AGIG

Business Context and Reporting Period

This Form 10-Q covers the quarterly period ended June 30, 2025, for Houston American Energy Corp. (HUSA), a smaller reporting company. Historically an independent oil and gas operator, the Company underwent a material change in control on July 1, 2025, following the completion of a Share Exchange with Abundia Global Impact Group, LLC (AGIG). AGIG is a technology platform focused on converting waste products into renewable fuels and chemicals. The filing reflects HUSA's operations prior to the closing of the Share Exchange, though subsequent events detail the acquisition and new strategic direction. All share and per-share data have been retroactively adjusted for a 1-for-10 reverse stock split effected on June 6, 2025.

Key Financial Metrics

Cash Flow Summary (Six Months Ended June 30, 2025):

• Operating Activities: Used $2,817,410 (compared to provided $87,803 in 2024).
• Investing Activities: Used $160,000 (primarily a refundable acquisition deposit).
• Financing Activities: Provided $6,968,265 (proceeds from issuance of common stock).

Material Changes Versus Prior Period

• Revenue Decline: Oil and gas revenue decreased 19% year-over-year to $212,902, primarily due to the shutdown of one well in the first quarter and natural production decline.
• Significant Increase in Expenses: General and administrative expenses surged 310% to $2,662,338 (excluding stock-based compensation) due to professional fees related to the pending AGIG acquisition. Lease operating expenses increased 60% in Q2 due to repair costs for the shut-in well.
• Net Loss Expansion: Net loss widened significantly to $2.83 million from $104,785 in the prior year period, driven by higher operating costs and the loss of "Other Income" from a relinquished interest in a Colombian drilling operator.
• Liquidity Improvement: Cash balances more than doubled to nearly $7 million, funded by registered direct offerings of common stock in January and June 2025.

Guidance, Outlook, Risks, and Subsequent Events

Subsequent Events (Post-June 30, 2025):

• Share Exchange Closing: On July 1, 2025, HUSA acquired AGIG. AGIG unitholders now own approximately 94% of the combined company, resulting in a change of control. New management, including Edward Gillespie (CEO) and Lucie Harwood (CFO), was appointed.
• Equity Line of Credit (ELOC): On July 10, 2025, the Company entered into an agreement for a $100 million committed equity financing facility with an institutional investor.
• Debt Financing and Asset Acquisition: On July 10, 2025, the Company issued a $5.43 million senior secured convertible note (7% interest, convertible at $10.92/share). Proceeds were used to purchase a 25-acre industrial site in Baytown, Texas, for approximately $8.5 million.

Risks and Going Concern:

• Substantial Doubt: The filing expresses substantial doubt about the Company's ability to continue as a going concern within one year, contingent on the ability to draw down funds under the ELOC and secure additional capital.
• Internal Controls: Management concluded that internal controls over financial reporting were not effective as of June 30, 2025, citing a lack of segregation of duties and technical accounting expertise. AGIG has also identified material weaknesses in its internal controls.
• AGIG Financials: AGIG reported a net loss of $2.12 million and negative working capital of $6.75 million for the six months ended June 30, 2025. It has no revenue-generating activities other than grant income, which ended in March 2025.

Investor Verification Checklist

• Capital Adequacy: Verify the Company's ability to access the $100 million ELOC facility and whether market conditions will allow for sufficient drawdowns to fund operations.
• Debt Obligations: Review the terms of the $5.43 million convertible note, specifically the requirement to prepay or convert 25% of principal and interest every three months, and the risk of default triggering an 18% interest rate.
• Asset Valuation: Assess the strategic value and cost basis of the $8.5 million industrial site acquisition in Baytown, Texas, relative to the Company's current cash position.
• Integration Risks: Evaluate the risks associated with the AGIG acquisition, including the lack of commercial revenue for AGIG, its history of losses, and the potential for unknown liabilities.
• Internal Controls: Monitor the remediation plan for material weaknesses in internal controls over financial reporting for both HUSA and AGIG.