{"url_path":"/sec/hgas/10-q/2026/item-2","section_key":"item-2","section_title":"Item 2 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/1817232/0001213900-26-056883-index.html","accession_number":"0001213900-26-056883","cik":"0001817232","ticker":"HGAS","issuer_name":"Global Gas Corp","edgar_url":"https://www.sec.gov/Archives/edgar/data/1817232/0001213900-26-056883-index.html","primary_entity_key":"0001817232","primary_entity_name":"Global Gas Corp"},"word_count":3504,"has_tables":true,"body_markdown":"**ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION\nAND RESULTS OF OPERATIONS**\n\n \n\n*The following “Management’s Discussion and Analysis of Financial\nCondition and Results of Operations” should be read in conjunction with our condensed consolidated financial statements for the three\nmonths ended March 31, 2026 and 2025 and our audited financial statements as of the year ended December 31, 2025, included in Form 10-K\nfiled with the Securities and Exchange Commission (“SEC”) on April 15, 2026. This discussion contains forward-looking statements\nthat involve risks and uncertainties. Our actual results could differ materially from such forward-looking statements. Factors that could\ncause or contribute to those differences include, but are not limited to, those identified below and those discussed in the sections titled\n“Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” included elsewhere in this report. Additionally,\nour historical results are not necessarily indicative of the results that may be expected in any future period. Amounts are presented\nin U.S. dollars.*\n\n \n\nUnless the context otherwise requires, references in this “Management’s\nDiscussion and Analysis of Financial Condition and Results of Operations” to “we,” “us,” “our” and\n“the Company” generally refer to Global Hydrogen in in the present tense or Global Gas from and after the Business Combination.\n\n \n\n**Cautionary Note Regarding Forward-Looking Statements**\n\n \n\nThis report contains certain “forward-looking statements”\nwithin the meaning of the Private Securities Litigation Reform Act of 1995 (the “PSLRA”). Forward-looking statements may be\nidentified by the use of words such as “anticipate,” “believe,” “continue,” “could,” “estimate,”\n“expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,”\n“predict,” “project,” “should,” “would,” “will,” “shall,” “seek,”\n“result,” “become,” “target” or other similar expressions that predict or indicate future events or trends\nor that are not statements of historical matters, but the absence of these words does not mean a statement is not forward looking. Indications\nof, and guidance or outlook on, future earnings, dividends or financial position or performance are also forward looking statements. These\nforward-looking statements include, but are not limited to: (1) references with respect to the anticipated benefits of the proposed Business\nCombination and anticipated closing timing; (2) the anticipated capitalization and enterprise value of the combined company following\nthe consummation of the proposed Business Combination; (3) current and future potential commercial and customer relationships; and (4)\nanticipated demand for New Global’s product and service offerings.\n\n \n\nThese forward-looking statements involve significant risks and uncertainties\nthat could cause the actual results to differ materially, and potentially adversely, from those expressed or implied in the forward-looking\nstatements. Forward-looking statements are predictions, projections and other statements about future events that are based on current\nexpectations and assumptions and, as a result, are subject to risks and uncertainties. Most of these factors are outside the Company’s\ncontrol and are difficult to predict. Factors that may cause such differences include, but are not limited to: (i) risks relating to the\nuncertainty of the projected financial information with respect to Global Hydrogen; (ii) risks relating to Global Hydrogen’s operations\nand business, including its ability to raise financing, hire employees, secure supplier, customer and other commercial contracts, obtain\nlicenses and information technology and protect itself against cybersecurity risks; (iii) intense competition and competitive pressures\nfrom other companies worldwide in the industries in which it operates; (iv) litigation and the ability to adequately protect its intellectual\nproperty rights; (v) changes in applicable laws or regulations; and (vi) the possibility that Global Hydrogen may be adversely affected\nby other economic, business and/or competitive factors.\n\n \n\nThese forward-looking statements should not be relied upon as representing\nthe Company’s assessments as of any date subsequent to the date of this report. Accordingly, undue reliance should not be placed upon\nthe forward-looking statements.\n\n \n\n15\n\n \n\n \n\n**Overview**\n\n \n\nGlobal Gas Corporation is a nascent pure-play hydrogen and carbon recovery\nproject developer and industrial gas supplier that has commenced initial operations and is building a growing project development pipeline.\nPotential projects are added to the project development pipeline only after Global Hydrogen has met with the potential customer, discussed\nthe scope of the project and discussed the project’s feasibility, preliminary sizing and design. Since its inception, Global Hydrogen\nhas worked to establish relationships in the form of channel checks with non-exclusive independent equipment suppliers and discussions\nwith vendors. As we expand our operations, we intend to offer potential customers reliable, low-carbon and clean hydrogen, pure carbon\ndioxide, and other gases generated from a variety of feedstocks. We intend for our operations to include (i) the sourcing, identification,\nevaluation and vetting of offtake customers seeking to purchase industrial gases, (ii) the securing of local feedstocks, equipment, and\nutilities, (iii) the planning and management of projects and (iv) the structuring and financing of our projects. We intend to offer our\ncustomers attractive pricing as we select and secure local, often waste, feedstock, and plan to deploy established industrial gas generation,\nstorage, compression, and dispensing technologies in our projects. On each planned project, we seek to sell multiple gas products, sourced\nfrom a single feedstock, for offtake to customers. We also intend to utilize and bring to market secondary offtake products such as oxygen.\nGlobal Hydrogen is currently a minority-owned business and we are targeting both privately- and publicly-funded hydrogen development and\nselected carbon recovery projects, including projects supported by local, county, state, and national-level governments in North America,\nWestern Europe, and Great Britain.\n\n \n\nIn selecting feedstock to generate industrial gases, we will primarily\ntarget renewable waste and will need to seek arrangements with owners of renewable waste feedstock, such as wastewater treatment plants,\nlandfills, food waste processing facilities, and agricultural farms, to access their renewable waste feedstock. In addition to generating\nindustrial gases from renewable waste feedstock, we plan to generate gases from non-renewable sources including pipeline natural gas.\nWe will need to seek arrangement with owners of such non-renewable feedstock. On projects where a non-renewable, or high greenhouse gas\noutput, energy source is used, as well as on selected other projects where such technology is required to produce clean hydrogen, we may\ndeploy carbon recovery technology — more commonly known as carbon capture technology.\n\n \n\nOn the hydrogen side, we seek to serve traditional industrial gas customers,\nand are particularly focused on plans to serve the rapidly growing hydrogen-as-energy-carrier market, comprising heavy duty hauling transportation\noperators such as transit bus agencies, long haul truck fleet operators, truck leasing operators, and refuse collection truck operators,\nmany of whom are considering deploying hydrogen fuel cell powertrain vehicles to decarbonize their fleets which currently runs almost\nexclusively on diesel. On the carbon dioxide side, we target both traditional industrial users of the gas, including food & beverage\ngrade users such as brewers and beverage bottlers requiring carbonation, as well as emerging users such as the producers of green building\nmaterials.\n\n \n\n**Growth Strategy**\n\n \n\nOur growth strategy is based on developing our ability to place modular\ngeneration, recovery, storage, and dispensing solutions in closer geographic proximity to our end customers — onsite in many cases\n— and our ability to produce and sell multiple outputs from a single feedstock input. We hope that these plans, if successfully\ncarried out, will allow us to produce clean hydrogen and carbon dioxide at a net cost normally seen only in larger scale plants and which\nsupports competitive market prices for our end products. Additionally, governments at all levels in North America and Western Europe have\nand are deploying substantial incentives to mitigate the impact of climate change and to decarbonize their economies. We believe we are\nwell-placed to benefit as a developer of projects eligible for several of these incentives, such as the hydrogen tax production credits\nand the investment tax credits made available in the United States through the Inflation Reduction Act of 2022.\n\n \n\n16\n\n \n\n \n\nGlobal Hydrogen management actively reviews its project development\npipeline and activity with potential customers. Potential projects are added to the project development pipeline only after Global Hydrogen\nhas met with the potential customer, discussed the scope of the project and discussed the project’s feasibility, preliminary sizing and\ndesign. Management has determined that its projections are reasonable based on its review and status of its potential projects. Global\nHydrogen has not yet successfully closed on any project.\n\n \n\nGlobal Hydrogen is headquartered in New York, New York and its corporate\nwebsite is globalhydrogen.co. Global Hydrogen’s website and the information contained on, or that can be accessed through, such website\nis not deemed to be incorporated by reference in, and is not considered part of, this proxy statement.\n\n \n\nWhile Global Hydrogen does not have significant past operating history,\nGlobal Hydrogen’s management is aware that the future operating results and future financial condition of Global Hydrogen may be different\nthan our past operating results and financial condition. Major factors that will have a material impact on future financial results and\ncondition include whether Global Hydrogen will be able to sign contracts with customers and suppliers necessary to undertake the business\nplan. Even if such contracts are signed, our business plan is complex and there are many factors which could impact our operating results\nand financial condition including delays in projects, volatility in the price of our raw materials and products, and volatility in the\ndemand for our services and products.\n\n \n\n**Results of Operations**\n\n \n\nThe following tables sets forth our condensed consolidated statements\nof operations for the three months ended March 31, 2026 and 2025, and the dollar and percentage change between the two periods:\n\n \n\n  \nThree Months Ended\nMarch 31,  \n   \n  \n\n  \n2026  \n2025  \n$ Change  \n% Change \n\nRevenue, net \n$-  \n$33,012  \n$(33,012) \n NM* \n\n  \n    \n    \n    \n   \n\nCosts and expenses: \n    \n    \n    \n   \n\nGeneral and administrative \n 16,596  \n 62,126  \n (45,530) \n (73)%\n\nTotal costs and expenses \n 16,596  \n 62,126  \n (45,530) \n (73)%\n\nOperating loss \n (16,596) \n (29,114) \n 12,518  \n (43)%\n\n  \n    \n    \n    \n   \n\nOther income (expense): \n    \n    \n    \n   \n\nInterest income \n 358  \n 885  \n (527) \n (60)%\n\nInterest expense \n (3,378) \n (4,353) \n 975  \n (22)%\n\nChange in fair value of derivative warrants liabilities \n 1,340  \n 4,040  \n (2,700) \n (67)%\n\nNet loss \n$(18,276) \n$(28,542) \n$10,266  \n (36)%\n\n \n\n**Revenue**\n\n \n\nFor the three months ended March 31, 2025, the Company recognized $33,012\nof revenue from a project recognized on a net basis.\n\n \n\n17\n\n \n\n \n\n**General and administrative expenses**\n\n \n\nGeneral and administrative expenses decreased by $45,530 for the three\nmonths ended March 31, 2026 compared to the three months ended March 31, 2025, primarily related to a decrease in legal fees and professional\nfees.\n\n \n\n**Interest income**\n\n \n\nFor the three months ended March 31, 2026 and 2025, the Company earned\n$358 and $885, respectively, of interest income on cash balances at bank.\n\n \n\n**Interest expense**\n\n \n\nFor the three months ended March 31, 2026 and 2025, the Company incurred\n$3,378 and $4,353, respectively, of interest expense on its convertible promissory notes.\n\n \n\n**Change in fair value of warrants liabilities**\n\n \n\nThe change in fair value of warrant liabilities for the three months\nended March 31, 2026 and 2025 of $1,340 and $4,040, respectively, is recognized into other income on the condensed consolidated statement\nof operations.\n\n \n\n**Liquidity and Capital Resources**\n\n \n\nSince inception, the Company’s primary sources of liquidity have been\ncash flows from contributions from a member and a related party and from revenue from customers. The Company had $5,472 in cash, a working\ncapital deficit of $299,776, and an accumulated deficit of $440,748 as of March 31, 2026.\n\n \n\nIn the future, the Company may borrow money and sell equity to finance\nits operations. As the Company has a limited operating history, its liquidity and capital resources may change substantially from past\nresults.\n\n \n\nThe Company’s future capital requirements will depend on many factors,\nincluding the Company’s revenue growth rate, the timing and extent of spending to support further sales and marketing and research and\ndevelopment efforts. In order to finance these opportunities, the Company will need to raise additional financing. While there can be\nno assurances, the Company intends to raise such capital through issuances of additional equity. If additional financing is required from\noutside sources, the Company may not be able to raise it on terms acceptable to the Company or at all. If the Company is unable to raise\nadditional capital when desired, the Company’s business, results of operations and financial condition would be materially and adversely\naffected.\n\n \n\nAs a result of the above, in connection with the Company’s assessment\nof going concern considerations in accordance with Financial Accounting Standard Board’s (“FASB”) ASC Subtopic 205-40, “Going\nConcern,” management has determined that the Company’s liquidity condition raises substantial doubt about the Company’s ability to\ncontinue as a going concern through twelve months from the date these condensed consolidated financial statements are available to be\nissued. These condensed consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets\nor the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.\n\n \n\n**Cash flows for the three months ended March 31, 2026 and 2025**\n\n \n\nThe following table summarizes cash flows from operating, investing\nand financing activities for the three months ended March 31, 2026 and 2025:\n\n \n\n  \nFor the Three Months Ended \n\n  \nMarch 31, \n\n  \n2026  \n2025 \n\nNet cash used in operating activities \n$(43,241) \n$(39,413)\n\nNet cash used in financing activities \n$-  \n$(707)\n\n \n\n18\n\n \n\n \n\n**Cash flows from operating activities**\n\n \n\nNet cash used in operating activities for the three months ended March\n31, 2026 was $43,241, primarily related to net loss and a decrease in accounts payable and accrued expenses.\n\n \n\nNet cash used in operating activities for the three months ended March\n31, 2025 was $39,413, primarily related to net loss for the period and a decrease contract liabilities.\n\n \n\n**Cash flows from financing activities**\n\n \n\nNet cash used in financing activities during the three months ended\nMarch 31, 2025 was $707, consisting of payment to a related party.\n\n \n\n**Critical Accounting Estimates**\n\n \n\nThe preparation of our condensed consolidated financial statements\nin conformity with GAAP requires management to make judgments, estimates and assumptions that impact the amounts reported in our condensed\nconsolidated financial statements and accompanying notes that are not readily apparent from other sources. The estimates and associated\nassumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates.\n\n \n\nThe estimates and underlying assumptions are reviewed on an ongoing\nbasis. Revisions to accounting estimates are recognized in the period in which the estimate is revised, if the revision affects only that\nperiod, or in the period of the revision and future periods, if the revision affects both current and future periods.\n\n \n\nA summary of our significant accounting policies is included in Note\n3, “Summary of significant accounting policies” to the accompanying condensed consolidated financial statements. Certain of\nour accounting policies are considered critical, as these policies require significant, difficult or complex judgments by management,\noften requiring the use of estimates about the effects of matters that are inherently uncertain.\n\n \n\n**Fair Value Measurement**\n\n \n\nWe determine the fair value of financial assets and liabilities using\nthe fair value hierarchy established in Accounting Standards Codification (“ASC”) Topic 820, *Fair Value Measurement* (“ASC\n820”). ASC 820 identifies fair value as the exchange price, or exit price, representing the amount that would be received to sell\nan asset or paid to transfer a liability in an orderly transaction between market participants. The hierarchy describes three levels of\ninputs that may be used to measure fair value, as follows:\n\n \n\n●Level 1: Inputs are quoted prices in active markets for identical assets or liabilities.\n\n \n\n●Level 2: Inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar\nassets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for the asset or liability,\neither directly or indirectly.\n\n \n\n●Level 3: Inputs are unobservable for the asset or liability.\n\n \n\n**Stock - Based Compensation**\n\n \n\nThe Company accounts for stock-based compensation in accordance with\nthe fair value recognition provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification\n(“ASC”) No. 718. The Company issues restricted stock to employees and officers. Costs for these transactions are measured at\nthe fair value of the equity instruments issued at the date of grant.\n\n \n\n19\n\n \n\n \n\n**Warrants**\n\n \n\nThe Company reviews the terms of warrants to purchase its common stock\nto determine whether warrants should be classified as liabilities or stockholders’ deficit in its condensed consolidated balance sheets.\nIn order for a warrant to be classified in stockholders’ deficit, the warrant must (i) be indexed to the Company’s equity and (ii) meet\nthe conditions for equity classification.\n\n \n\nIf a warrant does not meet the conditions for stockholders’ deficit\nclassification, it is carried on the condensed consolidated balance sheets as a warrant liability measured at fair value, with subsequent\nchanges in the fair value of the warrant recorded in other non-operating losses (gains) in the condensed consolidated statements of operations.\nIf a warrant meets both conditions for equity classification, the warrant is initially recorded, at its relative fair value on the date\nof issuance, in stockholders’ deficit in the condensed consolidated balance sheets, and the amount initially recorded is not subsequently\nremeasured at fair value.\n\n \n\n**Income taxes**\n\n \n\nThe Company follows the asset and liability method of accounting for\nincome taxes under FASB ASC 740, which requires an asset and liability approach to financial accounting and reporting for income taxes.\nDeferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the condensed\nconsolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets\nand liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences\nare expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income\nin the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to\nthe amount expected to be realized.\n\n \n\nFASB ASC 740 prescribes a recognition threshold and a measurement attribute\nfor the financial statement recognition and the measurement of tax positions taken or expected to be taken in a tax return. For those\nbenefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company\nrecognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. The Company is currently not aware\nof any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is\nsubject to income tax examinations by major taxing authorities since inception.\n\n \n\n**Recently Issued Accounting Standards**\n\n \n\nThe Company is expected to be an “emerging growth company”\nas defined in Section 2(a) of the Securities Act of 1933, as amended, (the “Securities Act”), as modified by the Jumpstart Our\nBusiness Startups Act of 2012 (the “JOBS Act”). The JOBS Act provides that an emerging growth company can take advantage of\nan extended transition period for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption\nof certain accounting standards until those standards would otherwise apply to private companies. The Company has elected to take advantage\nof the extended transition period to comply with new or revised accounting standards and to adopt certain of the reduced disclosure requirements\navailable to emerging growth companies. As a result of the accounting standards election, the Company will not be subject to the same\nimplementation timeline for new or revised accounting standards as other public companies that are not emerging growth companies which\nmay make comparison of the Company’s condensed consolidated financial statements to those of other public companies more difficult.\n\n \n\nFor the impact of recently issued accounting pronouncements on the\nCompany’s condensed consolidated financial statements, see Note 3 to the condensed consolidated financial statements included in Part\nI, Item 1 of this Quarterly Report on Form 10-Q and incorporated herein by reference.\n\n \n\n**Intellectual Property**\n\n \n\nGlobal Hydrogen does not currently hold material intellectual property\nbeyond certain logos and domain names assigned to the Company by William Bennett Nance, Jr., the former Chief Executive Officer and Founder\nof Global Hydrogen and a former director of the Company.\n\n \n\n20\n\n \n\n \n\n**Government Regulation**\n\n \n\nGlobal Hydrogen plans to own and operate hydrogen generation plants\nand to sell the resulting industrial gas. In many jurisdictions, hydrogen, oxygen, and other gases we will produce and sell, may be classified\nas fuel or controlled substances, and as such we may be required to obtain relevant licensing to produce, store, and sell such substances.\nWe intend to acquire such licenses on a project by project and jurisdiction by jurisdiction basis.\n\n \n\nSome of these gas generation plants we build or own may be in jurisdictions\nwhere CO2 emissions are subject to government regulation. When we produce hydrogen thermochemically, we will typically deploy carbon recovery\nsystems to significantly reduce — below relevant jurisdictional limits — or eliminate the CO2 emissions which otherwise would\nbe released to the atmosphere.\n\n \n\nThe construction of facilities that produce hydrogen will require compliance\nwith government regulation, including local zoning and permitting requirements, such requirements will depend on the jurisdiction of each\nproject.\n\n \n\nThe distribution of hydrogen, carbon dioxide, and oxygen will require\ncompliance with certain regulatory federal and state regimes and will depend on the relevant jurisdictions."}