Uinta Infrastructure Group Corp. - 10-K

Item 1A. Risk Factors.

Investing in our securities involves a high degree of risk. Before making an investment decision, you should consider carefully the following risk factors, as well as the other information set forth in this Annual Report, including matters addressed in the section titled “Cautionary Note Regarding Forward-Looking Statements.” If any of these risks actually occur, it may materially harm our business, financial condition, liquidity, and results of operations. As a result, the market price of our securities could decline, and you could lose all or part of your investment. Additionally, the risks and uncertainties described in this Annual Report are not the only risks and uncertainties that we face. We may face additional risks and uncertainties that are not presently known to us, or that we currently deem immaterial.

Risk Factor Summary

Our business is subject to numerous risks and uncertainties that you should be aware of before making an investment decision. These risks include, but are not limited to, the following:

We acquired our oil and gas assets in 2013 and have not conducted mining operations at our property since 2015. There can be no assurance that we will be able to upgrade or make our existing refinery facility operational.

Our operations will be subject to operational hazards that could expose us to potentially significant losses.

Instability in the global economic and political environment can lead to volatility in the cost and availability of crude oil and prices for refined products, which could adversely impact our results of operations.

The development schedule of infrastructure and refining projects is subject to delays and cost overruns.

Many of our planned refined products could cause serious injury or death if mishandled or misused.

Our business is impacted by increased risks of spills, discharges, or other releases of petroleum or hazardous substances.

We rely upon certain critical information systems for the operation of our business and the failure of any critical information system, including a cybersecurity breach, may result in harm to our business.

Our independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a “going concern.”

We must make substantial capital expenditures at our Facility and related assets to establish and maintain their reliability and efficiency.

The Shell Commitment Agreement and Letter of Credit Facility expose us to counterparty credit and performance risk.

The Parties to the Shell Commitment Agreement may not satisfy the Conditions Precedent, which could adversely affect our business.

Construction, development, maintenance and operation of our Facility involves significant risks and hazards.

Because we will rely on only one customer for our future Crude Oil Products, the change in ownership or management of such customer may adversely affect our business.

Inadequate liquidity could materially and adversely affect our business operations.

We may incur significant debt in the future.

Changes in the availability of and the cost of labor could adversely affect our business.

If there is an increase in transportation solutions within the Uinta Basin, it could lead to an increase in the demand for the natural resources in the Basin, thus potentially increasing the price of the resources and adversely affecting our business, financial condition and results of operations.

Our ability to generate cash and repay our indebtedness or fund capital expenditures depends on many factors beyond our control and any failure to do so could harm our business, financial condition, and results of operations.

Our debt agreements may impose significant operating and financial restrictions on us.

We may incur losses and incur additional costs as a result of forward-contract activities and derivative transactions.

Variable rate indebtedness would subject us to interest rate risk, which could cause our debt service obligations to increase significantly.

Adverse changes in global economic conditions and the demand for transportation fuels may impact our business.

The requirements of being a public company may strain our resources, result in more litigation and divert management’s attention.

Earnings and cash flows from our operations will depend on a number of factors, including the cost of crude oil and other refinery feedstocks.

Reclamation and financial assurances required in order to support those obligations can be expensive.

Geopolitical conflicts could increase the cost of our crude oil feedstocks and affect the demand for our products.

Our insurance coverage may be inadequate to protect us from the liabilities that could arise in our business.

Climate change may increase the frequency and severity of weather events that could adversely affect our operations.

We are subject to interruptions of supply and increased costs as a result of our reliance on third-party transportation of crude oil and refined products.

We may be subject to significant costs and liabilities related to environmental remediation and asset retirement obligations, which could adversely affect our financial condition and results of operations;

Changes in renewable fuel standards and related regulatory programs may increase our compliance costs and adversely impact our operations ;

The financial and operating results of our refinery, including the products we refine and sell, may be seasonal.

Meeting the requirements of evolving environmental, health, and safety laws and regulations could adversely affect our performance.

Potential legislative and regulatory actions addressing climate change could increase our costs, reduce our revenue and cash flow, or otherwise alter the way we conduct our business.

Regulatory and other requirements concerning the transportation of crude oil and other commodities by rail may cause increases in transportation costs.

Changes in the global trade environment, including the imposition of import tariffs, could adversely affect our results of operations.

Compliance with and changes in tax laws could materially and adversely affect our financial condition, results of operations and cash flows.

We are an “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.

Certain of our stockholders hold a significant percentage of our outstanding voting securities.

Our issuance of additional common stock or preferred stock may cause our common stock price to decline.

Our common stock may become subject to the SEC’s penny stock rules.

If we are unable to implement and maintain effective internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports.

Concurrent resale and potential dilution of stockholders’ ownership.

We do not know whether an active, liquid and orderly trading market will develop for our common stock.

Our common stock is not currently listed on a national securities exchange, and there can be no assurance that our stock will be approved for listing; as a result, investors may face limited liquidity, greater price volatility, and other material risk.

Investing in our Company is highly speculative and could result in the entire loss of your investment.

We do not intend to pay dividends for the foreseeable future.

Anti-takeover provisions in the Company’s charter and bylaws may prevent or frustrate attempts by stockholders to change the board of directors or current management.

If securities or industry analysts publish inaccurate or unfavorable research about our business, our stock price could decline.

Compliance with changing corporate governance regulations and public disclosures may result in additional risks and exposures.

The public offering price for our shares of common stock may not be indicative of prices that will prevail in the trading market and such market prices may be volatile.

Risks Related to the Company’s Business and Industry

Our independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a “going concern.”

We incurred a net loss of $20,882,176 and net loss of $4,822,902 for the years ended December 31, 2025 and 2024, respectively, and have had no substantial revenue generating operations during these periods. As of December 31, 2025, we had current liabilities of $35,871,254 largely consisting of notes payable coming due in the short-term and accounts payable. We may continue to incur negative operating cash flows and rely on raising debt and equity funding from the capital markets. Our ability to continue as a going concern depends primarily on our ability to increase cash flows from current and new operating activities, or our ability to raise funding as and when necessary. There is material uncertainty related to these events that causes significant doubt about our ability to continue as a going concern.

We must make substantial capital expenditures at our Facility and related assets to establish and maintain their reliability and efficiency.

Our Facility and related assets have existed for many years. Equipment, even if properly maintained, may require significant capital expenditures and expenses to keep operating efficiently. These costs do not result in increases in unit capacities, but rather are focused on trying to maintain safe, reliable operations. Delays or cost increases related to the engineering, procurement, and construction of new facilities, or improvements and repairs to our existing facilities and equipment, could have a material adverse effect on our business, financial condition, or results of operations. Such delays or cost increases may arise as a result of unpredictable factors in the marketplace, many of which are beyond our control, including: denial or delay in obtaining regulatory approvals and/or permits; unplanned increases in the cost of equipment, materials, or labor; disruptions in transportation of equipment and materials; severe adverse weather conditions, natural disasters, or other events; shortages of sufficiently skilled labor; market-related increases in a project’s debt or equity financing costs; and non-performance or force majeure by, or disputes with, our vendors, suppliers, contractors, or sub-contractors. Any one or more of these occurrences noted above could have a significant impact on our business. If we are unable to make up the delays or to recover the related costs, or if market conditions change, it could materially and adversely affect our financial position, results of operations, or cash flows.

The Shell Commitment Agreement and Letter of Credit Facility expose us to counterparty credit and performance risk.

Through our Shell Commitment Agreement with STUSCO, STUSCO owns all of the crude oil we produce and substantially all of our refined product inventories prior to our sale of the inventories. An adverse change in the business, results of operations, liquidity, or financial condition of STUSCO could adversely affect the ability of such counterparty to perform its obligations, which could consequently have a material adverse effect on our business, results of operations, or liquidity and, as a result, our business and operating results.

The Parties to the Shell Commitment Agreement may not satisfy the Conditions Precedent, which could adversely affect our business.

The Shell Commitment Agreement is subject to certain Conditions Precedent, including, among other things, the necessary refurbishment, construction, permitting, and receipt of approvals of or by the Facility have occurred. It is possible that these Conditions Precedent may not be achieved in a timely manner or at all. If the parties to the Shell Commitment Agreement are unable to complete the Conditions Precedent, the Company will not fully realize the anticipated benefits of the Transactions. STUSCO has the ability to curtail or cease its activities during the term of the Shell Commitment Agreement and in certain circumstances, STUSCO can terminate the Shell Commitment Agreement. STUSCO may elect to meaningfully curtail or cease its activities under the Shell Commitment Agreement for up to six months without us having the ability to terminate the Commitment Agreement and secure another customer. Furthermore, STUSCO may elect not to exercise its extension option on the Shell Commitment Agreement at the end of the seven-year term.

Construction, development, maintenance and operation of our Facility involves significant risks and hazards.

The construction of the Facility involves numerous risks. Success in constructing a particular project is contingent upon or may be affected by, among other things: timely implementation and satisfactory completion of construction; obtaining and maintaining required governmental permits and approvals; delivery of components on-budget and on-time; cost overruns and change orders; adverse environmental and geological or weather conditions; force majeure and other events outside of our control; and changes in laws affecting the project. If we fail to complete the improvements to the Facility, fail to meet one or more agreed target milestone dates or fail to perform other contract terms, there may be a delay in, reduction or cancellation of payments from STUSCO, increased costs due to contractual penalties, loss of future revenue, termination of the Shell Commitment Agreement, and we may not be able to recover our investment in the Facility.

Because we will rely on only one customer for our future Crude Oil Products, the change in ownership or management of such customer may adversely affect our business.

Our success will depend on developing and maintaining close working relationships with our Customer. Currently, we expect to generate a substantial majority of our revenue from the production of Crude Oil Products and related services we will provide to STUSCO. Changes in the business of this Customer, particularly with respect to a change in its management or ownership, could change the dynamics of our current relationship. If we are not able to establish a strategic relationship with the new management or ownership, or if new management or ownership chooses to enter into relationships with preferred service providers, it may materially and adversely affect our business, financial condition and results of operations.

Inadequate liquidity could materially and adversely affect our business operations.

If our cash flow and capital resources are insufficient to fund our obligations, we may be forced to reduce our capital expenditures, seek additional equity or debt capital, or restructure indebtedness. We cannot assure you that any of these remedies could, if necessary, be affected on commercially reasonable terms, or at all. The availability of capital when the need arises will depend upon a number of factors, some of which are beyond our control.

We may incur significant debt in the future.

A substantial level of indebtedness could have important consequences, including the following: we may be required to use a substantial portion of our cash flow from operations to pay interest and principal on our indebtedness and obligations under the Shell Commitment Agreement, which reduces funds available to us for other purposes; our ability to refinance such indebtedness or to obtain additional financing for working capital, capital expenditures, acquisitions, or general corporate purposes may be impaired; our leverage may be greater than that of some of our competitors, which may put us at a competitive disadvantage; and we may be more vulnerable to economic downturns and adverse developments in our business.

Changes in the availability of and the cost of labor could adversely affect our business.

Changes in labor markets due to various factors, including inflationary pressures, have increased the competition for recruiting and retaining talent. Our business could be adversely impacted by increases in labor, health care, and benefits costs necessary to attract and retain high quality employees with the right skill sets to meet our needs. Any failure by us to attract, develop, retain, motivate, and maintain good relationships with qualified individuals could adversely affect our business and results of operations.

If there is an increase in transportation solutions within the Uinta Basin, it could lead to an increase in the demand for the natural resources in the Basin, thus potentially increasing the price of the resources and adversely affecting our business, financial condition and results of operations.

If there is an increase in transportation solutions within the Uinta Basin, such as construction of the Uinta Basin Railway (the “UBR”), this may lead to an increase in the demand for the natural resources in the Basin, potentially adversely affecting our profit margin per barrel.

Our ability to generate cash and repay our indebtedness or fund capital expenditures depends on many factors beyond our control and any failure to do so could harm our business, financial condition, and results of operations.

Our ability to fund future capital expenditures and repay any indebtedness when due will depend on our ability to generate sufficient cash flow from operations and borrowings under future debt agreements. To a certain extent, this is subject to general economic, financial, competitive, legislative, and regulatory conditions and other factors that are beyond our control. We cannot assure you that our businesses will generate sufficient cash flow from operations or that future borrowings will be available to us at an amount sufficient to fund our liquidity needs. If our cash flow and capital resources are insufficient to fund our needs, we may be forced to reduce our planned capital expenditures, sell assets, seek additional equity or debt capital, or restructure our debt. We cannot assure you that any of these remedies could, if necessary, be affected on commercially reasonable terms, or at all, which could cause us to default on our obligations and could impair our liquidity.

Our debt agreements may impose significant operating and financial restrictions on us.

The terms of any future debt may impose significant operating and financial restrictions on us. These restrictions, among other things, may limit our ability to: pay dividends or distributions, repurchase equity, prepay junior debt, and make certain investments, loans, or acquisitions; incur additional debt, make guarantees of debt, or issue certain disqualified stock and preferred stock; sell or otherwise dispose of assets; incur liens; enter into certain hedging transactions; consummate fundamental changes, merge or consolidate with another company, sell all or substantially all of our assets, or alter our business; and enter into certain transactions with affiliates. All of these covenants may adversely affect our ability to finance our operations, meet or otherwise address our capital needs, pursue business opportunities, react to market conditions, or otherwise restrict activities or business plans. A breach of any of these covenants could result in a default in respect of the related indebtedness. If a default occurs, the requisite lenders could elect to declare the indebtedness, together with accrued interest and other fees, to be immediately due and payable and proceed against any collateral securing that indebtedness.

We may incur losses and incur additional costs as a result of forward-contract activities and derivative transactions.

We may enter into derivative contracts from time to time primarily to reduce our exposure to fluctuations in interest rates and in the price of crude oil and refined products. If the instruments we use to hedge our exposure are not effective, or if our counterparties are unable to satisfy their obligations to us, we may incur losses. We may also be required to incur additional costs in connection with future regulation of derivative instruments to the extent such regulation is applicable to us. Additionally, our commodity derivative activities may produce significant period-to-period earnings volatility that is not necessarily reflective of our underlying operational performance.

Variable rate indebtedness would subject us to interest rate risk, which could cause our debt service obligations to increase significantly.

We may be subject to interest rate risk in connection with future debt agreements as well as our Shell Commitment Agreement, which bear interest at variable rates. Interest rate changes could affect the amount of our interest payments and, accordingly, our future earnings and cash flows, assuming other factors are held constant. Increases in interest rates could also impact our ability to incur indebtedness to fund acquisitions and working capital needs. Since 2022, interest rates have been significantly higher than in recent years and a significant increase in prevailing interest rates could substantially increase our interest expense and have a material adverse effect on our financial condition, results of operations, and cash flows.

Adverse changes in global economic conditions and the demand for transportation fuels may impact our business.

A recession or prolonged economic downturn would adversely affect the business and economic environment in which we operate. These conditions increase the risks associated with the creditworthiness of our suppliers, customers, and business partners. The consequences of such adverse effects could include interruptions or delays in our suppliers’ performance of our contracts, reductions and delays in customer purchases, and delays in or the inability of customers to obtain financing to purchase our products.

The requirements of being a public company may strain our resources, result in more litigation and divert management’s attention.

As a public company, we will be subject to the reporting requirements of the Exchange Act, the Securities Act, the listing requirements of Nasdaq and other applicable securities rules and regulations. Complying with these rules and regulations will increase our legal and financial compliance costs, make some activities more difficult, time consuming or costly, and increase demand on our systems and resources, including management. We may also need to hire additional employees or engage outside consultants to comply with these requirements, which will increase our costs and expenses.

Our management has limited experience in managing the day-to-day operations of a public company.

The requirements of operating as a public company are many and sometimes difficult to navigate. This may require us to obtain outside assistance from legal, accounting, investor relations, or other professionals that could be more costly than planned. If we lack cash resources to cover these costs of being a public company in the future, our failure to comply with reporting requirements and other provisions of securities laws could negatively affect our stock price and adversely affect our potential results of operations, cash flow and financial condition.

We acquired our oil and gas assets in 2013 and have not conducted mining operations at our property since 2015. There can be no assurance that we will be able to upgrade or make our existing refinery facility operational.

We acquired our oil and gas assets in 2013 and have operated them as an open-pit tar sands mine. We have not conducted mining operations at our property since 2015. The Company intends to upgrade and bring its Facility online in order to process and refine feedstock oil to produce products to customer specifications. It is anticipated that the majority of our existing equipment associated with the refining process will be utilized to produce commercial products for the Customer. Additional equipment and process changes will be required to achieve this production and will be redesigned to accommodate the Customer feedstock. Our growth depends on successfully implementing our plans to make our Facility operational to produce feedstock for the Customer. There can be no assurance that we will be able to upgrade or bring our Facility online within our expected timeframe, within our planned budget, with our expected financing or at all. If we are unsuccessful in reaching and maintaining planned production rates at our Facility, we may not be able to build a sustainable or profitable business.

Our operations will be subject to operational hazards that could expose us to potentially significant losses.

Our operations will be subject to potential operational hazards and risks inherent in refining operations, in transporting and storing crude oil and refined products. Any of these risks, such as fires, explosions, security breaches, cyber threats, pipeline ruptures and spills, mechanical failure of equipment, and severe weather and natural disasters at our or third-party facilities could result in business interruptions or shutdowns and damage to our properties and the properties of others. A serious accident at our facilities could also result in serious injury or death to our employees or contractors and could expose us to significant liability for personal injury claims and reputational risk. Any such event or unplanned shutdown could have a material adverse effect on our business, financial condition, and results of operations.

Earnings and cash flows from our operations will depend on a number of factors, including the cost of crude oil and other refinery feedstocks.

Earnings and cash flows from our operations will depend on a number of factors, including to a large extent the cost of crude oil and other refinery feedstocks, which has fluctuated significantly in recent years. The expenses we pay and prices we receive will depend on numerous factors beyond our control, including the global supply and demand for crude oil, gasoline, and other refined products, which are subject to, among other things: changes in the global economy and the level of foreign and domestic production of crude oil and refined products; availability of crude oil and refined products and the infrastructure to transport crude oil and refined products; local factors, including market conditions, the level of operations of other refineries in our markets, and the volume and price of refined products imported; threatened or actual terrorist incidents (including cyber attacks), acts of war, and other global political conditions; government regulations or mandated production curtailments or limitations; and weather conditions, hurricanes, or other natural disasters.

Instability in the global economic and political environment can lead to volatility in the cost and availability of crude oil and prices for refined products, which could adversely impact our results of operations.

Instability in the global economic and political environment can lead to volatility in the cost and availability of crude oil and in the price and demand for refined products. This may place downward pressure on our results of operations. This is particularly true of developments in and relating to oil-producing countries, including terrorist activities, military conflicts, embargoes, internal instability, or actions or reactions of the U.S. or foreign governments in anticipation of, or in response to, such developments. Any such events may limit or disrupt markets, which could negatively impact our ability to access global crude oil commodity flows or sell our refined products.

The development schedule of infrastructure and refining projects is subject to delays and cost overruns.

Historically, these types of development projects have experienced delays and capital cost increases and overruns due to, among other factors, the unavailability or high cost of equipment, supplies, personnel and services. The cost to develop our projects is not yet fixed and will remain dependent upon a number of factors, including the completion of detailed cost estimates and final engineering, contracting and procurement costs. Our construction and operation schedules may not proceed as planned and may experience delays or cost overruns. Any delays may increase the costs of the project, requiring additional capital, and such capital may not be available in a timely and cost-effective fashion.

Reclamation and financial assurances required in order to support those obligations can be expensive.

Where mining operations are or have been conducted, the Company is obligated to reclaim mined areas and to maintain adequate resources, including related insurance and bonding, to support reclamation obligations. Both the cost of reclamation and the financial assurances required to be in place in order to mine can be expensive. Even with limited activity to date, the Company’s current estimated future reclamation obligation is approximately $796,000. As operations expand, this amount will increase accordingly.

Geopolitical conflicts could increase the cost of our crude oil feedstocks and affect the demand for our products.

In February 2022, following Russia’s invasion of Ukraine, the U.S. and other countries announced sanctions against Russia, including restrictions on the importation of Russian crude oil. The U.S. and other countries have imposed additional sanctions as the conflict has escalated. Any further sanctions imposed or actions taken by the U.S. or other countries, and any retaliatory measures by Russia in response, such as restrictions on energy supplies from Russia, may impact costs, reduce our sales and earnings, or otherwise have an adverse effect on our operations.

In March 2026, the U.S. and Israel initiated military actions against targets in Iran. In response, Iran has retaliated with a series of attacks on key infrastructure in neighboring countries across the Middle East. Further, Iran has committed to utilizing military intervention to close the Strait of Hormuz which impacts a significant portion of global oil and natural gas supply. An escalation by the U.S. or Israel, or other countries, and any retaliatory measures by Iran in response, such as broader attacks on regional infrastructure, may impact costs, reduce our sales and earnings, or otherwise have an adverse effect on our operations.

Additionally, conflicts like Russia’s invasion of Ukraine, the military actions against, and response from, Iran, and the risk of attacks on shipping in the Red Sea, including any ongoing barriers to the shipping lanes in the Strait of Hormuz, may exacerbate inflationary pressures, including with respect to commodity prices and energy costs, and disrupt global supply chains. Rapid and significant changes in commodity costs may affect the demand for our products.

Many of our planned refined products could cause serious injury or death if mishandled or misused.

While we will work to produce, refine, store, transport, and deliver all of our refined products in a safe manner, many of our refined products are highly flammable or explosive and could cause significant damage to persons or property if mishandled. Defects in our products (such as gasoline or jet fuel) or misuse by us or by end purchasers could lead to fatalities or serious damage to property. We may be held liable for such occurrences, which could have a material adverse effect on our business and results of operations.

Our business is impacted by increased risks of spills, discharges, or other releases of petroleum or hazardous substances.

The operation of refineries and refined products terminals is subject to increased risks of spills, discharges, or other inadvertent releases of petroleum or hazardous substances. If any of these events occur, or are found to have previously occurred, we could be liable for costs and penalties associated with their remediation under federal, state, and local environmental laws or common law, and could be liable for property damage to third parties caused by contamination from releases and spills. The penalties and clean-up costs that we may have to pay could be significant and have a material adverse effect on our business, financial condition, or results of operations.

Our insurance coverage may be inadequate to protect us from the liabilities that could arise in our business.

We carry property, casualty, business interruption, and other lines of insurance, but we do not maintain insurance coverage against all potential losses. We could suffer losses for uninsurable or uninsured risks or in amounts in excess of existing insurance coverage. There also can be no assurance that existing insurance coverage can be renewed at commercially reasonable rates or that available coverage will be adequate to cover future claims. The occurrence of an event that is not fully covered by insurance or failure by one or more insurers to honor its coverage commitments for an insured event could have a material adverse effect on our business, financial condition, and results of operations.

We rely upon certain critical information systems for the operation of our business and the failure of any critical information system, including a cybersecurity breach, may result in harm to our business.

We are heavily dependent on our technology infrastructure and maintain and rely upon certain critical information systems for the effective operation of our business. Our information systems are subject to damage or interruption from a number of potential sources including natural disasters, ransomware, software viruses or other malware, power failures, cyber-attacks, and other events. Any compromise of our data security or our inability to use or access these information systems at critical points in time could unfavorably impact the timely and efficient operation of our business and subject us to additional costs and liabilities, which could adversely affect our business, financial condition, and results of operations.

Climate change may increase the frequency and severity of weather events that could adversely affect our operations.

Increasing concentrations of greenhouse gasses (“GHG”) in Earth’s atmosphere may produce climate changes that have significant weather-related effects, such as increased frequency and severity of storms, droughts, floods, and other climatic events. If any of those effects were to occur, they could have an adverse effect on our operations, including damages to our refinery, retail locations, logistics assets or other properties from powerful wind or rising waters. Additionally, if we are named in litigation related to climate change, costs or other impacts resulting from such litigation could be material.

We are subject to interruptions of supply and increased costs as a result of our reliance on third-party transportation of crude oil and refined products.

We will rely on third-party transportation systems, including pipelines, trucking, and rail, to transport crude oil feedstocks to our Facility and to deliver refined products to customers. These transportation systems may be temporarily unavailable to us due to market conditions, regulatory reasons, mechanical reasons, weather-related events, or other factors or events outside of our control. If any of these transportation systems become unavailable, we could experience increased costs to deliver crude oil and refined products to alternate delivery points, or, in some cases, may be required to curtail or shut down operations until the transportation systems are restored. Any prolonged interruption in the functioning of these transportation systems could have a material adverse effect on our business, financial condition, and results of operations.

The financial and operating results of our refinery, including the products we refine and sell, may be seasonal.

Demand for gasoline in the Rockies and Northwest United States is generally higher during the summer months than during the winter months. Financial and operating results for the first and fourth calendar quarters may be lower than those for the second and third calendar quarters of each year as a result of this seasonality.

Risks Related to the Company’s Regulatory Environment

Meeting the requirements of evolving environmental, health, and safety laws and regulations could adversely affect our performance.

Consistent with the experience of other U.S. refineries, environmental laws and regulations have raised operating costs and may require significant capital investments. We may be required to address conditions that may be discovered in the future and require a response. Potentially material expenditures could be required in the future as a result of evolving environmental, health, and safety and energy laws, regulations, or requirements that may be adopted or imposed in the future. Currently, multiple legislative and regulatory measures to address GHG emissions are in various phases of consideration, promulgation, or implementation, each of which could require reductions in our GHG emissions. Requiring reductions in these emissions could result in increased costs to operate and maintain our facilities, install new emission controls at our facilities, and administer and manage any emissions programs, including acquiring emission credits or allotments. Requiring reductions in our GHG emissions and increased use of renewable fuels could also decrease the future demand for our refined products, and could have a material adverse impact on our business, financial condition, and results of operations.

Potential legislative and regulatory actions addressing climate change could increase our costs, reduce our revenue and cash flow, or otherwise alter the way we conduct our business.

Currently, multiple legislative and regulatory measures to address GHG, including CO2, methane, and NOX, and other emissions are in various phases of consideration, promulgation, or implementation at various levels of the federal and state government. These include actions to develop international, federal, regional, or statewide programs, which could require reductions in our GHG or other emissions, establish a carbon tax and decrease the demand for our refined products. The EPA has adopted regulations under existing provisions of the federal Clean Air Act that, among other things, establish Prevention of Significant Deterioration construction and Title V operating permit program requiring reviews for GHG emissions from certain large stationary sources. In addition, the EPA has adopted rules requiring the monitoring and reporting of GHG emissions from specified large GHG emission sources in the U.S., including petroleum refineries, on an annual basis. These EPA policies and rulemakings could adversely affect our operations and restrict or delay our ability to obtain air permits for new or modified facilities. Several states have pursued or are considering initiatives designed to reduce the carbon intensity of the transportation sector by encouraging increased use of renewable fuels or electric vehicles or by requiring reductions in transportation fuel-related GHG emissions. These state actions could reduce demand for our refined petroleum products, which could have a material adverse effect on our business, results of operations, and financial condition. Federal, regional, and state climate change and air emissions goals and regulatory programs under the Clean Air Act are complex, subject to change, and create uncertainty due to a number of factors including technological feasibility, legal challenges, and potential changes in federal policy. Nevertheless, stricter regulation can be expected in the future and any of these or similar changes may have a material adverse impact on our business, results of operations, and financial condition.

Regulatory and other requirements concerning the transportation of crude oil and other commodities by rail may cause increases in transportation costs.

We rely on a variety of systems to transport crude oil, including rail. Rail transportation is regulated by federal, state, and local authorities. New regulations or changes in existing regulations could result in increased compliance expenditures. Regulations that require the reduction of volatile or flammable constituents in crude oil that is transported by rail, change the design or standards for rail cars, change the routing or scheduling of trains carrying crude oil, or require any other changes that detrimentally affect the economics of delivering North American crude oil by rail, could increase the time required to move crude oil from production areas to our refinery, increase the cost of rail transportation, and decrease the efficiency of shipments of crude oil by rail within our planned operations.

We may be subject to significant costs and liabilities related to environmental remediation and asset retirement obligations, which could adversely affect our financial condition and results of operations.

Our operations involve the use, handling, and disposal of hazardous substances and petroleum-based products. As a result, we may incur substantial costs to investigate, remediate, or monitor contamination at current or former facilities, as well as third-party sites where we may have sent materials for disposal. These obligations may arise under various federal, state, and local environmental laws and regulations, including those governing the cleanup of contaminated properties.

In addition, we may be required to record and periodically adjust asset retirement obligations associated with the decommissioning, abandonment, or remediation of our facilities and related infrastructure. These estimates are inherently uncertain and may increase due to changes in laws and regulations, the discovery of previously unknown conditions, or advancements in remediation technologies. Any such increases could result in material charges to earnings.

Furthermore, we may be subject to claims for personal injury, property damage, or natural resource damages arising from alleged environmental contamination. We cannot assure that our insurance coverage will be adequate to cover all such liabilities, and uninsured or underinsured losses could have a material adverse effect on our business, financial condition, and results of operations.

Changes in renewable fuel standards and related regulatory programs may increase our compliance costs and adversely impact our operations.

We are subject to, or may become subject to, renewable fuel standards and similar regulatory regimes that require the blending of renewable fuels into transportation fuels or the acquisition of credits, such as Renewable Identification Numbers, to demonstrate compliance. The cost of complying with these programs is subject to significant volatility due to fluctuations in credit prices, changes in regulatory requirements, and market dynamics.

If we are unable to generate sufficient credits internally or procure them at reasonable cost, we may incur substantial expenses to meet our compliance obligations. Additionally, any failure to comply with applicable renewable fuel standards could result in significant penalties and reputational harm

Changes in the global trade environment, including the imposition of import tariffs, could adversely affect our results of operations.

Escalating trade tensions may lead to increased tariffs and trade restrictions, including tariffs applicable to the crude oil we purchase. Any such tariffs may place downward pressure on our results of operations. Further, significant changes in commodity costs may affect the demand for our products. The effect of such tariffs could be significant and have a material adverse effect on our business, financial condition, or results of operations.

Compliance with and changes in tax laws could materially and adversely affect our financial condition, results of operations and cash flows.

We are subject to extensive tax liabilities imposed by multiple jurisdictions including, without limitation, income taxes, indirect taxes, payroll taxes, franchise taxes, withholding taxes, and ad valorem taxes. New tax laws and regulations and changes in existing tax laws and regulations are continuously being enacted or proposed that could result in increased expenditures for tax liabilities in the future. Any adverse outcome of tax audits or related proceedings could result in unforeseen tax-related liabilities that may, individually or in the aggregate, materially affect our cash tax liabilities, results of operations, and financial condition.

Risks Related to the Ownership of Our Securities

We are an “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.

We are an “emerging growth company” as defined in the JOBS Act, and we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies.” We cannot predict whether investors will find our common stock less attractive if we rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

Certain of our stockholders hold a significant percentage of our outstanding voting securities.

Our officers and directors, and significant stockholders are the beneficial owners of a significant percentage of our outstanding voting securities. As a result, they possess significant influence over our elections and votes. Their ownership and control may have the effect of facilitating and expediting a future change in control, merger, consolidation, takeover or other business combination, or discouraging a potential acquirer from making a tender offer.

Our issuance of additional common stock or preferred stock may cause our common stock price to decline.

Issuances of a substantial number of additional shares of our common or preferred stock, or the perception that such issuances could occur, may cause prevailing market prices for our common stock to decline. Our board of directors is authorized to issue additional series of shares of preferred stock without any action on the part of our stockholders. If we issue cumulative preferred stock in the future that has preference over our common stock with respect to the payment of dividends or upon our liquidation, dissolution or winding up, or if we issue preferred stock with voting rights that dilute the voting power of our common stock, the market price of our common stock could decrease.

Our common stock may become subject to the SEC’s penny stock rules.

The SEC has adopted regulations which generally define “penny stock” to be an equity security that has a market price of less than $5.00 per share, subject to specific exemptions. Under these rules, broker-dealers who recommend such securities to persons other than institutional accredited investors must make a special written suitability determination for the purchaser, receive the purchaser’s prior written agreement to the transaction, provide the purchaser with risk disclosure documents, and obtain a signed and dated acknowledgment from the purchaser. If our common stock becomes subject to such rules, broker-dealers may find it difficult to effectuate customer transactions and trading activity in our securities may be adversely affected.

If we are unable to implement and maintain effective internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports.

As a public company, we would be required to maintain internal control over financial reporting and to report any material weaknesses in such internal control. If we identify material weaknesses in our internal control over financial reporting, if we are unable to comply with the requirements of Section 404 in a timely manner or assert that our internal control over financial reporting is effective, investors may lose confidence in the accuracy and completeness of our financial reports and the value of our securities could be negatively affected.

Concurrent resale and potential dilution of stockholders’ ownership.

The resale of shares by the selling stockholders, pursuant to the Resale Prospectus, could adversely impact the market price, liquidity, and demand for our common stock. As these shares are introduced into the market, there may be a significant increase in the number of shares available for sale, which could result in downward pressure on our stock price and affect liquidity. Furthermore, as the Resale Shares are sold, the ownership percentage of existing stockholders will be diluted, potentially reducing the value of their holdings.

We do not know whether an active, liquid and orderly trading market will develop for our common stock.

We are in the process of applying to have our common stock listed on the Nasdaq; however, even if our common stock is approved for listing on the Nasdaq, an active trading market for our shares may never develop or be sustained following this offering. You may not be able to sell your shares quickly or at the market price if trading in shares of our common stock is not active. We may not be able to satisfy the listing requirements of the Nasdaq or obtain or maintain a listing of our common stock on the Nasdaq. A delisting of our common stock from the Nasdaq may materially impair our stockholders’ ability to buy and sell our common stock and could have an adverse effect on the market price of, and the efficiency of the trading market for, our common stock.

Investing in our Company is highly speculative and could result in the entire loss of your investment.

Purchasing the offered shares is highly speculative and involves significant risk. Our business objectives are also speculative, and it is possible that we would be unable to accomplish them. Our shareholders may be unable to realize a substantial or any return on their purchase of the offered shares and may lose their entire investment.

We do not intend to pay dividends for the foreseeable future.

We currently intend to retain any future earnings to finance the operation and expansion of our business, and we do not expect to declare or pay any dividends on our common stock in the foreseeable future.

Anti-takeover provisions in the Company’s charter and bylaws may prevent or frustrate attempts by stockholders to change the board of directors or current management.

The Company’s bylaws contain provisions that may discourage, delay or prevent a merger, acquisition or other change in control that stockholders may consider favorable, including transactions in which stockholders might otherwise receive a premium for their shares. Furthermore, the Board of Directors has the ability to increase the size of the Board and fill newly created vacancies without stockholder approval. These provisions could limit the price that investors might be willing to pay in the future for shares of the Company’s common stock.

If securities or industry analysts publish inaccurate or unfavorable research about our business, our stock price could decline.

The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. Once our common stock is quoted, if one or more of the analysts who cover us downgrade our common stock or publish inaccurate or unfavorable research about our business, our common stock price would likely decline.

Compliance with changing corporate governance regulations and public disclosures may result in additional risks and exposures.

Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002 and new regulations from the SEC, have created uncertainty for public companies such as ours. These laws, regulations, and standards are subject to varying interpretations in many cases, and as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. As a result, our efforts to comply with evolving laws, regulations, and standards have resulted in, and are likely to continue to result in, increased expense and significant management time and attention.

The public offering price for our shares of common stock may not be indicative of prices that will prevail in the trading market and such market prices may be volatile.

The public offering price for our shares of common stock may vary from the market price of our shares of common stock following our public offering. The market price for our shares of common stock may be volatile and subject to wide fluctuations due to factors such as: the financial projections we may provide to the public; actual or anticipated fluctuations in our quarterly operating results; changes in financial estimates by securities research analysts; announcements by us or our competitors of acquisitions, strategic business relationships, joint ventures or capital commitments; and addition or departure of key personnel.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read together with the consolidated financial statements and related notes thereto included elsewhere in this Annual Report. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from these forward-looking statements as a result of certain factors. We discuss factors that we believe could cause or contribute to these differences below and elsewhere in this Annual Report, including those set forth in the sections of this Annual Report titled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements.” As a result of these risks, you should not place undue reliance on these forward-looking statements. We assume no obligation to revise or update any forward-looking statements for any reason, except as required by law.

Overview

Integrated Rail & Resources Inc. is an energy infrastructure and processing company focused on upgrading and redeploying legacy oil sands and refining assets to support third-party feedstock processing and refined-product delivery. The Company is a Delaware corporation that, in 2025, merged with Tar Sands Holdings II, LLC (“TSII”). Its core assets are located at Asphalt Ridge in northeastern Utah — one of the largest and most accessible oil sands deposits in the United States — where the Company owns 760 acres of fee-simple land, a permitted open-pit mine, and an existing large-scale extraction, refining and terminating facility in Vernal, Utah (the “Facility”).

With the planned equity and debt capital raises following the Business Combination, together with commitments under the Shell Commitment Agreement, the Company intends to upgrade and bring its existing Facility online to process and refine third-party crude feedstock into products meeting customer specifications. The Facility has been substantially constructed and refurbished over time, with more than $60 million historically invested in extraction, separation, and infrastructure upgrades, and prior commissioning activities have demonstrated that commercial-scale oil extraction is feasible. Rather than pursuing near-term oil sands development, the Company’s current strategy is to leverage its permitted mine site, processing infrastructure, and transportation assets – including an on-site transload and terminal facility – to support contracted feedstock processing and refining for Shell Trading US Company (“STUSCO”) and other potential customers. This approach positions the Company at the intersection of energy infrastructure, refining services, and logistics, with a capital-efficient path to commercialization through the reactivation and modernization of existing assets.

We have conducted phospholipidosis and toxicology studies on our processing capabilities and have completed a Phase 1 Front-End Loading (“FEL”) engineering review by Becht Engineering BT, Inc. in January 2025, with FEL-2 completed in January 2026 and FEL-3 expected by April 2026. The expected In-Service Date for the Facility is during the second half of 2027. We expect to continue to make investments in engineering, permitting, and construction to bring our Facility online.

We have incurred significant net losses to date. Our ability to generate revenue sufficient to achieve profitability will depend on our ability to successfully upgrade and commission our Facility and commence processing operations under the Shell Commitment Agreement. As of December 31, 2025, we had cash and cash equivalents of $372,165 and accumulated deficit of $40,622,120. During the year ended December 31, 2025, we had operating losses of $5,774,457 and used $1,928,466 of cash in operations. These losses have resulted primarily from costs incurred in connection with professional fees, salaries and wages, accretion and depreciation expenses, and certain costs associated with the Business Combination. We expect to continue to incur significant expenses and operating losses for the foreseeable future until the second half of 2027, the expected In-Service Date for the Facility.

Business Combination

On December 12, 2025, we consummated a business combination pursuant to an agreement and plan of merger, dated as of August 30, 2024 (the “Initial Merger Agreement,” as subsequently amended), by and among Integrated Rail and Resources Acquisition Corp., TSII and certain other parties. Upon the closing of the Business Combination, TSII became our wholly owned subsidiary, and the Company changed its name from Integrated Rail and Resources Acquisition Corp. to Integrated Rail & Resources Inc.

The Business Combination was accounted for as an asset acquisition. Prior to the Business Combination, the Company was a blank check company incorporated for the purpose of effecting a Business Combination. As a result, the Company’s historical financial results prior to the Business Combination reflect the operations of the SPAC, and the financial results after the Business Combination reflect the combined operations.

Trust Account

Upon close of our business combination, we paid shareholders that redeemed their Class A common stock at the July 15, 2025 and the September 15, 2025 special meetings, paid amount due to the trust account trustee and transferred the remaining funds from the trust account to our operating bank account. The trust account was subsequently terminated.

Equity Shares

Upon the close of our business combination, all outstanding shares of the Company’s Class A common stock converted to shares of Company common stock on a one-for-one basis.

Components of Our Results of Operations

Revenues

The Company has not reported any revenue for the years ended December 31, 2025 and 2024 and does not anticipate reporting any significant revenues until the Facility comes into service. The expected In-Service Date for the Facility is during the second half of 2027.

Accretion and depreciation expenses

The Company has an Asset Retirement Obligation (“ARO”) recorded that is associated with its oil and natural gas property; the fair value of the ARO was recorded as a liability and is accreted over time until the date the ARO is to be paid. Associated with this property is the asset retirement cost, which is the estimated cost of retiring the asset, whereas the asset retirement obligation is the estimated reclamation cost once the asset is deemed to be no longer productive. The asset retirement cost was fully impaired at the time the oil-producing assets were impaired.

Salaries and wages expenses

Salaries and wages expenses include all payroll-related expenses, including benefits and payroll taxes. Salaries and wages expenses were higher for the year ended December 31, 2025, as compared to December 31, 2024 as we did not pay salaries in the year ended December 31, 2024.

Property tax

The Company accrues property tax for the estimated tax obligations that are paid on an annual basis. The property tax estimates are trued up to actual property tax obligations on an annual basis as payments are made and actual obligations are settled.

Professional fees

The Company paid additional accounting, legal, and consulting fees during the year ended December 31, 2025 in conjunction with the Business Combination Agreement with the SPAC. There were fewer expenses incurred during the prior period.

Other expenses

Other expenses include miscellaneous operating expenses related to maintaining the property for items such as utilities and insurance. The increase was primarily attributable to an increase in our Delaware franchise taxes driven by the closing of our Business Combination.

Income tax

The Company was a corporation under provisions of the Internal Revenue Code and had elected to be treated as a corporation for income tax purposes. Due to a net loss, there was no income taxes accrued for the year ended December 31, 2025.

Results of Operations

Prior to the close of the business combination, we were a SPAC and had neither engaged in any operations nor generated any operating revenues. Our only activities from inception through December 12, 2025 were organizational activities and those necessary to prepare for the Initial Public Offering and an initial Business Combination. We generated non-operating income in the form of interest income on marketable securities held in the Trust Account after the Initial Public Offering. After the close of the business combination, we have not generated any operating revenue.

For the year ended December 31, 2025, we had a net loss of $20,882,176, which consisted of a change in fair value of warrant liabilities of $14,558,000, interest expense of $350,342, excise tax interest and penalties of $535,632 operating costs of $5,774,457 and provision for income taxes of $64,133, partially offset by interest and income earned on cash and investments in the Trust Account of $68,722, recovery of offering costs attributable to partial waiver of deferred underwriting fee, and a change in the fair value of the conversion event liability of $63,513.

For the year ended December 31, 2024, we had a net loss of $4,822,902, which consisted of a change in fair value of warrant liabilities of $2,090,000, interest expense of $422,128, change in fair value of conversion event liability of $17,821, operating costs of $3,054,750, a provision for income taxes of $462,092 and excise tax interest and penalties of $214,457, partially offset by interest and income earned on cash and investments in the Trust Account of $1,438,346.

Liquidity and Capital Resources

As of December 31, 2025, we had cash and cash equivalents of $372,165 and accumulated deficit of $40,622,120. During the year ended December 31, 2025, we had operating losses of $5,774,457 and used $1,928,466 of cash in operations. We are dependent upon equity and debt financing to support our operations until such time as our Facility becomes operational and generates revenue.

We expect to incur significant expenses and operating losses for the foreseeable future as we continue our efforts to upgrade and commission our facility and bring it online. We estimate that we will incur approximately $15 million in costs and related fees largely consisting of legal and investment banking merger advisory and financing services, approximately $80 million to refurbish the Facility, approximately $28 to $29 million for capital obligations related to the Business Combination, and $18 to $20 million in general business expenses. We believe we will be able to consistently generate revenue during the second half of 2027, at which point we will no longer need additional financing.

Our only source of liquidity at December 31, 2025 is our cash on hand. We plan on issuing debt and equity financing to fund operations and the costs of upgrading and bringing the existing Facility online to process and refine third-party crude feedstock into products meeting customer specifications. We cannot offer any assurances that such capital raises will be available in sufficient amounts or at an acceptable cost.

On March 9, 2026, the Company took steps to satisfy $1,455,589 of outstanding payables to B H, Inc. The Company made a cash payment of $750,000 and issued 7,056 share of the Company’s Series A Convertible Preferred Stock, having the designation, preferences, rights, privileges, powers and terms and conditions as specified in the Certificate of Designations, Preferences and Rights of Series A Convertible Preferred Stock, as filed with the Secretary of State of the State of Delaware on January 23, 2026, in full satisfaction and discharge of the $1,455,589 owed to B H, Inc.

Future Liquidity Needs

We intend to overcome the circumstances that impact our ability to remain a going concern through a combination of expanding our revenues, with interim cash flow deficiencies being addressed through additional equity and debt financing; however, we may not have commitments from third parties for a sufficient amount of additional capital. We cannot be certain that any such financing will be available on acceptable terms, or at all, and our failure to raise capital when needed could limit our ability to continue our operations. Our ability to obtain additional funding will determine our ability to continue as a going concern.

In connection with the PIPE SPA with Creto IRRX PIPE Investment, LLC, entered into on January 23, 2026, Creto invested $2,550,000 on January 23, 2026, an additional $2,750,000 on February 6, 2026, and a further $450,000 on March 23, 2026 in exchange for the Company’s Series A Convertible Preferred Stock. We may receive additional financing not to exceed $8.0 million in aggregate through the sale of Series A Convertible Preferred Stock. We have based our anticipated operating capital requirements on assumptions that may prove to be incorrect, and we may use all our available capital resources sooner than we expect.

We anticipate that we will continue to incur net losses into the foreseeable future as we invest in upgrading our Facility, complete permitting, and prepare for commencement of commercial operations. As a result, we have concluded that there is substantial doubt about our ability to continue as a going concern within one year after the date that the consolidated financial statements are issued. See Note 1 of the notes to our consolidated financial statements included elsewhere in this Annual Report for additional information.

Material Cash Requirements

As of December 31, 2025, we have promissory notes and other obligations outstanding, including a Note Payable due to the Sponsor of $5,273,225, Notes Payable due to related parties of $2,043,710, working capital expenses due to Endeavor of $47,319, a working capital loan due to the Sponsor of $17,935, fees for investment banking advisory services of $1,750,000, investment banking fees of $1,750,000 to satisfy the fee agreement from our Initial Public Offering, and three convertible promissory notes totaling $1,900,000.

Off-Balance Sheet Arrangements

We did not have, during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined under applicable SEC rules. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.

Cash Flows

The following table summarizes our cash flows for each of the periods presented (in thousands):

Year Ended December 31,

Change

Net cash used in operating activities

Net cash provided by investing activities

Net cash used in financing activities

Net change in cash and cash equivalents

Cash Flows from Operating Activities

For the year ended December 31, 2025, cash used in operating activities was $1,928,466. Net loss of $20,882,176 was affected by change in fair value of Warrant Liabilities of $14,558,000, interest and income on cash and Trust Account investments of $68,722, interest expense of $350,508, change in fair value of conversion event liability of $63,513 and recovery of offering costs attributable to partial waiver of deferred underwriting fee of $268,153. Changes in operating assets and liabilities provided $4,433,713 of cash from operating activities.

For the year ended December 31, 2024, cash used in operating activities was $2,544,827. Net loss of $4,822,902 was affected by change in fair value of Warrant Liabilities of $2,090,000, interest and income on Trust Account investments of $1,438,341, interest expense of $422,128 and change in fair value of conversion event liability of $17,821. Changes in operating assets and liabilities provided $1,186,467 of cash from operating activities.

Cash Flows from Investing Activities

For the year ended December 31, 2025, cash provided by investing activities was $4,123,683 and affected by cash withdrawn from Trust Account for payment to redeeming stockholders for $3,032,225, transfer of funds from Trust Account for payment of franchise and income taxes of $72,283, payment for asset acquisition of $817,285, cash deposited in Trust Account of $210,006 and cash withdrawn from the Trust Account upon closing of trust account of $280,694.

For the year ended December 31, 2024, cash provided by investing activities was $70,932,201 and affected by cash withdrawn from Trust Account for payment to redeeming stockholders for $70,178,335, transfer of funds from Trust Account for payment of franchise and income taxes of $1,443,866 and cash deposited in Trust Account of $690,000.

Cash Flows from Financing Activities

For the year ended December 31, 2025, cash used in financing activities was $1,051,906 affected by a payment to redeeming stockholders for $3,032,225, proceeds from convertible promissory note of $400,000, repayment of a notes payable from Sponsor of $120,000, repayment of a note payable – related party of $92,000, and proceeds from a notes payable to a related party of $1,745,000.

For the year ended December 31, 2024, cash used in financing activities was $68,347,625 affected by a payment to redeeming stockholders for $70,178,335, proceeds from convertible promissory note of $1,500,000, proceeds from a note payable from Sponsor of $540,000, and a repayment of note payable – related party of $209,290.

Critical Accounting Estimates

Our accounting policies are more fully described in Note 2 of the consolidated financial statements to this Annual Report. As disclosed therein, the preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions about future events that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ significantly from those estimates.

Impairment of Other Long-lived Assets

The Company reviews the carrying value of its long-lived assets annually or whenever events or changes in circumstances indicate that the historical cost-carrying value of an asset may no longer be appropriate. The Company assesses the recoverability of the carrying value of the asset by estimating the future net undiscounted cash flows expected to result from the asset, including eventual disposition. If the future net undiscounted cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset’s carrying value and estimated fair value.

Asset Retirement Obligations

ARO consists of future land reclamation expenses on open mine properties. The fair value of the ARO was recorded as a liability in the period in which the mine was acquired with a corresponding increase in the carrying amount of asset retirement costs of the assets. The liability is accreted for the change in its present value each period based on the expected dates that the mine will be required to be reclaimed. The future estimated reclamation cost was determined to be $796,000, discounted over an estimated life of 10 years using a credit-adjusted risk-free rate of 7.46%.

On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (“OBBBA”). ASC 740, “Income Taxes”, requires the effects of changes in tax laws to be recognized in the period in which the legislation is enacted. The Company is currently evaluating the impact of the new law. However, none of the tax provisions are expected to have a significant impact on the Company’s financial statements.

Derivative Liabilities

In determining the fair value of the Warrants and conversion event, assumptions related to market activity, expected share-price volatility, expected time to consummating a business combination, risk-free interest rate, discount rate, probability of closing on a business combination, and a market adjustment for an implied probability of closing on a business combination are utilized. The fair value of the warrant liabilities and conversion event liability is subject to change in future periods based on the underlying assumptions and changes in market data.

Recent Accounting Standards

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which will require the company to disclose specified additional information in its income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. ASU 2023-09 will also require the company to disaggregate its income taxes paid disclosure by federal, state and foreign taxes, with further disaggregation required for significant individual jurisdictions. The Company adopted ASU 2023-09 on January 1, 2025 on a prospective basis.

Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material adverse effect on the Company’s consolidated financial statements.

Emerging Growth Company

An “emerging growth company” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), is eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. As a result, changes in GAAP or their interpretation, the adoption of new guidance or the application of existing guidance to changes in the Company’s business could significantly affect our business, financial condition and results of operations.

In addition, we are in the process of evaluating the benefits of relying on the other exemptions and reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, as an emerging growth company, we may take advantage of certain exemptions from various reporting requirements and other burdens that are otherwise applicable generally to public companies. These provisions include, but are not limited to:

an exemption from compliance with the requirement to obtain an attestation and report from our auditors on the assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”);

an exemption from compliance with any new requirements adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotation;

reduced disclosure about our executive compensation arrangements in our periodic reports, proxy statements and registration statements; and

exemptions from the requirements of holding non-binding advisory votes on executive compensation or golden parachute arrangements.

The Company qualifies and will remain as an emerging growth company until the earlier of (i) the last day of the fiscal year (a) following the fifth anniversary of the closing of the initial public offering, (b) in which the Company has a total annual gross revenue of at least $1.235 billion, or (c) in which the Company is deemed to be a large accelerated filer, which means the market value of the common equity of the Company that is held by non-affiliates equals or exceeds $700 million as of the last business day of its most recently completed second fiscal quarter; and (ii) the date on which the Company has issued more than $1.00 billion in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company” have the meaning associated with it in the JOBS Act.

Smaller Reporting Company

We are also a “smaller reporting company” as defined in the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies until the fiscal year following the determination that (i) the market value of our voting and non-voting common stock held by non-affiliates is $250 million or more measured on the last business day of our second fiscal quarter, or (ii) our annual revenues are less than $100 million during the most recently completed fiscal year and the market value of our voting and non-voting common stock held by non-affiliates is $700 million or more measured on the last business day of our second fiscal quarter.