Global Gas Corporation (HGAS) Risk Analysis

The trading price of our securities could be volatile and subject to wide fluctuations in response to various factors including those discussed in this "Risk Factors" section. Many of such factors are beyond Global Gas' control. In such circumstances, the trading price of Global Gas' securities may not recover and may experience a further decline. Broad market and industry factors may also materially harm the market price of Global Gas' securities irrespective of Global Gas' operating performance. The stock markets in general, have experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected. The trading prices and valuations of these stocks and of Global Gas' securities may not be predictable. A loss of investor confidence in the market for retail stocks or the stocks of other companies which investors perceive to be similar to Global Gas could depress Global Gas' share price regardless of Global Gas' business, prospects, financial conditions, or results of operations. A decline in the market price of Global Gas' securities also could adversely affect Global Gas' ability to issue additional securities and Global Gas' ability to obtain additional financing in the future.

The trading market for Global Gas Common Stock will be influenced in part by the research and reports that securities or industry analysts may publish about us, Global Gas' business, Global Gas' market, or Global Gas' competitors. If one or more securities analysts initiate research with an unfavorable rating or downgrade Global Gas Common Stock, provide a more favorable recommendation about Global Gas' competitors or publish inaccurate or unfavorable research about Global Gas' business, Global Gas Common Stock price would likely decline. If few securities analysts commence coverage of us, or if one or more of these analysts cease coverage of Global Gas, or fail to publish reports on Global Gas regularly, Global Gas could lose visibility in the financial markets and demand for Global Gas' securities could decrease, which in turn could cause the price and trading volume of Global Gas Common Stock to decline.

The market price of Global Gas Common Stock could decline as a result of sales of a large number of shares of Global Gas Common Stock in the market after the Closing, or the perception that these sales could occur. Upon consummation of the Business Combination, the Sellers received 4,300,000 shares of Class B Common Stock, of which 1,600,000 shares were subsequently forfeited in March 2024 leaving an aggregate of 2,700,000 shares of Class B Common Stock outstanding, which is exchangeable for shares of Class A Common Stock on a one-for-one basis. At any time after the expiration of a lock-up to which such shares are subject, certain stockholders are entitled, under the Registration Rights Agreement, to certain rights with respect to the registration of the offer and sale of those shares under the Securities Act, including requesting Global Gas file a registration statement to register the offer and sale of their shares. Global Gas is also obligated to register certain shares of Global Gas Common Stock purchased by the Meteora Entities pursuant to the Forward Purchase Agreement and Subscription Agreement. In addition, Global Gas intends to file a registration statement to register shares reserved for future issuance under Global Gas' equity compensation plans. Upon effectiveness of that registration statement, subject to the satisfaction of applicable vesting restrictions and the expiration or waiver of the market standoff agreements and lock-up agreements referred to above, the shares issued upon exercise of outstanding stock options, restricted stock unit awards, and warrants or the vesting of other equity awards granted under such plans will be available for immediate resale in the public market. Sales of Global Gas Common Stock as restrictions end or pursuant to registration rights may make it more difficult for Global Gas to sell equity securities in the future at a time and at a price that Global Gas deems appropriate. These sales also could cause the trading price of Global Gas Common Stock to fall and make it more difficult for you to sell shares of Global Gas Common Stock at a time and price that you deem appropriate.

Our Warrants are exercisable at $11.50 per share. On March 25, 2024, the closing price of our Class A Common Stock was $1.44. Accordingly, the exercise prices of the Warrants on such date were greater than the current market price of our Class A Common Stock. Such Warrants are therefore unlikely to be exercised and the Company would not receive any proceeds from such exercise of the Warrants. Whether any holders of Warrants determine to exercise such Warrants, which would result in cash proceeds to the Company, will likely depend upon the market price of our Class A Common Stock at the time of any such holder's determination. We expect to use the net proceeds from the exercise of the Warrants for general corporate purposes. In order to fund planned operations while meeting obligations as they come due, we will need to secure additional debt or equity financing if substantial cash proceeds from the exercise of the Warrants are not received. Furthermore, to the extent that warrants are exercised on a "cashless basis," the amount of cash we would receive from the exercise of the warrants will decrease. There is no guarantee that the Warrants will ever be in the money prior to their expiration, and as such, the Warrants may expire worthless.

The percentage of shares of Global Gas Common Stock owned by current stockholders may be diluted in the future because of equity issuances for acquisitions, capital market transactions, or otherwise, including, without limitation, equity awards that Global Gas may grant to its directors, officers, and employees, exercise of Global Gas warrants.

The Amended and Restated Charter requires, to the fullest extent permitted by law, that derivative actions brought in Global Gas' name, actions against directors, officers and employees for breach of fiduciary duty, actions asserting an "internal corporate claim," as defined in Section 115 of the DGCL, and other similar actions may be brought in the Court of Chancery or, if that court lacks subject matter jurisdiction, another federal or state court situated in the State of Delaware. Any person or entity purchasing or otherwise acquiring any interest in shares of Global Gas' capital stock shall be deemed to have notice of and consented to the forum provisions in the Amended and Restated Charter. In addition, the Amended and Restated Charter and Amended and Restated Bylaws of Global Gas (the "Global Gas Bylaws") provides that the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action under the Securities Act and the Exchange Act. While the exclusive forum provision does not restrict the ability of stockholders to bring claims under the Securities Act, it may limit stockholders' ability to bring a claim in the judicial forum that they find favorable and may increase certain litigation costs on the stockholders, which may discourage the filing of claims under the Securities Act against Global Gas, its directors and officers. In March 2020, the Delaware Supreme Court issued a decision in Salzburg et al. v. Sciabacucchi, which found that an exclusive forum provision providing for claims under the Securities Act to be brought in federal court is facially valid under Delaware law. It is unclear whether this decision will be appealed, or what the final outcome of this case will be. Global Gas intends to enforce this provision, but it does not know whether courts in other jurisdictions will agree with this decision or enforce it. This choice of forum provision may limit a stockholder's ability to bring a claim in a judicial forum that it finds favorable for disputes with Global Gas or any of its directors, officers, other employees or stockholders, which may discourage lawsuits with respect to such claims. Alternatively, if a court were to find the choice of forum provision contained in the Amended and Restated Charter to be inapplicable or unenforceable in an action, Global Gas may incur additional costs associated with resolving such action in other jurisdictions, which could harm its business, operating results and financial condition. Additionally, it is uncertain whether this choice of forum provision is enforceable. Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. In light of this uncertainty, investors bringing a claim may face certain additional risks, including increased costs and uncertainty of litigation outcomes.

Certain provisions of the Amended and Restated Charter and the Global Gas Bylaws may have an anti-takeover effect and may delay, defer or prevent a merger, acquisition, tender offer, takeover attempt or other change of control transaction that a stockholder might consider in its best interest, including those attempts that might result in a premium over the market price for the shares held by Global Gas' stockholders. These provisions provide for, among other things: - the ability of Global Gas' Board to issue one or more series of preferred stock;- a classified board;- advance notice for nominations of directors by stockholders and for stockholders to include matters to be considered at Global Gas' annual meetings;- certain limitations on convening special stockholder meetings;- limiting the persons who may call special meetings of stockholders;- limiting the ability of stockholders to act by written consent; and - Global Gas' Board have the express authority to make, alter or repeal the Global Gas Bylaws. These anti-takeover provisions could make it more difficult or frustrate or prevent a third party from acquiring Global Gas, even if the third party's offer may be considered beneficial by many of Global Gas' stockholders. Additionally, the provisions may frustrate or prevent any attempts by Global Gas stockholders to replace or remove its current management by making it more difficult for stockholders to replace members of Global Gas' Board, which is responsible for appointing the members of its management. As a result, Global Gas' stockholders may be limited in their ability to obtain a premium for their shares. These provisions could also discourage proxy contests and make it more difficult for you and other stockholders to elect directors of your choosing and to cause Global Gas to take other corporate actions you desire. See "Description of Global Gas Securities".

If more than 50% of the voting power for the election of Global Gas' directors is held by an individual, a group or another company, Global Gas will become a "controlled company" within the meaning of the Nasdaq corporate governance standards. The Sponsor and William Bennett Nance, Jr. hold approximately 86.4% of the combined voting power of Global Gas immediately following the Closing. The Sponsor and William Bennett Nance, Jr. have no agreement or arrangement to act together with respect to voting of the Global Gas common stock, and thus they have not formed a "group" for purposes of controlled company status. Although no individual, group or other company will have more than 50% of the voting power of Global Gas, the Sponsor and William Bennett Nance, Jr. may in the future decide to act as a group, and this concentration of voting power would cause Global Gas to become a "controlled company" within the meaning of the Nasdaq corporate governance standards. As a result, if Global Gas becomes a "controlled company" within the meaning of the Nasdaq corporate governance standards, then Global Gas will not be subject to certain requirements that would otherwise require it to have, among other things: (i) a majority of its board of directors consist of "independent directors" as defined under the rules of the Nasdaq; (ii) a compensation committee that is composed entirely of directors who meet the Nasdaq independence standards for compensation committee members; and (iii) director nominations made, or recommended to the full board of directors, by its independent directors or by a nominations committee that consists entirely of independent directors.

Global Gas intends to retain future earnings, if any, for future operations, expansion, and debt repayment and there are no current plans to pay any cash dividends for the foreseeable future. The declaration, amount and payment of any future dividends on shares of Global Gas common stock will be at the sole discretion of Global Gas' Board. Global Gas' Board may take into account general and economic conditions, Global Gas' financial condition and results of operations, Global Gas' available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions, implications of the payment of dividends by Global Gas to its stockholders or by its subsidiaries to it, and such other factors as Global Gas' Board may deem relevant. As a result, you may not receive any return on an investment in Global Gas Common Stock unless you sell your Global Gas Common Stock for a price greater than that which you paid for it.

Global Gas' executive officers, directors and their affiliates beneficially own approximately 86.4% of Global Gas Common Stock outstanding, representing approximately 86.4% of the voting power thereof. As a result, these stockholders, if they act together, will be able to influence Global Gas' management and affairs and all matters requiring stockholder approval, including the election of directors, amendments of Global Gas' organizational documents, and approval of significant corporate transactions. They may also have interests that differ from yours and may vote in a way with which you disagree and which may be adverse to your interests. This concentration of ownership may have the effect of delaying, preventing, or deterring a change in control of Global Gas and might affect the market price of Global Gas Common Stock. In addition, Dune Acquisition Holdings LLC, a Delaware limited liability company (the "Sponsor"), has the right under the Nomination Agreement (as defined below) to nominate two directors to Global Gas' Board. This control could have the effect of delaying or preventing a change of control of Global Gas or changes in its management and will make the approval of certain transactions difficult or impossible without the support of these stockholders and their votes.

As a public company, Global Gas is required to comply with the requirements of the Sarbanes-Oxley Act, including, among other things, that Global Gas maintain effective disclosure controls and procedures and internal control over financial reporting. The standards required for a public company under Section 404(a) of the Sarbanes-Oxley Act are significantly more stringent than those required of Global Hydrogen as a privately held company. The Company continues to develop and refine its disclosure controls and other procedures that are designed to ensure that information Global Gas is required to disclose in the reports that Global Gas will file with the SEC is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to Global Gas' management, including Global Gas' principal executive and financial officers. We must continue to improve our internal control over financial reporting. Global Gas is required to make a formal assessment of the effectiveness of its internal control over financial reporting and once Global Gas ceases to be an emerging growth company, Global Gas is required to include an attestation report on internal control over financial reporting issued by Global Gas' independent registered public accounting firm. To achieve compliance with these requirements within the prescribed time period, Global Gas will be engaging in a process to document and evaluate Global Gas' internal control over financial reporting, which is both costly and challenging. In this regard, Global Gas will need to continue to dedicate internal resources, potentially engage outside consultants and adopt a detailed work plan to assess and document the adequacy of Global Gas' internal control over financial reporting, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting. There is a risk that Global Gas will not be able to conclude, within the prescribed time period or at all, that Global Gas' internal control over financial reporting is effective as required by Section 404 of the Sarbanes-Oxley Act. Moreover, Global Gas' testing, or the subsequent testing by Global Gas' independent registered public accounting firm, may reveal additional deficiencies in Global Gas' internal control over financial reporting that are deemed to be material weaknesses. Any failure to implement and maintain effective disclosure controls and procedures and internal control over financial reporting, including the identification of one or more material weaknesses, could cause investors to lose confidence in the accuracy and completeness of Global Gas' financial statements and reports, which would likely adversely affect the market price of Global Gas Common Stock. In addition, Global Gas could be subject to sanctions or investigations by Nasdaq, the SEC and other regulatory authorities.

We are a holding company with no material assets other than our ownership of Holdings Common Units. As a result, we have no independent means of generating revenue or cash flow. Our ability to pay dividends, taxes, and other expenses will depend on the financial results and cash flows of Holdings and its subsidiaries and the distributions we receive from Holdings. Deterioration in the financial condition, earnings or cash flow of Holdings and its subsidiaries for any reason could limit or impair Holdings' ability to pay such distributions. Additionally, to the extent that we need funds and Holdings is restricted from making such distributions under applicable law or regulation or under the terms of any financing arrangements, or Holdings is otherwise unable to provide such funds, it could materially adversely affect our liquidity and financial condition. Subject to the discussion herein, Holdings will continue to be treated as a partnership for U.S. federal income tax purposes and, as such, generally will not be subject to any entity-level U.S. federal income tax. Instead, taxable income will be allocated to holders of Holdings Common Units. Accordingly, we will be required to pay income taxes on our allocable share of any net taxable income of Holdings. Under the terms of the Amended and Restated Limited Liability Company Agreement (the "Holdings LLCA"), Holdings is obligated to make tax distributions to holders of the Holdings Common Units (including the Company) calculated at certain assumed tax rates. In addition to tax expenses, we will also incur expenses related to our operations, some of which will be reimbursed by Holdings. We intend to cause Holdings to make ordinary distributions and tax distributions

The preparation of our consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of certain assets, liabilities, revenues and expenses for the periods covered and certain amounts disclosed in the notes to our consolidated financial statements. These estimates are based on information available through the date of the issuance of the consolidated financial statements and actual results could differ from those estimates, which could have a material adverse impact on our financial condition, results of operations and cash flows.

We expect our revenue and operating results to vary from quarter to quarter. We may incur significant operating expenses during the start-up and early stages of large contracts and may not be able to recognize corresponding revenue in that same quarter. We may also incur additional expenses when contracts are terminated or expire and are not renewed. We may also incur additional expenses when companies are newly acquired. Payments that may be due to us from our future customers may be delayed due to billing cycles or as a result of failures of government budgets to gain congressional and administration approval in a timely manner. Additional factors that may cause our financial results to fluctuate from quarter to quarter include those addressed elsewhere in this "Risk Factors" section, including the immediately preceding risk factor, and the following factors, among others: - variability in demand for our services and solutions;- timing of award or performance incentive fee notices;- timing of shipments and deliveries to potential future customers;- variable purchasing patterns under blanket purchase agreements and other indefinite delivery/ indefinite quantity contracts;- terms of potential future contracts which may affect the timing of revenue recognition;- costs related to government inquiries;- strategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs and joint ventures;- strategic investments or changes in business strategy;- changes in the extent to which we use subcontractors;- potential performance errors in our systems;- seasonal fluctuations in our staff utilization rates;- changes in our effective tax rate, including changes in our judgment as to the necessity of the valuation allowance recorded against our deferred tax assets; and - the length of sales cycles.

You must consider the risks and difficulties we face as an early stage company with a limited operating history. If we do not successfully address these risks, our business, prospects, operating results and financial condition will be materially and adversely harmed. We have a very limited operating history on which investors can base an evaluation of our business, operating results and prospects. There are no assurances that we will be able to secure future business with potential customers. As an early stage company, it is difficult to predict our future revenues and appropriately budget for our expenses, and we have limited insight into trends that may emerge and affect our business. In the event that actual results differ from our estimates or we adjust our estimates in future periods, our operating results and financial position could be materially affected. Our performance and expectations depend on the successful implementation of management's growth strategies and are based on assumptions and events over which we have only partial or no control, including, but not limited to, adverse economic conditions, regulatory developments, our ability to finance our contemplated operations, difficulties in engineering, delays in designs or materials provided by the customer or a third party, equipment and materials delivery delays, schedule changes, customer scope changes, delays related to obtaining regulatory permits and rights-of-way, inability to find adequate sources of labor in the locations where we are building new plants, weather-related delays, delays by customers' contractors in completing their portion of a project, technical or transportation difficulties, cost overruns, supply difficulties, geopolitical risks and other factors. The assumptions underlying our expectations require the exercise of judgment and may not occur, and the expectations are subject to uncertainty due to the effects of economic, business, competitive, regulatory, legislative, and political or other changes.

The financial condition of our customers could affect our ability to market our equipment, products and services or to collect receivables. In addition, financial difficulties faced by our customers as a result of an adverse economic event or other market factors may lead to cancellation or delay of orders. Our customers may suffer financial difficulties that make them unable to pay for a product or service when payments become due, or they may decide not to pay us, either as a matter of corporate decision-making or in response to changes in local laws and regulations. We cannot be certain that, in the future, expenses or losses for uncollectible amounts will not have a material adverse effect on our net sales, earnings and cash flows.

The sourcing, purchasing, development, and servicing of our projects may be capital-intensive. We may determine that additional funds are necessary. This capital may be necessary to fund our future operations and to locate new opportunities. We may raise additional funds through the issuance of equity, equity related or debt securities or through obtaining credit from government or financial institutions. We cannot be certain that additional funds will be available on favorable terms when required, or at all. If we cannot raise additional funds when needed, our business, prospects, financial condition and operating results could be materially adversely affected.

We may seek to incur debt in the future in order to fund our exploration and operational programs, which would reduce our financial flexibility and could have a material adverse effect on our business, financial condition or results of operation. Should we incur debt, our ability to satisfy any resulting debt obligations and to reduce our level of indebtedness will depend on future performance. General economic conditions, mineral prices, and financial, business and other factors will have an impact on our operations and future performance, and many of these factors are beyond our control. As such, we cannot assure investors that we will be able to generate sufficient cash flow to pay the interest on any debt, or that future working capital, borrowings, or equity financing will be available to pay or refinance such debt or meet future debt covenants. Factors that will affect our ability to raise cash through an offering of securities or a refinancing of any debt include financial market conditions, the value of our assets, and our performance at the time we are seeking to raise capital. We cannot assure investors that we will have sufficient funds to make such payments. If we do not have sufficient funds and are otherwise unable to negotiate renewals of our current borrowings or to arrange for new financing, we might be required to take measures to generate liquidity, such as selling some or all of our assets. Any such sales could have a material adverse effect on our business, operations and financial results. Moreover, failure to obtain additional financing, if required, on a timely basis, could cause us to reduce or delay our proposed operations. We may need to raise additional capital in order to complete our programs and commence commercial operations and there is no assurance that we will be able to obtain adequate financing in the future or that such financing will be available to us on advantageous terms.

This Annual Report contains descriptions of the business strategy and management's expectations of Global Gas. Accordingly, such projections and forecasts should not be viewed as public guidance. These strategies and expectations are based on numerous variables and assumptions which are inherently uncertain and may be beyond the control of Global Gas and exclude, among other things, transaction-related expenses. Important factors that may affect actual results and results of Global Gas' operations following the Business Combination, or could lead to such strategies and expectations not being achieved include, but are not limited to: customer demand for Global Gas' products; an evolving competitive landscape; rapid technological change; margin shifts in the industry; regulatory changes; successful management and retention of key personnel; unexpected expenses; and general economic conditions. Investors are cautioned not to place undue reliance on the strategies and expectations of Global Gas, as such strategies and expectations may be materially different than actual results.

Global Gas will face increased legal, accounting, administrative and other costs and expenses as a public company that Global Hydrogen did not incur as a private company and these expenses may increase even more after Global Gas is no longer an "emerging growth company." The Sarbanes-Oxley Act, including the requirements of Section 404, as well as rules and regulations subsequently implemented by the SEC, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the rules and regulations promulgated and to be promulgated thereunder, the Public Company Accounting Oversight Board (United States) and the securities exchanges and the listing standards of Nasdaq, impose additional reporting and other obligations on public companies. Compliance with public company requirements will increase costs and make certain activities more time consuming and could require the management team of Global Gas to devote significant time and resources to such compliance. A number of those requirements require Global Gas to carry out activities Global Gas has not done previously. For example, Global Gas created new board committees, entered into new insurance policies and adopted new internal controls and disclosure controls and procedures. In addition, expenses associated with SEC reporting requirements will be incurred. Global Gas may be required to expand its staff to ensure that its workforce has the requisite experience to implement these changes. Furthermore, if any issues in complying with those requirements are identified (for example, if management or Global Gas' independent registered public accounting firm identifies a material weakness or significant deficiency in the internal control over financial reporting), Global Gas could incur additional costs rectifying those issues, the existence of those issues could adversely affect Global Gas' reputation or investor perceptions of it and it may be more expensive to obtain director and officer liability insurance. Risks associated with Global Gas' status as a public company may make it more difficult to attract and retain qualified persons to serve on the Global Gas Board or as executive officers. In addition, as a public company, Global Gas may be subject to stockholder activism, which can lead to substantial costs, distract management and impact the manner in which Global Gas operates its business in ways Global Gas does not currently anticipate. As a result of disclosure of information in this Annual Report and in filings required of a public company, Global Gas' business and financial condition will become more visible, which may result in threatened or actual litigation, including by competitors and other third parties. If such claims are successful, Global Gas' business and results of operations could be materially adversely affected and even if the claims do not result in litigation or are resolved in Global Gas' favor, these claims and the time and resources necessary to resolve them could divert the resources of Global Gas' management and adversely affect its business and results of operations. The additional reporting and other obligations imposed by these rules and regulations will increase legal and financial compliance costs and the costs of related legal, accounting and administrative activities. These increased costs will require Global Gas to divert a significant amount of money that could otherwise be used to expand the business and achieve strategic objectives. Advocacy efforts by stockholders and third parties may also prompt additional changes in governance and reporting requirements, which could further increase costs.

Investors should be aware of the difficulties normally encountered by a new enterprise, many of which are beyond our control, including substantial risks and expenses in the course of establishing or entering new markets, organizing operations and undertaking marketing activities. The likelihood of our success must be considered in light of these risks, expenses, complications, delays and the competitive environment in which we operate. There is, therefore, nothing at this time upon which to base an assumption that our business plan will prove successful, and we may not be able to generate significant revenue, raise additional capital or operate profitably. We will continue to encounter risks and difficulties frequently experienced by early commercial stage companies, including scaling up our infrastructure and headcount, and may encounter unforeseen expenses, difficulties or delays in connection with our growth. In addition, as a result of the capital-intensive nature of our business, we can be expected to continue to sustain substantial operating expenses and may not generate sufficient revenues to cover expenditures. Any investment in our company is therefore highly speculative and could result in the loss of your entire investment.

Global Gas' management has limited experience in the management of a publicly traded company. Global Gas' management team may not successfully or effectively manage its transition to a public company that will be subject to significant regulatory oversight and reporting obligations under federal securities laws. Their limited experience in dealing with the increasingly complex laws pertaining to public companies could be a significant disadvantage in that it is likely that an increasing amount of their time may be devoted to these activities which will result in less time being devoted to the management and growth of the post-combination company. Global Gas may not have adequate personnel with the appropriate level of knowledge, experience and training in the accounting policies, practices or internal control over financial reporting required of public companies in the U.S. Any fault in Global Gas' finance and accounting systems could impact its ability or prevent it from timely reporting its operating results, timely filing required reports with the SEC and complying with Section 404 of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act"). The development and implementation of the standards and controls necessary for Global Gas to achieve the level of accounting standards required of a public company in the U.S. may require costs greater than expected. It is possible that Global Gas will be required to expand its employee base and hire additional employees to support its operations as a public company which will increase its operating costs in future periods.