NUAI

Business Context and Reporting Period

Company: New Era Energy & Digital, Inc. (NUAI)
Filing Type: Form 10-Q (Unaudited)
Period Ended: March 31, 2026
Business Overview: The Company has executed a strategic pivot from legacy natural gas operations to a vertically-integrated developer of digital infrastructure and power assets for AI hyperscalers. The primary focus is the Texas Critical Data Centers (TCDC) flagship project, a 438-acre campus in Ector County, Texas, designed to support over 1 GW of compute capacity. The Company operates as a single reportable segment.

Key Financial Metrics

Material Changes vs. Prior Period

• Revenue Growth: Net revenues increased 145.8% to $802,353, driven by a 145.8% increase in natural gas sales due to higher prices ($1.56/Mcf increase) and volumes (51 MMcf increase).
• Expense Surge: Total costs and expenses rose 251.1% to $8.41 million. General and administrative (G&A) expenses increased 280.3% to $7.36 million, primarily due to a $1.73 million increase in stock-based compensation and a $2.59 million increase in legal expenses.
• Impairment: The Company recorded a $375,000 impairment expense related to a partially completed gas plant, reflecting the strategic pivot away from legacy assets.
• Balance Sheet Expansion: Total assets increased to $86.5 million from $14.1 million, largely due to the acquisition of TCDC land ($76.0 million) and the issuance of a $50.0 million senior secured convertible promissory note to fund the acquisition.
• Net Loss Widening: Net loss increased 170.8% to $8.99 million, driven by higher G&A, interest expense ($1.71 million), and the aforementioned impairment.

Guidance, Outlook, Risks, and Subsequent Events

Going Concern: Management has determined that the Company's liquidity condition raises substantial doubt about its ability to continue as a going concern for the twelve months following the issuance date (May 15, 2026), citing a working capital deficit and significant capital requirements ($73.7 million expected over the next 12 months).

Subsequent Events (Post-March 31, 2026):

• Equity Financing: On April 10, 2026, the Company completed an underwritten public offering, raising approximately $93.4 million in net proceeds (plus ~$14 million from option exercise). Proceeds were used to repay the $50 million convertible note issued for the TCDC acquisition.
• Debt Financing: On April 8, 2026, TCDC entered a senior secured term loan facility with Macquarie Equipment Capital Inc. for up to $290 million, with an initial $20 million tranche funded on April 13, 2026.
• Legal Proceedings: A federal securities class action lawsuit was filed on April 1, 2026. Additionally, a lawsuit filed by the State of New Mexico in December 2025 remains stayed pending unrelated bankruptcy proceedings.
• Internal Controls: Management concluded that disclosure controls and procedures were not effective as of March 31, 2026, citing a material weakness due to inadequate evaluation and testing of controls following the business combination.

Investor Verification Checklist

• Liquidity Runway: Verify the sufficiency of the $93.4 million raised in April 2026 against the projected $73.7 million capital requirement for the next 12 months and the $15 billion total project cost estimate.
• Debt Covenants: Review the terms of the Macquarie Term Loan Agreement, specifically the conditions precedent for additional tranches and the requirement to execute a data center lease within six months to avoid prepayment.
• Legal Exposure: Monitor the status of the New Mexico Litigation and the April 2026 shareholder class action for potential financial impact or operational restrictions.
• Internal Controls: Assess the remediation plan for the material weakness in internal controls over financial reporting disclosed in Item 4.
• Asset Valuation: Confirm the valuation of the $76 million land acquisition for TCDC and the assumptions used for the Asset Retirement Obligations (ARO) which totaled $12.6 million.