AleAnna, Inc.

We have completed or partially completed production facilities for conventional natural gas at the Longanesi Field (near Lugo, Italy), the Gradizza Field (near Copparo, Italy), and the Trava Field (near Ostellato, Italy). These conventional gas facilities do not require human intervention on a 24/7 basis and thus house no field staff. See Item 1., “Business” for a more detailed description of our conventional natural gas properties.

We have existing facilities and/or land under construction for renewable natural gas at the Campagnatico plant (Tuscany) and, following successful acquisitions, in short order, we expect to begin upgrading construction on the Casalino plant (near Milan) and the Campopiano plant (Tuscany).

• Our proved reserves are estimates that are based on many assumptions that may prove to be inaccurate. Any significant change in these underlying assumptions will greatly affect the quantities and present value of our reserves.
• The standardized measure of discounted future net cash flows from our proved reserves is not the same as the current market value of our estimated natural gas reserves.
• Natural gas prices are affected by a number of factors beyond our control, including many of which are unknown and cannot be anticipated, and we cannot predict with certainty future potential movements in the price for these commodities.
• A prolonged period of low natural gas prices may have an adverse effect on our revenue, profitability, future rate of growth, liquidity and financial position.
• A financial crisis or deterioration in general economic, business or geopolitical conditions could materially adversely affect our operations and financial condition.
• Developments related to climate change may expedite a transition away from the use of carbon-intensive sources for energy generation and products derived from certain fossil fuels, which could have a material and adverse effect on us if we are not able to demonstrate that our products align with a low-carbon transition.
• Our operations have substantial capital requirements, and we may not be able to obtain needed capital or financing on satisfactory terms, or at all.
• Derivative transactions may limit our potential gains and involve other risks.
• Our business and prospects depend significantly on our ability to build our brand and we may not succeed in continuing to establish, maintain, and strengthen our brand, and our brand and reputation could be harmed by negative publicity regarding our company.
• Cyber incidents targeting our digital work environment or other technologies or energy infrastructure may adversely impact our operations.
• The unavailability or high cost of additional drilling rigs, completion services, equipment, supplies, personnel, and oilfield services could adversely affect our ability to execute our exploration and development plans within our budget and on a timely basis.
• The loss of key personnel could adversely affect our ability to execute our strategic, operational and financial plans.
• We will depend on state-owned midstream providers for midstream services, and our failure to obtain and maintain access to the necessary infrastructure to successfully deliver natural gas to market on acceptable terms may adversely affect our earnings, cash flows and results of operations.
• Unexpected increases in fees related to transportation facilities and providers may negatively impact our financial position or projections.
• Failure to protect our intellectual property, inability to enforce our intellectual property rights or loss of our intellectual property rights through costly litigation or administrative proceedings, could adversely affect our ability to compete and our business.
• Risks Related to our Renewable Natural Gas Business and the Renewable Natural Gas Industry
• Our strategic success and financial results depend on our ability to identify, acquire, develop and operate natural gas plants.
• Acquiring existing plants involves numerous risks.
• Revenue from any renewable natural gas plants we complete may be adversely affected if there is a decline in public acceptance or support of renewable energy, or regulatory agencies, local communities, or other third parties delay, prevent, or increase the cost of constructing and operating our plants.
• We may not be fully reimbursed for a portion of our renewable natural gas construction costs or may only receive payment on a delayed basis.
• A prolonged environment of reduced demand for renewable natural gas or renewable electricity could have a material adverse effect on our long-term business prospects, financial condition and results of operations.
• A policy revision with respect to the Italian government sponsored renewable natural gas floor price and renewable natural gas capital expenditure reimbursements could have a material adverse effect on our long-term business prospects, financial condition and results of operations.
• We will face competition on the prices we receive for our renewable electricity and for rights to manage or develop renewable natural gas plants.
• Our renewable energy plants may not produce expected levels of output, and the amount of renewable natural gas actually produced at each of our plants will vary over time and, when a farm closes, eventually decline.
• We will be dependent on contractual arrangements with, and the cooperation of, farm site owners and operators for access to and operations on their sites.
• The financial performance of our business depends upon tax and other governmental incentives for renewable energy generation, any of which could change at any time and such changes may negatively impact our growth strategy.
• We will rely on both pipeline and electrical interconnection and transmission facilities that we do not own or control and that are subject to transmission constraints within a number of our regions. If these facilities fail to provide us with adequate transmission capacity or have unplanned disruptions, we may be restricted in our ability to deliver electric power and renewable natural gas to our customers and we may either incur additional costs or forego revenues.
• Increased attention to environmental, social, and governance (“ESG”) matters may adversely impact our business.
• Maintenance, expansion and refurbishment of renewable natural gas facilities involve significant risks that could result in unplanned outages or reduced output.
• Risks Related to Foreign Operations and Regulatory Matters
• Our primary operations are in Italy, making us vulnerable to risks associated with operating in one geographic area and we are subject to political, economic and other uncertainties.
• We are subject to pricing restrictions enforced by the Italian Regulatory Authority for Energy, Networks and Environment with respect to the residential customers we intend to service.
• All of our natural gas and renewable gas properties are located in the country of Italy, making us vulnerable to risks associated with operating in one geographic area.
• We currently have global operations, including in Italy, which subjects us to additional anti-corruption, anti-bribery, anti-money laundering, trade compliance, economic sanctions and similar laws, and non-compliance with such laws may subject us to criminal or civil liability and harm our business, financial condition and/or results of operations. We may also be subject to governmental export and import controls that could impair our ability to compete in international markets or subject us to liability if we violate the controls.
• Our results of operations, financial condition and cash flows could be adversely affected by changes in currency exchange rates.
• Our business may be affected by changes in applicable sanctions or export controls laws and regulations. Similarly, significant changes or developments in U.S. laws or policies, including changes in U.S. trade policies and tariffs and the reaction of other countries thereto, may have a material adverse effect on our business and financial statements.
• Our results of operations, financial condition and cash flows could be adversely affected by changes in environmental laws and regulations.
• Risks Relating to our Organizational Structure, our Class A Common Stock and Public Warrants
• We are a holding company and our organizational structure is what is commonly referred to as an Up-C structure, whereby all of the equity interests in AleAnna Energy are held by HoldCo and our sole material asset is our equity interest in HoldCo and we are accordingly dependent upon distributions from HoldCo to pay taxes and cover our corporate and other overhead expenses.
• If HoldCo were to become a publicly traded partnership taxable as a corporation for U.S. federal income tax purposes, we and HoldCo might be subject to potentially significant tax inefficiencies.
• In certain circumstances, HoldCo is required to make tax distributions to the HoldCo unitholders, including us, and the tax distributions that HoldCo is required to make may be substantial. The HoldCo tax distribution requirement may complicate our ability to maintain our intended capital structure.
• If we cannot meet the continued listing requirements of The Nasdaq Capital Market (“Nasdaq”), Nasdaq may delist our securities.
• Volatility in the stock market may prevent investors from selling their securities at or above the price they paid for the shares.
• We are controlled by Nautilus, whose interests may conflict with ours and the interests of other stockholders.
• We are a “controlled company” within the meaning of Nasdaq Capital Market rules and, as a result, qualify for exemptions from certain corporate governance requirements, and as a result, you will not have the same protections afforded to stockholders of companies that are not exempt from such corporate governance requirements.
• The market price of our Class A Common Stock could be adversely affected by sales of substantial amounts of our Class A Common Stock in the public or private markets or the perception in the public markets that these sales may occur, including sales by the members of AleAnna Energy after the redemption of any Class C HoldCo Units, together with an equal number of our Class C Common Stock, in exchange for shares of our Class A Common Stock, or other large holders.
• Future sales and issuances of our Class A Common Stock could result in additional dilution of the percentage ownership of our stockholders and could cause our share price to fall.
• If our estimates or judgments relating to our critical accounting policies prove to be incorrect or financial reporting standards or interpretations change, our operating results could be adversely affected.
• We have identified material weaknesses in our internal control over financial reporting. If we are unable to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report the Company’s financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results, and we may face litigation as a result.
• We do not have extensive experience operating as a public company subject to U.S. federal securities laws and may not be able to adequately develop and implement the governance, compliance, risk management and control infrastructure and culture required for a public company, including compliance with the Sarbanes-Oxley Act.
• The JOBS Act permits “emerging growth companies” like us to take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies.
• Because we have no current plans to pay regular cash dividends on our Class A Common Stock, you may not receive any return on investment unless you sell your Class A Common Stock for a price greater than that which you paid for it.
• If securities or industry analysts do not publish or cease publishing research or reports about us, our business or our market, or if they change their recommendations regarding our Class A Common Stock adversely, the price and trading volume of our Class A Common Stock could decline.
• Our Certificate of Incorporation designates the Court of Chancery of the State of Delaware as the exclusive forum for certain litigation that may be initiated by our shareholders, which could limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us.
• The Company may redeem unexpired Public Warrants prior to their exercise at a time that is disadvantageous to the holder, thereby making the Public Warrants worthless.
• We have the ability to require holders of the Public Warrants to exercise such Public Warrants on a cashless basis, which will cause holders to receive fewer shares of Class A Common Stock upon their exercise of the Public Warrants than they would have received had they been able to exercise their Public Warrants for cash.
• The exclusive forum clause set forth in the warrant agreement governing the Public Warrants may have the effect of limiting an investor’s rights to bring legal action against us and could limit the investor’s ability to obtain a favorable judicial forum for disputes with us.
• Our business and operations could be negatively affected if we become subject to any securities litigation or shareholder activism, which could cause us to incur significant expense, hinder execution of business and growth strategy and impact our stock price.
• A substantial number of the Company’s Class A Common Stock are restricted securities and as a result, there may be limited liquidity for our Class A Common Stock.
• Future resales of our Class A Common Stock may cause the market price of our Class A Common Stock to drop significantly, even if the Company’s business is doing well.
• Our acquisitions, divestitures and other strategic transactions may not produce anticipated results, which could have a material adverse effect on our business, financial condition or results of operations.