New ERA Energy & Digital, Inc.

From time to time, we may be party to or otherwise involved in legal proceedings arising in the ordinary course of business. We recognize provisions for legal proceedings in our financial statements, in accordance with accounting rules, when we are advised by independent outside counsel that (i) it is probable that an outflow of resources will be required to settle the obligation and (ii) a reliable estimate can be made of the amount of the obligation. The assessment of the likelihood of loss includes analysis by outside counsel of available evidence, the hierarchy of laws, available case law, recent court rulings and their relevance in the legal system. Our provisions for probable losses arising from these matters are estimated and periodically adjusted by management. In making these adjustments our management relies on the opinions of our external legal advisors.

New Mexico Litigation

On December 23, 2025, the State of New Mexico filed a lawsuit against the Company and other parties, including our former Chief Executive Officer E. Will Gray II, in the First Judicial District Court for Santa Fe County (“New Mexico Litigation”). The complaint alleges several causes of action, including unjust enrichment, violations of the New Mexico Oil and Gas Act, violations of the Uniform Voidable Transactions Act, Fraud Against Taxpayers Act, civil conspiracy, and veil piercing, and seeks, among other relief, monetary damages, civil penalties, costs, and attorneys’ fees. The New Mexico Litigation was stayed shortly after it was initiated because of the ongoing bankruptcy proceedings for several unrelated defendants.

The Company reached a settlement with the State of New Mexico and the Acacia Operating Company, LLC bankruptcy trustee that resolved all claims brought against the Company. That settlement was formally approved on July 9, 2026 in the U.S. Bankruptcy Court for the Western District of Texas. Pursuant to the settlement, the Company did not admit any liability, wrongdoing, fault, or violation of any law, regulation, duty, or obligation. The claims against the Company in*Torrez ex rel. State of New Mexico v. Acacia Operating Co.*will be dismissed.

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, the Company cannot predict the outcome of these proceedings, as legal matters are subject to inherent uncertainties, and there exists the possibility that the ultimate resolution of this matter could have a material adverse effect on the Company’s business, financial condition or results of operations.