ZION OIL & GAS INC

Note1 - Nature of Operations and Going Concern

A. Nature of Operations

Zion Oil & Gas, Inc., a Texas corporation (“we,” “our,” “Zion” or the “Company”) is an oil and gas exploration company with a history of25 years of oil & gas exploration in Israel. The shareholders of Zion Oil & Gas, Inc. approved the re-domestication of its incorporation to Texas on* June 4, 2025.*

As of* December 31, 2025*, the Company hasno revenues from its oil and gas operations.

Zion maintains its corporate headquarters in Dallas, Texas. The Company also has branch offices in Caesarea, Israel and Geneva, Switzerland. The purpose of the Israel branch is to support the Company’s operations in Israel, and the purpose of the Switzerland branch is to operate a foreign treasury center for the Company.

On* January 24, 2020,Zion incorporated a wholly owned subsidiary, Zion Drilling, Inc., a Delaware corporation, for the purpose of owning a drilling rig, related equipment and spare parts, and on January 31, 2020,Zion incorporated another wholly owned subsidiary, Zion Drilling Services, Inc., a Delaware corporation, to act as the contractor providing such drilling services. When Zion isnot* using the rig for its own exploration activities, Zion Drilling Services* maycontract with other operators in Israel to provide drilling services at market rates then in effect. On May 14, 2025,*Zion Drilling, Inc. and Zion Drilling Services, Inc. were re-domesticated and converted from Delaware corporations to Texas corporations pursuant to plans of conversion approved unanimously by the directors and shareholders of each corporation.

On* October 19, 2022,Zion incorporated a wholly owned subsidiary in Israel, Zion Drilling Israel Ltd, for the purpose of owning a drilling rig and related equipment and spare parts. On this date, the entity was created as a placeholder only. A bank account was created in November 2024and a tax file was created in January 2025.The bank account is denominated in Israeli Shekels. When there are bank transactions in the future, there will be a translation adjustment to United States Dollars. Zion Drilling Israel Ltd didnot* have any activities during the year ended* December 31, 2025*.

Zion has the trademark “ZION DRILLING” filed with the United States Patent and Trademark Office. Zion has the trademark filed with the World Intellectual Property Organization in Geneva, Switzerland, pursuant to the Madrid Agreement and Protocol. In addition, Zion has the trademark filed with the Israeli Trademark Office in Israel.

Exploration Rights/Exploration Activities

New Megiddo Valleys License434 (“NMVL434”) – Megiddo-Jezreel*#1* Re-Entry (“MJ-01”)

On* September 14, 2023,the Israel Ministry of Energy approved NMVL434,* allowing for oil and gas exploration on approximately 75,000 acres or 302 square kilometers. NMVL434 is valid forthree years until* September 13, 2026withfour* potential1-year extensions for a total ofseven years until* September 13, 2030.This NMVL434* effectively supersedes our previous NML428.

We continue our exploration focus here based on our studies as it appears to possess the key geologic ingredients of an active petroleum system with significant exploration potential. As previously announced, Zion deployed new technologies and stimulation methods for its re-entry into the MJ-01 well with the objective of potentially unlocking hydrocarbon flows in several identified key zones.

Zion’s rig crew arrived in Israel in* February 2025and completed critical maintenance and preparatory work. The rig, which was safely “warm stacked” in September 2024,underwent necessary checks for maintenance, including fluid changes, lubrication and greasing, and mechanical, electrical, and safety audits to ensure peak functionality. The rig crew drilled out the temporary plug at approximately1,100* meters and set a permanent plug at the deeper part of the well, allowing for isolation of targeted zones for testing. Perforation and stimulation operations were successfully completed, with gas observed at surface during early flowback.

On* June 10, 2025,we completed flowback operations at our Megiddo-Jezreel#1* well shut the well in and demobilized our crew. The last of our crew left the country just hours before the12-day war with Iran. We analyzed the initial gas composition data which confirmed that our targeted perforation and stimulation procedures were successful. Gas reached the surface and showed characteristics consistent with a productive reservoir.

During the lastsix months of2025, we engaged in planning and logistics activities for the next phase of operations in Israel. Our technical objective remains unchanged, which is to sidetrack the well and drill a lateral section into the identified target interval to enable multi-stage stimulation across multiple zones. The principal operational refinement is to begin this campaign from the MJ-02 well, located on the same pad as the MJ-01 well, just7.5 meters away on surface and approximately300 meters offset at depth. Both wellbores access the same target zone. Starting from MJ-02 allows us to begin in larger casing, use larger-diameter tools, and execute atwo-stage drilling plan—providing greater flexibility to manage downhole contingencies and improving our chance of operational success.

Logistics remain challenging in Israel’s onshore market, where most services and equipment must be imported with added time and cost. Despite providers being heavily contracted, we have secured key services such as drilling, mud, and cementing. Recent visa reforms and progress with ministry approvals are also positive steps forward.

Our rig crew arrived in Israel in* January 2026to begin a new phase of operations at both MJ-01 and MJ-02 in Israel. Currently, the team is focusing on routine rig repair and maintenance, including a much-needed upgrade to the generator system, ensuring reliable power for the drilling ahead. Once the rig is serviced and tested, our crew will re-enter MJ-01, complete cleanup of the wellbore, install a seal below the water aquifer zone, and re-establish the mandated water monitoring well as required by the Ministry of Energy and Ministry of Water. Following this work, we will rig down and conduct the mandatoryfive*-year recertification and inspection process to ensure full compliance with International Association of Drilling Contractors (“IADC”) and national standards before transitioning to the next stage. After inspection, we will rig up over MJ-02, plug and abandon the lower sections of that wellbore, set the direction, and begin the planned horizontal drilling operation into the target reservoir zone.

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Note1 - Nature of Operations and Going Concern(cont’d)

Zion’s Former Joseph License

Zion has plugged all of its exploratory wells on its former Joseph License area, and the reserve pits have been evacuated, but acknowledges its obligation to complete the abandonment of these well sites in accordance with guidance from the Energy Ministry, Environmental Ministry and local officials (see Note9B and9C).

**Uncertainty Due to the Russia-**Ukraine War

Due to Russia’s invasion of Ukraine, which began in* February 2022,and the resulting sanctions and other actions against Russia and Belarus, there has been uncertainty and disruption in the global economy. Although the Russian war against Ukraine didnot* have a material adverse impact on the Company’s financial results for the year ended* December 31, 2025*, at this time the Company is unable to fully assess the aggregate impact the Russian war against Ukraine* mayhave on its business due to various uncertainties, which include, but arenot* limited to, the duration of the war, the war’s effect on the global economy, future energy pricing, its impact to the businesses of the Company and actions that* may*be taken by governmental authorities related to the war.

Israel-Hamas War

On* October 7, 2023,Hamas, a militant terrorist organization in Gaza, infiltrated southern Israel, killing and injuring at leastone thousand* Israeli citizens. Roughly250 Israeli hostages were then taken back to Gaza. This unprovoked attack led the nation of Israel to declare war on Hamas approximatelyone week later. Israel and Gaza subsequently entered into a multi-phase ceasefire involving the cessation of battles in exchange for release of Israeli hostages and Palestinian prisoners, but hostilities resumed pending release of the remaining Israeli hostages.

On or around* October 13, 2025,following more thantwo* years after the initial invasion by Hamas, a ceasefire was negotiated between Israel and Hamas. The ceasefire deal containsthree phases and thefirst phase involves the release of all living and dead Israeli hostages held by Hamas, along with the release of approximately1,950 Palestinian prisoners being held in Israel prisons. All of the20 living hostages were released and all of the remains of the dead hostages have been released to Israeli families. The next phase (phase2) of the ceasefire deal is underway and involves the disarmament of Hamas.

There is uncertainty as to the degree of stability that will be seen in the Gaza strip and the wider impact on hostilities in the region.

While we acknowledge that uncertainty, the Company is moving forward with its MJ-02 recompletion activities (see note1 for details).

Israel-United States-Iran War

On* June 13, 2025,Israel launched Operation Rising Lion by surprise attacks on key military and nuclear facilities in Iran. This was a targeted operation to roll back the Iranian threat to Israel’s very survival. In the opening hours of the war, Israeli air force assassinated some of Iran's prominent military leaders and nuclear scientists, and damaged or destroyed Iran's air defenses and some of its nuclear and military facilities. Israel launched hundreds of airstrikes throughout the war. Iran retaliated with waves of missile and drone strikes against Israeli cities and military sites; over550* ballistic missiles and more than1,000 explosive drones were launched by Iran during the war. The Iran-allied Houthis in Yemen also fired several missiles at Israel. On theninth day of the war the United States bombedthree Iranian nuclear sites. On* June 24, 2025,*Israel and Iran agreed to a ceasefire.

On* February 28, 2026,Israel and the United States jointly attacked Iran. The attacks took the form of missile strikes throughout Iran targeting regime leadership, nuclear sites, ballistic missile sites and other military infrastructure. Iran’s former supreme leader. Ali Khomenei was killed on this day. The daily attacks are continuing as of the date of this filing. Furthermore, Iran has been firing missiles and drones on approximatelyfifteen* other countries, including, butnot limited to, Azerbaijan, Bahrain, Cypress, Iraq, Jordan, Kuwait, Saudi Arabia, Turkey, United Arab Emirates and Turkey.

Israel-Hezbollah War and Wider Hostilities

Immediately after the* October 7, 2023Hamas attack on Israel, the terrorist organization Hezbollah (in Lebanon) began launching daily rockets into Israel. Over the course of the next several months, both Hezbollah and Israel traded rocket fire into the other country, but without engaging in a full war. DuringQ3* 2024, both sides increased the frequency and number of missiles fired. In* September 2024,Israel began a ground invasion into Lebanon. On or around November 27, 2024,*Israel and Hezbollah signed a ceasefire agreement.

In early* March 2026,*Hezbollah joined the war against Israel by launching daily attacks, primarily missiles into northern Israel. Israel responded by launching its own missiles into Beirut and southern Lebanon and moving ground forces into southern Lebanon.

B. Going Concern

The Company incurs cash outflows from operations, and all exploration activities and overhead expenses to date have been financed by way of equity or debt financing. The recoverability of the costs incurred to date is uncertain and dependent upon achieving significant commercial production of hydrocarbons.

The Company’s ability to continue as a going concern is dependent upon obtaining the necessary financing to undertake further exploration and development activities and ultimately generating profitable operations from its oil and natural gas interests in the future. The Company’s current operations are dependent upon the adequacy of its current assets to meet its current expenditure requirements and the accuracy of management’s estimates of those requirements. Should those estimates be materially incorrect, the Company’s ability to continue as a going concern* maybe in doubt. The consolidated financial statements have been prepared on a going concern basis, which contemplates realization of assets and liquidation of liabilities in the ordinary course of business. During the year ended December 31, 2025*, the Company incurred a net loss of approximately $7.6 million and had an accumulated deficit of approximately $301.5 million. These factors raise substantial doubt about the Company’s ability to continue as a going concern forone year from the date the consolidated financial statements were issued.

To carry out planned operations, the Company must raise additional funds through additional equity and/or debt issuances or through profitable operations. There can beno assurance that this capital or positive operational income will be available to the Company, and if it isnot, the Company* maybe forced to curtail or cease exploration and development activities. The consolidated financial statements donot* include any adjustments that might result from the outcome of this uncertainty (see also Note12).

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Note2 - Summary of Significant Accounting Policies

A summary of the significant accounting policies applied in the presentation of the accompanying consolidated financial statements follows:

A. Basis of Presentation and Foreign Currency Matters

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”).

All amounts referred to in the notes to the consolidated financial statements are in United States Dollars ($) unless stated otherwise.

The currency of the primary economic environment in which the operations of the Company are conducted is the United States dollar (“dollar”). Therefore, the dollar has been determined to be the Company’s functional currency. Non-dollar transactions and balances have been translated into dollars in accordance with the principles set forth in Accounting Standards Codification (“ASC”)830 “Foreign Currency Matters.” Transactions in foreign currency (primarily in New Israeli Shekels – “NIS”) are recorded at the exchange rate as of the transaction date. Monetary assets and liabilities denominated in foreign currency are translated on the basis of the representative rate of exchange at the balance sheet date. Non-monetary assets and liabilities denominated in foreign currency are stated at historical exchange rates. All exchange gains and losses from re-measurement of monetary balance sheet items denominated in non-dollar currencies are reflected in the statement of operations as they arise.

B. Cash and Cash Equivalents

The Company maintains cash balances withseven banks, of whichfour banks are located in the United States,one in the United Kingdom, andtwo in Israel. For purposes of the statement of cash flows and balance sheet, the Company considers all highly liquid investments with a maturity ofthree months or less from the balance sheet date to be cash equivalents. At times, the Company maintains deposits in financial institutions in excess of federally insured limits. The Company hasnot experienced any losses in such accounts and doesnot believe it is exposed to any significant credit risk on cash.

C. Cash and Cash Equivalents - Restricted

Interest bearing deposits for a period which exceedsthree months butnot more than12 months and are restricted are classified as cash and cash equivalents – restricted. Certain cash deposits in Israeli banks are restricted by various Israeli ministries according to terms of our exploration license.

D. Oil and Gas Properties and Impairment

The Company follows the full-cost method of accounting for oil and gas properties. Accordingly, all costs associated with acquisition, exploration and development of oil and gas reserves, including directly related overhead costs, are capitalized.

All capitalized costs of oil and gas properties, including the estimated future costs to develop proved reserves, are amortized on the unit-of-production method using estimates of proved reserves. Investments in unproved properties and major development projects arenot amortized until proved reserves associated with the projects can be determined or until impairment occurs. If the results of an assessment indicate that the properties are impaired, the amount of the impairment is included in loss from continuing operations before income taxes, and the adjusted carrying amount of the proved properties is amortized on the unit-of-production method.

The Company’s oil and gas property represents an investment in unproved properties. These costs are excluded from the amortized cost pool until proved reserves are found or until it is determined that the costs are impaired. All costs excluded are reviewed at least quarterly to determine if impairment has occurred. The amount of any impairment is charged to expense since a reserve base hasnot yet been established. Impairment requiring a charge to expense* may*be indicated through evaluation of drilling results, relinquishing drilling rights or other information.

Currently, the Company hasno economically recoverable reserves andno amortization base. The Company’s unproved oil and gas properties consist of capitalized exploration costs of $27,673,000 and $21,682,000 as of* December 31, 2025*, and2024, respectively.

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E. Property and Equipment

Property and equipment other than oil and gas property and equipment is recorded at cost and depreciated by the straight-line method over its estimated useful life of 3 to 14 years. Depreciation charged to expense amounted to $721,000 and $779,000 for the years ended* December 31, 2025*, and2024, respectively. See Footnote2P for a discussion of the purchase of our drilling rig and related equipment.

F. Assets Held for Severance Benefits

Assets held for employee severance benefits represent contributions to severance pay funds and insurance policies that are recorded at their current redemption value.

G. Prepaid Expenses

The Company makes prepayments for various types of goods and services, including, butnot limited to, operational and logistics costs, insurance, professional subscriptions, licenses and other fees.

H. Use of Estimates

The preparation of the accompanying consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("US GAAP") requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of expenses. Such estimates include the valuation of unproved oil and gas properties, deferred tax assets, asset retirement obligations, borrowing rate of interest consideration for leases accounting and legal contingencies. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. The Company adjusts such estimates and assumptions when facts and circumstances dictate. Illiquid credit markets, volatile equity, foreign currency, and energy markets have combined to increase the uncertainty inherent in such estimates and assumptions. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in those estimates resulting from continuing changes in the economic environment will be reflected in the consolidated financial statements in future periods.

We have made the same estimates as to the potential impact of the Israel-United States-Iran war, Israel-Hezbollah war, the Israel-Hamas war have on our operations. Actual results* may*differ from these estimates.

I. Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled (see Note7). The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date.

Based on Accounting Standards Codification (ASC)740-10-25-6 “Income Taxes,” the Company recognizes the effect of income tax positions only if those positions are more likely thannot of being sustained. Recognized income tax positions are measured at the largest amount that is greater than50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company accounts for interest and penalties related to unrecognized tax benefits, if and when required, as part of income tax expense in the statements of operations. No liability for unrecognized tax benefits was recognized as of* December 31, 2025*, and2024.

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J. Environmental Costs and Loss Contingencies

Liabilities for loss contingencies, including environmental remediation costsnot within the scope of Financial Accounting Standards Board (FASB) ASC Subtopic410-20, Asset Retirement Obligations and Environmental Obligations – Asset Retirement Obligations, arising from claims, assessments, litigation, fines, and penalties and other sources, are recorded when probable that a liability has been incurred and the amount of the assessment and/or remediation can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. Recoveries of environmental remediation costs fromthird parties that are probable of realization are separately recorded as assets, and arenot offset against the related environmental liability.

Accruals for estimated losses from environmental remediation obligations generally are recognizedno later than completion of the remedial feasibility study. Such accruals are adjusted as further information develops or circumstances change. Costs of expected future expenditures for environmental remediation obligations arenot discounted to their present value.

K. Asset Retirement Obligation

Obligations for dismantlement, restoration and removal of facilities and tangible equipment at the end of oil and gas property’s useful life are recorded based on the estimate of the fair value of the liabilities in the period in which the obligation is incurred. This requires the use of management’s estimates with respect to future abandonment costs, inflation, market risk premiums, useful life and cost of capital. The estimate of asset retirement obligations doesnot give consideration to the value the related assets could have to other parties. The obligation is recorded if sufficient information about the timing and (or) method of settlement is available to reasonably estimate fair value (see Note9C).

L. Net Loss per Share Data

Basic and diluted net loss per share of common stock, par value $0.01 per share (“Common Stock”) is presented in conformity with ASC260-10 “Earnings Per Share.” Diluted net loss per share is the same as basic net loss per share for2025 as the inclusion of 29,681,325 in stock options and 26,696,406 in warrants would be anti-dilutive.

Diluted net loss per share is the same as basic net loss per share for2024 as the inclusion of 32,900,882 in stock options and 29,303,152 in warrants would be anti-dilutive.

M. Stock Based Compensation

ASC718, “Compensation – Stock Compensation,” prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the consolidated financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).

The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC718. Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.

N. Fair Value Measurements

The Company follows Accounting Standards Codification (ASC)820, “Fair Value Measurements and Disclosures,” as amended by Financial Accounting Standards Board (FASB) Financial Staff Position (FSP)No. 157 and related guidance. Those provisions relate to the Company’s financial assets and liabilities carried at fair value and the fair value disclosures related to financial assets and liabilities. ASC820 defines fair value, expands related disclosure requirements, and specifies a hierarchy of valuation techniques based on the nature of the inputs used to develop the fair value measures. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, assuming the transaction occurs in the principal or most advantageous market for that asset or liability.

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The Company uses athree-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The hierarchy requires the Company to use observable inputs when available, and to minimize the use of unobservable inputs, when determining fair value. Thethree tiers are defined as follows:

The Company’s financial instruments, including cash and cash equivalents, other receivables, prepaid expenses and other, Government receivables, accounts payable and accrued liabilities, are carried at historical cost. At* December 31, 2025and2024*, the carrying amounts of these instruments approximated their fair values because of the short-term nature of these instruments.

O. Warrants

In connection with the Dividend Reinvestment and Stock Purchase Plan (“DSPP”) financing arrangements, the Company has issued warrants to purchase shares of its common stock. The outstanding warrants are stand-alone instruments that arenot puttable or mandatorily redeemable by the holder and are classified as equity awards. The Company measures the fair value of the awards using the Black-Scholes option pricing model as of the measurement date. Warrants issued in conjunction with the issuance of common stock are initially recorded and accounted as a part of the DSPP investment as additional paid-in capital of the common stock issued. All other warrants are recorded at fair value and expensed over the requisite service period or at the date of issuance, if there isnot a service period. Warrants granted in connection with ongoing arrangements are more fully described in Note6, Stockholders’* Equity*.

P. Related parties

Parties are considered to be related to the Company if the parties, directly or indirectly, throughone or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company* maydeal ifone* party controls or can significantly influence the management or operating policies of the other to an extent thatone of the transacting parties might be prevented from fully pursuing its own separate interests. All transactions with related parties are recorded at fair value of the goods or services exchanged.

A hardship loan of $30,000 was given to an executive vice president in* March 2025with the stipulation of monthly repayments of $2,500 beginning in April 2025.The balance owed to Zion was $7,500 as of December 31, 2025.Monthly deductions of $2,500 occurred in Januaryand February 2026and the last scheduled repayment of $2,500 will be deducted on or around March 31, 2026.Zion didnot* have any other related party transactions during the fiscal years ending* December**2025* and2024.

Q. Depreciation and Accounting for Drilling Rig and Related Equipment

Zion purchased an onshore oil and gas drilling rig, drilling pipe, related equipment and spare parts for a purchase price of $5.6 million in cash, inclusive of approximately $540,000 allocated to spare parts and $48,000 allocated to additional separate assets. The value of the spare parts and separate assets are captured in separate ledger accounts, but reported asone line item with the drilling rig on the balance sheet. Zion determined that the life of the I-35 drilling rig (the rig Zion purchased), is 10 years. Zion is depreciating the rig on a straight-line basis.

Zion uses the First In First Out (“FIFO”) method of accounting for the inventory spare parts, meaning that the earliest items purchased will be thefirst item charged to the well in which the inventory of spare parts gets consumed.

It is also noteworthy that various components and systems on the rig will be subject to certifications by the manufacturer to ensure that the rig is maintained at optimal levels. Per standard practice in upstream oil and gas, each certification performed on our drilling rig increases the useful life of the rig byfive years. The costs of each certification will be added to the drilling rig account, and our straight-line amortization will be adjusted accordingly.

Zion purchased rig spare parts totaling approximately $1,143,000 and $178,000 during the years ending* December 31,*2025 and2024, respectively, in preparation for its MJ-01 re-entry project.

Zion sold some excess scrap drilling pipe and accessories for approximately $35,000 to a local Israeli party during the year2024. This transaction triggered a reduction in Other Drilling Assets, an accumulated depreciation adjustment and a loss on the disposal.

See the table below for a reconciliation of the rig-related activity during the years ending* December 31,*2025 and2024.

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I-35 Drilling Rig & Associated Equipment

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** R. Other Comprehensive Income**

The Company doesnot have any activity that results in Other Comprehensive Income.

S. Recently Adopted Accounting Pronouncements

In* November 2023,the FASB issued ASUNo.* 2023-07, “Segment Reporting (Topic280*): Improvements to Reportable Segment Disclosures*”. The ASU improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses among other disclosure requirements. ASU2023-07 is effective for fiscal years beginning after* December 15, 2023,and interim periods within fiscal years beginning after December 15, 2024.Early adoption is permitted. The amendments will be applied retrospectively to all prior periods presented in the financial statements. Zion adopted this ASU effective January 1, 2024.The adoption of this ASU didnot* have any impact on its consolidated financial statements.

In* December 2023,the FASB issued ASU2023*-09, “Improvements to Income Tax Disclosures.” This ASU enhances income tax disclosures under topic740 to increase transparency for investors. Key changes include more detailed rate reconciliations, disaggregation of taxes paid by jurisdiction, and increased disclosure of income before taxes. The effect of this ASU became effective for fiscal years beginning after* December 15, 2024.Zion adopted this ASU effective January 1, 2025.The adoption of this ASU didnot* have any impact on its consolidated financial statements.

Other Recent Accounting Pronouncements

The Company doesnot believe that the adoption of any recently issued accounting pronouncements had a significant impact on our consolidated financial position, results of operations, or cash flow.

T. Operating Segments

The Company hasone operating segment and its Chief Operating Decision Maker (“CODM”) is its CEO. Consistent with its mission and vision, the Company explores for hydrocarbons in onshore Israel. The CODM manages exploration activities considering the following areas, at a minimum: (1) geological prospects within its license area and related feasibility to produce hydrocarbons, (2) the regulatory, administrative and political climate in Israel, (3) competition in Israel, (4) equipment and labor sourcing and (5) operational financing.

Within unproved oil and gas properties costs, the CODM monitors the costs of permitting and regulatory compliance, logistics and supply chain considerations associated with importation of labor and equipment, including managing the amounts and timing of prepayments to international service providers. The CODM works closely with its vice president of operations and CFO on capital expenditures to ensure adequate capital is available when needed.

Within our Statement of Operations, the Company hastwo primary categories of expenses: (1) “General and Administrative” costs, which consists primarily of salaries, payroll taxes and benefits, and (2) “Other”, which consists of a broad range of non-compensation related expenses, including fees for directors, accounting, legal and information technology services, as well as other professional fees. This "Other" category also includes costs for various lines of insurance, investor relations activities, office facilities, depreciation and annual meeting expenses. Zion has had very low employee turnover in recent years and our CODM monitors the salaries paid to its existing workforce. Additionally, the CODM is the decision maker in its annual insurance renewals for directors and officers, cybersecurity, rig andthird-party liability insurance, both in Dallas and in Israel.

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Note3 - Provision for Severance Pay

Israeli law generally requires payment of severance pay upon dismissal of an Israeli employee or upon termination of employment in certain other circumstances. The following plans relate to the employees in Israel:

The deposited funds include profits/loss accumulated up to the balance sheet date. The value of the deposited funds is based on current redemption value of these policies.

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Note4 - Unproved Oil and Gas Properties, Full Cost Method

Unproved oil and gas properties, under the full cost method, are comprised as follows:

Changes in Unproved oil and gas properties during the years ended* December 31, 2025*, and2024, are as follows:

Please refer to Footnote1 – Nature of Operations and Going Concern for more information about Zion’s exploration activities.

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Note5 - Accrued Liabilities

Accrued liabilities are comprised as follows:

Note6 - Stockholders’** Equity**

The Company’s shareholders approved the amendment of the Company’s Amended and Restated Certificate of Incorporation to increase the number of shares of common stock, par value $0.01, that the Company is authorized to issue from 1,200,000,000 shares to 1,600,000,000 shares, effective* June 4, 2025.*

A.2021 Omnibus Incentive Stock Option Plan

Effective* June 9, 2021,*the Company’s shareholders authorized the adoption of the Zion Oil & Gas, Inc.2021 Omnibus Incentive Stock Option Plan (“Omnibus Plan”) for employees, directors and consultants, initially reserving for issuance thereunder 38,000,000 shares of common stock.

The Omnibus Plan provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, bonus stock, awards in lieu of cash obligations, other stock-based awards and performance units. The plan also permits cash payments under certain conditions.

The compensation committee of the Board of Directors (comprised of independent directors) is responsible for determining the type of award, when and to whom awards are granted, the number of shares and the terms of the awards and exercise prices. The options are exercisable for a periodnot to exceedten years from the date of grant.

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During the year ended* December 31, 2025*, the Company granted the following options from the Omnibus Plan for employees, directors and consultants, to purchase shares of common stock as non-cash compensation:

During the year ended* December 31, 2024,*the Company granted the following options from the Omnibus Plan for employees, directors and consultants, to purchase shares of common stock as non-cash compensation:

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D. Warrants and Options

The Company has reserved 56,377,731 shares of common stock as of* December 31, 2025*, for the exercise of warrants and options to employees and non-employees, of which 56,377,731 are exercisable. These warrants and options could potentially dilute basic earnings per share in future years. The warrants and options exercise prices and expiration dates are as follows:

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Note6 - Stockholders’** **Equity (cont’d)

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The stock option transactions since* January 1,*2024 are shown in the table below:

The aggregate intrinsic value of options exercised during2025, and2024 was approximately $92,000, and $22,000 respectively.

The aggregate intrinsic value of the outstanding options and warrants as of* December 31, 2025*, totaling 56,377,731 was approximately $2,914,000.

The aggregate intrinsic value of the outstanding options and warrants as of* December 31, 2024*, totaling 62,204,034 was approximately $2,414,000.

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The following table summarizes information about stock options outstanding as of* December 31, 2025*:

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Granted to employees

The following table sets forth information about the weighted-average fair value of options granted to employees and directors during the year, using the Black Scholes option-pricing model and the weighted-average assumptions used for such grants:

Granted to non-employees

The Company didnot grant any options to non-employees during the years ended* December**31,2025* and2024.

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The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the options.

The expected life represents the weighted average period of time that options granted are expected to be outstanding. The expected life of the options granted to employees and directors is calculated based on the Simplified Method as allowed under Staff Accounting BulletinNo. 110 (“SAB110”), giving consideration to the contractual term of the options and their vesting schedules, as the Company doesnot have sufficient historical exercise data at this time. The expected life of the option granted to non-employees equals their contractual term. In the case of an extension of the option life, the calculation was made on the basis of the extended life.

D. Compensation Cost for Warrant and Option Issuances

The following table sets forth information about the compensation cost of warrant and option issuances recognized for employees and directors:

The following table sets forth information about the compensation cost of warrant and option issuances recognized for non-employees:

As of* December 31, 2025*, and2024, there was$nil and$nil, respectively, of unrecognized compensation cost, related to non-vested stock options granted under the Company’s various stock option plans.

F-25

E. Dividend Reinvestment and Stock Purchase Plan (“DSPP”or the "Plan")

On* March 13, 2014,Zion filed a registration statement on Form S-3 that was part of a replacement registration statement that was filed with the SEC using a “shelf” registration process. The registration statement was declared effective by the SEC on March 31, 2014.On February 23, 2017,the Company filed a Form S-3 with the SEC (RegistrationNo.* 333-216191) as a replacement for the Form S-3 (RegistrationNo. 333-193336), for which thethree-year period ended* March 31, 2017,along with the base Prospectus and Supplemental Prospectus. The Form S-3, as amended, and the new base Prospectus became effective on March 10, 2017,along with the Prospectus Supplement that was filed and became effective on March 10, 2017.The Prospectus Supplement under RegistrationNo.* 333-216191 describes the terms of the DSPP and replaces the prior Prospectus Supplement, as amended, under the prior RegistrationNo. 333-193336.

On* December 14, 2022,the Company extended the termination date of the ZNWAG warrant byone* (1) year from the expiration date of* January 8, 2023to January 8, 2024.Zion considers this warrant as permanent equity per ASC815*-40-35-2. As such, there isno value assigned to this extension.

As of* January 8, 2024,*any outstanding ZNWAG warrants expired.

F-26

Under our Plan, the Company under a Request For Waiver Program executed Waiver Term Sheets of a unit option program consisting of a Unit (shares of stock and warrants) of its securities and subsequently an option program consisting of shares of stock to a participant. The participant’s Plan account was credited with the number of shares of the Company’s Common Stock and warrants that were acquired. Each warrant provided the participant the opportunity to purchaseone share of our Common Stock at a warrant exercise price of $1.00. The warrant has the company notation of “ZNWAM.” The warrants werenot registered for trading on the OTCQB or any other stock market or trading market. The warrants became exercisable on* January 15, 2021and continued to be exercisable through July 15, 2022.*

On* March 21, 2022,the Company extended the termination date of the ZNWAM warrant byone* (1) year from the expiration date of* July 15, 2022to July 15, 2023and revised the exercise price to $0.05. Zion considers this warrant as permanent equity per ASC815*-40-35-2. As such, there isno value assigned to this extension.

On* June 16, 2023,the Company extended the termination date of the ZNWAM warrant from July 15, 2023to September 6, 2023.Zion considers this warrant as permanent equity per ASC815*-40-35-2. As such, there isno value assigned to this extension.

On* August 21, 2023,the Company extended the termination date of the ZNWAM warrant from September 6, 2023to October 31, 2023.Zion considers this warrant as permanent equity per ASC815*-40-35-2. As such, there isno value assigned to this extension.

On* October 19, 2023,the Company extended the termination date of the ZNWAM warrant from October 31, 2023to December 31, 2023.Zion considers this warrant as permanent equity per ASC815*-40-35-2. As such, there isno value assigned to this extension.

On* December 18, 2023,the Company extended the termination date of the ZNWAM warrant from December 31, 2023to March 31, 2024.Zion considers this warrant as permanent equity per ASC815*-40-35-2. As such, there isno value assigned to this extension.

On* March 28, 2024,the Company extended the termination date of the ZNWAM warrant from March 31, 2024to December 31, 2024.Zion considers this warrant as permanent equity per ASC815*-40-35-2. As such, there isno value assigned to this extension.

On* January 21, 2025,the Company extended the termination date of the ZNWAM warrant from December 31, 2024to March 31, 2025.Zion considers this warrant as permanent equity per ASC815*-40-35-2. As such, there isno value assigned to this extension.

On* March 18, 2025,*the entire number of outstanding warrants of 4,376,000 were exercised at $.05 each for total proceeds to Zion of approximately $219,000. As of this report date, there areno ZNWAM warrants outstanding.

F-27

Under our Plan, the Company under a Request For Waiver Program executed a Waiver Term Sheet of a unit program consisting of units of shares of stock and warrants to a participant. After conclusion of the program on* June 18, 2021,the participant’s Plan account was credited with the number of shares of the Company’s Common Stock and warrants that were acquired. Each warrant provided the participant the opportunity to purchaseone share of our Common Stock at a warrant exercise price of$.25. The warrant shall have the company notation of “ZNWAQ.” The warrants werenot* registered for trading on the OTCQB or any other stock market or trading market. The warrants were issued on* May 5, 2022and were exercisable through July 15, 2023*at a revised per share exercise price of$.05.

On* June 16, 2023,the Company extended the termination date of the ZNWAQ warrant from July 15, 2023to September 6, 2023.Zion considers this warrant as permanent equity per ASC815*-40-35-2. As such, there isno value assigned to this extension.

On* August 21, 2023,the Company extended the termination date of the ZNWAQ warrant from September 6, 2023to October 31, 2023.Zion considers this warrant as permanent equity per ASC815*-40-35-2. As such, there isno value assigned to this extension.

On* October 19, 2023,the Company extended the termination date of the ZNWAQ warrant from October 31, 2023to December 31, 2023.Zion considers this warrant as permanent equity per ASC815*-40-35-2. As such, there isno value assigned to this extension.

F-28

On* December 18, 2023,the Company extended the termination date of the ZNWAQ warrant from December 31, 2023to March 31, 2024.Zion considers this warrant as permanent equity per ASC815*-40-35-2. As such, there isno value assigned to this extension.

On* March 28, 2024,the Company extended the termination date of the ZNWAQ warrant from March 31, 2024to December 31, 2024.Zion considers this warrant as permanent equity per ASC815*-40-35-2. As such, there isno value assigned to this extension.

On* January 21, 2025,the Company extended the termination date of the ZNWAQ warrant from December 31, 2024to March 31, 2025.Zion considers this warrant as permanent equity per ASC815*-40-35-2. As such, there isno value assigned to this extension.

During* March**2025,* the entire number of outstanding warrants of 23,428,348 were exercised at $.05 each for total proceeds to Zion of approximately $1,171,000. As of this report date, there areno ZNWAQ warrants outstanding.

Under our Plan, the Company under a Request For Waiver Program executed a Waiver Term Sheet of a unit program consisting of units of shares of stock and warrants to a participant. After conclusion of the program on* November 15, 2021,the participant’s Plan account was credited with the number of shares of the Company’s Common Stock and warrants that will be acquired. Each warrant provides the participant the opportunity to purchaseone* share of our Common Stock at a warrant exercise price of $1.00. The warrant shall have the company notation of “ZNWAS.” The warrants willnot be registered for trading on the OTCQB or any other stock market or trading market. The warrants were issued and became exercisable on* January 15, 2026and continue to be exercisable through June 30, 2026*at a per share exercise price of$.25.

On* January 15, 2026,the Company issued 145,180,117 warrants toone* participant, with an expiration date of* June 30, 2026.*The exercise price of the ZNWAS warrant is$.25.

Under our Plan, the Company under a Request For Waiver Program executed a Waiver Term Sheet of a unit program consisting of units of shares of stock and warrants to a participant. After conclusion of the program on* September 30, 2022,the participant’s Plan account was credited with the number of shares of the Company’s Common Stock and Warrants that were acquired. Each warrant provides the participant the opportunity to purchaseone* share of our Common Stock at a warrant exercise price of$.25. The warrant shall have the company notation of “ZNWAT.” The warrants willnot be registered for trading on the OTCQB or any other stock market or trading market.

On* August 27, 2025,the Company issued 9,019,652 warrants toone* participant, with an expiration date of* December 31, 2025.*The exercise price of the ZNWAT warrant was lowered from$.25 to $.18.

On* November 17, 2025,the Company extended the termination date of the ZNWAT warrant from December 31, 2025to March 31, 2026.Zion considers this warrant as permanent equity per ASC815*-40-35-2. As such, there isno value assigned to this extension.

F-29

Under our Plan, the Company under a Request For Waiver Program executed a Waiver Term Sheet of a unit program consisting of units of shares of stock and warrants to a participant. After conclusion of the program on* December 31, 2022,the participant’s Plan account was credited with the number of shares of the Company’s Common Stock and Warrants that were acquired. Each warrant provides the participant the opportunity to purchaseone* share of our Common Stock at a warrant exercise price of$.25. The warrant shall have the company notation of “ZNWAU.” The warrants willnot be registered for trading on the OTCQB or any other stock market or trading market.

On* January 15, 2026,the Company issued 19,147,462 warrants toone* participant, with an expiration date of* June 30, 2026.*The exercise price of the ZNWAU warrant is$.25.

On* January 1, 2024,the Company executed a Waiver Term Sheet with a participant consisting of shares of stock. After conclusion of the program on March 31, 2024,*the participant’s Plan account was credited with the number of shares of the Company’s Common Stock that were acquired.

On* April 1, 2024,*the Company executed a Waiver Term Sheet of a unit program with a participant consisting of shares of stock and warrants.

The program was scheduled to terminate at the earlier of: (a) a maximum purchase of $10,000,000 through the DSPP, (b)* October 1, 2024or (c) the closing price of Zion’s stock is 15 cents per share forfive* (5) consecutive days. Additional terms of the Waiver Term Sheet included the pro-rata issuance of up to 5,000,000 warrants with an exercise price of$.25 per share and an expiration date of* December 31, 2024,in the event the Participant purchases up to $5,000,000 of the Company’s stock by July 1, 2024.*

On or around* August 13, 2024,afirst* amendment to its current Waiver Term Sheet was signed with the participant. The additional terms of the Waiver Term sheet included the pro-rata issuance of up to 10,000,000 warrants with an exercise price of$.25 per share and an expiration date of* December 31, 2024,in the event the Participant purchases up to $10,000,000 of the Company’s stock by October 1, 2024.*

On or around* September 30, 2024,asecond* amendment to its current Waiver Term Sheet was signed with the participant. The additional terms of the Waiver Term sheet included changing the expiration date to* December 31, 2024and the pro-rata issuance of up to 10,000,000 warrants with an exercise price of$.25 per share and an expiration date of April 1, 2025,in the event the Participant purchases up to $10,000,000 of the Company’s stock by December 31, 2024.*

On or around* November 12, 2024,athird* amendment to its current Waiver Term Sheet was signed with the participant. The additional terms of the Waiver Term sheet included changing the provision for the program termination provided that the closing stock price is$.20 cents per share or higher forfive (5) consecutive days.

On or around* January 21, 2025,afourth* amendment to the Waiver Term Sheet was signed with the participant. The Pricing Plan of the program terminated at the earlier of: (a) a maximum purchase of $15,000,000 through the DSPP, (b)* June 30, 2025or (c) the closing price of Zion’s stock is 20 cents per share forfive* (5) consecutive days. Additional terms of the Waiver Term Sheet include the pro-rata issuance of up to 15,000,000 warrants with an exercise price of$.25 per share and an expiration date of* December 31, 2025,in the event the Participant purchases up to $15,000,000 of the Company’s stock by June 30, 2025.*

As of* May 2, 2025,*the above referenced Waiver Term Sheet was terminated as the participant completed the maximum purchase of $15,000,000 through the DSPP along with 15,000,000 warrants.

On* May 19, 2025,*a total of 15,000,000 warrants were issued to the participant with the internal designation as the “ZNWBB” warrants.

Under our Plan, the Company under a Request For Waiver Program executed a Waiver Term Sheet effective* August 27, 2025of shares of stock to a participant. This program had a maximum investment of $2,500,000. After conclusion of the program on around September 30, 2025,*the participant’s Plan account was credited with the number of shares of the Company’s Common Stock that were acquired.

Under our Plan, the Company under a Request For Waiver Program executed a Waiver Term Sheet of a unit program effective* November 4, 2025consisting of shares of stock and warrants to a participant. This program had a maximum investment of $250,000 excluding the exercise of any warrants. After conclusion of the program on or around November 18, 2025,the participant’s Plan account was credited with the number of shares of the Company’s Common Stock and warrants that were acquired. Each warrant provided the participant the opportunity to purchaseone* share of our Common Stock at a warrant exercise price of$.05. The warrant shall have the company notation of “ZNWBC.” The warrants willnot be registered for trading on the OTCQB or any other stock market or trading market.

On* November 19, 2025,a total of 1,519,136 warrants were issued to the participant with the internal designation of the “ZNWBC” warrants. The participant had until March 15, 2026*in which to exercise the warrants.

On* November 26, 2025,all of the ZNWBC warrants were exercised, resulting in approximately $76,000 to the Company. As of that date, there wereno* ZNWBC warrants outstanding.

Under our Plan, the Company under a Request for Waiver Program executed a Waiver Term Sheet effective* November 17, 2025of shares of stock to a participant. This program had a maximum investment of $1,500,000 by December 31, 2025.*After conclusion of the program, the participant’s Plan account was to be credited with the number of shares of the Company’s Common Stock that were acquired.

On* December 22, 2025,afirst* amendment to the Waiver Term Sheet was executed whereby the date was extended from* December 31, 2025to January 31, 2026in which to reach the maximum investment. As part of thisfirst* amendment, the termination date of the ZNWAT warrants was extended from* December 31, 2025to March 31, 2026.*

On* January 14, 2026,asecond* amendment to the Waiver Term Sheet was executed whereby the maximum investment was raised from $1,500,000 to $5,000,000. The termination date of* January 31, 2026remained in effect. Furthermore, this Waiver Term Sheet terminated on January 31, 2026*with the maximum investment being reached.

During the year ended* December 31, 2025,*Zion incurred $11,000 in equity issuance costs.

During the year ended* December 31, 2024,*Zion incurred $2,921,000 in equity issuance costs.

During2025,two participants who participated in the “Request for Waiver” aspect of the DSPP contributed approximately 60% of the cash raised through the DSPP.

During2024,one participant who participated in the “Request for Waiver” aspect of the DSPP contributed approximately 57% of the cash raised through the DSPP.

F-30

AmendmentNo. 4 – New Unit Option under the Plan**

Under our Plan, we provided a Unit Option under our Unit Program with this AmendmentNo. 4. This Unit Option period began on* November 6, 2023and was scheduled to terminate on December 31, 2023.See AmendmentNo* 5 below for data on an extension.

Our Unit Option consists of the combination of Common Stock and warrants with basic Unit Option program features, conditions and terms outlined in the Original Prospectus Supplement. AmendmentsNo. 1, 2 and3 have expired. AmendmentNo. 4 provided the option period, unit price and the determination of the number of shares of Common Stock and warrants per unit. This Unit Option began on* November 6, 2023and was scheduled to terminated on December 31, 2023,unless extended at the sole option of Zion Oil & Gas, Inc. The Unit Option consisted of Units of our securities where each Unit (priced at $250.00 each) was comprised of (i) a certain number of shares of Common Stock determined by dividing $250.00 (the price ofone* Unit) by the average of the high and low sale prices of the Company’s publicly traded common stock as reported on the OTCQB on the Unit Purchase Date and (ii) Common Stock purchase warrants to purchase an additionalfifty (50) shares of Common Stock at a per share exercise price of $0.25. The participant’s Plan account was credited with the number of shares of the Company’s Common Stock and Warrants that were acquired under the Units purchased. Each warrant provided the participant the opportunity to purchaseone share of our Common Stock at a warrant exercise price of $0.25. The warrants have the Company notation of “ZNWBA” and willnot be registered for trading on the OTCQB or any other stock market or trading market.

Plan participants, who enrolled into the Unit Option program with the purchase of at leastone Unit and enroll in the separate Automatic Monthly Investments (“AMI”) program at a minimum of*$50.00* per month, received an additionalfifty (50) warrants at an exercise price of $0.25 during this Unit Option Program. Thefifty (50) additional warrants were for enrolling in the AMI program and received the above warrant with the Company notation of “ZNWBA.” Existing subscribers to the AMI were entitled to the additionalfifty (50) warrants, if they purchased at leastone (1) Unit during the Unit program.

The ZNWBA warrants became exercisable on* January 15, 2024,and continued to be exercisable through January 15, 2025,unless extended, at a per share exercise price of $0.25. See AmendmentNo.* 5 below for new dates.

AmendmentNo. 5 – Extension of Termination Date to January 31, 2024****

Under our Plan, we extended the current Unit Option that was filed under AmendmentNo. 4, dated* November 6, 2023,to terminate on January 31, 2024.*

The ZNWBA warrants now would befirst exercisable on* February 15, 2024,instead of January 15, 2024and continue to be exercisable through February 15, 2025,instead of January 15, 2025,unless extended, at a per share exercise price of $0.25. Zion considers this warrant as permanent equity per ASC815*-40-35-2. As such, there isno value assigned to this extension.

Accordingly, all references in the Original Prospectus Supplement and AmendmentNo. 1 and AmendmentNo. 4, concerning the Unit Option, continue, except for the substitution of the revised Unit Option dates and features above. All other Plan features, conditions and terms remain unchanged.

The date of this AmendmentNo. 5 to Prospectus Supplement was* December 20, 2023.*

AmendmentNo. 6 – Extension of Termination Date to February**29,* 2024***

Under our Plan, we extended the current Unit Option that was filed under AmendmentNo. 4, dated* November 6, 2023,to terminate on February**29,* 2024.

The ZNWBA warrants now will be exercisable on* March 15, 2024,instead of February 15, 2024and continue to be exercisable through March 15, 2025,instead of February 15, 2025,unless extended, at a per share exercise price of $0.25. Zion considers this warrant as permanent equity per ASC815*-40-35-2. As such, there isno value assigned to this extension.

Accordingly, all references in the Original Prospectus Supplement and AmendmentNo. 1 and AmendmentNo. 4, concerning the Unit Option, continue, except for the substitution of the revised Unit Option dates and features above. All other Plan features, conditions and terms remain unchanged.

The date of this AmendmentNo. 6 to Prospectus Supplement was* January 29, 2024.*

F-31

AmendmentNo. 7 – Extension of Termination Date to March 31, 2024****

Under our Plan, we extended the current Unit Option that was filed under AmendmentNo. 4, dated* November 6, 2023,to terminate on March 31, 2024.*

The ZNWBA warrants now will befirst exercisable on* April 15, 2024,instead of March 15, 2024and continue to be exercisable through April 15, 2025,instead of March 15, 2025,unless extended, at a per share exercise price of $0.25. Zion considers this warrant as permanent equity per ASC815*-40-35-2. As such, there isno value assigned to this extension.

Accordingly, all references in the Original Prospectus Supplement and AmendmentNo. 1 and AmendmentNo. 4, concerning the Unit Option, continue, except for the substitution of the revised Unit Option dates and features above. All other Plan features, conditions and terms remain unchanged.

The date of this AmendmentNo. 7 to Prospectus Supplement was* February 26, 2024.*

AmendmentNo. 8 – Extension of Termination Date to April 30, 2024****

Under our Plan, we extended the current Unit Option that was filed under AmendmentNo. 4, dated* November 6, 2023,to terminate on April 30, 2024.*

The ZNWBA warrants now will befirst exercisable on* May 15, 2024,instead of April 15, 2024,and continue to be exercisable through May 15, 2025,instead of April 15, 2025,unless extended, at a per share exercise price of $0.25. Zion considers this warrant as permanent equity per ASC815*-40-35-2. As such, there isno value assigned to this extension.

Accordingly, all references in the Original Prospectus Supplement and AmendmentNo. 1 and AmendmentNo. 4, concerning the Unit Option, continue, except for the substitution of the revised Unit Option dates and features above. All other Plan features, conditions and terms remain unchanged.

The date of this AmendmentNo. 8 to Prospectus Supplement was* March 23, 2024.*

F-32

AmendmentNo. 9 – Extension of Termination Date to May 31, 2024****

Under our Plan, we extended the current Unit Option that was filed under AmendmentNo. 4, dated* November 6, 2023,to terminate on May 31, 2024.*

The ZNWBA warrants now will befirst exercisable on* June 15, 2024,instead of May 15, 2024,and continue to be exercisable through June 15, 2025,instead of May 15, 2025,unless extended, at a per share exercise price of $0.25. Zion considers this warrant as permanent equity per ASC815*-40-35-2. As such, there isno value assigned to this extension.

Accordingly, all references in the Original Prospectus Supplement and AmendmentNo. 1 and AmendmentNo. 4, concerning the Unit Option, continue, except for the substitution of the revised Unit Option dates and features above. All other Plan features, conditions and terms remain unchanged.

The date of this AmendmentNo. 9 to Prospectus Supplement was* April 24, 2024.*

AmendmentNo. 10 – Extension of Termination Date to August 31, 2024****

Under our Plan, we extended the current Unit Option that was filed under AmendmentNo. 4, dated* November 6, 2023,to terminate on August 31, 2024.*

The ZNWBA warrants now will befirst exercisable on* September 15, 2024,instead of June 15, 2024,and continue to be exercisable through September 14, 2025,instead of June 15, 2025,unless extended, at a per share exercise price of $0.25. Zion considers this warrant as permanent equity per ASC815*-40-35-2. As such, there isno value assigned to this extension.

Accordingly, all references in the Original Prospectus Supplement and AmendmentNo. 1 and AmendmentNo. 4, concerning the Unit Option, continue, except for the substitution of the revised Unit Option dates and features above. All other Plan features, conditions and terms remain unchanged.

The date of this AmendmentNo. 10 to Prospectus Supplement was* May 29, 2024.*

AmendmentNo. 11 – Extension of Termination Date to October 15, 2024****

Under our Plan, we extended the current Unit Option that was filed under AmendmentNo. 4, dated* November 6, 2023,to terminate on October 15, 2024.*

The ZNWBA warrants now will befirst exercisable on* November 15, 2024,instead of September 15, 2024,and continue to be exercisable through November 14, 2025,instead of September 15, 2025,unless extended, at a per share exercise price of $0.25. Zion considers this warrant as permanent equity per ASC815*-40-35-2. As such, there isno value assigned to this extension.

Accordingly, all references in the Original Prospectus Supplement and AmendmentNo. 1 and AmendmentNo. 4, concerning the Unit Option, continue, except for the substitution of the revised Unit Option dates and features above. All other Plan features, conditions and terms remain unchanged.

The date of this AmendmentNo. 11 to Prospectus Supplement was* August 22, 2024.*

F-33

AmendmentNo. 12 – Extension of Termination Date to December 31, 2024****

Under our Plan, we extended the current Unit Option that was filed under AmendmentNo. 4, dated* November 6, 2023.Our Unit Program consists of the combination of Common Stock and warrants with an extended time period, but otherwise the same Unit Program features, conditions and terms in the Prospectus Supplement and AmendmentNo.* 4 apply. We extended under our Unit Program that was to terminate* October 15, 2024,but now will terminate December 31, 2024,*and we extended the exercise and termination dates of the related ZNWBA warrants.

The ZNWBA warrants became exercisable on* January 31, 2025,instead of November 15, 2024,and continue to be exercisable through January 31, 2026,instead of November 15, 2025,unless extended, at a per share exercise price of $0.25. Zion considers this warrant as permanent equity per ASC815*-40-35-2. As such, there isno value assigned to this extension.

Accordingly, all references in the Original Prospectus Supplement and AmendmentNo. 1 and AmendmentNo. 4, concerning the Unit Option, continue, except for the substitution of the revised Unit Option dates and features above. All other Plan features, conditions and terms remain unchanged.

The date of this AmendmentNo. 12 to Prospectus Supplement was* October 9, 2024.*

F-34

AmendmentNo. 13 – Extension of Termination Date to February 28, 2025****

Under our Plan, we extended the current Unit Option that was filed under AmendmentNo. 4, dated* November 6, 2023,to terminate on February 28, 2025.*

The ZNWBA warrants now became exercisable on* March 31, 2025,instead of January 31, 2025,and continue to be exercisable through March 31, 2026,instead of January 31, 2026,unless extended, at a per share exercise price of $0.25. Zion considers this warrant as permanent equity per ASC815*-40-35-2. As such, there isno value assigned to this extension.

Accordingly, all references in the Original Prospectus Supplement and AmendmentNo. 1 and AmendmentNo. 4, concerning the Unit Option, continue, except for the substitution of the revised Unit Option dates and features above. All other Plan features, conditions and terms remain unchanged.

The date of this AmendmentNo. 13 to Prospectus Supplement was* December 10, 2024.*

The current Unit Option terminated on* February 28, 2025as described in AmendmentNo.* 13. The ZWNBA warrants, exercisable at $0.25, were issued on* March 31, 2025and will be exercisable through March 31, 2026.*

For the years ended* December 31, 2025*, and2024, approximately $29,000 and$nil, respectively, were recorded under the Company’s Statement of Changes in Stockholders’ Equity as Subscriptions Receivables. The funds corresponding to the* December 31, 2025balance were received in January 2026.*

For the years ended* December 31, 2025*, and2024, approximately $21,479,000, and $16,257,000 were raised under the DSPP program, respectively. The $21,479,000 and $16,257,000 figures were reduced by $11,000 and $2,921,000, respectively, in equity issuance costs to an outside party resulting in net cash provided of $21,468,000 and $13,336,000, respectively.

The company raised approximately $6,530,000 from the period* January 1, 2026through March 17, 2026under the DSPP program, which includes collection of the $29,000 stock subscription receivable at December 31, 2025.*

The warrants represented by the company notation ZNWAA are tradeable on the OTCQX market under the symbol ZNOGW. However, all of the other warrants characterized above, in the table below, and throughout this Form10-K, arenot tradeable and are used internally for classification and accounting purposes only.

F-35

G. Warrant Tables

The warrant activity and balances for the year2024 are shown in the table below:

The warrant activity and balances for the year2025 are shown in the table below:

F-36

H. Warrant Descriptions of Current Warrants

The price and the expiration dates for the series of warrants to investors are shown in the table below. The listing contains only those warrants that have a balance and with an expiration date beyond the balance sheet date.

F-37

Note7 - Income Taxes

The Company hadno income tax expense due to the operating loss incurred for the years ended* December 31, 2025and2024*.

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at* December 31, 2025and2024* are presented below:

In assessing the likelihood of the realization of deferred tax assets, management considers whether it is more likely thannot that some portion or all of the deferred tax assets willnot be realized. The ultimate realization of deferred tax assets, including net operating losses, is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible and tax carry forwards are utilizable.

Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. In order to fully realize the deferred tax asset, the Company will need to generate future taxable income of approximately $303,761,000 prior to the expiration of some of the net operating loss carry forwards between2025 and2046. Based upon the level of historical taxable losses since the Company’s inception, management believes that the Company willnot likely realize the benefits of these deductible differences and tax carry forwards and thus, full valuation allowances have been recorded at* December 31, 2025and2024*.

The Company continuously monitors all shareholders that might reach a5% ownership in the common stock for various purposes, in addition to the I.R.C*§382/383* limitation on net operating loss (“NOL”) carry forwards following an ownership change. Sections382/383 limit the use of corporate NOLs following an ownership change. Section382(g) defines an ownership change generally as a greater than50% change in the ownership of stock among certain5% shareholders over athree-year period. For the tax year2019, the Company became aware ofone individual owning greater than5%, as evidenced by the filing of a Section13(G) report with the SEC. However, there have beenno changes in stock ownership to trigger sections382/383.

At* December 31, 2025*, the Company has available federal net operating loss carry forwards of approximately $303,761,000 to reduce future U.S. taxable income.

F-38

Note7 - Income Taxes(cont’d)

The Tax Cuts and Jobs Act (TCJA) removed the2-year carryback provision, extended the20-year carryforward provision out indefinitely, and limited carryforwards to80% of net income in any future year. Net operating losses originating in tax years beginning prior to* Jan. 1, 2018,are still subject to the former carryover rules of100%* of net income and20 taxable years following the taxable year of loss. I.R.C.§172.

Income earned from activities in Israel is subject to regular Israeli tax rates. For Israeli tax purposes, exploration costs on unproved properties are expensed. Tax losses can be carried forward indefinitely. At* December 31, 2025*, the Company has available net operating loss carry forwards of approximately $198,871,672 to reduce future Israeli taxable income. Based upon the level of historical taxable losses since the Company’s inception, management believes that the Company willnot likely realize the benefits of these deductible differences and tax carry forwards and thus, full valuation allowances have been recorded at* December 31, 2025*.

On* July 11, 2014,Zion Oil & Gas, Inc. registered the Geneva Branch in the Canton of Geneva, Switzerland. The legal Swiss name for the foreign branch is “Zion Oil & Gas, Inc., Wilmington, Branch of Geneva.” The Geneva Branch has its registered office and its business office at6* Avenue Jules Crosnier,1206 Champel, Case Postale295, 1211 Geneva12, Switzerland. The purpose of the branch is to operate a foreign treasury center for the Company. As such, the Geneva branch isnot expected to have taxable income in any future year.

Reconciliation between the theoretical tax benefit on pre-tax reported (loss) and the actual income tax expense:

In* December 2023,the FASB issued ASU2023*-09, “Improvements to Income Tax Disclosures.” This ASU enhances income tax disclosures under topic740 to increase transparency for investors. Key changes include more detailed rate reconciliations, disaggregation of taxes paid by jurisdiction, and increased disclosure of income before taxes. The effect of this ASU became effective for fiscal years beginning after* December 15, 2024.Zion adopted this ASU effective January 1, 2025.The adoption of this ASU didnot* have any impact on its consolidated financial statements.

The Company hasno material unrecognized tax benefit which would favorably affect the effective income tax rate in future periods and doesnot believe there will be any significant increases or decreases within the nexttwelve months. No interest or penalties have been accrued.

The Company hasnot received final tax assessments since incorporation. In accordance with the US tax regulations, the U.S. federal income tax returns remain subject to examination for the years beginning in 2022.

The Israeli branch hasnot received final tax assessments since incorporation. In accordance with the Israeli tax regulations, tax returns submitted up to and including the 2020 tax year can be regarded as final.

F-39

Note8 - Right of use leases assets and leases obligations

The Company is a lessee in several non-cancellable operating leases, primarily for transportation and office space.

The table below presents the operating lease assets and liabilities recognized on the balance sheets as of* December 31, 2025and2024*:

The depreciable lives of operating lease assets and leasehold improvements are limited by the expected lease term.

The Company’s leases generally donot provide an implicit rate, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease within a particular currency environment. The Company used incremental borrowing rates as of* January 1, 2019*for operating leases that commenced prior to that date.

Dallas office lease

On* November 25, 2025,the Company and LLL Four Forest, LP (“LLL”) signed an Office Lease Agreement (“Agreement”) whereby approximately 8,006 rentable square feet of space, of which approximately 5,577 rentable square feet are located in Suite1450* located on thefourteenth floor, and approximately 2,429 square feet are located in Suite1740 located on theseventeenth floor. The lease commencement date is* January 1, 2026and the term is forthree years andfive* months with the lease termination being on around* May 31, 2029.The Agreement provided five (5) months of abated rent at the beginning of the lease term. A security deposit of $16,679 was paid in December 2025and prepaid rent of $192,144 was also paid in December 2025.With the payment of the prepaid rent in December 2025,the Company’s rent is paid through May 2027.Beginning on June 1, 2026and extending through May 31, 2027,the Company will pay monthly rent at $24.00 per square foot. Beginning on June 1, 2027and extending through May 31, 2028,the Company will pay monthly rent at $24.50 per square foot. Beginning on June 1, 2028and extending through May 31, 2029,*the Company will pay monthly rent at $25.00 per square foot. The Company will also pay its prorata share of electricity, taxes and common area maintenance in the building.

Israel office lease

The Company’s field office in Caesarea, Israel is under lease for 6,566 square feet.

The Company had an option to renew the lease for another five years from* February 1, 2024to January 31, 2029,provided it isnot* in breach of the agreement, where it is required as well to furnish a notice of intent to exercise the optionsix months prior to termination of lease, and it furnishes a bank guarantee and insurance confirmation prior to commencement of the option period. The Company exercised the option to renew the lease for another seven years from* February 1, 2024through January 31, 2031,when rent is to be paid on a monthly basis in the base amount of approximately NIS 46,500 per month (approximately $15,000) at the exchange rate in effect on the date of this report and is linked to an increase (butnot* a decrease) in the CPI.

The Company’s weighted average remaining lease term and weighted average discount rate for operating leases as of* December 31, 2025* are:

The table below reconciles the undiscounted future minimum lease payments (displayed by year and in the aggregate) under non-cancellable operating leases with terms of more thanone year to the total operating lease liabilities recognized on the balance sheets as of* December 31, 2025*:

Operating lease costs were $301,000 and $313,000 for the years ended* December 31, 2025*, and2024, respectively. Operating lease costs are included within general and administrative expenses on the statements of income.

Cash paid for amounts included in the measurement of operating lease liabilities was $13,000 and $276,000 for the years ended* December 31, 2025*, and2024, respectively, and this amount is included in operating activities in the statements of cash flows.

Right-of-use assets obtained in exchange for new operating lease liabilities were $331,000 and $829,000 for the years ended* December 31, 2025*, and2024, respectively.

F-40

Note9 - Commitments and Contingencies

A. Litigation

From time to time, the Company* may*be subject to routine litigation, claims or disputes in the ordinary course of business. The Company defends itself vigorously in all such matters. However, we cannot predict the outcome or effect of any of the potential litigation, claims or disputes.

On* June 3, 2025,the Company received a notification via summons that it is being sued in the Superior Court of California, County of Los Angeles under the state’s “Trap and Trace” law. California’s Trap and Trace law, part of the California Invasion of Privacy Act (CIPA) Penal Code Section638.51* prohibits installing or using devices or processes to capture incoming electronic signaling information (like IP addresses or routing data) without a court order or user consent. The company has retained counsel in the state of California and this case is ongoing. Approximately $25,000 in legal expenses was recognized in2025. We are expecting to incur some additional expenses in2026, but they arenot expected to be material to the Company.

On* March 9, 2026,*the Company was advised by the Superior Court of California, County of Los Angeles, that the lawsuit was dismissed without prejudice against the Company.

B. Asset Retirement

The Company currently estimates that the costs of plugging and decommissioning of the exploratory wells drilled to date in the former Joseph License area and the present New Megiddo Valleys License434 to be approximately $571,000 based on current cost rather than Net Present Value. The Company expects to incur such costs during2026. Liabilities for expenditures are recorded when environmental assessment and/or remediation is probable and the timing and costs can be reasonably estimated.

Changes in Asset Retirement Obligations were as follows:

C. Environmental and Onshore Licensing Regulatory Matters

The Company is engaged in oil and gas exploration and production and* may*become subject to certain liabilities as they relate to environmental clean-up of well sites or other environmental restoration procedures and other obligations as they relate to the drilling of oil and gas wells or the operation thereof. Various guidelines have been published in Israel by the State of Israel’s Petroleum Commissioner and Energy and Environmental Ministries as it pertains to oil and gas activities. Mention of these older guidelines was included in previous Zion filings.

The Company believes that these regulations will result in an increase in the expenditures associated with obtaining new exploration rights and drilling new wells. The Company expects that an additional financial burden could occur as a result of requiring cash reserves that could otherwise be used for operational purposes. In addition, these regulations are likely to continue to increase the time needed to obtain all of the necessary authorizations and approvals to drill and production test exploration wells.

As of* December 31, 2025and2024*, the Company accruednil andnil for license regulatory matters.

D. Charitable Foundations

Two charitable foundations were established,one in Israel andone in Switzerland, for the purpose of supporting charitable projects and other charities in Israel, the United States and internationally. A 3% royalty or equivalent interest in any Israeli oil and gas interests as* maynow be held or, in the future be acquired, by the Company was assigned to each charitable organization (6% interest in the aggregate). At December 31, 2025and2024*, the Company didnot have any outstanding obligation in respect of the charitable foundations, since to this date,no proved reserves have been found.

F-41

Note9 - Commitments and Contingencies(cont’d)

E. Office and Vehicle Leases

(i) The Company’s corporate office in Dallas, Texas is under lease for 8,006 square feet.

On* November 25, 2025,the Company and LLL Four Forest, LP (“LLL”) signed an Office Lease Agreement (“Agreement”) whereby approximately 8,006 rentable square feet of space, of which approximately 5,577 rentable square feet are located in Suite1450* located on thefourteenth floor, and approximately 2,429 square feet are located in Suite1740 located on theseventeenth floor. The lease commencement date is* January 1, 2026and the term is forthree years andfive* months with the lease termination being on or around* May 31, 2029.The Agreement provided five (5) months of abated rent at the beginning of the lease term. A security deposit of $16,679 was paid in December 2025and prepaid rent of $192,144 was also paid in December 2025.With the payment of the prepaid rent in December 2025,the Company’s rent is paid through May 2027.Beginning on June 1, 2027and extending through May 31, 2028,the Company will pay monthly rent at $24.50 per square foot. Beginning on June 1, 2028and extending through May 31, 2029,*the Company will pay monthly rent at $25.00 per square foot. The Company will also pay its prorata share of electricity, taxes and common area maintenance in the building.

Prior to the aforementioned lease, the Company’s corporate office in Dallas, Texas was under lease for 8,774 square feet in a separate building. On* October 4, 2023,the Company and the Lessor signed a Third Amendment to the Lease Agreement (“Third Amendment”) whereby the Lease extended from June 1, 2023through December 31, 2024,for a total of 19 months. The monthly payments to be paid were as follows: (1) basic rent of $7,677.25, (2) common area maintenance of $2,917.36, (3) taxes and insurance of $1,593.94 and (4) electricity charges of $1,703.62. That building changed ownership in April 2024.For the year2025,* a new lease or lease amendment wasnot extended to Zion and we continued to pay the same rates in2025 as we did in2024. The Company moved out of its former offices in mid-* December 2025.*

(ii) The Company’s field office in Caesarea, Israel is under lease for 6,566 square feet.

The Company had an option to renew the lease for another five years from* February 1, 2024to January 31, 2029,provided it isnot* in breach of the agreement, where it is required as well to furnish a notice of intent to exercise the optionsix months prior to termination of lease, and it furnishes a bank guarantee and insurance confirmation prior to commencement of the option period. The Company exercised its option to renew the lease for another seven years from* February 1, 2024through January 31, 2031,when rent is to be paid on a monthly basis in the base amount of approximately NIS 46,500 per month (approximately $15,000) at the exchange rate in effect on the date of this report and is linked to an increase (butnot* a decrease) in the CPI.

Under the lease agreement, the Company is authorized to further sublease part of the leased premises to athird party that is pre-approved by the sub-lessor. Rent and its related taxes, utilities, insurance and maintenance expenses for2025 and2024 were $414,000 and $397,000 respectively.

(iii) On* November 14, 2023,the Company and GM Financial (as Lessor) signed a motor vehicle lease agreement for a2023* Chevy Equinox. Thefirst payment of $499.32 was due on* November 14, 2023and this was paid on or around that date. The lease calls for38* additional payments, from* December 2023through January 2027,of $499.32 so that the sum of all39* payments is $19,473.48. At the inception of the lease, and in addition to the sum of the39 payments, lease signing bonuses provided an initial $1,500 reduction of the lease cost on* November 14, 2023.The value at the end of the lease has a residual value of $14,011.40 per the terms of the lease agreement. Additionally, the Company must pay the Lessor$.25 cents per mile for each mile in excess of20,000* annual miles. This lease is treated as an operating lease.

At* December 31, 2025*, and continuing through the date of this Form10-K report, all payments have been paid.

F-42

Note9 - Commitments and Contingencies(cont’d)

The future minimum lease payments as of* December 31, 2025*, are as follows:

F. Insurance Financing

Effective* November 16, 2023,the Company renewed itsthird*-party liability (“TPL”) insurance policy in Israel with total premiums, taxes and fees for approximately $76,000. A cash down payment of approximately $23,000 was paid on* November 16, 2023.Under the terms of the insurance financing, payments of approximately $5,000, which included interest at the rate of 13.99% per annum, were due each month for 10 months commencing on December 16, 2023.The Company has completed its financing commitment pertaining to the TPL insurance as of September 30, 2024.*

Effective* December 28, 2023,the Company renewed its D&O insurance policy with total premiums, taxes and fees for approximately $442,000. A cash down payment of approximately $69,000 was paid on December 13, 2023.Under the terms of the insurance financing, payments of approximately $37,000, which included interest at the rate of 13.4% per annum, are due each month for 10 months commencing on January 28, 2024.As of December 31, 2024,*this was fully paid off.

Effective* March 12, 2024,the Company renewed its rig insurance policy with total premiums, taxes and fees for approximately $95,000. A cash down payment of approximately $38,000 was paid on February 23, 2024.Under the terms of the insurance financing, payments of approximately $9,000, which included interest at the rate of 13.99% per annum, were due each month for 10 months commencing on April 12, 2024.As of December 31, 2024,*the outstanding balance was approximately$9.000.

Effective* November 18, 2024,the Company renewed itsthird* party liability policy in Israel with total premiums, taxes and fees for approximately $76,000. A cash down payment of approximately $20,000 was paid on* November 18, 2024.Under the terms of the insurance financing, payments of approximately $5,000, which included interest at the rate of 12.9% per annum, were due each month for 11 months commencing on December 16, 2024.As of December 31, 2024,the outstanding balance was approximately$51.000, and as of December 31, 2025,*the policy was fully paid off. The policy was capitalized under Unproved Oil and Gas assets.

Effective* December 3, 2024the Company renewed its Control of well (“COW”) insurance policy in Israel with total premiums, taxes and fees for approximately $84,000. A cash payment of approximately $84,000 was paid on December 3, 2024.The policy was capitalized under Unproved Oil and Gas assets. As of December 31, 2024,*the policy was fully paid off.

Effective* December 28, 2024,the Company renewed its D&O insurance policy with total premiums, taxes and fees for approximately $430,000. A cash down payment of approximately $41,000 was paid on January 2, 2025.Under the terms of the insurance financing, payments of approximately $39,000, which included interest at the rate of 12.9% per annum, were due each month for 10 months commencing on January 28, 2025.As of December 31, 2024,the outstanding balance was approximately $430.000, and as of December 31, 2025,*the policy was fully paid off.

Effective* March 12, 2025,the Company renewed its rig insurance policy with total premiums, taxes and fees for approximately $119,000. The total premium was paid in full on March 7, 2025.*The policy was capitalized under Unproved Oil and Gas assets.

Effective* June 1, 2025,the Company renewed its foreign package (“Foreign”) insurance in Israel with total premiums, taxes and fees for approximately $14,000. The total premium was paid in full on June 3, 2025.*The policy was capitalized under Unproved Oil and Gas assets.

Effective* June 1, 2025,the Company renewed its control of well (“COW”) insurance in Israel with total premiums, taxes and fees for approximately $37,000. The total premium was paid in full on June 11, 2025.*The policy was capitalized under Unproved Oil and Gas assets.

Effective* November 13, 2025,the Company renewed itsthird*-party liability (“TPL”) policy in Israel with total premiums, taxes and fees for approximately $71,000. The total premium was paid in full on* November 13, 2025.*The policy was capitalized under Unproved Oil and Gas assets.

Effective* December 3, 2025,the Company renewed its Control of well (“COW”) insurance policy in Israel with total premiums, taxes and fees for approximately $84,000. The total premium was paid in full on December 3, 2025.*

On* December 12, 2025,the Company paid approximately $2,000 to extend its cyber security insurance coverage through March 31, 2026.*

Effective* December 28, 2025,the Company renewed its D&O insurance policy with total premiums, taxes and fees for approximately $398,000. The total premium was paid in full on December 24, 2025.*

The balances for all lines of insurance financing at* December 31, 2025and2024,* were$nil and$490,000, respectively.

G. Bank Guarantees

As of* December 31, 2025,and2024,* the Company provided Israeli-required bank guarantees to various governmental bodies (approximately $1,424,000 and $972,000, respectively) and others (approximately $109,000 and $92,000, respectively) with respect to its drilling operation in an aggregate amount of approximately $1,533,000 and $1,064,000, respectively. The cash funds backing these guarantees are held in restricted interest-bearing accounts and are reported on the Company’s balance sheets as cash and cash equivalents – restricted.

H. Vendor concentration

The Company’s financial instruments that are exposed to a concentration of credit risk are accounts payable. There arefour suppliers in2025 andthree suppliers in2024 that represent 10% or more of the Company’s accounts payable outstanding balance, respectively.

I. Recent Market Conditions–** Israel-United States-Iran War, the Israel-Hezbollah War and the Israel-Hamas War**

On* June 13, 2025,Israel launched Operation Rising Lion by surprise attacks on key military and nuclear facilities in Iran. This was a targeted operation to roll back the Iranian threat to Israel’s very survival. In the opening hours of the war, Israeli air force assassinated some of Iran's prominent military leaders and nuclear scientists, and damaged or destroyed Iran's air defenses and some of its nuclear and military facilities. Israel launched hundreds of airstrikes throughout the war. Iran retaliated with waves of missile and drone strikes against Israeli cities and military sites; over550* ballistic missiles and more than1,000 explosive drones were launched by Iran during the war. The Iran-allied Houthis in Yemen also fired several missiles at Israel. On theninth day of the war the United States bombedthree Iranian nuclear sites. On* June 24, 2025,*Israel and Iran agreed to a ceasefire.

On* February 28, 2026,Israel and the United States jointly attacked Iran. The attacks took the form of missile strikes throughout Iran targeting regime leadership, nuclear sites, ballistic missile sites and other military infrastructure. Iran’s former supreme leader. Ali Khomenei was killed on this day. The daily attacks are continuing as of the date of this filing. Furthermore, Iran has been firing missiles and drones on approximatelyfifteen* other countries, including, butnot limited to, Azerbaijan, Bahrain, Cypress, Iraq, Jordan, Kuwait, Saudi Arabia, Turkey, United Arab Emirates and Turkey.

On* October 7, 2023,Hamas, a militant terrorist organization in Gaza, infiltrated southern Israel, killing and injuring at leastone thousand* Israeli citizens. Roughly250 Israeli hostages were then taken back to Gaza. This unprovoked attack led the nation of Israel to declare war on Hamas approximatelyone week later. Israel and Gaza subsequently entered into a multi-phase ceasefire involving the cessation of battles in exchange for release of Israeli hostages and Palestinian prisoners, but hostilities resumed pending release of the remaining Israeli hostages.

On or around* October 13, 2025,following more thantwo* years after the initial invasion by Hamas, a ceasefire was negotiated between Israel and Hamas. The ceasefire deal containsthree phases and thefirst phase involves the release of all living and dead Israeli hostages held by Hamas, along with the release of approximately1,950 Palestinian prisoners being held in Israel prisons. All of the20 living hostages were released and all of the remains of the dead hostages have been released to Israeli families. The next phase (phase2) of the ceasefire deal is underway and involves the disarmament of Hamas.

Immediately after the* October 7, 2023Hamas attack on Israel, the terrorist organization Hezbollah (in Lebanon) began launching daily rockets into Israel. Over the course of the next several months, both Hezbollah and Israel traded rocket fire into the other country, but without engaging in a full war. DuringQ3* 2024, both sides increased the frequency and number of missiles fired. In* September 2024,Israel began a ground invasion into Lebanon. On or around November 27, 2024,*Israel and Hezbollah signed a ceasefire agreement.

In early* March 2026,*Hezbollah joined the war against Israel by launching daily attacks, primarily missiles into northern Israel. Israel responded by launching its own missiles into Beirut and southern Lebanon and moving ground forces into southern Lebanon.

There is uncertainty as to the degree of stability that will be seen in the Middle East, and Israel in particular, due to these present hostilities. While we acknowledge that uncertainty, the Company is moving forward with its MJ-02 re-entry project.

F-43

Note10 - Risks and Uncertainties

We are directly influenced by the political, economic and military conditions affecting Israel.

We cannot predict the effect, if any, on our business of renewed hostilities between Israel and its neighbors or any other changes in the political climate in the area. Deterioration of political, economic and security conditions in Israel* may*adversely affect our operations.

We are subject to increasing Israeli governmental regulations and environmental requirements that* may*cause us to incur substantial incremental costs and/or delays in our drilling program.

Newly enacted onshore licensing and environmental and safety related regulations promulgated by the various energy related ministries in Israel during2024-2025 have rendered obtaining and drilling under new exploration licenses more time-consuming and expensive.

The Company believes that these new and/or revised regulations will also significantly increase the time, effort, and expenditures associated with obtaining all of the necessary authorizations and approvals prior to drilling and production testing its current and any subsequent well(s).

Economic risks* may*adversely affect our operations and/or inhibit our ability to raise additional capital.

Economically, our operations in Israel* may*be subject to:

Consequently, our operations* may*be substantially affected by local economic factors beyond our control, any of which could negatively affect our financial performance and prospects.

Legal risks could negatively affect our market value.

Legally, our operations in Israel* may*be subject to:

Our dependence on the limited contractors, equipment and professional services available in Israel* may*result in increased costs and possibly material delays in our work schedule.

F-44

Note10 - Risks and Uncertainties(cont’d)

The unavailability or high cost of equipment, supplies, other oil field services and personnel could adversely affect our ability to execute our exploration and development plans on a timely basis and within our budget.

Shouldone or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes* may*vary materially from those indicated.

Market risk is a broad term for the risk of economic loss due to adverse changes in the fair value of a financial instrument. These changes* may*be the result of various factors, including interest rates, foreign exchange rates, commodity prices and/or equity prices. In the normal course of doing business, we are exposed to the risks associated with foreign currency exchange rates and changes in interest rates.

Foreign Currency Exchange Rate Risks. A portion of our expenses, primarily labor expenses and certain supplier contracts, are denominated in New Israeli Shekels (“NIS”). As a result, we have significant exposure to the risk of fluctuating exchange rates with the U.S. Dollar (“USD”), our primary reporting currency. During the period* January 1,2025 through December 31, 2025*, the USD has fluctuated by approximately 12.5% against the NIS (the USD weakened relative to the NIS). In contrast, during the period* January 1,2024 through December 31, 2024*, the USD has fluctuated by approximately 0.6% against the NIS (the USD strengthened relative to the NIS). Continued weakening of the US dollar against the NIS will result in higher operating costs from NIS denominated expenses. To date, we havenot hedged any of our currency exchange rate risks, but we* may*do so in the future.

Interest Rate Risk. Our exposure to market risk relates to our cash and investments. We maintain an investment portfolio of short-term bank deposits and money market funds. The securities in our investment portfolio arenot leveraged, and are, due to their very short-term nature, subject to minimal interest rate risk. We currently donot hedge interest rate exposure. Because of the short-term maturities of our investments, we donot believe that a change in market interest rates would have a significant negative impact on the value of our investment portfolio except for reduced income in a low interest rate environment. At* December 31, 2025*, we had cash, cash equivalents and short-term and long-term bank deposits of approximately $9,862,000. The weighted average annual interest rate related to our cash and cash equivalents for the year ended* December 31, 2025*, exclusive of funds at US banks that earnno interest, was approximately 2.8%. At* December 31, 2024*, we had cash, cash equivalents and short-term and long-term bank deposits of approximately $3,336,000. The weighted average annual interest rate related to our cash and cash equivalents for the year ended* December 31, 2024*, exclusive of funds at US banks that earnno interest, was approximately 2.9%.

The primary objective of our investment activities is to preserve principal while at the same time maximizing yields without significantly increasing risk. To achieve this objective, we invest our excess cash in short-term bank deposits and money market funds that* may*invest in high quality debt instruments.

F-45

Note11 - Selected Quarterly Information (Unaudited)

The following represents selected quarterly consolidated financial information for2025 and2024:

Note12 - Subsequent Events

(i) On* January 5, 2026,the Company granted options under the Omnibus Plan toone* senior officer, to purchase 25,000 shares of Common Stock at an exercise price of $0.01 per share. The options vested upon grant and are exercisable through* January 4, 2036.*These options were granted per the provisions of the Israeli Appendix. The fair value of the options at the date of grant amounted to approximately $6,000.

(ii) On* January 5, 2026,the Company granted options under the Omnibus Plan tofive* senior officers andtwo staff members to purchase 175,000 shares of Common Stock at an exercise price of $0.24 per share. The options vested upon grant and are exercisable through* January 4, 2036.*The fair value of the options at the date of grant amounted to approximately $36,000.

(iii) Approximately $6,530,000 was collected through the Company’s DSPP program during the period* January 1, 2026through March 17, 2026which includes collection of the $29,000 stock subscription receivable at December 31, 2025.*

The Company has evaluated subsequent events through* March 19, 2026* the date the financial statements were available to be issued. Except as disclosed above,no other events have occurred that would require adjustment to or disclosure in these financial statements.