Global Gas(HGAS) - 2025 Q2 - Quarterly Report

Part I - Financial Information Item 1. Condensed Consolidated Financial Statements (Unaudited) Presents the Company's unaudited condensed consolidated financial statements and explanatory notes for periods ended June 30, 2025, and December 31, 2024 Condensed Consolidated Balance Sheets Details the Company's financial position, including assets, liabilities, and stockholders' deficit, for the reported periods - Total Assets decreased significantly by 62.81% from $264,729 at December 31, 2024, to $98,457 at June 30, 2025[10] - Total Liabilities decreased by 44.85% from $710,619 to $391,897, while Total Stockholders' Deficit improved by 34.19% from $(445,890) to $(293,440)[10] Condensed Consolidated Balance Sheet Highlights | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | Change ($) | Change (%) | | :-------------------------------- | :------------------------ | :------------------ | :--------- | :--------- | | Cash and cash equivalents | $83,772 | $114,146 | $(30,374) | -26.61% | | Deposit | $0 | $144,000 | $(144,000) | -100.00% | | Prepaid expenses and other receivables | $14,685 | $6,583 | $8,102 | 123.07% | | Total Current Assets | $98,457 | $264,729 | $(166,272) | -62.81% | | TOTAL ASSETS | $98,457 | $264,729 | $(166,272) | -62.81% | | Accounts payable – related party | $0 | $124,867 | $(124,867) | -100.00% | | Accounts payable and accrued expenses | $99,077 | $75,209 | $23,868 | 31.74% | | Deferred Revenue | $0 | $207,436 | $(207,436) | -100.00% | | Advances – related party | $0 | $2,207 | $(2,207) | -100.00% | | Convertible promissory notes – related parties | $273,950 | $273,950 | $0 | 0.00% | | Total Current Liabilities | $373,027 | $683,669 | $(310,642) | -45.44% | | Derivative warrant liabilities | $18,870 | $26,950 | $(8,080) | -29.98% | | TOTAL LIABILITIES | $391,897 | $710,619 | $(318,722) | -44.85% | | Accumulated deficit | $(307,482) | $(446,808) | $139,326 | -31.18% | | Total stockholders' deficit | $(293,440) | $(445,890) | $152,450 | -34.19% | Condensed Consolidated Statements of Operations Presents the Company's revenues, expenses, and net income for the three and six months ended June 30, 2025, and 2024 - Net Income for the six months ended June 30, 2025, decreased by 39% to $139,326 from $226,691 in the prior year period[13] - Revenue for the six months ended June 30, 2025, was $33,012, compared to $0 in the same period of 2024[13] Condensed Consolidated Statements of Operations Highlights | 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 | | :-------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Revenues | $0 | $0 | $33,012 | $0 | | General and administrative | $35,805 | $71,095 | $97,931 | $148,254 | | Loss from operations | $(35,805) | $(71,095) | $(64,919) | $(148,254) | | Other income | $202,173 | $0 | $202,173 | $0 | | Interest income | $874 | $4,909 | $1,759 | $12,475 | | Interest expense | $(3,414) | $0 | $(7,767) | $0 | | Change in fair value of derivative warrant liabilities | $4,040 | $471,620 | $8,080 | $362,470 | | Total other income, net | $203,673 | $476,529 | $204,245 | $374,945 | | Net Income | $167,868 | $405,434 | $139,326 | $226,691 | | Net income per Class A common stock, basic and diluted | $0.02 | $0.05 | $0.02 | $0.03 | | Net income per Class B common stock, basic and diluted | $0.02 | $0.05 | $0.02 | $0.03 | Condensed Consolidated Statements of Changes in Stockholders' Deficit Outlines changes in the Company's stockholders' deficit, including common stock, additional paid-in capital, and accumulated deficit - Total Stockholders' Deficit improved from $(445,890) at December 31, 2024, to $(293,440) at June 30, 2025, primarily due to net income[14] - Stock-based compensation added $13,124 to additional paid-in capital for the six months ended June 30, 2025[14] Condensed Consolidated Statements of Changes in Stockholders' Deficit Highlights | Metric | December 31, 2024 | March 31, 2025 | June 30, 2025 | | :-------------------------- | :---------------- | :--------------- | :-------------- | | Class A Common Stock Shares | 6,478,256 | 6,478,256 | 6,478,256 | | Class A Common Stock Amount | $648 | $648 | $648 | | Class B Common Stock Shares | 2,700,000 | 2,700,000 | 2,700,000 | | Class B Common Stock Amount | $270 | $270 | $270 | | Additional Paid-in Capital | $0 | $6,526 | $13,124 | | Accumulated Deficit | $(446,808) | $(475,350) | $(307,482) | | Total Stockholders' Deficit | $(445,890) | $(467,906) | $(293,440) | Condensed Consolidated Statements of Cash Flows Details the Company's cash flows from operating, investing, and financing activities for the six months ended June 30, 2025, and 2024 - Net cash used in operating activities significantly decreased from $(1,119,544) in H1 2024 to $(28,167) in H1 2025[18] - Net cash flows from financing activities shifted from $275,000 provided in H1 2024 to $(2,207) used in H1 2025[18] Condensed Consolidated Statements of Cash Flows Highlights | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | Change (%) | | :------------------------------------------------ | :----------------------------- | :----------------------------- | :--------- | :--------- | | Net cash and cash equivalents used in operating activities | $(28,167) | $(1,119,544) | $1,091,377 | -97.49% | | Net cash and cash equivalents (used in) provided by financing activities | $(2,207) | $275,000 | $(277,207) | -100.80% | | Net change in cash and cash equivalents | $(30,374) | $(844,544) | $814,170 | -96.40% | | Cash and cash equivalents, beginning of period | $114,146 | $1,183,328 | $(1,069,182) | -90.35% | | Cash and cash equivalents, end of period | $83,772 | $338,784 | $(255,012) | -75.28% | Notes to Condensed Consolidated Financial Statements Provides detailed explanations and disclosures supporting the condensed consolidated financial statements and accounting policies 1. Organization and Business Operations Describes the Company's nature of business, its status as a hydrogen and carbon recovery project developer, and key corporate events - Global Gas Corporation is a nascent pure-play hydrogen and carbon recovery project developer and industrial gas supplier, focusing on low-carbon and clean hydrogen, pure carbon dioxide, and other gases from various feedstocks[20] - The Company's securities were delisted from Nasdaq on June 25, 2024, due to non-compliance with listing standards and now trade on the OTCQB market[22] - A reverse recapitalization business combination with Global Hydrogen Energy LLC was consummated on December 21, 2023, with Global Hydrogen treated as the accounting acquirer[23][28] Going Concern Addresses the Company's ability to continue operations, highlighting liquidity challenges and the need for additional financing - As of June 30, 2025, the Company had $83,772 in cash, a working capital deficit of $274,570, and an accumulated deficit of $307,482, raising substantial doubt about its ability to continue as a going concern for the next twelve months[35][37] - Future capital requirements depend on revenue growth and spending, necessitating additional financing, likely through equity issuances, which may not be available on acceptable terms[36] 3. Summary of Significant Accounting Policies Outlines the key accounting principles and methods used in preparing the condensed unaudited consolidated financial statements - The condensed unaudited consolidated financial statements are prepared in accordance with GAAP for interim financial information[38] - The Company is an "emerging growth company" and has elected to use the extended transition period for complying with new or revised financial accounting standards[41][42] - Revenue is generated through product resale and recognized when the customer obtains control; for the six months ended June 30, 2025, $33,012 of revenue was recognized on a net basis, indicating the Company acted as an agent[57] 4. Accounts Payable and Accrued Expenses Details the composition and changes in the Company's accounts payable and accrued expenses as of June 30, 2025, and December 31, 2024 - Total accounts payable and accrued expenses increased by 31.74% from $75,209 at December 31, 2024, to $99,077 at June 30, 2025[63] Accounts Payable and Accrued Expenses Summary | Category | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :---------------------- | :------------ | :---------------- | :--------- | :--------- | | Accounting and Consulting | $12,531 | $4,277 | $8,254 | 192.99% | | Legal Fees | $35,000 | $39,560 | $(4,560) | -11.53% | | Transaction costs | $12,561 | $12,561 | $0 | 0.00% | | Others | $38,985 | $18,811 | $20,174 | 107.24% | | Total | $99,077 | $75,209 | $23,868 | 31.74% | 5. Related Party Transactions Describes transactions and balances with related parties, including advances, accounts payable, and convertible promissory notes - The Company repaid $707 in advances to a related party during the six months ended June 30, 2025, reducing the balance to $0[64] - Accounts payable to related parties decreased from $124,867 at December 31, 2024, to $0 at June 30, 2025[65][66] - Two convertible promissory notes totaling $273,950 from related parties were outstanding at June 30, 2025, accruing 5% non-cash interest and convertible into Class A common stock at $0.15 per share[67][68] 6. Stockholders' Equity Provides details on the Company's common stock, warrants, and other components of stockholders' equity - As of June 30, 2025, there were 6,478,256 shares of Class A common stock and 2,700,000 shares of Class B common stock issued and outstanding[73][74] - Holders of Class A common stock are entitled to dividends, while Class B common stock holders are not, and Class B shares were subject to forfeiture agreements[76][96] - The Company had 8,625,000 Public Warrants and 4,850,000 Private Placement warrants outstanding at June 30, 2025, exercisable at $11.50 per share[78] 7. Fair Value Measurements Explains the methodologies and classifications used for measuring the fair value of financial instruments, particularly derivative warrant liabilities - Total derivative warrant liabilities decreased by 29.98% from $26,950 at December 31, 2024, to $18,870 at June 30, 2025[99] - All warrant liabilities are classified as Level 1 in the fair value hierarchy, measured using quoted prices in active markets[99][100] Derivative Warrant Liabilities Fair Value | Liability Category | June 30, 2025 (Level 1) | December 31, 2024 (Level 1) | Change ($) | Change (%) | | :----------------------------------- | :---------------------- | :-------------------------- | :--------- | :--------- | | Derivative warrant liabilities – public | $12,080 | $17,250 | $(5,170) | -29.97% | | Derivative warrant liabilities – private placement | $6,790 | $9,700 | $(2,910) | -29.99% | | Total liabilities | $18,870 | $26,950 | $(8,080) | -29.98% | 8. Stock Based Compensation Details the stock-based compensation expense recognized and the status of restricted share grants - Stock-based compensation expense for the six months ended June 30, 2025, was $13,124, included in general and administrative expenses[102] - As of June 30, 2025, there was $0 remaining unrecognized stock-based compensation expense[102] - 1,050,000 restricted shares were granted in 2024, with no activity during the six months ended June 30, 2025[103] 9. Commitments and Contingencies Discusses potential future obligations and legal matters, including the impact of lawsuits and tax refunds - Management does not expect current lawsuits and legal proceedings to have a material adverse effect on the Company's financial position or results of operations[104] - In April 2025, the Company received a $202,173 refund for overpaid 2023 Delaware franchise taxes, recorded as other income[105] 10. Subsequent Events Reports on events occurring after the balance sheet date that may require disclosure or adjustment to the financial statements - Management evaluated subsequent events through August 12, 2025, and found no events requiring adjustment to the condensed unaudited consolidated financial statements[106] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Provides management's analysis of the Company's financial performance, condition, liquidity, capital resources, and critical accounting estimates Overview Introduces Global Gas Corporation as a hydrogen and carbon recovery project developer and outlines its growth strategy - Global Gas Corporation is a nascent pure-play hydrogen and carbon recovery project developer and industrial gas supplier, building a project development pipeline for low-carbon and clean hydrogen and pure carbon dioxide[109] - The Company's growth strategy focuses on placing modular generation, recovery, storage, and dispensing solutions closer to customers and producing multiple outputs from single feedstocks, leveraging government incentives like the Inflation Reduction Act of 2022[112] - Global Hydrogen has not yet successfully closed on any projects, and future operating results are dependent on signing contracts and managing project complexities[113][115] Results of Operations Analyzes the Company's financial performance, including revenue, expenses, and net income, for the reporting periods - Revenue for the six months ended June 30, 2025, was $33,012 from one project, compared to $0 in the prior year period[118][119] - Net income for the six months ended June 30, 2025, decreased by 39% to $139,326 from $226,691 in the same period of 2024[118] - General and administrative expenses decreased by $50,323 (34%) for the six months ended June 30, 2025, primarily due to lower franchise tax, legal, and professional fees[121] - A $202,173 refund of Delaware franchise taxes was recognized as other income during the three and six months ended June 30, 2025[120] Liquidity and Capital Resources Assesses the Company's ability to meet its short-term and long-term financial obligations and its capital-raising efforts - As of June 30, 2025, the Company had $83,772 in cash, a working capital deficit of $274,570, and an accumulated deficit of $307,482[125] - Management has determined that the Company's liquidity condition raises substantial doubt about its ability to continue as a going concern for the next twelve months[128] - Net cash used in operating activities for the six months ended June 30, 2025, was $(28,167), a significant improvement from $(1,119,544) in the prior year[129][130] - Net cash flows from financing activities shifted from $275,000 provided in H1 2024 to $(2,207) used in H1 2025[129][132] Critical Accounting Estimates Identifies accounting estimates that require significant judgment and can materially impact the financial statements - The preparation of financial statements requires significant judgments, estimates, and assumptions, particularly for the fair value measurement of warrant liabilities[45][133] - Fair value of financial assets and liabilities is determined using the ASC 820 hierarchy, with warrant liabilities classified as Level 1 based on active market prices[136][140] - Stock-based compensation costs are measured at the fair value of equity instruments issued at the grant date, in accordance with FASB ASC No. 718[137] New Accounting Pronouncements Discusses recently issued accounting standards and their potential impact on the Company's financial reporting - As an "emerging growth company," the Company has elected to use the extended transition period for complying with new or revised accounting standards, which may affect comparability with other public companies[143] - The Company adopted ASU 2023-07, "Segment Reporting," effective December 31, 2024, with no impact on reportable segments, and is evaluating ASU 2023-09, "Income Taxes"[61][62] Intellectual Property Describes the Company's current intellectual property holdings and strategy - Global Hydrogen currently holds no material intellectual property beyond certain logos and domain names[145] Government Regulation Discusses the regulatory environment affecting the Company's operations, including licensing, emissions, and construction compliance - The Company will need to obtain relevant licenses for producing, storing, and selling hydrogen, oxygen, and other gases on a project-by-project and jurisdiction-by-jurisdiction basis[146] - Plans include deploying carbon recovery systems to reduce or eliminate CO2 emissions from thermochemical hydrogen production to comply with jurisdictional limits[147] - Construction of hydrogen generation plants and distribution of gases will require compliance with local zoning, permitting, and federal/state regulatory regimes[148] Item 3. Quantitative and Qualitative Disclosures About Market Risk States that the Company, as a smaller reporting company, is exempt from providing quantitative and qualitative disclosures about market risk - The Company is a smaller reporting company and is therefore not required to provide quantitative and qualitative disclosures about market risk[149] Item 4. Controls And Procedures Details the Company's disclosure controls and procedures, acknowledging inherent limitations, and concludes on their effectiveness - Management acknowledges that controls and procedures provide only reasonable, not absolute, assurance due to resource constraints and judgment in cost-benefit evaluation[150][151] - As of June 30, 2025, the Company's management, including the chief executive officer and chief financial officer, concluded that disclosure controls and procedures were effective at the reasonable assurance level[152] Part II - Other Information Item 1. Legal Proceedings Reports that no currently pending legal claims or lawsuits are considered material or expected to have a material adverse effect - The Company does not consider any current claims, lawsuits, or proceedings to be material or likely to result in a material adverse effect on its future operating results, financial condition, or cash flows[154] Item 5. Other Information Discloses that no Rule 10b5-1 trading arrangements were adopted or terminated by the Company, its directors, or officers - During the quarter ended June 30, 2025, neither the Company nor its directors or officers adopted or terminated any Rule 10b5-1 trading arrangements[155] Item 6. Exhibits Lists all exhibits filed with the Form 10-Q, including required certifications and XBRL financial data - The exhibits include certifications (CEO, CFO, Section 906) and XBRL formatted financial statements (Condensed Consolidated Balance Sheets, Statements of Operations, Statements of Changes in Stockholders' Equity, Statements of Cash Flows, and Notes) for the quarter ended June 30, 2025[157] Signatures - The report was signed on August 12, 2025, by Carter Glatt, Chairman and Principal Executive Officer, and Shachi Shah, Chief Financial Officer and Principal Accounting and Financial Officer[159][161]