(2,827,323) | $(104,785) | | Weighted Average Common Shares - Basic | 1,623,011 | 1,090,635 | 1,564,380 | 1,090,635 | | Loss per Common Share - Basic and Diluted | $(1.11) | $(0.08) | $(1.81) | $(0.10) | - Options and warrants were excluded from diluted EPS calculation due to their anti-dilutive effect in periods of net loss[55](index=55&type=chunk) [NOTE 7 - COMMITMENTS AND CONTINGENCIES](index=16&type=section&id=NOTE%207%20-%20COMMITMENTS%20AND%20CONTINGENCIES) The company has an operating lease for office facilities expiring in October **2025**, with remaining future payments of **$30,020** | Year | Amount | | :--- | :----- | | 2025 | $30,020 | | Total future lease payments | $30,020 | | Present value of future operating lease payments | $29,285 | - The weighted-average remaining lease term is **0.58 years** with a weighted average discount rate of **12%**[57](index=57&type=chunk) [NOTE 8 - SUBSEQUENT EVENTS](index=16&type=section&id=NOTE%208%20-%20SUBSEQUENT%20EVENTS) Post-quarter, the company completed a share exchange with AGIG, changing control and management, and secured a **$100 million** equity line and **$5 million** convertible note for an industrial site - On July 1, **2025**, the company acquired all outstanding units of AGIG, issuing **31,778,032 shares** of common stock, resulting in AGIG Unitholders owning **94%** of the company and a change of control[58](index=58&type=chunk)[72](index=72&type=chunk) - New management was appointed, including Edward Gillespie as CEO and Lucie Harwood as CFO[59](index=59&type=chunk)[73](index=73&type=chunk) - On July 10, **2025**, the company entered into a **24-month** committed equity financing facility (ELOC Purchase Agreement) for up to **$100 million** with an institutional investor[60](index=60&type=chunk)[74](index=74&type=chunk) - On July 10, **2025**, the company also secured a senior secured convertible note for **$5,434,783**, with **$5 million** gross proceeds used to purchase a **25-acre** industrial site in Baytown, Houston, for approximately **$8.5 million**[61](index=61&type=chunk)[63](index=63&type=chunk)[75](index=75&type=chunk)[77](index=77&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) The company is transitioning from oil and gas to diversified energy by acquiring AGIG, resulting in higher expenses and net loss, but a strengthened cash position [Forward-Looking Information](index=18&type=section&id=Forward-Looking%20Information) Cautions that the report contains forward-looking statements with inherent risks and uncertainties, where actual results may differ from expectations - Statements in this report that are not historical facts are forward-looking and involve risks and uncertainties[65](index=65&type=chunk) - Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the report date[67](index=67&type=chunk) [Overview](index=18&type=section&id=Overview) The company is transitioning from oil and gas to diversified energy by acquiring AGIG, a waste-to-renewable fuels and chemicals platform - The company previously operated as an independent oil and gas company with properties in the U.S. Permian Basin and Louisiana Gulf Coast[69](index=69&type=chunk) - In November **2024**, a new management team was recruited to diversify and explore opportunities in oil and gas, renewable energy, and energy transition technologies[70](index=70&type=chunk) - On July 1, **2025**, the company acquired Abundia Global Impact Group (AGIG), a technology-driven platform for converting waste into renewable fuels and chemicals[70](index=70&type=chunk) [Recent Developments](index=19&type=section&id=Recent%20Developments) Completed the AGIG Share Exchange, changing control and management, and secured a **$100 million** equity line and **$5 million** convertible note for an industrial site - The Share Exchange with AGIG was completed on July 1, **2025**, leading to AGIG Unitholders owning **94%** of the company and a change in control[72](index=72&type=chunk) - New CEO Edward Gillespie and CFO Lucie Harwood were appointed following the Share Exchange[73](index=73&type=chunk) - A **24-month** committed equity financing facility of up to **$100 million** was secured on July 10, **2025**[74](index=74&type=chunk) - A senior secured convertible note for **$5.43 million** (gross proceeds **$5 million**) was issued on July 10, **2025**, to fund the acquisition of a **25-acre** industrial site for approximately **$8.5 million**[75](index=75&type=chunk)[77](index=77&type=chunk) [Critical Accounting Policies](index=20&type=section&id=Critical%20Accounting%20Policies) No material changes to critical accounting policies as of June 30, **2025**, consistent with the prior year's Form 10-K - No material changes or updates to critical accounting policies for the three and six months ended June 30, **2025**[79](index=79&type=chunk) [Reverse Stock Split](index=20&type=section&id=Reverse%20Stock%20Split) A **1-for-10** reverse stock split on June 6, **2025**, retroactively adjusted all share and per share data - A **1-for-10** reverse stock split was effected on June 6, **2025**, reducing outstanding common stock shares[80](index=80&type=chunk) [Results of Operations](index=20&type=section&id=Results%20of%20Operations) Oil and gas revenues decreased, while operating and G&A expenses significantly increased, resulting in a larger net loss and reduced other income | Metric | 3 Months Ended Jun 30, 2025 | 3 Months Ended Jun 30, 2024 | 6 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2024 | | :----- | :---------------------------- | :---------------------------- | :---------------------------- | :---------------------------- | | Oil and Gas Revenues | $110,557 (-5%) | $115,805 | $212,902 (-19%) | $263,490 | | Net oil production (Bbl) | 1,363 | 1,091 | 2,298 | 2,690 | | Average sales price – oil (per barrel) | $62.11 | $79.71 | $65.80 | $76.56 | | Lease Operating Expenses | $228,226 (+60%) | $142,203 | $304,251 (unchanged) | $305,233 | | General and Administrative Expense (excl. stock-based comp) | $1,609,977 (+369%) | $343,001 | $2,662,338 (+310%) | $650,141 | | Stock-Based Compensation | $50,029 (+293%) | $12,746 | $64,086 (+6%) | $60,413 | | Other Income (Expense), net | $27,639 (-91%) | $321,167 | $57,139 (-92%) | $713,597 | - Revenue decrease was primarily due to one well being shut down and natural production decline[81](index=81&type=chunk)[82](index=82&type=chunk) - Increase in lease operating expenses was due to repair costs for the shut-down well[84](index=84&type=chunk) - Significant increase in G&A expenses was attributable to professional fees for the AGIG acquisition[86](index=86&type=chunk) - Other income declined due to no income from Hupecol Meta LLC in **2025**[88](index=88&type=chunk) [Financial Condition](index=21&type=section&id=Financial%20Condition) Cash and working capital significantly improved from common stock sales, with operating activities using cash and financing activities providing funds | Metric | Jun 30, 2025 | Dec 31, 2024 | Change | | :----- | :----------- | :----------- | :----- | | Cash Balance | $6,951,006 | $2,960,151 | +134.8% | | Working Capital | $7,225,589 | $3,072,783 | +135.1% | - Cash increase was primarily due to the sale of **260,000 shares** in January **2025** and **255,729 shares** plus **49,662 pre-funded warrants** in June **2025**[89](index=89&type=chunk) - Operating activities used **$2,817,410** of cash in the six months ended June 30, **2025**, compared to **$87,803** provided in the prior year, mainly due to professional fees for the AGIG acquisition[90](index=90&type=chunk) - Financing activities provided **$6,968,265** in the six months ended June 30, **2025**, from common stock sales, compared to **$0** in the prior year[92](index=92&type=chunk) [Off-Balance Sheet Arrangements](index=21&type=section&id=Off-Balance%20Sheet%20Arrangements) No off-balance sheet arrangements or third-party guarantees existed as of June 30, **2025** - No off-balance sheet arrangements or third-party guarantees as of June 30, **2025**[94](index=94&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=22&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exempt from market risk disclosures as it qualifies as a smaller reporting company - The company is exempt from providing market risk disclosures as a smaller reporting company[95](index=95&type=chunk) [Item 4. Controls and Procedures](index=22&type=section&id=Item%204.%20Controls%20and%20Procedures) Internal control over financial reporting was ineffective due to material weaknesses in accounting knowledge, experience, and segregation of duties - Internal control over financial reporting was not effective as of June 30, **2025**[96](index=96&type=chunk) - Material weaknesses identified include a lack of appropriate accounting knowledge and experience for public company financial reporting, especially for reserve inputs, asset retirement obligations, DDA calculation, and full cost ceiling tests, and a lack of segregation of duties[96](index=96&type=chunk) - The company is relying on third-party consultants to assist in remedying these material weaknesses[96](index=96&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended June 30, **2025**[97](index=97&type=chunk) PART II—OTHER INFORMATION [Item 1. Legal Proceedings](index=23&type=section&id=Item%201.%20Legal%20Proceedings) No material legal proceedings are currently pending that would adversely affect the company's business or financial condition - No material legal proceedings are currently pending against the company[99](index=99&type=chunk) [Item 1A. Risk Factors](index=23&type=section&id=Item%201A.%20Risk%20Factors) Outlines risks from the Share Exchange, combined company ownership, AGIG's operations, manufacturing, regulatory compliance, intellectual property, and general economic factors [Risks Related to the Share Exchange](index=23&type=section&id=Risks%20Related%20to%20the%20Share%20Exchange) Post-Share Exchange business success is not guaranteed, and loss of key personnel or unmet investor expectations could negatively impact the company - The company's ability to successfully operate and grow the business related to the Share Exchange is not guaranteed, and the loss of key personnel could have a material adverse effect[100](index=100&type=chunk) - If the benefits of the Share Exchange do not meet investor expectations, the market price of the company's securities may decline and be volatile[101](index=101&type=chunk) [Risks Related to the Combined Company and our Ownership Structure After the Share Exchange](index=23&type=section&id=Risks%20Related%20to%20the%20Combined%20Company%20and%20our%20Ownership%20Structure%20After%20the%20Share%20Exchange) Existing stockholders face significant dilution, and AGIG Unitholders will control the combined company, operating as a "controlled company" exempt from some governance rules - HUSA stockholders will experience dilution due to the issuance of additional shares in the Share Exchange, limiting their influence on management[102](index=102&type=chunk) - AGIG Unitholders will beneficially own approximately **94%** of the voting power, giving them substantial control over the combined company[103](index=103&type=chunk) - The combined company will be a "controlled company" under NYSE American rules, potentially exempting it from certain corporate governance requirements (e.g., independent directors on the board and committees)[104](index=104&type=chunk) - Anti-takeover provisions under Delaware corporate law (Section **203** DGCL) may make it difficult to replace the board or deter acquisitions[105](index=105&type=chunk) - AGIG may have unknown, unasserted, or contingent liabilities that could adversely affect financial results[106](index=106&type=chunk) - AGIG will require additional capital to fund operations and may not be able to secure it on acceptable terms, leading to potential delays or elimination of development programs[107](index=107&type=chunk) [Risks Related to AGIG's Business and Operations](index=25&type=section&id=Risks%20Related%20to%20AGIG%27s%20Business%20and%20Operations) AGIG's history of losses raises going concern doubts, compounded by material internal control weaknesses, variable financial results, and a need for substantial financing - AGIG has incurred net losses since inception (**$3.6 million** in **2024**, **$2.1 million** in H1 **2025**) and expects to continue incurring losses, raising substantial doubt about its ability to continue as a going concern[113](index=113&type=chunk)[114](index=114&type=chunk) - Material weaknesses in AGIG's internal controls over financial reporting have been identified, particularly regarding the formal control environment, control activities, risk assessment for segregation of duties, and accounting for significant/unusual transactions[115](index=115&type=chunk)[116](index=116&type=chunk)[117](index=117&type=chunk) - AGIG's financial results could vary significantly quarter-to-quarter due to factors like cash resource use, timing of R&D releases, product popularity, competitor actions, and market entry success[119](index=119&type=chunk)[123](index=123&type=chunk) - AGIG will require substantial additional financing for operations and commercialization, which may not be available on favorable terms, potentially forcing delays or reductions in programs[121](index=121&type=chunk)[124](index=124&type=chunk) - AGIG's technology may not be successful in developing commercial products due to funding issues, regulatory approvals, competition, or commercialization challenges[125](index=125&type=chunk)[128](index=128&type=chunk) - Failure to effectively manage growth and expand operations could damage AGIG's reputation and business results[126](index=126&type=chunk)[129](index=129&type=chunk) - AGIG operates in a competitive bio-mass to liquid fuel market, facing established and new competitors with greater resources and market share[130](index=130&type=chunk)[132](index=132&type=chunk) - AGIG relies on industry partners for growth, and failure to maintain these relationships or accurately forecast demand could adversely affect its business[133](index=133&type=chunk)[134](index=134&type=chunk)[136](index=136&type=chunk) [Risks Related to AGIG's Manufacturing and Commercialization](index=31&type=section&id=Risks%20Related%20to%20AGIG%27s%20Manufacturing%20and%20Commercialization) AGIG's manufacturing and commercialization success is vulnerable to technological obsolescence, feedstock price/supply fluctuations, and scaling/cost reduction challenges - Technological innovation by competitors could render AGIG's technology and products uneconomical[140](index=140&type=chunk) - Fluctuations in waste-based feedstock prices and supply, as well as raw material costs, could affect AGIG's cost structure, margins, and ability to compete[141](index=141&type=chunk)[142](index=142&type=chunk)[144](index=144&type=chunk) - AGIG's success is highly dependent on its technology platform, and problems with engineering or data analysis could harm its business[143](index=143&type=chunk) - Inability to successfully add additional process trains or overcome manufacturing capacity issues could prevent AGIG from meeting customer demand and achieving profitability[146](index=146&type=chunk)[147](index=147&type=chunk) - Declines in feedstock availability or increased competition for them could force AGIG to delay production, raise prices, and reduce demand/revenue[148](index=148&type=chunk) - Failure to continuously reduce operating and capital costs for facilities may impact product adoption and negatively affect AGIG's business[149](index=149&type=chunk) - Construction of AGIG's facilities may face delays or increased costs due to regulatory, environmental, political, and legal uncertainties[150](index=150&type=chunk) - Supply chain issues for critical components could impact technology deployment cost estimates and schedule timelines[152](index=152&type=chunk)[153](index=153&type=chunk) [Risks Related to AGIG's Legal, Regulatory, and Environmental, Health and Safety Matters](index=33&type=section&id=Risks%20Related%20to%20AGIG%27s%20Legal%2C%20Regulatory%2C%20and%20Environmental%2C%20Health%20and%20Safety%20Matters) AGIG faces significant risks from hazardous materials, extensive regulations, and complex permitting for deployment sites, with non-compliance leading to fines and operational harm - AGIG and its partners use hazardous materials and must comply with extensive environmental, health, and safety laws; non-compliance could lead to liability, fines, and operational disruption[154](index=154&type=chunk) - AGIG is subject to extensive international, national, and subnational laws and regulations, and changes or non-compliance could materially adversely affect its business, especially with international expansion[155](index=155&type=chunk)[157](index=157&type=chunk) - Technology deployment sites require permitting and planning, often in line with petrochemical standards, and delays or inability to secure these could adversely affect deployment schedules[158](index=158&type=chunk)[159](index=159&type=chunk) - Product liability claims, defects, or errors in offerings could result in significant expense, diversion of management time, and damage to business and reputation[162](index=162&type=chunk)[163](index=163&type=chunk)[164](index=164&type=chunk) [Risks Related to AGIG's Intellectual Property](index=36&type=section&id=Risks%20Related%20to%20AGIG%27s%20Intellectual%20Property) AGIG's competitive advantage is vulnerable due to non-exclusive licenses, IP disputes, trade secret protection issues, costly infringement claims, and patent enforcement challenges - AGIG has non-exclusive service agreements or licenses to some intellectual property, and disputes over ownership with partners could harm commercialization plans[165](index=165&type=chunk) - Failure to protect proprietary technology through patents, trademarks, and trade secrets may significantly impair AGIG's competitive advantage, especially in foreign countries[166](index=166&type=chunk) - Patent rights may not provide commercially meaningful protection against competition, and existing or pending patents could be challenged or invalidated[167](index=167&type=chunk) - AGIG may face costly intellectual property infringement claims, leading to litigation, damages, and diversion of resources[169](index=169&type=chunk)[170](index=170&type=chunk)[171](index=171&type=chunk) - Reliance on trade secrets is risky as they are difficult to protect and enforce, and independent discovery by competitors could harm AGIG's business[173](index=173&type=chunk)[174](index=174&type=chunk)[175](index=175&type=chunk)[176](index=176&type=chunk)[177](index=177&type=chunk) - AGIG depends on licensed technologies and does not control their intellectual property rights, making it vulnerable to issues with licensors or adverse legal actions against them[178](index=178&type=chunk)[179](index=179&type=chunk) [General Risks Related to AGIG](index=39&type=section&id=General%20Risks%20Related%20to%20AGIG) AGIG faces risks from changing governmental incentives, market price volatility, currency fluctuations, adverse macroeconomic conditions, and depends on retaining key personnel and robust IT systems - Governmental programs incentivizing low carbon fuels could be repealed or changed, decreasing demand and revenue for AGIG's products[180](index=180&type=chunk)[181](index=181&type=chunk) - Market prices for alternatively produced products are volatile, and AGIG's reliance on its own market research for forecasts carries risks[182](index=182&type=chunk) - Significant fluctuations in U.S. dollar to Euro exchange rates could impact AGIG's results of operations, cash position, and funding requirements, despite hedging efforts[183](index=183&type=chunk)[184](index=184&type=chunk)[185](index=185&type=chunk) - Conditions in financial markets and the broader economy, including inflation and bank failures, may adversely affect AGIG's ability to raise capital, execute its business plan, or remain in business[186](index=186&type=chunk)[187](index=187&type=chunk)[188](index=188&type=chunk) - The loss of key personnel or inability to attract and retain additional qualified management and technical staff could harm AGIG's ability to meet business objectives[189](index=189&type=chunk) - Significant disruptions in information technology systems, including security breaches or failure to implement new systems, could adversely affect business operations and financial condition[190](index=190&type=chunk)[191](index=191&type=chunk)[192](index=192&type=chunk) - Natural or man-made disasters, social/economic/political instability, and pandemics may significantly disrupt AGIG's and its partners' businesses[193](index=193&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=41&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds were reported for the period - No unregistered sales of equity securities or use of proceeds[194](index=194&type=chunk) [Item 3. Defaults Upon Senior Securities](index=41&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported for the period - No defaults upon senior securities[194](index=194&type=chunk) [Item 4. Mine Safety Disclosures](index=41&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[194](index=194&type=chunk) [Item 5. Other Information](index=41&type=section&id=Item%205.%20Other%20Information) No other information was reported for the period - No other information[195](index=195&type=chunk) [Item 6. Exhibits](index=42&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with the Form 10-Q, including corporate amendments, purchase agreements, agency agreements, and certifications - Includes Certificate of Amendment of the Certificate of Incorporation, Securities Purchase Agreements, Placement Agency Agreements, and certifications (**31.1**, **31.2**, **32.1**, **32.2**)[196](index=196&type=chunk) SIGNATURES [SIGNATURES](index=44&type=section&id=SIGNATURES) The report is signed by Edward Gillespie (CEO) and Lucie Harwood (CFO) on August 14, **2025** - Signed by Edward Gillespie (CEO) and Lucie Harwood (CFO) on August 14, **2025**[201](index=201&type=chunk)