AleAnna, Inc.

Current report

Item 1A. Risk Factors

Previous report

We have previously identified material weaknesses in the internal control over financial reporting of AleAnna Energy, LLC. If we are unable to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report the Company’s financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results, and we may face litigation as a result.

Previous report

Effective internal controls are necessary to provide reliable financial reports and prevent fraud. AleAnna is in the process of adding resources with the appropriate level of experience and technical expertise to oversee its business processes and controls. While certain controls exist, AleAnna Energy, LLC has not yet formally designed and implemented the full set of business processes and related internal controls required to meet the standards applicable to a public company.

Previous report

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of annual or interim financial statements would not be prevented or detected on a timely basis.

Previous report

Management of AleAnna, Inc., as the registrant, is responsible for evaluating and remediating the internal control environment of AleAnna Energy, LLC. In connection with the preparation of AleAnna, Inc.’s consolidated financial statements as of and for the year ended December 31, 2024, management of AleAnna identified material weaknesses in internal control over financial reporting at AleAnna Energy, LLC. Specifically, management determined that AleAnna Energy LLC did not maintain an effective control environment in accordance with the COSO framework, as it did not maintain a sufficient complement of accounting and reporting resources commensurate with its financial reporting requirements. Details of the material weaknesses were as follows:

Previous report

Although AleAnna Energy LLC was excluded from management’s assessment of internal control over financial reporting as of December 31, 2024, in reliance on the one-year exemption provided under the SEC’s rules for newly acquired businesses, we disclosed these material weaknesses due to their potential impact on our consolidated financial reporting.

Previous report

We are implementing a plan to remediate the material weaknesses identified. Our plan includes the below:

Previous report

We cannot assure you that these measures will remediate the material weaknesses described above. The implementation of these remediation measures will require validation and testing of the design and operating effectiveness of the Company’s internal controls over a sustained period of financial reporting cycles and, as a result, the timing of when the Company will be able to remediate the material weaknesses is uncertain and the Company may not remediate these material weaknesses during the year ended December 31, 2025. If the steps the Company takes do not remediate the material weaknesses in a timely manner, there could be a reasonable possibility that these control deficiencies or others may result in a material misstatement of its annual or interim financial statements that would not be prevented or detected on a timely basis. This, in turn, could jeopardize the Company’s ability to comply with its reporting obligations, limit its ability to access the capital markets and adversely impact its stock price.

Previous report

We are required to develop and maintain proper and effective internal control over financial reporting in order to comply with Section 404 of the Sarbanes-Oxley Act. In addition, because of our status as an emerging growth company, you will not be able to depend on any attestation from our independent registered public accountants as to our internal control over financial reporting for the foreseeable future.

Previous report

While AleAnna, Inc has implemented certain internal controls at the holding company level, these controls do not yet cover the consolidated operations of AleAnna Energy, LLC, which continues to operate with control deficiencies.

Previous report

We are required by Section 404 of the Sarbanes-Oxley Act to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting in our second annual report following the completion of the Business Combination. The process of further designing, documenting, and implementing internal control over financial reporting required to comply with this requirement is ongoing, and is time-consuming, costly and complicated. During the course of our evaluation and testing, we may identify additional material weaknesses. If our remediation efforts are not successful, our management may be unable to assert that our internal control over financial reporting is effective in future filings. In addition, if we fail to achieve and maintain the adequacy of our internal controls, as such standards are modified, supplemented or amended from time to time, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act.

Previous report

In addition, our independent registered public accounting firm will not be required to attest formally to the effectiveness of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act for as long as we qualify for scaled “smaller reporting company” disclosure under the Exchange Act. Accordingly, you will not be able to depend on any attestation concerning our internal control over financial reporting from our independent registered public accountants for the foreseeable future.

Previous report

Although we are actively working to improve our internal control environment, we cannot be certain as to the timing of completion of our ongoing evaluation, testing and remediation actions or the impact of such actions on our operations. If we are not able to implement the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner or with adequate compliance, there could be a negative reaction in the financial markets due to a loss of confidence in the reliability of our financial statements. In addition, we may be required to incur costs in improving our internal control system and the hiring of additional personnel. Any such action could negatively affect our results of operations and cash flows.