Filed 2026-03-25 · Period ending 2025-12-31 · 45,967 words · SEC EDGAR
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# CoJax Oil & Gas Corp (CJAX) — 10-K
**Filed:** 2026-03-25
**Period ending:** 2025-12-31
**Accession:** 0001753926-26-000536
**Source:** [SEC EDGAR](https://www.sec.gov/Archives/edgar/data/1763925/000175392626000536/)
**Origin leaf:** 3a0328293f3d750b8007118cd0146b47663fc4cea674966ec8783738f916a912
**Words:** 45,967
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UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-K
(Mark
One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the Fiscal Year Ended December 31, 2025**
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the transition period from __________________________ to __________________________
Commission
File Number 333-232845
COJAX
OIL and GAS CORPORATION
(Exact
name of Registrant as specified in its charter)
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Virginia |
46-1892622 | |
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(State or other jurisdiction |
(I.R.S. Employer | |
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of incorporation
or organization) |
Identification No.) | |
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4830
Line Ave. #152
Shreveport,
Louisiana |
71106 | |
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(Address
of Principal Executive Offices) |
(Zip
Code) | |
**(703)
479-8538**
(Registrants
telephone number, including area code)
Securities
registered pursuant to Section 12(b) of the Act:
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Title
of each class |
Trading
Symbol(s) |
Name
of each exchange
on
which registered | |
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None |
N/A |
N/A | |
Securities
registered pursuant to Section 12(g) of the Act: **Common Stock, $0.01 par value per share**
Indicate
by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No
Indicate
by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes
No
Indicate
by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes
No
Indicate
by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant
to Rule 405 of Regulation S-T ( 232.405 of this chapter) during the preceding 12 months (or for such shorter period that
the Registrant was required to submit such files). Yes No
Indicate
by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a small reporting
company, or an emerging growth company. See the definitions of large accelerated filer, accelerated filer,
smaller reporting company, or an emerging growth company in Rule 12b-2 of the Exchange Act.
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Large
accelerated filer |
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Accelerated
filer |
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Non-accelerated
filer |
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Smaller
reporting company |
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Emerging
Growth company |
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If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate
by check mark whether the registrant has filed a report on and attestation to its managements assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report.
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes
No
If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the
registrant included in the filing reflect the correction of an error to previously issued financial statements. Yes
No
Indicate
by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrants executive owners during the relevant reporting period pursuant to 240.10D-1(b).
Yes No
The
aggregate market value of the voting and non-voting common equity held by non-affiliates computed as of the last business day
of the Registrants most recently completed fiscal quarter was $15,046,671.
On
March 24, 2026, there were 14,168,755 outstanding shares of common stock of the Company.
**DOCUMENTS
INCORPORATED BY REFERENCE**
None.
**CoJax
Oil and Gas Corporation**
**Form
10-K**
**For
the Fiscal Year Ended December 31, 2025**
**TABLE
OF CONTENTS**
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Page | |
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PART I |
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Item 1. |
Business |
8 | |
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Item 1A. |
Risk Factors |
18 | |
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Item 1B. |
Unresolved Staff Comments |
30 | |
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Item 1C. |
Cybersecurity |
30 | |
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Item 2. |
Properties |
31 | |
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Item 3. |
Legal Proceedings |
31 | |
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Item 4. |
Mine Safety Disclosures |
31 | |
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PART II |
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Item 5. |
Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
32 | |
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Item 6. |
[Reserved] |
32 | |
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Item 7. |
Managements Discussion and Analysis of Financial Condition and Results of Operations |
32 | |
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Item 7A. |
Quantitative and Qualitative Disclosures About Market Risk |
40 | |
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Item 8. |
Financial Statements and Supplementary Data |
F
41 - F 62 | |
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Item 9. |
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
63 | |
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Item 9A. |
Controls and Procedures |
63 | |
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Item 9B. |
Other Information |
65 | |
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Item 9C. |
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections |
65 | |
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PART III |
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Item 10. |
Directors, Executive Officers, and Corporate Governance |
66 | |
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Item 11. |
Executive Compensation |
68 | |
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Item 12. |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
75 | |
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Item 13. |
Certain Relationships and Related Transactions, and Director Independence |
76 | |
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Item 14. |
Principal Accountant Fees and Services |
77 | |
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PART IV |
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Item 15. |
Exhibits, Financial Statement Schedules |
77 | |
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Item 16. |
10-K Summary |
80 | |
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SIGNATURES |
81 | |
2
**FORWARD-LOOKING
STATEMENTS**
This
Annual Report contains forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause changes in our actual results and reflect the current view about future events and are based on our
current expectations and assumptions regarding our business, potential target businesses, the economy, and other future conditions.
Such statements are generally accompanied by words such as may, should, expect, believe,
plan, anticipate, could, intend, target, goal,
project, contemplate, believe, estimate, predict, potential,
will, or continue or the negative of these terms or other similar expressions. Any forward-looking
statements contained or incorporated by reference in this Annual Report speak only as of the date on which we make them and are
based upon our historical performance and on current plans, estimates, and expectations. Forward-looking statements contained
or incorporated by reference herein include or may include, but are not limited to, statements about:
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our business strategy; | |
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our plans, objectives,
expectations, and intentions; | |
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our future operating
results and future operating results of Barrister as a wholly-owned subsidiary of CoJax; | |
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the competitive
nature of the industry in which we will conduct our business; | |
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crude oil and natural
gas commodity prices; | |
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The supply and demand
for oil, natural gas, and other products or services, including impacts of actions taken by OPEC and other state-controlled
oil companies; | |
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the impact of adverse
weather conditions and unexpected events like the COVID-19 pandemic and other pandemics or epidemics; | |
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the effects of government
regulation and changes in that regulation; | |
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geopolitical and
business conditions in key regions of the world; | |
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the effect of a
loss of, or the financial distress of, one or more key customers of our future, proposed oil production; | |
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our ability to obtain
or renew customer or supply contracts; | |
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the effect of a
loss of, or interruption in operations of, one or more key vendors, suppliers or contractors; | |
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our ability to maintain
the right level of commitment under any future oil supply agreements; | |
3
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the market price
and availability of materials or equipment; | |
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the impact of new
technology on oil exploration and production and our ability to acquire and use that technology; | |
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our ability to employ
or engage as contractors a sufficient number of skilled and qualified workers and to retain key management; | |
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our ability to obtain
permits, approvals, and authorizations from governmental and third parties; | |
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our ability to consummate
planned acquisitions and future capital expenditures; | |
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our ability to maintain
effective information technology systems and guard against cyber-attacks or hacking; | |
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our ability to maintain
an effective system of internal controls over financial reporting; | |
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financial strategy,
liquidity or capital required for our ongoing operations and acquisitions, and our ability to raise additional capital to
acquire and expand oil drilling and production and to fund overhead and our ability to service our debt obligations; and | |
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the market volatility
of our stock. | |
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cybersecurity threats,
including increased use of artificial intelligence technologies; | |
We
caution you that the foregoing list may not contain all of the forward-looking statements made or incorporated by reference in
this Annual Report. You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking
statements contained in this Annual Report primarily on our current expectations and projections about future events and trends
that we believe may affect our business, financial condition, results of operations, and prospects. The outcome of the events
described in these forward-looking statements is subject to risks, uncertainties, and other factors described in Item 1A. Risk
Factors and elsewhere in this Form 10-K. This Annual Report may include market data and certain industry data and forecasts,
which we may obtain from internal company surveys, market research, consultant surveys, publicly available information, reports
of governmental agencies and industry publications, articles and surveys. Industry surveys, publications, consultant surveys and
forecasts generally state that the information contained therein has been obtained from sources believed to be reliable, but the
accuracy and completeness of such information is not guaranteed.
Moreover,
it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained
or incorporated by reference herein. We cannot assure you that the results, events, and circumstances reflected in the forward-looking
statements will be achieved or occur, and actual results, events, or circumstances could differ materially from those described
in the forward-looking statements.
The
forward-looking statements made or incorporated by reference in this Annual Report relate only to events as of the date on which
the statements are made. We undertake no obligation to update any forward-looking statements made or incorporated by reference
in this Annual Report to reflect events or circumstances after the date hereof, respectively, or to reflect new information or
the occurrence of unanticipated events, except as required by law.
4
**COMMONLY
USED ABBREVIATIONS AND DEFINED TERMS**
Unless
otherwise indicated or the context requires otherwise, the terms Company, we, us, and
our, refer to CoJax Oil and Gas Corporation, a Virginia corporation, and its wholly-owned subsidiary, Barrister
Energy, L.L.C., a Mississippi limited liability company (Barrister). In addition, below are abbreviations and definitions
of certain terms used in this Annual Report commonly used in the oil and natural gas industry:
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ARO
means asset retirement obligation; | |
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Bbl
means one stock tank barrel, of 42 U.S. gallons liquid volume; | |
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Btu
means one British thermal unit, the quantity of heat required to raise the temperature of a one-pound mass of water by one
degree of Fahrenheit; | |
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Basin
means a large natural depression on the earths surface in which sediments generally brought by water accumulate; | |
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CommissionorS.E.C.means
the U.S. Securities and Exchange Commission; | |
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Company
Oil Rights means the crude oil and natural gas exploration and production leases and rights owned or controlled
by the Company (as more fully described under Business Company Oil Rights below). | |
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Completion
means the process of treating a drilled well followed by the installation of permanent equipment for the production of natural
gas or oil, or in the case of a dry hole, the reporting of abandonment to the appropriate agency; | |
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COPmeans
Central Operating, L.L.C., a Mississippi limited liability company | |
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Deep drill
wellordeep drilling rigmeans a drilled oil well approximately 10,000
deep or a drilling rig capable of drilling to depths of approximately 10,000 feet or more; | |
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Developed
acreage means the number of acres that are allocated or assignable to productive wells or wells capable of production; | |
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Development
well means a well drilled within the proved area of a crude oil, NGL, or natural gas reservoir to the depth of
a stratigraphic horizon (rock layer or formation) known to be productive for the purpose of extracting proved crude oil, NGL,
or natural gas reserves. | |
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Differential
means the difference between a benchmark price of crude oil and natural gas and the wellhead price received. | |
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Exchange
Actmeans the Securities Exchange Act of 1934, as amended. | |
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Field
means an area consisting of a single reservoir or multiple reservoirs all grouped on, or related to, the same individual geological
structural feature or stratigraphic condition. The field name refers to the surface area, although it may refer to both the
surface and the underground productive formations; | |
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Formation
means a layer of rock that has distinct characteristics that differ from nearby rock; | |
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Gasmeans
natural gas; | |
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Gulf States
Drill Region means the geographic area(s) where oil and gas leases, drilling, and production rights, are located.
The Gulf States Drill Region extends from Texas to the Florida Panhandle along the Gulf Coast Region both onshore
and offshore. Prolific oil and natural gas production from variable formations and depths exists within this geographic boundary. | |
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Hydraulic
fracturing means the technique of improving a wells production by pumping a mixture of fluids into the formation
and rupturing the rock, creating an artificial channel. As part of this technique, sand or other material may also be injected
into the formation to keep the channel open, so that fluids or natural gases may more easily flow through the formation; | |
5
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Mcf
means one thousand cubic feet of natural gas; | |
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MMBtu
means one million Btu; | |
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MMcf
means one million cubic feet of natural gas; | |
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NGL
means natural gas liquids; | |
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NYMEX
means the New York Mercantile Exchange; | |
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Oilmeans
crude oil that has not been refined or processed; | |
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OPEC
means the Organization of Petroleum Exporting Countries; | |
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Possible
reserves means the additional reserves which analysis of geoscience and engineering data suggest are less likely
to be recoverable than probable reserves; | |
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Probable
reserves means the additional reserves which analysis of geoscience and engineering data indicate are less likely
to be recovered than proved reserves but which together with proved reserves, are as likely as not to be recovered; | |
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Productive
well means a well that is found to be capable of producing hydrocarbons in sufficient quantities such that proceeds
from the sale of the production exceed production expenses and taxes; | |
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Proved
reserves means the quantities of crude oil, NGLs and natural gas, which by analysis of geosciences and engineering
data, can be estimated with reasonable certainty to be economically producible, from a given date forward, from known reservoirs,
and under existing economic conditions, operating methods, and government regulations, prior to the time at which contracts
providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether
deterministic or probabilistic methods are used for the estimation. The project to extract the hydrocarbons must have commenced
or the operator must be reasonably certain that it will commence the project within a reasonable time; | |
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Prospect
means a specific geographic area which, based on supporting geological, geophysical, or other data and also preliminary economic
analysis using reasonably anticipated prices and costs, is deemed to have the potential for the discovery of commercial hydrocarbons; | |
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Recompletion
means the process of re-entering an existing wellbore that is either producing or not producing and completing new reservoirs
in an attempt to establish or increase existing production; | |
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Reservoir
means a porous and permeable underground formation containing a natural accumulation of producible oil and/or natural gas
that is confined by impermeable rock or water barriers and is separate from other reservoirs; | |
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Resourcesmeans
quantities of oil and gas estimated to exist in naturally occurring accumulations. A portion of the resources may be estimated
to be recoverable, and another portion may be considered to be unrecoverable. Resources include both discovered and undiscovered
accumulations; | |
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Securities
Actmeans the Securities Act of 1933, as amended; | |
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Smackover
Trend means a regional boundary where the Smackover formation exists below the surface of the ground. | |
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Spacing
means the distance between wells producing from the same reservoir. Spacing is often expressed in terms of acres, e.g., 40-acre
spacing, and is often established by regulatory agencies; | |
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Undeveloped
acreage means acreage on which wells have not been drilled or completed to a point that would permit the production
of economic quantities of crude oil, NGLs, and natural gas, regardless of whether such acreage contains proved reserves. Undeveloped
acreage includes net acres held by operations until a productive well is established in the spacing unit; | |
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Unit
means the joining of all or substantially all interests in a reservoir or field, rather than a single tract, to provide for
development and operation without regard to separate property interests. Also, the area covered by a unitization agreement; | |
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Working
interest means the right granted to the lessee of a property to explore for and to produce and own natural gas
or other minerals. The working interest owners bear the exploration, development, and operating costs on either a cash, penalty
or carried basis; | |
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WTI
means West Texas Intermediate, a light, sweet blend of oil produced from the fields in West Texas. | |
7
**PART
I**
**ITEM
1. BUSINESS**
**Overview**
We
are an early-stage development oil and gas company seeking to become an independent energy company. Our assets and principal properties
are located in the Gulf States Drill Region, where we target acquisition and subsequent exploitation and development of crude
oil and natural gas, including acquisitions of hydrocarbon revenues and underlying oil and gas exploration and production rights.
We believe that we can establish a profitable niche in crude oil and natural gas production due to the quality of the light sweet
crude oil produced from the Gulf States Drill Region, which is cheaper to refine than crude oil from other regions of the U.S.
and Canada.
The
Company was incorporated in the Commonwealth of Virginiaon November 13, 2017, and started its operations on November 17,
2020, upon an acquisition (the Barrister Acquisition) of all outstanding capital of Barrister, including all of
Barristers crude oil and natural gas exploration and production leases and rights owned or controlled by Barrister. In
consideration for the Barrister Acquisition, the Company issued 3,650,000 shares of the Companys common stock, $0.01 par
value per share (the Common Stock) to the members of Barrister and assumed Barristers debt obligations to
Central Operating, LLC(COP) in principal amount of $2,700,000, which was discharged on November 16, 2021 pursuant
to a debt exchange agreement between the Company and COP in exchange for the issuance of 1,350,000 shares of the Companys
Common Stock to COP. Currently we are producing very limited crude oil production from limited production operations as a result
of the Barrister Acquisition. It is insufficient to fund new acquisitions or drilling without additional funding or equity transactions.
On
November 8, 2022, the Company, through Barrister, its wholly-owned subsidiary, acquired from Taxodium Energy, LLC, a Mississippi
limited liability company (Taxodium), 100% ownership, right, title and interest in certain properties located in
Mississippi and Alabama, including all oil and gas leases, interests, royalties, overriding royalties, subleases, fee estates,
net profit interest, and carried interests (collectively, NONOP Assets) pursuant to the Assignment, Bill of Sale
and Conveyance, dated October 31, 2022, executed by Taxodium. This transaction became effective on October 1, 2022, for accounting
purposes, based on when the Company obtained control of the acquired assets.
On
December 2, 2022, the Company, through Barrister, acquired from Taxodium a 100% ownership, right, title and interests in additional
properties located in Mississippi, including certain wells, facilities, the oil gas and mineral leases, together with all surface
and subsurface and all operating rights, working interest, and net revenue interest arising out of such leases and rights (collectively,
Buckley Assets) pursuant to the Assignment, Bill of Sale and Conveyance, dated December 2, 2022, executed by Taxodium
and Barrister.
While
the Company acquired these new properties, including drilling wells, currently, these wells have very limited production, not
sufficient for the Company to become profitable.
On
May 31, 2024, the Company, through Barrister, its wholly-owned subsidiary, completed the acquisition of certain various mineral
and oil and gas properties, lands and leases located in Mississippi and related assets from Liberty Operating Company, LLC (Liberty)
pursuant to the Assignment and Bill of Sale, entered into and executed by Barrister and Liberty on May 31, 2024. The Acquisition
has an effective date of May 1, 2024, for accounting purposes.
On
August 29, 2024, the Company, through Barrister, its wholly-owned subsidiary, completed the acquisition of certain various mineral
and oil and gas properties, lands and leases located in Mississippi and related assets from Liberty pursuant to the Assignment
and Bill of Sale, entered into and executed by Barrister and Liberty on August 29, 2024. The Acquisition has an effective date
of July 1, 2024, for accounting purposes.
On July 1, 2025, the Board of Directors
of CoJax Oil and Gas Corporation approved a Reassignment Agreement by which the Company assigned and conveyed 100% of its interest
in the NONOP Assets back to Taxodium Energy, LLC and its affiliates due to diminishing operating margins the Company elected to
dispose of its interests in the NONOP Assets.. On October 22, 2025, pursuant to the Reassignment Agreement, the Company transferred
to Taxodium 100% ownership, right, title and interests in the aforementioned NONOP Assets. As consideration for the reassignment,
Taxodium fully released and canceled all outstanding payables related to the NONOP Assets.
8
**Our
Growth Strategy**
The
Company is seeking to acquire existing underexploited conventional and unconventional oil and natural gas producing properties
and rights in the Gulf States Drill Region. These properties typically contain upside potential through operational efficiencies,
recompletions to behind pipe zones and infill drilling. Our long-term goal is to create shareholder value by identifying
and assembling a portfolio of low-risk assets with attractive economic profiles. Our ability to implement our business plan is
subject, in part, in our ability to timely raise adequate and affordable funding from investors or lenders for establishing acquisitions.
Our first acquisition was Barrister, followed by the acquisition of NONOP Assets and Buckley Assets in the fourth quarter of 2022.
In 2024, we acquired the non-operated interests of Liberty Operating Company, LLC in three separate fields located within Mississippi.
Our efforts now involve raising sufficient working capital to perform planned well work on existing properties to increase gross
production and cash flow.
The
Company will continue to seek acquisitions that can be obtained in exchange for the Companys stock or under an earn-out
arrangement. Preference is given to existing producing properties or companies wishing to divest all their assets. Acquisition
of a company that holds oil and lease rights affords the company the advantage of bypassing the long process of acquiring oil
leases and rights and existing drilling operations with in-place management in a single transaction.
Our
teaming approach is also designed to facilitate rapid growth by bringing necessary expertise into operations from available contractors.
Our ability to realize profitability from oil and gas production may also depend upon the success of drill wells, engaging
necessary operations expertise, and market price for crude oil and natural gas remaining at attractive levels. If we have adequate
funding and/or sufficient cash flow, then we may seek to drill for oil in other assignee or leasehold interests or, alternatively,
in oil and gas assignee or leasehold interests or properties owned by our potential affiliates or teaming partners. The Company
currently allows the purchasers to market its crude oil and natural gas production, whether current or future, on a month-to-month
basis.
If
the production of oil increases from the properties in which the Company obtains its oil rights, the Company will have to expand
the marketing efforts by engaging a person or firm to seek out new customers for the oil production in case the current customer
base is unable or unwilling to purchase increased oil production. The cost means and extent of any enhanced future marketing effort
will depend on the amount of increased oil production, the then-current market for oil, and the potential customer base for the
oil production. If the existing customer base will not purchase increased oil production, then the engagement of a dedicated marketing
person who engages in direct marketing, by telephone and internet, of potential customers for oil production may be required for
the sale of any future increase of oil production.
9
**Competitive
Strengths**
**Use
of Contractors **
Our
strategy is to develop our assets in a manner that generates sustainable cash flow and improves margins and operating efficiencies
while improving our environmental, social and governance and safety performance. The Company relies on the extensive experience
of William R. Downs, our Chief Executive Officer, who has more than 42 years of experience in the oil and gas industry. In addition,
the Company utilizes experienced contractors, including former members of Barrister, who have significant oil and gas production
experience in the Gulf States Drill Region. This approach is particularly valuable during the initial phases of implementing our
business plan. We believe this contractor model is the most efficient and cost-effective way to operate as a small independent
oil and gas producer, enabling us to leverage expert drilling and production personnel without incurring the high overhead of
full-time employees. Currently, we engage COP and Taxodium as our contractors to manage drilling storage and production operations
for our oil rights. These contractors bring extensive experience with operational and administrative expertise and
provide the skilled personnel necessary to handle daily crude oil production. With adequate funding, we plan to expand
this teaming model to attract and retain experienced oil industry engineers and production specialists. Their role will be to
identify acquisitions and drill sites and operate wells efficiently to achieve industry-leading production rates.
**Seasonality**
Our
drill sites in the Gulf States Drill Region allow for year-round drilling. However, adverse weather conditions can affect drilling,
completion, and field operations, as well as third-party midstream and downstream pipeline operations, thereby influencing overall
production volumes. which can impact overall production volumes. Variations in seasonal weather patterns can either lessen or
intensify these impacts, and extreme weather events may temporarily constrain our operations.
**Title
to Oil and Natural Gas Properties**
In
the oil and gas industry, it is customary to conduct only a preliminary review of title to undeveloped oil and natural gas leases
at acquisition. More extensive title examinations are typically performed when we prepare to develop the leases or acquire producing
properties. In future acquisitions, we will conduct title examinations on material portions of such properties in a manner generally
consistent with industry practice. The properties we have acquired may be subject to certain imperfections in title, encumbrances,
easements, servitudes or other restrictions, none of which, in managements opinion, will materially restrict our operations.
**Competition**
The
Company competes with many companies of all sizes in the Gulf States Drill Region and adjacent areas. Many of these competitors
have extensive operational histories, seasoned management, established market share, and profitable operations. They also possess
significant oil and gas fields or leases to exploit and the funding to explore new fields or acquire mature ones. There is also
an established oil and gas production industry in northern Alaska and in North Dakota and western Canada. Many of our competitors
not only explore for and produce oil and natural gas, but also have midstream and further downstream operations and market a variety
of hydrocarbon products on a regional, national or worldwide basis. In addition, oil and natural gas compete with other forms
of energy available to customers, primarily based on price. Oil and natural gas compete with alternative energy sourcessuch
as wind, solar, coal, and fuel oilsprimarily on price. Changes in energy availability, pricing, market conditions, and
regulatory factors may affect demand.
The
Company has a limited operating history of its business operation and lacks the financial, technical, and manpower resources,
proven crude oil reserves, and distribution channels of its competitors. The Companys current production levels are
modest enough that they do not attract significant attention from competitors, which allows it to operate as a small producer
of oil and gas without competitive pressures. If oil production increase significantly, we may face stiffer competition
from other small independent oil producers. Any increase in competitive pressure would likely necessitate a dedicated, full-time
marketing effort.
**Company
Oil Rights**
*Description
of Oil Properties and Oil Production Operations.*The Companys current oil and gas assets primarily consist
of non-operating interests. Nevertheless, production from these assets has significantly enhanced our operational capability.
As
shown in the tables below, production has improved over the three-year period presented. However, the Company will not be able
to increase production until sufficient financial resources are secured through debt and equity financing.
*The
Smackover Trend***. **The Smackover trend is a belt of Late Jurassic carbonate, evaporite, and clastic rocks that
rims the Gulf Coast of the United States. It spans from Texas to Arkansas and extends through Louisiana, Mississippi, Southwest
Alabama, and the Florida panhandle. Stratigraphic and geochemical data indicate that the oil and gas were generated from
algae-rich lime mudstones. The trend was named after the Smackover oil field, which was discovered in Union County, Arkansas,
in 1937.
10
*Current
Barrister Energy Properties.*During the year ended December 31, 2024, we acquired interest in 24 wells. During
the year ended December 31, 2025, we disposed of our interest in 28 wells. As of the date of this Annual Report, we have interests
in 27 wells.
The
table below summarizes production, average production prices, and average production costs by final product sold for the last
three years. All production during the three years presented occurred in the United States.
|
|
|
For
the Year Ended December 31, |
| |
|
|
|
2025 |
|
|
2024 |
|
|
2023 |
| |
|
Net Production: |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Oil
(Bbl) |
|
|
14,636 |
|
|
|
14,220 |
|
|
|
12,664 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Natural
Gas (Mcf) |
|
|
|
|
|
|
225 |
|
|
|
4,940 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Total (BOE) |
|
|
14,636 |
|
|
|
14,257 |
|
|
|
13,488 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Average Production
Prices: |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Oil (Bbl) |
|
$ |
67.75 |
|
|
$ |
71.38 |
|
|
$ |
79.61 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Natural Gas (Mcf) |
|
$ |
|
|
|
$ |
4.54 |
|
|
|
2.88 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Average Production
Costs |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Production Costs
(per BOE) |
|
$ |
28.56 |
|
|
$ |
25.05 |
|
|
$ |
18.43 |
| |
Average
production prices have been calculated by using sales quantities from Barristers production as the divisor. Average production
costs have been computed by using net production quantities for the divisor. The volumes of crude oil and natural gas liquids
(NGL) production used for this computation are shown in the oil and gas production table. The volumes of natural
gas used in the calculation are the production volumes of natural gas available for sale and are also shown. Gas is converted
to an oil-equivalent basis at*six million cubic feet per one thousand barrels*.
11
**Oil
and Gas Properties, Wells, Operations, and Acreage**
**Gross
and Net Productive Wells**
|
|
|
Year-End 2025 |
|
Year-End 2024 |
|
Year-End2023 |
| |
|
|
|
Oil |
|
Gas |
|
Oil |
|
Gas |
|
Oil |
|
Gas |
| |
|
|
|
Gross |
|
Net |
|
Gross |
|
Net |
|
Gross |
|
Net |
|
Gross |
|
Net |
|
Gross |
|
Net |
|
Gross |
|
Net |
| |
|
Gross and Net Productive Wells |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Consolidated Subsidiaries |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
United States |
|
27 |
|
26.8 |
|
|
|
|
|
55 |
|
28 |
|
|
|
|
|
30 |
|
6 |
|
|
|
|
| |
|
Total Consolidated Subsidiaries |
|
|
|
|
|
|
|
|
|
55 |
|
28 |
|
|
|
|
|
30 |
|
6 |
|
|
|
|
| |
|
Total gross and net productive wells |
|
27 |
|
26.8 |
|
|
|
|
|
55 |
|
28 |
|
|
|
|
|
30 |
|
6 |
|
|
|
|
| |
**Gross
and Net Developed Acreage**
|
|
|
Year-End 2025 |
|
Year-End 2024 |
|
Year-End2023 |
| |
|
|
|
Gross |
|
Net |
|
Gross |
|
Net |
|
Gross |
|
Net |
| |
|
|
|
(acres) |
| |
|
Gross and Net Developed Acreage |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Consolidated Subsidiaries |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
United States |
|
3,164 |
|
2,935 |
|
8,004 |
|
3,437 |
|
5,208 |
|
782 |
| |
|
Total Consolidated Subsidiaries |
|
3,164 |
|
2,935 |
|
8,004 |
|
3,437 |
|
5,208 |
|
782 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Total gross and net developed acreage |
|
3,164 |
|
2,935 |
|
8,004 |
|
3,437 |
|
5,208 |
|
782 |
| |
Separate
acreage data for oil and gas are not maintained because, in many instances, both are produced from the same acreage.
**Gross
and Net Undeveloped Acreage**
|
|
|
Year-End Need |
|
Year-End 2024 |
|
Year-End2023 |
| |
|
|
|
Gross |
|
Net |
|
Gross |
|
Net |
|
Gross |
|
Net |
| |
|
|
|
(acres) |
| |
|
Gross and Net Undeveloped Acreage |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Consolidated Subsidiaries |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
United States |
|
644 |
|
586 |
|
3,244 |
|
612 |
|
2,600 |
|
26 |
| |
|
Total Consolidated Subsidiaries |
|
644 |
|
586 |
|
3,244 |
|
612 |
|
2,600 |
|
26 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Total gross and net undeveloped acreage |
|
644 |
|
586 |
|
3,244 |
|
612 |
|
2,600 |
|
26 |
| |
Separate
acreage data for oil and gas are not maintained because, in many instances, both are produced from the same acreage.
Our
investment in developed and undeveloped acreage comprises numerous leases. The List of Leases is included as Exhibit 99.1 to this
Annual Report. The terms and conditions under which the Company maintains exploration and production rights to the acreage are
property-specific, contractually defined, and vary significantly by property. Work programs are designed to ensure that the exploration
potential of any property is thoroughly evaluated before expiration. In some instances, we may elect to relinquish acreage in
advance of the contractual expiration date if the evaluation process is complete and there is not a business justification for
an extension. In cases where additional time may be required to evaluate acreage fully, the Company has generally been successful
in obtaining extensions. The scheduled expiration of leases and concessions for undeveloped acreage over the next three years
is not expected to have a material adverse effect on the Company.
12
**Government
Regulation**
Companies with oil and natural gas operations
such as the Company are subject to various types of legislation, regulation, and other legal requirements enacted by governmental
authorities. This legislation and regulation affecting the oil and natural gas industry are under constant review for amendment
or expansion. Some of these requirements carry substantial penalties for failure to comply. The regulatory burden on the oil and
natural gas industry increases our cost of doing business and, consequently, can affect our profitability. Because these laws,
rules and regulations are frequently amended or reinterpreted and new laws, rules and regulations are promulgated, we are unable
to predict the future cost or impact of complying with the laws, rules and regulations to which we are, or will be required to
comply.
*Regulation
of Drilling and Production*
The
production of oil and natural gas is subject to regulation under a wide range of local, state, and federal statutes, rules, orders,
and regulations. Federal, state, and local statutes and regulations require permits for drilling operations, drilling bonds, and
reports concerning operations. The trend in oil and natural gas regulation has been to increase regulatory restrictions and limitations
on such activities. Any changes in, or more stringent enforcement of, these laws and regulations may result in delays or restrictions
in permitting or development of projects or more stringent or costly construction, drilling, water management or completion activities
or waste handling, storage, transport, remediation, or disposal emission or discharge requirements which could have a material
adverse effect on the Company. In January 2021, the Biden administration issued: (1) an order signed by the acting Secretary of
the Interior providing for a 60-day pause (ii) an executive order signed by President Biden instruction the Department of the
Interior to pause new oil and natural gas leases on public lands pending completion of a comprehensive review and consideration
of federal oil and natural gas permitting and leasing practices (together, the Biden Administration Federal Lease Orders).
The U.S. District Court for the District of Louisiana enjoined the pause within 13 states, including Texas, in August 2022. The
Department of the Interior has recently resumed lease sales in several states.
On
January 20, 2025, President Trump signed several energy-related executive orders intended to boost U.S. oil and gas production
and exports by declaring a national energy emergency, removing regulatory barriers, including the Biden Administrations
restrictions on oil and gas production in Alaska, and expediting permitting approval for oil and gas projects. It also opened
areas for oil and gas development including the Arctic National Wildlife Refuge. These executive orders give the executive branchmore
power to expedite approvalfor building infrastructure for energy resources defined as crude oil, natural
gas, lease condensates, natural gas liquids, refined petroleum products, uranium, coal, biofuels, geothermal heat, the kinetic
movement of flowing water, and critical minerals. It includes two provisions directly relevant to the oil and gas market.
It mandates all agencies to conduct immediate review of all existing regulations, orders, guidance documents, policies and other
actions that burden the development of domestic energy resources, with a focus on oil, natural gas, coal, hydropower,
biofuels, critical mineral, and nuclear energy resources and ends the Biden Administrationspause on approval of liquified
natural gas exportsand requests the Secretary of Energy to restart reviews of applications for approvals of liquified natural
gas export projects as expeditiously as possible.
Currently,
all our properties and operations are in Alabama and Mississippi, which have regulations governing conservation matters, such
as the unitization or pooling of oil and natural gas properties, the establishment of maximum allowable rates of production from
oil and natural gas wells, the regulation of well spacing, and plugging and abandonment of wells. The effect of these regulations
is to limit the amount of oil and natural gas that we can produce from our wells and to limit the number of wells or the locations
at which we can drill, although we can apply for exceptions to such regulations or to have reductions in well spacing. Moreover,
Alabama and Mississippi impose a production or severance tax with respect to the production and sale of oil, natural gas, and
natural gas liquids within their jurisdictions. Failure to comply with these rulesand regulations can result in substantial
penalties. Our competitors in the oil and natural gas industry are subject to the same regulatory requirements and restrictions
that affect our operations.
13
*Regulation
of Transportation of Oil*
Sales
of crude oil, condensate, and natural gas liquids are not currently regulated and are made at negotiated prices; however, Congress
could reenact price controls in the future.
Our
sales of crude oil are affected by the availability, terms, and cost of transportation. The transportation of oil in common carrier
pipelines is also subject to rate regulation. The Federal Energy Regulatory Commission, or the FERC, regulates interstate oil
pipeline transportation rates under the Interstate Commerce Act. Intrastate oil pipeline transportation rates are subject to regulation
by state regulatory commissions. The basis for intrastate oil pipeline regulation, and the degree of regulatory oversight and
scrutiny given to intrastate oil pipeline rates, varies from state to state. Insofar as effective interstate and intrastate rates
are equally applicable to all comparable shippers, we believe that the regulation of oil transportation rates will not affect
our operations in any way that is of material difference from those of our competitors. Further, interstate and intrastate common
carrier oil pipelines must provide service on a non-discriminatory basis. Under this open access standard, common carriers must
offer service to all shippers requesting service on the same terms and under the same rates. When oil pipelines operate at full
capacity, access is governed by pro-rationing provisions set forth in the pipelines published tariffs. Accordingly, we
believe that access to oil pipeline transportation services generally will be available to us to the same extent as to our competitors.
*Regulation
of Transportation and Sale of Natural Gas*
Historically,
the transportation and sale for resale of natural gas in interstate commerce have been regulated pursuant to the Natural Gas Act
of 1938, the Natural Gas Policy Act of 1978, and regulations issued under those Acts by the FERC. In the past, the federal government
has regulated the prices at which natural gas could be sold. While sales by producers of natural gas can currently be made at
uncontrolled market prices, Congress could reenact price controls in the future.
Since
1985, the FERC has endeavored to make natural gas transportation more accessible to natural gas buyers and sellers on an open
and non-discriminatory basis. The FERC has stated that open access policies are necessary to improve the competitive structure
of the interstate natural gas pipeline industry and to create a regulatory framework that will put natural gas sellers into more
direct contractual relations with natural gas buyers by, among other things, unbundling the sale of natural gas from the sale
of transportation and storage services. Although the FERCs orders do not directly regulate natural gas producers, they
are intended to foster increased competition within all phases of the natural gas industry. We cannot accurately predict whether
the FERCs actions will achieve the goal of increasing competition in markets in which our natural gas is sold. Therefore,
we cannot provide any assurance that the less stringent regulatory approach established by the FERC will continue. However, we
do not believe that any action taken will affect us in a way that materially differs from the way it affects other natural gas
producers.
Intrastate
natural gas transportation is subject to regulation by state regulatory agencies. The basis for intrastate regulation of natural
gas transportation and the degree of regulatory oversight and scrutiny given to intrastate natural gas pipeline rates and services
varies from state to state. Insofar as such regulation within a particular state will generally affect all intrastate natural
gas shippers within the state on a comparable basis, we believe that the regulation of similarly situated intrastate natural gas
transportation in any states in which we operate and ship natural gas on an intrastate basis will not affect our operations in
any way that is of material difference from those of our competitors.
*Environmental,
Health and Safety Regulations*
The
exploration, development, production, gathering and processing of oil and natural gas are subject to various federal, state and
local environmental laws and regulations. These laws and regulations can increase the costs of planning, designing, drilling,
completing and operating oil and natural gas wells, midstream facilities and produced water injection and disposal wells. Our
activities are subject to a variety of environmental laws and regulations, including, but not limited to: the Oil Pollution Act
of 1990, the Clean Water Act, the Comprehensive Environmental Response, Compensation, and Liability Act, the Resource Conservation
and Recovery Act, the Clean Air Act and the Occupational Safety and Health Act, as well as comparable state statutes and regulations.
We also may be subject to regulations governing the handling, transportation, storage and disposal of wastes generated by our
activities and naturally occurring radioactive materials (NORM) that may result from our oil and natural gas operations.
Administrative, civil and criminal fines and penalties may be imposed for noncompliance with these environmental laws and regulations,
and violations and liability with respect to these laws and regulations could also result in remedial clean-ups, natural resource
damages, permit modifications or revocations, operational interruptions or shutdowns and other liabilities. Additionally, these
laws and regulations require the acquisition of permits or other governmental authorizations before undertaking some activities,
may limit or prohibit other activities because of protected wetlands, areas or species and require investigation and cleanup of
pollution. These laws, rules and regulations may also restrict the production rate of oil and natural gas or limit the injection
of produced water into disposal wells below the rates that would otherwise be possible.
We
believe that we are in substantial compliance with current applicable environmental laws and regulations and that continued compliance
with existing requirements may have a material adverse impact on the Company. Environmental laws and regulations have been subject
to frequent changes over the years, and the imposition of more stringent requirements or new regulatory schemes such as carbon
"cap and trade" or pricing programs could have a material adverse effect upon our capital expenditures, earnings or
competitive position, including the suspension or cessation of operations in affected areas. The Biden administration has made,
and the Trump administration may also make additional changes to applicable regulations. There are costs associated with responding
to changing regulations and policies, whether such regulations are more or less stringent. Changing laws or regulations may increase
the Companys risk of noncompliance and result in the generation of fines or penalties. As such, there can be no assurance
that material costs and liabilities will not be incurred in the future.
14
Oil
Pollution Act of 1990 (the OPA 90) and its regulations impose requirements on responsible parties
related to the prevention of crude oil spills and liability for damages resulting from oil spills into or upon navigable waters,
adjoining shorelines or on the exclusive economic zone of the United States. A responsible party under the OPA 90
may include the owner or operator of an onshore facility. The OPA 90 subjects responsible parties to strict, joint and several
financial liability for removal and remediation costs and other damages, including natural resource damages, caused by an oil
spill that is covered by the statue. Failure to comply with the OPA 90 may subject a responsible party to civil or criminal enforcement
action.
The
Clean Water Act (the CWA) and comparable state laws impose restrictions and strict controls regarding the discharge
of produced waters, fill materials and other materials into navigable waters. These controls have become more stringent over the
years, and it is possible that additional restrictions will be imposed in the future. Permits are required to discharge pollutants
into certain state and federal waters and to conduct construction activities in those waters and wetlands. The CWA and comparable
state statutes provide for civil, criminal and administrative penalties for any unauthorized discharges of oil and other pollutants
and impose liability for the costs of removal or remediation of contamination resulting from such discharges. In September 2015,
a rule issued by the EPA and U.S. Army Corp of Engineers (the Corps) to revise the definition of waters of
the United States (WOTUS) for all CWA programs, thereby defining the scope of the EPAs and the Corps
jurisdiction, became effective. The EPA rescinded this rule in 2019 and promulgated the Navigable Waters Protection Rule (the
NWPR) in 2020. The NWPR was viewed as narrowing the scope of WOTUS as compared to the 2015 rule. In August 2021,
the U.S. District Court for the District of Arizona vacated and remanded the NWPR. On January 18, 2023, the EPA and the Corps
jointly issued a final rule revising the definition of WOTUS that largely returned to the pre-2015 regulatory regime. On September
8, 2023, the U.S. Supreme Court issued a decision limiting the scope of federal jurisdiction over wetlands only to those that
have a continuous surface connection to water bodies. On August 29, 2023, the EPA and the Corps jointly issued a final rule, effective
immediately, aligning the regulatory definition of WOTUS with the Supreme Courts ruling. The new rule has been challenged
by several states and industry groups. On November 17, 2025, the EPA and the USACE announced a proposed rule to further revise
the definition of WOTUS. Certain state regulations and the general permits issued under the Federal National Pollutant Discharge
Elimination System program prohibit the discharge of produced waters and sand, drilling fluids, drill cuttings and certain other
substances related to the natural gas and oil industry into certain coastal and offshore waters, unless otherwise authorized.
Further, the EPA has adopted regulations requiring certain natural gas and oil exploration and production facilities to obtain
permits for storm water discharges. Costs may be associated with the treatment of wastewater or developing and implementing storm
water pollution prevention plans. The proposed rule may limit the scope of waters regulated under the CWA. The public comment
period for the rule closed on January 5, 2026. As a result, substantial uncertainty exists with respect to future implementation
of the September 2023 rule and the scope of CWA jurisdiction more generally. To the extent the rule or any future rule or court
decision expands the scope of the CWAs jurisdiction, the Company could face increased permitting costs and project delays.
The
CWA and comparable state statutes provide for civil, criminal and administrative penalties for unauthorized discharges for oil
and other pollutants and impose liability on parties responsible for those discharges for the cost of cleaning up any environmental
damage caused by the release and for natural resource damages resulting from the release. We believe that our operations comply
in all material respects with the requirements of the CWA and state statutes enacted to control water pollution and that the requirements,
including those under the 2023 WOTUS rule and 2025 WOTUS rule, are not any more burdensome to us than to other similarly situated
companies involved in natural gas and oil exploration and production activities.
Comprehensive
Environmental Response, Compensation, and Liability Act (CERCLA), also known as the Superfund law,
imposes liability, without regard to fault or the legality of the original conduct, on various classes of persons that are considered
to have contributed to the release of a hazardous substance in the environment. These persons include the owner
or operator of the site where the release occurred and companies that disposed of, or arranged for the disposal of, the hazardous
substances found at the site. Persons who are responsible for releases of hazardous substances under CERCLA may be subject to
joint and several liability for the costs of cleaning up the hazardous substances and for damages to natural resources. In addition,
it is not uncommon for neighboring landowners and other third parties to file claims for personal injury and property damage allegedly
caused by hazardous substances released into the environment. Although CERCLA generally exempts petroleum from the definition
of hazardous substances, our operations may in the future, involve the use or handling of materials that are classified as hazardous
substances under CERCLA. Each state also has environmental cleanup laws analogous to CERCLA. RCRA and comparable state and local
statues govern the management, including treatment, storage and disposal, of both hazardous and nonhazardous solid wastes. Hazardous
wastes are subject to more stringent and costly disposal requirements than nonhazardous wastes.
Our
operations are also subject to the Clean Air Act ("CAA"), and comparable state and local requirements. The CAA, as amended,
restricts the emission of air pollutants from many sources, including oil and natural gas production. Amendments to the CAA were
adopted in 1990 and contain provisions that may result in the gradual imposition of certain pollution control requirements with
respect to air emissions from our operations. EPA issued its final rule on December 2, 2023 that has a number of provisions intended
to reduce methane emissions from natural gas and oil operations. On March 12, 2025, EPA Administrator Lee Zeldin announced that
the EPA was reconsidering the prior rule, and, on July 28, 2025 and December 3, 2025, the EPA issued an interim final rule and
final rule, respectively, extending the deadlines for certain provisions on the rule. We believe our operations will not be materially
adversely affected by the new requirements, and the requirements will not be any more burdensome to us than to other similarly
situated companies involved in natural gas and oil exploration and production activities.
In
addition, certain states have comparable legislation, which may be more restrictive than the CAA. These laws and any implementing
regulations impose stringent air permit requirements and require us to obtain pre-approval for the construction or modification
of certain projects or facilities expected to produce air emissions, or to use specific equipment or technologies to control emissions.
Federal and state regulatory agencies can impose administrative, civil and criminal penalties for non-compliance with air permits
or other requirements of the CAA and associated state laws and regulations.
On
August 16, 2022, the Inflation Reduction Act of 2022 (the IRA) was signed into law. In addition, in August 2022,
the Inflation Reduction Act of 2022 was signed into law. Among other things, it created the Methane Emissions Reduction Program
to incentivize methane emission reductions and impose a fee on greenhouse gas emissions from certain facilities that exceed specified
emissions levels which imposes a first-time federal fee on methane emissions for the oil and gas sector, the Waste Emissions Charge
("WEC"). In May 2024, the EPA finalized amendments to the Greenhouse Gas Reporting Program for petroleum and natural
gas facilities. Among other things, the rule expands the emissions events that are subject to reporting requirements to include
other large release events. The emissions reported under the Greenhouse Gas Reporting Program will be the basis
for any payments under the Methane Emissions Reduction Program. However, petitions for reconsideration to the EPA are pending
and litigation in the D.C. Circuit challenging the revisions has commenced. In November 2024, the EPA finalized a regulation to
implement the Inflation Reduction Acts Waste Emissions Charge. The final rule included an increasing fee schedule beginning
in 2024. In January 2025, President Trump issued an executive order directing the heads of all federal agencies to identify and
begin the processes to suspend, revise, or rescind all agency actions that are unduly burdensome on the identification, development,
or use of domestic energy resources. On March 14, 2025, President Trump signed a Joint Resolution of Disapproval under the Congressional
Review Act overturning the EPA's WEC rule. The One Big Beautiful Bill Act signed into law by President Trump on July 4, 2025 postpones
the implementation of the WEC to 2034. We believe our operations will not be materially adversely affected by the IRA, and the
requirements will not be any more burdensome to us than to other similarly situated companies involved in natural gas and oil
exploration and production activities. While these actions eliminate near-term compliance obligations, future regulatory developments
remain uncertain and could still impose operational, compliance, or financial impacts on the Company.
15
Internationally,
in 2015, the United States participated in the United Nations Conference on Climate Change, which led to the creation of the Paris
Agreement. The Paris Agreement, which was signed by the United States in April 2016, requires countries to review and represent
a progression in their intended nationally determined contributions (NDC), which set greenhouse gas emission
reduction goals, every five years beginning in 2020. The United States exited the Paris Agreement in November 2020; rejoined the
agreement effective February 19, 2021. In April 2021, the United States made its NDC submittal, setting an emissions reduction
goal of a 50 to 52% reduction from 2005 levels in economy-wide net greenhouse gas pollution in 2030. Further, in November 2021,
the United States and other countries entered into the Glasgow Climate Pact, which includes a range of measures designed to address
climate change, including but not limited to the phase-out of fossil fuel subsidies, reducing methane emissions 30% by 2030 and
cooperating toward the advancement of the development of alternative sources of energy.
Any
changes that result in more stringent and costly waste handling, storage, transport, disposal, cleanup or operating requirements
could materially adversely affect our operations and financial condition, as well as those of the oil and natural gas industry
in general.
In
2021, the Biden administration issued an Executive Order pausing new natural gas and oil leasing and drilling permits for U.S.
public lands and offshore waters until the Secretary of the Interior conducts a comprehensive review and reconsideration of Federal
natural gas and oil permitting and leasing practices. In 2022, the Biden administration reopened federal lands for natural gas
and oil leasing under a reformed program that significantly reduces the acreage available for lease and, in 2025, President Trump
revoked the 2021 Executive Order. We believe our operations will not be materially adversely affected by these changes and expect
that the impacts to our operations will be similar to other similarly situated companies involved in natural gas and oil exploration
and production activities.
For
instance, in January 2021, President Biden issued Executive Order which directed a government-wide effort to address climate change
by reducing greenhouse gas emissions and achieving net-zero global carbon emissions by 2050 or before, designed to infuse climate
policy in all aspects of federal decision-making, including specific directives that touch on foreign policy, national security,
financial regulation, federal procurement, infrastructure, and environmental justice among other things. Based on this Executive
Order and other findings, the EPA has begun adopting and implementing a comprehensive suite of regulations to restrict emissions
of greenhouse gases under existing provisions of the CAA. On December 2, 2023, the EPA issued a prepublication version of a final
rule to regulate emissions from oil and natural gas sources that includes NSPS to limit greenhouse gas and volatile organic compound
emissions for new, modified or reconstructed sources, as well as emissions guidelines for states to follow when establishing plans
to limit methane emissions from existing sources. Additionally, on November 17, 2023, the EPA issued a final rule that enables
states to implement more stringent methane emissions standards than the federal guidelines require. President Trump issued an
executive order directing the notice to the United Nations of the United States immediate withdrawal from the Paris Agreement
and all other agreements made under the United Nations Framework Convention on Climate Change. The withdrawal became effective
in January 2026. At the same time, various state and local governments have publicly committed to furthering the goals of the
Paris Agreement and many of these initiatives are expected to continue. The full impact of these actions remains unclear. Please
see*Item 1ARisk Factors*in this Annual Report on Form 10-K for further discussion of risks related to
climate change and the regulation of methane emissions.
As
another example, in January 2023, the EPA announced a proposed consent decree that, if finalized as proposed, would establish
a December 10, 2024 deadline for the EPA to review and propose revisions to the National Emission Standards for Hazardous Air
Pollutants (NESHAP) for oil and natural gas production facilities and natural gas transmission and storage facilities,
which may require us to make additional changes to our operations.
It
is difficult to predict the timing and certainty of any future government action and the effect on our operations. Future legislation
or regulations adopted to address climate change could also make our products more or less desirable than competing sources of
energy. However, we expect that the impacts to our operations will not be materially different from other similarly situated companies
involved in natural gas and oil exploration and production activities.
Legislative
and regulatory initiatives related to climate change and greenhouse gas emissions could, and likely would, require us to incur
increased operating costs adversely affecting our profits and could adversely affect demand for the oil and natural gas we produce,
depressing the prices we receive for oil and natural gas.
In
the course of our routine oil and natural gas operations, surface spills and leaks, including casing leaks, of oil, produced water
or other materials may occur, and we may incur costs for waste handling and environmental compliance. It is also possible that
our oil and natural gas operations may require us to manage NORM. NORM is present in varying concentrations in sub-surface formations,
including hydrocarbon reservoirs, and may become concentrated in scale, film and sludge in equipment that comes in contact with
crude oil and natural gas production and processing streams. Some states, including Texas and Louisiana, have enacted regulations
governing the handling, treatment, storage and disposal of NORM.
We
are subject to the requirements of OSHA and comparable state statutes. The OSHA Hazard Communication Standard, the community
right-to-know regulations under Title III of the federal Superfund Amendments and Reauthorization Act and similar state
statutes require us to organize information about hazardous materials used, released or produced in our operations. Certain of
this information must be provided to employees, state and local governmental authorities and local citizens. We are also subject
to the requirements and reporting set forth in OSHA workplace standards.
We
have not in the past been, and do not anticipate in the near future to be, required to expend amounts that are material in relation
to our total capital expenditures as a result of environmental laws and regulations, but since these laws and regulations are
periodically amended, we are unable to predict the ultimate cost of compliance. We have no assurance that more stringent laws
and regulations protecting the environment will not be adopted or that we will not otherwise incur material expenses in connection
with environmental laws and regulations in the future. We may be unable to pass on such increased compliance costs to our customers.
16
**Principal
Executive Offices**
Our
principal executive office is located at 4830 Line Avenue, Suite 152, Shreveport, Louisiana, 71106, and our telephone number is
(703) 479-8538. We rent our principal executive offices under a month-to-month lease for a monthly rental of $26. The Company
website is www.cojaxoilandgas.com.
**Employees**
We
currently have two full-time employees: William R. Downs, our Chief Executive Officer, and Jeffrey J. Guzy, our Chief Financial
Officer. The officers devote the number of hours necessary to perform their duties, and each officer, in his sole discretion,
determines the extent of the time commitment.
17
**ITEM
1A. RISK FACTORS**
**RISK
FACTORS**
*An
investment in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described
below before making a decision to invest in our common stock. The risks and uncertainties discussed below are not the only ones
we face. Risks could also harm our business, operating results, financial condition, or prospects, and uncertainties not currently
known to us or that we currently do not believe are material, and these risks and uncertainties could result in a complete loss
of your investment. Prior to the Barrister Acquisition, we did not have revenue-generating operations that will fund our operating
overhead. While we began to generate revenue following the Barrister Acquisition, our business, operating results, financial
condition, or prospects could be materially and adversely affected by any of these risks and uncertainties. In assessing the risks
and uncertainties described below, you should also refer to the other information contained herein, including our consolidated
financial statements, pro forma financial statements, and the related notes thereto.*
**RISKS
RELATED TO OUR BUSINESS**
**Risks
Related to the Oil & Natural Gas Industry**
**Oil
and natural gas prices are volatile, and any sustained decline in oil market prices could adversely affect the Companys
business, financial condition, results of operations, and its ability to meet capital expenditure obligations and financial commitments.**
Our
success is highly dependent on prices for oil and natural gas, which have in recent years been, and we expect will continue to
be, extremely volatile. Oil is a commodity, and its price may fluctuate widely in response to relatively minor changes in the
supply of and demand for oil and market uncertainty. Historically, oil prices have been volatile due to sensitivity to political
and economic developments or crises. The prices we receive for oil production, and the levels of oil production, depend on numerous
factors beyond our control, which include worldwide and regional economic conditions affecting the global supply and demand for
oil, such as:
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levels of production,
domestic and worldwide inventories; | |
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the capacity of
U.S. and international refiners to use U.S. supplies of oil, natural gas and NGLs | |
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the price and quantity
of foreign imports of oil and their effect on U.S. oil producers; | |
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relative price and
availability of alternative forms of energy; | |
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political and economic geopolitical instability, including the ongoing war between Russia and Ukraine, the conflict in the Middle East, including the recent conflict between the U.S. and Iran, as well as sanctions and other government actions arising from these conflicts, and conditions in or affecting other oil-producing regions or countries, including Africa, South America, which significantly affects global oil market price; | |
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actions of the OPEC,
its members, and other state-controlled oil companies relating to oil price and production controls, especially production
disputes between Saudi Arabia and Russia, who often have different goals | |
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the level of global
exploration, development, and production of oil | |
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the proximity, capacity,
cost, and availability of oil gathering and transportation facilities; | |
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localized and global
oil supply and demand fundamentals and transportation availability | |
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the cost of exploring
for, developing, producing, and transporting oil which cost may go up due to oil storage surpluses created by COVID-19 pandemic | |
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weather conditions
and other natural disasters, and storms in the Gulf States Drilling Region appear to increase in intensity in the past five
years | |
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technological advances
affecting oil consumption, especially the growing production of electric-powered cars, trucks, and buses | |
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the price and availability
and consumer demand for alternative fuels to oil and reduction in the use of products that are made from oil, especially certain
plastics, which demand is fueled by environmental concerns | |
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climate control
legislation that increases the cost and lowers the demand for oil by providing incentives and tax benefits for use of non-oil
fuels, and | |
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effect of existing
U.S. federal, state, and local, and non-U.S. governmental regulation and taxes. | |
These
factors make it extremely difficult to predict future oil, natural gas and NGLs price movements with any certainty. During the
three years ended December 31, 2025, NYMEX WTI prices ranged from a high of $95.03 per barrel on September 28, 2023, to a low
of $54.98 per barrel on December 16, 2025, and NYMEX Henry Hub prices ranged from a high of $6.40 per MMBtu on February 18, 2025,
to a low of $1.21 per MMBtu on November 11, 2024. We make price assumptions that are used for planning purposes, and a significant
portion of our cash outlays, are largely fixed in nature. Accordingly, if commodity prices are below the expectations on which
these commitments were based, our financial results are likely to be adversely and disproportionately affected because these cash
outlays are not variable in the short term and cannot be quickly reduced to respond to unanticipated decreases in commodity prices.
Specifically, prices of oil, and NGLs may adversely affect our revenues, cash flows, earnings and returns; our ability to attract
capital to finance our operations and the cost of the capital; the profit or loss we incur in exploring for and developing our
reserves; and the value of our oil and natural gas properties.
A
substantial or extended decline in commodity prices may also reduce the amount of oil and natural gas that we can produce economically
and cause a significant portion of our development projects to become uneconomic. This may result in our having to make significant
downward adjustments to our estimated proved reserves. A reduction in production could also result in a shortfall in expected
cash flows and require us to reduce capital spending, which could negatively affect our ability to replace our production and
our future rate of growth, or require us to borrow funds to cover any such shortfall, which we may be unable to obtain at such
time on satisfactory terms. Additionally, if we are required to curtail our drilling program, we may be unable to continue to
hold leases that are scheduled to expire, which may further reduce our reserves. As a result, if oil and/or NGL prices experience
a sustained period of weakness, our future business, financial condition, results of operations, liquidity, and ability to finance
planned capital expenditures may be materially and adversely affected.
**Our
business is subject to climate-related transition risks, including evolving climate change legislation, fuel conservation measures,
technological advances and negative shift in market perception towards the oil and natural gas industry, which could result in
increased operating expenses and capital costs, financial risks and potential reduction in demand for oil and natural gas.**
The
governmental and regulatory bodies, as well as investors, consumers, industry and other stakeholders increasingly focus on combating
climate change. This attention resulted in the enactment of climate change-related regulations, policies and initiatives, including
alternative energy requirements, new fuel consumption standards, energy conservation and emissions reductions measures and responsible
energy development; technological advances with respect to the generation, transmission, storage and consumption of energy, increased
availability of, and increased demand from consumers and industry for, energy sources other than oil and natural gas (including
wind, solar, nuclear, and geothermal sources as well as electric vehicles) and development of, and increased demand from
consumers and industry for, lower-emission products and services (including electric vehicles and renewable residential and commercial
power supplies) as well as more efficient products and services.
19
These
developments may in the future adversely affect the demand for products manufactured with, or powered by, petroleum products,
as well as the demand for, and in turn the prices of, oil and natural gas products. Such developments may also adversely impact,
among other things, our stock price and access to capital markets, and the availability to us of necessary third-party services
and facilities that we rely on, which may increase our operational costs and adversely affect our ability to successfully carry
out our business strategy. Climate change-related developments may also impact the market prices of or our access to raw materials
such as energy and water and therefore result in increased costs to our business.
More
broadly, the enactment of climate change-related regulations, policies and initiatives across the market at the government, corporate,
and/or investor community levels may in the future result in increases in our compliance costs and other operating costs and have
other adverse effects (e.g., greater potential for governmental investigations or litigation).
**Seismic
studies do not guarantee that oil or hydrocarbons are present or, if present, will produce in economic quantities.**
Oil
exploration and production companies, like we are, rely on seismic studies to assist in assessing prospective drilling opportunities
on oil and gas properties, as well as on properties that a company may acquire. Such seismic studies are merely an interpretive
tool and do not necessarily guarantee that hydrocarbons are present or, if present, will produce in economic or profitable quantities.
**Restrictions
on our ability to obtain, recycle and dispose of water may impact our ability to execute our drilling and development plans in
a timely or cost-effective manner.**
Water
is an essential component of both the drilling and hydraulic fracturing processes. If drought conditions were to occur or demand
for water were to outpace supply, our ability to obtain water could be impacted and in turn, our ability to perform hydraulic
fracturing operations could be restricted or made more costly. If we are unable to obtain water to use in our operations from
local sources, we may be unable to economically produce oil and natural gas, which could have an adverse effect on our financial
condition, results of operations and cash flows. In addition, significant amounts of water are produced in our operations. Inadequate
access to or availability of water recycling or water disposal facilities could adversely affect our production volumes or significantly
increase the cost of our operations.
**Participants
in the oil and gas industry are subject to numerous laws that can affect the cost,manner, or feasibility of doingbusiness.**
Exploration
and production activities in the oil and gas industry are subject to various laws and regulations. Any oil and gas exploration
and production operated by the Company are or may become subject to numerous environmental and occupational health and safety
laws and regulations that may be imposed domestically at the federal, regional, state, and local levels. The more significant
of these environmental and occupational health and safety laws and regulations include the following:
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The U.S. Clean Air
Act, which restricts the emission of air pollutants from many sources and imposes various pre-construction, operational, monitoring,
and reporting requirements, and the Environmental Protection Agency or EPA has relied upon as authority for
adopting climate change regulatory initiatives relating to Green House Gases or GHG emissions. | |
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The U.S. Federal
Water Pollution Control Act, also known as the Federal Clean Water Act, which regulates discharges of pollutants from facilities
to state and federal waters and establishes the extent to which waterways are subject to federal jurisdiction and rulemaking
as protected waters of the United States | |
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The U.S. Oil Pollution
Act of 1990, which subjects owners and operators of vessels, onshore facilities, and pipelines, as well as lessees or permittees
of areas in which offshore facilities are located, to liability for removal costs and damages arising from an oil spill in
waters of the United States | |
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The U.S. Comprehensive
Environmental Response, Compensation and Liability Act of 1980, which imposes liability on generators, transporters, and arrangers
of hazardous substances at sites where hazardous substance releases have occurred or are threatening to occur | |
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The U.S. Resource
Conservation and Recovery Act, which governs the generation, treatment, storage, transport, and disposal of solid wastes,
including hazardous wastes | |
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The U.S. Safe Drinking
Water Act (SDWA), which ensures the quality of the nations public drinking water through the adoption
of drinking water standards and control over the injection of waste fluids into below-ground formations that may adversely
affect drinking water sources | |
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The U.S. Emergency
Planning and Community Right-to-Know Act, requires facilities to implement a safety hazard communication program and disseminate
information to employees, local emergency planning committees, and response departments on toxic chemical uses and inventories | |
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The U.S. Occupational
Safety and Health Act, which establishes workplace standards for the protection of the health and safety of employees, including
the implementation of hazard communications programs designed to inform employees about hazardous substances in the workplace,
potentially harmful effects of these substances, and appropriate control measures | |
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The U.S. Endangered
Species Act, restricts activities that may affect federally identified endangered and threatened species or their habitats
through the implementation of operating restrictions or a temporary, seasonal, or permanent ban in affected areas | |
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The U.S. National
Environmental Policy Act, requires federal agencies, including the Department of the Interior, to evaluate significant agency
actions having the potential to affect the environment and that may require the preparation of environmental assessments and
more detailed environmental impact statements that may be made available for public review and comment | |
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U.S. Department
of Transportation regulations, which relate to advancing the safe transportation of energy and hazardous materials and emergency
response preparedness. | |
These
environmental and occupational health and safety laws and regulations, including new or amended legal requirements, are expected
to have a considerable effect on any expanded Companys operations in terms of compliance costs.
In
addition, regional, state, and local jurisdictions in the United States where the Company operates or may operate also have, or
are developing or considering developing, similar environmental and occupational health and safety laws and regulations governing
many of these same types of activities. The State of Alabama has extensive operationand licensing laws for oil drilling.
The State Oil and Gas Boards of Mississippi and Alabama are regulatory agencies of the States of Mississippi and Alabama
with the statutory charge of regulating oil exploration and production, including preventing waste and promoting the conservation
of oil and gas while ensuring the protection of both the environment and the correlative rights of owners. These boards are granted
broad authority in state oil and gas conservation statutes to promulgate and enforce rules and regulations to ensure the conservation
and proper development of the states petroleum resources. Specific regulations may vary from state to state across
the Gulf States Drill Region. We will rely on consultants and local legal counsel for compliance with the state regulatory
regime.
Failure
to comply with these laws and regulations may result in the suspension or termination of our operations and subject us to administrative,
civil, and criminal penalties. Moreover, new laws and regulations may be enacted, and current laws and regulations could change,
or their interpretations could change, in ways that could substantially increase our costs. The occurrence of any of these factors,
or the continuation thereof, could have a material adverse effect on our business, financial position, or future results of operations.
**Our
operations are subject to operating hazards inherent to our industry that may adversely impact our ability to conduct business,
and we may not be fully insured against all such operating risks.****
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The
operating hazards in exploring for and producing oil and natural gas include: encountering unexpected subsurface conditions that
cause damage to equipment or personal injury, including loss of life; equipment failures that curtail or stop production or cause
severe damage to or destruction of property, natural resources or other equipment; blowouts or other damages to the productive
formations of our reserves that require a well to be re-drilled or other corrective action to be taken; and storms and other extreme
weather conditions that cause damages to our production facilities or wells. Because of these or other events, we could experience
environmental hazards, including release of oil and natural gas from spills, natural gas leaks, accidental leakage of toxic or
hazardous materials, such as petroleum liquids, drilling fluids or fracturing fluids, including chemical additives, underground
migration, and ruptures. If we experience any of these problems, we could incur substantial losses in excess of our insurance
coverage. The occurrence of a significant event or claim, not fully insured or indemnified against, could have a material adverse
effect on our financial condition and operations. In accordance with industry practice, we maintain insurance against some of
the operating risks to which our business is exposed. Also, no assurance can be given that we will be able to maintain insurance
in the future at rates we consider reasonable to cover our possible losses from operating hazards and we may elect no or minimal
insurance coverage. However, we do not have insurance covering environmental and occupational health and safety risks, and even
if we had such insurance, it may not cover penalties or fines that may be issued by a governmental authority.
**Negative
public perception of the oil and gas industry could have a material and adverse effect on us.**
Oil
and natural gas drilling and development activities are subject to growing negative public perception globally, and particularly,
in the United States resulting from, among other things, concerns raised by advocacy groups about climate change may lead to increased
reputational and litigation risk and regulatory, legislative and judicial scrutiny, which may, in turn, lead to new state and
federal safety and environmental laws, regulations, guidelines and enforcement interpretations. Companies in the oil and natural
gas industry are often the target of activist efforts from both individuals and non-governmental organizations regarding safety,
human rights, climate change, environmental matters, sustainability, and business practices. The foregoing factors may cause operational
delays or restrictions, increased operating costs, additional regulatory burdens and increased risk of litigation. Negative perceptions
regarding our industry and reputational risks may also in the future adversely affect our ability to successfully carry out our
business strategy by adversely affecting our access to capital. Certain segments of the investor community have developed negative
sentiments towards investing in our industry.
Further,
certain investment banks and asset managers based both domestically and internationally have announced that they are adopting
climate change guidelines for their banking and investing activities. Certain other stakeholders have also pressured commercial
and investment banks to stop financing oil and gas production and related infrastructure projects. Institutional lenders who provide
financing to companies in the energy sector have also become more attentive to sustainable lending practices, and some may elect
not to provide traditional energy producers or companies that support such producers with funding. Such developments aimed at
limiting climate change and reducing air pollution, could result in downward pressure on the stock prices of oil and gas companies,
including ours. This may also potentially result in a reduction of available capital funding for potential development projects,
impacting our future financial results.
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**Terrorist
attacks aimed at energy operations could adversely affect our future oil exploration and production business.**
The
continued threat of terrorism and the effect of military and other government action have led and may lead to further increased
volatility in prices for oil and natural gas and could affect these commodity markets or the financial markets. The U.S. government
has issued warnings that energy assets may be a future target of terrorist organizations. These developments have subjected our
oil and natural gas operations to increased risks. Any future terrorist attack on facilities used by Barrister or other future
oil exploration and production operations, those of such operations customers, the infrastructure used for transportation
of oil, and, in some cases, those of other energy companies, could have a material adverse effect on the Company.
**Operational
Risks**
**We
have a limited history of owning and operating oil and gas exploration and production operations**.
Prior
to the Barrister Acquisition in November 2020, we had not generated any revenue. Although we acquired Barristers business
pursuant to the Barrister Acquisition, these production operations are minimal and commenced less than three years ago. In addition,
the history of obtaining oil rights by Barrister was minimal in terms of production and does not reveal the potential oil production
and profitability of the Company Oil Rights. Subsequently, in the fourth quarter of 2022, we acquired additional oil rights and
interests by purchasing NONOP Assets and Buckley Assets. In the third and fourth quarters of 2024, respectively, we acquired the
non-operated interests of Liberty Operating Company, LLC in the Liberty and Pine Grove Fields of Mississippi. Now we need to obtain
sufficient funds to develop reserves related to these properties. However, the lack of a more extensive operating history may
discourage lenders or funding sources from providing working capital to the Company. There is no assurance that the oil
rights acquired by the Company to date will produce oil or natural gas on a profitable basis. Investors should carefully
consider the lack of operating history of the Company and the lack of any significant oil production from the Company Oil Rights
prior to making an investment decision to invest in the Company. If the Company is unable to obtain needed capital or financing
on satisfactory terms, its ability to develop future reserves will be adversely affected. If production or drilling operations
are curtailed, then the Company may be unable to continue to hold leases and drilling rights that are scheduled to expire, which
may further reduce oil reserves, which will materially and adversely affect future business, financial condition, results of operations,
liquidity, and ability to finance planned capital expenditures.
**We
have entered a highly competitive and highly capital-intensive industry, and any oil production may be insufficient to fund, sustain,
or expand revenue-generating operations.**
The
oil drilling exploration and production business are capital intensive due to the cost of experienced personnel; equipment and
other assets required to drill, produce and store oil; regulatory compliance costs; potential liability exposures and financial
effects; and the risk of unpredictable volatility in oil market prices and predatory pricing by competitors. Drilling requires
an upfront payment of operational costs with no guarantee that actual oil production will cover such expenses. Dry
holes for the first and/or second oil wells could deplete any available funding raised by the Company and render the Company insolvent.
The actual amount and timing of our future capital expenditures may differ materially from our estimates as a result of, among
other things, market oil prices, actual drilling results, the availability of drilling rigs and other services and equipment,
and regulatory, technological, and competitive developments. The Company does not have cash flow or cash reserves sufficient
to fund more extensive and deep drilling on Company Oil Rights. While we will seek such funding, there are no assurances
that we can obtain funding that will be sufficient to fund deep drill wells or new property acquisitions, which are needed to
produce any significant levels of oil production. Future cash flow from our operations and access to capital are subject
to a number of variables, including, but not limited to: (i) the market prices at which our oil production is sold; (ii) our proved
reserves; (iii) the level of hydrocarbons we can produce from any future oil wells; (iv) our ability to acquire, locate and produce
new oil reserves; (v) the levels of our operating expenses; (vi) reduction in the U.S. and global demand for oil.
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**Our
acquisitions of oil and gas properties and subsequent exploration and development drilling efforts and the operation of our wells
may not be profitable or achieve our targeted returns.**
Exploration,
development, drilling and production activities are subject to many risks. Acquiring oil and natural gas exploration and production
rights and leases requires us to assess reservoir and infrastructure characteristics, including recoverable reserves, development
and operating costs, and potential environmental and other liabilities. We may invest in property, including undeveloped leasehold
acreage, which we believe will result in projects that will add value over time. However, we cannot guarantee that any leasehold
acreage acquired will be profitably developed, that new wells drilled will be productive or that we will recover all or any portion
of our investment in such leasehold acreage or wells. Drilling for oil and natural gas may involve unprofitable efforts, including
wells that are productive but do not produce sufficient net reserves to return a profit after deducting operating and other costs.
In
addition, we may not be successful in controlling our drilling and production costs to improve our overall return and wells that
are profitable may not achieve our targeted rate of return. Wells may have production decline rates that are greater than anticipated.
Future drilling and completion efforts may impact production from existing wells, and parent-child effects may impact future well
productivity as a result of timing, spacing proximity or other factors. Acquiring oil and natural gas properties requires us to
assess reservoir and infrastructure characteristics, including recoverable reserves, development and operating costs and potential
environmental and other liabilities. Such assessments are inexact and inherently uncertain. In connection with the assessments,
we perform a review of the subject properties, but such a review will not necessarily reveal all existing or potential problems.
In the course of our due diligence, we may not inspect ever well or pipeline. We cannot necessarily observe structural and environmental
problems, such as pipe corrosion, when an inspection is made. We may not be able to obtain contractual indemnities from the seller
for liabilities created prior to our purchase of the property. We may be required to assume the risk of the physical condition
of the properties in addition to the risk that the properties may not perform in accordance with our expectations. These risks
could render unprofitable our drilling operations and significantly affect the overall financial performance and condition of
the Company. Failure to conduct our oil and gas operations in a profitable manner may result in impairments of our proved reserves
quantities, impairment of our oil and gas properties, and a write-down in the carrying value of our unproved properties, and over
time may adversely affect our growth, revenues and cash flows.
**Due
to our contractor model of operations, we will be vulnerable to any inability to engage or retain qualified operational personnel
for new or existing drilling operations.**
Our
operation plan depends on a teaming/contractor approach to operate oil rigs. We may be unable to locate or retain a sufficient
number of qualified independent contractors to operate new or existing oil rigs. Finding and engaging qualified independent contractors
will be essential to commencing, expanding, and sustaining drilling operations. Since we will, in all likelihood, depend on one
or two new oil rigs at the start of operations after raising sufficient working capital, any inability to engage or retain qualified
independent contractors would be potentially fatal to our efforts to establish increased revenue-generating operations. The use
of independent contractors also poses the risk of such personnel leaving for more lucrative opportunities with competitors or
other oil producers. Many of our competitors can afford more lucrative compensation packages for qualified personnel. We lack
the resources to effectively compete against larger competitors for operational personnel, especially against competitors with
liquid public markets for their capital stock and the ability to offer attractive stock-based incentive compensation.
**Loss
of key operational personnel could cause the suspension of any expanded drilling operations. **
The
Company does not have key-man insurance or the available cash to easily employ or engage experienced, full-time outside senior
management personnel. The loss of key personnel, including our Chief Executive Officer and operational personnel of COP and our
other operators that manage the Companys oildrilling and production could undermine the Companys ability to
manage operations and implement the Companys business plan.
**With
any expanded oil exploration and drilling, we will need to replace existing oil reserves with new oil reserves and develop those
oil reserves. If we are unable to do so, oil reserves and production will decline, which would adversely affect future cash flows
and results of operations.**
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Once
we increase oil production, then producing oil reservoirs generally will be characterized by declining production rates that vary
depending upon oil reservoir characteristics and other factors. Unless the Company conducts successful ongoing exploration and
development activities or continually acquires properties containing proved reserves, proved reserves would decline as those reserves
are produced. Future reserves and production, and therefore future cash flow and results of operations, are highly dependent on
the success in efficiently developing current reserves and economically finding or acquiring additional recoverable oil reserves.
We may not be able to develop, find, or acquire sufficient additional reserves to replace our current and future production. If
we are unable to replace current and future oil production, the value of existing reserves will decrease, and business, financial
condition, and results of operations would be materially and adversely affected.
**The
oil and gas development, exploration and production industry is very competitive, and some of our competitors have greater financial
and other resources than we do.**
We
face competition in every aspect of our business, including buying and selling reserves and leases, obtaining goods and services
needed to operate our business and marketing natural gas and oil. Competitors include multinational oil companies, independent
production companies and individual producers and operators. Many of our competitors have greater financial and other resources
than we do and may have greater access to the capital and credit markets. Many of these companies not only explore for and produce
oil and natural gas, but also carry on midstream and refining operations and market petroleum and other products on a regional,
national or worldwide basis. As a result, these competitors may be able to address the competitive factors of the industry more
effectively or weather industry downturns more easily than we can. We also face indirect competition from alternative energy sources,
including wind, solar and electric power.
**The
potential lack of availability of, or cost of, drilling rigs, equipment,*****supplies, personnel, and crude oil
field services could adversely affect our ability****to execute on a timely basis exploration and development plans within
any budget.***
We
may encounter an increase in the cost of securing needed drilling rigs, equipment, and supplies. Larger producers may be more
likely tosecure access to such equipment by offering more lucrative terms. If we are unable to acquire access to such resources
or can obtain access only at higher prices, its ability to convert oil reserves into cash flow could be delayed, and the cost
of producing from those oil reserves could increase significantly, which would adversely affect results of operations and financial
condition. Our current drilling operations are limited, and the availability of essential drilling assets may not become
a risk factor until such time as we increase drilling operations.
**We
have a limited customer base for its oil production due to its limited oil production and operating history. The cost of
and difficulty in expanding the customer base for increased production from the Company Oil Rights is unknown. **
We
can only determine the cost and difficulty of expanding our customer base based on actual oil production and then-current market
conditions and demand for oil. As such, we cannot predict the cost and ease or difficulty of selling increased oil production
from the Company Oil Rights. This unknown factor in commercially exploiting any increased oil production from the Company
Oil Rights increases the risk of investing in the shares of the Company because it renders uncertain a key factor in future profitability
of the Company.
25
**Cyber-attacks
targeting systems and infrastructure used by the oil and gas industry and related regulations may adversely impact our operations
and, if we are unable to obtain and maintain adequate protection for our data, our business may be adversely affected.**
Our
business has become increasingly dependent on digital technologies to conduct certain exploration, development and production
activities. We depend on digital technology to estimate quantities of oil, natural gas and NGL reserves, process and record financial
and operating data, analyze seismic and drilling information, and communicate with our customers, employees and third-party partners.
The U.S. government has issued public warnings that indicate that energy assets might be specific targets of cyber security threats.
Our technologies, systems, networks, and those of our vendors, suppliers and other business partners, may become the target of
cyberattacks or information security breaches that could result in the unauthorized access to our seismic data, reserves information,
customer or employee data or other proprietary or commercially sensitive information could lead to data corruption, communication
interruption, or other disruptions in our exploration or production operations or planned business transactions, any of which
could have a material adverse impact on our results of operations.
Cybersecurity
attacks in particular are evolving and include, but are not limited to, ransomware or other malicious software, social engineering
attacks, deepfakes and artificial intelligence ("AI")-enhanced phishing, attempts to gain unauthorized access to data,
and other electronic security breaches that could lead to disruptions in critical systems, unauthorized release of confidential
or otherwise protected information and corruption of data. Threat actors may leverage AI and machine learning, technologies to
conduct more sophisticated surveillance, reconnaissance and attacks against our systems. We seek to prevent, detect and investigate
cybersecurity incidents, but in some cases, we might be unaware of an incident or its magnitude and effects.
If
our information technology systems cease to function properly or our cybersecurity is breached, we could suffer disruptions to
our normal operations, which may include drilling, completion, production and corporate functions. A cyber-attack involving our
information systems and related infrastructure, or that of our business associates, could result in supply chain disruptions that
delay or prevent the transportation and marketing of our production, non-compliance leading to regulatory fines or penalties,
loss or disclosure of, or damage to, our customers, suppliers or royalty owners data or confidential information
that could harm our business by damaging our reputation, subjecting us to potential financial or legal liability, and requiring
us to incur significant costs, including costs to repair or restore our systems and data or to take other remedial steps.
The
increased use of artificial intelligence (AI) technologies, both by the Company and by third parties, may introduce
additional cybersecurity and operational risks. AI-enabled applications and services may rely on large volumes of data, third-party
models, and cloud-based infrastructure, which could increase exposure to data privacy, security, and intellectual property risks.
In addition, threat actors may increasingly leverage AI-enabled techniques to enhance the scale, speed, and sophistication of
cyberattacks, including social engineering, phishing, and automated exploitation. While the Company seeks to manage these risks
through its cybersecurity and risk management programs, there can be no assurance that such measures will prevent all AI-related
security incidents, which could have a material adverse effect on the Companys business, financial position, results of
operations, or cash flows.
In
addition, certain cyber incidents, such as surveillance, may remain undetected for an extended period. Although we utilize various
procedures and controls to monitor and protect against these threats and to mitigate our exposure to such threats, there can be
no assurance that these procedures and controls will be sufficient in preventing security threats from materializing. Our systems
for protecting against cyber security risks may not be sufficient. While we have not been subject to cybersecurity challenges
that have materially impaired our operations or financial standing, we recognize the importance of developing, implementing and
maintaining cybersecurity measures to better safeguard our information systems and protect the confidentiality, integrity and
availability of our data. Our risk management team will work with our IT department to evaluate and address cybersecurity risks
in alignment with our business objectives and operational needs. In the future, the Company will require the Board and employees
to complete cybersecurity training related to the physical security of assets, data privacy and other information security policies
and procedures.
However,
implementation of various procedures and controls to monitor and mitigate such security threats and to increase security for its
information, systems, facilities, and infrastructure may require us to expend significant additional resources to continue to
modify or enhance our protective measures or to investigate and remediate any vulnerabilities to cyberattacks. Moreover, there
can be no assurance that such procedures and controls will be sufficient to prevent security breaches from occurring.
**Risk
related to the Third-Party Transportation of Oil Production.**
The
marketability of oil production will depend upon the availability, proximity, and capacity of transportation facilities owned
by third parties. Any oil production will be transported from the wellhead to gathering systems. The oil is then transported by
the purchaser by truck or other means to a transportation facility. We will not be able to control most of these third-party transportation
means and facilities, and access to them may be limited or denied. If in the future, the Company is unable, for any sustained
period, to implement acceptable delivery or transportation arrangements or encounter production-related difficulties, it may be
required to shut in or curtail production. Any such shut-in or curtailment, or an inability to obtain favorable terms for delivery
of the oil produced, would materially and adversely affect our efforts to attain or sustain revenues from operations and improved
future financial condition and results of operations.
**Risks
Related to Our Financial Condition and Capital Requirements**
**Our
independent registered public accounting firm has included an explanatory paragraph relating to our ability to continue as a going
concern in its report on our audited financial statements.**
On
a consolidated basis, the Company has incurred significant operating losses since inception and has a working capital deficit.
The Companys financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Because the Company does not expect that existing operational cash flow will be sufficient to fund presently anticipated operations,
this raises substantial doubt about the Companys ability to continue as a going concern. Therefore, the Company will need
to raise additional funds and is currently exploring alternative sources of financing. Historically, the Company has raised capital
through an officer loan as an interim measure to finance working capital needs and will continue to raise additional capital through
the sale of common stock or other securities. The Company will be required to continue to do so until its consolidated operations
become profitable. Our past efforts to raise working capital have been unsuccessful.
26
Although
our initial registration statement on Form S-1 was declared effective by the Commission in August 2019, we were unable to sell
any shares and terminated said initial public offering. Our initial public offering commenced after October 9, 2020, following
the effectiveness of the Form S-1 registration statement; however, we only raised $53,000 in that initial public offering, which
was not sufficient, and closed in on May 31, 2021. The impact of COVID-19 pandemic and volatility of market price for oil in 2020
and 2021 further hampered efforts to raise additional working capital by creating economic uncertainty and heightened risks in
lending or investing in oil production. These factors, among others, raise substantial doubt about the Companys ability
to continue as a going concern. If we are unable to obtain sufficient funding, our business, prospects, financial condition, and
results of operations will be materially and adversely affected, and we may be unable to continue as a going concern. If we cannot
continue as a viable entity, you would lose all or most of your investment in the Company.
**We
do not have directors and officers liability insurance due to the high cost.**
The
lack of directors and officers liability insurance hinders our ability to attract directors and officers. We intend
to seek to purchase directors and officers liability insurance if we have sufficient cash reserves from the net
proceeds of this Offering or future funding efforts. Typically, such insurance costs $100,000 or more per annum, if available.
Further, directors and officers insurance require that the insured company cover the first $300,000 or more of costs
prior to insurance coverage occurring. This high deductible can be beyond the financial means of a small company and effectively
denies the insured company of the benefits of the insurance. If we do not have sufficient cash to purchase directors and
officers liability insurance, our ability to attract and retain qualified officers and directors will suffer, especially
considering the lack of a public market for the common stock and resulting inability to offer incentive compensation to directors
and officers. We may be unable to find an insurer willing to provide directors and officers liability insurance
since we are an early-stage development company with limited operating history and no revenue-generating operations.
**Risks
Relating to Our Common Stock**
**Our
common stock is currently quoted on OTCID market of OTC Markets, Inc.; however, because our common stock was downgraded to Expert
Market, a new application for Proprietary Quotations may be required to allow brokers to place proprietary quotations on our stock
.. We do not have an active, liquid trading market for our common stock and may never develop it.**
In
October 2021, our Common Stock became eligible for quotations on OTC Markets. Between October 2021 and July 2023, our stock was
quoted at the time on the OTC Pink marketplace, which published brokerage quotations; however, because we were delinquent with
our reporting obligations and did not file our 2022 annual report and 2023 quarterly reports timely, our stock was downgraded
to Expert Market marketplace until we filed all required reports. While our common stock is currently trading on the OTCID Marketplace,
which is a new tier of OTC Markets, indicating that companies on that tier complies with all SEC reporting obligations and additional
obligations imposed by OTC Markets, that are current our stock is not eligible for proprietary broker-dealer quotations, and all
quotes of our common stock reflect unsolicited customer orders. These unsolicited-only stocks have a higher risk of wider spread,
increased volatility, and price dislocations. To be eligible for public brokerage quotations and to provide continuous market
making, a market maker needs to submit a new application under SEC Rule15c2-11 which needs to be approved by FINRA. Even if our
stock becomes eligible for proprietary quotations, the trading on the OTCID marketplace, which is the basic marketplace, is often
thin and characterized by wide fluctuations in trading prices, due to many factors that may have little to do with our operations
or business prospects. The securities market has from time-to-time experienced significant price and volume fluctuations that
are not related to the operating performance of particular companies. These market fluctuations may also materially and adversely
affect the market price of shares of our common stock.
27
In
the absence of an active trading market investors may have difficulty buying and selling or obtaining market quotations, market
visibility for shares of our common stock may be limited, and a lack of visibility for shares of our common stock may have a depressive
effect on the market price for shares of our common stock. The lack of an active market impairs the ability of our stockholders
to sell their shares at a price that they consider reasonable and may also reduce the fair market value of the shares. Moreover,
OTC Markets is not a securities exchange, and trading of securities is often more sporadic than the trading of securities listed
on a quotation system like Nasdaq or any other national stock exchange. Accordingly, stockholders may have difficulty reselling
any shares of common stock.
**Future
capital raises may dilute our existing shareholders ownership, the value of their equity securities and/or have other adverse
effects on our operations.**
If
we raise additional capital by issuing equity securities by acquisition or by equity financing, our existing shareholders may
experience substantial dilution. If we raise additional funds by issuing debt instruments, these debt instruments could impose
significant restrictions on our operations, including liens on our assets. If we raise additional funds through collaborations
and licensing arrangements, we may be required to relinquish some rights to our technologies or products, or to grant licenses
on terms that are not favorable to us or could diminish the rights of our shareholders. Furthermore, if we offer to sell our shares
of common stock in subsequent offerings for a purchase price that is less than the purchase price of shares of common stock we
offered to our shareholders in the past, it may impact the value of equity securities of the shareholders that purchased it in
the past. In addition, the issuance of such additional shares may impact the ability of any investor to sell their shares once
such shares are eligible for sale.
**There
is no assurance that we will be able to pay dividends to our stockholders, which means that you could receive little or no return
on your investment.**
Payment
of dividends from our earnings and profits may be made at the sole discretion of our board of directors. There is no assurance
that we will generate any distributable cash from operations. Our board may elect to retain cash for operating purposes, debt
retirement, or some other purpose. Consequently, you may receive little or no return on your investment.
**Penny
Stock rules may make buying or selling our Common Stock difficult. Limitations upon Broker-Dealers Effecting Transactions
in Penny Stocks**
Trading
in our Common Stock is subject to material limitations as a consequence of regulations that limit the activities of broker-dealers
effecting transactions in penny stocks. Pursuant to Rule 3a51-1 under the Exchange Act, our Common Stock is a penny
stock because it (i) is not listed on any national securities exchange (ii) has a market price of less than $5.00 per share,
and (iii) its issuer (the Company) has net tangible assets less than $2,000,000 (if the issuer has been in business for at least
three (3) years) or $5,000,000 (if the issuer has been in business for less than three (3) years). Rule 15g-9 promulgated under
the Exchange Act imposes limitations upon trading activities on penny stocks, which makes selling our Common Stock
more difficult compared to selling securities that are not penny stocks. Rule 15a-9 restricts the solicitation of
sales of penny stocks by broker-dealers unless the broker first (i) obtains from the purchaser information concerning
his financial situation, investment experience, and investment objectives, (ii) reasonably determines that the purchaser has sufficient
knowledge and experience in financial matters that the person is capable of evaluating the risks of investing in penny
stocks, and (iii) delivers and receives back from the purchaser a manually signed written statement acknowledging the purchasers
investment experience and financial sophistication.
Rules
15g-2 through 15g-6 promulgated under the Exchange Act require broker-dealers who engage in transactions in penny stocks
first to provide their customers with a series of disclosures and documents, including (i) a standardized risk disclosure document
identifying the risks inherent in investing in penny stocks, (ii) all compensation received by the broker-dealer
in connection with the transaction, (iii) current quotation prices and other relevant market data, and (iv) monthly account statements
reflecting the fair market value of the securities.
There
can be no assurance that any broker-dealer which initiates quotations for the Common Stock will continue to do so, and the loss
of any such broker-dealer likely would have a material adverse effect on the market price of our Common Stock.
**FINRA
sales practice requirements may also limit a stockholders ability to buy and sell our stock.**
In
addition to the penny stock rules described below, FINRA has adopted rules that require that in recommending an
investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that
customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customers financial status, tax status, investment objectives, and other
information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced
securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers
to recommend that their customers buy our Common Stock, which may limit your ability to buy and sell our stock and have an adverse
effect on the market for our shares.
28
Because
our Common Stock is deemed a low-priced penny stock, it will be cumbersome for brokers and dealers to trade in our
Common Stock, making the market for our Common Stock less liquid and negatively affecting the price of our stock. We will be subject
to certain provisions of the Exchange Act, commonly referred to as the penny stock rules as defined in Rule 3a51-1.
A penny stock is generally defined to be any equity security that has a market price less than $5.00 per share, subject to certain
exceptions. Since our stock is deemed to be a penny stock, trading is subject to additional sales practice requirements of broker-dealers.
These require a broker-dealer to:
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Deliver to the customer,
and obtain a written receipt for, a disclosure document; | |
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Disclose certain
price information about the stock; | |
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Disclose the amount
of compensation received by the broker-dealer or any associated person of the broker-dealer; | |
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Send monthly statements
to customers with market and price information about the penny stock; and | |
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In some circumstances,
approve the purchasers account under certain standards and deliver written statements to the customer with the information
specified in the rules. | |
Consequently,
penny stock rules and FINRA rules may restrict the ability or willingness of broker-dealers to trade and/or maintain a market
in our Common Stock. Also, prospective investors may not want to get involved with the additional administrative requirements,
which may have a material adverse effect on the trading of our shares.
**We
are an emerging growth company under the JOBS Act of 2012 and a smaller reporting company and, as
a result of the reduced disclosure and governance requirements applicable to emerging growth companies and smaller reporting companies,
our Common Stock may be less attractive to investors.**
We
are an emerging growth company, as defined in the JOBS Act, and we may take advantage of certain exemptions from
various reporting requirements that are applicable to other public companies that are not emerging growth companies
including, but not limited to, not being required to comply with the auditor attestation requirements of section 404 of the Sarbanes-Oxley
Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions
from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute
payments not previously approved. We cannot predict if investors will find our Common Stock less attractive because we may rely
on these exemptions. If some investors find our Common Stock less attractive as a result, there may be a less active trading market
for our Common Stock and our stock price may be more volatile.
In
addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended
transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.
In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards
would otherwise apply to private companies. We are choosing to take advantage of the extended transition period for complying
with new or revised accounting standards.
We
will remain an emerging growth company until the earlier of (i) the last day of the year following the fifth anniversary
of the date of the completion of our initial public offering, (ii) the last day of the year in which we have total annual gross
revenue of at least $1.235 billion, (iii) the last day of the year in which we are deemed to be a large accelerated filer
as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our Common Stock held by non-affiliates
exceeded $700.0 million as of the last business day of the second fiscal quarter of such year, or (iv) the date on which we have
issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.
29
Even
after we no longer qualify as an emerging growth company, we may still qualify as a smaller reporting company,
which would allow us to continue to take advantage of many of the same exemptions from disclosure requirements, including, among
other things, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act,
presenting only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and reduced
disclosure obligations regarding executive compensation in this Report and our periodic reports and proxy statements.
**Our
status as an emerging growth company under the JOBS Act may make it more difficult to raise capital as and when
we need it.**
Because
of the exemptions from various reporting requirements provided to us as an emerging growth company and because we
will have an extended transition period for complying with new or revised financial accounting standards, we may be less attractive
to investors and it may be difficult for us to raise additional capital as and when we need it. Investors may be unable to compare
our business with other companies in our industry if they believe that our financial accounting is not as transparent as other
companies in our industry. If we are unable to raise additional capital as and when we need it, our financial condition and results
of operations may be materially and adversely affected**.**
**ITEM
1B. UNRESOLVED STAFF COMMENTS**
None.
**ITEM
1C. CYBERSECURITY**
****
|
Risk
Management and Strategy
The
Company has a risk-based cybersecurity program, designed to protect the Companys operations and information assets.The
Company constantly assesses its cybersecurity risks by evaluating the likelihood of occurrence and the potential impact on the
business. The risk identification process considers those common in the oil and gas industry and those that pertain to the technologies
within the Companys applications and infrastructure.
We
use several key risk mitigation processes and software tools in place to prevent, detect, and respond to cybersecurity attacks.
Multi-factor authentication and privileged access are required to access the Companys network in order to protect internal
data and ensure appropriate access. The Company utilizes security vulnerability scanning software and 24/7 monitoring in an effort
to detect and prevent significant cybersecurity threats as well as uses email and spam filtering.
The
Company also uses a backup and recovery methodology that supports the replication of data across multiple secure data centers
with the intent to prevent local and cloud backup data from accidental destruction and unavailability in the event of data loss
or a major cyber event. The Company also has contracted retainers with third party vendors in the event they are required to assist
during a major cybersecurity incident.
Security
due diligence is performed when considering purchasing third party software and utilizing third party hosted providers.This
evaluation considers the security architecture, confidentiality and criticality of data, as well as methods and practices used
by third party vendors to encrypt, transmit, store, back up, and recover data. | |
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Governance
The
board of directorsof the Company has oversight of the Companys risk management, including cybersecurity.The
Companys senior officers are responsible for cybersecurity risk management and regularly communicate with the board of
directors regarding risks and threats, including the status of current cybersecurity risk prevention and threat detection efforts.
Jeffery Guzy, Chief Financial Officer is the primary individual responsible for assessing and managing cybersecurity risks.He
has extensive experience managing information technology departments of oil and gas organizations.This includes responsibilities
for securing the solutions, data, and infrastructure for both corporate and field operations technology. The Companys technology
environment is managed by an experienced team of professionals who follow an extensive set of policies and procedures related
to data security.
The
Company is not aware of any risks from cybersecurity threats that have materially affected or are reasonably likely to materially
affect the Company, including its business strategy, results of operations, or financial condition.Please seeItem
1ARisk Factors Cyber-attacks targeting systems and infrastructure used by the oil and gas industry
and related regulations may adversely impact our operations and, if we are unable to obtain and maintain adequate protection for
our data, our business may be adversely affected in this Annual Report on Form 10-K for further discussion regarding
the Companys cybersecurity risks.
Recognizing
the critical importance of robust cybersecurity measures, the Company is committed to developing, implementing and maintaining
measures to better safeguard our information systems and protect the confidentiality, integrity and availability of our data.
Our management team actively evaluates and addresses cybersecurity risks in alignment with our business objectives and operational
needs. The Company utilizes third party dedicated servers to protect its confidential information and has installed malware detection
applications to monitor any security breaches. To date, our operations or financial standing have not been materially impaired
by any cybersecurity challenges. Looking ahead, the Company will mandate comprehensive cybersecurity training for both the Board
and employees, covering key areas such as physical security of assets, data privacy and other information security policies and
procedures. | |
****
30
**ITEM
2. PROPERTIES**
See
Business for descriptions of our properties. We rent our principal executive offices at 4830 Line Avenue, Suite
152, Shreveport, Louisiana, 71106, under a month-to-month lease and for a monthly rental of $26. This office space is deemed
adequate for the current needs of our executive management and corporate headquarters. We have no other offices. We believe
that this property is sufficient for our current and proposed business.
**ITEM
3. LEGAL PROCEEDINGS**
As
of the date of this report, the Company is not a party to any pending legal proceedings, nor is any of its property subject to
litigation. Furthermore, no director, officer or affiliate and no owner, whether of record or beneficially holding more than 5%
of any class of our voting securities, or any other security holder, is involved in any legal action adverse to the Company or
that presents a material adverse interest.
**ITEM
4. MINE SAFETY DISCLOSURES**
Not
applicable.
31
**PART
II**
**ITEM
5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES**
Our
Common Stock is currently quoted on the OTCID marketplace of OTC Markets Group, Inc., an inter-dealer quotation system, under
the symbol CJAX. However, because our common stock was temporarily downgraded to Expert Market, it is not currently
eligible for proprietary broker-dealer quotations, and all quotes of our common stock reflect unsolicited customer orders. We
need a market maker to submit a new application under SEC Rule15c2-11 which needs to be approved by FINRA to become eligible again
for proprietary quotations. Currently only a very limited trading market for our Common Stock and there is no assurance that a
regular trading market will ever develop.
As
of December 31, 2025, there were 67 stockholders of record of our Common Stock.
*Dividends*
We
have never declared or paid any cash dividends on our common stock. We currently intend to retain future earnings, if any, for
working capital purposes and do not anticipate paying any cash dividends in the foreseeable future.
*Recent
Issuances of Unregistered Securities*
None.
*Securities
Authorized for Issuance Under Equity Compensation Plan*
The
Company adopted the 2018 Equity Incentive Plan on December 31, 2018. No awards were granted under the 2018 Equity Incentive
Plan as of December 31, 2025.
**ITEM
6. [Reserved]**
**ITEM
7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**
**Forward-Looking
Statements**
*The
following discussion and analysis should be read in conjunction with our financial statements and the related notes thereto. The
management's discussion and analysis contain forward-looking statements, such as statements of our plans, objectives, expectations,
and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words
believe, plan, intend, anticipate, target, estimate,
expect, and the like, and/or future tense or conditional constructions (will, may, could,
should, etc.), or similar expressions, identify certain of these forward-looking statements. These statements are
only predictions and involve known and unknown risks, uncertainties, and other factors that may cause our or our industrys
actual results, levels of activity, or performance to be materially different from any future results, levels of activity, or
performance expressed or implied by these forward-looking statements.*
32
*Although
we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, or performance. You should not place undue reliance on these statements, which speak only as of the date of
this Annual Report. These cautionary statements should be considered with any written or oral forward-looking statements that
we may issue in the future. You should read this Annual Report on Form 10-K with the understanding that our actual future results
may be materially different from what we expect. All forward-looking statements speak only as of the date on which they are made.
We undertake no obligation to update such statements to reflect events that occur or circumstances that exist after the date on
which they are made, except as required by applicable law.*
*Managements
discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements
which have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP).
The following discussion and analysis of financial condition and results of operations of the Company is based upon and should
be read in conjunction with the audited consolidated financial statements and related notes elsewhere in this Annual Report on
Form 10-K.*
**Overview**
We
were incorporated on November 13, 2017, under the laws of the Commonwealth of Virginia, to acquire, fund, and operate oil exploration
and production from assets in the Gulf States Drill Region. We are an early-stage corporation seeking to become an independent
energy company focused on the acquisition and subsequent exploitation and development of crude oil and natural gas in the Gulf
States Drill Region.
Since
our inception, we have incurred operating losses. Prior to the Barrister Acquisition, we had not generated positive cash flows
from operations, and while after the Barrister Acquisition, we started to generate revenue, there are no assurances that we will
be successful in obtaining an adequate level of financing for the development and commercialization of our proposed oil exploration
and production business. These factors raise substantial doubt about our ability to continue as a going concern. We expect to
incur expenses and operating losses for the foreseeable future as we seek to implement our business plan. Due to its limited
revenues, the Acquisitions do not remedy substantial doubts about our ability as a going concern. The Company has been unable
to raise additional capital as of the date of this Annual Report, other than personal loans by Jeffrey J. Guzy, our Chief Financial
Officer, and $53,000 raised in the initial public offering in 2020.
Reserve
engineering is a process of estimating underground accumulations of oil that cannot be measured in an exact way. The accuracy
of any reserve estimate depends on the quality of available data, the interpretation of such data, and price and cost assumptions
made by reserve engineers. In addition, the results ofdrilling, testing, and production activities may justify revisions
of estimates that were made previously. If significant,such revisions would change the schedule of any further production
and development drilling. Accordingly, reserve estimates may differ significantly from the quantities of oil that are ultimately
recovered. When we acquire oil exploration and production leases and rights, we will use oil reserve reports as one factor
in deciding whether to drill in the property of a specific oil lease or right. Reserve estimates depend on many assumptions
that may turn out to be inaccurate. Any material inaccuracies in reserve estimates or underlying assumptions will materially affect
the quantities and present value of oil from a drilling site.
33
**Risks
and Uncertainties**
Oil
and natural gas prices have and may continue to be volatile. Recessionary concerns have placed some downward pressure on commodity
prices, causing oil and gas prices to decline in the fourth quarter of 2025 from their earlier highs in 2023. Although supply
has increased throughout the last three years, there is still an element of volatility and uncertainty that we expect to continue
at least for the near-term and possibly longer, in part by the impact of the Russian-Ukrainian military conflict on global commodity
and financial markets, and the associated effect of trade sanctions on imports of oil and natural gas from Russia. This volatility
could negatively impact future prices for oil, natural gas, petroleum products and industrial products.
34
**Results
of Operations**
**Year
Ended December 31, 2025, Compared to Year Ended December 31, 2024****
|
|
|
For
the Year Ended December 31, |
| |
|
|
|
|
|
|
|
|
|
Change |
|
|
Change |
| |
|
|
|
2025 |
|
|
2024 |
|
|
Amount |
|
|
% |
| |
|
Revenues |
|
$ |
963,621 |
|
|
$ |
971,686 |
|
|
$ |
(8,065 |
) |
|
|
(0.8% |
) | |
|
Lease operating
expenses |
|
|
417,967 |
|
|
|
355,644 |
|
|
|
62,323 |
|
|
|
17.5% |
| |
|
General & administrative
expenses |
|
|
775,792 |
|
|
|
919,994 |
|
|
|
(144,202 |
) |
|
|
(15.7% |
) | |
|
Depletion and accretion
on discounted liabilities |
|
|
397,022 |
|
|
|
382,061 |
|
|
|
14,961 |
|
|
|
3.9% |
| |
|
Impairment
expense |
|
|
402,152 |
|
|
|
922,932 |
|
|
|
(520,780 |
) |
|
|
(56.4% |
) | |
|
Loss
from operations |
|
|
(1,029,312 |
) |
|
|
(1,608,945 |
) |
|
|
579,633 |
|
|
|
(36.0% |
) | |
|
Other
expense, net |
|
|
(79,897 |
) |
|
|
(901 |
) |
|
|
(78,996 |
) |
|
|
(8767.6% |
) | |
|
Net
loss |
|
$ |
(1,109,209 |
) |
|
$ |
(1,609,846 |
) |
|
$ |
500,637 |
|
|
|
(31.1% |
) | |
*Revenues*
Revenues
were $963,621 for the year ended December 31, 2025, and $971,686 for the year ended December 31, 2024. The Company is an early-stage
company and began producing significant revenue in 2023. The decrease in revenue of $8,065 is attributable to the decrease in
oil prices since prior year and disposal of certain mineral and oil and gas interests during 2025.
*General
and Administrative Expenses*
General
and administrative expenses consisted primarily of accounting and audit fees, legal and professional services fees, and payroll-related
expenses. General and administrative expenses were $775,792 for the year ended December 31, 2025, compared to $919,994 in the
same period in 2024, representing a decrease of 15.7% or $144,202. The decrease was primarily driven by a decrease in payroll
expenses.
*Lease
Operating Expenses*
Lease
operating expenses were $417,967 for the year ended December 31, 2025, compared to $355,644 in the same period in 2024. The increase
in lease operating expenses of 17.5% or $62,323 was primarily driven by the result of a full year of operating expenses related
to the 2024 acquisition of additional mineral and oil and gas interests that occurred in Q2 and Q3 2024.
*Loss
from Operations*
Total
operating loss was $1,029,312 for the year ended December 31, 2025, and $1,608,945 for the year ended December 31, 2024. The change
in loss was primarily driven by the decrease in impairment expense and general and administrative expenses, offset by an increase
in lease operating expenses.
*Other
Expense, Net*
Other
expense, net was ($79,897) for the year ended December 31, 2025, compared to ($901) for the same period in 2024. The increase
in other expense, net, was attributable to a loss on disposition of proved reserves not present in the prior year.
35
*Net
Loss*
As
a result of the above factors, there was a net loss of $1,109,209 for the year ended December 31, 2025, compared to a net loss
of $1,609,846 in the same period of 2024.
**Liquidity
and Capital Resources**
**Sources
of Liquidity**
The
Company had cash and cash equivalents of $77,219 at December 31, 2025. During the year ended December 31, 2025 the Company generated
$40,569 in operating cash flows. Prior to the year ended December 31, 2025 the Company had incurred net operating losses and operating
cash flow deficits since its inception. Historically, the primary sources of financing have been a combination of loans or contributions
of Jeffrey J. Guzy, an officer and director of the Company, and $53,000 raised in the public offering. This limited funding
has been inadequate as of the date of this Annual Report to fund our business strategy. The Company has not attained profitable
operations and its ability to pursue any future plan of operation is dependent upon our ability to obtain additional financing.
**Funding
Requirements**
The
Company believes that its working capital on hand, as of the date of this report, will not be sufficient to fund its plan of operations
over the next 12 months. Until such time, if ever, as the Company can generate substantial revenues, it expects to continue relying
on a combination of equity offerings and debt financings to fund ongoing operations. To the extent that the Company raises additional
capital through the sale of equity or debt securities, the ownership interest of the Company may be materially diluted, and the
terms of such securities could include liquidation or other preferences that adversely affect the rights of the Companys
existing stockholders. There is no assurance that the Company will be able to complete any additional sales of equity securities
or that it will be able to arrange for other financing to fund its planned business activities.
Debt
or equity financing arrangements may not be available to us or may be available only on unfavorable terms. Based on prior experience
in seeking funding for drilling on properties without any significant oil production, funding for drilling is challenging to obtain
at all or on affordable terms. Our ability to obtain additional financing may be impaired by many factors outside of our control,
including the capital markets (both generally and in the crude oil industry in particular), our lack of operating history, the
location of our proposed or future crude oil properties and prices of crude oil on the commodities markets (which will influence
the amount of asset-based financing available to us) and other factors. Further, if oil prices on the commodities markets decline,
our revenues from any exploitation of the Company Oil Rights will likely decrease, and such decreased revenues may increase our
requirements for capital.The Company may continue to incur substantial costs in the future in connection with raising capital
to fund our business, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing
and distribution expenses, and other costs. The Company may also be required to recognize non-cash expenses in connection with
certain securities we may issue, which may adversely affect our financial condition.
If
the Company is unable to raise additional funds through equity or debt financings or other arrangements sufficient to satisfy
its long-term capital requirements, together with its revenues from any acquired operations, it may be required to reduce operating
costs, which are already minimal and delay, reduce or eliminate its acquisition and development activities. That reduction could
jeopardize the Companys future strategic initiatives and business plans. The Company may be required to sell some or all
of its acquired properties (which could be on unfavorable terms), seek joint ventures with one or more strategic partners, strategic
acquisitions, and other strategic alternatives, cease our operations, sell or merge our business, or file a petition for bankruptcy
(either liquidation or reorganization under the U.S. Bankruptcy Code). Any of these actions could result in investors in the common
stock losing their investment or failing to realize any appreciation in the common stock from the purchase price.
36
**Working
Capital (Deficit)**
The
following table summarizes our total current assets, total current liabilities, and working capital (deficit) as of December 31,
2025, and December 31, 2024:
|
|
|
As
of |
|
|
As
of |
| |
|
|
|
December
31, 2025 |
|
|
December
31, 2024 |
| |
|
Current
assets |
|
$ |
207,756 |
|
|
$ |
215,030 |
| |
|
Current
liabilities |
|
|
1,183,826 |
|
|
|
1,326,177 |
| |
|
Working
capital deficit |
|
$ |
(976,070 |
) |
|
$ |
(1,111,147 |
) | |
****
**Cash
Flows**
Changes
in the net cash provided by and (used in) operating, investing, and financing activities for the years ended December 31, 2025,
and December 31, 2024, are set forth in the following table:
|
|
|
Year
Ended |
|
|
Year
Ended |
| |
|
|
|
December
31, 2025 |
|
|
December
31, 2024 |
| |
|
Net
cash provided by/(used in) operating activities |
|
$ |
40,569 |
|
|
$ |
(19,187 |
) | |
|
Net cash provided
by investing activities |
|
|
|
|
|
|
|
| |
|
Net
cash used in financing activities |
|
|
(10,088 |
) |
|
|
(9,983 |
) | |
|
Cash
at beginning of period |
|
|
46,738 |
|
|
|
75,908 |
| |
|
Net
increase (decrease) in cash |
|
$ |
30,481 |
|
|
$ |
(29,170 |
) | |
Net
cash from operating activities is derived from net loss from operations adjusted for non-cash items, changes in accounts receivables
balances, prepaid expenses, accounts payables, and accrued expenses. For the period ended December 31, 2025, net cash provided
by operating activities was $40,569 compared to net cash used in operating activities of $19,187 for the period ended December
31, 2024. The net increase in operating cash flows was primarily attributable to the reduction in net loss between periods, the
noncash settlement of payables related to the disposition of proved reserves in 2025, offset by the transfer of receivables related
to the disposed proved reserves.
Net
cash used in investing activities was $0 for both the periods ended December 31, 2025, and December 31, 2024.
Total
net cash used in financing activities was $10,088 for the period ended December 31, 2025. Net cash used in financing activities
was $9,983 for the period ended December 31, 2024. The net increase was due to the increase in payments made on the SBA PPP loan.
37
**Going
Concern**
The
accompanying consolidated financial statements have been prepared assuming we will continue as a going concern, which contemplates
the realization of assets and the satisfaction of liabilities in the normal course of business for the twelve-month period following
the date of these financial statements. On a consolidated basis, we have incurred significant operating losses since inception.
Because we do not expect that existing operational cash flow will be sufficient to fund presently anticipated operations, this
raises substantial doubt about our ability to continue as a going concern. Therefore, we will need to raise additional funds and
are currently exploring sources of financing. Historically, we have raised capital through private offerings of debt and equity
and officer loans to finance working capital needs. There can be no assurances that we will be able to continue to raise additional
capital through the sale of common stock or other securities or obtain short-term loans.
**Off-Balance
Sheet Arrangements**
We
have no off-balance sheet arrangements.
**Critical
Accounting Policies and Estimates**
Our
discussion of financial condition and results of operations is based upon the information reported in our financial statements.
The preparation of these statements requires us to make assumptions and estimates that affect the reported amounts of assets,
liabilities, revenues, and expenses as well as the disclosure of contingent assets and liabilities at the date of our financial
statements. We base our assumptions and estimates on historical experience and other sources that we believe to be reasonable
at the time. Actual results may vary from our estimates due to changes in circumstances, weather, politics, global economics,
mechanical problems, general business conditions, and other factors. Our significant accounting policies are detailed in Note1
to our financial statements included in this Annual Report. We have outlined below certain of these policies as being of particular
importance to the portrayal of our financial position and results of operations and which require the application of significant
judgment by our management.
*Revenue
Recognition.*In January2018, the Company adopted Financial Accounting Standards Board (FASB) Codification
*Revenues from Contracts with Customers (Topic 606)*. The timing of recognizing revenue from the sale of produced crude oil
and natural gas was not changed as a result of adopting ASC 606. The Company predominantly derives its revenue from the sale of
produced crude oil and natural gas. The contractual performance obligation is satisfied when the product is delivered to the purchaser.
Revenue is recorded in themonth the product is delivered to the purchaser. The Company receives payment within one month
after pickup. The transaction price includes variable consideration as product pricing is based on published market prices and
reduced for contract-specified differentials. The new guidance regarding ASC 606 does not require that the transaction price be
fixed or stated in the contract. Estimating the variable consideration does not require significant judgment. Revenue is recognized
net of royalties due to third parties in an amount that reflects the consideration the Company expects to receive in exchange
for those products. See Note2 of our financial statements for additional information.
38
*Successful
Efforts Method of Accounting.*We account for oil and natural gas properties in accordance with the successful efforts
method. Under this method, all acquisition costs of proved properties are capitalized and amortized on a unit-of-production basis
over the remaining life of the proved reserves. All development costs of proved properties are capitalized and amortized on a
unit-of-production basis over the remaining life of the proved developed reserves. Costs of retired, sold, or abandoned properties
that constitute a part of an amortization base are charged or credited, net of proceeds, to accumulated depreciation, depletion,
and amortization unless doing so significantly affects the unit-of-production amortization rate, in which case a gain or loss
is recognized in the current period. Gains or losses from the disposal of other properties are recognized in the current period.
For assets acquired, we base the capitalized cost on the fair value at the acquisition date. We expense expenditures for maintenance
and repairs necessary to maintain properties in operating condition, as well as annual lease rentals, as they are incurred. Estimated
dismantlement and *abandonment* costs are capitalized at their estimated net present value and amortized over the remaining
lives of the related assets. Interest is capitalized only during the periods in which these assets are brought to their intended
use. We only capitalize the interest on borrowed funds related to our share of costs associated with qualifying capital expenditures.
*Impairment
of Oil and Natural Gas Properties*. We evaluate the impairment of our proved oil and natural gas properties generally
on a field-by-field basis or at the lowest level for which cash flows are identifiable, whenever events or changes in circumstance
indicate that the carrying value may not be recoverable. We reduce the carrying values of proved properties to fair value when
the expected undiscounted future cash flows are less than the net book value. We measure the fair values of proved properties
using valuation techniques consistent with the income approach, converting future cash flows to a single discounted amount. Significant
inputs used to determine the fair values of proved properties include estimates of (i) reserves; (ii) future operating and development
costs; (iii) future commodity prices; and (iv) a risk-adjusted discount rate. These inputs require significant judgments and estimates
by our management at the time of the valuation. The most significant financial statement effect from a change in our oil and gas
reserves or impairment of its proved properties would be the DD&A rate.
An
impairment may not be reversed in future periods even though higher oil and natural gas prices may subsequently increase the ceiling.
Our
estimates of reserves and future cash flow as of December 31, 2025, and 2024 were prepared using an average price equal to the
unweighted arithmetic average of the first day of the month price for each month within the 12-month periods ended December 31,
2025, and 2024, respectively, in accordance with SEC guidelines. As of December 31, 2025, our reserves are based on an SEC
average price of $62.73 per Bbl of WTI oil posted and $3.201 per MCF natural gas. As of December 31, 2024, our reserves are based
on an SEC average price of $73.68 per Bbl of WTI oil posted and $2.013 per MCF natural gas. Prices are adjusted by local field
and lease level differentials and are held constant for the life of reserves in accordance with SEC guidelines.
39
*Income
Taxes.*Deferred income taxes are provided for the difference between the tax basis of assets and liabilities and the
carrying amount in our financial statements. This difference will result in taxable income or deductions in future years when
the reported amount of the asset or liability is settled. Since our tax returns are filed after the financial statements are prepared,
estimates are required in valuing tax assets and liabilities. We record adjustments to the actual values in the period we file
our tax returns.
**Recent
Issued Accounting Pronouncements**
See
Note 4 in the notes to our consolidated financial statements for further discussion regarding recently issued accounting standards.
**ITEM
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS**
As
a smaller reporting company, we are not required to provide the information required by this Item.
40
**ITEM
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA**
|
CONTENTS |
PAGE | |
|
|
| |
|
Reports of Independent Registered Public Accounting Firms |
F 42 | |
|
|
| |
|
Financial Statements: |
| |
|
|
| |
|
Consolidated Balance Sheets as of December 31, 2025, and December 31, 2024 |
F 43 | |
|
|
| |
|
Consolidated Statements of Operations for the years ended December 31, 2025, and December 31, 2024 |
F 44 | |
|
|
| |
|
Consolidated Statements of Stockholders Equity for the years ended December 31, 2025, and 2024 |
F 45 | |
|
|
| |
|
Consolidated Statements of Cash Flows for the years ended December 31, 2025, and December 31, 2024 |
F 46 | |
|
|
| |
|
Notes to Consolidated Financial Statements |
F 47
F 62 | |
F 41
*
**REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**
To
the Board of Directors and Stockholders
CoJax
Oil and Gas Corporation
**Opinion
on the Consolidated Financial Statements**
We have audited the accompanying
consolidated balance sheet of CoJax Oil and Gas Corporation (the Company) as of December 31, 2025 and 2024, and the related consolidated
statements of operations, stockholders equity, and cash flows for the years then ended, and the related notes (collectively
referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present
fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its
operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United
States of America.
**Going
Concern**
The
accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed
in Note 2 to the consolidated financial statements, the Company has yet to achieve profitable operations, has negative cash flows
from operating activities, and is dependent upon future issuances of equity or other financings to fund ongoing operations all
of which raises substantial doubt about its ability to continue as a going concern. Managements plans regarding these matters
are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
**Basis
for Opinion**
These
consolidated financial statements are the responsibility of the Companys management. Our responsibility is to express an
opinion on the Companys consolidated financial statements based on our audit. We are a public accounting firm registered
with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to
the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and
Exchange Commission and the PCAOB.
We
conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether
due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over
financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting,
but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting.
Accordingly, we express no such opinion.
Our
audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether
due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis,
evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the
accounting principles used and the significant estimates made by management, as well as evaluating the overall presentation of
the consolidated financial statements. We believe our audit provides a reasonable basis for our opinion.
**Critical
Audit Matter**
The
critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements
that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that
are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.
The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken
as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit
matter or on the accounts or disclosures to which it relates.
**Oil
and gas properties**
As
described in Notes 3, 5 and 12 to the consolidated financial statements, the Company accounts for its oil and gas properties using
the successful efforts method of accounting which requires management to estimate reserve volumes and future net revenues to assess
if there are indications the carrying value of certain properties exceed the fair value and if so, determine the fair value of
its oil and gas properties. To estimate the volume of reserves and future net revenues, management makes significant estimates
and assumptions, and rely on third party experts. In addition, the estimation of reserves is also impacted by managements
judgments and estimates regarding thefinancial performance of wells associated with reserves to determine if wells are expected,
with reasonable certainty, to be economical under the pricing assumptions required in the impairment evaluation and measurements.
We identified the evaluation of oil and gas properties as a critical audit matter.
Our
audit procedures related to the estimation of proved reserves included the following, among others.
|
|
|
We
evaluated the level of knowledge, skill and ability of the Companys reservoir engineering specialists and their relationship
to the Company, made inquiries of those reservoir engineers regarding the process followed and judgments made to estimate
the Companys proved reserves, and read the reserve report prepared by the Companys reservoir engineering specialists. | |
|
|
|
We
tested the accuracy of the Companys impairment evaluation and measurement that included these proved reserve reports. | |
|
|
|
We
evaluated sensitive inputs and assumptions used to determine reserve volumes and other cash flow inputs and assumptions derived
from the Companys accounting records. These assumptions included historical pricing differentials, current and future
operating costs, estimated future capital costs, and ownership interests. | |
/s/
M&K CPAS, PLLC
M&K
CPAS, PLLC
PCAOB
ID: 2738
We
have served as the Companys auditor since 2024
The
Woodlands, TX
March
24, 2026
F 42
CoJax Oil and Gas Corporation
Consolidated Balance Sheets
|
| |
| | |
| | |
|
| |
As of | | |
As of | | |
|
| |
December 31, 2025 | | |
December 31, 2024 | | |
|
ASSETS | |
| | | |
| | | |
|
Current assets: | |
| | | |
| | | |
|
Cash | |
$ | 77,219 | | |
$ | 46,738 | | |
|
Accounts receivable, net | |
| 109,953 | | |
| 147,082 | | |
|
Prepaid expenses | |
| 20,584 | | |
| 21,210 | | |
|
Total current assets | |
| 207,756 | | |
| 215,030 | | |
|
Property and Equipment: | |
| | | |
| | | |
|
Oil and gas properties at cost | |
| | | |
| | | |
|
Proved Properties | |
| 8,105,480 | | |
| 8,895,495 | | |
|
Unproved Properties | |
| 2,169,812 | | |
| 2,169,812 | | |
|
Less: Accumulated depletion | |
| (900,012 | ) | |
| (766,901 | ) | |
|
Total property and equipment - net | |
| 9,375,280 | | |
| 10,298,406 | | |
|
| |
| | | |
| | | |
|
Total assets | |
$ | 9,583,036 | | |
$ | 10,513,436 | | |
|
| |
| | | |
| | | |
|
LIABILITIES and STOCKHOLDERS EQUITY | |
| | | |
| | | |
|
Current liabilities: | |
| | | |
| | | |
|
Accounts payable | |
$ | 131,365 | | |
$ | 113,473 | | |
|
Workover expense payable | |
| 2,205 | | |
| 40,334 | | |
|
Accrued salaries and payroll taxes | |
| 937,065 | | |
| 1,059,281 | | |
|
Current portion of notes payable | |
| 10,190 | | |
| 10,088 | | |
|
Notes payable related party | |
| 103,001 | | |
| 103,001 | | |
|
Total current liabilities | |
| 1,183,826 | | |
| 1,326,177 | | |
|
Long-term liabilities: | |
| | | |
| | | |
|
Asset retirement obligations | |
| 544,656 | | |
| 553,538 | | |
|
Notes payable, net of current portion | |
| 817 | | |
| 11,007 | | |
|
Total long-term liabilities | |
| 545,473 | | |
| 564,545 | | |
|
| |
| | | |
| | | |
|
Total liabilities | |
| 1,729,299 | | |
| 1,890,722 | | |
|
| |
| | | |
| | | |
|
Stockholders equity: | |
| | | |
| | | |
|
Preferred stock, $0.10 par value, 50,000,000 current shares authorized, 0 and 0 Series A shares, $0.01 par value issued and outstanding at December 31, 2025 and 2024, respectively. | |
| | | |
| | | |
|
Common stock, $0.01 par value, 300,000,000 current shares authorized, 14,168,755 and 13,998,639 shares issued and outstanding at December 31, 2025 and 2024, respectively. | |
| 141,687 | | |
| 139,986 | | |
|
Subscription payable | |
| 10,000 | | |
| 10,000 | | |
|
Additional paid-in capital | |
| 21,185,146 | | |
| 20,846,615 | | |
|
Accumulated deficit | |
| (13,483,096 | ) | |
| (12,373,887 | ) | |
|
| |
| | | |
| | | |
|
Total stockholders equity | |
| 7,853,737 | | |
| 8,622,714 | | |
|
| |
| | | |
| | | |
|
Total liabilities and stockholders equity | |
$ | 9,583,036 | | |
$ | 10,513,436 | | |
See accompanying notes to consolidated financial
statements.
F 43
CoJax Oil and Gas Corporation
Consolidated Statements of Operations
|
| |
For the Year Ended | | |
For the Year Ended | | |
|
| |
December 31, 2025 | | |
December 31, 2024 | | |
|
Revenues | |
$ | 963,621 | | |
$ | 971,686 | | |
|
| |
| | | |
| | | |
|
Operating costs and expenses: | |
| | | |
| | | |
|
Lease operating expenses | |
| 417,967 | | |
| 355,644 | | |
|
General and administrative expenses | |
| 775,792 | | |
| 919,994 | | |
|
Depletion and accretion on discounted liabilities | |
| 397,022 | | |
| 382,061 | | |
|
Impairment expense | |
| 402,152 | | |
| 922,932 | | |
|
Total operating costs and expenses | |
| 1,992,933 | | |
| 2,580,631 | | |
|
| |
| | | |
| | | |
|
Loss from operations | |
| (1,029,312 | ) | |
| (1,608,945 | ) | |
|
| |
| | | |
| | | |
|
Other income (expense): | |
| | | |
| | | |
|
Other income and expense | |
| 897 | | |
| 2,690 | | |
|
Loss on disposition of proved reserves | |
| (78,326 | ) | |
| - | | |
|
Interest expense | |
| (2,468 | ) | |
| (3,591 | ) | |
|
Total other income (expense) | |
| (79,897 | ) | |
| (901 | ) | |
|
| |
| | | |
| | | |
|
Net loss | |
$ | (1,109,209 | ) | |
$ | (1,609,846 | ) | |
|
| |
| | | |
| | | |
|
Net loss per common share - basic and diluted | |
$ | (0.08 | ) | |
$ | (0.13 | ) | |
|
Weighted average number of common shares outstanding during the period - basic and diluted | |
| 14,127,148 | | |
| 12,380,074 | | |
See accompanying notes to consolidated financial
statements.
F 44
CoJax Oil and Gas Corporation
Consolidated Statements of Stockholders
Equity
For the years ending December 31, 2025,
and December 31, 2024
|
| |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| |
| | |
| | |
| | |
| | |
| | |
Additional | | |
| | |
Total | | |
|
| |
Preferred stock | | |
Common stock | | |
Subscriptions | | |
paid-in | | |
Accumulated | | |
Stockholders | | |
|
| |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
payable | | |
capital | | |
deficit | | |
equity | | |
|
Balance, December 31, 2023 | |
| 105,000 | | |
$ | 1,050 | | |
| 9,315,902 | | |
$ | 93,159 | | |
$ | 10,000 | | |
$ | 13,727,918 | | |
$ | (10,764,041 | ) | |
$ | 3,068,086 | | |
|
Common stock issued for services | |
| | | |
| | | |
| 100,000 | | |
| 1,000 | | |
| | | |
| 98,000 | | |
| | | |
| 99,000 | | |
|
Conversion of preferred stock to common stock | |
| (105,000 | ) | |
| (1,050 | ) | |
| 1,050,000 | | |
| 10,500 | | |
| | | |
| (9,450 | ) | |
| | | |
| | | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
|
Common stock issued for acquisitions | |
| | | |
| | | |
| 3,532,737 | | |
| 35,327 | | |
| | | |
| 7,030,147 | | |
| | | |
| 7,065,474 | | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
|
Net loss for the year ending December 31, 2024 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
$ | (1,609,846 | ) | |
$ | (1,609,846 | ) | |
|
Balance, December 31, 2024 | |
| | | |
| | |
| 13,998,639 | | |
$ | 139,986 | | |
$ | 10,000 | | |
$ | 20,846,615 | | |
$ | (12,373,887 | ) | |
$ | 8,622,714 | | |
|
Common stock issued for accrued salaries | |
| | | |
| | | |
| 170,116 | | |
| 1,701 | | |
| | | |
| 338,531 | | |
| | | |
| 340,232 | | |
|
Net loss for the year ending December 31, 2025 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| (1,109,209 | ) | |
| (1,109,209 | ) | |
|
Balance, December 31, 2025 | |
| | | |
$ | | | |
| 14,168,755 | | |
$ | 141,687 | | |
$ | 10,000 | | |
$ | 21,185,146 | | |
$ | (13,483,096 | ) | |
$ | 7,853,737 | | |
See accompanying notes to consolidated financial
statements.
F 45
CoJax Oil and Gas Corporation
Consolidated Statements of Cash Flows
|
| |
For the Year Ended | | |
For the Year Ended | | |
|
| |
December 31, 2025 | | |
December 31, 2024 | | |
|
Operating Activities: | |
| | | |
| | | |
|
Net loss | |
$ | (1,109,209 | ) | |
$ | (1,609,846 | ) | |
|
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |
| | | |
| | | |
|
Impairment loss on oil and gas properties | |
| 402,152 | | |
| 922,932 | | |
|
Loss on disposition of proved resources | |
| 78,326 | | |
| | | |
|
Depletion expense | |
| 352,970 | | |
| 346,726 | | |
|
Accretion of asset retirement obligations | |
| 44,052 | | |
| 35,335 | | |
|
Common stock issued for services and salaries | |
| | | |
| 99,000 | | |
|
Changes in operating assets and liabilities: | |
| | | |
| | | |
|
Accounts receivable | |
| (177,263 | ) | |
| 58,224 | |
|
Prepaid expense | |
| 626 | | |
| (21,210 | ) | |
|
Accounts payable and accrued liabilities | |
| 448,915 | | |
| 149,652 | | |
|
Net cash provided by (used in) operating activities | |
| 40,569 | | |
| (19,187 | ) | |
|
| |
| | | |
| | | |
|
Investing Activities: | |
| | | |
| | | |
|
Net cash provided by investment activities | |
| | | |
| | | |
|
| |
| | | |
| | | |
|
Financing Activities: | |
| | | |
| | | |
|
Payments of loans payable SBA PPP Loan | |
| (10,088 | ) | |
| (9,983 | ) | |
|
Net cash used in financing activities | |
| (10,088 | ) | |
| (9,983 | ) | |
|
| |
| | | |
| | | |
|
Net change in cash | |
| 30,481 | | |
| (29,170 | ) | |
|
Cash - beginning of period | |
| 46,738 | | |
| 75,908 | | |
|
Cash - end of period | |
$ | 77,219 | | |
$ | 46,738 | | |
|
| |
| | | |
| | | |
|
Supplemental disclosure of non-cash operating activities: | |
| | | |
| | | |
|
Cash paid for interest | |
$ | 413 | | |
$ | 1,538 | | |
|
Cash paid for taxes | |
$ | 9,381 | | |
$ | 16,994 | | |
|
Supplemental disclosure of non-cash investing activities: | |
| | | |
| | | |
|
ARO assumed from acquisitions | |
$ | | | |
$ | 398,358 | | |
|
Change in estimate of ARO Asset and related liability | |
$ | | | |
$ | 14,727 | | |
|
Capital expenditures on oil and natural gas properties included in accounts payable | |
$ | 9,345 | | |
$ | | | |
|
Supplemental disclosure of non-cash financing activities: | |
| | | |
| | | |
|
Common shares issued for accrued compensation | |
$ | 340,232 | | |
$ | | | |
|
Common shares issued for acquisitions | |
$ | | | |
$ | 7,065,474 | | |
|
Common shares issued upon conversion of Series A Preferred shares | |
$ | | | |
$ | 2,100,000 | | |
See accompanying notes to consolidated financial
statements.
F 46
CoJax Oil and Gas Corporation
Notes to Consolidated Financial Statements
**NOTE 1 ORGANIZATION, NATURE
OF OPERATIONS AND BASIS OF PRESENTATION**
**Organization**
CoJax Oil & Gas Corporation, a Virginia
corporation (Company), was incorporated on November 13, 2017. The Company is based in Arlington, Virginia,
with a wholly owned subsidiary, Barrister Energy LLC (Barrister Energy), registered in Mississippi and based in Laurel,
Mississippi.
**Nature of Operations**
The Company is a growing U.S. energy company
engaged in the acquisition and development of lower-risk onshore oil and gas-producing properties within the Southeastern U.S.
The Companys focused growth strategy relies primarily on leveraging managements expertise to acquire both operated
and non-operated interests in producing properties with the goal of assembling a large oil and gas portfolio. Through this strategy
of acquisition of operated and non-operated properties, the Company has the unique ability to benefit from the technical and scientific
expertise of world-class exploration and production (E&P) companies operating in the area.
Since the companys inception, it
has been engaged in organizational activities and had limited revenue-generating operations prior to the periods covered by this
current report. The company has begun to acquire assignments of hydrocarbon revenues and underlying oil and gas exploration
and production rights as covered by this current report. The company runs all operations of its current acquisitions through Barrister
Energy LLC, the operational subsidiary.
The Company focuses on the acquisition
of and exploitation of upstream energy assets, specifically targeting select oil and gas mineral interests. These acquisitions
are structured primarily as acquisitions of leases, working interests, real property interests and mineral rights and royalties
and are generally not regarded as the acquisition of securities, but rather real property interests. As an owner, the Company
has the right to receive a portion of the production from the leased acreage (or of the proceeds of the sale thereof). As an owner,
the Company also has an obligation for its share of lease operating costs.
**Basis of Presentation**
The accompanying financial statements have
been prepared in conformity with accounting principles generally accepted in the United States of America (US GAAP),
which contemplate the continuation of the Company as a going concern.
**NOTE 2 GOING CONCERN DISCLOSURE**
The Companys consolidated financial
statements are prepared in accordance with U.S. GAAP applicable to a going concern that contemplates the realization of assets
and liquidation of liabilities in the normal course of business. There can be no assurance that the Company will be able
to achieve its business plan, raise any additional capital, or secure the additional financing necessary to implement its current
operating plan. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the
Company is unable to continue as a going concern.
F 47
The Company has yet to achieve profitable
operations, expects to incur further losses in the development of its business, and is dependent upon future issuances of equity
or other financings to fund ongoing operations, all of which raises substantial doubt about the Companys ability to continue
as a going concern for a period of twelve months from the issuance of these financial statements. The Companys ability to
continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary
financing from stockholders or other sources to meet its obligations and repay its liabilities arising from normal business operations
when they come due. Management has no formal plan in place to address this concern but considers that the Company will be able
to obtain additional funds by equity financing and/or related party advances, however, there is no assurance of additional funding
being available or on acceptable terms, if at all.
**NOTE 3 SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES**
**Principles of consolidation**
The accompanying consolidated financial
statements include the accounts of the Company and of its wholly-owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated in consolidation.
**Use of Estimates**
The preparation of financial statements
in conformity U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities,
the disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues
and expenses during the reporting period. Significant areas of estimate include the impairment of assets and rates for amortization,
accrued liabilities, future income tax obligations, and the inputs used in calculating stock-based compensation. Actual results
could differ from those estimates and would affect future results of operations and cash flows.
**Reclassifications**
Certain prior period amounts have been
reclassified to conform with the current year presentation. Reclassifications include combining or further disaggregation of certain
line items in the consolidated balance sheets, consolidated statements of operations, and consolidated statements of cash flows.
Such reclassifications had no significant impact on our reported net loss, current assets, total assets, current liabilities, total
liabilities, shareholders equity or cash flows.
**Cash and Cash Equivalents**
The Company considers all highly liquid
temporary cash investments with an original maturity of three months or less to be cash equivalents. At December 31, 2025, and
December 31, 2024, the Company had no cash equivalents.
F 48
**Oil and Gas Producing Activities**
The Company uses the successful efforts
method of accounting for oil and gas activities. Under this method, the costs of productive exploratory wells, all development
wells, related asset retirement obligation assets, and productive leases are capitalized and amortized, principally by field, on
a units-of-production basis over the life of the remaining proved reserves. Exploration costs, including personnel costs, geological
and geophysical expenses, and delay rentals for oil and gas leases are charged to expense as incurred. Exploratory drilling costs
are initially capitalized but charged to expense if and when the well is determined not to have found reserves in commercial quantities.
Estimates of oil and gas reserves, as determined
by independent petroleum engineers, are continually subject to revision based on price, production history and other factors. Depletion
expense, which is computed based on the units of production method, could be significantly impacted by changes in such estimates.
Additionally, US GAAP requires that if the expected future undiscounted cash flows from an asset are less than its carrying cost,
that asset must be written down to its fair market value. As the fair market value of an oil and gas property will usually be significantly
less than the total undiscounted future net revenues expected from that asset, slight changes in the estimates used to determine
future net revenues from an asset could lead to the necessity of recording a significant impairment of that asset.
Unproved oil and gas properties will be
assessed annually to determine whether they have been impaired by the drilling of dry holes on or near the related acreage or other
circumstances, which may indicate a decline in value. When impairment occurs, a loss will be recognized. When leases for unproved
properties expire, the costs thereof, net of any related allowance for impairment, will be removed from the accounts and charged
to expense.
The Company will review its proved oil
and natural gas properties for impairment whenever events and circumstances indicate that a decline in the recoverability of its
carrying value may have occurred. It estimates the undiscounted future net cash flows of its oil and natural gas properties and
compares such undiscounted future cash flows to the carrying amount of the oil and natural gas properties to determine if the carrying
amount is recoverable. If the carrying amount exceeds the estimated undiscounted future cash flows, the Company will adjust the
carrying amount of the oil and natural gas properties to fair value.
During the years ended December 31, 2025,
and 2024, the Company recorded impairments of $402,152 and $922,932, respectively, on oil and gas properties.
**Long-Lived Assets**
The Company accounts for the impairment
or disposal of long-lived assets according to the Financial Accounting Standards Boards (FASB) Accounting
Standards Codification (ASC) 360 Property, Plant and Equipment. ASC 360 clarifies the accounting for
the impairment of long-lived assets and for long-lived assets to be disposed of, including the disposal of business segments and
major lines of business. Long-lived assets are reviewed when facts and circumstances indicate that the carrying value of the asset
may not be recoverable. When necessary, impaired assets are written down to estimated fair value based on the best information
available. Estimated fair value is generally based on either appraised value or measured by discounting estimated future cash flows.
Considerable management judgment is necessary to estimate discounted future cash flows. Accordingly, actual results could vary
significantly from such estimates. The Company did not recognize any impairment losses on long-lived assets during the years ending
December 31, 2025, and 2024.
F 49
**Fair Value of Financial Instruments**
The Company had no financial instruments
for the year ending December 31, 2025, or for the year ending December 31, 2024.
ASC 820 Fair Value Measurements
and Disclosures defines fair value as the exchange price that would be received for an asset or paid to transfer a liability
(an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market
participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant
assumptions developed based on market data obtained from independent sources (observable inputs) and (2) a reporting entitys
own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable
inputs). The fair value hierarchy consists of three broad levels, which give the highest priority to unadjusted quoted prices in
active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three
levels of the fair value hierarchy are described below:
**Level 1** Unadjusted quoted
prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
**Level 2** Inputs other than
quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including
quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities
in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest
rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means; and
**Level 3** Fair value measurements
are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market
data (unobservable inputs).
Fair value estimates discussed herein are
based upon certain market assumptions and pertinent information available to management as of December 31, 2025, and 2024. The
respective carrying values of certain on-balance-sheet financial instruments approximated their fair values due to the short-term
nature of these instruments.
F 50
**Revenue Recognition**
The Company accounts for revenue under ASC 606 Revenue
from Contracts with Customers. Under ASC 606, oil and natural gas sales revenues are recognized when control of the product
is transferred to the customer, the performance obligations under the terms of the contracts with customers are satisfied and collectability
is reasonably assured. All the Companys oil and natural gas sales are made under contracts with customers. The performance
obligations for the Companys contracts with customers are satisfied at a point in time through the delivery of oil and natural
gas to its customers. Accordingly, the Companys contracts do not give rise to contract assets or liabilities. The Company
typically receives payment within 90 days of the month of delivery. The Companys contracts for oil and natural gas sales
are standard industry contracts that include variable consideration based on the monthly index price and adjustments that may include
counterparty-specific provisions related to volumes, price differentials, discounts, and other adjustments and deductions.
Revenues consist of the following:
|
| |
Year ended December 31, 2025 | | |
Year ended December 31, 2024 | | |
|
Crude oil revenues | |
$ | 963,621 | | |
$ | 971,686 | | |
|
Gas revenues | |
| | | |
| | | |
|
Total revenues | |
$ | 963,621 | | |
$ | 971,686 | | |
**Accounts Receivable**
Accounts receivable consists of oil and
natural gas receivables. Ongoing evaluations of collectability are performed and an allowance for potential credit losses is provided
against the portion of accounts receivable that is estimated to be uncollectible. The Company did not recognize any write-offs
during the years ended December 31, 2025, and 2024. The estimated credit losses is $0 as of December 31, 2025, and 2024.
**Stock-Based Compensation**
The Company accounts for Stock-Based Compensation
under ASC 718 Compensation Stock Compensation, which addresses the accounting for transactions in which an
entity exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains
employee services in share-based payment transactions. Generally accepted accounting principles require measurement of the cost
of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. Incremental
compensation costs arising from subsequent modifications of awards after the grant date must be recognized.
The Company issues stock to consultants
for various services. The costs for these transactions are measured at the fair value of the consideration received or the fair
value of the equity instruments issued, whichever is more reliably measurable. The value of the common stock is measured at the
earlier of (i) the date at which a firm commitment for performance by the counterparty to earn the equity instruments is reached
or (ii) the date at which the counterparty's performance is complete. The Company recognized consulting expense and a corresponding
increase to additional paid-in-capital related to stock issued for services.
**Income Taxes**
Income taxes are accounted for under ASC
740, using the liability method of accounting for income taxes. Under the liability method, future tax liabilities and assets are
recognized for the estimated future tax consequences attributable to differences between the amounts reported in the financial
statement carrying amounts of assets and liabilities and their respective tax bases. Future tax assets and liabilities are measured
using enacted or substantially enacted income tax rates expected to apply when the asset is realized, or the liability settled.
The effect of a change in income tax rates on future income tax liabilities and assets is recognized in income in the period that
the change occurs. Future income tax assets are recognized to the extent that they are considered more likely than not to be realized.
F 51
ASC 740 clarifies the accounting for uncertainty
in income taxes recognized in an enterprises financial statements. This standard requires a company to determine whether
it is more likely than not that a tax position will be sustained upon examination based on the technical merits of the position.
If the more-likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the
financial statements.
Because of the implementation of this standard,
the Company performed a review of its material tax positions in accordance with recognition and measurement standards established
by ASC 740 and concluded that it had no uncertain tax positions as of December 31, 2025, or as of December 31, 2024.
**Basic and Diluted Income per Share**
The Company computes income per share in
accordance with ASC 260, "Earnings per Share", which requires the presentation of both basic and diluted earnings per
share (EPS) on the face of the consolidated statement of operations. Basic EPS is computed by dividing income available
to common stockholders by the weighted average number of shares outstanding during the period. Diluted EPS gives effect to all
dilutive potential shares of common stock outstanding during the period using the treasury stock method and convertible preferred
stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the
number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential
shares if their effect is anti-dilutive. As of both December 31, 2025, and 2024, the Company had 0 potentially dilutive common
shares outstanding, respectively.
**Asset Retirement Obligations**
The Company records the estimated fair
value of obligations associated with the retirement of tangible, long-lived assets in the period in which they are incurred. When
a liability is initially recorded, the Company capitalizes the cost by increasing the carrying amount of the related long-lived
asset. Over time, the liability is accreted to its present value, and the capitalized cost is depleted over the useful life of
the related asset.
Revisions to estimated asset retirement
obligations will result in an adjustment to the related capitalized asset and corresponding liability. Upon settlement of the liability,
the Company either settles the obligation for its recorded amount or incurs a gain or loss. The Companys asset retirement
obligation relates to the plugging, dismantling, removal, site reclamation, and similar activities of its oil and gas properties.
Asset retirement obligations are estimated
at the present value of expected future net cash flows and are discounted using the Companys credit adjusted risk-free rate.
The Company uses unobservable inputs in the estimation of asset retirement obligations that include, but are not limited to: costs
of labor, costs of materials, profits on costs of labor and materials, the effect of inflation on estimated costs, and discount
rate. Due to the subjectivity of assumptions and the relative long lives of the Companys leases, the costs to ultimately
retire the Companys obligations may vary significantly from prior estimates. Assumptions used in determining estimates are
reviewed annually.
F 52
**Concentration of Credit Risk**
Our revenue can be materially affected
by current economic conditions and the price of oil and natural gas. However, based on the current demand for crude oil and natural
gas and the fact that alternative purchasers are readily available, we believe that the loss of our marketing agents and/or any
of the purchasers identified by our marketing agents would not have a long-term material adverse effect on our financial position
or results of international operations. The continued economic disruption resulting from Russias invasion of Ukraine, a
potential global recession, and other varying macroeconomic conditions could materially impact the Company's business in future
periods. Any potential disruption will depend on the duration and intensity of these events, which are highly uncertain and cannot
be predicted at this time.
**Segment Information**
The Company operates in one reportable
segment engaged in the acquisition, exploration, and production of oil and natural gas properties in the Gulf States Drilling Region.
The Companys chief operating decision
maker (CODM) is the President and Chief Executive Officer as he maintains responsibility for assessment of the Companys
performance and decision-making regarding resource allocation. Consolidated net income (loss) is the performance measure used by
the CODM to evaluate the segments performance and allocate capital and to monitor budget versus actual results. The information
regularly provided to the CODM on the segments revenues and significant expenses aligns with the categories presented in
the Consolidated Statements of Income. Furthermore, the segments assets are reported on the Consolidated Balance Sheets
as total assets.
**NOTE 4 RECENT ACCOUNTING PRONOUNCEMENTS**
In November 2023, the Financial Accounting
Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic
280): Improvements to Reportable Segment Disclosures.* The ASU requires enhanced disclosures about significant segment expenses
that are regularly provided to the Chief Operating Decision Maker and included in each reported measure of segment profit or loss.
Additionally, the ASU expanded interim disclosure segments. The ASU was adopted by the Company during the year ended December 31,
2025 and did not have a material impact on the consolidated financial statements. See *Segment Information* as disclosed with
Note 3 for additional information regarding the updates made.
Management does not believe any other recently
issued accounting pronouncements, if adopted, would have a material effect on the Companys present or future financial statements.
**NOTE 5 ROYALTY INTERESTS IN OIL
AND GAS PROPERTIES**
On August 29, 2024, the Company issued
2,211,982 shares of common stock, $0.01 par value per share, valued at $2.00 per share (the Pine Grove Shares to
Liberty Operating, LLC, a Mississippi limited liability company (Liberty), in consideration for the sale and assignment
of various mineral and oil and gas interests in and to certain properties located in Mississippi to Barrister Energy, LLC, a wholly-owned
subsidiary of the Company organized under the laws of Mississippi. At the request and the instructions of Liberty, the Company
issued the Pine Grove Shares to all members of Liberty on the pro rata basis of their ownership in Liberty. This acquisition was
effective as of July 1, 2024.
On May 31, 2024, the Company issued 1,320,755
shares of common stock, $0.01 par value per share, valued at $2.00 per share (the Liberty Shares), to Liberty in
consideration for the sale and assignment of various mineral oil and gas interests in and to certain properties located in Mississippi
to Barrister Energy, LLC, a wholly-owned subsidiary of the Company organized under the laws of Mississippi. At the request and
the instructions of Liberty, the Company issued the Liberty Shares to all members of Liberty on the pro rata basis of their ownership
in Liberty. This acquisition was effective as of May 1, 2024.
During the year ended December 31, 2025
due to diminishing operating margins the Company elected to dispose of its interests in the NONOP Assets. On July 1, 2025, the
Board of Directors of CoJax Oil and Gas Corporation approved a Reassignment Agreement by which the Company assigned and conveyed
100% of its interest in the NONOP Assets back to Taxodium Energy, LLC and its affiliates. On October 22, 2025, pursuant to the
Reassignment Agreement, the Company transferred to Taxodium 100% ownership, right, title and interests in the aforementioned NONOP
Assets in exchange for full release from all outstanding payables related to the NONOP assets. To recognize the reassignment the
Company removed the following balances: accounts receivable of $214,392, oil and gas properties at cost of $397,207 accumulated
depletion of $219,859, accounts payable of $249,855, workover payable of $10,625, and asset retirement obligations of $52,934.
No cash was transferred due to the reassignment. The Company accounted for this transaction as an asset disposal and recognized
a loss of $78,326 on the disposal.
The Company did not execute any acquisitions
during the year ended December 31, 2025.
In connection with fair value assessments
for oil and gas proved properties, during the year ended December 31, 2025, the Company recorded impairment of $402,152 on its
Liberty property, which was acquired in 2024. During the year ended December 31, 2024, the Company recorded impairment of $992,932
on its NONOP property, which was acquired in 2022.
F 53
At December 31, 2025, and December 31,
2024, the Company had leased oil and gas properties assets valued at $9,375,280 and $10,298,406, respectively.
Scheduled leased oil and gas properties
assets
|
| |
As of December 31, 2025 | | |
As of December 31, 2024 | | |
|
Beginning balance | |
$ | 10,298,406 | | |
$ | 4,089,503 | | |
|
Additions to proved reserves | |
| | | |
| 5,294,020 | | |
|
Additions to unproved reserves | |
| | | |
| 2,169,814 | | |
|
Development costs capitalized in period | |
| 9,344 | | |
| | | |
|
Revisions of prior year ARO estimates | |
| | | |
| 14,727 | | |
|
Transfer of proved reserves at cost | |
| (351,968 | ) | |
| | | |
|
Reversal of historical depletion related to transferred reserves | |
| 219,858 | | |
| | | |
|
Settlement of ARO due to transfer of proved reserves | |
| (45,238 | ) | |
| | | |
|
Depletion expense | |
| (352,970 | ) | |
| (346,726 | ) | |
|
Impairment expense | |
| (402,152 | ) | |
| (922,932 | ) | |
|
Ending Balance | |
$ | 9,375,280 | | |
$ | 10,298,406 | | |
We recorded depletion expense of ($0.35)
million and ($0.35) million for the years ended December 31, 2025, and 2024, respectively.
**NOTE 6 NOTES PAYABLE**
Schedule of notes payable
|
| |
December 31, 2025 | | |
December 31, 2024 | | |
|
| |
| | | |
| | | |
|
On May 7, 2020, the Company applied for a Small Business Association (SBA) loan under the Paycheck Protection Program (PPP). The Company met all the necessary qualifications to apply for a $49,992 loan. On June 10, 2020, the SBA PPP loan was approved and transferred to the Company to be used for payment of accrued payroll and related payroll taxes. On November 29, 2021, the Company was notified that the request for forgiveness was denied. The note has been converted to a five-year loan at 1% interest beginning on January 1, 2022. | |
$ | 11,007 | | |
$ | 21,095 | | |
|
| |
| | | |
| | | |
|
Notes payable | |
$ | 11,007 | | |
$ | 21,095 | | |
|
Less: current portion | |
| (10,190 | ) | |
| (10,088 | ) | |
|
Notes payable net of current portion | |
$ | 817 | | |
$ | 11,007 | | |
F 54
**Related Party**
The Company was a party to several loans
with related parties. The note holder is the CEO and Executive Chairman of the Company. At December 31, 2025, and 2024, notes payable
consisted of the following:
|
| |
December 31, 2025 | | |
December 31, 2024 | | |
|
| |
| | |
| | |
|
On January 24, 2022, the Company's Executive Chairman loaned $20,000 to the Company, and the Company issued a promissory note for such amount. The promissory note is unsecured and bears interest at 2% per annum principal and accrued interest matures on January 24, 2023. | |
$ | 10,000 | | |
$ | 10,000 | | |
|
| |
| | | |
| | | |
|
On April 21, 2022, the Company's Executive Chairman loaned $18,000 to the Company, and the Company issued a promissory note for such amount. The promissory note is unsecured and bears interest at 2% per annum principal and accrued interest matures on April 21, 2023. | |
$ | 18,000 | | |
$ | 18,000 | | |
|
| |
| | | |
| | | |
|
On August 23, 2022, the Company's Executive Chairman loaned $20,000 to the Company, and the Company issued a promissory note for such amount. The promissory note is unsecured and bears interest at 2% per annum principal and accrued interest matures on August 23, 2023. | |
$ | 20,000 | | |
$ | 20,000 | | |
|
| |
| | | |
| | | |
|
On September 15, 2022, the Company's Executive Chairman loaned $15,000 to the Company, and the Company issued a promissory note for such amount. The promissory note is unsecured and bears interest at 2% per annum principal and accrued interest matures on September 16, 2023. | |
$ | 15,000 | | |
$ | 15,000 | | |
|
| |
| | | |
| | | |
|
On October 25, 2022, the Company's Executive Chairman loaned $20,000 to the Company, and the Company issued a promissory note for such amount. The promissory note is unsecured and bears interest at 2% per annum principal and accrued interest matures on October 25, 2023. | |
$ | 20,000 | | |
$ | 20,000 | | |
|
| |
| | | |
| | | |
|
On December 8, 2022, the Company's Executive Chairman loaned $20,000 to the Company, and the Company issued a promissory note for such amount. The promissory note is unsecured and bears interest at 2% per annum principal and accrued interest matures on December 8, 2023. | |
$ | 20,001 | | |
$ | 20,001 | | |
|
| |
| | | |
| | | |
|
Notes payable related party | |
$ | 103,001 | | |
$ | 103,001 | | |
On December 31, 2025 all outstanding notes
with the Companys CEO and Executive Chairman were extended to have a maturity date of December 31, 2026.
Future annual maturities related to total
gross debt as of December 31, 2025 are as follows:
|
| | |
| | |
|
2026 | | |
$ | 113,191 | | |
|
2027 | | |
| 817 | | |
|
Thereafter | | |
$ | | | |
|
Future Loan Maturities | | |
$ | 114,008 | | |
During the years ended December 31, 2025,
and 2024 the Company recorded interest expense of $2,468 and $3,591, respectively.
**NOTE 7 RELATED PARTY TRANSACTIONS**
For the years ending December 31, 2025,
and 2024, in addition to the related party loans payable (NOTE 6), the following related party transactions occurred between the
Companys directors or executive officers or any person nominated or chosen by the Company to become a director or executive
officer:
F 55
On April 10, 2025, the Company issued 170,116
shares at the price of $2.00 per share to Wm. Barrett Wellman for settlement of accrued compensation expenses.
Effective as of January 10, 2024, the board
of directors of the Company (the Board) increased the size of the Board from two to three directors and appointed
William R. Downs to the Board.
On January 10, 2024, Jeffrey J. Guzy resigned
from serving as Chief Executive Officer, President and Chairman of the Board. Immediately upon Mr. Guzys resignation from
these offices, Mr. Downs was appointed as Chief Executive Officer, President and Chairman of the Board. Also on January 10, 2024,
Wm. Barrett Wellman resigned as Chief Financial Officer and Secretary of the Company. Effective immediately upon Mr. Wellmans
resignation, the Board appointed Mr. Guzy as the Companys Chief Financial officer and Secretary.
On January 10, 2024, the Company issued
100,000 common shares at $0.99 per share to William R. Downs in connection with his appointment as the Companys new Chief
Executive Officer. The issuance of 100,000 shares was recognized at the share price on the date of the employment agreement.
On January 26, 2024, Mr. Guzy and Mr. Wellman,
being the holders of all of the Companys Series A Stock converted all 105,000 shares issued and outstanding into common
shares at a conversion rate of one to ten. The conversion occurred at the rate specified in the initial issuance agreement and
therefore no gain or loss was recognized on the conversion. In connection with the exercise of the conversion option, the Company
issued 575,000 and 475,000 common shares to Jeffrey J. Guzy and Wm. Barrett Wellman, respectively.
**NOTE 8 STOCKHOLDERS EQUITY**
**Authorized Capital**
The Company has 300,000,000 authorized
shares of Common Stock at $0.01 par value and 50,000,000 authorized shares of Preferred Stock at a par value of $0.10, and Series
A convertible shares at a par value of $0.01. The Company had 14,168,755 and 13,998,639 shares of Common Stock issued and outstanding
as of December 31, 2025, and 2024, respectively. The Company had 0 shares of Preferred Stock issued and outstanding as of December
31, 2025 and 2024.
F 56
**Preferred Stock**
The holders of Preferred Stock are entitled
to receive dividends equal to the amount of the dividend or distribution per share of common stock payable multiplied by the number
of shares of common stock the shares of Series A preferred shares held by such holder are convertible into. Each Series A preferred
share is convertible into ten common shares.
The Company classified the Series A Preferred
Stock as permanent equity in the consolidated financial statements as the terms do not provide for an obligation to buy back the
shares in exchange for cash or other assets of the Company. The shares are not considered debt under ASC 480 Distinguishing
Liabilities from Equity as the shares do not represent an obligation that must or may be settled with a variable number
of shares. No other redemption features exist within the terms of the instrument.
Refer to Note 7 for details on convertible
preferred stock activity during the years ending December 31, 2025, and 2024.
**Common Stock**
Refer to Note 7 for details on common share
issuances to the Companys officers.
Refer to Note 5 for details on common share
issuances for acquired interests in oil and gas properties.
During the year ended December 31, 2025,
there has been no additional common share activity outside of the items disclosed in Notes 5 and 7.
F 57
The above shares of capital stock are restricted
securities under Rule 144 and were issued in reliance on an exemption from the registration requirements of the Securities Act.
**NOTE 9 - INCOME TAXES**
The Company provides for income taxes using
the liability method in accordance with ASC 740 Income Taxes. Deferred income taxes arise from the differences in
the recognition of income and expenses for tax purposes. There were no deferred tax assets or liabilities at December 31, 2025,
and 2024.
Management has reviewed the provisions
regarding the assessment of their valuation allowance on deferred tax assets and based on those criteria determined that it would
not have sufficient taxable income to realize those assets. Therefore, management has assessed the realization of the deferred
tax assets and has determined that it is more likely than not that they will not be realized and has provided a full valuation
allowance against the deferred tax asset.
The Company recognizes the financial statement
effect of a tax position only after determining that the relevant tax authority would more likely than not sustain the position
following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the consolidated financial
statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with
the relevant tax authority.
The Company is subject to income taxes
in the U.S. federal jurisdiction and the state of Virginia. The tax regulations within each jurisdiction are subject to the interpretation
of related tax laws and regulations and require significant judgment to apply. The Company is not presently undergoing any tax
audits.
The Company will apply the federal and
state net operating loss (NOL) carry-forward in FY 2025 and later years.
On December 22, 2017, the United States
Government passed new tax legislation that, among other provisions, will lower the corporate tax rate from 35% to 21%. In addition
to applying the new lower corporate tax rate in 2018 and thereafter to any taxable income we may have, the legislation affects
the way we can use and carry forward net operating losses previously accumulated and results in a revaluation of deferred tax assets
recorded on our balance sheet. Given that the deferred tax assets are offset by a full valuation allowance, these changes have
no net effect on the Companys financial position and net loss. However, when we become profitable, we will receive a reduced
benefit from such deferred tax assets.
A reconciliation of the income tax provision
computed at statutory rates to the reported tax provision is as follows:
|
| |
Year ended December 31, 2025 | | |
Year ended December 31, 2024 | | |
|
Federal income tax rate | |
| 21.0 | % | |
| 21.0 | % | |
|
Loss before income taxes | |
$ | (1,109,209 | ) | |
$ | (1,609,846 | ) | |
|
Non-deductible expenses | |
| | | |
| | | |
|
Taxable loss | |
$ | (1,109,209 | ) | |
$ | (1,609,846 | ) | |
|
Expected approximate tax recovery on net loss | |
$ | (232,934 | ) | |
$ | (338,068 | ) | |
|
Changes in valuation allowance | |
| 232,934 | | |
| 338,068 | | |
|
Income tax | |
$ | | | |
$ | | | |
F 58
The component of the Companys deferred
tax asset is as follows:
|
|
|
As of
December
31, 2025 |
|
|
As of
December
31, 2024 |
| |
|
Deferred income tax assets: |
|
|
|
|
|
|
|
| |
|
Net operating losses carried forward |
|
$ |
446,481 |
|
|
$ |
1,013,260 |
| |
|
Impairments |
|
|
1,089,323 |
|
|
|
1,198,687 |
| |
|
Other |
|
|
120,078 |
|
|
|
118,052 |
| |
|
Total gross deferred income tax assets |
|
$ |
1,655,882 |
|
|
$ |
2,329,999 |
| |
|
Less: valuation allowance |
|
|
(1,655,882) |
|
|
|
(2,329,999) |
| |
|
Net deferred tax asset |
|
$ |
|
|
|
$ |
|
| |
The Company has a valuation allowance against
the full amount of its net deferred tax assets due to the uncertainty of the realization of the deferred tax assets.
At December 31, 2025, and December 31,
2024, the Company has incurred accumulated net operating losses in the United States of America totaling $2,126,101 and $4,825,047
respectively which are available to reduce taxable income in future taxation years.
**NOTE 10 - COMMITMENTS AND CONTINGENCIES**
**Operating Lease Commitments**
The Company has no lease obligations at
December 31, 2025, and 2024. Additionally, the Company has no known contingencies as of December 31, 2025, and December 31, 2024.
**Purchase Commitments**
The Company has no purchase obligations
at December 31, 2025, and 2024.
**Significant Risks and Uncertainties**
*Concentration of Credit Risk
Cash* The Company maintains cash and cash equivalent balances at a single financial institution that are insured by
the Federal Deposit Insurance Corporation (FDIC) up to $250,000. At December 31, 2025, and December 31, 2024, the Company had no
exposure in excess of insurance.
F 59
*Concentration of Credit Risk
Accounts Receivable and Revenues* For the periods presented, all of the Companys outstanding accounts receivable
and revenues were transacted with three parties, Taxodium Energy, LLC, Liberty Operating Company, LLC, and Skye MS, LLC.
**Legal Matters**
During the course of business, litigation
commonly occurs. From time to time, the Company may be a party to litigation matters involving claims against the Company. The
Company operates in a highly regulated industry and employs personnel, which may inherently lend itself to legal matters. Management
is aware that litigation has associated costs and that results of adverse litigation verdicts could have a material effect on the
Company's financial position or results of operations.
There are no known legal proceedings against
the Company or its officers and directors in their capacity as officers and directors of the Company.
**NOTE 11 ASSET RETIREMENT OBLIGATION**
Changes in the asset retirement obligation
were as follows:
|
| |
As of December 31, 2025 | | |
As of December 31, 2024 | | |
|
Beginning balance | |
$ | 553,538 | | |
$ | 105,118 | | |
|
Liabilities acquired | |
| | | |
| 398,358 | | |
|
Liabilities settled | |
| (52,934 | ) | |
| | | |
|
Accretion expense | |
| 44,052 | | |
| 35,335 | | |
|
Revisions | |
| | | |
| 14,727 | | |
|
Ending Balance | |
$ | 544,656 | | |
$ | 553,538 | | |
**NOTE 12 RESERVE AND RELATED
FINANCIAL DATA - UNAUDITED**
*Disclosure of Reserves*
The table below summarizes our estimated
net proved reserves, as of December 31, 2025, and 2024, based on reserve reports prepared by Netherland, Sewell & Associates,
Inc. (NSAI), our third-party independent reserve engineers. In preparing its reports, NSAI evaluated properties representing all
of our proved reserves at December 31, 2025, and 2024 in accordance with the rules and regulations of the SEC applicable to companies
involved in oil and natural gas producing activities. Our estimated net proved reserves in the table below do not include probable
or possible reserves and do not in any way include or reflect our commodity derivatives.
F 60
Schedule of proved developed and undeveloped oil and gas reserve
quantities
|
|
|
Natural Gas (Mmcf) |
|
|
Oil (Mbbl) |
|
|
MBOE |
| |
|
Proved Developed and Undeveloped Reserves at December 31, 2023 |
|
|
|
|
165 |
|
|
165 |
| |
|
Revisions of Previous Estimates |
|
|
(385 |
) |
|
|
(231 |
) |
|
|
(296 |
) | |
|
Purchases of Minerals in Place |
|
|
2,489 |
|
|
|
1,198 |
|
|
|
1,613 |
| |
|
Production |
|
|
|
|
|
|
(14 |
) |
|
|
(14 |
) | |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Proved Developed and Undeveloped Reserves at December 31, 2024 |
|
|
2,104 |
|
|
|
1,118 |
|
|
|
1,468 |
| |
|
Revisions of Previous Estimates |
|
|
|
|
|
|
(35) |
|
|
|
(34) |
| |
|
Purchases of Minerals in Place |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Sale of Minerals in Place |
|
|
|
|
|
|
(21) |
|
|
|
(21) |
| |
|
Production |
|
|
|
|
|
|
(15) |
|
|
|
(15) |
| |
|
Proved Developed and Undeveloped Reserves at December 31, 2025 |
|
|
2,104 |
|
|
|
1,047 |
|
|
|
1,398 |
| |
The table above values oil and natural
gas reserve quantities as of December 31, 2025, and 2024, assuming constant realized prices of $62.73 and $73.68 per barrel of
oil and $3.201 and $2.013 per Mcf of natural gas, respectively. Under SEC guidelines, these prices represent the average prices
per barrel of oil and per Mcf of natural gas at the beginning of each month in the 12-month period prior to the end of the reporting
period, after adjustment to reflect applicable transportation and quality differentials.
*Standardized Measure*
The standardized measure of discounted
future net cash flows and changes in such cash flows are prepared using assumptions required by the Financial Accounting Standards
Board.Such assumptions include using 12-month average prices for oil and gas, based on the first-day-of-the-month price
for each month in the period, and year-end costs for estimated future development and production expenditures to produce year-end
estimated proved reserves.
Discounted future net cash flows are calculated
using a 10% rate. Estimated future income taxes are calculated by applying year-end statutory rates to future pre-tax net cash
flows, less the tax basis of related assets and applicable tax credits.
The estimated well abandonment costs are
deducted from the standardized measure using year-end costs and discounted at 10%.Such abandonment costs are recorded
as a liability on the consolidated balance sheet, using estimated values as the projected abandonment date and discounted using
a risk-adjusted rate when the well is drilled or acquired.
The standardized measure does not represent
managements estimate of the Companys future cash flows or the value of proved oil and gas reserves.Probable
and possible reserves, which may become proved in the future, are excluded from the calculations.Furthermore, prices
used to determine the standardized measure are influenced by supply and demand as affected by recent economic conditions and other
factors and may not be the most representative in estimating future revenues or reserve data.
The table below reflects the standardized
measure of discounted future net cash flows related to the Companys interest in proved reserves.
F 61
|
| |
| | |
| | |
|
| |
Year Ended December 31, | | |
|
| |
2025 | | |
2024 | | |
|
(in thousands) | |
| | |
| | |
|
Future cash inflows | |
$ | 72,483 | | |
$ | 86,581 | | |
|
Future production costs | |
| 3,460 | | |
| 5,736 | | |
|
Future developmentand abandonment costs | |
| 12,350 | | |
| 12,479 | | |
|
Future tax expense | |
| 9,148 | | |
| 12,209 | | |
|
Future net cash flows | |
| 47,525 | | |
| 56,157 | | |
|
10% annual discount for estimated timing of cash flows | |
| 28,146 | | |
| 32,965 | | |
|
Standardized measure of discounted future net cash flows | |
$ | 19,379 | | |
$ | 23,192 | | |
The principal changes in the standardized
measure of discounted future net cash flows attributable to the Company's proved reserves are as follows:
|
| |
|
|
|
|
|
| | |
|
| |
Year Ended December 31, | | |
|
| |
2025 | | |
2024 | | |
|
(in thousands) | |
| | |
| | |
|
Beginning of period | |
$ | 23,192 | | |
$ | 5,052 | | |
|
Sales of oil and natural gas produced, net of production costs | |
| (554 | ) | |
| (616 | ) | |
|
Net change due to extensions, discoveries, and improved recovery | |
| | | |
| | | |
|
Net change of prices and production costs | |
| (4,140 | ) | |
| (2,975 | ) | |
|
Change in future development costs | |
| (135 | ) | |
| (24 | ) | |
|
Revisions of quantity and timing estimates | |
| (805 | ) | |
| (6,831 | ) | |
|
Accretion of discount | |
| 5,667 | | |
| 6,837 | | |
|
Change in income taxes | |
| (1,547 | ) | |
| (4,801 | ) | |
|
Purchases of minerals in place | |
| | | |
| 23,096 | | |
|
Sale of minerals in place | |
| (222 | ) | |
| | | |
|
Other | |
| (2,077 | ) | |
| 3,454 | | |
|
End of period | |
$ | 19,379 | | |
$ | 23,192 | | |
**NOTE 13 - SUBSEQUENT EVENTS**
The Company has evaluated all events that
occurred after the balance sheet date through the date when the financial statements were issued to determine if they must be reported.
Management determined that there were no reportable subsequent events to be disclosed.
F 62
**ITEM 9. CHANGES IN AND DISAGREEMENTS
WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE**
None.
**ITEM 9A. CONTROLS AND PROCEDURES**
*Evaluation of Disclosure Controls and
Procedures*
We maintain disclosure
controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as
amended (the Exchange Act)) that are designed to ensure that information required to be disclosed in our reports
under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SECs rules
and forms, and that such information is accumulated and communicated to our management, including our principal executive officer
and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures. In designing disclosure
controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship
of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon
certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving
its stated goals under all potential future conditions. Any controls and procedures, no matter how well designed and operated,
can provide only reasonable, not absolute, assurance of achieving the desired control objectives.
Our management, with
the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of the design
and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation
and subject to the foregoing, our principal executive officer and principal financial officer concluded that, our disclosure controls
and procedures were not effective as of December 31, 2025, due to the material weaknesses in internal control over financial reporting
described below.
*Managements Report on Internal
Control Over Financial Reporting*
Management is responsible
for establishing and maintaining adequate internal control over financial reporting. The Companys internal control over
financial reporting is a process designed under the supervision of its principal executive and principal financial officer to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of its consolidated financial statements
for external reporting purposes in accordance with GAAP.
Because of its inherent
limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any
evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions or that the degree of compliance with the policies or procedures may deteriorate.
*Material Weaknesses in Internal Control
over Financial Reporting*
Management assessed
the effectiveness of the Companys internal control over financial reporting as of December 31, 2025, based on the framework
established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission. Based on this assessment, management has determined that the Companys internal control over financial reporting
as of December 31, 2025, was not effective.
63
A material weakness,
as defined in the standards established by the Sarbanes-Oxley Act of 2002 (the Sarbanes-Oxley Act), is a deficiency,
or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that
a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely
basis.
The ineffectiveness
of the Companys internal control over financial reporting was due to the following material weaknesses:
|
|
|
Inadequate segregation of duties consistent with control objectives; | |
|
|
|
Lack of formal policies and procedures; | |
|
|
|
Lack of a functioning audit committee and independent directors on the Companys board of directors to oversee financial reporting responsibilities; and | |
|
|
|
Lack of risk assessment procedures on internal controls to detect financial reporting risks on a timely manner. | |
*Managements Plan to Remediate
the Material Weakness*
Management has been
implementing and continues to implement measures designed to ensure that control deficiencies contributing to the material weakness
are remediated, such that these controls are designed, implemented, and operating effectively. The remediation actions planned
include:
|
|
|
Continue to search for and evaluate qualified independent outside directors; | |
|
|
|
Identify gaps in our skills base and the expertise of our staff required to meet the financial reporting requirements of a public company; and | |
|
|
|
Continue to develop policies and procedures on internal control over financial reporting and monitor the effectiveness of operations on existing controls and procedures. | |
We are committed to
maintaining a strong internal control environment and believe that these remediation efforts will deliver improvements in our control
environment. Our management will continue to monitor and evaluate the relevance of our risk-based approach and the effectiveness
of our internal controls and procedures over financial reporting on an ongoing basis and is committed to taking further action
and implementing additional enhancements or improvements, as necessary and as funds allow.
This Annual Report
does not include an attestation report of the Companys independent registered public accounting firm regarding internal
control over financial reporting. Managements report was not subject to attestation by the Companys independent registered
public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide
only managements report in this Annual Report, which may increase the risk that weaknesses or deficiencies in our internal
control over financial reporting go undetected.
64
*Changes in Internal Control Over Financial
Reporting*
There were no changes
in our internal control over financial reporting that occurred during our fourth fiscal quarter that have materially affected,
or that are reasonably likely to materially affect, our internal control over financial reporting.
**ITEM 9B. OTHER INFORMATION**
During the three months
ended December 31, 2025, no director or officer of the Company adopted or terminated a Rule 10b5-1 trading arrangement
or non-Rule 10b5-1 trading arrangement, as each term is defined in Item 408(a) of Regulation S-K.
**ITEM 9C. DISCLOSURE REGARDING FOREIGN
JURISDICTIONS THAT PREVENT INSPECTIONS**
None.
65
**PART III**
**ITEM 10. DIRECTORS, EXECUTIVE OFFICERS,
AND CORPORATE GOVERNANCE**
**Executive Officers
and Directors**
The following table
sets forth information regarding our current directors and executive officers:
|
Name |
|
Age |
|
Position | |
|
William R. Downs |
|
66 |
|
Chief Executive Officer, President, Chairman, Director | |
|
Jeffrey J. Guzy |
|
74 |
|
Chief Financial Officer, Secretary, Director | |
|
William Allan Bradley |
|
58 |
|
Director | |
Our directors hold office until the next
annual meeting of stockholders of the Company and until their successors have been elected and qualified. Our officers are elected
by the Board and serve at the discretion of the Board.
**Biographies**
William R. Downs, age
66, has more than 43 years of experience in the Oil and Gas Industry, specifically in generating, evaluating and managing oil and
gas exploration, development and acquisition projects of private, independent and public companies in the area of North and South
Louisiana, East Texas, South Arkansas, Mississippi, Oklahoma, Alabama and Montana. He also owned and managed several oilfield service
companies.
Prior to joining CoJax,
between February 2022 and October 2023, Mr. Downs served as Executive Vice President and Chief Operating Officer of Topcat Companies,
an oilfield service company, where he was responsible for the management of the workover rigs, saltwater transportation and disposal,
drilling fluids disposal, financial and safety oversight, oversight of individual vice presidents and their team management. Between
August 2020 and October 2023, Mr. Downs served as Executive Vice President and Chief Operating Officer of Topcat Waste Management
Facility and was responsible for managing of the drilling fluids and solids waste disposal site in Waskom, Texas, saltwater disposal
and transportation and workover rigs.
In August 2017, Mr.
Downs founded Downs Energy Acquisitions and Downs Operating Company, an oil and gas production acquisition and operating company,
which he managed and owned between August 2017 and December 2020. This company operated three gas field in East Texas and North
Louisiana, and Mr. Downs managed the operational, financial and personnel activities of the Company. In December 2020, Mr. Downs
divested his ownership in this company.
Mr. Downs is a Certified
Petroleum Geologist, a member of American Association of Petroleum Geologists, a former Convention Chairman and President of the
GCAGS and a member of Division of Professional Affairs. Mr. Downs earned his Bachelor of Science in Geology in 1981 from Centenary
College of Louisiana.
Jeffrey J. Guzy, age
74, served as our Chief Executive Officer from January 22, 2020 to January 10, 2024, and as a director since November 17, 2017.
He served as our Chief Financial Officer from November 17, 2017, through March 16, 2020, and effective, January 10, 2024, is currently
serving as the Chief Financial Officer.
Mr. Guzy has served
as an outside director of Leatt Corp. (OTC Trading Symbol: LEAT), since April 2007.Mr.
Guzy also served, from October 2007 to August 2010, as Leatt Corps President. Mr. Guzy has served as an executive manager
or consultant for business development, sales, customer service, and management in the telecommunications industry, specifically,
with IBM Corp., Sprint International, Bell Atlantic Video Services, Loral CyberStar, and FaciliCom International. Mr. Guzy has
also started his own telecommunications company providing Internet services in Western Africa. He serves as an independent director
and chairman of the audit committee of Capstone Companies, Inc. (OTC Trading Symbol: CAPC), Since 2020, he has also served as an
independent director of Brownies Marine Group, Inc. (OTC Trading Symbol: BWMG). Mr. Guzy has an MBA in Strategic Planning and Management
from The Wharton School of the University of Pennsylvania, an M.S. in Systems Engineering from the University of Pennsylvania;
a B.S. in Electrical Engineering from Penn State University; and a Certificate in Theology from Georgetown University.Mr.
Guzys management and extensive experience led to the conclusion that he should serve as a director.
William
Bradley, age 58, has served as our director since March 7, 2022. Mr. Bradley has over fifteen years of leadership, business consulting,
financial, and management experience for publicly traded and private companies. Since June 2011, Mr. Bradley served as M&A/Business
Consulting Managing Director and Chief Financial Officer at Global Advisors Inc. where he provided business consulting services,
reviewed clients financial positions and managed relationships, conducted financial reviews, including the PCAOB or IFRS
audit process, and provided his consulting business advice on restructuring and potential mergers and acquisitions. Since September
2018 he has served as the Chairman of the Board of Magagram Social Media Inc., a Toronto-based private company, from December 2006
to June 2011 as Chief Executive Officer of Ocean to Ocean Inc., and from January 2002 until November 2006, as Vice President of
Gourmet Foods International. Mr. Bradley graduated from York University in 1998 in Finance and Economics and received his undergraduate
degree with honors in 1991 in Business Finance from Sandford College.
66
**Board Committees**
We currently do not have
any committees of our Board of Directors.
**Family Relationships**
There are no family relationships among
any of our officers or directors.
**Code of Ethics and Insider Trading Policy**
We have adopted
a Code of Business Conduct and Ethics (the Code of Ethics) that applies to our principal executive, financial and
accounting officers (or persons performing similar functions).
On March 6, 2025,
our Board of Directors adopted a stand-alone insider trading policy (the Insider Trading Policy) to update and expand
the scope of the insider trading policy included in the Code of Ethics. The Insider Trading Policy is applicable to all officers,
directors, employees and other covered persons and governs the purchase, sale and other disposition of our securities that we believe
are reasonably designed to promote compliance with insider trading laws, rules and regulations and any applicable OTC Markets Group
standards. A copy of our Insider Trading Policy is filed as Exhibit 19.1 to this Annual Report on Form 10-K.
**Involvement in Certain Legal Proceedings**
To our knowledge, our directors and executive
officers have not been involved in any of the following events during the past ten years:
|
|
1. |
any bankruptcy petition filed by or against such person or any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; | |
|
|
2. |
any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); | |
|
|
3. |
being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from or otherwise limiting his involvement in any type of business, securities or banking activities or to be associated with any person practicing in banking or securities activities; | |
|
|
4. |
being found by a court of competent jurisdiction in a civil action, the SEC or the Commodity Futures Trading Commission to have violated a Federal or State securities or commodities law, and the judgment has not been reversed, suspended, or vacated; | |
|
|
5. |
being subject of, or a party to, any Federal or State judicial or administrative order, judgment decree, or finding, not subsequently reversed, suspended, or vacated, relating to an alleged violation of any Federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or | |
|
|
6. |
being subject of or party to any sanction or order, not subsequently reversed, suspended, or vacated, of any self-regulatory organization, any registered entity, or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. | |
**Delinquent Section 16(a) Reports**
The Company is not aware of any reporting person that failed
to file on a timely basis reports required by Section 16(a) of the Exchange Act during the most recent fiscal year.
67
*Compensation of Directors*
**2025 Director Compensation Table**
|
Name |
|
Fees
Earned
or Paid
in Cash |
|
|
Stock
Awards |
|
|
Option Awards |
|
|
Non-Equity
Incentive Plan
Compensation |
|
|
Nonqualified
Deferred
Compensation Earnings |
|
|
All Other
Compensation |
|
|
Total |
| |
|
William R. Downs |
|
2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Jeffrey J. Guzy |
|
2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
William A. Bradley |
|
2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
For the years ended
December 31, 2025, and 2024, no compensation has been paid to our directors in consideration for their services rendered in their
capacities as directors.
*Outstanding Equity Awards at Fiscal
Year-End*
There are no current
outstanding equity awards to our executive officers as of December 31, 2025.
*Long-Term Incentive Plans*
There are no arrangements
or plans in which we provide pension, retirement, or similar benefits for directors or executive officers.
**ITEM 11. EXECUTIVE COMPENSATION**
The following table
sets forth information concerning all cash and non-cash compensation awarded to, earned by or paid to our Chief Executive Officer
and the other executive officer with compensation exceeding $100,000 during 2025 and 2024 (each a Named Executive Officer).
**SUMMARY COMPENSATION TABLE**
|
Name and Principal Position | |
Year | | |
Salary ($) | | |
Bonus ($) | | |
Option Awards ($)(2) | | |
All Other Compensation ($) | | |
Total ($) | | |
|
William R. Downs(1) | |
2025 | | |
$ | 150,000 | | |
$ | | | |
$ | | | |
$ | | | |
$ | 12,000 | | |
|
| |
2024 | | |
$ | 150,000 | | |
$ | | | |
$ | | | |
$ | | | |
$ | | | |
|
Jeffrey J. Guzy(2) | |
2025 | | |
$ | 100,000 | | |
$ | | | |
$ | | | |
$ | | | |
$ | 10,000 | | |
|
| |
2024 | | |
$ | 100,000 | | |
$ | | | |
$ | | | |
$ | | | |
$ | | | |
|
Wm. Barrett Wellman (3) | |
2025 | | |
$ | | | |
$ | | | |
$ | 340,232 | | |
$ | | | |
$ | | | |
|
| |
2024 | | |
$ | 100,000 | | |
$ | | | |
$ | | | |
$ | | | |
$ | | | |
(1) Mr. Downs was appointed
as the Chief Executive Officer on January 10, 2024 and serves in this capacity as of the date of this filing. William Downs
base annual salary of $150,000 is payable on a semi-monthly basis in equal installments, but the base salary is deferred until
the Company has sufficient cash flow to pay the base salary. Further, the base salary can either be paid in total when the Company
is adequately funded, or the accrued unpaid base salary can be converted into shares of the CoJax Common Stock at the lower conversion
price of the initial public offering price of $2.00 or current market price at the time of conversion by Mr. Downs.
(2) Mr.
Guzy was appointed as Chief Executive Officer on January 22, 2020 and served in this capacity until January 10, 2024. Jeffrey
Guzys base annual salary of $120,000 is payable on a semi-monthly basis in equal installments, but the base salary is deferred
until the Company has sufficient cash flow to pay the base salary. Further,thebase salary can either be
paid in total when Company is adequately funded, or the accrued unpaid base salary can be converted into shares of the CoJax Common
Stock at the lower conversion price of the initial public offering price of $2.00 or current market price at the time of conversion
by Mr. Guzy.
68
(3) Mr. Wellman was appointed Chief Financial
Officer on March 16, 2020. He resigned from this position on January 10, 2024. Mr. Wellmans base salary of $100,000
is payable semi-monthly in equal installments, but the base salary is deferred until the Company has sufficient cash flow to pay
the base salary. Alternatively, the accrued unpaid base salary can be converted into shares of the CoJax Common Stock at
the lower conversion price of the initial public offering price of $2.00 or current market price at the time of conversion by Mr.
Wellman. On April 10, 2025 the accrued unpaid base salary was converted to 170,116 shares at $2.00 per share.
69
**Employment Agreements with Key Executives**
On February 20, 2020, the Company entered
into an initial employment agreement with Jeffrey Guzy. The term of that agreement was 3 years. This initial employment agreement
was terminated on February 14, 2023, on the date the Company entered into a second employment agreement with Mr. Guzy (the Guzy
2023 Employment Agreement), pursuant to which Mr. Guzy continued serving the Company as Chief Executive Officer, President
and Chairman of the Company. The Guzy 2023 Employment Agreement has a 3-year term through February 14, 2026, unless terminated
earlier pursuant to the terms of the Guzy 2023 Employment Agreement. Pursuant to the Guzy 2023 Employment Agreement, Mr.
Guzy will be paid a base salary of $120,000 per annum, which salary will accrue and can either be paid in total when the Company
is adequately funded or, alternatively, the accrued unpaid base salary can be converted into shares of the Companys common
stock at the lower conversion price of the initial public offering price of $2.00 or current market price at the time of conversion
by Mr. Guzy. Pursuant to the Guzy 2023 Employment Agreement, Mr. Guzy may participate in any incentive compensation and other benefit
plans may be granted bonus performance bonus payments to be paid in cash, stock, or both. In addition, the Guzy 2023 Employment
Agreement includes provisions for paid vacation time and expense reimbursement.
The Guzy 2023 Employment Agreement provided
for termination (i) immediately upon Mr. Guzys death or Disability; (ii) by the Company for Cause; (iii) by Mr. Guzy for
Good Reason (as these terms are defined in the Guzy 2023 Employment Agreement or (iv) other than for Cause or Good Reason, by Mr.
Guzy or the Company upon not less than sixty (60) days prior written notice of termination. If Mr. Guzyterminates the employment
for a Good Reason, then he would be entitled to: a cash payment, payable in equal installments over a six (6) month period after
Mr. Guzy terminates employment, equal to the sum of the following: (a) subject to the payment of the following sums not causing
the insolvency of the Company,the equivalent of the greater of (i) twenty-four (24) months of Mr. Guzys then-current
base salary or (ii) the remainder of the term of the Guzy 2023 Employment Agreement; plus (b) any previously earned but unpaid
salary through Mr. Guzys final date of employment, being Mr. Guzys termination of employment. On January 10, 2024,
the Guzy 2023 Employment Agreement was terminated in connection with Mr. Guzys resignation from serving as Chief Executive
Officer, President and Chairman. On the same date, in connection with the appointment of Mr. Guzy to serve as Chief Financial Officer,
the Company entered into a new employment agreement with Mr. Guzy for his services as Chief Financial Officer.
The Company entered into an employment
agreement with Wm. Barrett Wellman on March 16, 2020, for his service as Chief Financial Officer. That agreement had an initial
3-year term and was extended until August 16, 2024. This employment agreement provided for the following:
|
|
(1) |
a base annual salary of $100,000 to be paid semi-monthly in equal installments, but the base salary can either be paid in total when CoJax is adequately funded or, alternatively, the accrued unpaid base salary can be converted into shares of the CoJax common stock at the lower conversion price of the initial public offering price of $2.00 or current market price at the time of conversion by Mr. Wellman; | |
|
|
(2) |
Mr. Wellman is eligible for an ad hoc performance bonus if and in an amount approved by the disinterested directors; | |
|
|
(3) |
Mr. Wellman may participate in any incentive compensation and other benefit plans to the extent that he is eligible to do so; | |
|
|
(4) |
continuation of Mr. Wellmans benefits under CoJaxs health insurance and other benefit plans for 24 months after any termination of his employment for good reason (as defined in the employment agreement); | |
|
|
(5) |
imposes confidentiality and non-recruitment of Company employees obligations on Mr. Wellman for one year after end of employment, and | |
|
|
(6) |
the employment agreement provides for CoJax to terminate Mr. Wellmans employment for cause (as defined in the employment agreement) and for Mr. Wellman to terminate the employment agreement for good reason (as defined in the employment agreement). | |
Mr. Wellmans unpaid base salary
is deferred if unpaid at the time due.
70
If Mr. Wellman terminates the employment
for a good reason, then he would be entitled to: A cash payment, payable in equal installments over a six (6) month period after
Mr. Wellman terminates employment, equal to the sum of the following:
*Base Annual Salary.*Subject
to the payment of the following sums subject to not causing the insolvency of the Company*,*the equivalent of the greater
of (i) twenty-four (24) months of Mr. Wellmans then-current base salary or (ii) the remainder of the term of the employment
agreement (the "Severance Period"); plus
*Earned but Unpaid Amounts.*Any
previously earned but unpaid salary through Mr. Wellmans final date of employment, Mr. Wellmans termination of employment.
The employment agreement also provided
the following indemnification to Mr. Wellman: The Company shall indemnify and save harmless Mr. Wellman for any liability
incurred by reason of any act or omission performed by Mr. Wellman while acting in good faith on behalf of the Company. No indemnification
barred by regulations or policies of the SEC or in clear violation of public policy will be permitted under the employment agreement.
Mr. Wellmans Employment Agreement
was terminated on January 10, 2024 upon his resignation as Chief Financial Officer and Secretary.
**Director Compensation**
William R. Downs did not receive any cash
compensation for his role as a director for the year ended December 31, 2025.
Jeffrey Guzy did not receive any cash compensation
for his role as a director for the year ended December 31, 2025.
William A. Bradley did not receive any
cash compensation for his role as a director for the year ended December 31, 2025.
**Employee Benefit Plans**
The Company currently has no employee benefit
plans.
**2018 Equity Incentive Plan**
Our Board of Directors and stockholders
approved the 2018 Equity Incentive Plan on December 31, 2018 (2018 Plan), which replaced the 2017 Equity Incentive
Plan (2017 Plan) that was approved by the Board of Directors and stockholders on January 2, 2018. The Board
of Directors terminated the 2017 Plan on December 31, 2018. No options or awards were granted under the 2017 Plan.
No options or other incentive compensation
has been granted as of December 31, 2025.
71
The following is a summary of the 2018
Plan:
*2018 Plan Purpose*.
The 2018 Plan will allow us to grant equity awards, including performance awards, to incentivize high levels of performance and
productivity by individuals who provide services to us and to further align the interests of our employees with those of CoJax
and its stockholders. The use of our common stock as part of our compensation program is intended to foster a pay-for-performance
culture that is an essential element of our overall compensation philosophy. Our equity will be used to retain our officers and
other employees and promote a focus on sustained enhancement through improved performance. The 2018 Plan is intended to be performance-based
compensation under Section 162(m) of the Internal Revenue Code (Section 162(m)), to be exempt from the tax
deduction limits of Section 162(m) if they meet the other requirements of Section 162(m).
*2018 Plan Administration.*The
Board of Directors, or the Compensation Committee of the Board of Directors when formed by the Board of Directors, has the authority
to administer our 2018 Plan. Subject to the terms of the 2018 Plan, the Board of Directors or the authorized board committee, referred
to as the plan administrator, determines recipients, dates of grant, the numbers and types of stock awards to be
granted, and the terms and conditions of the stock awards, including the period of their exercisability and vesting schedule applicable
to a stock award. Subject to the limitations set forth below, the plan administrator will also determine the exercise price, strike
price, or purchase price of awards granted and the types of consideration to be paid for the award. The plan administrator has
the authority to modify outstanding awards under our 2018 Plan. Subject to the terms of our 2018 Plan, the plan administrator has
the authority, without stockholder approval, to reduce the exercise, purchase or strike price of any outstanding stock award, cancel
any outstanding stock award in exchange for new stock awards, cash, or other consideration, or take any other action that is treated
as a repricing under generally accepted accounting principles; provided, that, stockholders must approve any repricing of SARs.
*2018 Plan Share
Reserve*. Three million shares of common stock are reserved for issuance under grants or awards made pursuant to
the 2018 Plan. If a stock award granted under our 2018 Plan expires or otherwise terminates without being exercised
in full, or is settled in cash, the shares of our common stock not acquired pursuant to the stock award again will become available
for subsequent issuance under our 2018 Plan. The following types of shares under our 2018 Plan may become available for the grant
of new stock awards under our 2018 Plan: (1)shares that are forfeited to or repurchased by us before becoming fully vested;
(2)shares withheld to satisfy income or employment withholding taxes; or (3)shares used to pay the exercise or purchase
price of a stock award. Shares issued under our 2018 Plan may be previously unissued shares or reacquired shares bought by us on
the open market.
*2018 Plan Stock
Awards. *Our 2018 Plan provides for the grant of incentive stock options (within the meaning of Section422 of the
Internal Revenue Code of 1986, as amended, (Code)), non-statutory stock options, stock appreciation rights, or SARs,
restricted stock awards, restricted stock unit awards, performance-based stock awards and other forms of equity compensation, which
are collectively referred to as stock awards. Our 2018 Plan also provides for the grant of performance cash awards. Incentive stock
options may be granted only to employees. All other awards may be granted to employees, including officers, and to non-employee
directors and consultants*. *Incentive and non-statutory stock options are evidenced by stock option agreements adopted
by the plan administrator. The plan administrator determines the exercise price for a stock option, within the terms and conditions
of our 2018 Plan, provided that the exercise price of a stock option generally cannot be less than 100% of the fair market value
of our common stock on the date of grant. Options granted under our 2018 Plan vest at the rate specified by the plan administrator.
The plan administrator determines the term of stock options granted under our 2018 Plan, up to a maximum of ten years. Unless the
terms of an option holders stock option agreement provide otherwise, if an option holders service relationship with
us, or any of our affiliates, ceases for any reason other than disability, death, or cause, the option holder may generally exercise
any vested options for three monthsfollowing the cessation of service. The option term will automatically be extended in
the event that exercise of the option following such a termination of service is prohibited by applicable securities laws or our
insider trading policy.
72
Acceptable consideration for the purchase
of common stock issued upon the exercise of a stock option will be determined by the plan administrator and may include (1)cash,
check, bank draft, or money order, (2)a broker-assisted cashless exercise, (3)the tender of shares of our common stock
previously owned by the option holder, (4)a net exercise of the option if it is a nonqualified stock option, and (5)other
legal consideration approved by the plan administrator.
Unless the plan administrator provides
otherwise, options generally are not transferable except by will, the laws of descent and distribution, or pursuant to a domestic
relations order.
*Tax Limitations
on Incentive Stock Options.*The aggregate fair market value, determined at the time of grant, of our common stock with
respect to incentive stock options that are exercisable for the first time by an option holder during any calendar year under all
of our stock plans, may not exceed $100,000. Options or portions thereof that exceed such limit will be treated as nonqualified
stock options. No incentive stock option may be granted to any person who, at the time of the grant, owns or is deemed to own stock
possessing more than 10% of our total combined voting power or that of any of our affiliates unless (1)the option exercise
price is at least 110% of the fair market value of the stock subject to the option on the date of grant and (2)the term of
the incentive stock option does not exceed five years from the date of grant.
*Restricted Stock
Awards.*Restricted stock awards are evidenced by restricted stock award agreements adopted by the plan administrator.
Restricted stock awards may be granted in consideration for (1)cash, check, bank draft, or money order, (2)services
rendered to us or our affiliates, or (3)any other form of legal consideration. Common stock acquired under a restricted stock
award may, but need not, be subject to a share repurchase option in our favor in accordance with a vesting schedule as determined
by the plan administrator. Rights to acquire shares under a restricted stock award may be transferred only upon such terms and
conditions as set by the plan administrator. Except as otherwise provided in the applicable award agreement, restricted stock unit
awards that have not vested will be forfeited upon the participants cessation of continuous service for any reason.
*Restricted Stock
Unit Awards. *Restricted stock unit awards are evidenced by restricted stock unit award agreements adopted by the plan
administrator. Restricted stock unit awards may be granted in consideration for any form of legal consideration or no consideration.
A restricted stock unit award may be settled by cash, delivery of stock, a combination of cash and stock as deemed appropriate
by the plan administrator, or in any other form of the consideration set forth in the restricted stock unit award agreement. Additionally,
dividend equivalents may be credited in respect of shares covered by a restricted stock unit award. Rights under a restricted stock
units award may be transferred only upon such terms and conditions as set by the plan administrator. Restricted stock unit awards
may be subject to vesting as determined by the plan administrator. Except as otherwise provided in the applicable award agreement,
restricted stock units that have not vested will be forfeited upon the participants cessation of continuous service for
any reason.
73
*Stock Appreciation
Rights or SARs*. SARs are evidenced by SAR grant agreements adopted by the plan administrator. The plan administrator
determines the strike price for a SAR, which generally cannot be less than 100% of the fair market value of our common stock on
the date of grant. Upon the exercise of a SAR, we will pay the participant an amount in cash or stock equal to (1)the excess
of the per-share fair market value of our common stock on the date of exercise over the strike price, multiplied by (2)the
number of shares of common stock with respect to which the SAR is exercised. A SAR granted under our 2018 Plan vests at the rate
specified in the SAR agreement as determined by the plan administrator.
The plan administrator determines the term
of SARs granted under our 2018 Plan, up to a maximum of ten years. Unless the terms of a participants SAR agreement provides
otherwise, if a participants service relationship with us or any of our affiliates ceases for any reason other than cause,
disability, or death, the participant may generally exercise any vested SAR for a period of three months following the cessation
of service. The SARs term will be further extended in the event that applicable securities laws prohibit the exercise of
the SAR following such a termination of service. In no event may a SAR be exercised beyond the expiration of its term.
Unless the plan administrator provides
otherwise, SARs generally are not transferable except by will, the laws of descent and distribution, or pursuant to a domestic
relations order. A SAR holder may designate a beneficiary, however, who may exercise the SAR following the holders death.
*Performance Awards.*Our
2018 Plan permits the grant of performance-based stock and cash awards. Our compensation committee can structure such awards so
that stock or cash will be issued or paid pursuant to such award only after the achievement of certain pre-established performance
goals during a designated performance period. Theplan administrator determines the performance goals. The performance goals
may be based on company-wide performance or performance of one or more business units, divisions, affiliates, or business segments.
They may be either absolute or relative to the performance of one or more comparable companies or the performance of one or more
relevant indices.
*Other Stock Awards.*The
plan administrator may grant other awards based in whole or in part by reference to our common stock. The plan administrator will
set the number of shares under the stock award and all other terms and conditions of such awards.
*Changes to Capital
Structure.*In the event that there is a specified type of change in our capital structure, such as a stock split or recapitalization,
appropriate adjustments will be made to (1)the class and a maximum number of shares reserved for issuance under our 2018
Plan, (2)the class and a maximum number of shares by which the share reserve may increase each year automatically, (3)the
class and a maximum number of shares that may be issued upon the exercise of incentive stock options and (4)the class and
number of shares and exercise price, strike price or purchase price, if applicable, of all outstanding stock awards.
*Change in Control.*The
plan administrator may provide, in an individual award agreement or any other written agreement between a participant and us, that
the stock award will be subject to additional acceleration of vesting and exercisability or settlement in the event of a change
in control. Under our 2018 Plan, a change in control is generally (1)the acquisition by a person or entity of more than 50%
of our combined voting power other than by merger, consolidation, or similar transaction, (2)a consummated merger, consolidation,
or similar transaction immediately after which our stockholders cease to own more than 50% of the combined voting power of the
surviving entity or (3)a consummated sale, lease or exclusive license or other disposition of all or substantially all of
our consolidated assets.
74
*Amendment and Termination.*Board
of Directors has the authority to amend, suspend or terminate our 2018 Plan, provided that such action does not materially impair
the existing rights of any participant without such participants written consent and provided further that certain types
of amendments will require the approval of stockholders. No incentive stock options may be granted after the tenth anniversary
of the date that the Board of Directors adopts the 2018 Plan.
**Outstanding Equity Awards**
There were no outstanding equity awards
to our Named Executive Officers as of December 31, 2025.
**ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS**
The following table
lists, as of the date of this Annual Report, the number of shares of common stock beneficially owned by (i) each person, entity
or group (as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934) known to the Company to be the beneficial
owner of more than 5% of the outstanding common stock; (ii) each of our directors (iii) each of our Named Executive Officers and
(iv) all executive officers and directors as a group. Information relating to beneficial ownership of common stock by our principal
stockholders and management is based upon information furnished by each person using beneficial ownership concepts
under the rules of the SEC. Under these rules, a person is deemed to be a beneficial owner of a security if that person directly
or indirectly has or shares voting power, which includes the power to vote or direct the voting of the security, or investment
power, which includes the power to dispose or direct the disposition of the security. The person is also deemed to be a beneficial
owner of any security of which that person has a right to acquire beneficial ownership within 60 days. Under the SEC rules, more
than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner
of securities as to which he or she may not have any pecuniary interest. Except as noted below, each person has sole voting and
investment power with respect to the shares beneficially owned and each stockholders address is c/o CoJax Oil and Gas Corporation,
4830 Line Avenue, Suite 152, Shreveport, Louisiana, 71106. The percentages below are calculated based on 14,168,755 shares of
common stock issued and outstanding as of March 20, 2026.
|
Name of Beneficial Owner | |
Shares | | |
Percentage | | |
|
Executive Officers and Directors: | |
| | | |
| | | |
|
Jeffrey J. Guzy | |
| 1,121,241 | | |
| 7.9 | % | |
|
William R. Downs | |
| 135,000 | | |
| 1.0 | % | |
|
William Allan Bradley | |
| 10,000 | | |
| 0.1 | % | |
|
Total Directors and Executive Officers (3 persons) | |
| 1,266,241 | | |
| 9.0 | % | |
|
| |
| | | |
| | | |
|
5% Beneficial Owners | |
| | | |
| | | |
|
Roger Allums McLeod | |
| 2,920,000 | | |
| 20.61 | % | |
|
Rosswood Capital LLC(1) | |
| 1,350,000 | | |
| 9.53 | % | |
|
Stone Creek Properties, LLC (2) | |
| 889,559 | | |
| 6.28 | % | |
|
Stonefield Fund LLC (3) | |
| 755,000 | | |
| 5.33 | % | |
|
Lamar Resources, LLC (4) | |
| 1,035,909 | | |
| 7.31 | % | |
|
Lazaro Resources, LLC (5) | |
| 729,954 | | |
| 5.15 | % | |
75
(1) Peter Biglane is the Manager of Rosswood Capital
LLC and has sole voting and dispositive power over the shares held by Rosswood Capital LLC.
(2) David Sullivan is the Manager of Stone Creek Properties
LLC and has sole voting and dispositive power over the shares held by Stone Creek Properties LLC.
(3) Alfonso Rivera Revilla is the Manager of Stonefield
Fund LLC and has sole voting and dispositive power over the shares held by Stonefield Fund LLC.
(4) Marty Rutland is the Owner of Lamar Resources,
LLC and has sole voting and dispositive power over the shares held by Lamar Resources, LLC.
(5) John Young is the Owner of Lazaro Resources, LLC
and has sole voting and dispositive power over the shares held by Lazaro Resources, LLC.
*Changes in Control Agreements.*
As of December 31,
2025, we are not aware of any arrangements that may result in changes in control, as that term is defined by the
provisions of Item 403(c) of Regulation S-K.
**ITEM 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS, AND DIRECTOR INDEPENDENCE**
In addition to the
executive officer compensation arrangements discussed in Executive Compensation, below we describe transactions since
incorporation, in which we have been a participant, in which the amount involved in the transaction is material to our Company,
and in which any of the following is a party:
|
|
(a) |
enterprises that directly or indirectly through one or more intermediaries, control or are controlled by, or are under common control with, our Company; | |
|
|
(b) |
associates; | |
|
|
(c) |
individuals owning, directly or indirectly, an interest in the voting power of our Company that gives them significant influence over our Company, and close members of any such individuals family; | |
|
|
(d) |
key management personnel, that is, those persons having authority and responsibility for planning, directing, and controlling the activities of our Company, including directors and senior management of companies and close members of such individuals families; and | |
|
|
(e) |
enterprises in which a substantial interest in the voting power is owned, directly or indirectly, by any person described in (c) or (d) or over which such a person is able to exercise significant influence. | |
**Review, Approval, and Ratification of
Related Party Transactions**
Given our small size
and limited financial resources, we have not adopted formal policies and procedures for the review, approval, or ratification of
transactions, such as those described above, with our executive officer(s), Director(s), and significant stockholders. We intend
to establish formal policies and procedures in the future, once we have sufficient resources and have appointed additional Directors,
so that such transactions will be subject to the review, approval, or ratification of our Board of Directors, or an appropriate
committee thereof. On a moving forward basis, our Directors will continue to approve any related party transaction.
On January 10, 2024,
the Company issued 100,000 common shares at $0.99 per share to William R. Downs in connection with his appointment as the Companys
new Chief Financial officer. The issuance of 100,000 shares was recognized at the share price on the date of the employment agreement.
On January 26, 2024,
Mr. Guzy and Mr. Wellman, being the holders of all of the Companys Series A Stock converted all 105,000 shares issued and
outstanding into common shares at a conversion rate of one to ten. The conversion occurred at the rate specified in the initial
issuance agreement and therefore no gain or loss was recognized on the conversion. In connection with the exercise of the conversion
option, the Company issued 575,000 and 475,000 common shares to Jeffrey J. Guzy and Wm. Barrett Wellman, respectively.
On August 20, 2024,
Mr. Guzy purchased 475,000 shares of common stock from Mr. Wellman in a negotiated transaction. The transfer had no financial impact
on the Company during the year ended December 31, 2024.
On April 11, 2025,
the Company issued 170,116 shares of Common Stock at $2.00 per share to Mr. Wellman in lieu of the accrued salary liability of
$340,232 for services performed by Mr. Wellman in his previous role as Chief Financial Officer. The issuance of these shares did
not involve any underwriters, underwriting discounts or commissions or any public offering and we believe is exempt from the registration
requirements of the Securities Act by virtue of Section 4(2) thereof as a transaction not involving a public offering.
76
**ITEM 14. PRINCIPAL ACCOUNTING
FEES AND SERVICES**
*Audit and Accounting Fees*
Effective as of January
4, 2024, Sadler, Gibb & Associates, LLC resigned as the Companys independent registered public accounting firm and the
Board of the Company appointed M&K CPAs, PLLC (M&K) as our independent registered public accounting firm
for the fiscal year ended December 31, 2025. The following table sets forth the fees billed to the Company for professional services
rendered by M&K and S|G for each of the years ended December 31, 2025, and 2024, respectively:
|
Services | |
2025 | | |
2024 | | |
|
Audit fees | |
$ | 60,500 | | |
$ | 97,000 | | |
|
Audit related fees | |
| | | |
| | | |
|
Tax fees | |
| | | |
| | | |
|
All other fees | |
| | | |
| | | |
|
Total fees | |
$ | 60,500 | | |
$ | 97,000 | | |
*Audit Fees*
The aggregate audit
fees billed and unbilled for the fiscal years ended December 31, 2025, and 2024 were for professional services rendered by M&K
and S|G, respectively, for the audits of our annual consolidated financial statements, the audit of our consolidated financial
statements included in our registration statement on Form 10-K.
*Tax Fees*
The Company did not
incur any aggregate tax fees billed and unbilled for the fiscal years ended December 31, 2025, and 2024.
*Other Fees*
The Company did not
incur any other fees related to services rendered by our principal accountant for the fiscal years ended December 31, 2025, and
2024.
Effective May 6, 2003,
the Securities and Exchange Commission adopted rules that require that before our auditor is engaged by us to render any auditing
or permitted non-audit related service, the engagement be:
|
|
|
approved by our audit committee; or | |
|
|
|
entered into pursuant to pre-approval policies and procedures established by the audit committee, provided that the policies and procedures are detailed as to the particularservice,theaudit committee is informed of each service, and such policies and procedures do not include delegation of the audit committees responsibilities to management. | |
77
We do not have an audit committee.Our
entire board of directors pre-approves all services provided by our independent auditors.
All of the above services and fees were
reviewed and approved by the entire board of directors before the respective services were rendered.
78
**PART IV**
**ITEM 15. EXHIBITS, FINANCIAL STATEMENT
SCHEDULES**
The
following exhibits are included with this Annual Report:
|
Exhibit
No. |
Description | |
|
3.1 |
Articles of Incorporation of CoJax Oil and Gas Corporation (incorporated by reference to Exhibit 3.1 to the Form S-1 Registration Statement filed with the Commission on July 26, 2019) | |
|
3.2 |
Amended and Restated Articles of Incorporation of CoJax Oil and Gas Corporation (incorporated by reference to Exhibit 3.1.1 to the Form S-1 Registration Statement filed with the Commission on July 26, 2019) | |
|
3.3 |
Amendment to Amended and Restated Articles of Incorporation of CoJax Oil and Gas Corporation with the Designation of Series A Convertible Preferred Stock, $0.01 par value per share, dated January 23, 2020 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the Commission on January 31, 2020) | |
|
3.4 |
Amendment to Amended and Restated Articles of Incorporation of CoJax Oil and Gas Corporation dated June 12, 2020 (incorporated by reference to Exhibit 3.1.2 to the Form S-1 Registration Statement filed with the Commission on September 25, 2020) | |
|
3.5 |
By-Laws (incorporated by reference to Exhibit 3.2 to the Form S-1 Registration Statement filed with the Commission on July 26, 2019) | |
|
4.1 |
Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Form S-1 Registration Statement filed with the Commission on July 26, 2019) | |
|
4.2 |
Description of Securities (incorporated by reference to Exhibit 4.1 to the Form S-1 Registration Statement filed with the Commission on July 26, 2019) | |
|
10.1 |
Employment Agreement between CoJax Oil and Gas Corporation and Jeffrey J. Guzy (incorporated by reference to Exhibit 10.1 to the Form 8-K filed with the Commission on January 22, 2020) | |
|
10.2 |
Employment Agreement by CoJax Oil and Gas Corporation and Jeffrey Delancey dated May 15, 2018 (incorporated by reference to Exhibit 10.3 to the Form S-1 Registration Statement filed with the Commission on July 26, 2019) | |
|
10.3 |
Acquisition Agreement, dated June 16, 2020, by and among CoJax Oil and Gas Corporation, Barrister Energy, LLC., and all of the Members of Barrister Energy, LLC(incorporated by reference to Exhibit 2.1 to the Form 8-K filed with the Commission on June 22, 2020) | |
|
10.4 |
2018 Equity Incentive Plan (incorporated by reference to Exhibit 10.5 to the Form S-1 Registration Statement filed with the Commission on July 26, 2019) | |
|
10.5 |
Investment Banking/Corp Advisory Agreement by Newbridge Securities Corporation and CoJax Oil and Gas Corporation, dated March 14, 2019 (incorporated by reference to Exhibit 10.7 to the Form S-1 Registration Statement filed with the Commission on July 26, 2019) | |
|
10.6 |
Employment Agreement by CoJax Oil and Gas Corp. and Wm. Barrett Wellman, dated March 16, 2020 (incorporated by reference to Exhibit 10.1 to Form 8-K filed with Commission on March 23, 2020) | |
|
10.9 |
Assignment and Assumption of Promissory Note, dated June 16, 2020, by CoJax Oil and Gas Corporation and Barrister Energy, LLC (incorporated by reference to Exhibit 2.4 to the Form 8-K filed with the Commission on June 22, 2020) | |
79
|
10.10 |
Debt Exchange Agreement, dated November 16, 2021, by and between the Company and Central Operating, LLC (incorporated by reference to Exhibit 10.1 to the Form 8-K filed with the Commission on November 19, 2021) | |
|
10.11 |
Restricted Stock Grant Agreement dated January 4, 2021, by CoJax Oil and Gas Corporation and Jeffrey Guzy(incorporated by reference to Exhibit 10.1 to the Form 8-K filed with the Commission on January 7, 2021) | |
|
10.12 |
Restricted Stock Grant Agreement dated January 4, 2021, by CoJax Oil and Gas Corporation and Wm. Barrett Wellman (incorporated by reference to Exhibit 10.2 to the Form 8-K filed with the Commission on January 7, 2021) | |
|
10.13 |
Restricted Stock Grant Agreement dated January 4, 2022, by CoJax Oil and Gas Corporation and Jeffrey Guzy(incorporated by reference to Exhibit 10.1 to the Form 8-K filed with the Commission on January 4, 2022) | |
|
10.14 |
Restricted Stock Grant Agreement dated January 4, 2022, by CoJax Oil and Gas Corporation and Wm. Barrett Wellman (incorporated by reference to Exhibit 10.2 to the Form 8-K filed with the Commission on January 4, 2022) | |
|
10.15 |
NONOP purchase and sale agreement dated November 8, 2022 (incorporated by reference to Exhibit 10.15 to the Annual Report on Form 10-K for 2022 filed with the Commission on November 20, 2023) | |
|
10.16 |
BUCKLEY purchase and sale agreement dated October 15, 2022 (incorporated by reference to Exhibit 10.16 to the Annual Report on Form 10-K for 2022 filed with the Commission on November 20, 2023) | |
|
10.17 |
Employment Agreement between William R. Downs and the Company dated January 10, 2024 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Commission on January 16, 2024) | |
|
10.18 |
Employment Agreement between Jeffrey J. Guzy and the Company dated January 10, 2024 (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the Commission on January 16, 2024) | |
|
14 |
Code of Ethics (incorporated by reference to Exhibit 14 to the Form S-1 Registration Statement filed with the Commission on July 26, 2019) | |
|
19.1 |
Insider Trading Policy | |
|
21.1 |
Subsidiaries of CoJax Oil and Gas Corporation (incorporated by reference to Exhibit 21.1 to the Form S-1 Registration Statement filed with the Commission on June 24, 2021) | |
|
23.1* |
Consent of Netherland, Sewell & Associates, Inc. | |
|
31.1** |
Certification of William R. Downs, Chief Executive Officer and President of CoJax Oil and Gas Corporation, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
|
31.2** |
Certification of Jeffrey J. Guzy, Chief Financial Officer of CoJax Oil and Gas Corporation, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
|
32.1* |
Certification of William R. Downs, Chief Executive Officer and President of CoJax Oil and Gas Corporation, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
|
32.2* |
Certification of Jeffrey J. Guzy, Chief Financial Officer of CoJax Oil and Gas Corporation, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
|
99.1 |
Barrister Energy, LLC Oil Leases (incorporated by reference to Exhibit 99.2 to the Companys Annual Report on Form 10-K, filed with the Commission on May 14, 2021) | |
|
99.2* |
Reserve
Report, Netherland, Sewell & Associates, Inc., Texas Registered Engineering Firm F-2699 | |
** Filed Herewith*
*** Filed Herewith as amended*
**ITEM 16. FORM 10K SUMMARY**
None.
80
**SIGNATURES**
Pursuant to the requirements
of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
COJAX OIL AND GAS CORPORATION
|
By: |
/s/ William R. Downs |
| |
|
William R. Downs | |
|
Chief Executive Officer and President
(Principal Executive Officer) | |
|
Date: |
March 24, 2026 | |
|
By: |
/s/ Jeffrey J. Guzy |
| |
|
Jeffrey J. Guzy | |
|
Chief Financial Officer
(Principal Financial and Accounting
Officer) | |
|
Date: |
March 24, 2026 | |
Pursuant to the requirements
of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant
and in the capacities and on the dates indicated.
|
By: |
/s/ William R. Downs |
| |
|
William R. Downs | |
|
Chief Executive Officer, Presidentand
director
(Principal Executive Officer) | |
|
Date: |
March 24, 2026 | |
|
By: |
/s/ Jeffrey J. Guzy |
| |
|
Jeffrey J. Guzy | |
|
Chief Financial Officer, Secretary
and director
(Principal Financial and Accounting
Officer) | |
|
Date: |
March 24, 2026 | |
|
By: |
/s/ William Allan Bradley |
| |
|
William Allan Bradley
Date: March 24, 2026 | |
81