ANNA 10-Q
AleAnna, Inc. (ANNA)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
FOR
THE QUARTERLY PERIOD ENDED
or
FOR THE TRANSITION PERIOD FROM ___________ TO __________
COMMISSION FILE NUMBER:
(Exact name of registrant as specified in its charter)
| 1311 | ||||
| (State or other jurisdiction of incorporation or organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification Number) |
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||
| The | ||||
| The |
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant:
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§
232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such
files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☒
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of May 12, 2025,
Table of Contents
| PART I FINANCIAL INFORMATION | ||
| Item 1. | Financial Statements and Supplementary Data | 1 |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 20 |
| Item 3. | Controls and Procedures | 28 |
| PART II OTHER INFORMATION | ||
| Item 1. | Legal Proceedings | 29 |
| Item 1A. | Risk Factors | 29 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 29 |
| Item 3. | Repurchase of Securities | 29 |
| Item 4. | Mine Safety Disclosures | 29 |
| Item 5. | Other Information | 29 |
| Item 6. | Exhibits | 29 |
| Signatures | 30 | |
i
Item 1. Financial Statements and Supplementary Data
1
ALEANNA,
INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2025 (unaudited) AND DECEMBER 31, 2024
| March 31, 2025 | December 31, 2024 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable | ||||||||
| Prepaid expenses and other assets | ||||||||
| Total Current Assets | ||||||||
| Non-current assets: | ||||||||
| Natural gas and other properties, successful efforts method | ||||||||
| Renewable natural gas properties, net of accumulated depreciation of $ | ||||||||
| Value-added tax refund receivable | ||||||||
| Operating lease right-of-use assets | ||||||||
| Deferred tax assets | ||||||||
| Total Non-current Assets | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND STOCKOLDERS’ EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Lease liability, short-term | ||||||||
| Total Current Liabilities | ||||||||
| Non-current Liabilities: | ||||||||
| Asset retirement obligation | ||||||||
| Lease liability, long-term | ||||||||
| Contingent consideration liability, long-term | ||||||||
| Total Non-current Liabilities | ||||||||
| Total Liabilities | ||||||||
| Commitments and Contingencies (Note 6) | ||||||||
| Stockholders’ Equity: | ||||||||
| Class A Common Stock, par value $ | ||||||||
| Class C Common Stock, par value $ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Noncontrolling interest | ||||||||
| Total Stockholders’ Equity | ||||||||
| Total Liabilities and Stockholders’ Equity | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
2
ALEANNA, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (unaudited)
FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND MARCH 31, 2024
| For the Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenues | $ | $ | ||||||
| Operating expenses: | ||||||||
| Cost of revenues | $ | $ | ||||||
| General and administrative | ||||||||
| Depreciation | ||||||||
| Accretion of asset retirement obligation | ||||||||
| Total operating expenses | ||||||||
| Operating loss | ( | ) | ( | ) | ||||
| Other income: | ||||||||
| Interest and other income | ||||||||
| Change in fair value of derivative liability | ||||||||
| Total other income | ||||||||
| Loss before income taxes | ( | ) | ( | ) | ||||
| Income tax benefit | ||||||||
| Net loss | ( | ) | ( | ) | ||||
| Deemed dividend to Class 1 Preferred Units redemption value | ( | ) | ||||||
| Net loss attributable to noncontrolling interests | ||||||||
| Net loss attributable to Class A Common stockholders or holders of Common Member Units | $ | ( | ) | $ | ( | ) | ||
| Other comprehensive loss | ||||||||
| Currency translation adjustment | ||||||||
| Comprehensive loss | ( | ) | ( | ) | ||||
| Comprehensive loss attributable to noncontrolling interests | ||||||||
| Total comprehensive loss attributable to Class A Common stockholders or holders of Common Member Units | $ | ( | ) | $ | ( | ) | ||
| Weighted average shares of Class A Common Stock outstanding, basic and diluted | ||||||||
| Net loss per share of Class A Common Stock, basic and diluted | $ | ( | ) | $ | ( | ) | ||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
3
ALEANNA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ AND MEMBERS’ EQUITY (unaudited)
FOR THE THREE MONTHS ENDED MARCH 31, 2025 and 2024
| Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||
| Class A | Class C | Additional | Accumulated other | Total | ||||||||||||||||||||||||||||||||
| Common Stock | Amount | Common Stock | Amount | paid-in capital | Accumulated deficit | comprehensive loss | Noncontrolling interest | Stockholders’ Equity | ||||||||||||||||||||||||||||
| Balance, December 31, 2024 | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Exercises of warrants | - | |||||||||||||||||||||||||||||||||||
| Foreign currency translation | - | - | ||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Balance, March 31, 2025 | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Temporary Equity | Members’ Equity | |||||||||||||||||||||||||||||||
| Class 1 | Common | Additional | Accumulated other | Total | ||||||||||||||||||||||||||||
| Preferred Units | Amount | Member Units | Amount | paid-in capital | Accumulated deficit | comprehensive loss | Members’ Equity | |||||||||||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||
| Shares issued | - | |||||||||||||||||||||||||||||||
| Deemed dividend to redemption value | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Capital contributions due from members | - | ( | ) | - | ( | ) | ||||||||||||||||||||||||||
| Foreign currency translation | - | - | ||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance, March 31, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
4
ALEANNA,
INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
FOR THE THREE MONTH ENDED MARCH 31, 2025 AND 2024
| For the Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Cash flows from operating activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Accretion asset retirement obligation | ||||||||
| Change in fair value of derivative liability | ( | ) | ||||||
| Changes in working capital items: | ||||||||
| Accounts receivable | ||||||||
| Prepaid expenses and other assets | ( | ) | ||||||
| Value-added tax refund receivable | ( | ) | ||||||
| Accounts payable and accrued expenses | ( | ) | ( | ) | ||||
| Related party payables | ( | ) | ||||||
| Change in operating lease liability | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities | ||||||||
| Additions to renewable natural gas properties | ( | ) | ( | ) | ||||
| Additions to conventional natural gas properties | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities | ||||||||
| Proceeds from exercises of warrants | ||||||||
| AleAnna Energy Class 1 Preferred Units issued for cash | ||||||||
| Net cash provided by financing activities | ||||||||
| Effect of foreign currency translation on cash | ||||||||
| Change in cash during the period | ( | ) | ||||||
| Cash, beginning of period | ||||||||
| Cash, end of period | $ | $ | ||||||
| Noncash investing and financing activities: | ||||||||
| Deemed dividend to Class 1 Preferred Units redemption value (see Note 10) | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
5
ALEANNA, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE QUARTER ENDED MARCH 31, 2025
NOTE 1 – NATURE OF OPERATIONS AND RECENT EVENTS
AleAnna, Inc. (together
with its subsidiaries, the “Company” or “AleAnna”), a Delaware corporation, was formed on
Conventional Natural Gas
AleAnna is a natural gas
resource developer focused on delivering critical natural gas supplies to Europe through both onshore conventional natural gas exploration
and renewable natural gas development in Italy. The Company has several conventional natural gas discoveries including the Longanesi
field, located in the Po Valley in Northern Italy, which is one of Italy’s largest modern gas discoveries. AleAnna retains a
On October 29, 2024, the Company entered into a gas sale agreement (“GSA”) with Shell Energy Europe Limited (“SEEL”), whereby SEEL became the exclusive buyer of AleAnna’s share of the natural gas produced from the Longanesi field net of (i) any consumption and/or losses incurred in the transport, treatment and compression of gas before delivery; (ii) any volume to be allocated for regulated royalties auctions, if applicable; and (iii) any other volume contractually allocated to other parties before August 31, 2022. Future sales under the GSA are contingent upon the commencement of gas production.
As of March 31, 2025, the Company had not recognized revenue from its conventional natural gas activities. While the tie-in of the Longanesi development wells and the installation of a temporary processing facility were complete as of March 31, 2025, production activities remained on hold due to a plant testing and stabilization program and were not yet at a stage to result in recognized revenue for the quarter. Sales began in May 2025.
Renewable Natural Gas (“RNG”)
In 2021, AleAnna launched a renewable natural gas (“RNG”) development business focused on bringing to market carbon negative renewable natural gas derived from animal and agricultural waste.
Between March 2024
and July 2024, the Company successfully completed three separate strategic acquisitions of renewable natural gas (“RNG”)
assets in Italy for an aggregate of approximately $
Campagnatico Asset Acquisition
On March 20, 2024,
the Company closed the acquisition of the Campagnatico Greenfield (“Campagnatico”) natural gas asset in Tuscany, Italy for
approximately $
Casalino and Campopiano Asset Acquisitions
On July 8, 2024, the
Company closed the acquisition of the Societa Agricola Fattoria delle Jersey S.S. plant asset (“Casalino”) for approximately
$
6
ALEANNA, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE QUARTER ENDED MARCH 31, 2025
The Company plans to begin upgrading the sites to refine biogas into biomethane through upgrading units. Following the upgrade process, the Company expects to sell renewable natural gas to customer(s) by trucking or via connection to the interstate pipeline system (SNAM).
The Company has a
AleAnna Energy Member Contributions
During 2024, AleAnna Energy
received $
NOTE 2 – REVERSE RECAPITALIZATION TRANSACTION
On December 13, 2024 (the “Closing Date”), the previously announced business combination was consummated pursuant to that certain Agreement and Plan of Merger (as amended by that certain First Amendment to the Merger Agreement, dated as of October 8, 2024, the “Merger Agreement”), dated June 4, 2024, by and among Swiftmerge Acquisition Corp., a Cayman Islands exempted company (“Swiftmerge”), Swiftmerge HoldCo LLC, a Delaware limited liability company and wholly-owned subsidiary of Swiftmerge (“HoldCo”), Swiftmerge Merger Sub LLC, a Delaware limited liability company and wholly-owned subsidiary of HoldCo (“Merger Sub”) and AleAnna Energy (the “Merger”). The transactions contemplated by the Merger Agreement are collectively referred to herein as the “Business Combination.”
The Business Combination included, among other things:
| ● | (i) SPAC undergoing the Domestication and changing its name to “AleAnna, Inc.”; (ii) each Swiftmerge Class A Ordinary Share converting into one share of Class A Common Stock; (iii) each Swiftmerge Class B Ordinary Share converting into one share of Class B Common Stock in the Domestication and then each share of Class B Common Stock converting into one share of Class A Common Stock at the completion of the Business Combination; (iv) each warrant to purchase Swiftmerge Class A Ordinary Shares becoming exercisable by its terms to purchase an equal number of shares of Class A Common Stock; and (v) a series Class C Common Stock being authorized, each share of which will have voting rights equal to a share of Class A Common Stock but which shall have no entitlement to earnings or distributions of the Company; |
| ● | following the Domestication but prior to the Merger, (i) the Company contributed to HoldCo (a) all of its assets (excluding its interests in HoldCo), including, for the avoidance of doubt, the Available Cash (as defined herein), and (b) a number of shares of Class C Common Stock equal to the number of Class C HoldCo Units designated to be issued to the AleAnna Members, and (ii) HoldCo issued to the Company a number of Class A HoldCo Units which equaled the number of shares of Class A Common Stock issued and outstanding immediately after the Closing; and |
| ● | following the Pre-Closing Contribution, Merger Sub merged with and into AleAnna Energy, with AleAnna Energy being the surviving company and a wholly-owned subsidiary of HoldCo. Each AleAnna Energy Member received its pro rata portion of |
The Business Combination was accounted for as a common control transaction with respect to AleAnna Energy, which is akin to a reverse recapitalization. Nautilus Resources LLC (“Nautilus”), the majority owner of AleAnna Energy, had a controlling financial interest in AleAnna Energy prior to the Business Combination and has a controlling financial interest in the Company, as AleAnna Energy is a subsidiary of HoldCo, in which AleAnna, Inc. holds a majority economic interest. The net assets of Swiftmerge are stated at their historical carrying amounts with no goodwill or intangible assets recognized in accordance with U.S. GAAP. The Business Combination with respect to AleAnna Energy was not treated as a change in control primarily due to Nautilus receiving the controlling voting stake in the Company and the ability of Nautilus to nominate the full board of directors and management of the Company.
In accounting for the Business Combination, Swiftmerge was treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of AleAnna Energy issuing stock for the net assets of Swiftmerge, accompanied by a recapitalization.
7
ALEANNA, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE QUARTER ENDED MARCH 31, 2025
The Class A common stock,
par value $
Total proceeds raised from
the Business Combination were $
As of March 31, 2025, shares of Class C Common Stock had been exchanged for shares of Class A Common Stock.
NOTE 3 – BASIS OF PRESENTATION
Basis of Presentation — The accompanying unaudited consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”), and in conformity with the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, these financial statements contain all adjustments necessary for a fair statement of the results of the interim periods presented. Accordingly, the financial statements do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (“2024 Form 10-K”). Results for interim periods are not necessarily indicative of results to be expected for a full year or any future period.
Immaterial Restatement of Prior Period Financial Statements — In the fourth quarter of 2024, we identified an error in the classification of the contingent consideration liability and an error in the computation of foreign currency translation adjustments as of and for the three months ended March 31, 2024. Refer to Note 16 for quantification of the prior period restatement impacts. Additionally, comparative prior period amounts in the applicable notes to the condensed consolidated financial statements have been restated.
Principles of Consolidation — The Company’s policy is to consolidate all entities that the Company controls by ownership interest or other contractual rights giving the Company control over the most significant activities of an investee. The condensed consolidated financial statements include the accounts of AleAnna and its wholly-owned subsidiaries HoldCo, AleAnna Energy, AleAnna Resources, LLC, AleAnna Italia S.p.A., AleAnna Renewable and the RNG Subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates — The preparation of condensed consolidated financial statements in conformity with accounting principles U.S GAAP requires management to make estimates and assumptions that affect the reported amounts of expenses, assets, and liabilities and disclosure of contingent assets and liabilities. The Company regularly assesses these estimates; however, actual amounts could differ from those estimates. The most significant items involving management’s estimates include estimates of contingencies including contingent consideration and estimates of the timing and amount of asset retirement obligations. The impact of changes in estimates is recorded in the period in which they become known.
Emerging Growth Company — The Company is 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”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
8
ALEANNA, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE QUARTER ENDED MARCH 31, 2025
Further, 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 Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth 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. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s condensed consolidated financial statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult because of the potential differences in accounting standards used.
Risks and Uncertainties — The Company is currently in the development stage and has not yet commenced principal operations or generated revenue from its conventional natural gas business. The development of the Company’s projects is subject to a number of risks and uncertainties including, but not limited to, the receipt of the necessary permits and regulatory approvals, commodity price risk impacting the decision to go forward with the projects, and the availability and ability to obtain the necessary financing for the development of projects.
The Company’s ability to develop and operate commercial production facilities, as well as expand production at future commercial production facilities, is subject to many risks beyond its control, including regulatory developments, construction risks, and global and regional macroeconomic developments.
Significant Accounting Policies — There have been no material changes to the Company’s significant accounting policies as described in the audited consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2024.
NOTE 4 – RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In November 2024, the FASB issued ASU 2024-03 to improve the disclosures about a public business entity’s expenses. The update requires more detailed information on expense components, such as inventory purchases, employee compensation, depreciation, amortization, and depletion, within commonly reporting categories like cost of sales, SG&A, and research and development. These amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The Company is currently evaluating the provisions of the amendments and the impact on its future consolidated statements and disclosures.
In December 2023, the FASB issued ASU 2023-09 to improve disclosures and presentation requirements to the transparency of the income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation and income taxes paid disaggregated by jurisdiction. The amendments are effective in annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the provisions of the amendments and the impact on its future consolidated financial statements and disclosures.
NOTE 5 – LEASES, RIGHT-OF-USE ASSETS AND RELATED LIABILITIES
Leases to explore for or
use minerals, oil, natural gas, and similar nonregenerative resources (see ASC 930, Extractive Activities — Mining,
and ASC 932, Extractive Activities — Oil and Gas) are excluded from the scope of ASC 842, Leases.
The Company has surface and use agreements for Longanesi, Gradizza, Trava, and Armonia in Italy. These agreements are directly related
to accessing the subsurface minerals and are assessed as part of the oil and gas properties. As of December 31, 2023, all leases
in AleAnna’s portfolio, in addition to its lease of office space, are short-term leases (
In July 2024, in conjunction
with the Casalino acquisition, AleAnna entered into a lease of the land that holds the biomethane processing and conversion asset utilized
to produce electricity. The lease term is from July 1, 2024 through December 31, 2032, with an
The Company does not have
any borrowings; therefore, it does not have a readily determinable incremental borrowing rate, and there was no incremental borrowing
rate implicit in the Casalino land lease. As such, the company utilized a discount rate of
9
ALEANNA, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE QUARTER ENDED MARCH 31, 2025
NOTE 6 – CONTINGENT CONSIDERATION LIABILITY
On July 13, 2016, AleAnna
Europa S.r.L., a former subsidiary of AleAnna Resources LLC (which was subsequently merged into AleAnna Italia S.p.A. in December 2022),
purchased a
In connection with the achievement
of first production and related revenue generation at Longanesi, AleAnna will be required to reserve $
The Company recognized a liability for the contingent consideration in accounting for the asset acquisition in accordance with ASC 450, Contingencies (the “contingent consideration liability”).
As of March 31, 2025
and December 31, 2024, the contingent consideration liability was recorded at $
Changes in the contingent consideration liability attributable to factors other than foreign currency exchange rates are recognized in the condensed consolidated statement of operations. Changes in the contingent consideration liability attributable to foreign currency translation are recognized in other comprehensive loss within the condensed consolidated statement of operations and comprehensive loss. The change in the contingent consideration liability for all periods presented is attributable to changes in foreign exchange rates.
NOTE 7 – DERIVATIVE LIABILITY
As of December 31,
2023, the Company recorded a $
NOTE 8 – NATURAL GAS PROPERTIES
Conventional Natural Gas Properties
A summary of conventional natural gas properties is as follows:
| March 31, 2025 | December 31,
2024 | |||||||
| Natural gas properties | ||||||||
| Less: Accumulated Impairment | ( | ) | ( | ) | ||||
| Natural gas and other properties, net | $ | $ | ||||||
10
ALEANNA, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE QUARTER ENDED MARCH 31, 2025
The Company uses the successful efforts method of accounting for conventional natural gas-producing activities. Under this method, the cost of productive wells and related equipment, development dry holes, and any permits related to productive acreage are capitalized, and depleted using the unit-of-production method. These costs include other internal costs directly attributable to production activities. Although initial production activities commenced in March 2025, the Company has not yet placed its Longanesi field assets into service for accounting purposes, and therefore depletion expense has been recorded as of March 31, 2025. Costs for exploratory dry holes, exploratory geological and geophysical activities, and delay rentals as well as other property carrying costs are charged to exploration expense.
There were no exploratory wells drilled and there were no capitalized exploratory well costs incurred during the three months ended March 31, 2025 or March 31, 2024. Asset additions during the three months ended March 31, 2025 primarily related to the construction of the Longanesi processing facility. Asset additions during the three months ended March 31, 2024 primarily related to the drilling and testing of three incremental Longanesi development wells. The company recorded impairment of natural gas properties during the three months ended March 31, 2025 or the year ended December 31, 2024.
First Production at Longanesi
On March 13, 2025,
AleAnna achieved a key milestone with the first production from its five wells in the Longanesi field. However, as of March 31,
2025, the Company had not recognized revenue from its conventional natural gas activities. While the tie-in of the Longanesi
development wells and the installation of a temporary processing facility were complete as of March 31, 2025, production activities
remained on hold due to a plant testing and stabilization program, and were not yet at a stage to result in recognized revenue for
the quarter. Sales began in May 2025. In connection with Longanesi start-up, AleAnna will be required to reserve $
Renewable Natural Gas Properties
As of March 31, 2025,
renewable natural gas properties include $
During the three months
ended March 31, 2025, all revenue was derived from a single source (sales of electricity) and a single customer (the local state-owned
electrical utility). As of March 31, 2025, the Company had $
11
ALEANNA, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE QUARTER ENDED MARCH 31, 2025
NOTE 9 – COMMITMENTS AND CONTINGENCIES
Participation Agreements
In conjunction with the closing of the Enel acquisition, AleAnna became a participant in the Longanesi Unitization Agreement (“UA”) with Societa Padana Energia (“Padana”). The UA governs the combination of Padana’s San Potito Concession and AleAnna’s San Marco Concession into a production unit. At the same time, AleAnna became a participant in the Unified Operating Agreement (“UOA”), which governs the bylaws by which Padana and AleAnna agree to develop the unit and fund future operations.
Under the UOA, AleAnna and
Padana have agreed to jointly develop Longanesi per a plan approved by the Italian Ministry of the Environment (“MISE”). AleAnna
and Padana entered the UOA with initial participating shares in the Longanesi field equal to
AleAnna and Padana fund their respective working interest shares of the capital required for Longanesi development and will receive their respective shares of the production output from the unitized field. However, such working interest percentages may be subsequently amended as more certainty is obtained over the Gas Originally in Place (“GOIP”) through redetermination procedures prescribed by the UOA. The redetermination process evaluates the results of the development drilling program (well logs, production tests, etc.) and other data that may be gathered prior to or during the drilling process (such as 3D seismic imaging) to determine if new data gathered changed the respective working interest percentages. If a redetermination process suggests GOIP changes, but AleAnna and Padana do not agree on revised working interest percentages, an independent third party will opine and set the revised working interest allocations. Adjustments to future production entitlements and capital contributions may be made accordingly. Cash payments may be made between the participants where there is insufficient production to true up contributions to date. If a true up of historical capital contributions is required as a result of redetermination, such capital true-up amounts will include an interest charge based on the nine-month Euro interbank offered rate (“Euribor”) and the date of the original capital contribution.
On October 26, 2023, Padana formally called for the First Redetermination process, as defined in the UOA, to begin. However, the outcome of this or any future redetermination, which may impact working interest percentages and require a capital contribution rebalancing, is highly uncertain and such amounts are not estimable at this time. Accordingly, AleAnna has not recorded any receivable from or payable to Padana related to the redetermination process.
Contingencies and Legal Proceedings
The Company is subject to loss contingencies related to litigation, claims, investigations and legal and administrative cases and proceedings arising in the ordinary course of business. The Company evaluates these contingencies on a regular basis and accrues a liability for such matters when the Company believes that a loss is probable, and the amount of the loss can be reasonably estimated. Any such accruals are adjusted thereafter as appropriate to reflect changed circumstances. In the event the Company determines that (i) a loss to the Company is probable, but the amount of the loss cannot be reasonably estimated, or (ii) a loss to the Company is less likely than probable but is reasonably possible, then the Company is required to disclose the matter herein, although the Company is not required to accrue such loss.
When able, the Company determines an estimate of reasonably possible losses or ranges of reasonably possible losses, whether in excess of any related accrued liability or where there is no accrued liability, for legal proceedings.
In instances where such estimates can be made, any such estimates are based on the Company’s analysis of currently available information and are subject to significant judgment and a variety of assumptions and uncertainties and may change as new information is obtained.
The ultimate outcome of the matters described below, such as whether the likelihood of loss is remote, reasonably possible, or probable, or if and when the range of loss is reasonably estimable, is inherently uncertain.
Furthermore, due to the inherent subjectivity of the assessments and unpredictability of outcomes of legal proceedings, any amounts accrued or estimated as possible losses may not represent the ultimate loss to the Company from the legal proceedings in question and the Company’s exposure and ultimate losses may be higher, and possibly significantly so, than the amounts accrued or estimated.
12
ALEANNA, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE QUARTER ENDED MARCH 31, 2025
As described in Note 1,
AleAnna acquired a
On May 28, 2024, the
Company reached a settlement agreement (the “Blugas Settlement Agreement”) with Blugas regarding the Blugas ORRI. Under the
terms of the Blugas Settlement Agreement, the Company paid Blugas approximately €
The Blugas Settlement Agreement
was accounted for as an acquisition of the Blugas ORRI claim with a corresponding increase to the estimated future cash flows from our
reserves. As such, the cost of the acquisition is included in natural gas and other properties, with the VAT portion included in value-added
tax refund receivable in the consolidated balance sheet as of March 31, 2025 and December 31, 2024. The Company’s year-end December 31,
2023 reserve quantities included the
NOTE 10 – EQUITY
AleAnna Common Stock
and Noncontrolling Interests – As of March 31, 2025, the Company had
Following the Business Combination,
holders of Class A Common Stock own a direct controlling economic interest in the results of the combined entity. Holders of Class C
HoldCo Units and Class C Common Stock own an economic interest in the Company, shown as noncontrolling interests (“NCI”)
in stockholders’ equity in the Company’s condensed consolidated financial statements. Holders of Class C Common Stock have
voting rights equal to holders of Class A Common Stock but no entitlement to earnings or distributions. The ownership interests of the
Class A Common Stockholders and the NCI were
13
ALEANNA, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE QUARTER ENDED MARCH 31, 2025
The financial statements
also reflect NCI related to the
Warrants
– There were
The Company may call the Public Warrants for redemption:
| ● | in whole and not in part; |
| ● | at a price of $ |
| ● | upon not less than 30 days’ prior written notice of redemption (the “30-day redemption period”) to each Public Warrant holder; |
| ● | if, and only if, the reported last sale price of the Class A Common Stock equals or exceeds $ |
| ● | if, and only if, there is a current registration statement in effect with respect to the Class A Common Stock underlying such Public Warrants. |
In the event that the Company elects to redeem all of the redeemable Public Warrants, it will fix a date for the redemption. Pursuant to the terms of the warrant agreement, notice of redemption will be mailed by first class mail, postage prepaid, by not less than 30 days prior to the redemption date to the registered holders of the redeemable Public Warrants to be redeemed at their last addresses as they appear on the registration books. Any notice mailed in the manner provided in the warrant agreement will be conclusively presumed to have been duly given whether or not the registered holder received such notice.
The Company has established
the last of the redemption criterion discussed above to prevent a redemption call unless there is at the time of the call a significant
premium to the Public Warrant exercise price. If the foregoing conditions are satisfied and the Company issues a notice of redemption
of the Public Warrants, each Public Warrant holder will be entitled to exercise his, her or its Public Warrant prior to the scheduled
redemption date. However, the price of the Class A Common Stock may fall below the $
In January and February
2025, holders exercised an aggregate
AleAnna Energy Members’ Equity (pre-Business Combination) – Prior to the Business Combination the Company had Common Units and Class 1 Preferred Units issued and outstanding. Due to the redemption features of the Class 1 Preferred Units, they were recorded at redemption value and classified as temporary equity in the consolidated balance sheets. The difference between the book value of Class 1 Preferred Units issued and the redemption value, less the amount attributable to the derivative liability discussed in Note 7, was recorded as a deemed dividend in periods prior to the Business Combination. AleAnna Energy’s Class 1 Preferred Units and Common Units were exchanged for AleAnna common stock in connection with the Business Combination (see Note 2).
14
ALEANNA, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE QUARTER ENDED MARCH 31, 2025
NOTE 11 – EXECUTIVE COMPENSATION
On September 1, 2022,
the Company entered into an employment agreement with the CEO. Within this employment agreement, there is a Medium/Long Term Incentive
Plan (“M/LTIP” or the “Plan”) outlined, which includes cash bonus amounts to be paid based on the completion
of certain milestones within the established thresholds. Such payments could result in total payments ranging from €
The Company tracks each of the milestones for the executive compensation package based on the current and future business plans. Based on the metrics and performance indicators outlined in the executive compensation package, management has concluded that the likelihood of achieving each of these metrics is not probable as of March 31, 2025. Accordingly, no accrual has been recorded.
NOTE 12 – INCOME TAXES
As of March 31, 2025
and December 31, 2024, AleAnna, Inc. held
AleAnna Energy was historically and remains a disregarded subsidiary of a partnership for U.S. Federal income tax purposes with each partner being separately taxed on its share of taxable income or loss. As a direct result of the Business Combination, HoldCo became the sole member of AleAnna Energy. As such, HoldCo’s distributive share of any net taxable income or loss and any related tax credits of AleAnna Energy are then distributed to the Company. For the days and periods prior to the closing of the Business Combination, AleAnna Energy was a disregarded subsidiary of an entity treated as a partnership. As such, its net taxable loss and any related tax credits were allocated to its members.
AleAnna’s Italian subsidiary (AleAnna Italia, S.p.A.) is a joint stock company or S.p.A. and is considered a corporation under the Italian tax code. Therefore, the statutorily determined cumulative taxable loss of AleAnna Italia was tax affected and recognized as a deferred tax asset as of March 31, 2025 and December 31, 2024. The Company has also recorded deferred tax assets for temporary differences between the book and tax basis in the underlying assets and liabilities. Given AleAnna’s history of losses, and because future production remained uncertain as of March 31, 2025 and December 31, 2024, a full valuation allowance was applied against the deferred tax assets.
The Company applies an estimated
annual effective rate to interim period pre-tax income to calculate the income tax provision for the quarter in accordance with the principal
method prescribed by the accounting guidance established for computing income taxes in interim periods. The company recognized less than
$
15
ALEANNA, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE QUARTER ENDED MARCH 31, 2025
The Company has assessed the realizability of the net deferred tax assets, and in that analysis, has considered the relevant positive and negative evidence available to determine whether it is more likely than not that some portion or all of the deferred tax assets will be realized. In making such a determination, the Company considered all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, and recent results of operations. After consideration of all available evidence, given AleAnna’s history of losses, and because future production remained uncertain as of March 31, 2025 and December 31, 2024, the Company recorded a full valuation allowance against its deferred tax assets as. This valuation allowance will be maintained until there is sufficient evidence to support the reversal of all or some portion of these allowances. As noted above, the valuation allowances completely offset the deferred tax assets, which resulted in a net zero impact to the Company’s consolidated balance sheets as of March 31, 2025 and December 31, 2024.
The Company recognizes the financial statement effects of uncertain income tax positions when it is more likely than not, based on the technical merits, that the position will be sustained upon examination. To the extent the Company’s assessment of such tax positions changes, the change in estimate will be recorded in the period in which the determination is made. As of March 31, 2025 and December 31, 2024, the Company had not recorded any uncertain tax positions or accrued interest and penalties on the consolidated balance sheets.
The Company’s income tax filings will be subject to audit by various taxing jurisdictions. The Company will monitor the status of U.S. Federal, state and local income tax returns and Italian tax returns that may be subject to audit in future periods. No U.S. Federal, state and local income tax returns or Italian tax returns are currently under examination by the respective taxing authorities.
NOTE 13 – RELATED PARTY TRANSACTIONS
The Company follows FASB ASC subtopic 850-10, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions.
Certain executive officers
of AleAnna are currently employed by and participate in employee benefit plans sponsored by an affiliate of Nautilus and provide administrative
and support services to AleAnna under a master services agreement. As of March 31, 2025, AleAnna had outstanding payables of $
NOTE 14 – LOSS PER SHARE
The Business Combination was accounted for as a common control transaction with respect to AleAnna Energy which is akin to a reverse recapitalization. This conclusion was based on Nautilus’s controlling financial interest in AleAnna Energy prior to the Business Combination and its continued control over the combined entity. Following the Business Combination, Nautilus holds Class A Common Stock, representing a direct controlling economic interest, and Class C HoldCo Units and Class C Common Stock, representing a noncontrolling economic interest classified as NCI in stockholders’ equity in the Company’s consolidated financial statements.
Given this change in equity structure and the requirements of ASC 260, Earnings per Share, the Company retrospectively adjusted its calculation of loss per share for the prior-year period to reflect the impact of the new capital structure in accordance with applicable reverse recapitalization guidance. As a result, the weighted average shares outstanding for the year ended December 31, 2023, were calculated by applying the implied conversion ratio from the Business Combination to the pre-merger AleAnna Energy LLC units, ensuring comparability with the post-Business Combination period.
16
ALEANNA, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE QUARTER ENDED MARCH 31, 2025
Basic net loss per share has been computed by dividing net loss attributable to holders of Class A Common Stock by the weighted average number of shares of Class A Common Stock outstanding during the respective periods. Diluted earnings per share of Class A Common Stock was computed by dividing net loss attributable to holders of Class A Common Stock by the weighted-average number of shares of Class A Common Stock outstanding adjusted to give effect to potentially dilutive securities.
The Company’s potentially
dilutive securities have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss
per share. Therefore, the weighted average number of shares of Class A Common Stock outstanding used to calculate both basic and diluted
net loss per share is the same.
The AleAnna Energy Class 1 Preferred Units were not considered to be participating based on their contractual rights. However, due to the redemption features of the Class 1 Preferred Units, they were recorded at redemption value and classified as temporary equity in the consolidated balance sheets prior to the Business Combination. The difference between the book value of Class 1 Preferred Units issued and the redemption value, less the amount attributable to the derivative liability discussed in note discussed in Note 7 prior to the Business Combination, was recorded as a deemed dividend. The deemed dividend reduced the net loss attributable to holders of Common Member Units (and subsequently holders of Class A Common Stock) in the calculation of the numerator above.
| Three months ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Net loss attributable to Class A Common stockholders before deemed dividend | $ | ( | ) | $ | ( | ) | ||
| Deemed dividend to AleAnna Energy Class 1 Preferred Units redemption value | ( | ) | ||||||
| Loss attributable to noncontrolling interests | ||||||||
| Net Loss attributable to holders of Class A Common Stock | ( | ) | ( | ) | ||||
| Weighted average shares of Class A Common Stock outstanding, basic and diluted | ||||||||
| Net loss per share of Class A Common Stock, basic and diluted | ( | ) | ( | ) | ||||
The
17
ALEANNA, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE QUARTER ENDED MARCH 31, 2025
NOTE 15 – SEGMENT REPORTING
The Company’s operations
consist of
AleAnna’s principal products include conventional natural gas produced from onshore exploration and development and RNG derived from animal and agricultural waste. The Company has not yet recognized revenue from its conventional natural gas activities and has only recently begun deriving revenue from sales of electricity related to its RNG business.
While the Company has recently acquired three RNG assets, these assets are still in the early stages of development which may include expansion and installation of upgrading units to refine biomethane into renewable natural gas (rather than conversion to electricity). These assets have not generated significant revenues or incurred material expenses. As of and for the period ending March 31, 2025, the Company’s CODM was primarily focused on capital investing decisions, strategy, and forward-looking investment economics. While the CODM monitors cash reserves and overall enterprise liquidity, extensive review and analysis of the Company’s performance and loss statements is not performed beyond review of the consolidated financial statements. As such, the CODM continues to assess the financial performance of the Company as a single enterprise on a consolidated basis, without distinguishing between conventional natural gas and RNG operations. Given the Company has not generated significant revenue or profits and is focused on development activities, the CODM does not utilize a specific measure of profit or loss to assess performance. The CODM does not monitor specific expense categories separately. The financial information reviewed by the CODM is consistent with the audited consolidated balance sheets and statements of operations and cash flows included herein.
All of the Company’s primary operating activities and assets remain located in Italy. The Company will continue to assess the need for including multiple reportable segments as the business evolves.
NOTE 16 – IMMATERIAL RESTATEMENT OF PRIOR PERIOD FINANCIAL STATEMENTS
Subsequent to the issuance of the Company’s unaudited consolidated financial statements as of and for the three months ended March 31, 2024, errors were identified in the computation of foreign currency translation adjustments. As a result, the Company has restated the prior period financial statements to correct the errors. Management evaluated the materiality of the errors and concluded they were not material to the prior period financial statements. The Company will also correct previously reported financial information for such immaterial errors in future filings, as applicable.
18
ALEANNA, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE QUARTER ENDED MARCH 31, 2025
The following tables reflect the effects of the correction on all affected line items of the Company’s previously reported March 31, 2024 consolidated financial statements presented in this Form 10-Q:
| March 31, 2024 | March 31, 2024 | |||||||||||
| CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS (unaudited) | Previously Reported | Correction | As Corrected | |||||||||
| Operating expenses: | ||||||||||||
| Change in contingent consideration liability | $ | ( | ) | $ | $ | |||||||
| Total operating expenses | $ | $ | ||||||||||
| Operating loss | $ | ( | ) | $ | ( | ) | ( | ) | ||||
| Net loss attributable to Common Member Units | $ | ( | ) | $ | ( | ) | ( | ) | ||||
| Other comprehensive income (loss) | ||||||||||||
| Currency translation adjustment | ( | ) | ||||||||||
| Comprehensive loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| March 31, 2024 | March 31, 2024 | |||||||||||
| CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited) | Previously Reported | Correction | As Corrected | |||||||||
| Cash flows from operating activities: | ||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||
| Change in fair value of contingent consideration | ( | ) | $ | |||||||||
| Net cash used in operating activities | $ | ( | ) | $ | $ | ( | ) | |||||
NOTE 17 – SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to May 15, 2025, the date that the financial statements were issued.
Warrant Exercises
Between April 23, 2025
and May 12, 2025, holders exercised an aggregate
19
Item 2. 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 our consolidated financial statements and the related notes appearing elsewhere in this Quarterly Report on Form 10-Q, as well as our audited consolidated financial statements and related notes and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission (“SEC”) on March 31, 2025.
This discussion and analysis contains forward-looking statements that reflect our plans, estimates and beliefs that involve risks and uncertainties that may be outside our control. Actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set for under “Risk Factors” in our Annual Report on Form 10-K. Unless the context otherwise requires, all references in this section to “we,” “us,” “our,” “AleAnna,” or the “Company” refer to AleAnna, Inc.
Certain capitalized terms used in this Quarterly Report on Form 10-Q are defined in the Glossary of Selected Industry Terms included in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 31, 2025, and are incorporated herein by reference.
Overview
AleAnna is a natural gas resource developer focused on delivering critical natural gas supplies to Europe through both onshore conventional natural gas exploration and renewable natural gas development in Italy. We have several conventional natural gas discoveries including the Longanesi field, located in the Po Valley in Northern Italy, which is one of Italy’s largest modern gas discoveries. We retain a 33.5% working interest in the Longanesi field with our working interest partner, and operator, Padana. We acquired our working interest in the Longanesi field through a 2016 transaction with Enel. We also retain wholly owned concessions, permits, and pending applications on other exploration and development prospects across Italy which are supported by proprietary modern 3D seismic imaging. In 2021, we launched a renewable natural gas development business focused on bringing to market carbon-negative renewable natural gas derived from animal and agricultural waste.
As of March 31, 2025, although we had generated revenue from electricity sales from two renewable natural gas assets, we had not yet recognized any revenue from our conventional natural gas business. Our recent activities involve the drilling and testing of three Longanesi development wells (during 2022 and 2023) as well as the re-completion of two original discovery wells. We had no drilling activity during the three months ended March 31, 2025 or the year ended December 31, 2024. We had no other exploratory or development drilling during the three months ended March 31, 2025 or the year ended December 31, 2024. Our Longanesi, Trava and Gradizza discoveries were classified by DeGolyer and MacNaughton as proved undeveloped reserves as such wells had not yet started production as of December 31, 2024 and require future investments to install production facilities prior to being fully completed and producible.
While the tie-in of the Longanesi development wells and the installation of a temporary processing facility were complete as of March 31, 2025, production activities remained on hold due to a plant testing and stabilization program and were not yet at a stage to result in recognized revenue for the quarter. Sales began in May 2025. A permanent processing facility is expected to be constructed over the remainder of 2025 and early 2026 and commissioned in mid-2026.
The Transactions
On December 13, 2024, we consummated the previously announced business combination pursuant to the Merger Agreement, dated June 4, 2024, by and among Swiftmerge, HoldCo, Swiftmerge Merger Sub LLC, a Delaware limited liability company and wholly-owned subsidiary of HoldCo, and AleAnna Energy. Pursuant to the terms of the Merger Agreement, on December 13, 2024, SPAC migrated to and domesticated as a Delaware corporation in accordance with Section 388 of the Delaware General Corporation Law, as amended, and the Companies Act (As Revised) of the Cayman Islands and changed its name to AleAnna, Inc. The transactions contemplated by the Merger Agreement are collectively referred to herein as the “Business Combination.”
The Business Combination was accounted for as a common control transaction with respect to AleAnna Energy which is akin to a reverse recapitalization. This conclusion was based on the fact that Nautilus Resources LLC (“Nautilus”) had a controlling financial interest in AleAnna Energy prior to the Business Combination and has a controlling financial interest in AleAnna, which includes AleAnna Energy as a wholly owned subsidiary. The net assets of SPAC are stated at their historical carrying amounts with no goodwill or intangible assets recognized in accordance with the accounting principles generally accepted in the United States of America (“GAAP”). The Business Combination with respect to AleAnna Energy was not treated as a change in control primarily due to Nautilus receiving the controlling voting stake in AleAnna and the ability of Nautilus to nominate the full board of directors and management of AleAnna.
20
Under a reverse recapitalization, SPAC is treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Business Combination is treated as the equivalent of AleAnna Energy issuing stock for the net assets of SPAC, accompanied by a recapitalization.
We incurred $9.5 million in transaction costs related to the Business Combination. Approximately $0.6 million of these costs were recorded as a reduction to additional paid-in capital, up to the amount of cash proceeds received in the transaction. Of the remaining $8.9 million, approximately $0.5 million represented prepaid directors and officers insurance premiums that were recorded to other assets in the consolidated balance sheet, and $8.4 million represented legal, accounting, consulting and advisory fees which were recorded as Business Combination transaction expenses in the consolidated statement of operations and comprehensive loss.
Recent Developments
First Production at Longanesi
On March 13, 2025, AleAnna achieved a key milestone with the first production from its five wells in the Longanesi field. However, as of March 31, 2025, the Company had not recognized revenue from its conventional natural gas activities. While the tie-in of the Longanesi development wells and the installation of a temporary processing facility were complete as of March 31, 2025, production activities remained on hold due to a plant testing and stabilization program and were not yet at a stage to result in recognized revenue for the quarter. Sales began in May 2025.
In connection with Longanesi start-up, AleAnna will be required to reserve $3.1 million related to the contingent consideration liability due to Enel via a bank guarantee. Any cash deposits required to secure this bank guarantee will be classified as restricted cash in future balance sheets and may be used to satisfy the contingent consideration liability as payments become due.
Gas Sale Agreement
On October 29, 2024, we entered into a gas sale agreement (“GSA”) with Shell Energy Europe Limited (“SEEL”), whereby SEEL became the exclusive buyer of our share of the natural gas produced from the Longanesi field net of (i) any consumption and/or losses incurred in the transport, treatment and compression of gas before delivery; (ii) any volume to be allocated for regulated royalties auctions, if applicable; and (iii) any other volume contractually allocated to other parties before August 31, 2022. Future sales under the GSA are contingent upon the commencement of gas production.
Key Factors Affecting our Performance, Prospects and Future Results
We believe that our performance and future success depend on a number of factors that present significant opportunities for us but also pose risks and challenges, including competition from other carbon-based and non-carbon-based fuel producers, regulatory hurdles posed by the Italian government, and other factors discussed under the section titled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024. We believe the factors described below are key to our success.
Achieving First Production at Longanesi
As previously discussed, we and Padana achieved first production of the five wells in the Longanesi field in March 2025 through use of a temporary processing facility. The permanent processing facility is expected to be constructed over the remainder of 2025 and early 2026 and commissioned mid-2026.
We believe our achieving first production of the Longanesi field is a key milestone that will fuel our potential growth. We also have potentially viable discoveries in our Gradizza and Trava fields that are expected to achieve first production in the future.
Commencing and Expanding Renewable Natural Gas Operations
In 2021, we launched a renewable natural gas development business focused on bringing to market carbon negative renewable natural gas derived from animal and agricultural waste. The first three renewable natural gas assets were purchased between March 2024 and July 2024, with additional renewable natural gas projects expected to be purchased in the future.
We believe expanding the renewable natural gas business is another key to our potential growth and may unlock potential partnership or joint venture opportunities.
Key Components of Results of Operations
We are an early-stage company, and our historical results may not be indicative of our future results. Accordingly, the drivers of our future financial results, as well as the components of such results, may not be comparable to our historical results of operations or our future results of operations.
21
Revenue
During the three months ended March 31, 2025, we generated approximately $0.6 million of revenue from electricity sales at two renewable natural gas assets acquired in July 2024 (the “Casalino” and “Campopiano” plants). The plant assets are fully permitted for production of electricity through conversion of crop and animal waste bio feedstocks. The plant assets are currently biomethane to electricity conversion assets. It is our intention to begin upgrading the sites to refine biomethane into renewable natural gas through upgrading units. Following the upgrade process to transition the assets to biomethane to renewable natural gas conversion, we expect to sell renewable natural gas to customer(s) by trucking or piping the renewable natural gas to the interstate pipeline system (SNAM). Until the plant assets are upgraded, we will actively source bio feedstocks for the assets to produce biomethane which will be processed through reciprocating generators in order to generate electricity. The electricity is then sold onto the grid through a metered interconnection. Casalino and Campopiano derive revenues from the sale of such electricity to the local state-owned electrical utility (Gestore dei Servizi Energetici SpA or “GSE”). Energy generation revenue is recognized as the electricity generated by the Casalino and Campopiano assets is delivered to GSE. Revenues are based on actual output and “on-the-spot” predetermined prices for small renewable energy producers.
In addition to sales of renewable natural gas, we expect to generate a significant portion of our future revenue from the sale of conventional natural gas.
Expenses
General and Administrative (G&A) Expense
G&A expenses consist of compensation costs for personnel in executive, finance, accounting, and other administrative functions. G&A expenses also include legal fees, professional fees paid for accounting, auditing and consulting services, and insurance costs. As a newly public company, we expect that we will incur higher G&A expenses for public company costs such as compliance with the regulations of the Securities and Exchange Commission (the “SEC”) and the Nasdaq Capital Market.
Income Tax Effects
AleAnna’s income tax consequences have been reflected in its consolidated financial statements in accordance with ASC 740, Income Taxes. Given AleAnna’s history of losses, and because future production remains uncertain, a full valuation allowance was applied against deferred tax assets and no income tax liabilities or expenses were recognized as of or for the three months ended March 31, 2025 and 2024.
We are also subject to a Valued-Added Tax (“VAT”) which is a broadly-based consumption tax that is assessed to the value that is added to goods and services. The VAT applies to nearly all goods and services that are bought and sold within the EU. Italian law allows for certain VAT payments to be recovered through ongoing applications for refunds. We have incurred higher VAT input paid (i.e., VAT paid on purchases) than the VAT output collected (i.e., VAT collected on sales), resulting in a net VAT refund receivable. As of March 31, 2025 and December 31, 2024, we had VAT receivables of $6.6 million, and $6.8 million, respectively.
Operations
Our net losses were $3.3 million and $114.3 million for the three months ended March 31, 2025 and 2024 respectively. As of March 31, 2025 and December 31, 2024, we had an accumulated deficit of $193.1 million and $191.0 million, respectively. The majority of these losses stem from costs associated with the Longanesi field drilling and development, including asset impairments from previous years, as well as seismic imaging, exploratory costs for other conventional natural gas prospects, and general and administrative expenses. The net loss for the three months ended March 31, 2024 and the accumulated deficits also include historical deemed dividends to the redemption value of AleAnna Energy’s previous Class 1 Preferred Units (exchanged for Class A and Class C common stock in connection with the Business Combination) based on the redemption features of those units and the related accounting requirements. See “Note 10 — Equity” to the condensed consolidated financial statements for further details. We expect to continue to incur substantial expenses related to our operations, exploration, and development activities, including pre-commercialization efforts as we continue our development of, and seek regulatory approval for, our discoveries and exploration prospects. Since inception, we have incurred net losses annually and do not expect to achieve sustained profitability until the second half of 2025.
22
Results of Operations
Comparison of the three months ended March 31, 2025 and 2024:
| For the Three Months Ended March 31, | Dollar | Percentage | ||||||||||||||
| 2025 | 2024 | Change | Change | |||||||||||||
| Revenues | $ | 644,600 | $ | - | $ | 644,600 | NM | |||||||||
| Operating expenses: | ||||||||||||||||
| Cost of revenues | $ | 838,395 | $ | - | $ | 838,395 | NM | |||||||||
| General and administrative | 3,324,845 | 2,018,524 | 1,306,321 | 65 | % | |||||||||||
| Depreciation | 73,106 | - | 73,106 | NM | ||||||||||||
| Accretion of asset retirement obligation | 33,505 | 33,311 | 194 | 1 | % | |||||||||||
| Total operating expenses | 4,269,850 | 2,051,835 | 2,218,015 | 108 | % | |||||||||||
| Operating loss | (3,625,250 | ) | (2,051,835 | ) | (1,573,415 | ) | 77 | % | ||||||||
| Other income: | ||||||||||||||||
| Interest and other income | 237,605 | 289,337 | (51,732 | ) | -18 | % | ||||||||||
| Change in fair value of derivative liability | - | 173,177 | (173,177 | ) | -100 | % | ||||||||||
| Total other income | 237,605 | 462,514 | (224,909 | ) | -49 | % | ||||||||||
| Loss before income taxes | (3,387,646 | ) | (1,589,321 | ) | (1,798,325 | ) | -113 | % | ||||||||
| Income tax benefit | 48,276 | - | 48,276 | NM | ||||||||||||
| Net loss | (3,339,370 | ) | (1,589,321 | ) | (1,750,049 | ) | -110 | % | ||||||||
| Deemed dividend to Class 1 Preferred Units redemption value | - | (112,673,176 | ) | 112,673,176 | 100 | % | ||||||||||
| Net loss attributable to noncontrolling interests | 1,333,231 | - | 1,333,231 | NM | ||||||||||||
| Net loss attributable to Class A Common stockholders or holders of Common Member Units | $ | (2,006,139 | ) | $ | (114,262,497 | ) | $ | 112,256,358 | 98 | % | ||||||
| Other comprehensive income (loss) | $ | - | ||||||||||||||
| Currency translation adjustment | 1,139,303 | 113,872 | 1,025,431 | 901 | % | |||||||||||
| Comprehensive loss | (2,200,067 | ) | (1,475,449 | ) | 1,073,707 | 73 | % | |||||||||
| Comprehensive income attributable to noncontrolling interests | 1,333,231 | - | - | NM | ||||||||||||
| Total comprehensive loss attributable to Class A Common stockholders | $ | (866,836 | ) | $ | (1,475,449 | ) | $ | 608,613 | 41 | % | ||||||
Revenues and Cost of Revenues
During the three months ended March 31, 2025, all of our revenue was earned through electricity generation and sales at the Casalino and Campopiano renewable natural gas plants that were purchased in July 2024. Cost of revenues consists of feedstock costs, direct labor and overhead necessary to produce RNG and generate electricity. All cost of revenues was related to the RNG assets that were purchased in 2024.
General and Administrative Expenses
General and administrative expenses consist of salaries and benefits, outside professional services including legal, human resources, audit and accounting services, and development stage expenses. We expect to continue to incur expenses to support operations as a public company, including expenses related to existing and future compliance with rules and regulations of the SEC and the Nasdaq, insurance expenses, investor relations, audit fees, professional services and general overhead and administrative costs.
General and administrative expenses increased by $1.3 million, or 65%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. The increase was primarily driven by higher salaries and benefits related to the operating RNG plants and the addition of one full-time corporate employee in late 2024, as well as increased legal, audit and consulting costs associated with public company compliance.
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Contingent Consideration Liability
As of March 31, 2025 and December 31, 2024, the contingent consideration liability was recorded at $26.0 million and $25.0 million, respectively. The estimate of the contingent consideration liability was determined based on inputs including the following as of March 31, 2025 and December 31, 2024: the intercontinental exchange futures prices for European natural gas, Euro to USD exchange rates of 1.08 and 1.04, respectively, and management’s future expected annual Longanesi production. We are required to make formulaic deferred consideration payments effectively equating to 20% to 50% of revenue above certain European natural gas threshold prices. The calculation and timing of such payments are primarily driven by future expected Longanesi production, as modeled by DeGolyer and MacNaughton, as well as forward European natural gas prices. While the timing and quantities of expected Longanesi production were unchanged from December 31, 2024 to March 31, 2025, and we had fully accrued the total capped Euro amount of the liability, average annual European natural gas forward prices declined.
Since the total capped Euro-denominated liability was recorded as of March 31, 2025 and December 31, 2024, and March 31, 2024 and December 31, 2023, any changes in the USD-equivalent amount were entirely due to foreign exchange rate fluctuations. As such, these changes were included in currency translation adjustment for the three months ended March 31, 2025 and 2024.
Interest and Other Income
Interest and other income primarily includes interest earned on cash and cash equivalents. Interest and other income decreased by $0.1 million during the three months ended March 31, 2025, compared to the same period in 2024, primarily due to slightly higher interest earned on larger average cash balances during the 2024 period compared to the 2025 period presented.
Change in Fair Value of Derivative Liability
The change in the fair value of derivative liability related to the Class 1 Preferred Units was nil during the three months ended March 31, 2025, compared to $0.2 million during the same period in 2024. The fair value gain recorded during the three months ended March 31, 2024 (representing a decrease in the liability) was primarily due to a higher liquidation threshold which was driven by capital contributions made during the first quarter of 2024 through the Class 1 Preferred Units. The derivative liability was reduced from $0.2 million as of December 31, 2023 to zero as of March 31, 2024 and was ultimately derecognized in conjunction with the Business Combination.
Currency Translation Adjustment
For the purposes of presenting consolidated financial statements, the assets and liabilities of our Euro operations are translated to USD at the exchange rate on the reporting date. The income and expenses are translated using average exchange rates. Foreign currency differences that arise on translation for consolidated purposes are recognized as a currency translation adjustment in other comprehensive loss on the consolidated statements of operations and comprehensive loss.
The currency translation adjustment increased by $1.0 million or 901% for the three months ended March 31, 2025 compared to the same period in 2024. This increase was due to the fluctuation of the exchange rates between the Euro and the U.S. Dollar as well as the level of our activities.
Segment Considerations
Our operations consist of one reportable segment reflecting the manner in which operations are managed and the criteria used by the chief operating decision maker (“CODM”), our Executive Chairman and Chief Executive Officer, collectively, to evaluate performance, develop strategy, and allocate resources.
AleAnna’s principal products include conventional natural gas produced from onshore exploration and development, and electricity and RNG derived from animal and agricultural waste. As of March 31, 2025, we had not yet recognized revenue from our conventional natural gas activities and had only recently begun deriving revenue from sales of electricity related to our RNG business.
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While we have recently acquired three RNG assets, these assets are still in the early stages of development which may include expansion and installation of upgrading units to refine biomethane into renewable natural gas (rather than conversion to electricity). These assets have not generated significant revenues or incurred material expenses. As of and for the year ended December 31, 2024, the CODM was primarily focused on capital investing decisions, strategy, and forward-looking investment economics. While the CODM monitors cash reserves and overall enterprise liquidity, extensive review and analysis of our performance and loss statements is not performed beyond review of the consolidated financial statements. As such, the CODM continues to assess our financial performance as a single enterprise on a consolidated basis, without distinguishing between conventional natural gas and RNG operations. Given we have not generated significant revenue or profits and are focused on development activities, the CODM does not utilize a specific measure of profit or loss to assess performance. The CODM does not monitor specific expense categories separately. The financial information reviewed by the CODM is consistent with the audited consolidated balance sheets and statements of operations and cash flows included herein.
All of the Company’s primary operating activities and assets remain located in Italy. We will continue to assess the need for including multiple reportable segments as the business evolves.
Liquidity, Capital Resources and Operations
We have generated minimal revenues from our operations to date and we had an accumulated deficit of $193.1 million as of March 31, 2025. We had $27.8 million in cash and cash equivalents on March 31, 2025. The Company’s continuing operations, as intended, are dependent upon its ability to generate cash flows or obtain additional financing. Between January 2024 and May 2024, prior to the Business Combination, we received an aggregate of $62.1 million in capital contributions from AleAnna Energy members resulting in the issuance of 62,100 Class 1 Preferred Units, to fund operating costs, capital expenditures, Business Combination related transaction expenses, and to provide working capital to meet our liabilities and commitments as they become due. We have also received approximately $1.1 million from exercises of Public Warrants between January 2025 and May 2025. In addition, we are exploring Resource Backed Loan (“RBL”) financing, renewable natural gas project loan products and other financing arrangements with several financial institutions; however, there is no guarantee that such financing will be available to us. As a normal part of our business, depending on market conditions, we may from time to time consider opportunities to issue equity or debt securities to raise additional capital. Changes in our operating plans, lower than anticipated revenues, increased expenses, acquisitions or other events may cause us to seek additional debt or equity financing in future periods. There can be no guarantee that financing will be available on acceptable terms or at all.
Presently, Padana is the operator of the Longanesi field under a Unitized Operating Agreement, and other companies in the future may operate some of the properties in which we have an interest. The failure of an operator of our wells or joint venture participant to adequately perform operations, an operator’s breach of the applicable agreements or an operator’s failure to act in ways that are in our best interest could reduce our production and revenues.
To mitigate operator risks, we monitor the operational risks, credit risk, financial position and liquidity of Padana. Operational risks are monitored and acted on through: (i) periodic meetings with Padana, through a formal committee known as the “Technical Committee”, to examine upcoming activities and discuss questions and concerns, (ii) through the receipt and analysis of daily reports, (iii) through requesting unscheduled calls with Padana where areas of concern are identified, and (iv) through occasional site visits. Further, Padana’s credit risk, financial position, and liquidity are periodically evaluated through review of the financial condition of Padana’s parent organization, Gas Plus S.p.A., which is a publicly-traded company on the Italian Stock Exchange (Euronext Milan). We are able to continuously monitor the financial health of Gas Plus S.p.A. through exchange-required public disclosures, including half-annual and annual financial statements, corporate presentations, and press releases.
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Cash Flows
The following table includes our cash flow data for the three months ended March 31, 2025 and 2024:
| For the Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Consolidated Statement of Cash Flows Data: | ||||||||
| Net cash used in operating activities | (1,859,544 | ) | (2,377,061 | ) | ||||
| Net cash used in investing activities | (1,219,315 | ) | (3,961,410 | ) | ||||
| Net cash provided by financing activities | 276,253 | 44,348,250 | ||||||
Cash used in operating activities
Cash used in operating activities decreased by $0.5 million for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. This decrease primarily reflects collections on electricity sales receivable and the timing of payments of accounts payable during the three months ended March 31, 2025 compared to the same period in 2024.
Cash used in investing activities
Cash used in investing activities decreased by $2.7 million for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. In both periods presented, cash used in investing includes continued completion and tie in of the Longanesi wells. The decrease in cash used in investing activities primarily reflects a lower level of Longanesi completion and tie-in activity during three months ended March 31, 2025 compared to the same period in 2024.
Cash provided by financing activities
Cash provided by financing activities in the three months ended March 31, 2025 reflects proceeds from cash exercises of Public Warrants.
Cash provided by financing activities in the three months ended March 31, 2024 reflects pre-Business Combination issuances of AleAnna Energy Class 1 Preferred Units used to fund our operations. Such Class 1 Preferred Units were exchanged for Class A and Class C commons stock as part of the Business Combination.
Contractual Obligations and Other Commitments
Participation Agreements and Blugas ORRI
In the normal course of business, we enter into agreements with other entities to assist in the performance of drilling of the Longanesi field. On June 26, 2009, we entered into a Participation Agreement with Padana for the drilling of the ‘Longanesi 1 exploration well, ’San Potito’ concession and ‘Abbadessee 1’ exploration,’ collectively referred to as the Longanesi field.
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The Unified Operating Agreement arrangement was originally signed between Eni and Grove and dated September 26, 2009. However, Padana has succeeded Eni as the operator and 66.5% working interest owner, and we succeeded Grove as the non-operator and 33.5% working interest owner. On July 13, 2016, we acquired a 33.5% working interest in the Longanesi field from Enel, and, as part of the purchase, acquired a legacy contingent liability arising from an agreement between the Longanesi working interest’s original owner Grove Energy and Blugas. Blugas retained an interest akin to an ORRI, whereby Blugas was entitled to physical delivery of 20% of the first 350 million standard cubic meters (approximately 2,472 106ft3) produced from the Longanesi field. Prior to the Blugas settlement in May 2024 (as further described below), in accounting for the acquisition of the 33.5% working interest, we did not recognize an asset or liability in the consolidated financial statements related to the Blugas ORRI as our SEC Case reserves estimates contemplated the contractual arrangement and physical gas delivery to Blugas, such that the gas revenues attributable to our 33.5% working interest were reduced to reflect sale of the Blugas quantity and payment of such revenues (cash outflows to Blugas).
The physical volumes due to Blugas were being contested by us as usury because we considered, among other reasons, that extraction services and all associated risks are executed by us and that participation by Blugas was limited to financing a part of the sum necessary to start drilling, without participation in the construction and exploitation of the reservoir, and therefore do not share the risks or costs, which had increased compared to the initial forecast of the investment.
On May 28, 2024, we entered into the Blugas Settlement Agreement regarding the Blugas ORRI whereby Blugas was entitled to physical delivery of 20% of the first 350 million standard cubic meters (approximately 2,472 106ft3) produced from the Longanesi field. Under the terms of the Blugas Settlement Agreement, we paid Blugas approximately €5 million, plus an additional €1.1 million in applicable VAT, or a total of approximately $6.6 million. In exchange, we were released from any future liability related to the Blugas ORRI. As a result of the transactions contemplated by the Blugas Settlement Agreement, our 33.5% working interest in the Longanesi field is now unencumbered except for normal government royalties (10%). The Blugas Settlement Agreement was accounted for as an acquisition of the Blugas ORRI claim with a corresponding increase to the expected future cash flows from our reserves. Our year-end December 31, 2023 reserve quantities included the 20% of 350 million standard cubic meters (approximately 2,472 106ft3) allocable to the Blugas ORRI in our proved gas reserves. However, the required payments to Blugas associated with the sale of such quantities were reflected as cash outflows (costs) in our year-end December 31, 2023 reserve report as if such amounts were paid to Blugas. Following settlement, our year-end December 31, 2024 reserve quantities continue to include the 20% of 350 million standard cubic meters (approximately 2,472 106ft3), however, the previously required payments to Blugas associated with the sale of such quantities were no longer reflected as cash outflows (costs) as if such amounts were paid to Blugas. As the cash outflows (costs) were no longer reflected as if paid to Blugas, such amounts are reflected in our December 31, 2024 reserve report as allocable to our unencumbered 33.5% working interest.
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Contingent Consideration Liability
In connection with our purchase of our 33.5% working interest in the Longanesi field, consideration paid included €7 million cash and up to €24 million of deferred consideration payable upon production of the Longanesi field. The deferred consideration is payable based on a formulaic calculation which is predominantly dependent on sales volumes and spot natural gas prices during the first 12 years of production (the “Earn-Out Period”). There will be no deferred consideration due if Longanesi is not developed and no deferred consideration due if average annual gas prices are less than €3.65/Mcf over the Earn-Out Period. Upon first production, AleAnna will also be required to reserve cash collateral of €3 million related to the contingent consideration liability which will be classified as restricted cash in future balance sheets and may be used to satisfy the contingent consideration liability as payments become due.
We recognized a liability for the contingent consideration in accordance with ASC 450, Contingencies (“contingent consideration liability”). As of March 31, 2025, and December 31, 2024, the total contingent consideration liability was recorded at $26.0 million and $25.0 million, respectively.
Emerging Growth Company Accounting Election
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 are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect not to take advantage of the extended transition period and comply with the requirements that apply to non-emerging growth companies, and any such election to not take advantage of the extended transition period is irrevocable. We expect to be an emerging growth company at least through 2025.
Item 3. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the supervision and participation of our Principal Executive Officer and Principal Financial Officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report.
Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were not effective due to material weaknesses in internal control over financial reporting previously identified and described in our Annual Report on Form 10-K for the year ended December 31, 2024.
Changes in Internal Control over Financial Reporting
Other than changes that are being implemented as a result of remediation activities related to the material weaknesses noted above, there has been no change in our internal control over financial reporting during the most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II OTHER INFORMATION
Item 1. Legal Proceedings
For a description of material pending legal proceedings, see the discussion set forth under the heading “Contingencies and Legal Proceedings” in Note 9 to our Condensed Consolidated Financial Statements, which is incorporated by reference herein.
Item 1A. Risk Factors
There have been no material changes to the risk factors disclosed under “Item 1A. Risk Factors” of our 2024 Form 10-K. For additional information concerning our risk factors, please refer to “Item 1A. Risk Factors” of our 2024 Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Repurchase of Securities
None.
Item 4. Mine Safety Disclosures
Not Applicable.
Item 5. Other information
Item 6. Exhibits
| * | Filed herewith. |
| ** | Furnished herewith. |
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
| May 15, 2025 | AleAnna, Inc. | |
| By: | /s/ Tristan Yopp | |
| Name: | Tristan Yopp | |
| Title: | Chief Financial Officer | |
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