AleAnna, Inc.

Previous wording

Our recent drilling and exploration 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 and six months ended June 30, 2025 or 2024. We had no other exploratory or development drilling during three and six months ended June 30, 2025 or 2024. Our Longanesi, Trava and Gradizza wells were classified by DeGolyer 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. However, as noted in the “Recent Developments” section below, we achieved first production from the Longanesi field in 2025.

Current wording

Our recent drilling and exploration 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 and nine months ended September 30, 2025 or 2024. We had no other exploratory or development drilling during three and nine months ended September 30, 2025 or 2024. Our Longanesi, Trava and Gradizza wells were classified by DeGolyer 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. However, as noted in the “Recent Developments” section below, we achieved first production from the Longanesi field in 2025.

Previous wording

During both the three and six months ended June 30, 2025, we generated approximately $3.3 million of revenue from sales of our share of natural gas from the Longanesi field. Results from the Longanesi field have been above expectations, with a stabilized production rate of approximately 28 million cubic feet per day (“MMcf/d”), which was achieved ahead of the anticipated 3-month ramp up timeline for this milestone.

Current wording

During both the three and nine months ended September 30, 2025, we generated approximately $10.6 million and $13.9 million of revenue from sales of our share of natural gas from the Longanesi field. Results from the Longanesi field have been above expectations, with a stabilized production rate of approximately 28 million cubic feet per day (“MMcf/d”), which was achieved ahead of the anticipated 3-month ramp up timeline for this milestone.

Previous wording

During the three and six months ended June 30, 2025, we generated approximately $0.7 million and $1.4 million, respectively, 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 in order to produce biomethane which will be processed through reciprocating generators in order to generate electricity which 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.

Current wording

During the three and nine months ended September 30, 2025, we generated approximately $0.6 million and $2.0 million, respectively, 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 in order to produce biomethane which will be processed through reciprocating generators in order to generate electricity which 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.

Previous wording

We are also subject to a Valued-Added Tax (“VAT”), a broadly-based consumption tax assessed on the value added to goods and services. VAT generally applies to most goods and services bought and sold within the EU. In certain cases, including cross-border sales to business customers and sales of biogas within Italy, we are not required to collect VAT on revenues. To date, we have incurred higher VAT on purchases (input VAT) than we have collected on sales (output VAT), resulting in a net VAT refund receivable. As of June 30, 2025 and December 31, 2024, we had VAT receivables of $8.4 million, and $6.8 million, respectively. Under Italian tax law, VAT receivables may be used to offset other tax liabilities, including payroll taxes, income taxes, and other taxes payable to the Italian government.

Current wording

We are also subject to a Valued-Added Tax (“VAT”), a broadly-based consumption tax assessed on the value added to goods and services. VAT generally applies to most goods and services bought and sold within the EU. In certain cases, including cross-border sales to business customers and sales of biogas within Italy, we are not required to collect VAT on revenues. To date, we have incurred higher VAT on purchases (input VAT) than we have collected on sales (output VAT), resulting in a net VAT refund receivable. As of September 30, 2025 and December 31, 2024, we had VAT receivables of $8.5 million and $6.8 million, respectively. Under Italian tax law, VAT receivables may be used to offset other tax liabilities, including payroll taxes, income taxes, and other taxes payable to the Italian government.

Previous wording

Our net income or loss attributable to common stockholders was $0.4 million (income) and $1.6 million (loss) for the three and six months ended June 30, 2025, respectively, and $43.1 million and $157.5 million for the same periods in 2024. As of June 30, 2025 and December 31, 2024, we had an accumulated deficit of $192.7 million and $191.0 million, respectively. The majority of these accumulated 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 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 audited 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. We achieved quarterly net income for the first time during the three months ended June 30, 2025. We expect to achieve sustained profitability during the second half of 2025.

Current wording

Our net income attributable to common stockholders was $3.3 million and $1.7 million for the three and nine months ended September 30, 2025, respectively, as compared to net loss attributable to common stockholder of $1.1 million and $158.4 million for the same periods in 2024. As of September 30, 2025 and December 31, 2024, we had an accumulated deficit of $189.4 million and $191.0 million, respectively. The majority of these accumulated 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 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 audited 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. We achieved quarterly net income for the first time during the second quarter of 2025. We achieved net income during the three and nine months ended September 30, 2025 and 2024. We expect to continue sustained profitability.

Previous wording

Comparison of the three and six months ended June 30, 2025 and 2024

Current wording

Comparison of the three and nine months ended September 30, 2025 and 2024

Previous wording

During the three and six months ended, our revenue was earned through sales of our share of natural gas production from the Longanesi field and from electricity generation and sales at the Casalino and Campopiano renewable natural gas plants. Cost of revenues from sales of electricity 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.

Current wording

During the three and nine months ended September 30, 2025, our revenue was earned through sales of our share of natural gas production from the Longanesi field and from electricity generation and sales at the Casalino and Campopiano renewable natural gas plants. Cost of revenues from sales of electricity consists of feedstock costs, direct labor and overhead necessary to produce RNG and generate electricity. Cost of revenues from sales of natural gas consists of gas tariffs and royalties, as well as rent expense.

Previous wording

General and administrative expenses increased by $0.8 million, or 87%, and $2.1 million or 72% for the three and six months ended June 30, 2025, compared to same periods in 2024. The increases were primarily due to increases in legal, audit and consulting fees to support public company operations.

Current wording

General and administrative expenses increased by $0.6 million or 38% and $2.7 million or 61% for the three and nine months ended September 30, 2025, compared to same periods in 2024. The increases were primarily due to increases in legal, audit and consulting fees to support public company operations.

Previous wording

Refer to the descriptions of lease operating expenses and depreciation and depletion provided in the “Expenses” section above. As of June 30, 2024, the Casalino and Campopiano plants had not yet been acquired, and the Longanesi field had not commenced production. Accordingly, period-over-period comparisons for these expense categories are not meaningful.

Current wording

Refer to the descriptions of lease operating expenses and depreciation and depletion provided in the “Expenses” section above. As of September 30, 2024, the Longanesi field had not commenced production. The Casalino and Campopiano plants were acquired during the third quarter of 2024. Accordingly, period-over-period comparisons for these expense categories are not meaningful.

Previous wording

Since the total capped Euro-denominated liability was recorded as of June 30, 2025 and December 31, 2024, and June 30, 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 and six months ended June 30, 2025 and 2024.

Current wording

Since the total capped Euro-denominated liability was recorded as of September 30, 2025 and December 31, 2024, and September 30, 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 and nine months ended September 30, 2025 and 2024.

Previous wording

Interest and other income (expenses) primarily includes interest earned on cash and cash equivalents. Interest and other income decreased by $0.5 million and $0.5 million during the three and six months ended June 30, 2025 compared to the same periods in 2024, primarily due to higher interest (higher rates) earned on larger average cash balances during the 2024 periods compared to the 2025 periods presented.

Current wording

Interest and other income (expenses) primarily includes interest earned on cash and cash equivalents. Interest and other income decreasedby $0.2 million or 63% and $0.8 million or 59% during the three and nine months ended September 30, 2025 compared to the same periods in 2024, primarily due to higher interest (higher rates) earned on larger average cash balances during the 2024 periods compared to the 2025 periods presented.

Previous wording

The change in the fair value of derivative liability related to the Class 1 Preferred Units was nil during the three and six months ended June 30, 2025, compared to nil during the three months ended June 30, 2024 and $0.2 million during the six months ended June 30, 2024. The fair value gain recorded during the six months ended June 30, 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 during the first quarter of 2024 and was ultimately derecognized in conjunction with the Business Combination.

Current wording

The change in the fair value of derivative liability related to the Class 1 Preferred Units was nil during the three and nine months ended September 30, 2025, compared to nil during the three months ended September 30, 2024 and $0.2 million during the nine months ended September 30, 2024. The fair value gain recorded during the nine months ended September 30, 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 during the first quarter of 2024 and was ultimately derecognized in conjunction with the Business Combination.

Previous wording

The currency translation adjustment increased by $3.9 million and $4.9 million for the three and six months ended June 30, 2025, respectively, compared to the same periods in 2024. This increase was primarily driven by fluctuation of the exchange rates between the Euro and the U.S. Dollar as well as the level of our activities. This increase was primarily driven by fluctuations in the Euro to U.S. Dollar exchange rates and the level of our Euro-denominated activities. The spot rate strengthened from December 31, 2024 to June 30, 2025, and the average exchange rates were higher during the 2025 periods, resulting in larger positive currency translation adjustments relative to the 2024 periods.

Current wording

The currency translation adjust ment decreased by $1.7 million and increased by $3.2 million for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024. The decrease and increase were primarily driven by fluctuations of the exchange rates between the Euro and the U.S. Dollar as well as the level of our activities. This change was primarily driven by fluctuations in the Euro to U.S. Dollar exchange rates and the level of our Euro-denominated activities. The spot rate strengthened from December 31, 2024 to September 30, 2025, and the average exchange rates were higher during the 2025 periods, resulting in larger positive currency translation adjustments relative to the 2024 periods.

Previous wording

During the second quarter of 2025, in connection with the commencement of production at the Longanesi field, our evaluation of operating results between conventional and renewable operations became more relevant to the chief operating decision maker, resulting in further disaggregation of the Company’s single reportable segment. As a result, as of June 30, 2025, we determined that we have two operating segments, each of which also qualifies as a reportable segment, based on the manner in which the chief operating decision maker (“CODM”)—the Company’s Executive Director and Chief Executive Officer, collectively—reviews financial information to assess performance and allocate resources.

Current wording

During the second quarter of 2025, in connection with the commencement of production at the Longanesi field, the Company’s evaluation of operating results between conventional and renewable operations became more relevant to the chief operating decision maker, resulting in further disaggregation of the Company’s single reportable segment. As a result, as of September 30, 2025, we determined that we have two operating segments, each of which also qualifies as a reportable segment, based on the manner in which the chief operating decision maker (“CODM”)—the Company’s Executive Director and Chief Executive Officer, collectively—reviews financial information to assess performance and allocate resources.

Previous wording

Reconciling items include items not directly attributable to either reportable segment. These include corporate financing and investing activities, as well as administrative functions that support the Company’s overall operations. These items are presented in the segment reconciliation but do not constitute a reportable segment.

Current wording

Reconciling items include items not directly attributable to either reportable segment. These include corporate financing and investing activities, as well as administrative functions that support the Company’s overall operations. These items are presented in the segment reconciliation but does not constitute a reportable segment.

Previous wording

The three and six months ended June 30, 2025 reflect the revenue and expense categories noted above in the consolidated Results of Operations. For the three and six months ended June 30, 2024, the Company had no revenues, immaterial RNG assets, and minimal operating expenses outside of corporate general and administrative expenses. The vast majority of natural gas development activities were capitalized prior to the second quarter of 2025.

Current wording

The three and nine months ended September 30, 2025 reflect the revenue and expense categories noted above in the consolidated Results of Operations. For the three and nine months ended September 30, 2024, the Company had no revenues, immaterial RNG assets, and minimal operating expenses outside of corporate general and administrative expenses. The vast majority of natural gas development activities were capitalized prior to the second quarter of 2025.

Previous wording

We have begun generating revenue from our operations, although total revenues to date have been limited. We had an accumulated deficit of $192.7 million as of June 30, 2025. We had $22.8 million in unrestricted cash and cash equivalents on June 30, 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 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.

Current wording

We have begun generating revenue from our operations. We had an accumulated deficit of $189.4 million as of September 30, 2025. We had $31.2 million in unrestricted cash and cash equivalents on September 30, 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 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.

Previous wording

The following table includes our cash flow data for the six months ended June 30, 2025 and 2024:

Current wording

The following table includes our cash flow data for the nine months ended September 30, 2025 and 2024:

Previous wording

Cash used in operating activities

Current wording

Cash generated (used) used in operating activities

Previous wording

Cash used in operating activities decreased by $2.1 million for the six months ended June 30, 2025, compared to the same period in 2024. This decrease primarily reflects cash revenues from the Longanesi field from May and June 2025, collections on electricity sales receivable from RNG plants, and the timing of payments of accounts payable during the six months ended June 30, 2025 compared to the same period in 2024.

Current wording

Cash generated in operating activities increased by $13.3 million for the nine months ended September 30, 2025, compared to the same period in 2024. This increase primarily reflects cash revenues from the Longanesi field from the second half of 2025, collections on electricity sales receivable from RNG plants, and the timing of payments of accounts payable during the nine months ended September 30, 2025 compared to the same period in 2024.

Previous wording

Cash used in investing activities decreased by $5.6 million for the six months ended June 30, 2025, compared to the same period in 2024. In both periods, investing cash flows primarily reflected continued development of the Longanesi wells. The decrease during the six months ended June 30, 2025 was driven by a lower level of completion and tie-in activity relative to the same period in 2024. During the second quarter of 2025, the five Longanesi wells were brought online, resulting in only a partial quarter of capitalized costs. Capital expenditures during the 2025 period primarily reflected final tie-in work and capital calls from our operating partner, Padana, for the permanent Longanesi processing facility. In contrast, the 2024 period included a full six months of development and tie-in costs for the Longanesi field, in addition to the acquisition of the Campagnatico RNG asset.

Current wording

Cash used in investing activities increased by $14.3 million for the nine months ended September 30, 2025, compared to the same period in 2024. In both periods, investing cash flows primarily reflected continued development of the Longanesi wells. The increase during thenine months ended September 30, 2025 was driven by a lower level of completion and tie-in activity relative to the same period in 2024. During the second quarter of 2025, the five Longanesi wells were brought online, resulting in only a partial year of capitalized costs. Capital expenditures during the 2025 period primarily reflected final tie-in work and capital calls from our operating partner, Padana, for the permanent Longanesi processing facility. In contrast, the 2024 period included a full nine months of development and tie-in costs for the Longanesi field, in addition to the acquisition of the Campagnatico RNG asset.

Previous wording

Cash provided by financing activities during the six months ended June 30, 2025 reflects proceeds from cash exercises of Public Warrants.

Current wording

Cash provided by financing activities during the nine months ended September 30, 2025 reflects proceeds from cash exercises of Public Warrants.

Previous wording

Cash provided by financing activities during the six months ended June 30, 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.

Current wording

Cash provided by financing activities during the nine months ended September 30, 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.

Previous wording

We recognized a liability for the contingent consideration in accounting for the asset acquisition in accordance with ASC 450,Contingencies(“contingent consideration liability”). As of June 30, 2025 and December 31, 2024, the total contingent consideration liability was recorded at $28.1 million and $25.0 million, respectively.

Current wording

We recognized a liability for the contingent consideration in accounting for the asset acquisition in accordance with ASC 450,Contingencies(“contingent consideration liability”). As of September 30, 2025 and December 31, 2024, the total contingent consideration liability was recorded at $28.1 million and $25.0 million, respectively, with $10.8 million and nil being classified as a short-term and $17.4 million and the entire balance being classified as a long-term liability for the same respective periods.