UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (MARK ONE) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended September 30, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-42417 CO2 ENERGY TRANSITION CORP. (Exact Name of Registrant as Specified in Its Charter) | Delaware | 87-2950691 | | --- | --- | | (Sta ...

[Part I. Financial Information](index=4&type=section&id=Part%20I.%20Financial%20Information) This part presents the company's unaudited condensed financial statements and management's financial analysis [Item 1. Condensed Interim Financial Statements](index=4&type=section&id=Item%201.%20Condensed%20Interim%20Financial%20Statements) This section presents the unaudited condensed financial statements, including the balance sheets, statements of operations, changes in stockholders' deficit, and cash flows, along with their accompanying notes, for the periods ended June 30, 2025, and December 31, 2024 [Condensed Balance Sheets](index=4&type=section&id=Condensed%20Balance%20Sheets%20as%20of%20June%2030%2C%202025%20%28Unaudited%29%20and%20December%2031%2C%202024) This section presents the unaudited condensed balance sheets as of June 30, 2025, and December 31, 2024 | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | Change | | :-------------------------------- | :------------------------ | :------------------ | :------------------ | | Cash | $469,288 | $953,069 | $(483,781) | | Prepaid expenses | $167,691 | $220,947 | $(53,256) | | Total Current Assets | $636,979 | $1,174,016 | $(537,037) | | Long-term prepaid insurance | $33,333 | — | $33,333 | | Investments held in Trust Account | $70,686,381 | $69,310,897 | $1,375,484 | | TOTAL ASSETS | $71,356,693 | $70,484,913 | $871,780 | | Accrued expenses | $115,716 | $297,787 | $(182,071) | | Accrued offering costs | $75,000 | $75,000 | $0 | | Income tax payable | $289,597 | $61,039 | $228,558 | | Promissory note – related party | $11,730 | $11,730 | $0 | | Total Current Liabilities | $492,043 | $445,556 | $46,487 | | Deferred underwriting fee | $2,070,000 | $2,070,000 | $0 | | TOTAL LIABILITIES | $2,562,043 | $2,515,556 | $46,487 | | Common stock subject to possible redemption | $70,332,415 | $69,233,258 | $1,099,157 | | Accumulated deficit | $(1,538,034) | $(1,264,170) | $(273,864) | | Total Stockholders' Deficit | $(1,537,765) | $(1,263,901) | $(273,864) | [Condensed Statements of Operations](index=5&type=section&id=Condensed%20Statements%20of%20Operations%20For%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024%20%28Unaudited%29) This section presents the unaudited condensed statements of operations for the three and six months ended June 30, 2025 and 2024 - The company reported a net income of **$418,891** for the three months ended June 30, 2025, compared to a net loss of **$20,055** for the same period in 2024. For the six months ended June 30, 2025, net income was **$825,293**, a significant improvement from a net loss of **$40,453** in 2024[14](index=14&type=chunk) - A primary driver of the income was interest earned on investments held in the Trust Account, totaling **$729,611** for the three months and **$1,455,374** for the six months ended June 30, 2025, with no such income in 2024[14](index=14&type=chunk) - General and administrative costs increased substantially, from **$20,055** to **$162,313** for the three-month period and from **$40,453** to **$333,033** for the six-month period, reflecting increased operational activities as a public company[14](index=14&type=chunk) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | General and administrative costs | $162,313 | $20,055 | $333,033 | $40,453 | | Loss from operations | $(162,313) | $(20,055) | $(333,033) | $(40,453) | | Interest expense | $(1,657) | — | $(4,282) | — | | Interest earned on investments held in Trust Account | $729,611 | — | $1,455,374 | — | | Total other income, net | $727,954 | — | $1,451,092 | — | | Income (loss) before provision for income taxes | $565,641 | $(20,055) | $1,118,059 | $(40,453) | | Provision for income taxes | $(146,750) | — | $(292,766) | — | | Net income (loss) | $418,891 | $(20,055) | $825,293 | $(40,453) | | Basic and diluted net income per share, non-redeemable common stock | $0.04 | $(0.01) | $0.09 | $(0.02) | [Condensed Statements of Changes in Stockholders' Deficit](index=6&type=section&id=Condensed%20Statements%20of%20Changes%20in%20Stockholders%27%20Deficit%20For%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024%20%28Unaudited%29) This section presents the unaudited condensed statements of changes in stockholders' deficit for the three and six months ended June 30, 2025 and 2024 - The accumulated deficit increased from **$(1,264,170)** at January 1, 2025, to **$(1,538,034)** at June 30, 2025, primarily due to accretion for common stock to redemption amount, partially offset by net income[17](index=17&type=chunk) | Metric | January 1, 2025 | March 31, 2025 | June 30, 2025 | | :------------------------------------ | :-------------- | :------------- | :------------ | | Accumulated Deficit (Start) | $(1,264,170) | $(1,469,071) | $(1,538,034) | | Accretion for common stock to redemption amount | — | $(611,303) | $(487,854) | | Net income | — | $406,402 | $418,891 | | Total Stockholders' Deficit (End) | $(1,263,901) | $(1,468,802) | $(1,537,765) | | Metric | January 1, 2024 | March 31, 2024 | June 30, 2024 | | :-------------------- | :-------------- | :------------- | :------------ | | Accumulated Deficit (Start) | $(361,845) | $(382,243) | $(402,298) | | Net loss | — | $(20,398) | $(20,055) | | Total Stockholders' Deficit (End) | $(336,845) | $(357,243) | $(377,298) | [Condensed Statements of Cash Flows](index=7&type=section&id=Condensed%20Statements%20of%20Cash%20Flows%20For%20the%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024%20%28Unaudited%29) This section presents the unaudited condensed statements of cash flows for the six months ended June 30, 2025 and 2024 - Net cash used in operating activities increased significantly from **$(76,718)** for the six months ended June 30, 2024, to **$(563,672)** for the same period in 2025, primarily due to interest earned on Trust Account investments being a non-cash operating adjustment[21](index=21&type=chunk) - The company provided **$79,891** in cash from investing activities in 2025, representing cash withdrawn from the Trust Account for taxes, compared to no investing activities in 2024[21](index=21&type=chunk) | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | | Net income (loss) | $825,293 | $(40,453) | | Interest earned on Investments held in Trust Account | $(1,455,374) | — | | Changes in operating assets and liabilities (net) | $149,410 | $(42,315) | | Net cash used in operating activities | $(563,672) | $(76,718) | | Cash withdrawn from Trust Account for taxes | $79,891 | — | | Net cash provided by investing activities | $79,891 | — | | Net cash provided by financing activities | — | $74,925 | | Net Change in Cash | $(483,781) | $(1,793) | | Cash – End of year | $469,288 | $319 | [Notes to Condensed Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Financial%20Statements%20%28Unaudited%29) This section provides detailed explanations and disclosures for the unaudited condensed financial statements and their notes [Note 1. Description of Organization, Business Operations and Going Concern](index=8&type=section&id=NOTE%201.%20DESCRIPTION%20OF%20ORGANIZATION%2C%20BUSINESS%20OPERATIONS%20AND%20GOING%20CONCERN) This note describes the company's organization, business operations as a blank check company, and going concern considerations - CO2 Energy Transition Corp. was incorporated on September 30, 2021, as a blank check company to effect a business combination, primarily targeting the Oil, Gas, and LNG sectors. It is an early-stage and emerging growth company[24](index=24&type=chunk) - The company has not commenced operations and will not generate operating revenues until after completing its initial Business Combination. Non-operating income is generated from interest on Trust Account proceeds[25](index=25&type=chunk) - The Initial Public Offering (IPO) closed on November 22, 2024, selling **6,900,000 units** at **$10.00** each, generating **$69,000,000** gross proceeds. Each unit includes one common stock share, one redeemable warrant, and one right[26](index=26&type=chunk) - Simultaneously, **265,000** private units were sold to the Sponsor for **$2,650,000**[27](index=27&type=chunk) - **$69,000,000** from the IPO and private placement proceeds was placed in a Trust Account, invested in U.S. government securities or money market funds, to be used for a Business Combination or distributed to public stockholders[33](index=33&type=chunk) - The company must complete a Business Combination with a fair market value of at least **80%** of the net assets in the Trust Account within **18 months** (or up to **24 months** with extensions) from the IPO closing[32](index=32&type=chunk)[41](index=41&type=chunk) - Public stockholders can redeem their shares for a pro rata portion of the Trust Account upon completion of a Business Combination. Initial Stockholders waive redemption rights for Founder Shares[34](index=34&type=chunk)[40](index=40&type=chunk) - Management has determined that a potential liquidity shortfall and mandatory liquidation if a Business Combination is not completed by May 22, 2026, raise substantial doubt about the company's ability to continue as a going concern[51](index=51&type=chunk) [Note 2. Significant Accounting Policies](index=12&type=section&id=NOTE%202.%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the significant accounting policies used in preparing the unaudited condensed financial statements - Unaudited condensed financial statements are prepared in accordance with GAAP for interim financial information, condensed or omitted certain disclosures per SEC rules[52](index=52&type=chunk) - The company is an Emerging Growth Company (EGC) and has elected to use the extended transition period for complying with new or revised financial accounting standards, aligning with private company adoption dates[54](index=54&type=chunk)[56](index=56&type=chunk) - As of June 30, 2025, cash was **$469,288** (December 31, 2024: **$953,069**), with no cash equivalents[59](index=59&type=chunk) - Assets in the Trust Account are held in money market funds primarily invested in U.S. government securities, accounted for as trading securities at fair value[62](index=62&type=chunk) - The company follows the asset and liability method for income taxes (ASC 740). As of June 30, 2025, and December 31, 2024, a full valuation allowance was established against deferred tax assets. The effective tax rate for the three and six months ended June 30, 2025, was **25.94%** and **26.19%**, respectively, differing from the **21%** statutory rate due to the valuation allowance[66](index=66&type=chunk)[68](index=68&type=chunk)[70](index=70&type=chunk) - Net income (loss) per common share is calculated by dividing net income (loss) by weighted average shares outstanding. Diluted EPS is the same as basic EPS as warrants are contingent on future events and anti-dilutive[73](index=73&type=chunk)[74](index=74&type=chunk) - Common stock subject to redemption is classified as temporary equity outside of permanent equity, with changes in redemption value recognized immediately and adjusted to equal redemption value at each reporting period end[81](index=81&type=chunk) [Note 3. Initial Public Offering](index=18&type=section&id=NOTE%203.%20INITIAL%20PUBLIC%20OFFERING) This note details the terms and proceeds of the company's Initial Public Offering (IPO) - On November 22, 2024, the Company sold **6,900,000 Units** at **$10.00** per Unit, including the full exercise of the over-allotment option. Each Unit consists of one common stock share, one Public Right (1/8 share upon Business Combination), and one redeemable Public Warrant (**$11.50** exercise price)[84](index=84&type=chunk) [Note 4. Private Placement](index=18&type=section&id=NOTE%204.%20PRIVATE%20PLACEMENT) This note describes the terms and proceeds of the private placement of units to the Sponsor - The Sponsor purchased **265,000 Private Units** at **$10.00** each, totaling **$2,650,000**. Each Private Unit includes one Private Share, one Private Right (1/8 share upon Business Combination), and one redeemable Private Warrant (**$11.50** exercise price)[85](index=85&type=chunk) - Proceeds from Private Units were added to the Trust Account. If no Business Combination, these units and underlying securities expire worthless[85](index=85&type=chunk) [Note 5. Related Parties](index=18&type=section&id=NOTE%205.%20RELATED%20PARTIES) This note details transactions and relationships with related parties, including the Sponsor and its affiliates - The Sponsor holds **2,300,000 Founder Shares**, which were initially subject to forfeiture but are no longer due to the full exercise of the over-allotment option. These shares are subject to transfer restrictions[86](index=86&type=chunk) - An unsecured promissory note from the Sponsor, initially for **$400,000** and amended multiple times, had **$11,730** outstanding as of June 30, 2025, and December 31, 2024. This amount was rolled into a new Working Capital Note[87](index=87&type=chunk) - The Sponsor or affiliates may provide Working Capital Loans up to **$1,500,000** to finance transaction costs. These loans are non-interest bearing and convertible into units at **$10.00** per unit. As of June 30, 2025, no amounts were outstanding under the Working Capital Note[90](index=90&type=chunk)[91](index=91&type=chunk)[94](index=94&type=chunk) - The Company pays the Sponsor **$10,000** per month for office space, utilities, and administrative services. For the three and six months ended June 30, 2025, **$30,000** and **$60,000**, respectively, were incurred and paid[95](index=95&type=chunk) [Note 6. Commitments and Contingencies](index=20&type=section&id=NOTE%206.%20COMMITMENTS%20AND%20CONTINGENCIES) This note outlines the company's commitments and contingencies, including registration rights and deferred underwriting fees - Holders of Founder Shares, Private Placement Units, and Working Capital Note Units have rights to require the Company to register their securities for resale. The Company bears the expenses[96](index=96&type=chunk) - The underwriters fully exercised their over-allotment option for **900,000 units**. They received a cash underwriting discount of **$517,500** and are entitled to a deferred underwriting discount of **$2,070,000**, payable upon closing of a Business Combination[98](index=98&type=chunk)[99](index=99&type=chunk) [Note 7. Stockholders' Deficit](index=21&type=section&id=NOTE%207.%20STOCKHOLDERS%27%20DEFICIT) This note details the components of stockholders' deficit, including common stock, rights, and warrants - Authorized **1,000,000** shares of preferred stock, none issued or outstanding[100](index=100&type=chunk) - Authorized **40,000,000** shares of common stock, with **2,685,750** shares issued and outstanding (excluding **6,900,000** shares subject to possible redemption) as of June 30, 2025, and December 31, 2024[101](index=101&type=chunk) - Each right entitles the holder to receive one-eighth (**1/8**) of one common stock share upon Business Combination. As of June 30, 2025, there were **6,900,000 Public Rights** and **265,000 Private Rights** outstanding. Rights expire worthless if no Business Combination is completed[102](index=102&type=chunk)[103](index=103&type=chunk)[106](index=106&type=chunk) - Public Warrants become exercisable **30 days** after Business Combination or **12 months** from IPO closing, expiring **five years** from Business Combination. The Company may redeem Public Warrants at **$0.01** if common stock price exceeds **$18.00** for **20 trading days** within a **30-day period**. Private Warrants are identical but non-transferable until **30 days** post-Business Combination and non-redeemable while held by initial purchasers[107](index=107&type=chunk)[109](index=109&type=chunk)[113](index=113&type=chunk)[114](index=114&type=chunk) [Note 8. Representative Shares](index=24&type=section&id=NOTE%208.%20REPRESENTATIVE%20SHARES) This note describes the issuance and terms of Representative Shares to the underwriters' representative - The Company issued **138,000 Representative Shares** to Kingswood Capital Partners LLC, the underwriters' representative, valued at **$77,280**[117](index=117&type=chunk) - These shares are subject to a **180-day lock-up period** post-IPO and waivers of redemption and liquidation rights[117](index=117&type=chunk)[118](index=118&type=chunk) [Note 9. Fair Value Measurements](index=24&type=section&id=NOTE%209.%20FAIR%20VALUE%20MEASUREMENTS) This note explains the company's fair value measurements and their classification within the hierarchy - Fair value measurements are classified into a three-tier hierarchy (Level 1, 2, 3)[119](index=119&type=chunk)[121](index=121&type=chunk) - As of June 30, 2025, and December 31, 2024, investments held in the Trust Account (**$70,686,381** and **$69,310,897**, respectively) are classified as Level 1, as they are held in money market funds primarily invested in U.S. government securities[119](index=119&type=chunk) [Note 10. Segment Information](index=24&type=section&id=NOTE%2010.%20SEGMENT%20INFORMATION) This note clarifies that the company operates as a single reportable operating segment - The Chief Financial Officer, as the CODM, reviews the company's operating results as a whole, determining that the company has only one reportable operating segment[123](index=123&type=chunk) - The CODM assesses performance based on net income or loss, total assets, general and administrative expenses, and interest earned on the Trust Account[124](index=124&type=chunk) [Note 11. Subsequent Events](index=25&type=section&id=NOTE%2011.%20SUBSEQUENT%20EVENTS) This note confirms that no subsequent events requiring adjustment or disclosure were identified - The Company evaluated events up to the financial statement issuance date and identified no subsequent events requiring adjustment or disclosure[125](index=125&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition, operating results, liquidity, capital resources, and critical accounting estimates [General Information](index=26&type=section&id=General%20Information) This section provides general information and defines key terms used throughout the management discussion and analysis - This section should be read in conjunction with the interim unaudited condensed financial statements and the notes thereto included in this Quarterly Report on Form 10-Q[127](index=127&type=chunk) - References to the 'Company,' 'we,' 'us,' 'our,' and 'CO2 Energy' refer specifically to CO2 Energy Transition Corp. References to our 'management' or our 'management team' refer to our officers and directors, and references to the 'Sponsor' refer to CO2 Energy Transition, LLC[131](index=131&type=chunk) [Special Note Regarding Forward-Looking Statements](index=26&type=section&id=Special%20Note%20Regarding%20Forward-Looking%20Statements) This section highlights the forward-looking nature of certain statements and associated risks and uncertainties - The report includes forward-looking statements about future events or performance, reflecting management's current beliefs, but actual results may differ materially due to various risks and uncertainties[132](index=132&type=chunk) - Key risks highlighted include the company's lack of operating history, ability to continue as a 'going concern,' ability to complete an initial Business Combination within the prescribed timeframe, potential liability for third-party claims, conflicts of interest, and market volatility from geopolitical events[134](index=134&type=chunk)[136](index=136&type=chunk)[139](index=139&type=chunk) - The company disclaims any intention or obligation to update or revise any forward-looking statements unless expressly required by applicable securities law[137](index=137&type=chunk) [Overview](index=29&type=section&id=Overview) This section provides an overview of CO2 Energy Transition Corp. as a blank check company and its business combination strategy - CO2 Energy Transition Corp. is a blank check company incorporated on September 30, 2021, formed for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or other similar business combination with one or more businesses[138](index=138&type=chunk) - The company intends to effectuate its initial business combination using cash derived from the proceeds of the Initial Public Offering and the sale of the private placement units, its shares, debt or a combination of cash, shares and debt[138](index=138&type=chunk) [Liquidity, Capital Resources and Going Concern](index=30&type=section&id=Liquidity%2C%20Capital%20Resources%20and%20Going%20Concern) This section discusses the company's liquidity, capital resources, and the going concern assessment - As of June 30, 2025, the Company had **$469,288** in cash and working capital of **$434,534**[140](index=140&type=chunk) - The Initial Public Offering generated **$69,000,000** gross proceeds, and a private placement generated **$2,650,000**, with **$69,000,000** placed in the Trust Account[141](index=141&type=chunk)[142](index=142&type=chunk) - For the six months ended June 30, 2025, cash used in operating activities was **$563,672**, primarily due to interest earned on marketable securities held in the trust account being a non-cash item[143](index=143&type=chunk) - Substantially all funds held in the trust account (less income taxes payable) are intended to complete the initial business combination. Remaining proceeds will be used as working capital for the target business[148](index=148&type=chunk) - The company entered into a convertible promissory note with its Sponsor on April 15, 2025, allowing drawdowns up to **$1,500,000** for working capital, with no interest, convertible into units at **$10.00** per unit[150](index=150&type=chunk)[151](index=151&type=chunk)[152](index=152&type=chunk) - Management has identified a potential liquidity shortfall and mandatory liquidation if a Business Combination is not completed by May 22, 2026, raising substantial doubt about the company's ability to continue as a going concern[154](index=154&type=chunk)[155](index=155&type=chunk) [Off-Balance Sheet Financing Arrangements](index=32&type=section&id=Off-Balance%20Sheet%20Financing%20Arrangements) This section confirms the absence of off-balance sheet financing arrangements as of June 30, 2025 - As of June 30, 2025, the company has no obligations, assets, or liabilities considered off-balance sheet arrangements[157](index=157&type=chunk) [Contractual Obligations](index=32&type=section&id=Contractual%20Obligations) This section outlines the company's contractual obligations, including administrative services and deferred underwriting fees - The company has an agreement to pay the Sponsor **$10,000** per month for office space, utilities, secretarial support, and other administrative and consulting services[158](index=158&type=chunk) - A deferred underwriting discount of **$2,070,000** is payable to underwriters upon the closing of an initial business combination[160](index=160&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) This section analyzes the company's operating results, highlighting net income/loss and interest income from the Trust Account - The company has neither engaged in any operations nor generated any revenues to date and does not expect to until after the completion of its Business Combination[161](index=161&type=chunk) - Non-operating income is generated in the form of interest income on marketable securities held in the Trust Account[161](index=161&type=chunk) - For the three months ended June 30, 2025, net income was **$418,891**, driven by **$729,611** in interest income from the Trust Account, offset by **$162,313** in operating costs and **$146,750** in income taxes. This compares to a net loss of **$20,055** for the same period in 2024[162](index=162&type=chunk) - For the six months ended June 30, 2025, net income was **$825,293**, primarily from **$1,455,374** in interest income, offset by **$333,033** in operating costs and **$292,766** in income taxes. This compares to a net loss of **$40,453** for the same period in 2024[163](index=163&type=chunk) [Critical Accounting Estimates](index=33&type=section&id=Critical%20Accounting%20Estimates) This section states that the company did not have any critical accounting estimates to disclose as of June 30, 2025 - As of June 30, 2025, the company did not have any critical accounting estimates to disclose[164](index=164&type=chunk) [Recent Accounting Standards](index=33&type=section&id=Recent%20Accounting%20Standards) This section discusses the impact of recently issued accounting pronouncements on the company's financial statements - Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the company's unaudited condensed financial statements[165](index=165&type=chunk) [Commitments and Contractual Obligations (MD&A)](index=33&type=section&id=Commitments%20and%20Contractual%20Obligations%20%28MD%26A%29) This section details the company's commitments and contractual obligations, including registration rights - The holders of founder shares, private placement warrants, and warrants that may be issued upon conversion of Working Capital Loans are entitled to certain registration rights, with the company bearing the expenses incurred in connection with the filing of any such registration statements[166](index=166&type=chunk) [Underwriting Agreement](index=34&type=section&id=Underwriting%20Agreement%20%28MD%26A%29) This section outlines the deferred underwriting discount payable upon completion of a business combination - A deferred underwriting discount of **$2,070,000** is payable to the underwriter from the amounts held in the trust account solely in the event that the Company completes an initial business combination[167](index=167&type=chunk)[168](index=168&type=chunk) [JOBS Act](index=34&type=section&id=JOBS%20Act) This section explains the company's election to use extended transition periods as an 'emerging growth company' under the JOBS Act - As an 'emerging growth company,' the company is allowed to comply with new or revised accounting pronouncements based on the effective date for private companies, and has elected to delay the adoption of such standards[169](index=169&type=chunk) - The company may also rely on other JOBS Act provisions, such as delaying the auditor's attestation report on internal controls and reduced executive compensation disclosures[170](index=170&type=chunk) [Common Stock Subject to Possible Redemption](index=34&type=section&id=Common%20Stock%20Subject%20to%20Possible%20Redemption) This section explains the classification of common stock subject to redemption as temporary equity - Shares of common stock subject to mandatory redemption or conditionally redeemable common stock are classified as temporary equity, outside of the stockholders' equity section, due to redemption rights being outside the company's control[171](index=171&type=chunk) [Net Income Per Common Share](index=35&type=section&id=Net%20Income%20Per%20Common%20Share) This section details the calculation of basic and diluted net income (loss) per common share - Net income (loss) per common share is calculated by dividing the net income (loss) by the weighted average shares of common stock outstanding for the respective period, shared pro rata between redeemable and non-redeemable classes[172](index=172&type=chunk) - Diluted earnings per common share is the same as basic earnings per common share because the warrants are anti-dilutive under the treasury stock method[173](index=173&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, CO2 Energy Transition Corp. is not required to provide quantitative and qualitative disclosures about market risk - The company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information otherwise required under this Item[174](index=174&type=chunk) [Item 4. Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of the company's disclosure controls and procedures and reports on any changes in internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=35&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section reports on management's conclusion regarding the effectiveness of disclosure controls and procedures - Management, including the Chief Executive Officer and Chief Financial Officer, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[176](index=176&type=chunk) - Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that their objectives are met, and are subject to inherent limitations and resource constraints[177](index=177&type=chunk) [Changes in Internal Control over Financial Reporting](index=35&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section reports no material changes in internal control over financial reporting during the quarter - There was no change in the company's internal control over financial reporting that occurred during the fiscal quarter ended June 30, 2025, that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting[178](index=178&type=chunk) [Part II. Other Information](index=36&type=section&id=Part%20II.%20Other%20Information) This part covers legal proceedings, risk factors, unregistered equity sales, and other disclosures [Item 1. Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) The company reported no legal proceedings - The company is not currently involved in any legal proceedings[180](index=180&type=chunk) [Item 1A. Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the significant risk factors previously disclosed in the company's Annual Report on Form 10-K, noting no material changes - The significant factors known to the company that could materially adversely affect its business, financial condition, or operating results are described in the Annual Report on Form 10-K for the year ended December 31, 2024[180](index=180&type=chunk) - As of the date of this Quarterly Report on Form 10-Q, there have been no material changes from the risk factors previously disclosed in the Annual Report on Form 10-K[180](index=180&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports on unregistered sales of equity securities and details the use of proceeds from the Initial Public Offering and private placement [Recent Sales of Unregistered Securities](index=36&type=section&id=Recent%20Sales%20of%20Unregistered%20Securities) This section reports no previously undisclosed unregistered sales of equity securities during the quarter - There have been no sales of unregistered securities during the quarter ended June 30, 2025, and for the period from July 1, 2025, to the filing date of this Report, which have not previously been disclosed[181](index=181&type=chunk) [Purchases of equity securities by the issuer and affiliated purchasers](index=36&type=section&id=Purchases%20of%20equity%20securities%20by%20the%20issuer%20and%20affiliated%20purchasers) This section reports no purchases of equity securities by the issuer and affiliated purchasers - There were no purchases of equity securities by the issuer and affiliated purchasers[182](index=182&type=chunk) [Use of Proceeds](index=36&type=section&id=Use%20of%20Proceeds) This section details the gross proceeds from the IPO and private placement and their allocation to the Trust Account and offering expenses - The Initial Public Offering generated gross proceeds of **$69,000,000** from **6,900,000 Units**, and the private placement generated gross proceeds of **$2,650,000** from **265,000 Private Units**[183](index=183&type=chunk) - An aggregate of **$69,000,000** was placed in the Trust Account, to be invested in U.S. government securities or money market funds[184](index=184&type=chunk) - Total expenses incurred in connection with the Initial Public Offering amounted to **$3,423,710**, including cash underwriting discount, deferred underwriting fees, fair value of Representative Shares, and other offering costs[185](index=185&type=chunk) - There has been no material change in the planned use of proceeds from the offering as described in the final prospectus[186](index=186&type=chunk) [Item 3. Defaults Upon Senior Securities](index=36&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - There were no defaults upon senior securities[187](index=187&type=chunk) [Item 4. Mine Safety Disclosures](index=36&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company reported no mine safety disclosures - There were no mine safety disclosures[187](index=187&type=chunk) [Item 5. Other Information](index=36&type=section&id=Item%205.%20Other%20Information) This section provides other material information, including personnel changes and trading plan disclosures - Mr. Mark Mathews's services as General Counsel of the Company were terminated by the Board of Directors, effective August 8, 2025[187](index=187&type=chunk) - During the quarter ended June 30, 2025, none of the Company's directors or officers adopted or terminated any contract, instruction, or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any 'non-Rule 10b5-1 trading arrangement'[188](index=188&type=chunk) [Item 6. Exhibits](index=38&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Quarterly Report on Form 10-Q, including certifications and XBRL - The report includes certifications from the Principal Executive Officer and Principal Financial Officer (Exhibits 31.1, 31.2, 32.1, 32.2) and various Inline XBRL documents (Exhibits 101.INS, SCH, CAL, DEF, LAB, PRE, 104)[190](index=190&type=chunk) [Part III. Signatures](index=39&type=section&id=Part%20III.%20Signatures) This section contains the required signatures for the Quarterly Report on Form 10-Q [Signatures](index=39&type=section&id=Signatures) This section contains the required signatures for the Quarterly Report on Form 10-Q, certifying its submission on behalf of CO2 Energy Transition Corp - The report is signed by Brady Rodgers, Chief Executive Officer, and Harold R. DeMoss, III, Chief Financial Officer, on August 12, 2025[196](index=196&type=chunk)

Financial Position - As of March 31, 2025, the company had $631,409 in cash and working capital of $424,782[139] - As of March 31, 2025, the company had investments of $70,020,977 held in the trust account, with no principal or interest withdrawn except for tax payments[145] - The company has no long-term debt or off-balance sheet financing arrangements as of March 31, 2025[153] Initial Public Offering (IPO) - The company completed its Initial Public Offering on November 22, 2024, raising gross proceeds of $69,000,000 from the sale of 6,900,000 units[140] - A total of $69,000,000 was placed in the trust account following the Initial Public Offering, with $3,423,710 incurred in associated expenses[141] - The underwriters fully exercised their over-allotment option to purchase an additional 900,000 units at the IPO price of $10.00 per unit[155] - The underwriters received a cash underwriting discount of 0.75% of the gross proceeds from the Initial Public Offering, totaling $517,500, and a deferred underwriting discount of 3.00%, amounting to $2,070,000[164] Income and Expenses - For the three months ended March 31, 2025, the company reported a net income of $406,402, influenced by interest earned on marketable securities of $725,763[142] - For the three months ended March 31, 2025, the company reported a net income of $406,402, driven by interest income of $725,763 from investments held in the trust account[158] - The company incurred operating costs of $170,720 and a provision for income taxes amounting to $146,016 during the same period[158] - The company incurred a net loss of $20,398 for the three months ended March 31, 2024, attributed solely to general and administrative expenses[158] Business Strategy - The company intends to use substantially all funds in the trust account to complete its initial business combination and for working capital of the target business[146] - The company entered into a Working Capital Note allowing for loan drawdowns of up to $1,500,000 from the sponsor for transaction costs related to the initial business combination[148] - The Working Capital Note amounts are convertible into units at a price of $10.00 per unit, each consisting of one share of common stock, one warrant, and one right[150] Accounting and Reporting - The company has not generated any operating revenues to date and does not expect to do so until after the completion of its Business Combination[157] - The company has not disclosed any critical accounting estimates as of March 31, 2025[159] - The company qualifies as an "emerging growth company" under the JOBS Act, allowing it to delay the adoption of new or revised accounting standards[166] - The recent accounting standards update requires public entities to disclose significant segment expenses and other segment items, effective for fiscal years beginning after December 15, 2023[160] - The company has not considered the effect of warrants sold in the initial public offering in the calculation of diluted earnings per share, resulting in the same value for basic and diluted earnings per share[170] Equity Structure - As of March 31, 2025, the company had 6,900,000 shares of common stock subject to possible redemption, classified as temporary equity[168]

Financial Position and Capital Requirements - The company has approximately $953,069 available outside the trust account as of December 31, 2024, to fund working capital requirements[155] - The net proceeds from the IPO and the sale of private placement units provided the company with $69 million in trust account funds for completing its initial business combination[177] - The company may incur significant costs in pursuit of acquisition plans, and management's plans to address capital needs may involve loans from affiliates, which are not guaranteed[155] - The company may face challenges in obtaining additional financing for its initial business combination, which could lead to restructuring or abandonment of the transaction[187] - The trust account may be reduced due to third-party claims, potentially leading to a per-share redemption amount of less than $10.00[259] - The trust account funds will be invested in U.S. government treasury bills or money market funds, which could yield negative interest rates, affecting the per-share redemption amount[262] Business Combination Risks and Challenges - If the initial business combination is not completed within the required time period, public stockholders may receive only approximately $10.00 per share upon liquidation of the trust account[155] - There is uncertainty regarding the company's ability to complete an initial business combination due to potential changes in laws or regulations[164] - The company may be forced to cease operations and liquidate if it does not have sufficient funds available to complete the initial business combination[155] - The company may complete its initial business combination with a single target business, which could result in a lack of diversification and expose it to various economic, competitive, and regulatory risks[178] - There is a risk that the company may pursue a business combination with a private company, which typically has limited public information available, potentially leading to unexpected profitability outcomes[180] - The company may face challenges in obtaining stockholder approval for a business combination if the target does not meet its general criteria and guidelines, which could complicate the transaction process[169] - If the business combination is subject to CFIUS review, it may face delays or prohibitions, impacting the ability to complete the transaction[182] - The company may incur substantial costs in investigating potential acquisitions, which would not be recoverable if the acquisition does not proceed[172] - The company may attempt to simultaneously complete multiple business combinations, which could increase costs and risks, negatively impacting operations and profitability[179] Regulatory and Compliance Considerations - The SEC adopted final rules on January 24, 2024, regarding the regulation of SPACs under the Investment Company Act, which could impact the company's operations[159] - If deemed an investment company, the company may face burdensome compliance requirements and restrictions that could hinder the completion of an initial business combination[161] - Compliance with the Sarbanes-Oxley Act may increase the time and costs associated with completing an acquisition, particularly if the target business is not compliant[190] - The company is classified as an "emerging growth company," allowing it to take advantage of certain exemptions from disclosure requirements, which may affect investor attractiveness[240] - The company is also a "smaller reporting company," permitting reduced disclosure obligations, including only two years of audited financial statements[242] - The company has not opted out of the extended transition period for new financial accounting standards, which may complicate financial comparisons with other public companies[241] Management and Governance Issues - Past performance of the management team is not indicative of future performance or success in identifying suitable candidates for business combinations[167] - The company is dependent on a small group of individuals for its operations, and their departure could adversely affect its ability to operate[203] - Key personnel may negotiate employment agreements with target businesses, which could create conflicts of interest in selecting advantageous business combinations[204] - The company’s directors and officers may have conflicts of interest due to their involvement in other business activities, impacting their commitment to the company[206] - Certain directors and officers may be affiliated with entities engaged in similar business activities, leading to potential conflicts in business opportunity presentations[207] Shareholder Rights and Dilution Risks - The nominal purchase price for founder shares may lead to significant dilution of public shares upon the initial business combination, as the implied value of public shares is initially $10.00[215] - The potential issuance of additional shares could significantly dilute the equity interest of investors and may affect the market price of the company's common stock[275] - The company may redeem outstanding warrants at a price of $0.01 per warrant if the Reference Value equals or exceeds $18.00 per share[277] - If the company calls the warrants for redemption, it may require holders to exercise on a "cashless basis," resulting in fewer shares received[279] - The company may not hold an annual stockholder meeting until after the initial business combination, limiting stockholder rights[239] - The absence of a specified maximum redemption threshold may allow the company to complete a business combination even if a substantial majority of stockholders disagree[217] Market and Competitive Environment - The increasing number of special purpose acquisition companies (SPACs) may lead to a scarcity of attractive targets, raising costs and complicating the acquisition process[198] - Competition for available targets may increase, potentially resulting in less favorable financial terms for the company[199] - The market for directors and officers liability insurance has become less favorable, with fewer insurers providing quotes and premiums generally increasing[243] Miscellaneous Financial Considerations - The Inflation Reduction Act of 2022 imposes a 1% excise tax on stock repurchases by publicly traded domestic corporations, which may apply to redemptions in connection with business combinations[246] - The excise tax could make transactions with the company less appealing to potential business combination targets, depending on various factors including the fair market value of redemptions[247] - The company will not use trust funds to pay any excise tax that may be incurred[248] - The company has authorized the issuance of up to 40,000,000 shares of common stock, with 22,353,625 shares currently available for issuance[271] - The exercise price for public warrants is set at $11.50 per share, which is higher than typical offerings in similar blank check companies, increasing the likelihood of warrants expiring worthless[276] - The registration of a significant number of securities for trading may adversely affect the market price of the company's common stock[270]

Financial Performance - The company reported a net loss of $26,532 for the three months ended September 30, 2024, compared to a net loss of $5,290 for the same period in 2023, indicating an increase in losses [110]. - For the nine months ended September 30, 2024, the company had a net loss of $66,985, compared to a net loss of $135,402 for the same period in 2023, showing a decrease in losses year-over-year [110]. - The company has not generated any revenues to date and does not expect to do so until after completing its Business Combination [109]. Initial Public Offering (IPO) - The company completed its Initial Public Offering on November 22, 2024, raising gross proceeds of $69,000,000 from the sale of 6,900,000 Units at $10.00 per Unit [112]. - Following the IPO, a total of $69,000,000 was placed in the Trust Account, with $3,423,710 incurred in expenses related to the IPO [113]. - The underwriters exercised their over-allotment option to purchase an additional 900,000 Units at the IPO price, generating additional funds for the company [121]. Use of Funds - The company intends to use substantially all funds in the Trust Account to complete its Business Combination, with remaining proceeds allocated for working capital [114]. - The company may need additional financing to complete its Business Combination or to cover redemptions of public shares [117]. Liabilities and Expenses - The company has no long-term debt or significant liabilities, except for a monthly payment of $10,000 to the Sponsor for administrative services [120]. - The company incurred significant costs related to being a public entity, including legal and compliance expenses [109].