New ERA Energy & Digital, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 1. ORGANIZATION AND BASIS OF PRESENTATION

Organization and Nature of Operations

References herein to New Era Energy & Digital, Inc. (“New Era”, “NUAI” or the “Company”), include New Era and its consolidated subsidiaries. In these interim consolidated financial statements, the words “we,” “our,” “ours” and “us” refer only to New Era and its consolidated subsidiaries or, in certain contexts, to New Era or an individual consolidated subsidiary and not to any other person, with certain exceptions.

The Company is a vertically-integrated developer and operator of next-generation digital infrastructure and integrated power assets accelerating speed-to-power for advanced artificial intelligence (“AI”) hyperscalers. In the second half of 2025, we executed a strategic pivot from our legacy natural gas operations to focus exclusively on developing data center campuses where power, land, and connectivity can be assembled and delivered on accelerated timelines. Our mission is to deliver speed-to-power by converging behind-the-meter power flexibility with data center development capabilities. Our primary strategy is to aggregate and entitle “Powered Land” and to develop “Powered Shells” and build-to-suit assets in power-advantaged markets, beginning with the Permian Basin, which benefits from energy abundance, regulatory clarity, and fiber connectivity.

We are initially focused on our flagship project, Texas Critical Data Centers LLC (“TCDC”), a 493-acre campus in Ector County, Texas, designed to support over 1 gigawatt (“GW”) of potential compute capacity through phased development, with projected power delivery beginning as early as the end of 2027. We believe our proximity to major natural gas pipelines, fiber networks and carbon dioxide (“CO2”) pipelines will provide us with the ability to serve our customers lower transmission costs and best-in-class uptime for purposes of reliably generating AI compute to capitalize on the AI revolution. We intend to execute through partnering across engineering, construction, procurement, power generation and sustainability with a world-class developer partner to provide our hyperscaler tenants with certainty of execution and speed-to-power.

The Company’s current operations also include the exploration, development, and production of helium, natural gas, oil, and natural gas liquids (“NGLs”). The Company’s producing oil and gas assets and non-producing acreage are primarily located in Chaves County, New Mexico. The Company also owns overriding royalty interests located in Howard County, Texas.

Basis of Presentation

The accompanying condensed consolidated financial statements of the Company as of June 30, 2026 and December 31, 2025, have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) issued by the Financial Accounting Standards Board (“FASB”). The accompanying condensed consolidated financial statements reflect all adjustments including normal recurring adjustments, which, in the opinion of management, are necessary to present fairly the financial position, results of operations, and cash flows for the periods presented. References to GAAP issued by the FASB in these accompanying notes to the condensed consolidated financial statements are to the FASB Accounting Standards Codification (“ASC”). These interim unaudited consolidated financial statements with the notes herein have been condensed and should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2025 that was filed with the Securities and Exchange Commission (“SEC”) on March 12, 2026.

Emerging Growth Company

Section 102(b)(1) of the Jumpstart Our Business Startups Act (“JOBS Act”) exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. 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 applications 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, until such time the Company is no longer considered to be an emerging growth company. At times, the Company may elect to early adopt a new or revised standard.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Liquidity and Going Concern

The Company recorded a net loss of $31,266,599 for the six months ended June 30, 2026 and $6,926,260 for the six months ended June 30, 2025. As of June 30, 2026, the Company had a working capital surplus of $82,879,767 and a cash and cash equivalent balance of $69,821,390.

During the three months ended June 30, 2026, the Company significantly strengthened its liquidity position. On April 8, 2026, TCDC, the Company’s wholly owned subsidiary, entered into a senior secured term loan facility providing for borrowings of up to $290.0 million, including an initial committed tranche of $20.0 million, which was fully funded on April 13, 2026. Access to additional amounts under the term loan facility beyond the initial committed tranche is subject to lender approval and the satisfaction of certain conditions. On April 10, 2026, the Company completed an underwritten public offering resulting in proceeds, net of underwriters’ discount and issuance costs, of approximately $93.4 million, and the underwriters’ exercise of their option to purchase additional shares resulted in additional net proceeds of approximately $14.1 million. The Company used a portion of the offering proceeds to repay in full the outstanding borrowings under its senior secured convertible promissory note.

The Company’s primary sources of liquidity include proceeds from equity and debt financings and cash received from oil, natural gas and product sales.

The Company’s future capital requirements will depend on many factors, including its future rate of revenue growth and the timing and extent of expenditures to support sales, marketing, and infrastructure development, including the buildout of data center capacity. The Company currently expects cash requirements of approximately $25 million to $30 million over the next twelve months. Upon execution of binding term sheets or definitive agreements with data center users, these expected expenditures may increase materially; the Company expects that any such increases would be funded through a combination of customer prepayments, additional borrowings under the term loan facility, equity offerings and cash on hand.

In connection with the preparation of the condensed consolidated financial statements for the three months ended June 30, 2026, management assessed the Company’s ability to continue as a going concern in accordance with ASC Subtopic 205-40, Presentation of Financial Statements — Going Concern. In its Quarterly Report for the three months ended March 31, 2026, the Company disclosed that its liquidity condition at that time, including recurring net losses, a working capital deficit, and significant near-term payment obligations, raised substantial doubt about its ability to continue as a going concern.

As a result of the debt and equity financings completed in April 2026, the repayment of the senior secured convertible promissory note and current and forecasted operating uses of cash, management has concluded that the Company’s existing cash and cash equivalents on hand and expected sources of liquidity are sufficient to fund its operations and meet its obligations as they become due for at least twelve months from the date these condensed consolidated financial statements are issued. Accordingly, the conditions that previously raised substantial doubt about the Company’s ability to continue as a going concern have been alleviated, and substantial doubt no longer exists as of the issuance date of these condensed consolidated financial statements.

Cash, Cash Equivalents, and Restricted Cash

The Company considers all highly liquid instruments purchased with an original maturity date of three months or less to be cash equivalents. Cash equivalents are stated at cost plus accrued interest, which approximates market value, and are primarily invested in liquid highly-rated instruments issued by government or municipal entities with strong credit standings. Restricted cash consists of contributions made by the Company to TCDC that are required under the Company’s term loan facility to be deposited into a blocked account controlled by the administrative agent. The funds are not available for use until specified disbursement conditions under the facility are satisfied and are pledged as collateral thereunder. The Company expects the funds to be used within the next twelve months and has classified the balance as current.

The following table reconciles cash, cash equivalents, and restricted cash on the condensed consolidated balance sheets to the condensed consolidated statements of cash flows:

Receivables and Allowance for Expected Losses

The Company’s receivables result primarily from the sale of natural gas and NGLs as well as billings to joint interest owners for properties in which the Company serves as the operator. Receivables from product sales are generally due within 30 to 60 days after the last day of each production month and do not bear any interest. Receivables associated with joint interest billings are regularly reviewed by management for collectability, and they establish or adjust an allowance for expected losses as necessary. The Company determines its allowance for each type of receivable by considering a number of factors, including the length of time accounts receivable are past due, the Company’s previous loss history, the debtor’s current ability to pay its obligation to the Company, the condition of the general economy and the industry as a whole. During the three and six months ended June 30, 2026 and 2025, the Company did not record any provision for expected credit losses or write off any accounts receivables.

Impairment of Long-lived Assets

The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its carrying amount. The Company recorded an impairment charge of $250,000 and $625,000 related to a partially completed plant during the three and six months ended June 30, 2026, respectively. No impairment charges were recorded during the three and six months ended June 30, 2025.

Stock-based Compensation

The Company accounts for its stock-based compensation awards in accordance with ASC Topic 718, Compensation-Stock Compensation (“ASC 718”). ASC 718 requires all stock-based payments to employees and non-employees including grants of stock options, to be recognized as expense in the consolidated statements of operations based on their grant date fair values. Our accounting policy for the recognition of compensation expense for awards with only a service condition is to expense the costs on a straight-line basis over the life of the award. For performance and market based awards, our accounting policy is to recognize compensation expense separately for each vesting tranche over that tranche’s requisite service period. Stock-based compensation expense is not adjusted for actual achievement of market conditions.

The Company periodically issues common stock and common stock options to consultants for various services. Costs of these transactions are measured at the fair value of the service received or the fair value of the equity instruments issued, whichever is more reliably measurable. The value of the common stock is measured at the earlier of (i) the date at which a firm commitment for performance by the counterparty to earn the equity instruments is reached or (ii) the date at which the counterparty’s performance is complete.

Business Combination and Asset Acquisitions

The Company evaluates acquisitions of assets and other similar transactions to assess whether or not the transaction should be accounted for as a business combination or asset acquisition by first applying a screen to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If the screen is met, the transaction is accounted for as an asset acquisition. If the screen is not met, further determination is required as to whether or not the Company has acquired inputs and processes that have the ability to create outputs, which would meet the requirements of a business. If determined to be a business combination, the Company accounts for the transaction under the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations (“ASC 805”), which requires the acquiring entity in a business combination to recognize the fair value of all assets acquired, liabilities assumed, and any non-controlling interest in the acquiree and establishes the acquisition date as the fair value measurement point.

If the acquired set of assets and activities does not meet the definition of a business, the Company accounts for the transaction as an asset acquisition in accordance with ASC Subtopic 805-50, Acquisition of Assets Rather than a Business. We record asset acquisitions using the cost accumulation model. Under the cost accumulation model of accounting, the cost of the acquisition, including certain transaction costs, are allocated to the assets acquired using relative fair values.

Restatement of Previously Issued Financial Statements

As described in Amendment No. 1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2026, filed with the SEC on August 14, 2026, management identified errors in the Company’s accounting for performance stock units granted during the three months ended March 31, 2026 and in the classification of certain professional fees related to the Company’s acquisition and financing transactions. The Company assessed the materiality of the errors, individually and in the aggregate, and concluded that the errors were material to the previously issued unaudited condensed consolidated financial statements. Accordingly, the condensed consolidated financial statements as of and for the three months ended March 31, 2026 have been restated to correct the errors. The combined effect of the errors described above, in addition to certain other immaterial errors, was an understatement of net loss of $1,832,087 for the three months ended March 31, 2026; as restated, net loss is $10,823,974 and net loss per share, basic and diluted, is $(0.19), as compared to $8,991,887 and $(0.16), respectively, as previously reported. The Company has reflected these corrections to the accompanying condensed consolidated financial statements for periods presented in this Report.

Recent Accounting Pronouncements

Recent Accounting Pronouncements, not yet adopted:

In November 2024, the FASB issued ASU 2024-03,Disaggregation of Income Statement Expenses (“ASU 2024-03”). This ASU requires disclosures about specific types of expenses included in the expense captions presented on the face of the statement of operations as well as disclosure about selling expenses. ASU 2024-03 is effective for fiscal years beginning after December 15, 2027 with early adoption permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statements and disclosures.

NOTE 3: ASSET ACQUISITION

On January 16, 2026, the Company entered into a Membership Interest Purchase Agreement (the “SharonAI Purchase Agreement”) with SharonAI, Inc. (“SharonAI”), pursuant to which the Company acquired all of SharonAI’s membership interests in TCDC, resulting in TCDC becoming a wholly owned subsidiary of the Company. Prior to the transaction, the Company held a 50% interest in TCDC, which was accounted for under the equity method.

TCDC’s primary asset consists of land. The Company concluded that the transaction represents an asset acquisition rather than a business combination, as substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset. In addition, the Company did not acquire any substantive processes, workforce, or outputs that would meet the definition of a business under ASC 805. The Company accounted for the transaction as an asset acquisition using the cost accumulation and allocation model. Accordingly, the total consideration transferred was allocated to the identifiable assets acquired and liabilities assumed on a relative fair value basis. As substantially all of the value of the acquired assets is concentrated in land, the purchase price was primarily allocated to land. The aggregate purchase price for the acquired interests was approximately $70 million, which consisted of (i) $10.0 million in cash, (ii) $10.0 million deferred equity consideration obligation under the SharonAI Purchase Agreement, and (iii) a $50.0 million senior secured convertible promissory note issued to SharonAI. The deferred equity consideration was valued as of the asset acquisition date with any subsequent changes in fair value impacting the statement of operations. The number of shares issued was determined based on the 30-day volume weighted average price of the Company’s common stock which resulted in an implied contractual value of approximately $4.78 per share. The cash portion was funded through a combination of cash on hand and the related party promissory note, which was subsequently converted to equity in April 2026. The $50.0 million senior secured convertible promissory note was paid in full on April 24, 2026.

In satisfaction of the equity consideration, the Company issued 2,091,351 shares of common stock to SharonAI on March 31, 2026. In addition, pursuant to the terms of the SharonAI Purchase Agreement, the Company issued an additional 893,724 shares of common stock on April 10, 2026 as a true-up adjustment following the closing of the underwritten public offering.

The following tables present the reconciliation of consideration transferred to total cost basis, including the Company’s previously held equity method investment, and the preliminary allocation of such cost basis to the identifiable assets acquired and liabilities assumed.

NOTE 4. NOTES PAYABLE

Senior Secured Convertible Promissory Note

On January 16, 2026, the Company issued a $50.0 million senior secured convertible promissory note (the “SharonAI Note”) to SharonAI in connection with the acquisition of TCDC.

The SharonAI Note bears interest at a rate of 10.0% per annum, payable in cash at maturity, and matures on June 30, 2026. The SharonAI Note is secured by the Company’s ownership interests in TCDC and substantially all of TCDC’s assets.

The SharonAI Note includes embedded features, including conversion and event of default provisions. SharonAI has the right to convert up to $10.0 million of the outstanding principal into shares of the Company’s common stock at a price based on the volume-weighted average price of the Company’s common stock over a specified period preceding conversion, subject to a floor price.

The Company evaluated the embedded features in accordance with ASC 815 and determined that certain features, including the conversion and event of default provisions, require bifurcation as a derivative liability due to provisions that may result in variable share settlement. The derivative is recorded at fair value at issuance, with subsequent changes in fair value recognized in earnings.

At issuance, the fair value of the embedded derivative liability was approximately $1.5 million, which was recorded as a debt discount. The debt discount is amortized to interest expense over the term of the SharonAI Note using the effective interest method.

On April 24, 2026, the Company repaid in full the SharonAI Note. The total payoff amount was $51.3 million, consisting of $50.0 million of outstanding principal and $1.3 million of accrued interest. Upon receipt of the payoff amount, the SharonAI Note was deemed satisfied and paid in full. In connection with the repayment, all guarantees were terminated, and all related security interests, liens, and collateral arrangements were released.

In connection with the repayment, the Company remeasured the embedded derivative associated with the SharonAI Note to its fair value immediately prior to extinguishment. During the three and six months ended June 30, 2026, the Company recognized a gain of $302,893 and $615,587, respectively, related to changes in the fair value of the embedded derivative associated with the SharonAI Note. Upon extinguishment of the SharonAI Note, the embedded derivative liability was derecognized.

The Company recognized a loss on extinguishment of debt of $70,657 during the three and six months ended June 30, 2026, reflecting the difference between the repayment amount and the carrying amounts of the SharonAI Note, the remaining unamortized debt discount, the embedded derivative liability, and other balances derecognized upon extinguishment.

Note Payable

On March 25 2026, in connection with the amendment of certain real property agreements, the Company, through its subsidiary, agreed to pay total consideration of approximately $4.35 million, consisting of $1.0 million paid in cash upon execution and $3.35 million evidenced by a promissory note (the “Promissory Note”).

The Promissory Note bears interest at a fixed annual rate of 3.7%, calculated on a 360-day basis and compounded annually. The Promissory Note matures on July 20, 2026, at which time all outstanding principal and accrued but unpaid interest are due and payable in full.

The Promissory Note is unsecured. On May 14, 2026, the Company repaid the Promissory Note in full, including principal of $3,347,500 and accrued interest of $17,202. As a result, no amounts were outstanding under the Promissory Note as of June 30, 2026.

Term Loan Agreement with Macquarie Equipment Capital Inc.

On April 8, 2026, TCDC entered into a Term Loan Agreement with Macquarie Equipment Capital Inc. (“Macquarie”) for a senior secured term loan facility of up to $290,000,000 (the “Term Loan Agreement”). The facility consists of a committed $20,000,000 Term Loan A-1, a $30,000,000 Term Loan A-2, a $40,000,000 Term Loan A-3, and a $200,000,000 Delayed Draw Term Loan (as defined in the Term Loan Agreement). Borrowings under the Term Loan A-2, Term Loan A-3, and the Delayed Draw Term Loan are available solely at Macquarie’s discretion and are subject to certain conditions precedent. TCDC’s obligations under the Term Loan Agreement are secured by a first priority perfected security interest in all of the Collateral (as defined in the Term Loan Agreement), prior to all other liens on the Collateral except for certain permitted liens.

The loans mature on April 8, 2029, and bear interest at a rate equal to Term SOFR plus an applicable margin of 5.50% for Term Loans A-1 and A-2, and 7.75% for Term Loan A-3 and the Delayed Draw Term Loan. The borrowings are subject to a multiple on invested capital (“MOIC”) premium, which is fully earned upon execution of the agreement and payable upon repayment, prepayment, or acceleration. Depending on the staging of the loans and the timing of the repayment, the required MOIC ranges from 1.10 to 1.35. Funding of the Term Loan A-1 was conditioned upon, among other things, the Company closing an underwritten offering of at least $50 million. The Term Loan Agreement also includes certain post-closing covenants requiring the Company to establish an at-the-market program with an aggregate offering price of at least $100 million within 60 days of the closing date and close one or more sales of equity securities resulting in gross proceeds of at least $30 million within 60 days of the closing date. Furthermore, if a data center lease is not executed within six months of the closing date, or if aggregate loan drawings are less than $50 million, the lender may elect to require full prepayment or monthly repayment installments.

On April 13, 2026, TCDC drew the full $20.0 million available under the Term Loan A-1 facility after satisfying the applicable funding conditions (“Term Loan A-1”). In connection with the funding, the Company issued Macquarie warrants to purchase 400,208 shares of the Company’s common stock with an exercise price of approximately $5.00 per share (the “Macquarie Warrants”) and sold 1,000,520 shares of the Company’s common stock to Macquarie at a purchase price of approximately $5.00 per share. The Term Loan A-1 matures on April 8, 2029, at which time all outstanding principal, accrued interest, applicable repayment premiums, and other amounts due under the agreement become payable, unless earlier repaid or accelerated in accordance with the terms of the Term Loan Agreement. No borrowings were outstanding under the Term Loan A-2, Term Loan A-3, or Delayed Draw Term Loan facilities as of June 30, 2026.

On July 17, 2026, the Company, on behalf of TCDC, entered into a Waiver and Consent Letter (the “Consent Letter”) with Macquarie, pursuant to which Macquarie agreed to waive certain requirements under the Term Loan Agreement, by and among TCDC, the Company and Macquarie. Pursuant to the Consent Letter, among other procedure-related waivers, the parties agreed to extend the deadline for the Company to establish an “at-the-market” program on an effective registration statement with an aggregate offering price of at least $100 million. The Company shall now be required to establish such “at-the-market” program within 60 days of receiving written notice from Macquarie or its permitted successors and assigns, or, under certain circumstances, within five business days following the filing of the Company’s next quarterly or annual periodic report.

The carrying value of the Term Loan A-1 is presented net of unamortized debt discounts and debt issuance costs. At issuance, the Company recognized a debt discount of $1,111,885 related to the fair value of the Macquarie Warrants issued in connection with the financing and a derivative liability of $2,620,000 associated with certain features of the Term Loan Agreement. The debt discounts are amortized to interest expense over the term of the loan using the effective interest method. The derivative liability is remeasured at fair value at each reporting date, with changes in fair value recognized in earnings. As of June 30, 2026, the outstanding principal balance under the Term Loan A-1 was $20.0 million, and the carrying value of the loan was $15,172,929.

NOTE 5. RELATED PARTY TRANSACTIONS

Balance outstanding of related parties:

On March 31, 2026, the Company issued a $5,000,000 promissory note to Zachary Zhou who beneficially owns more than 5% of the Company’s common stock (the “Zhou Note”). The transaction was reviewed and approved by the Company’s Audit Committee and Board of Directors. The Zhou Note was amended and restated on April 6, 2026 (the “Amended and Restated Zhou Note”).

The Amended and Restated Zhou Note bore interest at 5.00% per annum, was subject to a repayment premium equal to 102% of the outstanding principal and accrued interest, and provided for repayment or conversion upon the occurrence of certain financing events or upon maturity.

On April 10, 2026, the Amended and Restated Zhou Note was fully converted into 1,522,389 shares of the Company’s common stock in accordance with its terms.

NOTE 6. ASSET RETIREMENT OBLIGATIONS

The Company has a number of oil and gas wells in production, each of which has an asset retirement obligation (“ARO”) that will be settled once the well is permanently removed from service. The primary obligations involve the removal and disposal of surface equipment, plugging and abandoning the wells and site restoration.

AROs associated with the retirement of tangible long-lived assets are recognized as liabilities with an increase to the carrying amounts of the related long-lived assets in the period incurred. The fair value of AROs is recognized at the date a new well is completed or the acquisition date of the working interest. The cost of the tangible asset, including the asset retirement cost, is depleted over the life of the asset. AROs are recorded at estimated fair value, measured by reference to the expected future cash outflows required to satisfy the retirement obligations discounted at the Company’s credit-adjusted risk-free interest rate. Accretion expense is recognized over time as the discounted liabilities are accreted to their expected settlement value. If estimated future costs of AROs change, an adjustment is recorded to both the ARO and the long-lived asset. Revisions to estimated AROs can result from changes in retirement cost estimates including revisions to estimated inflation rates, revisions to estimated discount rates and changes in the estimated timing of abandonment.

The Company used the following inputs in its calculation of its AROs.

The following table shows the change in the Company’s ARO liability for the three and six months ended June 30, 2026:

During 2025, the Company’s two helium contracts expired. With no supporting helium contracts, the Company was unable to justify carrying helium volumes in forecasted Proved Helium reserves. As a result, the estimated economic lives of many of our producing properties shortened considerably.

NOTE 7. EQUITY

Amendment to Equity Purchase Facility Agreement

During 2025, the Company entered into a series of amendments to its existing Equity Purchase Facility Agreement (“EPFA”) dated December 6, 2024. These amendments modified certain pricing restrictions and ultimately increased the Company’s right to sell common stock to the Investor (as defined in the EPFA) from $75.0 million to $1.0 billion. On October 16, 2025, the Company provided notice to terminate the EPFA, effective October 24, 2025. The Company did not incur any penalties in connection with the termination.

Warrants – As of June 30, 2026 and December 31, 2025, there were 5,750,000 public warrants (the “Public Warrants”) and 230,750 private placement warrants (the “Private Warrants”) outstanding. Each warrant allows the holder to purchaseone share of the Company’s common stock at an exercise price of $11.50 per share.

Pursuant to a securities purchase agreement, dated December 6, 2024, by and between us and ATW AI Infrastructure II LLC (the “Investor”) (together with the Form of First Tranche Warrant and Form of Second Tranche Warrant issued on December 6, 2024, the “Warrant Purchase Agreement”), we issued and sold to the Investor warrants to purchase shares of our common stock, comprised of two tranches (the “First Tranche Warrant” and “Second Tranche Warrant” and together, the “Investor Warrants”). The Warrant Purchase Agreement was amended by that certain Amended and Restated Consent and Waiver, dated January 16, 2026, by and between us and the Investor (the “Waiver”), pursuant to which, among other things, the Investor agreed to partially waive the anti-dilution provisions of the First Tranche Warrant and Second Tranche Warrant such that the exercise prices of the First Tranche Warrant and Second Tranche Warrant were each adjusted down solely to $2.00. The Investor also waived certain provisions of the Warrant Purchase Agreement relating to restrictions on Variable Rate Transactions (as defined in the Warrant Purchase Agreement), additional issuances of equity securities, redemption or payment of cash dividends, and stock splits. The parties agreed to certain administrative updates to the Warrant Purchase Agreement including cashless exercise after 75 days from the effective date of the Waiver (solely to the extent a resale registration statement is not effective), registration rights obligations, the provision of a transfer agent instruction letter, and a forced exercise provision granting the Company the right to force exercise of the Investor Warrants assuming certain conditions are met. The Investor Warrants may be exercised on any day on or after December 6, 2024, in whole or in part at $2.00 per share, subject to certain adjustments as provided in the applicable Warrant.

The number of shares of common stock issuable upon exercise of the First Tranche Warrant is equal to the quotient of (i) the product of (x) $10 million minus any amounts previously paid to exercise the Investor Warrants and (y) multiplied by 110%, and (ii) divided by the exercise price then in effect. Currently, the number of shares of common stock issuable upon exercise of the First Tranche Warrant is equal to 5,500,000, assuming an exercise price of $2.00. The number of shares of common stock issuable upon exercise of the Second Tranche Warrant, assuming an exercise price of $2.00, is equal to 10,700,000.

During the six months ended June 30, 2026, the Company received exercise notices for a portion of the Investor Warrants, resulting in the issuance of an aggregate of approximately 13,164,000 shares of common stock at an exercise price of $2.00 per share.

The Company has analyzed the Public Warrants, Private Warrants, Investor Warrants and Macquarie Warrants and determined they are considered to be freestanding instruments and do not exhibit any of the characteristics in ASC 480 and therefore are not classified as liabilities under ASC 480 or ASC 815.

On February 1, 2026, the Company entered into an Amended and Restated Consent and Waiver (the “Amended Waiver”) with the Investor pursuant to which the Investor agreed to partially waive the anti-dilution provisions of the First Tranche Warrant and Second Tranche Warrant such that the exercise prices of the First Tranche Warrant and Second Tranche Warrant were each adjusted down solely to $2.00. As a result of the anti-dilution adjustments in the Investor Warrants, as modified by the Amended Waiver, the number of shares of common stock of the Company issuable pursuant to the First Tranche Warrant total 5.5 million shares and the number of shares of common stock issuable pursuant to the Second Tranche Warrant total 10.7 million shares.

The Investor also waived certain provisions of the Warrant Purchase Agreement relating to restrictions on Variable Rate Transactions (as defined in the Warrant Purchase Agreement), additional issuances of equity securities, redemption or payment of cash dividends, and stock splits. The parties agreed to certain administrative updates to the Warrant Purchase Agreement including cashless exercise after 75 days from the effective date of the Amended Waiver (solely to the extent a resale registration statement is not effective), registration rights obligations, the provision of a transfer agent instruction letter, and a forced exercise provision granting the Company the right to force exercise of the Investor Warrants assuming certain conditions are met.

Equity Issuances

From time to time beginning with the initial funding of the Term Loan Agreement, the Company may issue Macquarie Warrants to Macquarie, with an aggregate value of up to $5.0 million. In connection with the initial funding of the Term Loan Agreement, on April 13, 2026, the Company issued 400,208 Macquarie Warrants to Macquarie, at an exercise price of $5.00 and with an aggregate value of approximately $2.0 million. The Macquarie Warrants are exercisable at any time or from time to time on or before April 8, 2031. The Macquarie Warrants are exercisable for cash only, subject to customary adjustments. Under the Term Loan Agreement, the Company is required to deliver a Macquarie Warrant to Macquarie for an aggregate purchase price of up to 10% of the principal amount of the applicable Loans (as defined in the Term Loan Agreement) funded, subject to certain limitations. The Company’s obligation to issue Macquarie Warrants ceases once the aggregate outstanding principal amount of the Loans is equal to or greater than $50,000,000. The exercise price is equal to the product of (i)120% multiplied by (ii) the five-day volume weighted average price of the Company’s common stock as of the date of issuance of the Macquarie Warrants, subject to a minimum price floor of $4.30. Additionally, the Company issued 1,000,520 shares of common stock to Macquarie at a price of $5.00 per share and entered into a Registration Rights Agreement with Macquarie with respect to the resale of these securities.

Underwritten Public Offering of Common Stock

On April 9, 2026, the Company announced the pricing of an underwritten public offering of 29,850,746 shares of its common stock at a public offering price of $3.35 per share. In connection with this offering, the Company entered into an underwriting agreement with Northland Securities, Inc., acting as the representative for the underwriters. Pursuant to this agreement, the Company granted the underwriters a 30-day option to purchase up to an additional 4,477,611 shares of common stock at the public offering price, less underwriting discounts. Additionally, the Company agreed to a 90-day lock-up period during which it may not sell, transfer, or otherwise dispose of any shares of common stock without the prior written consent of the underwriters, subject to certain exceptions.

On April 10, 2026, the underwriters exercised their option to purchase an additional 4,477,611 shares of common stock (the “Option Shares”) at the public offering price, less the underwriting discounts and commissions. The closing of the purchase of the Option Shares by the underwriters occurred on April 14, 2026.

Issuance of Unregistered Equity Securities

On April 10, 2026, the Company issued 893,724 shares of its common stock to SharonAI in connection with the SharonAI Purchase Agreement. This issuance compensated for the difference in value between shares issued to SharonAI on March 31,2026, and the shares that would have been received had the Company’s recent underwritten public offering closed prior to March 31, 2026. Additionally, on April 10, 2026, the Company issued 1,522,389 shares of common stock to Zachary Yi Zhou upon the maturity of the Amended and Restated Zhou Note dated April 6, 2026. The maturity of this note was triggered by the closing of the Company’s underwritten public offering, which qualified as a Qualified Equity Financing. Both issuances were made pursuant to an exemption from registration under Section 4(a)(2) of the Securities Act of 1933.

Acquisition Consideration and Share Issuance Cap

Pursuant to the SharonAI Purchase Agreement, the Company acquired SharonAI’s equity interests in TCDC for an aggregate purchase price of $70 million, consisting of $10 million in cash, $10 million in equity securities, and a $50 million senior secured convertible promissory note. The entirety of this acquisition consideration was subject to a 19.99% issuance cap, requiring stockholder approval to issue any shares of the Company’s common stock above this threshold. The Company held a Special Meeting of the Stockholders on April 16, 2026, to approve the issuance of shares of the Company’s common stock in excess of the issuance cap. The proposal to approve the issuance of shares of the Company’s common stock in excess of the issuance cap was approved by a majority of the shares present in person or by proxy and entitled to vote on the matter.

NOTE 8. LOSS PER SHARE

The Company calculated net income/(loss) per share using the treasury stock method. The table below sets forth the computation of basic and diluted net income/(loss) per share for the period presented below.

For the three and six months ended June 30, 2026 the Company had potentially dilutive securities including warrants, stock options, performance share awards, and restricted stock units that have not been included in the calculation of dilutive EPS as their effects would be anti-dilutive. For the three and six months ended June 30, 2025 the Company had potentially dilutive securities including convertible notes and warrants that have not been included in the calculation of dilutive EPS as their effects would be anti-dilutive.

NOTE 9. COMMITMENTS AND CONTINGENCIES

Legal Actions

From time to time, the Company may be a party to various proceedings and claims incidental to its business. While many of these matters involve inherent uncertainty, the Company believes that the amount of the liability, if any, ultimately incurred with respect to these proceedings and claims will not have a material adverse effect on the Company’s consolidated financial position as a whole or on its liquidity, capital resources or future annual results of operations. The Company records reserves for contingencies when information available indicates that a loss is probable, and the amount of the loss can be reasonably estimated.

Environmental Matters

The Company, as a lessee of oil and gas properties, is subject to various federal, provincial, state and local laws and regulations relating to discharge of materials into, and protection of, the environment. These laws and regulations may, among other things, impose liability on the lessee under an oil and gas lease for the cost of pollution clean-up resulting from operations and subject the lessee to liability for pollution damages. In some instances, the Company may be directed to suspend or cease operations in the affected area. There can be no assurance, however, that current regulatory requirements will not change, or past noncompliance with environmental laws will not be discovered on the Company’s properties which may, in turn, require further remediation efforts.

Irrevocable Standby Letter of Credit and Promissory Note

The Company maintains a $920,000 irrevocable standby letter of credit with West Texas National Bank, supported by a promissory note under which amounts would become payable only if drawn. No amounts were drawn under the letter of credit as of June 30, 2026 or December 31, 2025.

Agreement with Arjae Design Solutions Ltd.

On September 22, 2025, the Company entered into an agreement with Arjae Design Solutions Ltd (“Arjae”). In this agreement, the Company is required to make a $125,000 per month payment (the “Installation Payments”) starting in September 2025 and ending in May 2026 (the “Installment Period”). If the Company makes all of the Installation Payments, upon expiration of the Installment Period, the Company has the option to assign the Commercial & Technical Proposal dated July 10, 2023, a Purchase Order dated July 1, 2023 and Arjae’s Terms & Conditions – Equipment & Material Supply (the “Underlying Agreement”) with respect to the Pecos Slope Helium Recovery Facility (as defined in the Underlying Agreement). This assignment is subject to the consent of Arjae, such consent not to be unreasonably withheld. Should the Company elect not to assign the Underlying Agreement, the Company may terminate the Underlying Agreement by making a payment to Arjae in the amount of $933,200 (the “Termination Payment”). This payment would be considered the full and final payment relating to the termination of the Underlying Agreement. The Installation Payments will not be allocated towards the Termination Payment. As of June 30, 2026, the Company recorded an estimated liability of $0.9 million, which is included in accrued liabilities in the condensed consolidated balance sheet. The related expense was recognized within general and administrative expenses in the condensed consolidated statements of operations for the three and six months ended June 30, 2026. The Company fully satisfied its obligation in relation to the Termination Payment in July 2026.

Financing Agreement for Director and Officer Insurance

On December 6, 2025, the Company entered into a financing agreement with First Insurance Funding (“the Finance Agreement”) to finance a portion of the Company’s directors’ and officers’ insurance policy. The Finance Agreement required a downpayment of $43,500 with the unpaid balance of $391,500 to be financed at an annual percentage rate of 7.25% over a 10-month period commencing in January 2026 and ending in October 2026 (the “Financing Period”). The total amount to be paid during the Financing Period will be $404,627, which includes $13,127 in interest.

Shareholder Litigation

On April 1, 2026, a federal securities class action lawsuit was filed in the U.S. District Court for the Western District of Texas against the Company and certain members of its management, styledAnnonio v. New Era Energy & Digital, Inc., et al., Case No. 7:26-cv-00120. The complaint asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and seeks, among other relief, a determination that the action is a proper class action under Rule 23 of the Federal Rules of Civil Procedure, monetary damages, costs, and attorneys’ fees. On June 17, 2026, the Court appointed Mr. Mitchell Patterson as lead plaintiff. The lead plaintiff has until August 21, 2026 to file a consolidated amended complaint. Following the filing of the amended complaint, the Company will have 60 days to file a responsive pleading.

The Company intends to vigorously defend itself against these claims. The Company believes that the resolution of this litigation will not have a material adverse effect on its business, financial condition or results of operations. Nonetheless, this legal matter remains pending, and we are unable to estimate the costs we may incur, if any, at this time.

Settlement Agreement

On May 28, 2026, the Company announced a pending settlement agreement with the United States Trustee for the bankruptcy estates of Acacia Resources, LLC and Acacia Operating Company, LLC (the “Settlement Agreement”). Under the terms of the Settlement Agreement, the Company and certain related parties will pay $1.0 million to resolve all claims brought by the State of New Mexico regarding legacy helium and gas assets and associated environmental obligations. The Settlement Agreement does not constitute an admission of liability or wrongdoing and remains subject to the approval of the United States Bankruptcy Court for the Western District of Texas.

As of June 30, 2026, the Company recorded an estimated liability of $1.0 million, which is included in accrued liabilities in the condensed consolidated balance sheet. The related expense was recognized within general and administrative expenses in the condensed consolidated statements of operations for the three and six months ended June 30, 2026. In July 9, 2026, the Settlement Agreement was formally approved in the U.S. Bankruptcy Court for the Western District of Texas, and the Company fully satisfied its obligation in relation to the settlement.

NOTE 10: REVENUES

The following table presents the revenue by type as of the dates indicated:

NOTE 11. FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. The hierarchy is broken down into three levels based on the observability of inputs as follows:

The Company accounts for certain liabilities at fair value and classifies these liabilities with the fair value hierarchy. Our ARO liabilities are measured at fair value on a non-recurring basis.

Liabilities subject to fair value measurements are as follows:

The carrying value of cash and cash equivalents, accounts receivable, prepaid and other current assets, related party receivable, accounts payable, accrued liabilities, due to related party, and other current liabilities, as reflected in the consolidated balance sheets, approximate fair value, due to the short-term maturity of these instruments. The Term Loan A-1 bears interest at a variable rate. Its carrying value, net of unamortized debt discounts, approximates fair value as of June 30, 2026, as the interest rate approximates current market rates for instruments with similar terms and credit risk, and the loan was issued at market terms in April 2026.

The fair value of the embedded derivative liability associated with the SharonAI Note was estimated using a Monte Carlo simulation model. The following table summarizes the significant assumptions and unobservable inputs used in the valuation at the issuance date and as of the payoff date.

The following table presents quantitative information regarding the Level 3 fair value measurements of the embedded derivative associated with the SharonAI Note as of June 30, 2026:

The fair value of the embedded derivative liability associated with the Term Loan Agreement was estimated using a Monte Carlo simulation model. The following table summarizes the significant assumptions and unobservable inputs used in the valuation at the issuance date and as of June 30, 2026.

The following table presents quantitative information regarding the Level 3 fair value measurements of the embedded derivative associated with the note as of June 30, 2026:

In connection with the issuance of the Term Loan Agreement, the Company also issued 400,208 equity-classified warrants. The warrants were initially measured at fair value of approximately $1.1 million using the Black-Scholes option pricing model, a Level 3 valuation technique due to the use of significant unobservable inputs, including expected volatility. Because the warrants are classified as equity, they are not subsequently remeasured at fair value. The following table summarizes the significant assumptions and unobservable inputs used to estimate the fair value of the warrants at the issuance date.

NOTE 12. SEGMENTATION

ASC Topic 280, Segment Reporting, establishes standards for companies to report in their financial statements information about operating segments, products, services, geographic areas, and major customers. Operating segments are defined as components of an enterprise that engage in business activities from which they may recognize revenues and incur expenses, and for which separate financial information is available that is regularly evaluated by the Company’s Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources and assess performance.

The Company’s CODM has been identified as the Chief Executive Officer, who reviews total assets and income (loss) from operations of the Company on a consolidated basis to make decisions regarding the allocation of resources and assessment of financial performance.

Management evaluated the Company’s segment reporting conclusion following the acquisition of the remaining interests in TCDC. Management considered that TCDC represents a significant strategic initiative of the Company and comprises a substantial portion of the Company’s consolidated asset base following the acquisition. Management also considered that executive management devotes significant time to evaluating the development activities, financing arrangements, capital needs, and strategic direction of TCDC.

However, management concluded that TCDC did not constitute a separate operating and reportable segment as of June 30, 2026. Although discrete financial information related to TCDC exists for accounting and legal entity reporting purposes, the CODM did not regularly review standalone operating results, profitability measures, or other discrete measures of financial performance for purposes of assessing performance and allocating resources in the manner contemplated by ASC 280. During the periods, TCDC remained in the development stage and had not yet commenced revenue-generating operations. Resource allocation decisions related to TCDC were made in the context of consolidated liquidity management, financing activities, and enterprise-wide capital planning rather than through a separate recurring review of operating results or segment profitability.

Accordingly, management determined that the Company operated as asingle operating and reportable segment as of June 30, 2026, as the CODM reviews operating results, allocates resources, and assesses performance on a consolidated basis.

The CODM assesses performance for the single segment and decides how to allocate resources based on net income or loss as reported in the consolidated statements of operations. The measure of segment assets and liabilities is reported on the consolidated balance sheets as total assets and total liabilities. When evaluating the Company’s performance and making key decisions regarding resource allocation, the CODM reviews several key metrics included in net income or loss, total assets, and total liabilities, which include the following:

NOTE 13. STOCK-BASED COMPENSATION

A summary of stock option activity under the Equity Incentive Plan (the “Plan”) for the three and six months ended June 30, 2026, is presented below:

At June 30, 2026, the aggregate intrinsic value of outstanding stock options was $3,799,315 and the weighted-average remaining contractual term was approximately 9 years. The total intrinsic value of options exercised during the three and six months ended June 30, 2026 was $0 and $112,877, respectively.

Restricted Stock Awards

During the three and six months ended June 30, 2026, the Company granted restricted stock units (“RSUs”) of 1,695,000 and 4,748,363, respectively.

The RSUs entitle the holder to receiveone share of the Company’s common stock for each vested unit. The RSUs generally vest in equal monthly installments over a four-year period, subject to the participant’s continued employment with the Company through each applicable vesting date. The grant-date fair value of the RSUs is based on the closing price of the Company’s common stock on the date of grant.

For the three and six months ended June 30, 2026, the Company recognized stock-based compensation expense related to RSUs of approximately $1.6 million and $2.4 million, respectively, which is included in general and administrative expenses in the condensed consolidated statements of operations.

As of June 30, 2026, there was $29.2 million of total unrecognized stock-based compensation expense related to unvested RSUs, which is expected to be recognized over a weighted-average period of approximately 3.7 years.

Performance Awards

During the three and six months ended June 30, 2026, the Company granted performance share awards (“PSUs”) of 650,000 and 9,199,418, respectively.

The PSUs entitle the holder to receive shares of the Company’s common stock upon vesting. The PSUs vest based on the achievement of specified performance and market conditions over a performance period ending January 1, 2031, subject to certification by the Compensation Committee.

The grant-date fair value of PSUs with performance conditions is based on the closing price of the Company’s common stock on the date of grant. The grant-date fair value of PSUs with market conditions was determined using a Monte Carlo simulation model utilizing the following significant assumptions:

The awards include market-based vesting conditions tied to specified stock price thresholds through January 1, 2031.

During the three and six months ended June 30, 2026, the Company determined the performance conditions were probable of achievement and recognized expense accordingly. For the three and six months ended June 30, 2026, the Company recognized stock-based compensation expense related to PSUs of approximately $7.4 million and $11.7 million, respectively, which is included in general and administrative expenses in the condensed consolidated statements of operations.

As of June 30, 2026, there was approximately $47.4 million of total unrecognized stock-based compensation expense related to unvested PSUs, which is expected to be recognized over a weighted-average period of approximately 2.6 years. This amount excludes PSUs subject to performance conditions that are not considered probable of achievement, for which no compensation cost has been recognized. As of June 30, 2026, PSUs with a maximum potential value of $2.1 million remain outstanding for which achievement of the performance conditions was not deemed probable.