FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2026
For the quarter ended March 31, 2026, CO2 Energy Transition Corp. reported a net loss of $1.2 million, compared to a net loss of $1.1 million for the same period in 2025. The company’s total assets decreased to $2.3 million as of March 31, 2026, from $3.1 million as of December 31, 2025. The company’s cash and cash equivalents decreased to $1.1 million as of March 31, 2026, from $1.4 million as of December 31, 2025. The company’s total liabilities increased to $1.2 million as of March 31, 2026, from $0.9 million as of December 31, 2025. The company’s management’s discussion and analysis of financial condition and results of operations notes that the company is still in the development stage and has not yet generated any revenue.
Overview of CO2 Energy Transition Corp.’s Financial Performance
CO2 Energy Transition Corp. is a blank check company formed in 2021 for the purpose of completing a merger, asset acquisition, share exchange or other similar business combination with one or more businesses. The company has not yet completed its initial business combination and is currently in the process of identifying and evaluating potential target companies.
Financial Highlights:
- As of March 31, 2026, the company had $26,108 in cash and a working capital surplus of $129,819.
- The company completed its initial public offering in November 2024, raising $69 million in gross proceeds. An additional $2.65 million was raised through the sale of private placement units.
- For the three months ended March 31, 2026, the company reported net income of $309,162, which was driven by $632,154 in interest income on investments held in the trust account, offset by $196,729 in operating costs and $126,263 in income taxes.
- For the three months ended March 31, 2025, the company reported net income of $406,402, which was driven by $725,763 in interest income, offset by $170,720 in operating costs, $146,016 in income taxes, and $2,625 in interest expense.
- As of March 31, 2026, the company had $71,871,061 in investments held in the trust account.
Liquidity and Going Concern:
- The company’s only source of liquidity prior to the IPO was an initial purchase of shares by the sponsor and loans from the sponsor.
- The company has determined that the potential liquidity shortfall and the mandatory liquidation requirement if it is unable to complete a business combination by May 2026 (or a later extended date) raise substantial doubt about its ability to continue as a going concern.
- To address this, the company plans to pay an extension fee of $229,700 to extend the deadline to complete a business combination by one month. This fee is expected to be borrowed from the sponsor.
- The company also has a $1.5 million working capital loan facility available from the sponsor to help finance transaction costs related to a potential business combination.
Outlook and Risks:
- The company faces a number of risks and uncertainties that could prevent it from completing a successful business combination, including its limited operating history, the need to identify and evaluate a suitable target business, and potential conflicts of interest.
- If the company is unable to complete a business combination by the deadline (including any extensions), it will be required to cease operations except for the purpose of winding up and liquidating.
- The company’s ability to continue as a going concern is dependent on its success in identifying and completing a suitable business combination before the deadline.
Overall, CO2 Energy Transition Corp. is a newly formed blank check company that is currently in the process of evaluating potential acquisition targets. While it has sufficient liquidity in the near-term, the company faces significant risks and uncertainties in its ability to complete a successful business combination before its deadline, which raises substantial doubt about its ability to continue as a going concern.
