UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ANNUAL REPORT For the Fiscal Year Ended December 31, Commission File Number: 000-56091 501 1st Ave N., Suite 901 St. (Address of principal executive (727)-482-1505 (Issuer’s telephone (Former name or former address if changed since last report) Securities registered Indicate by check mark Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 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 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 (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes [X] No [ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, If an emerging growth company, Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes The aggregate market value on June 30, 2019 (the last business day of the As of March 16, 2021, there were 391,243,635 shares of the registrant’s common stock Cautionary Note Regarding Forward Looking Statements This annual report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “may,” “should,” “could,” “will,” “plan,” “future,” “continue, “and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters identify forward-looking statements. These forward-looking statements are based largely on our expectations or forecasts of future events, can be affected by inaccurate assumptions, and are subject to various business risks and known and unknown uncertainties, a number of which are beyond our control. Therefore, actual results could differ materially from the forward-looking statements contained in this document, and readers are cautioned not to place undue reliance on such forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. A wide variety of factors could cause or contribute to such differences and could adversely impact revenues, profitability, cash flows and capital needs. There can be no assurance that the forward-looking statements contained in this document will, in fact, transpire or prove to be accurate. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors” that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by any forward-looking statements. Important factors that may cause the actual results to differ from the forward-looking statements, projections or other expectations include, but are not limited to, the following: Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this report. Except as required by law, we do not undertake to update or revise any of the forward-looking statements to conform these statements to actual results, whether as a result of new information, future events or otherwise. As used in this annual report, “Sylios,” the “Company,” “we,” “us,” or “our” refer to Sylios Corp unless otherwise indicated. TABLE OF CONTENTS Sylios Corp (f/k/a US Natural Gas Sylios Corp is a holding corporation, which through its subsidiaries, has operations engaged in the exploration and development of oil and natural gas Our operations are currently divided amongst five wholly owned subsidiaries, US Natural Gas Corp Subsidiaries US Natural Gas Corp WV: US Natural Gas Corp WV (“WV”) (formerly Wilon Resources, Inc.) is a WV’s operations were based in Wayne County, West Virginia and primarily concentrated on the production of commercially viable natural gas. Through WV, the Company seeks to identify and acquire “non-operator” royalty or working interest participations in natural gas wells that are in production. As of the date of this filing, the Company does not own any real property, royalty or working interest participations in WV. US Natural Gas Corp KY: US Natural Gas Corp KY (“KY”) is a wholly owned subsidiary formed in the Our business strategy is to economically increase reserves, production, and the sale of natural gas and oil from existing and acquired properties in the Appalachian Basin and elsewhere, in order to maximize We expect to generate long-term reserve and production growth through drilling activities and further acquisitions. We believe that our management’s experience and expertise will enable us to identify, evaluate, and develop natural gas projects. We have acquired and intend to acquire additional producing oil and gas property rights where we believe significant additional value can be created. Our Management is primarily interested in developmental properties where some combination of these factors exist: (1) opportunities for long production life with stable production levels; (2) geological formations with multiple producing horizons; (3) substantial exploitation potential; and (4) relatively low capital investment production costs. The Company currently holds the following royalties in certain wells in the SI Multiple within KY 30 The GREEN and JAMES PHARIS wells are covered under the bond of The wells sold to On May 10, 2018, the Company’s subsidiary, US Natural Gas Corp KY (“KY”), entered into an Asset Purchase Agreement with Soligen Technologies, Inc. (“SGTN”) for the sale of 13 previously producing crude and natural gas wells, approximately 1700 acres of leaseholds, tank batteries and gathering systems (collectively the “assets”) all located in multiple counties throughout the State of Kentucky. Under the terms of the Agreement, SGTN acquired the assets for consideration of One Hundred Forty Thousand and no/100 Dollars ($140,000). At Closing, SGTN assigned KY a royalty for payment out of production, whereby KY shall receive thirty percent (30%) of the gross proceeds of production from the acquired assets. In addition, KY shall receive ten percent (10%) of the monthly gross proceeds of production from any new drilled wells on the acquired leases. KY shall receive payments from production until such time that KY has received a total of One Hundred Forty Thousand and no/100 Dollars ($140,000). Please seeNOTE E - OIL AND GAS ROYALTY INTERESTS for further information. E 3 Petroleum Corp: E 3 Petroleum Corp (“E3”) is a wholly owned subsidiary formed in the Land Development 5496 NRMF, LLC: 5496 NRMF, LLC (“NRMF”) is a wholly owned subsidiary formed in the State of Florida on October 12, 2019. NRMF’s future On October 9, 2019, the Company 1720 RCMG, LLC: 1720 RCMG, LLC (“RCMG”) is On October 6, 2018, the Company entered into a Commercial Real Estate Purchase and Sale Agreement with the On October 6, 2018, the Company issued its President a Secured Note in the amount of $75,000. The Note has a term of one year and bears interest at 3%. The Company’s first payment in the amount of $15,000 was due within 90 days of an effective reverse stock split. As of the date of issuance of these Financial statements, except for a $5,000 payment made by the Company to the Company’s president on November 12, 2018, the Company has not made any payment against the Note. The Company’s plans are to develop a 21,000 square foot self-storage facility containing 140-160 units plus retail units to lease. There are no guarantees that the Company will be able to secure financing to construct the facility. Surplus Inventory On September 12, 2019, the Company entered into an Inventory Purchase Agreement with Wanshan Engineering Services, LLC for the purchase of surplus inventory. The Company purchased 30,000 Squeezee Soap Filled Scrubbers for the purchase price of $100,000 via the issuance of 10,000,000 shares of restricted common stock. The Closing of the transaction occurred on September 15, 2019. On September 21, 2019, the Company entered into an Inventory Purchase Agreement with Wanshan Engineering Services, LLC for the purchase of surplus inventory. The Company purchased 1,000 Ampt wireless earbuds for the purchase price of $60,000 via the issuance of 6,000,000 shares of restricted common stock. The Closing of the transaction occurred on September 25, 2019. Squeezee Soap Filled Scrubbers: The innovative Squeezee sponge has concentrated dishwashing liquid inside the sponge with grease cutting formula and Aloe for soft hands. The Squeezee scrubber makes dishwashing both more convenient and economical. No more need for purchasing separate detergents. The soft antibacterial non-scratch double-sided scrubber has a unique shape allowing to reach those hard to get to places for multi-purpose use. Ampt Wireless Bluetooth Earbuds: Pair the AMPT stereo Bluetooth earphones with each other for a stereo experience. In single earbud mode, each wireless headset can connect with two Bluetooth source devices like your iPhone or Android phone, iPad, tablet, or laptop simultaneously. If you are streaming music from your iPad, and receive an incoming call on your iPhone, the wireless earphones will recognize this and allow you to take the call seamlessly without the hassle of repairing. Pairing 2 cordless earbuds wirelessly like Apple AirPods, making it the smallest stereo Bluetooth headset on the market. Siri is just a touch away via the main button on either of the cordless earbuds. You never have to take your smartphone out of your pocket, giving you a genuine hands-free, wireless stereo experience. Consulting Services On December 16, 2019, the Company entered into a Consulting Agreement (the “Agreement”) with Deep Green Waste & Recycling, Inc. (hereinafter “Deep Green”), a publicly traded entity under the symbol “DGWR.” Under the terms of the Agreement, the Company is to assist Deep Green in the preparation of its Registration Statement on Form S-1, introduce the Company to a PCAOB audit firm and introduce potential funding sources. The term of the Agreement is for On August 22, 2019, the Company entered into a Consulting Agreement (the “Agreement”) with Global Technologies, Ltd (hereinafter “Global”), a publicly traded entity under the symbol “GTLL.” Under the terms of the Agreement, the Company is to assist Global in the preparation of its Registration Statement on Form 10, introduce the Company to a PCAOB audit firm and Former Subsidiaries: Bud Bank, LLC: On April 21, 2017, the Company entered into a definitive Asset Acquisition Agreement (the “Agreement”) with The Greater Cannabis Company, Inc. (“GCC”), whereby GCC acquired the Company’s wholly owned subsidiary Bud Bank, Inc. (“Bud Bank”). Under the Agreement, GCC is obligated to pay the Company a royalty of 10% of net sales proceeds generated by Bud Bank through its operations up to a total of $50,000 and thereafter for perpetuity pay a royalty of 3% of net sales proceeds generated by Bud Bank through its operations. The transaction closed on June 21, 2017 concurrent with the Company’s filings with the State of Florida. The transaction closed on June 20, 2017. SLMI Options, LLC: SLMI Options, LLC (“SLMI”) was a Equity holdings in which we hold >5% ownership of the issued and AMDAQ Corp: AMDAQ Corp (“AMDAQ”) (formerly E 2 Investments, LLC) was a wholly owned subsidiary of the The Company’s business model from On September 1, 2017, the Company AMDAQ’s multi-faceted business model will allow the company to take advantage of the significant emerging opportunities being developed utilizing blockchain technology. The opportunities we have identified to date cross many industries, which will help minimize our exposure to any single sector. We have associated ourselves with leading experts in the field of blockchain technologies, allowing for a broad overview of exciting applications being developed, which include direct investments in blockchain applications, the AMDAQ marketplace and our TIKR division. The AMDAQ marketplace will provide the infrastructure for the administration of pre-existing and potential ownership of both tangible and intangible assets and its adaptable structural utility can be used in parallel to any equity fundraising mechanism. AMDAQ will allow both the documented ownership and transfer of assets for which there is no established registration process and the sub-division of ownership interests in otherwise registered assets where transfer processes may be expensive/cumbersome and/or trigger taxes and other expenses. Using the AMDAQ platform, assets can be titled in a Smart Contract with ownership interests evidenced by ownership of an associated Ethereum token. The Smart Contract will provide not only the rules as For further information on the Company’s Competition We are in direct competition with numerous oil and natural gas companies, drilling and income programs and partnerships exploring various areas of the Appalachian Basin and elsewhere competing for customers. Several of our competitors are large, well-known oil and gas and/or energy companies, but no single entity dominates the industry. Many of our competitors possess greater financial and personnel resources, sometimes enabling them to identify and acquire more economically desirable energy producing properties and drilling prospects than us. We are more of a regional operator, and have the traditional competitive strengths of one, including recently established contacts and in-depth knowledge of the local geography. Additionally, there is increasing competition from other fuel choices to supply the energy needs of consumers and industry. Management believes that there exists a viable Patents and Trademarks The success of our business depends on our continued ability to use our existing trade name in order to increase our brand awareness. In that regard, we believe that our trade name is valuable asset that is critical to our success. As of the date of this filing, we have not submitted a trademark application for our name, Sylios Corp or that of any of our subsidiaries. In the event the Company does file an application, there is no guarantee that the U.S. Patent and Trademark Office will grant us a trademark. The unauthorized use or other misappropriation of our trade name could diminish the value of our business concept and may cause a decline in our revenue. Seasonality The exploration for oil and natural gas reserves depends on access to areas where operations are to be conducted. Seasonal weather variations, including freeze-up and break-up affect access in certain circumstances. According to the American Petroleum Institute, more than 60 million U.S. households use natural gas for water heating, space heating, or cooking. In total, natural gas accounts for more than 50 percent of the fuel used to heat U.S. homes. Residential and commercial heating demand for natural gas is highly weather-sensitive, making weather the biggest driver of natural gas demand in the short term. As a result, natural gas demand is highly “seasonal” in nature, with significant “peaks” in the winter heating season. Seasonality and the natural gas in storage also play a prominent role in natural gas prices. Because natural gas consumption is seasonal, but production is not, natural gas inventories are built during the summer for use in the winter. This seasonality leads to higher winter prices and lower summer prices. In addition, inventories above the seasonal average depress prices, and inventories below the seasonal average boost prices. Government Regulations and Environmental Quality Operations are or will be subject to various types of regulation at the federal, state and local levels. Such regulation includes requiring permits for the drilling of wells; maintaining bonding requirements in order to drill or operate wells; implementing spill prevention plans; submitting notification and receiving permits relating to the presence, use and release of certain materials incidental to oil and gas operations; and regulating the location of wells, the method of drilling and casing wells, the use, transportation, storage and disposal of fluids and materials used in connection with drilling and production activities, surface usage and the restoration of properties upon which wells have been drilled, the plugging and abandoning of wells and the transporting of production. Operations are or will also be subject to various conservation matters, including the regulation of the size of drilling and spacing units or proration units, the number of wells which may be drilled in a unit, and the unitization or pooling of oil and gas properties. In this regard, some states allow the forced pooling or integration of tracts to facilitate exploration while other states rely on voluntary pooling of lands and leases, which may make it more difficult to develop oil and gas properties. In addition, state conservation laws establish maximum rates of production from oil and gas wells, generally limit the venting or flaring of gas, and impose certain requirements regarding the ratable purchase of production. The effect of these regulations is to limit the amounts of oil and gas we may be able to produce from the wells and to limit the number of wells or the locations at which we may be able to drill. Business is affected by numerous laws and regulations, including energy, environmental, conservation, tax and other laws and regulations relating to the oil and gas industry. We plan to develop internal procedures and policies to ensure that operations are conducted in full and substantial environmental regulatory compliance. Failure to comply with any laws and regulations may result in the assessment of administrative, civil and criminal penalties, the imposition of injunctive relief or both. Moreover, changes in any of these laws and regulations could have a material adverse effect on business. In view of the many uncertainties with respect to current and future laws and regulations, including their applicability to us, we cannot predict the overall effect of such laws and regulations on future operations. We believe that our operations comply in all material respects with applicable laws and regulations and that the existence and enforcement of such laws and regulations have no more restrictive an effect on operations than on other similar companies in the energy industry. We do not anticipate any material capital expenditures to comply with federal and state environmental requirements. Furthermore, we are subject to various other federal, state, local and international laws and regulations applicable to its business. We believe that we are in substantial compliance with these laws and regulations. Licenses We held a Gathering Line Operators License in the state of Kentucky during the time we acted as the operator of our wells. As we no longer act in the capacity as the “Operator” of any shut-in/producing wells, the Company is no longer required to retain its operator license in the State of Kentucky. In the event that we would elect to act as the Operator of our wells, we would be required to submit an application to retain a license. Compliance Expenses Our company incurs annual expenses to comply with state and federal licensing requirements. We estimate these costs to be under $2,000 per year. In the event we elect to drill any new wells in Kentucky, we anticipate annual expenditures of approximately $25,000 per well related to environmental costs including water drainage and land development. It is difficult to estimate these environmental expenses while we are still a development stage company as they are largely dependent on many factors for each drilled well. See “Government Regulation” and “Environmental Regulation” below. Principal Products or Services and Markets The principal markets for the Company’s crude oil are local refining companies. The principal markets for the Company’s natural gas production are local utilities, private industry end-users, and gas marketing companies. When the wells we maintain a royalty interest in are in production, the crude oil produced is sold at or near the wells to Sunoco, Inc. or Barrett Oil Purchasing, Inc. The Company may sell some or all of its production to one or more additional refineries in order to maximize revenues as purchases prices offered by the refineries fluctuate from time to time. At present, all of the wells we maintain an interest are shut-in as contract labor initiates the re-entry of each to place them back into production. Drilling Equipment The Company obtains drilling services as required from time to time from various companies as available and various drilling contractors in Kentucky. The Company does not own any of its own drilling equipment nor maintain a storage facility in Kentucky. Distribution Methods of Products or Services Crude oil is normally delivered to refineries in Kentucky by tank truck and natural gas is distributed and transported by pipeline. Commodity Price Volatility Oil and natural gas prices are volatile and subject to a number of external factors. Prices are cyclical and fluctuate as a result of shifts in the balance between supply and demand for oil and natural gas, world and North American market forces, conflicts in Middle Eastern countries, inventory and storage levels, OPEC policy, weather patterns and other factors. OPEC supply curtailment, tensions in the Middle East, increased demand in China and low North American crude stocks have kept crude oil prices high. Natural gas prices are greatly influenced by market forces in North America since the primary source of supply is contained within the continent. Market forces include the industry’s ability to find new production and reserves to offset declining production, economic factors influencing industrial demand, weather patterns affecting heating demand and the price of oil for fuel switching. Labor and Other Supplies Oil and Natural Gas Operations: We contract all labor for the development of leasehold acreage in preparation for drilling, as well as the drilling and completion crews. Our contract labor monitors the wells on a daily basis, replaces the completion components as needed, makes repairs to the gathering system, and any other day-to-day maintenance when our wells are in production. Other Operational Activities: We contract all labor for website development, accounting, legal and daily activities outside of management. Employees As of the date of this Report, we Report to Shareholders On February 18, 2021, the Company received an Order of Suspension of Trading from the Securities and Exchange Commission because of questions regarding the accuracy and adequacy of information in the marketplace about the Company and its securities. The Order also cited the Company’s delinquencies in its periodic filings with the Commission. On April 16, 2012, the Company filed a Form 15 with the Securities and Exchange Commission to immediately end the Company’s requirements as a fully reporting entity. The Company’s common stock continued to be quoted on the OTC Markets “PINK.” Prior to filing the Form 15, the Company was subject to the informational requirements of the Securities Exchange Act of 1934. Accordingly, we Company Information We are a Florida for-profit corporation. Our corporate address is 501 1st Ave N., Suite 901, St Petersburg, FL 33701, our telephone number is (727) 482-1505 and our website address is www.sylios.com. The information on our website is not a part of this prospectus. The Company’s stock is quoted under the symbol “UNGS” on the OTC Markets. The Company’s transfer agent is Pacific Stock Transfer whose address is 6725 Via Austi Pkwy, Las Vegas, NV 89119 and phone number is (702) 361-3033. You should carefully consider the risks described below COVID-19 Related Risks On March 11, 2020, the The adverse impacts of the pandemic on our business and future financial performance could include, but are not limited to: Risks Relating to Our Financial Condition Our independent registered accounting firm has expressed concerns about our ability to continue as a going concern. The report of our independent registered accounting firm expresses concern about our ability to continue as a going concern based on the absence of significant revenues, our significant losses from operations and our need for additional financing to fund all of our operations. It is not possible at this time for us to predict with assurance the potential success of our business. The revenue and income potential of our proposed business and operations are unknown. If we cannot continue as a viable entity, we may be unable to continue our operations and you may lose some or all of your investment in our common stock. We have limited operational history in an emerging industry, making it difficult to accurately predict and forecast business operation. As we have approximately ten years of corporate operational history and have yet to generate substantial revenue, it is extremely difficult to make accurate predictions and forecasts on our finances. This is compounded by the fact that we operate in both the technology, retail and cannabis industries, which are three rapidly transforming industries. There is no guarantee that our products or services will remain attractive to potential and current users as these industries undergo rapid change or that potential customers will utilize our services. As a growing company, we have yet to achieve a profit and may not achieve a profit in the near future, if at all. We have not yet produced a net profit and may not in the near future, if at all. While we expect our revenue to grow, we have not achieved profitability and cannot be certain that we will be able to sustain our current growth rate or realize sufficient revenue to achieve profitability. Our ability to continue as a going concern may be dependent upon raising capital from financing transactions, increasing revenue throughout the year and keeping operating expenses below our revenue levels in order to achieve positive cash flows, none of which can be assured. We may require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all. We intend to continue to make investments to support our business growth and may require additional funds to respond to business challenges, including the need to develop new features and products or enhance our existing products, improve our operating infrastructure or acquire complementary businesses and technologies. Accordingly, we may need to engage in continued equity or debt financings to secure additional funds. If we raise additional funds through future issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of our common stock. Any debt financing we secure in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. We may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and to respond to business challenges could be impaired, and our business may be harmed. We expect our quarterly financial results to fluctuate. We expect our revenue and operating results to vary significantly from quarter to quarter due to a number of factors, including changes in: General economic conditions, both domestically and in foreign markets; The performance of the two spin-offs of which we hold an equity investment; Production from the oil and natural gas wells in which we maintain ownership; Our ability to identify future acquisition targets; Our ability to raise capital to implement our business plan; and General acceptance and growth of the cannabis and blockchain technology industries. As a result of the variability of these and other factors, our operating results in future quarters may be below the expectations of our stockholders. General Business Risks Conflicts of interest may arise from other business activities of our directors and officers. Our sole officer and director, Wayne Anderson, currently We are highly dependent on the services of key executives, the loss of whom could materially harm our business We are highly dependent on our management team, specifically Wayne Anderson. If we lose key employees, our business may suffer. Furthermore, our future success will also depend in part on the continued service of our management personnel and our ability to identify, hire, and retain additional key personnel. We do not carry “key-man” life insurance on the lives of any of our executives, employees or advisors. We experience intense competition for qualified personnel and may be unable to attract and retain the We will need to raise additional capital to continue operations over the coming year. We anticipate the need to raise approximately $500,000 in capital to fund our operations through December 31, 2021. We expect to use these cash proceeds, primarily for the development of the Company’s proposed storage facility in Macon, GA, to assist AMDAQ Corp in the further development of its business plan including legal and accounting expenses aimed at its “going public” event, to find a suitable acquisition/joint venture target for our US Natural Gas Corp KY subsidiary, for the acquisition of additional royalty interests in oil and natural gas wells and to remain in full legal and accounting compliance with the SEC. We cannot guarantee that we will be able to raise these required funds or generate sufficient revenue to remain operational. We may be unable to manage growth, which may impact our potential profitability. Successful implementation of our business strategy requires us to manage our growth. Growth could place an increasing strain on our management and financial resources. To manage growth effectively, we will need to: If we fail to manage our growth effectively, our business, financial condition or operating results could be materially harmed, and our stock price may decline. Our lack of adequate D&O insurance may also make it difficult for us to retain and attract talented and skilled directors and officers. We may in the future be subject to additional litigation, including potential class action and stockholder derivative actions. Risks associated with legal liability are difficult to assess and quantify, and their existence and magnitude can remain unknown for significant periods of time. To date, we have not obtained directors and officers liability (“D&O”) insurance. While neither Florida law nor our Articles of Incorporation or bylaws require us to indemnify or advance expenses to our officers and directors involved in such a legal action, we have entered into an indemnification agreement with our President and intend to enter into similar agreements with other officers and directors in the future. Without adequate D&O insurance, the amounts we would pay to indemnify our officers and directors should they be subject to legal action based on their service to the Company could have a material adverse effect on our financial condition, results of operations and liquidity. Furthermore, our lack of adequate D&O insurance may make it difficult for us to retain and attract talented and skilled directors and officers, which could adversely affect our business. If we are unable to maintain effective internal control over our financial reporting, the reputational effects could materially adversely affect our business. Under the provisions of Section 404(a) of the Sarbanes-Oxley Act of 2002, as amended by the Dodd Frank Wall Street Reform and Consumer Protection Act of 2010, the SEC adopted rules requiring public companies to perform an evaluation of Internal Control over Financial Reporting (Internal Controls) and to report on our evaluation in our Annual Report on Form 10-K. Our Internal Controls constitute a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP. In the event we discover material weakness in our internal controls and our remediation of such reported material weakness is ineffective, or if in the future we are unable to maintain effective Internal Controls, additional resulting material restatements could occur, regulatory actions could be We expect to incur substantial expenses to meet our reporting obligations as a public company. In addition, failure to maintain adequate financial and management processes and controls could lead to errors in our financial reporting and could harm our ability to manage our expenses. We estimate that it will cost approximately $50,000 annually to maintain the proper management and financial controls for our filings required as a public reporting company. In addition, if we do not maintain adequate financial and management personnel, processes and controls, we may not be able to accurately report our financial performance on a timely basis, which could cause a decline in our stock price and adversely We have a limited operating history and if we are not successful in continuing to grow our business, then we may have to scale back or even cease ongoing business operations. We are in the “developmental” stage of business and have yet to commence any substantive commercial operations. We have limited history of revenues from operations. We have yet to generate positive earnings and there can be no assurance that we will ever operate profitably. We have a limited operating history and must be considered in the developmental stage. Success is significantly dependent on a successful drilling, completion and production program. Operations will be subject to all the risks inherent in the establishment of a developing enterprise and the uncertainties arising from the absence of a significant operating history. We may be unable to locate recoverable reserves or operate on a profitable basis. We are in the developmental stage and potential investors should be aware of the difficulties normally encountered by enterprises in this stage. If the business plan is not successful, and we are not able to operate profitably, investors may lose some or all of their investment in the Company. Risks Inherit to Our Oil & Gas Operations As properties are in the exploration stage, there can be no assurance that we will establish commercial discoveries on the properties. Exploration for economic reserves of oil and gas is subject to a number of risk factors. Few properties that are explored are ultimately developed into producing oil and/or gas wells. The We are a new entrant into the oil and gas exploration and development industry without profitable operating history. Since inception, activities have been limited to organizational efforts, obtaining working capital and acquiring and developing a very limited number of properties. As a result, there is limited information regarding property related production potential or revenue generation potential. As a result, future revenues may be limited or non-existent. The business of oil and gas exploration and development is subject to many risks. The potential profitability of oil and natural gas properties if economic quantities are found is dependent upon many factors and risks beyond our control, including, but not limited to: (i) unanticipated ground conditions; (ii) geological problems; (iii) drilling and other processing problems; (iv) the occurrence of unusual weather or operating conditions and other force majeure events; (v) lower than expected reserve quantities; (vi) accidents; (vii) delays in the receipt of or failure to receive necessary government permits; (viii) delays in transportation; (ix) labor disputes; (x) government permit restrictions and regulation restrictions; (xi) unavailability of materials and equipment; and (xii) the failure of equipment or drilling to operate in accordance with specifications or expectations. Drilling operations may not be successful which would harm our ability to operate. There can be no assurance that future drilling activities will be successful, and we cannot be sure that overall drilling success rate or production operations within a particular area will ever come to fruition and, if it does, will not decline over time. We may not recover all or any portion of the capital investment in the wells or the underlying leaseholds. Unsuccessful drilling activities would have a material adverse effect upon results of operations and financial condition. The cost of drilling, completing, and operating wells is often uncertain, and a number of factors can delay or prevent drilling operations including: (i) unexpected drilling conditions; (ii) pressure or irregularities in geological formations; (iii) equipment failures or accidents; (iv) adverse weather conditions; and (iv) shortages or delays in availability of drilling rigs and delivery of equipment. If we are unable to successfully drill for oil and natural gas, we will not have revenue and in turn, the company could fail. Production initiatives may not prove successful which could have a material adverse effect upon our operations. The shales from which we intend to produce natural gas frequently contain water, which may hamper the ability to produce gas in commercial quantities. The amount of natural gas that can be commercially produced depends upon the rock and shale formation quality, the original free gas content of the shales, the thickness of the shales, the reservoir pressure, the rate at which gas is released from the shales, and the existence of any natural fractures through which the gas can flow to the well bore. However, shale rock formations frequently contain water that must be removed in order for the gas to detach from the shales and flow to the well bore. The ability to remove and dispose of sufficient quantities of water from the shales will determine whether or not we can produce gas in commercial quantities. There is no guarantee that the potential drilling locations we have or acquire in the future will ever produce natural gas, which could have a material adverse effect upon the results of operations. Prospects that we decide to drill may not yield oil or natural gas in commercially viable quantities which could have a material adverse effect upon our operations. Prospects are in various stages of preliminary evaluation and assessment and we have not reached the point where we will decide to drill at all on the subject prospects. The use of seismic data, historical drilling logs, offsetting well information, and other technologies and the study of producing fields in the same area will not enable us to know conclusively prior to drilling and testing whether natural gas will be present or, if present, whether oil or natural gas will be present in sufficient quantities or quality to recover drilling or completion costs or to be economically viable. In sum, the cost of drilling, completing and operating any wells is often uncertain and new wells may not be productive. If production results from operations, we are dependent upon transportation and storage services provided by third parties. We will be dependent on the transportation and storage services offered by various interstate and intrastate pipeline companies for the delivery and sale of gas supplies. Both the performance of transportation and storage services by interstate pipelines and the rates charged for such services are subject to the jurisdiction of the Federal Energy Regulatory Commission or state regulatory agencies. An inability to obtain transportation and/or storage services at competitive rates could hinder processing and marketing operations and/or affect sales margins. The potential profitability of oil and gas ventures depends upon factors beyond the control of our company. The potential profitability of oil and gas properties is dependent upon many factors beyond our control. For instance, world prices and markets for oil and gas are unpredictable, highly volatile, potentially subject to governmental fixing, pegging, controls, or any combination of these and other factors, and respond to changes in domestic, international, political, social, and economic environments. Additionally, due to worldwide economic uncertainty, the availability and cost of funds for production and other expenses have become increasingly difficult, if not impossible, to project. These changes and events may materially affect financial performance. Adverse weather conditions can also hinder drilling operations. A productive well may become uneconomic in the event that water or other deleterious substances are encountered which impair or prevent the production of oil and/or gas from the well. The marketability of oil and gas which may be acquired or discovered will be affected by numerous factors beyond our control. These factors include the proximity and capacity of oil and gas pipelines and processing equipment, market fluctuations of prices, taxes, royalties, land tenure, allowable production and environmental regulations. These factors cannot be accurately predicted and the combination of these factors may result in our company not receiving an adequate return on invested capital. The oil and gas industry is highly competitive and there is no assurance that we will be successful in acquiring new leases. The oil and gas industry is intensely competitive. We compete with numerous individuals and companies, including many major oil and gas companies, which have substantially greater technical, financial and operational resources and staffs. Accordingly, there is a high degree of competition for desirable oil and gas leases, suitable properties for drilling operations and necessary drilling equipment, as well as for access to funds. We cannot predict if the necessary funds can be raised or that any projected work will be completed. With the increased competition for mineral rights leases, we cannot say with certainty that we will be able to expand beyond the current Oil and gas operations are subject to comprehensive regulation which may cause substantial delays or require capital outlays in excess of those anticipated causing an adverse effect on our company. Oil and gas operations are subject to federal, state, and local laws relating to the protection of the environment, including laws regulating removal of natural resources from the ground and the discharge of materials into the environment. Oil and gas operations are also subject to federal, state, and local laws and regulations which seek to maintain health and safety standards by regulating the design and use of drilling methods and equipment. Various permits from government bodies are required for drilling operations to be conducted; no assurance can be given that such permits will be received. Environmental standards imposed by federal, state or local authorities may be changed and any such changes may have material adverse effects on activities. Moreover, compliance with such laws may cause substantial delays or require capital outlays in excess of those anticipated, thus causing an adverse effect on us. Additionally, we may be subject to liability for pollution or other environmental damages which we may elect not to insure against due to prohibitive premium costs and other reasons. To date we have not been required to spend any material amount on compliance with environmental regulations. However, we may be required to do so in future and this may affect our ability to expand or maintain operations. Exploration activities are subject to certain environmental regulations which may prevent or delay the commencement or continuance of operations. In general, exploration activities are subject to certain federal, state and local laws and regulations relating to environmental quality and pollution control. Such laws and regulations increase the costs of these activities and may prevent or delay the commencement or continuance of a given operation. Compliance with these laws and regulations has not had a material effect on operations or financial condition to date. Specifically, we are subject to legislation regarding emissions into the environment, water discharges and storage and disposition of hazardous wastes. In addition, legislation has been enacted which requires well and facility sites to be abandoned and reclaimed to the satisfaction of state authorities. However, such laws and regulations are frequently changed and we are unable to predict the ultimate cost of compliance. Generally, environmental requirements do not appear to affect us any differently or to any greater or lesser extent than other companies in the industry. We believe that our operations comply, in all material respects, with all applicable environmental regulations. Our operating partners maintain insurance coverage customary to the industry; however, we are not fully insured against all possible environmental risks. Exploratory drilling involves many risks and we may become liable for pollution or other liabilities which may have an adverse effect on financial position. Drilling operations generally involve a high degree of risk. Hazards such as unusual or unexpected geological formations, power outages, labor disruptions, blow-outs, sour gas leakage, fire, inability to obtain suitable or adequate machinery, equipment or labor, and other risks are involved. We may become subject to liability for pollution or hazards against which we cannot adequately insure or which we may elect not to insure. Incurring any such liability may have a material adverse effect on financial position and operations. Any change to government regulation/administrative practices may have a negative impact on the ability to operate and profitability. The laws, regulations, policies or current administrative practices of any government body, organization or regulatory agency in the United States or any other jurisdiction, may be changed, applied or interpreted in a manner which will fundamentally alter the ability of our company to carry on our business. The actions, policies or regulations, or changes thereto, of any government body or regulatory agency, or other special interest groups, may have a detrimental effect on us. Any or all of these situations may have a negative impact on our ability to operate profitably. Risks Inherit to Our Equity Holding in AMDAQ Corp Government actions or digital distribution platform restrictions could result in AMDAQ Corp’s products and services being unavailable in certain geographic regions, harming future growth. Due to their connections to the blockchain industry, governments and government agencies could ban or cause their network or future apps to become unavailable in certain regions and jurisdictions. This could greatly impair or prevent them from registering new customers at their online portal in affected areas and prevent current customers from accessing the network. In addition, government action taken against their service providers, suppliers or partners could cause their network to become unavailable for extended periods of time. Failure to identify and acquire technology and assets in the blockchain sector could greatly harm AMDAQ Corp’s business model. Their business model is reliant on their ability to identify and acquire technology and assets within the blockchain sector. There is Competing blockchain platforms and technologies. The development and acceptance of competing blockchain platforms or technologies may cause consumers to use alternative distributed ledgers or an alternative to distributed ledgers altogether. This may adversely affect the Company and its exposure to various blockchain technologies. Such circumstances would have a A network or data security incident may allow unauthorized access to AMDAQ Corp’s network or data, harm their reputation, create additional liability and adversely impact our Increasingly, companies are subject to Government regulation of the Blockchain industry and digital assets is evolving, and unfavorable changes could substantially harm AMDAQ Corp’s business and results of operations. They are subject to general business regulations and laws as well as Federal and state regulations and laws specifically governing securities and digital assets. Existing and future laws and regulations may impede the growth of the Internet, e-commerce or other online services, and increase the cost of providing online services. These regulations and laws may cover taxation, tariffs, user privacy, data protection, pricing, content, copyrights, distribution, electronic contracts and other communications, consumer protection, broadband residential Internet access and the characteristics and quality of services. It is not clear how existing laws governing issues such as property ownership, sales, use and other taxes, libel and personal privacy apply to the Internet and e-commerce. Unfavorable resolution of these issues may harm their business and results of operations. Due to AMDAQ Corp’s involvement in the blockchain industry, they may have a difficult time obtaining the various insurances that are desired to operate their business, which may expose them to additional risk and financial liabilities. Insurance that is otherwise readily available, such as general liability, and directors and officer’s insurance, may become more difficult for them to find and more expensive, because they are a service provider to companies in the digital asset sector. There Forms of Attack Against the Ethereum Network. Exploitation of Flaws in the Ethereum Network’s Source Code As with any other computer code, the Ethereum Network source code may contain certain flaws. Several errors and defects have been found and corrected, including those that disabled some functionality for users, exposed users’ information, or Greater than Fifty Percent of Network Computational Power Malicious actors can structure an If a malicious actor acquired sufficient computational power necessary to control the Ethereum Network (which amount would be well in excess of fifty percent), it would be able to engage in double-spending, or prevent some or all transactions from being confirmed, and prevent some or all other miners from mining any valid new blocks. The malicious actor or group of actors, however, would not be able to reverse other people’s transactions, change the fixed number of Ethers generated per new block, or transfer previously existing Ether that belong to other users. Cancer Nodes This form of attack involves a malicious actor propagating “cancer nodes” to isolate certain users from the legitimate Ethereum Network. A target user functionally surrounded by cancer nodes would be put on a separate “network,” allowing the malicious actor to relay only blocks created by the separate network and thus opening the target user to double-spending attacks. By using cancer nodes, a malicious actor also can disconnect the target user from the Ethereum economy entirely by refusing to relay any blocks or transactions. Ethereum software programs make these attacks more difficult by limiting the number of outbound connections through which users are connected to the Ethereum Network. Manipulating Blockchain Formation A malicious actor may attempt to double-spend Ether by manipulating the formation of the Blockchain rather than through control of the Ethereum Network. In this type of attack, a miner creates a valid new block containing a double-spend transaction and schedules the release of such attack block so that it Rapid technological changes. The industries in which AMDAQ Corp intends to compete with are subject to rapid technological changes. No assurances can be given that the technological advantages which may be enjoyed by the Company in respect of their technologies cannot or will not be overcome by technological advances in the respective industries rendering the Company’s technologies obsolete or non-competitive. Protection of intellectual property. The success of AMDAQ Corp will be dependent, in part, upon the protection of its various proprietary technologies from competitive use. Certain of its technologies are the subject of various patents in varying jurisdictions. In addition to the In the future, Risk to Our Common If we fail to remain current on our reporting requirements, we could be removed from the Companies We do not expect to pay dividends in the future; any return on investment may be limited to the value of our common stock. We do not currently anticipate paying cash dividends in the foreseeable future. The payment of dividends on our common stock will depend on earnings, financial condition and other business and economic factors affecting it at such time as the board of directors may consider relevant. Our current intention is to apply net earnings, if any, in the foreseeable future to increasing our capital base and development and marketing efforts. There can be no assurance that the Company will ever have sufficient earnings to declare and pay dividends to the holders of our common stock, and in any event, a decision to declare and pay dividends is at the sole discretion of our board of directors. If we do not pay dividends, our common stock may be less valuable because a return on your investment will only occur if its stock price appreciates. Authorization of preferred Our Certificate of Incorporation authorizes the issuance of up to 5,000,000 shares of preferred stock with designations, rights and preferences determined from time to time by its Board of Directors. Accordingly, our Board of Directors is empowered, without stockholder approval, to issue preferred stock with dividend, liquidation, conversion, voting, or other rights which could adversely affect the voting power or other rights of the holders of the common stock. In the event of issuance, the preferred stock could be utilized, under certain circumstances, as a method of discouraging, delaying or preventing a change in control of the Company. The The price of the Shares has been arbitrarily determined and bears no relationship to the assets or book value of the Company, or other customary investment criteria. No independent counsel or appraiser has been retained to value the Shares, and no assurance can be made that the offering price is in fact reflective of the underlying value of the Shares offered hereunder. Each prospective investor is therefore urged to consult with his or her own legal counsel and tax advisors as to the offering price and terms of the Shares offered hereunder. The Shares are an illiquid investment and transferability of the Shares is subject to significant restriction. There are substantial restrictions on the transfer of the Shares. Therefore, the purchase of the Shares must be considered a long-term investment acceptable only for prospective investors who are willing and can afford to accept and bear the substantial risk of the investment for an indefinite period of time. There is not a public market for the resale of the Shares. A prospective investor, therefore, may not be able to liquidate its investment, even in the event of an emergency, and Shares may not be acceptable as collateral for a The market price for our common stock may be particularly volatile given our status as a relatively unknown company, with a limited operating history and lack of profits which could lead to wide fluctuations in our share price. You may be unable to sell your common stock at or above your purchase price, which may result in substantial losses to you. Our stock price may be particularly volatile when compared to the Existing stockholders will experience significant dilution from our sale of shares under potential Securities Purchase Agreements. The sale of shares pursuant to any Securities Purchase Agreements executed by the Company in the future will have a dilutive impact on our stockholders. As a result, the market price of our common stock could decline significantly, as we sell shares pursuant to the Securities Purchase Agreement. In addition, for any particular advance, we will need to issue a greater number of shares of common stock under the Securities Purchase Agreement as our stock price declines. If our stock price is lower, then our existing stockholders would experience greater dilution. The Company May Issue Shares of Preferred Stock with Greater Rights than Common Stock. The Company’s charter authorizes the Board of Directors to issue one or more series of preferred stock and set the terms of the Being a Public Company Significantly Increases the Company’s Administrative Costs. The Sarbanes-Oxley Act of 2002, as well as rules subsequently implemented by the SEC and listing requirements subsequently adopted by the NYSE Amex in response to Our shares Our stock is subject to U.S. “Penny Stock” rules, which may make the stock more difficult to trade on the open market. Our common shares are not currently Our common stock does not currently fit into any of the above exceptions. If an investor buys or sells a penny stock, SEC regulations require that the investor receive, prior to the transaction, a disclosure explaining the penny stock market and associated risks. Furthermore, trading in our common stock will be subject to Rule 15g-9 of the Exchange Act, which relates to non-NASDAQ and non-exchange listed securities. Under this rule, broker/dealers who recommend our securities to persons other than established customers and accredited investors must make a special written suitability determination for the purchaser and receive the purchaser’s written agreement to a transaction prior to sale. Securities are exempt from this rule if their market price is at least $5.00 per share. Since our common stock is currently deemed penny stock regulations, it may tend to reduce market liquidity of our common stock, because they limit the broker/dealers’ ability to trade, and a purchaser’s ability to sell, the stock in the secondary market. The low price of Because we can issue additional shares of common stock, We are authorized to issue up to 750,000,000 shares of common stock, of which 391,243,635 shares of common stock are issued and outstanding as of March 16, 2021. Our Board of Directors has the You may be diluted by conversions of the As of December 31, 2019, we had (i) outstanding options/warrants to purchase an aggregate of 8,324,617 shares of our common stock with exercise prices ranging from $0.024- $0.80 per share, and (ii) outstanding third-party notes in an aggregate principal amount of $1,533,519, which are convertible for up to 560,374,918 shares of our common stock, and (iii) 1,000,000 shares of Series A Preferred stock outstanding, which are convertible into 7,800,000 shares of our common stock; and (iv) 100 shares of Series D Preferred stock which is convertible into 416,666,667 shares of our common stock. The exercise of such options and warrants, conversion of the Issuances of shares of common stock The issuance of additional shares of our common stock or securities convertible into or exchangeable for our common stock could The Company’s shares of common stock are quoted on the OTC Markets Pink Sheet, which limits the liquidity and price of the Company’s common stock. The Company’s shares of Common Stock are traded on the OTC Markets Pink Sheet market under the symbol “UNGS.” Quotation of the Company’s securities on the OTC Pink Sheet market limits the liquidity and price of the Company’s Common Stock more than if the Company’s shares of Common Stock were listed on The Nasdaq Stock Market or a national exchange. There is currently no active trading market in the Company’s Common Stock. There can be no assurance that there will be an active trading market for the Company’s Common Stock following a business combination. In the event that an active trading market commences, there can be no assurance as FINRA sales practice requirements may limit a The Financial Industry Regulatory Authority, Inc. (“FINRA”) has adopted rules requiring 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 or low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA has indicated its belief that there is a high probability that speculative or low-priced securities will not be suitable for at least some customers. If these FINRA requirements are applicable to us or our securities, they may make it more difficult for broker-dealers to recommend that at least some of their customers buy our common stock, which may limit the ability of our stockholders to buy and sell our common stock and could have an adverse effect on the market for and price of our common stock. We are classified as a “smaller reporting company” and we cannot be certain if the reduced disclosure requirements applicable to smaller reporting companies will make our common stock less attractive to investors. We are a “smaller reporting company.” Specifically, “smaller reporting companies” are able to provide simplified executive compensation disclosures in their filings; are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting; and have certain other decreased disclosure obligations in their SEC filings. Because directors and officers currently and for the foreseeable future will continue to control Sylios Corp, it is not likely that you will be able to elect directors or have any say in the policies of the Company. Our shareholders are not entitled to cumulative voting rights. Consequently, the election of directors and all other matters requiring shareholder approval will be decided by majority vote. The directors, officers and affiliates of Sylios Corp beneficially own approximately 1.0% of our outstanding common stock through direct ownership plus an indeterminate number of shares of common stock Since we intend to retain any earnings for development of our We have never declared or paid any cash dividends or distributions on our capital stock. We currently intend to The Company is a holding company. The Company is a holding company and essentially all of its assets are the capital stock of its material subsidiaries. As a result, investors in the Company are subject to the risks attributable to its subsidiaries. Consequently, our cash flows and ability to complete current or desirable future enhancement opportunities are dependent on the earnings of its subsidiaries and investments and the distribution of those earnings to the Company. The ability of these entities to pay dividends and other distributions will depend on their operating results and are subject to applicable laws and regulations which require that solvency and capital standards be maintained by such companies and contractual restrictions contained in the instruments governing their debt. In the event of a bankruptcy, liquidation or reorganization of any of our material subsidiaries, holders of indebtedness and trade creditors may be entitled to payment of their claims from the assets of those subsidiaries before the Company. Cautionary Note Because the risk factors referred to above, as well as other risks not mentioned above, could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements made by us, you should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made. We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for us to predict which ones will arise. In addition, we We are a smaller reporting company as defined by Rule 12b-2 of the Our current office space is We own a .92 acre tract of vacant commercial land in Bibb County, Georgia. With adequate financing, the Company’s current plans are to initiate the development of a storage facility on site during calendar 2021. Please seeNOTE D – PROPERTY AND EQUIPMENT for further We own a 1.1 acre tract of vacant commercial land in Santa Rosa County, Florida. With adequate financing, the We believe that our From time to time, we may be a defendant and plaintiff in various legal proceedings arising in the normal course of our business. We are currently not a party to any material pending legal proceedings or government actions, including any bankruptcy, receivership, or similar proceedings. In addition, management is not aware of any known litigation or liabilities involving the operators of our properties that could affect our operations. Should any liabilities be incurred in the future, they will be accrued based on management’s best estimate of the potential loss. As such, there is no adverse effect on our consolidated financial position, results of operations or cash flow at this time. Furthermore, On On December 31, 2013, PR Newswire Assoc, LLC (“Plaintiff”) filed a complaint against the Company On December 5, 2013, Jack Rice Insurance, LLC (“Plaintiff”) filed a complaint against the Company (“Defendant”) with the Circuit Court of Pinellas County, Florida, alleging that the Defendant failed to pay the Plaintiff for insurance premiums in the amount of $1941.96 plus costs in the amount of $191.11 for a total of $2,133.07. On February 13, 2014, the Court issued a Final Judgment against the Company in the amount of $1,941.96 principal, costs in the sum of $191.11 for a total of $2,133.07. Said total is to draw interest at the legal rate of 4.75% interest per annum. As of December 31, 2019, $1,406.28 principal plus all inherit interest remain due. On November 27, 2013, Wallace L. Scruggs and Renee Scruggs (Plaintiffs”) filed a complaint against the Company (“Defendant”) in the United States District Court, Southern District of West Virginia, Huntington Division alleging that the Defendant failed to make payments on the terms of a Subscription Agreement entered into by the On August 29, 2011, US Natural Gas Corp (“Plaintiff”) filed a complaint against Northwest Florida Operations, Inc. (“Defendant”) in the County Court of Pinellas County Florida, Small Claims Division alleging breach of contract against the None. The The closing stock prices reflect the Company’s 1:4000 reverse stock split effective as of December 28, 2018. Holders As of December 31, 2019, there were 290 shareholders of record of our common stock. Dividend Policy The Company has never declared or paid any cash dividends on its common stock. We currently intend to retain future earnings, if any, to finance the expansion of our business. As a result, we do not anticipate paying any cash dividends in the foreseeable future. The The Company paid a stock dividend to its shareholders in the spin-off of its wholly owned subsidiary, AMDAQ Corp (f/k/a E 2 Investments, LLC). AMDAQ Corp will file its Registration Statement on Form S-1 during the second quarter of 2019. Penny Stock Regulations and Restrictions on Marketability The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a market price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with (a) bid and offer quotations for the penny stock, (b) the compensation of In addition, the These disclosure requirements may have the effect of reducing the trading activity for our common Securities authorized for issuance under equity compensation plans We have no equity compensation plans and Transfer Agent Pacific Stock Transfer 6725 Via Austi Pkwy, Suite 300 Las Vegas, NV 89119 (800) 785-7782 voice (702) 433-1979 fax www.pacificstocktransfer.com Recent Sales of Unregistered Securities During the year ended December 31, 2019, we issued securities that were not registered under the Securities Act and Common Stock On January 4, 2019, the Company On January 7, 2019, the On February 7, 2019, the Company issued On February 14, 2019, the Company issued On February 20, 2019, the Company issued On April On August 22, 2019, the Company issued On September 9, 2019, the Company issued On September 15, 2019, the Company issued On September 25, 2019, the Company issued On October 28, 2019, the Company issued On October 28, 2019, the Company issued 1,000,000 shares of its common stock On November 25, 2019, the Company issued On December 5, 2019, the Company On December 5, 2019, the Company On December 10, 2019, the Company issued 3,545,487 shares of its common stock to a convertible On December 12, 2019, the Company issued 1,940,268 shares of its common stock to a convertible noteholder in satisfaction of $3,150 principal, $17 in accrued interest and $500 in fees against an outstanding note. The $1,572 excess of the $5,239 fair value of the 1,940,268 shares over the $3,667 liability reduction was charged to loss on conversion of debt in the three months ended December 31, 2019. On December 20, 2019, the Company issued 2,023,234 shares of its common stock to a convertible noteholder in satisfaction of $2,600 principal, $16 in accrued interest and $500 in fees against an outstanding note. The $3,156 excess of the $6,272 fair value of the 2,023,234 shares over the $3,116 liability reduction was charged to loss on conversion of debt in the three months ended December 31, 2019. On December 26, 2019, the Company issued 4,093,514 shares of its common stock to a convertible noteholder in satisfaction of $1,773 principal and $28 in accrued interest against an outstanding note. The $8,023 excess of the $9,824 fair value of the 4,093,514 shares over the $1,801 liability reduction was charged to loss on conversion of debt in the three months ended December 31, 2019. On December 30, 2019, the Company issued 2,116,895 shares of its common stock to a convertible noteholder in satisfaction of $2,600 principal, $12 in accrued interest and $500 in fees against an outstanding note. The $3,239 excess of the $6,351 fair value of the 2,116,895 shares over the $3,112 liability reduction was charged to loss on conversion of debt in the three months ended December 31, 2019. We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item. The following discussion of our financial condition and results of operations should be read in conjunction with Our Management’s Discussion and Analysis contains not only statements that Although the forward-looking statements in this annual Our financial statements are stated in United States Dollars (USD or US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. All references to “common stock” refer to the common shares in our capital stock. Overview Sylios Corp (f/k/a US Natural Gas Corp) (“Sylios”, the “Company”, “we”, “us”, or “our”) was organized as a Florida Corporation on March 28, 2008 under the name of Adventure Energy, Inc. Sylios has five wholly owned subsidiaries: (i) US Natural Gas Corp KY (“USNG KY”), a corporation incorporated in Florida on February 1, 2010; (ii) US Natural Gas Corp WV (“USNG WV”) a corporation incorporated in Tennessee on August 25, 2009 and Effective March 10, 2017, Sylios distributed approximately 80.01% of the common stock of The Greater Cannabis Company, Inc. (“GCAN”), a former wholly owned subsidiary of Sylios organized in Florida on March 13, 2014. Please seeNOTE G - INVESTMENTS IN AND ADVANCES TO SPUN-OFF FORMER SUBSIDIARIES for further information. Effective October 2, 2017, Sylios distributed approximately 41.05% of the common stock of AMDAQ Corp (formerly E 2 Investments, LLC) (“AMDAQ”), a former wholly owned subsidiary of Sylios organized in Florida on July 20, 2009. Please seeNOTE G - INVESTMENTS IN AND ADVANCES TO SPUN-OFF FORMER SUBSIDIARIES and Effective December 28, 2018, Sylios effected a 1 share for 4,000 shares reverse stock split of its common stock reducing the number of issued and outstanding shares of its common stock from 10,949,884,000 to 2,737,471 shares. The accompanying financial statements retroactively reflect the reverse stock split. Sylios owns vacant land in Macon, GA and Milton, FL, which subject to receipt of adequate financing, it plans upon developing a storage facility for customer rentals on each tract of land. Please seeNOTE D - PROPERTY AND EQUIPMENT for further information. USNG KY was granted royalty interests in 13 oil and gas wells in Kentucky (that had been shut-in since 2014) that it had acquired several years prior to the year ended December 31, 2017, which Results of Operations Operating Revenues During the Operating Expenses and During the year ended December 31, 2019, the Company incurred operating expenses of $1,359,147 compared to operating expenses of $379,253 for the year ended December 31, 2018. The increase in operating expenses is attributed to an increase in officer and For the year ended December 31, 2019, the Company recorded net income of $5,804,894 or $0.33 per share, compared with a net loss of Liquidity and Capital Resources Working Capital At December 31, 2019, the Company had cash of $67 and total current assets of $67 compared with cash of $28,005 and total current assets of $28,005 at December 31, 2018. The decrease in total current assets is attributable to a decrease in cash at December 31, 2019. At December 31, 2019, the Company had total current liabilities of $4,069,581 compared to $11,548,595 at December 31, 2018. The decrease in total current liabilities was attributed to a decrease in the calculation of the The overall working capital deficit decreased from $11,520,590 at December 31, 2018 to $4,069,514 at December 31, 2019. The decrease in working capital deficit is mainly due to the calculation of Cash Flows Cashflow from Operating Activities During the year ended December 31, 2019, the Company used cash of $202,435 in operating activities compared to cash used of $29,252 from operating activities for the year ended December 31, 2018. The increase in cash used from operating activities was due to a loss on conversions of notes payable, an increase on amortization of debt discounts offset by derivative liability income of $7,659,285. Cashflow from Investing Activities During the year ended December 31, 2019, the Company used cash of $35,039 in investing activities compared to cash used of $- from investing activities for the year ended December 31, 2018. Cashflow from Financing Activities During the year ended December 31, 2019, cash provided by financing activities was $209,536 compared to $57,255 for the year ended December 31, 2018. During the year ended December 31, 2019, the Company received $206,450 of proceeds from the issuance of multiple convertible debentures payable to unrelated parties and We currently have We are If we are unable to raise the funds required to fund our operations, we will Convertible Debentures On December 13, 2019, the Company entered into a Securities Purchase Agreement (the “Agreement”) with Armada Investment Fund, LLC (“Armada”) wherein the Company issued Armada a Convertible Promissory Note (the “Note”) in the amount of $16,500 ($1,500 OID). The Note has a term of one (1) year (due on December 13, 2020) and bears interest at 8% annually. The Note is convertible, in whole or in part, at any time and from time to time before maturity at the option of the holder. The conversion price for the principal and interest in connection with voluntary conversions by the Holder shall be 60% multiplied by the Market Price (as defined herein)(representing a discount rate of 40%), subject to adjustment as described herein (“Conversion Price”). Market Price” means the lowest one (1) Trading Prices (as defined below) for the Common Stock during the twenty (20) Trading Day period ending on the last complete Trading Day prior to the Conversion Date. “Trading Prices” means, for any security as of any date, the lowest traded price on the Over-the Counter Pink Marketplace, OTCQB. As part and parcel of the foregoing transaction, Armada was issued a warrant granting the holder the right to purchase up to 841,200 shares of the Company’s common stock at an exercise price of $0.024 for a term of 5-years. Please see NOTE J - NOTES PAYABLE, THIRD PARTIES for further information. On October 30, 2019, the Company entered into a Securities Purchase Agreement (the “Agreement”) with Armada Investment Fund, LLC (the “Investor”) wherein the Company issued the Investor a Convertible Promissory Note (the “Note”) in the amount of $25,300. The Note has a term of one (1) year, is due on October 30, 2020 and bears interest at 8% annually. The Note is convertible, in whole or in part, at any time and from time to time before maturity (October 30, 2020) at the option of the holder. The conversion price for the principal and interest in connection with voluntary conversions by the Holder shall be 60% multiplied by the Market Price (as defined herein)(representing a discount rate of 40%), subject to adjustment as described herein (“Conversion Price”). Market Price” means the lowest one (1) Trading Prices (as defined below) for the Common Stock during the twenty (20) Trading Day period ending on the last complete Trading Day prior to the Conversion Date. “Trading Prices” means, for any security as of any date, the lowest traded price on the Over-the Counter Pink Marketplace, OTCQB. As part and parcel of the foregoing transaction, the Investor was issued a warrant granting the holder the right to purchase up to 1,402,000 shares of the Company’s common stock at an exercise price of $0.024 for a term of 5-years. Please see NOTE J - NOTES PAYABLE, THIRD PARTIES for further information. On July 24, 2019, the Company executed a Convertible Note (the “Convertible Note”) payable to Armada Investment Fund, LLC (“ARMADA”) in the principal amount of $15,400. The Convertible Note is convertible, in whole or in part, at any time and from time to time before maturity (July 24, 2020) at the option of the holder. The conversion price for the principal and interest in connection with voluntary conversions by the Holder shall be 70% multiplied by the Market Price (as defined herein)(representing a discount rate of 30%), subject to adjustment as described herein (“Conversion Price”). Market Price” means the lowest one (1) Trading Prices (as defined below) for the Common Stock during the twenty (20) Trading Day period ending on the last complete Trading Day prior to the Conversion Date. “Trading Prices” means, for any security as of any date, the lowest traded price on the Over-the Counter Pink Marketplace, OTCQB, or applicable trading market (the “OTCQB”) as reported by a reliable reporting service (“Reporting Service”) designated by the Holder (i.e. www.Nasdaq.com) or, if the OTCQB is not the principal trading market for such security, on the principal securities exchange or trading market where such security is listed or traded or, if the lowest intraday trading price of such security is not available in any of the foregoing manners, the lowest intraday price of any market makers for such security that are quoted on the OTC Markets. The Convertible Note has a term of one (1) year and bears interest at 8% annually. As part of the transaction, ARMADA was also issued a warrant granting the holder the right to purchase up to 256,667 shares of the Company’s common stock at an exercise price of $.08 for a term of 5-years. Please see NOTE J - NOTES PAYABLE, THIRD PARTIES for further information. On July 2, 2019, the Company executed a Convertible Note (the “Convertible Note”) payable to Armada Investment Fund, LLC (“ARMADA”) in the principal amount of $16,500. The Convertible Note is convertible, in whole or in part, at any time and from time to time before maturity (June 5, 2020) at the option of the holder. The conversion price for the principal and interest in connection with voluntary conversions by the Holder shall be 70% multiplied by the Market Price (as defined herein)(representing a discount rate of 30%), subject to adjustment as described herein (“Conversion Price”). Market Price” means the lowest one (1) Trading Prices (as defined below) for the Common Stock during the twenty (20) Trading Day period ending on the last complete Trading Day prior to the Conversion Date. “Trading Prices” means, for any security as of any date, the lowest traded price on the Over-the Counter Pink Marketplace, OTCQB, or applicable trading market (the “OTCQB”) as reported by a reliable reporting service (“Reporting Service”) designated by the Holder (i.e. www.Nasdaq.com) or, if the OTCQB is not the principal trading market for such security, on the principal securities exchange or trading market where such security is listed or traded or, if the lowest intraday trading price of such security is not available in any of the foregoing manners, the lowest intraday price of any market makers for such security that are quoted on the OTC Markets. The Convertible Note has a term of one (1) year and bears interest at 8% annually. As part of the transaction, ARMADA was also issued a warrant granting the holder the right to purchase up to 220,000 shares of the Company’s common stock at an exercise price of $.075 for a term of 5-years. Please see NOTE J - NOTES PAYABLE, THIRD PARTIES for further information. On June 5, 2019, the Company executed a Convertible Note (the “Convertible Note”) payable to Armada Investment Fund, LLC (“ARMADA”) in the principal amount of $16,500. The Convertible Note is convertible, in whole or in part, at any time and from time to time before maturity (June 5, 2020) at the option of the holder. The conversion price for the principal and interest in connection with voluntary conversions by the Holder shall be 70% multiplied by the Market Price (as defined herein)(representing a discount rate of 30%), subject to adjustment as described herein (“Conversion Price”). Market Price” means the lowest one (1) Trading Prices (as defined below) for the Common Stock during the twenty (20) Trading Day period ending on the last complete Trading Day prior to the Conversion Date. “Trading Prices” means, for any security as of any date, the lowest traded price on the Over-the Counter Pink Marketplace, OTCQB, or applicable trading market (the “OTCQB”) as reported by a reliable reporting service (“Reporting Service”) designated by the Holder (i.e. www.Nasdaq.com) or, if the OTCQB is not the principal trading market for such security, on the principal securities exchange or trading market where such security is listed or traded or, if the lowest intraday trading price of such security is not available in any of the foregoing manners, the lowest intraday price of any market makers for such security that are quoted on the OTC Markets. The Convertible Note has a term of one (1) year and bears interest at 8% annually. As part of the transaction, ARMADA was also issued a warrant granting the holder the right to purchase up to 220,000 shares of the Company’s common stock at an exercise price of $.075 for a term of 5-years. Please see NOTE J - NOTES PAYABLE, THIRD PARTIES for further information. On February 18, 2019, the Company executed a Convertible Note (the “Convertible Note”) payable to Armada Investment Fund, LLC, (“ARMADA”) in the principal amount of $11,550 in exchange for $10,500 cash. The Convertible Note is convertible, in whole or in part, at any time and from time to time before maturity (February 18, 2020) at the option of the holder. The conversion price for the principal and interest in connection with voluntary conversions by the Holder shall be 70% multiplied by the Market Price (as defined herein)(representing a discount rate of 30%), subject to adjustment as described herein (“Conversion Price”). Market Price” means the lowest one (1) Trading Prices (as defined below) for the Common Stock during the twenty (20) Trading Day period ending on the last complete Trading Day prior to the Conversion Date. “Trading Prices” means, for any security as of any date, the lowest traded price on the Over-the Counter Pink Marketplace, OTCQB. The Convertible Note has a term of one (1) year and bears interest at 8% annually. As part of the transaction, ARMADA was also issued a warrant granting the holder the right to purchase up to 26,250 shares of the Company’s common stock at an exercise price of $.10 for a term of 5-years. Please see NOTE J - NOTES PAYABLE, THIRD PARTIES for further information. On February 12, 2019, the Company issued an Amended and Restated Replacement Convertible Promissory Note in the amount of Twenty-One Thousand Five Hundred and NO/100 Dollars ($21,500) to Armada Investment Fund, LLC (“ARMADA) dated February 12, 2019. On this same date, ARMADA entered into an Assignment Agreement with Bullfly Trading Company, Inc. (“BULLFLY”) for the assignment of two convertible notes issued by the Company to BULLFLY the first dated June 1, 2016 with a principal amount of $4,000 and the second dated July 11, 2016 in the principal amount of $4,000 and with Mountain Properties, Inc. (“MOUNTAIN”) for the assignment of one convertible note issued by the Company to MOUNTAIN dated February 24, 2016 with a principal amount of $7,500. The Amended and Restated Replacement Convertible Promissory Note includes all principal and accrued interest on the three notes purchased by ARMADA. The Convertible Note is convertible, in whole or in part, at any time and from time to time at the option of the holder at the Variable Conversion Price The “Variable Conversion Price” shall equal the lesser of (i) 50% multiplied by the lowest Trading Price (as defined herein) during the previous twenty five (25) Trading Days (as defined herein) before the Issue Date of this Note (representing a discount rate of 50%) or (ii) 50% multiplied by the Market Price (as defined herein) (representing a discount rate of 50%). “Market Price” means the lowest Trading Price (as defined below) for the Common Stock during the twenty-five (25) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. The notes bears interest at 8% annually. Please see NOTE J - NOTES PAYABLE, THIRD PARTIES for further information. On December 31, 2018, the Company executed a Convertible Note (the “Convertible Note”) payable to Armada Investment Fund, LLC, (“ARMADA”) in the principal amount of $33,000. The Convertible Note was funded on December 31, 2018. The Convertible Note is convertible, in whole or in part, at any time and from time to time before maturity (December 31, 2019) at the option of the holder at the Variable Conversion Price, shall equal the lesser of (i) 50% multiplied by the lowest Trading Price during the previous twenty (20) Trading Days before the Issue Date of this Note (representing a discount rate of 50%) or (iii) 50% multiplied by the Market Price (as defined herein) (representing a discount rate of 50%). “Market Price” means the lowest Trading Price (as defined below) for the Common Stock during the twenty (20) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. The Convertible Note has a term of one (1) year and bears interest at 8% annually. As part of the transaction, ARMADA was also issued a warrant granting the holder the right to purchase 82,500 shares of the Company’s common stock at an exercise price of $0.50 for a term of 5-years. Please see NOTE J - NOTES PAYABLE, THIRD PARTIES for further information. On October 9, 2018, the Company executed a Convertible Note (the “Convertible Note”) payable to Armada Investment Fund, LLC, (“ARMADA”) in the principal amount of $30,000. The Convertible Note was funded on October 10, 2018. The Convertible Note is convertible, in whole or in part, at any time and from time to time before maturity (October 9, 2019) at the option of the holder at the Variable Conversion Price, shall equal the lesser of (i) 50% multiplied by the lowest Trading Price during the previous twenty (20) Trading Days before the Issue Date of this Note (representing a discount rate of 50%) or (iii) 50% multiplied by the Market Price (as defined herein) (representing a discount rate of 50%). “Market Price” means the lowest Trading Price (as defined below) for the Common Stock during the twenty (20) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. The Convertible Note has a term of one (1) year and bears interest at 8% annually. As part of the transaction, ARMADA was also issued a warrant granting the holder the right to purchase 62,500 shares of the Company’s common stock at an exercise price of $0.40 for a term of 5-years. As part of the Convertible Note, the Company executed a Registration Rights Agreement (the “RRA”) dated October 9, 2018. Among other things, the RRA provides for the Company to file a Registration Statement with the SEC covering the resale of shares underlying the Convertible Note and the warrant and to have declared effective such Registration Statement. In the event that the Company doesn’t meet the registration requirements provided for in the RRA, the Company is obligated to pay ARMADA certain payments for such failures. Please see NOTE J - NOTES PAYABLE, THIRD PARTIES for further information. j) On May 2, 2019, the Company executed a Convertible Note (the “Convertible Note”) payable to Jefferson Street Capital, LLC in the principal amount of $11,000 in exchange for $9,000 cash. The Convertible Note is convertible, in whole or in part, at any time and from time to time before maturity (February 3, 2020) at the option of the holder. The conversion price for the principal and interest in connection with voluntary conversions by the Holder shall be 58% multiplied by the Market Price (as defined herein)(representing a discount rate of 42%), subject to adjustment as described herein (“Conversion Price”). Market Price” means the lesser of the (i) lowest one (1) Trading Prices (as defined below) for the Common Stock during the twenty (20) Trading Day period ending on the last complete Trading Day prior to the Conversion Date or (ii) lowest one (1) Trading Prices (as defined below) for the Common Stock during the twenty (20) Trading Day period ending on the last complete Trading Day prior to the Original Issue Date. “Trading Prices” means, for any security as of any date, the lowest traded price on the Over the Counter Pink Marketplace, OTCQB, or applicable trading market (the “OTCQB”) as reported by a reliable reporting service. “Trading Prices” means, for any security as of any date, the lowest traded price on the Over-the Counter Pink Marketplace, OTCQB. The Convertible Note has a term of nine (9) months and bears interest at 8% annually. As part of the transaction, JEFFERSON was also issued a warrant granting the holder the right to purchase up to 50,000 shares of the Company’s common stock at an exercise price of $.10 for a term of 5-years. Please see NOTE J - NOTES PAYABLE, THIRD PARTIES for further information. On February 18, 2019, the Company executed a Convertible Note (the “Convertible Note”) payable to Jefferson Street Capital, LLC, (“JEFFERSON”) in the principal amount of $11,550 in exchange for $10,500 cash. The Convertible Note is convertible, in whole or in part, at any time and from time to time before maturity (February 18, 2020) at the option of the holder. The conversion price for the principal and interest in connection with voluntary conversions by the Holder shall be 70% multiplied by the Market Price (as defined herein)(representing a discount rate of 30%), subject to adjustment as described herein (“Conversion Price”). Market Price” means the lowest one (1) Trading Prices (as defined below) for the Common Stock during the twenty (20) Trading Day period ending on the last complete Trading Day prior to the Conversion Date. “Trading Prices” means, for any security as of any date, the lowest traded price on the Over-the Counter Pink Marketplace, OTCQB. The Convertible Note has a term of one (1) year and bears interest at 8% annually. As part of the transaction, JEFFERSON was also issued a warrant granting the holder the right to purchase up to 26,250 shares of the Company’s common stock at an exercise price of $.10 for a term of 5-years. Please see NOTE J - NOTES PAYABLE, THIRD PARTIES for further information. On October 16, 2019, the Company executed a Convertible Note (the “Convertible Note”) payable to BHP Capital NY Inc. (“BHP”) in the principal amount of $13,750. The Convertible Note is convertible, in whole or in part, at any time and from time to time before maturity (October 16, 2020) at the option of the holder. The conversion price for the principal and interest in connection with voluntary conversions by the Holder shall be 60% multiplied by the Market Price (as defined herein)(representing a discount rate of 40%), subject to adjustment as described herein (“Conversion Price”). Market Price” means the lowest one (1) Trading Prices (as defined below) for the Common Stock during the twenty (20) Trading Day period ending on the last complete Trading Day prior to the Conversion Date. “Trading Prices” means, for any security as of any date, the lowest traded price on the Over-the Counter Pink Marketplace, OTCQB, or applicable trading market (the “OTCQB”) as reported by a reliable reporting service (“Reporting Service”) designated by the Holder (i.e. www.Nasdaq.com) or, if the OTCQB is not the principal trading market for such security, on the principal securities exchange or trading market where such security is listed or traded or, if the lowest intraday trading price of such security is not available in any of the foregoing manners, the lowest intraday price of any market makers for such security that are quoted on the OTC Markets. The Convertible Note has a term of one (1) year and bears interest at 8% annually. As part of the transaction, BHP was also issued a warrant granting the holder the right to purchase up to 761,598 shares of the Company’s common stock at an exercise price of $.024 for a term of 5-years. Please see NOTE J - NOTES PAYABLE, THIRD PARTIES for further information. m) On May 2, 2019, the Company executed a Convertible Note (the “Convertible Note”) payable to BHP Capital NY Inc. in the principal amount of $11,000 in exchange for $9,000 cash. The Convertible Note is convertible, in whole or in part, at any time and from time to time before maturity (February 3, 2020) at the option of the holder. The conversion price for the principal and interest in connection with voluntary conversions by the Holder shall be 58% multiplied by the Market Price (as defined herein)(representing a discount rate of 42%), subject to adjustment as described herein (“Conversion Price”). Market Price” means the lesser of the (i) lowest one (1) Trading Prices (as defined below) for the Common Stock during the twenty (20) Trading Day period ending on the last complete Trading Day prior to the Conversion Date or (ii) lowest one (1) Trading Prices (as defined below) for the Common Stock during the twenty (20) Trading Day period ending on the last complete Trading Day prior to the Original Issue Date. “Trading Prices” means, for any security as of any date, the lowest traded price on the Over the Counter Pink Marketplace, OTCQB, or applicable trading market (the “OTCQB”) as reported by a reliable reporting service “Trading Prices” means, for any security as of any date, the lowest traded price on the Over-the Counter Pink Marketplace, OTCQB. The Convertible Note has a term of nine (9) months and bears interest at 8% annually. As part of the transaction, BHP was also issued a warrant granting the holder the right to purchase up to 50,000 shares of the Company’s common stock at an exercise price of $.10 for a term of 5-years. Please see NOTE J - NOTES PAYABLE, THIRD PARTIES for further information. On February 18, 2019, the Company executed a Convertible Note (the “Convertible Note”) payable to BHP Capital NY Inc., (“BHP”) in the principal amount of $11,550 in exchange for $10,500 cash. The Convertible Note is convertible, in whole or in part, at any time and from time to time before maturity (February 18, 2020) at the option of the holder. The conversion price for the principal and interest in connection with voluntary conversions by the Holder shall be 70% multiplied by the Market Price (as defined herein)(representing a discount rate of 30%), subject to adjustment as described herein (“Conversion Price”). Market Price” means the lowest one (1) Trading Prices (as defined below) for the Common Stock during the twenty (20) Trading Day period ending on the last complete Trading Day prior to the Conversion Date. “Trading Prices” means, for any security as of any date, the lowest traded price on the Over-the Counter Pink Marketplace, OTCQB. The Convertible Note has a term of one (1) year and bears interest at 8% annually. As part of the transaction, BHP was also issued a warrant granting the holder the right to purchase up to 26,250 shares of the Company’s common stock at an exercise price of $.10 for a term of 5-years. Please see NOTE J - NOTES PAYABLE, THIRD PARTIES for further information. On October 16, 2019, the Company executed a Convertible Note (the “Convertible Note”) payable to Fourth Man, LLC (“FOURTH”) in the principal amount of $13,750. The Convertible Note is convertible, in whole or in part, at any time and from time to time before maturity (October 16, 2020) at the option of the holder. The conversion price for the principal and interest in connection with voluntary conversions by the Holder shall be 60% multiplied by the Market Price (as defined herein)(representing a discount rate of 40%), subject to adjustment as described herein (“Conversion Price”). Market Price” means the lowest one (1) Trading Prices (as defined below) for the Common Stock during the twenty (20) Trading Day period ending on the last complete Trading Day prior to the Conversion Date. “Trading Prices” means, for any security as of any date, the lowest traded price on the Over-the Counter Pink Marketplace, OTCQB, or applicable trading market (the “OTCQB”) as reported by a reliable reporting service (“Reporting Service”) designated by the Holder (i.e. www.Nasdaq.com) or, if the OTCQB is not the principal trading market for such security, on the principal securities exchange or trading market where such security is listed or traded or, if the lowest intraday trading price of such security is not available in any of the foregoing manners, the lowest intraday price of any market makers for such security that are quoted on the OTC Markets. The Convertible Note has a term of one (1) year and bears interest at 8% annually. As part of the transaction, FOURTH was also issued a warrant granting the holder the right to purchase up to 761,598 shares of the Company’s common stock at an exercise price of $.024 for a term of 5-years. Please see NOTE J - NOTES PAYABLE, THIRD PARTIES for further information. On July 24, 2019, the Company executed a Convertible Note (the “Convertible Note”) payable to Fourth Man, LLC (“FOURTH”) in the principal amount of $15,400. The Convertible Note is convertible, in whole or in part, at any time and from time to time before maturity (July 24, 2020) at the option of the holder. The conversion price for the principal and interest in connection with voluntary conversions by the Holder shall be 70% multiplied by the Market Price (as defined herein)(representing a discount rate of 30%), subject to adjustment as described herein (“Conversion Price”). Market Price” means the lowest one (1) Trading Prices (as defined below) for the Common Stock during the twenty (20) Trading Day period ending on the last complete Trading Day prior to the Conversion Date. “Trading Prices” means, for any security as of any date, the lowest traded price on the Over-the Counter Pink Marketplace, OTCQB, or applicable trading market (the “OTCQB”) as reported by a reliable reporting service (“Reporting Service”) designated by the Holder (i.e. www.Nasdaq.com) or, if the OTCQB is not the principal trading market for such security, on the principal securities exchange or trading market where such security is listed or traded or, if the lowest intraday trading price of such security is not available in any of the foregoing manners, the lowest intraday price of any market makers for such security that are quoted on the OTC Markets. The Convertible Note has a term of one (1) year and bears interest at 8% annually. As part of the transaction, FOURTH was also issued a warrant granting the holder the right to purchase up to 256,667 shares of the Company’s common stock at an exercise price of $.08 for a term of 5-years. Please see NOTE J - NOTES PAYABLE, THIRD PARTIES for further information. On January 27, 2017, the Company executed a Convertible Note (the “Note”) payable to Tangiers Investment Group, LLC (“TANGIERS”), in the principal amount of $55,000. The Note is convertible, in whole or in part, at any time and from time to time before maturity (January 17, 2018) at the option of the holder at the Variable Conversion Price, which shall mean the lesser of 50% multiplied by the Market Price (as defined). “Market Price” means the lowest Trading Prices (as defined below) for the Common Stock during the twenty (20) Trading Day period ending on the last complete Trading Day prior to the Conversion Date. The Note has a term of one (1) year and bears interest at 8% annually. Please see NOTE J - NOTES PAYABLE, THIRD PARTIES for further information. On June 3, 2015, the Company executed a Convertible Note (the “Note”) payable to Tangiers Investment Group, LLC (“TANGIERS”), in the principal amount of $17,250. The Note is convertible, in whole or in part, at any time and from time to time before maturity (June 3, 2016) at the option of the holder at the Variable Conversion Price, which shall mean the lesser of 50% multiplied by the Market Price (as defined). “Market Price” means the lowest Trading Prices (as defined below) for the Common Stock during the twenty (20) Trading Day period ending on the last complete Trading Day prior to the Conversion Date. The Note has a term of one (1) year and bears interest at 10% annually. Please see NOTE J - NOTES PAYABLE, THIRD PARTIES for further information. On August 12, 2014, the Company executed a Convertible Note (the “Note”) payable to Tangiers Investment Group, LLC (“TANGIERS”), in the principal amount of $112,500. The Note is convertible, in whole or in part, at any time and from time to time before maturity (August 21, 2015) at the option of the holder at the Variable Conversion Price, which shall mean the lesser of 50% multiplied by the Market Price (as defined). “Market Price” means the lowest Trading Prices (as defined below) for the Common Stock during the twenty (20) Trading Day period ending on the last complete Trading Day prior to the Conversion Date. The Note has a term of one (1) year and bears interest at 8% annually. Please see NOTE J - NOTES PAYABLE, THIRD PARTIES for further information. The Convertible Notes are convertible into In addition, the number of shares issuable upon conversion of the Convertible Note is potentially limitless. While the overall ownership of each individual Holder at any one moment may be limited to 9.99% of the issued and outstanding shares of our common stock, each holder may be free to sell any shares into the market that have previously been issued to them, thereby enabling them to convert the remaining portion of these Convertible Notes. We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act INDEX TO FINANCIAL STATEMENTS REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Sylios Corp Opinion on We have audited the accompanying consolidated balance sheets of Basis for Opinion These financial statements We conducted our Our audit Going Concern Uncertainty The accompanying financial statements referred to Freeport, New York March 17, 2021 We have served as the Company’s auditor since 2019. CONSOLIDATED BALANCE SHEETS The accompanying notes are an integral part of these consolidated financial statements. CONSOLIDATED STATEMENTS OF OPERATIONS For the years ended December 31, Income (loss) per common share: 0.33 17,393,217 2,737,471 455,877,245 2,737,471 CONSOLIDATED STATEMENTS OF For the years ended December 31, For the year ended December 31, 2,141,396 For the year ended December 31, 2,176,617 2,177 67,823 70,000 995,025 40,000 The accompanying notes are an integral part of these consolidated financial statements. CONSOLIDATED STATEMENTS OF CASH FLOWS For the years ended December 31, 2019 and 2018 - 10,000 (198,398 93,498 - (15,000 (5,000 75,000 71,326 110,000 The accompanying notes are an integral part of these consolidated financial statements. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, NOTE A Sylios Corp (f/k/a US Natural Gas Corp) (“Sylios”, the “Company”, “we”, “us”, or “our”) was organized as a Florida Corporation on March 28, 2008 under the name of Adventure Energy, Inc. Sylios has five wholly owned subsidiaries: (i) US Natural Gas Corp KY (“USNG KY”), a corporation incorporated in Florida on February 1, 2010; (ii) US Natural Gas Corp WV (“USNG WV”), a corporation incorporated in Tennessee on August 25, 2009 and redomiciled in Florida on April 26, 2010; (iii) E 3 Petroleum Corp (“E 3”), a corporation incorporated in Florida on February 2, 2010; (iv) 1720 RCMG, LLC (“RCMG”), a limited liability company formed in the State of Florida on July 24, 2019; and (v) 5496 NRMF, LLC (“NRMF”), a limited liability company formed in the State of Florida on October 12, 2019. Effective March 10, 2017, Sylios distributed approximately 80.01% of the common stock of The Greater Cannabis Company, Inc. (“GCAN”), a former wholly owned subsidiary of Sylios organized in Florida on March 13, 2014. Please seeNOTE G - INVESTMENTS IN AND ADVANCES TO SPUN-OFF FORMER SUBSIDIARIES for further information. Effective October 2, 2017, Sylios distributed approximately 41.05% of the common stock of AMDAQ Corp (formerly E 2 Investments, LLC) (“AMDAQ”), a former wholly owned subsidiary of Sylios organized in Florida on July 20, 2009. Please seeNOTE G - INVESTMENTS IN AND ADVANCES TO SPUN-OFF FORMER SUBSIDIARIES and NOTE R- SUBSEQUENT EVENTS for further information. Effective December 28, 2018, Sylios effected a 1 share for 4,000 shares reverse stock split of its common stock reducing the number of issued and outstanding shares of its common stock from 10,949,884,000 to 2,737,471 shares. The accompanying financial statements retroactively reflect the reverse stock split. Sylios owns vacant land in Macon, GA and Milton, FL, which subject to receipt of adequate financing, it plans upon developing storage facilities for customer rentals. Please seeNOTE D - PROPERTY AND EQUIPMENT for further information. USNG KY was granted royalty interests in 13 oil and gas wells in Kentucky (that had been shut-in since 2014) that it had acquired several years prior to the year ended December 31, 2017, which were sold to a third party in 2018. Please seeNOTE E - OIL AND GAS ROYALTY INTERESTS for further information. On September 5, 2019, the Company filed a Form 8-A12G with the Securities and Exchange Commission to become a mandatory filer under the Securities Exchange Act of 1934. NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Summary of This summary of Principles of Consolidation The consolidated financial statements include the accounts of SYLIOS CORP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, NOTE Cash Equivalents Investments having an original maturity of 90 days or less that are readily convertible into cash are considered to be cash equivalents. Income Taxes In accordance with We expect to recognize the financial statement benefit of Financial We adopted ASC Topic 820, Fair Value Measurements and Disclosures, for assets and liabilities measured at fair value on a recurring basis. ASC Topic 820 establishes a common definition for fair value to be applied to existing US GAAP that requires the use of fair value measurements that establishes a ASC 820 defines fair value as the The carrying value of financial Oil and Gas Properties The Company has adopted the successful efforts method of accounting for oil and gas producing activities. Under the successful efforts method, costs to acquire mineral interests in oil and gas properties, to drill and equip exploratory wells that find proved reserves, and to drill and equip developmental wells are capitalized. Costs to drill exploratory wells that do not find proved reserves, costs of developmental wells on properties the Company has no further interest in, geological and geophysical costs, and costs of carrying and retaining unproved properties are expensed. SYLIOS CORP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2019 and NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) When a property is determined to contain proved reserves, the capitalized costs of such properties are transferred from unproved properties to proved properties and are amortized by the unit-of-production method based upon estimated proved developed reserves. To the extent that capitalized costs of groups of proved properties having similar characteristics exceed the estimated future net cash flows, the excess, if any, of capitalized costs are written down to the present value of such amounts. Estimated future net cash flows are determined based primarily upon the estimated future proved reserves related to the On sale or abandonment of an entire interest in Derivative Liabilities We evaluate convertible notes payable, stock options, stock warrants and other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under the relevant sections of ASC Topic 815-40, Derivative Instruments and Hedging: Contracts in Entity’s Own Equity. The result of this accounting treatment could be that the fair value of a financial instrument is classified as a derivative instrument and is marked-to-market at each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income or other expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Financial instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815-40 are reclassified to a liability account at the fair value of the instrument on the reclassification date. Long-lived Assets Long-lived assets such as property and equipment and intangible assets are periodically reviewed for impairment. We test for impairment losses on long-lived assets used in operations whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of an asset to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. Impairment evaluations involve management’s estimates on asset useful lives and future cash flows. Actual useful lives and cash flows could be different from those estimated by management which could have a material effect on our reporting results and financial positions. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. Marketable Equity Securities Marketable equity securities are stated at market value with unrealized gains and losses included in operations. The Company has classified its marketable equity securities as trading securities. Deferred Financing Costs Deferred financing costs represent costs incurred in connection with obtaining debt financing. These costs are amortized ratably and charged to financing expenses over the term of the related debt. SYLIOS CORP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, NOTE Equity Instruments Issued to Non-Employees for Acquiring Goods or Services Issuances of our common stock or warrants for acquiring goods or services 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 measurement date for the fair value of the equity instruments issued to consultants or vendors is determined at the earlier of (i) the date at which a commitment for performance to earn the equity instruments is reached (a “performance commitment” which would include a penalty considered to be of a magnitude that is a sufficiently large disincentive for nonperformance) or (ii) the date at which performance is complete. Although situations may arise in which counter performance may be required over a period of time, the equity award granted to the party performing the service is fully vested and non-forfeitable on the date of the agreement. As a result, in this situation in which vesting periods do not exist if the instruments are fully vested on the date of agreement, we determine such date to be the measurement date and will record the estimated fair market value of the instruments granted as a prepaid expense and amortize such amount to expense over the contract period. When it is appropriate for us to recognize the cost of a transaction during financial reporting periods prior to the measurement date, for purposes of recognition of costs during those periods, the equity instrument is measured at the then-current fair values. Stock-Based Compensation We account for share-based awards to employees in accordance with ASC 718 “Stock Compensation”. Under this guidance, stock compensation expense is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the estimated service period (generally the vesting period) on the straight-line attribute method. Share-based awards to non-employees are accounted for in accordance with ASC 505-50 “Equity”, wherein such awards are expensed over the period in which the related services are rendered. Related Parties A party is considered to be related to us if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with us. Related parties also include our principal owners, our management, members of the immediate families of our principal owners and our management and other parties with which we may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties, or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests, is also a related party. Revenue Recognition Revenue Advertising Costs Advertising costs are expensed as incurred. For the periods presented, we had no advertising costs. Income (loss) per share We compute income (loss) per share in accordance with Basic income (loss) per share amounts are SYLIOS CORP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, NOTE Recently Enacted Accounting Standards In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers, which will supersede nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five-step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. As amended by the FASB in July 2015, the standard is effective for annual periods beginning after December 15, 2017, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). ASU 2014-09 has not had any significant effect on our Financial statements for the periods presented. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), to provide guidance on recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements, specifically differentiating between different types of leases. The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from all leases. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from previous GAAP. There continues to be a differentiation between finance leases and operating leases. However, the principal difference from previous guidance is that the lease assets and lease liabilities arising from operating leases should be recognized in the balance sheet. The accounting applied by a lessor is largely unchanged from that applied under previous GAAP. The amendments will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and early adoption is permitted. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply. These practical expedients relate to the identification and classification of leases that commenced before the effective date, initial direct costs for leases that commenced before the effective date, and the ability to use hindsight in evaluating lessee options to extend or terminate a lease or to purchase the underlying asset. An entity that elects to apply the practical expedients will, in effect, continue to account for leases that commence before the effective date in accordance with previous GAAP unless the lease is modified, except that lessees are required to recognize a right-of-use asset and a lease liability for all operating leases at each reporting date based on the present value of the remaining minimum rental payments that were tracked and disclosed under previous GAAP. ASU No. 2016-02 has not had any significant effect on our Financial statements for the periods presented. On July 13, 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (“ASU”) 2017-11. Among other things, ASU 2017-11 provides guidance that eliminates the requirement to consider “down round” features when determining whether certain financial instruments or embedded features are indexed to an entity’s stock and need to be classified as liabilities. ASU 2017-11 provides for entities to recognize the effect of a down round feature only when it is triggered and then as a dividend and a reduction to income available to common stockholders in basic earnings per share. The guidance is effective for annual periods beginning after December 15, 2018; early adoption is permitted. The Company has early adopted ASU 2017-11. As a result, we have not recognized the fair value of the warrants containing down round features as liabilities. Please seeNOTE N - CAPITAL STOCK for further information. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. SYLIOS CORP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Fair Value of Financial Instruments The Company NOTE Inventory consists of the following at: On September 12, 2019, the Company entered into an Inventory Purchase Agreement with Wanshan Engineering Services, LLC for the purchase of surplus inventory. The Company purchased 30,000 Squeeze Soap Filled Scrubbers for the purchase price of $100,000 via the issuance of 10,000,000 shares of Sylios restricted common stock. The Closing of the transaction occurred on September 15, 2019. On September 21, 2019, the Company entered into an Inventory Purchase Agreement with Wanshan Engineering Services, LLC for the purchase of surplus inventory. The Company purchased 1,000 Ampt wireless earbuds for the purchase price of $60,000 via the issuance of 6,000,000 shares of Sylios restricted common stock. The Closing of the transaction occurred on September 25, 2019. Pending significant sales of the inventory purchased from Wanshan Engineering Services, LLC, the Company has not assigned any value to the inventory. Squeezee Soap Filled Scrubbers: The innovative Squeezee sponge has concentrated dishwashing liquid inside the sponge with grease cutting formula and Aloe for soft hands. The Squeezee scrubber makes dishwashing both more convenient and economical. No more need for purchasing separate detergents. The soft antibacterial non-scratch double-sided scrubber has a unique shape allowing to reach those hard to get to places for multi-purpose use. The Company launched its ecommerce site for the Squeezee Scrubber on February 10, 2020. However, to the date of issuance of these financial statements, the Company has not yet made any sales of this product. Ampt Wireless Bluetooth Earbuds: Pair the AMPT stereo Bluetooth earphones with each other for a stereo experience. In single earbud mode, each wireless headset can connect with two Bluetooth source devices like your iPhone or Android phone, iPad, tablet, or laptop simultaneously. If you are streaming music from your iPad, and receive an incoming call on your iPhone, the wireless earphones will recognize this and allow you to take the call seamlessly without the hassle of repairing. Pairing 2 cordless earbuds wirelessly like Apple AirPods, making it the smallest stereo Bluetooth headset on the market. Siri is just a touch away via the main button on either of the cordless earbuds. You never have to take your smartphone out of your pocket, giving you a genuine hands-free, wireless stereo experience. The Company launched its ecommerce site for the Ampt Wireless Bluetooth Earbuds on February 28, 2020. However, to the date of issuance of these financial statements, the Company has not yet made any sales of this product. The products are currently stored in a warehouse in Largo, Florida. NOTE D - PROPERTY AND EQUIPMENT Property and equipment consist of the following at: Land in Santa Rosa County, Florida (1.1 acre tract)(ii) The Company uses the straight-line method of depreciation for computer software and SYLIOS CORP For the years ended December 31, NOTE Oil and gas royalty interests consist of: No gain or loss has been recognized from the sale of these wells. No guaranteed royalty revenue was granted to the Company in the sale, only a royalty interest dependent on future production. There was no remaining carrying value for these wells at the time of the NOTE The Company The Company hopes to NOTE G - INVESTMENTS IN AND ADVANCES TO SPUN-OFF FORMER SUBSIDIARIES The Greater Cannabis Company, Inc. Effective March 10, 2017, in SYLIOS CORP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2019 and 2018 NOTE G - INVESTMENTS IN AND ADVANCES TO SPUN-OFF SUBSIDIARIES (continued) Generally accepted accounting principles in the United States require that an entity’s distribution of shares of a wholly owned or consolidated subsidiary to be recorded based on the carrying value of the subsidiary. The partial spin-off was recorded at the carrying value of GCAN’s net assets which was a deficit of $113,922 as of March 10, 2017, as follows: Since GCAN had negative assets at the March 10, 2017 effective date of the spin-off, the Company recorded its 19.9% investment in GCAN at $0. At December 31, 2019 and December 31, 2018, the Company held 628,476 (1.60% of the 39,301,323 issued and outstanding common shares) and 5,378,476 (16.87% of the 31,880,969 issued and outstanding common shares) shares of common stock of GCAN, respectively. On January 9, 2019, the Company transferred 4,000,000 shares of GCAN common stock (fair value of $840,000) to AMDAQ Corp On September 1, 2017, AMDAQ Corp (“AMDAQ”) acquired AMDAQ, Ltd. (“Limited”), a corporation formed under the Registrar of Companies for England and Wales in March 2016, in exchange for Effective October 2, 2017, in connection with a Generally accepted accounting principles in the United States require that an entity’s distribution of shares of a wholly owned or consolidated subsidiary to SYLIOS CORP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, NOTE Since AMDAQ had negative net assets at the October 2, 2017 effective date of the spin-off, the Company recorded its 9.1% investment in AMDAQ at $0. NOTE H – ACQUISITION OF GLOBAL TECHNOLOGIES, LTD (ENTITY CONTROLLED BY WAYNE ANDERSON) SERIES L CONVERTIBLE PREFERRED STOCK Effective August 22, 2019, the Company entered into a Consulting Agreement with Global Technologies, Ltd. (“GTLL”) pursuant to which GTLL issued Each share of GTLL Series L Convertible Preferred Stock (the “Preferred Stock”) is entitled to receive dividends when, as, and if declared by the GTLL Board of Directors in its sole discretion. The Preferred Stock has voting rights equal to four times the sum of i) the total number of shares of GTLL common stock Generally accepted accounting principles in the United States require that an equity transaction involving entities under common control are to be recorded based on the carrying value of the assets acquired. The transaction was recorded at GTLL’s carrying value of $0. Since GTLL had negative net assets at August 22, 2019, the effective date of the Consulting Agreement, the Company recorded its 10 shares of GTLL Series L Convertible Preferred Stock at $0. At the date of issuance of these financial statements, the Company still holds the aforementioned 10 shares of GTLL Series L Convertible Preferred Stock. NOTE I – ACCRUED OFFICER AND DIRECTOR COMPENSATION Accrued officer and director compensation is due to Wayne Anderson, the sole officer and For the years ended December 31, 2019 and 2018, the balance of 479,464 60,000 539,464 SYLIOS CORP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, NOTE Notes payable to SYLIOS CORP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, NOTE 2,863 SYLIOS CORP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, NOTE Concentration of Debt Due Lenders: 339,162 93,559 503,220 23,474 117,033 526,694 456,195 Interest expense consists of: 23,474 The stated interest and additional default interest expense relates to the 27,300 27,300 23,932 23,932 59,058 23,474 23,474 SYLIOS CORP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, NOTE Income from modification of convertible and non-convertible notes payable consists of: (1) The debt modifications with SLMI Energy Holdings, LLC (“SLMI”) provide that in the event that the Company does not make a payment to SMLI within 30 days written notice of demand by SLMI, all unpaid interest accruing since September 4, 2009 (in the case of the original September 4, 2009 Note) and accruing since November 12, 2009 (in the case of the original November 12, 2009 Note) shall accrue at a 18% default interest rate rather than the 3% stated interest rate in the Renewal Notes. If that had occurred on December 31, 2019, the additional default interest accruable would have been approximately $1,365,000. As of the date of the issuance of these financial statements, SLMI has not provided the Company any notice of demand for payment and accordingly, the Company is not in default of these obligations. (2) As of the date of the issuance of these financial statements, waivers of the additional default interest for both Darling and Tangiers obligations remain in effect. However, the Company is still in technical default for the principal and stated interest of these significantly past-due convertible promissory notes. Gain on settlement of convertible notes payable consists of: Convertible Note Conversions: For the year ended December 31, 2019, the Company issued Loss on conversions of SYLIOS CORP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, NOTE K - Notes payable to 138,000 The Secured Promissory Note dated October 6, 2018 payable to Wayne Anderson SYLIOS CORP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, NOTE The 207,837 584,473 1,251,922 SYLIOS CORP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, NOTE The Convertible Promissory The fair value of the derivative liability was measured at the respective issuance dates and at December 31, Derivative liability income (expense) consists of: 7,659,285 NOTE M – ASSET RETIREMENT OBLIGATIONS The Company’s asset retirement obligations relate to future plugging and abandonment costs relating to the 13 oil and gas wells located in Kentucky, which were sold to Soligen Technologies, Inc. (“Soligen”) on May 10, 2018 (Please seeNOTE E -OIL AND GAS ROYALTY INTERESTS for further information). The $64,500 liability was estimated by management at December 31, 2016 based upon a number of factors including the depth of the wells and the regional reclamation, plugging and abandonment costs. No change in the estimate of $64,500 has been recognized from December 31, 2016 to December 31, If and when Soligen replaces our operating bond on deposit with the Kentucky Department of Natural Resources, Soligen will then become responsible for the asset retirement obligations NOTE N On September 2, 2009, the Board of Directors unanimously approved the designation of a series of preferred stock to be known as “Series A Preferred Stock”. The designations, powers, preferences and rights, and the qualifications, limitations or restrictions hereof, in respect of the Series A Preferred Stock shall be as hereinafter described. The holders of Series A Preferred Stock shall not be entitled to receive dividends nor shall dividends be paid on common stock or any other Series of Preferred Stock while Series A Preferred shares are outstanding. The holders of Series A Preferred Stock shall be entitled to vote on all matters submitted to a vote of the Shareholders of the Company and shall have such number of votes equal to the number of shares of Series A Preferred Stock held on a one per one share basis. Upon the availability of a sufficient number of authorized but unissued and unreserved shares of common stock, the holders of any Series A Preferred Stock shall be entitled to convert such shares in to fully paid and non-assessable shares of common stock at the rate of 7.8 shares of common stock for each share of Series A Preferred Stock only if the Company has failed to satisfy all financial obligations by the designated time inclusive of the cure period. The Board of Directors of the Company, pursuant to authority granted in the Articles of Incorporation, created a series of preferred stock designated as Series A Preferred Stock (the “Series A Preferred Stock”) with a stated value of $0.001 per share. The number of authorized shares constituting the Series A Preferred Stock was Three Million (3,000,000) shares. At December 31, On September 2, 2009, the Board of Directors unanimously approved the designation of a series of preferred stock to be known as “Series B Preferred Stock”. The designations, powers, preferences and rights, and the qualifications, limitations or restrictions hereof, in respect of the Series B Preferred Stock shall be as hereinafter described. The holders of Series B Preferred Stock shall not be entitled to receive dividends. The holders of Series B Preferred Stock shall not be entitled to vote on any matters submitted to a vote of the Shareholders of the Company. Upon the availability of a sufficient number of authorized but unissued and unreserved shares of common stock, the holders of Series B Preferred Stock may at their election convert such shares in to fully paid and non-assessable shares of common stock at the rate of ten shares of common stock for each share of series B Preferred Stock. The Board of Directors of the Company, pursuant to authority granted in the Articles of Incorporation, created a series of preferred stock designated as Series B Preferred Stock (the “Series B Preferred Stock”) with a stated value of $0.001 per share. The number of authorized shares constituting the Series B Preferred Stock was SYLIOS CORP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2019 and 2018 NOTE N - CAPITAL STOCK (continued) On April 14, 2011, the Board of Directors unanimously approved the designation of a series of preferred stock to be known as “Series C Preferred Stock”. The designations, powers, preferences and rights, and the qualifications, limitations or restrictions hereof, in respect of the Series C Preferred Stock shall be as hereinafter described. The holders of Series C Preferred Stock shall not be entitled to receive dividends nor shall dividends be paid on common stock or any other Series Preferred Stock while Series C Preferred shares are outstanding. On November 14, 2017, the Company’s Board of Directors unanimously approved the designation of a series of preferred stock to be known as “Series D Preferred Stock” with a stated value of $0.001 per share. The designations, powers, preferences and rights, and the qualifications, limitations or restrictions hereof, in respect of the Series D Preferred Stock shall be as hereinafter described. The holders of Series D Preferred Stock shall not be entitled to receive dividends. If at least one share of Series D Preferred Stock is issued and outstanding, then the total aggregate issued shares of Series D Preferred Stock at any given time, regardless of their number, shall have voting rights equal to four times the sum of: i) the total number of shares of Common Stock which are issued and outstanding at the time of voting, plus ii) the total number of shares of Series A, plus Series B, plus Series C Preferred Stocks which are issued and outstanding at the time of voting. Upon the availability of a sufficient number of authorized but unissued and unreserved shares of common stock, the holders of Series D Preferred Stock may at their election convert such shares in to fully paid and non-assessable shares of common stock upon the following formula: Calculation- Each individual share of Series D Preferred Stock shall be convertible into the number of shares of Common Stock equal to: [5000] divided by: [.80 times the lowest closing price of the Company’s common stock for the immediate five-day period prior to the receipt of the Notice of Conversion remitted to the Company by the Series D Preferred stockholder] The number of authorized shares constituting the Series D Preferred Stock was Five Hundred Thousand (500,000) shares. At December 31, 2019 and December 31, 2018, there are 100 and 100 shares issued and outstanding, respectively. Common Stock Holders of the Company’s common stock are entitled to one vote for each share on all matters submitted to a stockholder vote. Holders of common stock do not have cumulative voting rights. A vote by the holders of a majority of the Company’s outstanding voting shares is required to effectuate certain fundamental corporate changes such as liquidation, merger or an amendment to the Company’s articles of incorporation. Holders of the Company’s common stock are entitled to share in all dividends that the board of directors, in its discretion, declares from legally available funds. In the event of a liquidation, dissolution or winding up, each outstanding share entitles its holder to participate pro rata in all assets that remain after payment of liabilities and after providing for each class of stock, if any, having preference over the common stock. The Company’s common stock has no pre-emptive rights, no conversion rights and there are no redemption provisions applicable to the Company’s common stock. SYLIOS CORP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2019 and 2018 NOTE N - CAPITAL STOCK (continued) In April 2018, the Board of Directors approved a 1:4000 reverse stock split. On December 7, 2018, the Company filed a new Issuer Company-Related Action Notification Form with the Financial Industry Regulatory Authority (“FINRA”) for the Company’s approved 1:4000 reverse stock split. On December 27, 2018, the Company was notified by FINRA that it had sufficient information to pass on the corporate action. The Company’s common stock began trading on a post-split basis beginning on December 28, 2018 (the “Effective date”). The trading symbol for the Company’s common stock was changed to “UNGSD” for the first twenty business days including the effective date, thereafter the trading symbol reverted back to “UNGS.” Common Stock and Preferred Stock Issuances For the years ended December 31, 2019 and 2018, the Company issued and/or sold the following unregistered securities: Common Stock 2019 On January 4, 2019, the Company issued 37,500 shares of its common stock (with a fair value of $14,959) in satisfaction of $15,000 in accounts payable due a consultant. On January 7, 2019, the prior owner of AMDAQ, Ltd and the prior owners of the AMDAQ tokens agreed to a reduction in the number of common shares of AMDAQ Corp that they would retain. Of the 15,000,000 shares of AMDAQ Corp common stock issued to the prior owner of AMDAQ, Ltd, 7,500,000 were returned to AMDAQ Corp to be retired. Of the 3,000,000 shares of AMDAQ Corp common stock issued for the purchase of the AMDAQ tokens, 1,500,000 were returned to AMDAQ Corp to be retired. On February 7, 2019, the Company issued 594,066 shares of its common stock to a convertible noteholder in satisfaction of $642 accrued interest. The $59,418 excess of the $60,060 fair value of the 594,066 shares over the $642 liability reduction was charged to loss on conversion of debt in the three months ended March 31, 2019. On February 14, 2019, the Company issued 1,500,000 shares of its common stock to a Valvasone Trust affiliate as payment for services rendered on behalf of the Company. The $150,000 fair value of the 1,500,000 shares was charged to professional fees in the three months ended March 31, 2019. On February 20, 2019, the Company issued 536,585 shares of its common stock to a convertible noteholder in satisfaction of $1,100 notes payable. The $52,559 excess of the $53,659 fair value of the 536,585 shares over the $1,100 liability reduction was charged to loss on conversion of debt in the three months ended March 31, 2019. On April 17, 2019, the Company issued 116,822 shares of its common stock to Wayne Anderson, the Company’s chief executive officer and sole officer and director of the Company, in satisfaction of $10,000 director’s stock-based compensation for the first quarter of calendar year 2019. On August 22, 2019, the Company issued 583,523 shares of its common stock to a convertible noteholder in satisfaction of $345 principal and $851 interest against an outstanding note. The $7,557 excess of the $8,753 fair value of the 583,523 shares over the $1,196 liability reduction was charged to loss on conversion of debt in the three months ended September 30, 2019. On September 9, 2019, the Company issued 1,226,583 shares of its common stock to a convertible noteholder in satisfaction of $1,300 interest against an outstanding note. The $10,966 excess of the $12,266 fair value of the 1,226,583 shares over the $1,300 liability reduction was charged to loss on conversion of debt in the three months ended September 30, 2019. On September 15, 2019, the Company issued 10,000,000 shares of restricted common stock for the purchase of $100,000 in inventory. Please seeNOTE C – INVENTORY for further information. On September 25, 2019, the Company issued 6,000,000 shares of restricted common stock for the purchase of $60,000 in inventory. Please seeNOTE C – INVENTORY for further information. On October 28, 2019, the Company issued 1,248,390 shares of its common stock to a convertible noteholder as a partial cashless exercise of a warrant. On October 28, 2019, the Company issued 1,000,000 shares of its common stock to a convertible noteholder in satisfaction of $3,700 principal and $500 in fees against an outstanding note. The $5,800 excess of the $10,000 fair value of the 1,000,000 shares over the $4,200 liability reduction was charged to loss on conversion of debt in the three months ended December 31, 2019. On November 25, 2019, the Company issued 2,072,133 shares of its common stock to a convertible noteholder in satisfaction of $605 principal and $721 in accrued interest against an outstanding note. The $19,395 excess of the $20,721 fair value of the 2,072,133 shares over the $1,326 liability reduction was charged to loss on conversion of debt in the three months ended December 31, 2019. On December 5, 2019, the Company issued 893,006 shares of its common stock to a convertible noteholder as a partial cashless exercise of a warrant. On December 5, 2019, the Company issued 772,133 shares of its common stock to a convertible noteholder in satisfaction of $400 principal, $721 in accrued interest and $500 in fees against an outstanding note. The $2,240 excess of the $3,861 fair value of the 772,133 shares over the $1,621 liability reduction was charged to loss on conversion of debt in the three months ended December 31, 2019. On December 10, 2019, the Company issued 3,545,487 shares of its common stock to a convertible noteholder in satisfaction of $1,875 principal and $39 in accrued interest against an outstanding note. The $9.077 excess of the $10,991 fair value of the 3,545,487 shares over the $1,914 liability reduction was charged to loss on conversion of debt in the three months ended December 31, 2019. On December 12, 2019, the Company issued 1,940,268 shares of its common stock to a convertible noteholder in satisfaction of $3,150 principal, $17 in accrued interest and $500 in fees against an outstanding note. The $1,572 excess of the $5,239 fair value of the 1,940,268 shares over the $3,667 liability reduction was charged to loss on conversion of debt in the three months ended December 31, 2019. On December 20, 2019, the Company issued 2,023,234 shares of its common stock to a convertible noteholder in satisfaction of $2,600 principal, $16 in accrued interest and $500 in fees against an outstanding note. The $3,156 excess of the $6,272 fair value of the 2,023,234 shares over the $3,116 liability reduction was charged to loss on conversion of debt in the three months ended December 31, 2019. On December 26, 2019, the Company issued 4,093,514 shares of its common stock to a convertible noteholder in satisfaction of $1,773 principal and $28 in accrued interest against an outstanding note. The $8,023 excess of the $9,824 fair value of the 4,093,514 shares over the $1,801 liability reduction was charged to loss on conversion of debt in the three months ended December 31, 2019. On December 30, 2019, the Company issued 2,116,895 shares of its common stock to a convertible noteholder in satisfaction of $2,600 principal, $12 in accrued interest and $500 in fees against an outstanding note. The $3,239 excess of the $6,351 fair value of the 2,116,895 shares over the $3,112 liability reduction was charged to loss on conversion of debt in the three months ended December 31, 2019. 2018 In December 2018, the Company issued 995,025 shares of its common stock (with a fair value of $40,000) to Wayne Anderson, the Company’s chief executive officer and sole officer and director of the Company, in satisfaction of $40,000 accrued director’s compensation for the calendar year 2018. In December 2018, the Company issued 2,176,617 shares of its common stock (with a fair value of $70,000) to Wayne Anderson in satisfaction of $70,000 accrued director’s compensation for the calendar years 2011-2017. The number of common shares authorized with a SYLIOS CORP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2019 and 2018 NOTE Preferred Stock None Warrants and Options A summary of - (26,250 (26,250 As of The following table summarizes information about warrants outstanding as of December 31, 2019: SYLIOS CORP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2019 and 2018 NOTE O - INCOME TAXES The provision for (benefit from) income taxes differs from the amount computed by applying the statutory United States federal income tax rate for the periods presented to income (loss) before income taxes. The income tax rate was 21% for the years ended December 31, 2019 and 2018. The sources of the difference are as follows: All tax years remain subject to examination by the Internal Revenue Service. Significant components of the Company’s deferred income tax are as follows: Based on management’s present assessment, the Company has not yet determined it to be more likely than not that a deferred tax asset of $2,370,532 attributable to the Current tax laws limit the SYLIOS CORP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Occupancy On Employment and Director Agreements On April 1, 2018, the Company executed an employment agreement with Wayne Anderson to serve in the role as President, Treasurer, and Secretary of the Company upon the terms and provisions and, subject to the conditions set forth in the Agreement, for a term of three (3) years, commencing on April 1, 2018 and terminating on March 31, 2021, unless earlier terminated as provided in the Agreement. The Agreement included options to Mr. Anderson to purchase 25,000 shares of common stock at a price of $0.40 per share. The agreement provides for Mr. Anderson to receive an annual compensation of $270,000 for each of the three years of the Agreement. Please seeNOTE I – ACCRUED OFFICER AND DIRECTOR COMPENSATION for further information. SYLIOS CORP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2019 and 2018 NOTE P - COMMITMENTS AND CONTINGENCIES (continued) On January 2, 2018, the Company executed a new Board of Directors Service Agreement with Wayne Anderson. Under the terms of the Agreement, commencing January 2, 2018 the Company is to pay Mr. Anderson $10,000 per quarter for which Mr. Anderson serves on the Board of Directors. In addition to cash compensation, the Company is to issue Mr. Anderson the equivalent of $10,000 of the Company’s common stock on the last calendar day of each quarter. The calculation for the number of shares to be issued to Mr. Anderson shall be as follows: $10,000/(Closing stock price on the last trading day of each quarter x .80). Please seeNOTE I – ACCRUED OFFICER AND DIRECTOR COMPENSATION for further information. On April 1, 2015, the Company executed an employment agreement with Wayne Anderson to serve in the role as President, Treasurer, and Secretary of the Company upon the terms and provisions and, subject to the conditions set forth in the Agreement, for a term of three (3) years, commencing on April 1, 2015, and terminating on March 31, 2018, unless earlier terminated as provided in the Agreement. The Agreement included options to Mr. Anderson to purchase 25,000 shares of common stock at a price of $0.40 per share. Mr. Anderson was accrued an annual compensation of $221,767 for each of the three years of the Agreement. On January 5, 2011, the Company executed a Board of Directors Service Agreement with Wayne Anderson. Under the terms of the Agreement, commencing January 5, 2011 the Company was to pay Mr. Anderson the equivalent of $2,500 per quarter in common stock for which Mr. Anderson served on the Board of Directors. For the years ended December 31, 2011 to December 31, 2017, the Company expensed $10,000 per year, which was satisfied through the issuance of the Company’s common stock on December 31, 2018. Please see NOTE I – ACCRUED OFFICER AND DIRECTOR COMPENSATION for further information. Legal From time to time, the Company is subject to litigation from service providers and others. As of December 31, 2019 and December 31, 2018, there are two outstanding judgments against the Company totaling $6,658 and $6,658, respectively (which is included in accounts payable). As of December 31, 2019 and December 31, 2018 and at the date of issuance of these financial statements, there is no outstanding litigation against the Company. Key Man life insurance On July 17, 2019, the Company applied for a 10-year term Key Man life insurance policy for its sole officer and director, Jimmy Wayne Anderson, in the amount of $500,000. The policy was approved in August 2019 with an effective start date of September 1, 2019. The monthly cost to the company is $59.38. SYLIOS CORP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2019 and 2018 NOTE Q - GOING CONCERN UNCERTAINITY Under ASC 205-40, we have the responsibility to evaluate whether conditions and/or events raise substantial doubt about our ability to meet our future financial obligations as they become due within one year after the date that the financial statements are issued. As required by this standard, our evaluation shall initially not take into consideration the potential mitigating effects of our plans that have not been fully implemented as of the date the financial statements are issued. In performing the first step of this assessment, we concluded that the following conditions raise substantial doubt about our ability to meet our financial obligations as they become due. We have a history of net losses: As of December 31, 2019, we had an accumulated deficit of $14,667,703. For the year ended December 31, 2019, we used cash from operating activities of $202,435. We expect to continue to incur negative cash flows until such time as our operating segments generate sufficient cash inflows to finance our operations and debt service requirements. In performing the second step of this assessment, we are required to evaluate whether our plans to mitigate the conditions above alleviate the substantial doubt about our ability to meet our obligations as they become due within one year after the date that the financial statements are issued. Our future plans include securing additional funding sources that may include establishing corporate partnerships, establishing licensing revenue agreements, issuing additional convertible debentures and issuing public or private equity securities, including selling common stock through an at-the-market facility (ATM). There is no assurance that sufficient funds required during the next year or thereafter will be generated from operations or that funds will be available through external sources. The lack of additional capital resulting from the inability to generate cash flow from operations or to raise capital from external sources would force the Company to substantially curtail or cease operations and would, therefore, have a material effect on the business. Furthermore, there can be no assurance that any such required funds, if available, will be available on attractive terms or they will not have a significant dilutive effect on the Company’s existing shareholders. We have therefore concluded there is substantial doubt about our ability to continue as a going concern through March 2022. The accompanying consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from our failure to continue as a going concern. NOTE R - SUBSEQUENT EVENTS On January 10, 2020, the Company entered into a separate Securities Purchase Agreement (the “Agreement”) with each of Armada Investment Fund, LLC (“Armada”) and Fourth Man, LLC (“FM”) wherein the Company issued each of Armada and FM a Convertible Promissory Note On January On March 6, 2020, the Company entered into an Assignment Agreement (the “Agreement”) with Armada Investment Fund, LLC (“Assignee”). Under the terms of the Agreement, the Company sold, assigned, conveyed and transferred its interest into the Securities Purchase Agreement, Convertible Promissory Note (principal amount of $23,000), Stock Purchase Warrant Agreement (262,500 shares of common stock) and Registration Rights Agreement entered into by the Company and Deep Green Waste & Recycling, Inc. all dated January 13, 2020 in exchange for Ten Thousand Five Hundred and No/100 Dollars ($10,500) cash compensation and the forgiveness of all principal and interest remaining on the Amended and Restated Replacement Convertible Promissory Note issued by the Company to the Assignee dated February 12, 2019. The transaction closed on March 12, 2020. On April 14, 2020, the Company issued 2,448,979 shares of its common stock to a convertible noteholder in satisfaction of $1,900 of principal and $500 of fees against an outstanding note. The $3,733 excess of the $5,633 fair value of the 2,448,979 shares over the $1,900 liability reduction will be charged to loss on conversion of debt. On May 4, 2020, the Company issued 2,551,020 shares of its common stock to a convertible noteholder in satisfaction of $2,000 of principal and $500 of fees against an outstanding note. The $6,673 excess of the $8,673 fair value of the 2,551,020 shares over the $2,000 liability reduction will be charged to loss on conversion of debt. On May 6, 2020, the Company issued 4,093,514 shares of its common stock to a convertible noteholder in satisfaction of $1,773 of principal and $28 of interest against an outstanding note. The $12,526 excess of the $14,327 fair value of the 4,093,514 shares over the $1,801 liability reduction will be charged to loss on conversion of debt. On May 21, 2020, the Company issued 5,685,666 shares of its common stock to a convertible noteholder in satisfaction of $625 of principal, $160 of interest and $921 of fees against an outstanding note. The $19,115 excess of the $19,900 fair value of the 5,685,666 shares over the $785 liability reduction will be charged to loss on conversion of debt. On June 5, 2020, the Company issued 5,699,000 shares of its common stock to a convertible noteholder in satisfaction of $9 of interest and $1,701 of fees against an outstanding note. The $14,239 excess of the $14,248 fair value of the 5,699,000 shares over the $9 liability reduction will be charged to loss on conversion of debt. On June 10, 2020, the Company issued 6,823,020 shares of its common stock to a convertible noteholder in satisfaction of $2,047 of interest against an outstanding note. The $16,375 excess of the $18,422 fair value of the 6,823,020 shares over the $2,047 liability reduction will be charged to loss on conversion of debt. On June 24, 2020, the Company issued 7,504,633 shares of its common stock to a convertible noteholder in satisfaction of $212 of principal and $2,039 of interest against an outstanding note. The $13,509 excess of the $15,760 fair value of the 7,504,633 shares over the $2,251 liability reduction will be charged to loss on conversion of debt. On June 25, 2020, the Company issued 8,254,333 shares of its common stock to a convertible noteholder in satisfaction of $2,476 of principal against an outstanding note. The $18,985 excess of the $21,461 fair value of the 8,254,333 shares over the $2,476 liability reduction will be charged to loss on conversion of debt. On July 13, 2020, the Company issued 9,078,933 shares of its common stock to a convertible noteholder in satisfaction of $2,683 of principal and $41 of interest against an outstanding note. The $15,434 excess of the $18,158 fair value of the 9,078,933 shares over the $2,724 liability reduction will be charged to loss on conversion of debt. On July 27, 2020, the Company issued 9,985,933 shares of its common stock to a convertible noteholder in satisfaction of $2,996 of principal against an outstanding note. The $21,969 excess of the $24,965 fair value of the 9,985,933 shares over the $2,996 liability reduction will be charged to loss on conversion of debt. On August 4, 2020, the Company issued 5,442,933 shares of its common stock to a convertible noteholder in satisfaction of $1,633 of principal against an outstanding note. The $16,329 excess of the $17,962 fair value of the 5,442,933 shares over the $1,633 liability reduction will be charged to loss on conversion of debt. On August 4, 2020, the Company issued 5,540,600 shares of its common stock to a convertible noteholder in satisfaction of $1,158 of principal and $2,167 of interest against an outstanding note. The $14,959 excess of the $18,284 fair value of the 5,540,600 shares over the $3,325 liability reduction will be charged to loss on conversion of debt. On August 4, 2020, the Company issued 4,225,000 shares of its common stock to a convertible noteholder in satisfaction of $2,180 of interest and $1,200 of fees against an outstanding note. The $11,763 excess of the $13,943 fair value of the 4,225,000 shares over the $2,180 liability reduction will be charged to loss on conversion of debt. On August 11, 2020, the Company issued 6,403,850 shares of its common stock to a convertible noteholder in satisfaction of $3,842 of principal against an outstanding note. The $25,616 excess of the $29,458 fair value of the 6,403,850 shares over the $3,842 liability reduction will be charged to loss on conversion of debt. On August 14, 2020, the Company issued 10,778,000 shares of its common stock to a convertible noteholder in satisfaction of $3,449 of interest against an outstanding note. The $49,363 excess of the $52,812 fair value of the 10,778,000 shares over the $3,449 liability reduction will be charged to loss on conversion of debt. On August 21, 2020, the Company issued 15,530,500 shares of its common stock to a convertible noteholder in satisfaction of $4,235 of principal and $734 of interest against an outstanding note. The $44,729 excess of the $49,698 fair value of the 15,530,500 shares over the $4,969 liability reduction will be charged to loss on conversion of debt. On October 10, 2020, the Company issued 25,862,069 shares of its common stock to a convertible noteholder in satisfaction of $8,850 of principal and $6,150 of interest against an outstanding note. The $34,178 excess of the $49,178 fair value of the 25,862,069 shares over the $15,000 liability reduction will be charged to loss on conversion of debt. On October 21, 2020, the Company issued 28,533,866 shares of its common stock to a convertible noteholder in satisfaction of $9,883 of principal and $2,958 of interest against an outstanding note. The $41,373 excess of the $54,214 fair value of the 28,533,866 shares over the $12,841 liability reduction will be charged to loss on conversion of debt. On November 5, 2020, the Company issued 13,121,179 shares of its common stock to a convertible noteholder in satisfaction of $5,117 of principal against an outstanding note. The $13,253 excess of the $18,370 fair value of the 13,121,179 shares over the $5,117 liability reduction will be charged to loss on conversion of debt. On January On February 9, 2021, the Company issued 12,842,105 shares of its common stock to a convertible noteholder in satisfaction of $11,000 of interest against an outstanding note. The $84,032 excess of the $95,032 fair value of the 12,842,105 shares over the $11,000 liability reduction will be charged to loss on conversion of debt. On February 12, 2021, the Company entered into a Consulting Agreement (the “Agreement”) with Deep Green Waste & Recycling, Inc. (hereinafter “Deep Green”), a publicly traded entity under the symbol “DGWR.” Under the terms of the Agreement, the Company is to assist Deep Green in the preparation of its Registration Statement on Form S-1 and preparation of its Annual Report on Form 10-K. The term of the Agreement is for three months or until Deep Green’s Form S-1 is filed with the SEC and the Company is to be compensated 750,000 shares of Deep Green’s common stock. There have been no disagreements on accounting and financial disclosures from the inception of our Company through the date of this Form 10-K. Michael T. Studer CPA P.C has audited our financial statements for the years ended December 31, 2019 and 2018. Evaluation of Disclosure Controls and Procedures We maintain “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. We conducted an evaluation (the “Evaluation”), under the supervision and with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures (“Disclosure Controls”) as of the end of the period covered by this report pursuant to Rule 13a-15 of the Exchange Act. Based on this Evaluation, our CEO and CFO has concluded that our disclosure controls and procedures were not effective to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms due to material weaknesses in our internal controls described below. Limitations on the Effectiveness of Controls Our management, including our CEO and CFO, does not expect that our disclosure controls and internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within us have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management or board override of the control. The design of any system of controls 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; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. Management’s Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Our internal control over financial reporting is a process designed to provide reasonable assurance to our management and board of directors regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2019. In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework. Based on our assessment, we believe that, as of December 31, 2019, our internal control over financial reporting was not effective based on those criteria. Management’s assessment identified several material weaknesses in our internal control over financial reporting. These material weaknesses include the following: This Annual Report on Form 10-K does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report. Changes in Internal Controls There were no changes in our internal control over financial reporting during the year ended December 31, 2019, which have affected, or are reasonably likely to affect, our internal control over financial reporting. None. Officers and Directors Our officers are elected by the board of directors to a term of one (1) year and serves until their successor is duly elected and qualified, or until they are removed from office. The board of directors has no nominating, auditing or compensation committees. The names, ages and positions of our present officers and director are set forth below: Jimmy Wayne Anderson, President, Director and Chairman of the Board – Mr. Anderson is the co-founder and acting President and Chairman of the Board of Sylios Corp and has served in this capacity since the Company’s inception in 2008. Mr. Anderson has been instrumental in the establishment and development of each of the Company’s operational subsidiaries. Mr. Anderson leverages nearly 15 years of business experience in the financial and medical sectors prior to founding the Company. Mr. Anderson completed his undergraduate education at the University of Georgia and received his Doctorate degree from Temple University. Mr. Anderson also serves as the sole officer and director of Global Technologies, Ltd., a publicly traded company listed on the OTC Markets “PINK” under the symbol “GTLL” and as the sole officer and director of AMDAQ Corp. Mr. Anderson served as the principal executive officer, principal financial officer and chairman of The Greater Cannabis Company, Inc., a publicly traded company listed on the OTC Markets “QB” under the symbol “GCAN,” from inception through July 31, 2018. The Company anticipates that it will need to retain additional management and key personnel in the near future. Family Relationships There are no family relationships among the directors and executive officers. Conflicts of Interest We believe that our current officer and director will not be subject to conflicts of interest. No policy has been implemented or will be implemented to address conflicts of interest. Involvement in Certain Legal Proceedings During the past ten years, Mr. Anderson has not been the subject of the following events: Audit Committee and Audit Committee Financial Expert We do not have an audit committee or an audit committee financial expert (as defined in Item 407 of Regulation S-K) serving on its board of directors. All current members of the board of directors lack sufficient financial expertise for overseeing financial reporting responsibilities. We do not have an audit committee financial expert because we believe the costs related to retaining a financial expert at this time is prohibitive. Further, because we are only beginning our commercial operations, at the present time, we believe the services of a financial expert are not warranted. We intend to establish an audit committee of the Board of Directors, which will consist of independent directors. The audit committee’s duties will be to recommend to our board of directors the engagement of an independent registered public accounting firm to audit our financial statements and to review our accounting and auditing principles. The audit committee will review the scope, timing and fees for the annual audit and the results of audit examinations performed by the internal auditors and independent registered public accounting firm, including their recommendations to improve the system of accounting and internal controls. The audit committee will at all times be composed exclusively of directors who are, in our opinion, free from any relationship which would interfere with the exercise of independent judgment as a committee member and who possess an understanding of financial statements and generally accepted accounting principles. Code of Ethics We have adopted a Disclosure Committee and Charter We do not have a disclosure committee and disclosure committee charter. We plan to establish a Disclosure Committee and will operate under a charter. The purpose of a disclosure committee would be to provide assistance to the Principal Executive Officer and the Principal Financial Officer in fulfilling their responsibilities regarding the identification and disclosure of material information about us and the accuracy, completeness and timeliness of our financial reports. Section 16(a) Beneficial Ownership Compliance Section 16(a) of the Exchange Act requires our officers and directors, and persons who own more than 10% of our common stock, to file reports of ownership and changes in ownership with the SEC. These persons are required by SEC regulations to furnish to us copies of all Section 16(a) forms they file. SEC regulations require us to identify in this Annual Report anyone who filed a required report late or failed to file a required report. Based on our review of forms we received, we believe that during 2019 all Section 16(a) filing requirements were satisfied on a timely basis. Summary Compensation Table The following table sets forth the compensation paid by us to our officers during the last two fiscal years ended December 31, 2019 and 2018. This information includes the dollar value of base salaries, bonus awards and number of stock options granted, and certain other compensation, if any. The compensation discussed addresses all compensation awarded to, earned by, or paid to our named executive officers. All Other Compensation Wayne Anderson, President, Treasurer, Secretary, Chairman (1) 296,000 We have no plans in place and have never maintained any plans that provide for the payment of retirement benefits or benefits that will be paid primarily following retirement including, but not limited to, tax qualified deferred benefit plans, supplemental executive retirement plans, tax-qualified deferred contribution plans and nonqualified deferred contribution plans. Except as indicated below, we have no contracts, agreements, plans or arrangements, whether written or unwritten, that provide for payments to the named executive officers listed above. Equity Compensation, Pension or Retirement Plans No retirement, pension, profit sharing, stock option or insurance programs or other similar programs have been adopted by the Company for the benefit of its employees. Outstanding Equity Awards at Fiscal Year-End 2019 Number of Securities Underlying Unexercised Options (#)(3) Option Exercise Price (3) Option Expiration Audit Committee Presently, our Board of Directors is performing the duties that would normally be performed by an audit committee. We intend to form a separate audit committee, and plan to seek potential independent directors. In connection with our search, we plan to appoint an individual qualified as an audit committee financial expert. Options/SARS Grants During Last Fiscal Year None. Directors’ Compensation On January Please seeNOTE P- COMMITMENTS AND CONTINGENCIES and NOTE I - ACCRUED OFFICER AND DIRECTOR COMPENSATION for further information. The following table sets forth with respect to the named director, compensation information inclusive of equity awards and payments made in the years ended December 31, 2019 and 2018. Fees Earned or Paid in Cash ($) Nonqualified Deferred Compensation Earnings ($) Total ($) CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS On October 6, 2018, the Company entered into a Commercial Real Estate Purchase and Sale Agreement with the Company’s President for the purchase of a .92 acre of land located in Bibb County, GA. The purchase price for the land was $40,000. On this same date, the Company entered into an Asset Purchase Agreement with its President for the purchase of all architectural and engineering plans for the development of a storage facility to be constructed on the .92 acre of land. The purchase price for these assets was $35,000. On October 6, 2018, the Company issued its President a Secured Note in the amount of $75,000. The Note has a term of one year and bears interest at 3%. The Company’s first payment in the amount of $15,000 was due within 90 days of an effective reverse stock split. As of the date of issuance of these Financial statements, except for a $5,000 payment made by the Company to the Company’s president on November 12, 2018, the Company has not made any payment against the Note. On December 31, 2017, the Company issued 100 shares of its Series D Preferred Stock to its President. As of the date of this filing, all issued and outstanding shares of the Company’s Series D Preferred Stock are held by its President. On September 15, 2017, the Company issued an unsecured Promissory Note in the amount $70,000 to Around the Clock Partners, LP for funds advanced to the Company. Around the Clock Partners, LP is an entity controlled by Wayne Anderson, the Company’s President. There are no stock option, retirement, or pension plans for the benefit of our officers and directors. Director Independence Our Board of Directors will periodically review relationships that directors have with the Company to determine whether the directors are independent. Directors are considered “independent” as long as they do not accept any consulting, advisory or other compensatory fee (other than director fees) from the Company, are not an affiliated person of the Company or its subsidiaries (e.g., an officer or a greater-than-ten-percent stockholder) and are independent within the meaning of applicable laws, regulations and the Nasdaq listing rules. In this latter regard, the Board of Directors will use the Nasdaq listing rules (specifically, Section 5605(a)(2) of As of the date of this Form 10-K, the Board of Directors has determined that the Company Long-Term Incentive Plan Awards We do not have any long-term incentive plans that provide compensation intended to serve as Indemnification Under our Articles of Incorporation and Regarding indemnification for liabilities arising under the Securities Act of We have determined beneficial ownership in accordance with the The percentage of beneficial ownership is based on 407,393,252 shares of our Common Stock outstanding as of March 16, 2021, which includes 391,243,635 shares of common stock outstanding, 7,800,000 shares of common stock issuable upon conversion of the Company’s Series A Preferred Stock, 25,000 shares issuable under an option granted to our President and 8,324,617 shares of our common stock issuable upon the exercise of warrants issued in multiple financing transactions, which are all outstanding as of March 16, 2021 and excludes: Beneficial Ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Shares of common stock subject to options, warrants, or convertible debt currently exercisable or convertible, or exercisable or convertible within 60 days of March 16, 2021 are deemed outstanding for computing percentage of the person holding such option or warrant but are not deemed outstanding for computing the percentage of any person. Percentages are based on a total of shares of common stock outstanding on March 16, 2021, and the shares issuable upon exercise of options, warrants exercisable, and debt convertible on or within 60 days of March 16, 2021. The number of common shares outstanding used in computing the percentages is 391,243,635. Series D Preferred Stock On October 6, 2018, the Company entered into a Commercial Real Estate Purchase and Sale Agreement with the Company’s President for the purchase of a .92 acre of land located in Bibb County, GA. The purchase price for the land was $40,000. On this same date, the Company entered into an Asset Purchase Agreement with its President for the purchase of all architectural and engineering plans for the development of a storage facility to be constructed on the .92 acre of land. The purchase price for these assets was $35,000. On October 6, 2018, the Company issued On December 31, 2017, the Company issued 100 shares of its Series On September Michael T. Studer CPA P.C has audited our financial statements for the 1) Audit Fees The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for our audit of annual financial statements and review of financial statements included in our Quarterly Reports on Form 10-Q or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years was: 2) Audit-Related Fees The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountants that are reasonably related to the performance of the audit or review of our financial statements and are not reported in the preceding paragraph: 3) Tax Fees The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning was: 4) All Other Fees The aggregate fees billed in each of the last two fiscal years for the products and services provided by the principal accountant, other than the services reported in paragraphs (1), (2), and (3) was: 5) During the fiscal year ending December 31, Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on this 17th day of March 2021. Jimmy Wayne Anderson 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 Jimmy Wayne Anderson(Mark One)UNDERPURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER2010TRANSITION REPORT UNDER SECTION13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934FOR THE TRANSITION PERIOD FROM __________ TO __________COMMISSION FILE NUMBER: 000-51837US NATURAL GAS CORP(Name of registrant in its charter)(Exact name of registrant as specified in its charter) Florida 26-2317506 (State or other jurisdiction of
incorporation or organization)26-2317506(I.R.S. Employer
Identification No.)1717 Dr. Martin Luther King Jr. N, Saint Petersburg, FL 33704 (Address33701offices) (Zipoffices, including Zip Code)Number: number, including area code)(727) 824-2800NOT APPLICABLEunder Section 12(b) of the Exchange Act: None.Securities registered underpursuant to Section 12(g) of the Exchange Act: None.whetherif the registrant is a well-known seasoned issuer, as defined inby Rule 405 of the Securities Act. Yes o[ ] No xSection 15(d) of the Exchange Act. Yes o[X] No xx[X] No ooor a non-accelerated filer.filer, smaller reporting company, or an emerging growth company. See definitionthe definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and large accelerated filer”“emerging growth company” in Rule 12b-212b–2 of the Exchange Act.Large accelerated filer o Accelerated filer oNon-accelerated filer oLarge accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company [X] Emerging growth company [ ] xo[ ] No xAs of April 6, 2011, there were 187,361,092 shares[X]registrant'sCompany’s completed second quarter of fiscal 2019) of the voting common stock par value $0.001, issued and outstanding. Of these, 165,880,086 shares are held by non-affiliates of the registrant. The market value of securities heldregistrant, computed by non-affiliates is $1,409,980, based onreference to the closing price of $.0085 forthe stock on that date, was approximately $108,875. The registrant does not have non-voting common stock outstanding.on April 6, 2011. Shares of common stock held by each officer and director and by each shareowner affiliated with a director have been excluded from this calculation because such persons may be deemed to be affiliates. This determination of officer or affiliate status is not necessarily a conclusive determination for other purposes. DOCUMENTS INCORPORATED BY REFERENCENone.1TABLE OF CONTENTS Page●risk that we will not be able to remediate identified material weaknesses in our internal control over financial reporting and disclosure controls and procedures; PART I●Item 1. Descriptionrisk that we fail to meet the requirements of Business4Item 1A. Risk Factors10Item 2. Properties16Item 3. Legal Proceedings17Item 4. Submissionthe agreements under which we acquired our business interests, including any cash payments to the business operations, which could result in the loss of Mattersour right to a Vote of Security Holders17continue to operate or develop the specific businesses described in the agreements; ● risk that we will be unable to secure additional financing in the near future in order to commence and sustain our planned development and growth plans; ● risk that we cannot attract, retain and motivate qualified personnel, particularly employees, consultants and contractors for our operations; ● risks and uncertainties relating to the various industries and operations we are currently engaged in; ● results of initial feasibility, pre-feasibility and feasibility studies, and the possibility that future growth, development or expansion will not be consistent with our expectations; ● risks related to the inherent uncertainty of business operations including profit, cost of goods, production costs and cost estimates and the potential for unexpected costs and expenses; ● risks related to commodity price fluctuations; ● the uncertainty of profitability based upon our history of losses; ● risks related to failure to obtain adequate financing on a timely basis and on acceptable terms for our planned development projects; ● risks related to environmental regulation and liability; ● risks related to tax assessments; ● other risks and uncertainties related to our prospects, properties and business strategy. - 2 - - 3 - 2FORWARD-LOOKING STATEMENTSThis report contains forward-looking statements. All statements other than statements of historical facts included in this Annual Report on Form 10-K, including without limitation, statements in this Management’s Discussion and Analysis of Financial Condition and Results of Operations regarding our financial position, estimated working capital, business strategy, the plans and objectives of our management for future operations and those statements preceded by, followed by or that otherwise include the words “believe”, “expects”, “anticipates”, “intends”, “estimates”, “projects”, “target”, “goal”, “plans”, “objective”, “should”, or similar expressions or variations on such expressions are forward-looking statements. We can give no assurances that the assumptions upon which the forward-looking statements are based will prove to be correct. Because forward-looking statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by the forward-looking statements. There are a number of risks, uncertainties and other important factors that could cause our actual results to differ materially from the forward-looking statements, including, but not limited to, the availability and pricing of additional capital to finance operations, including the drilling of our initial gas wells, longer term drilling programs and additional leasehold acquisitions, the viability of the crude and shale gas fields in south central Kentucky and West Virginia, our ability to build and maintain a successful operations infrastructure and to effectively drill and develop producing wells, the successful negotiation and execution of cost-effective third-party crude and gas drilling and distribution agreements, the continued commitment of drill rig operators and future economic conditions and volatility in energy prices.3ITEM 1. DESCRIPTION OF BUSINESS.CorpCorp) (“US Natural Gas”Sylios”, the “Company”, “we”, “us”, or “our”) was organized as a Florida Corporation on March 28, 2008 under the name of Adventure Energy, Inc. As discussed further below, US Natural Gasindustryproperties, purchase of royalty and is engagedworking interest units in exploration,producing properties (oil and natural gas) and alternative land development projects. The Company maintains equity investments in our two spin-offs (The Greater Cannabis Company, Inc. (“GCAN”) and AMDAQ Corp (“AMDAQ”)) that focus on the development and production activities incommercialization of cannabinoid delivery systems and blockchain technology, respectively. As of the Appalachian Basin, particularly in Kentucky and West Virginia. Our business activities focus primarily on the drilling and acquisitiondate of proven developed and underdeveloped proprieties and on the enhancement and development of these properties.On March 22, 2010,this filing, the Company amendedmaintains a 1.81% ownership of the Articlesissued and outstanding common shares of Incorporation to effectively change its name toGCAN and a 9.84% ownership of the issued and outstanding common shares of AMDAQ.from Adventure Energy,KY (“KY”), US Natural Gas Corp WV (“WV”) (formerly Wilon Resources, Inc. On April 14, 2010,), E 3 Petroleum Corp (“E3”), 1720 RCMG, LLC (“RCMG”) and 5496 NRMF, LLC (“NRMF”). During the name change became effective along withfiscal year ended 2017, the Company spun-off its two formerly owned subsidiaries, The Greater Cannabis Company, Inc. and AMDAQ Corp. In addition, in June 2017 the Company sold its wholly owned subsidiary Bud Bank, Inc.changewholly owned subsidiary that was formed in Tennessee and acquired in June 2010.Company's trading symbol from "ADVE" to "UNGS".WELLS AND MINERAL RIGHTS Acres Total Wells Producing Not in Production West Virginia - Wayne County (c) a) b) c) d) Kentucky - multiple counties (d) e) We continue to seek to identifyState of Florida on June 8, 2010. KY’s operations concentrate on oil and natural gas leaseholds and wells for possible acquisition. However, there can be no assurance that we will be able to enter into agreements for the acquisition of these wells upon terms that are satisfactory to the Company.While we anticipate the majority of future capital expenditures will be expended on the acquisition of previously drilled wells, reworking of wells, repair and maintenance to our gathering system, and drilling of wells, we intend to use our experience and regional expertise to add leasehold interests to the inventory of leases for future drillingproducing activities as well as property acquisitionsArea of OperationsAppalachia is surrounded by major natural gas marketsmainly in the northeastern United States. This proximity to a substantial number of large commercial and industrial gas markets, including natural gas powered electricity plants, coupled with the relatively stable nature of Appalachian production and the availability of transportation facilities has resulted in generally higher wellhead prices for Appalachian natural gas than those prices available in the Gulf Coast and Mid-continent regions of the United States.Appalachia includes portions of Ohio, Pennsylvania, New York, West Virginia, Kentucky and Tennessee. Although Appalachia has sedimentary formations indicating the potential for deposits of gas and oil reserves to depths of 30,000 feet or more, most production in the Basin has been from wells drilled to a number of relatively shallow blanket formations at depths of 1,000 to 7,500 feet. These formations are generally characterized by long-lived reserves that produce for more than 20 years. The drilling success rates of other operators drilling to these formations historically have exceeded 90%.4Long production life and high drilling success rates to these shallow formations has resulted in a highly fragmented, extensively drilled, low technology operating environment in Appalachia. As a result, there has been limited testing or development of productive and potentially productive formations at deeper depths. Although our management believes that significant exploration and development opportunities may exist in these deeper, less developed formations for those operators with the capital and technical expertise, we will not engage in drilling to such depths unless as part of a program in which investors put up substantially all the funds needed.Cash RequirementsTo fund the Company's drilling, rework, and completion operations on the leasehold properties in Kentucky and West Virginia over the next 12 months, the Company anticipates it will require up to approximately $2,000,000. Additional capital will be required to effectively support the operations and to otherwise implement overall business strategy. We currently do not have any contracts or commitments for additional financing outside of the Securities Purchase Agreement between the Company and Tangiers Investors, LP. There can be no assurance that financing will be available in amounts or on terms acceptable to us, if at all. The inability to obtain additional capital will restrict the ability to grow and may reduce the ability to continue to conduct business operations. If we are unable to obtain additional financing, we will likely be required to curtail drilling and development plans and possibly cease operations. Any additional equity financing may involve substantial dilution to then existing shareholders.The capital raised from the completed private placements during 2010 satisfied our capital requirements through year's end. On September 24, 2009, we entered into a Securities Purchase Agreement with Tangiers Investors, LP (“Tangiers”). Pursuant to the Securities Purchase Agreement the Company may, at its discretion, periodically sell to Tangiers shares of its common stock for a total purchase price of up to $3,000,000. Management believes that the funds available under the Securities Purchase Agreement will be sufficient to fund operations for the next 12 months.Discussion of Our Businessshareholders'shareholders’ return over the long term. Our strategic locationslocation in Kentucky and West Virginia enableenables us to actively pursue the acquisition and development of producing properties in that area that will enhance our revenue base without proportional increases in overhead costs.- 4 - LicensesWe hold licenses to operatestatesState of Kentucky and West Virginia. We also hold a Gathering Line Operators License inTennessee. The Company is not required to cover the statewells on its blanket bond nor is it required to expend any future capital on maintenance.ROYALTIES HELD (as NON-OPERATOR) WELL NAME COUNTY
(STATE)%
ROYALTYSTATUS
(b)PRODUCT (c) GREEN 7-3-TW FENTRESS (TN) 15 O JAMES PHARIS K-1 CUMBERLAND (KY) 5 SI O Wells sold in the Soligen Technologies, Inc. transaction dated May 10, 2018 SI O (b) - Status i) PR - In Production ii) PL - Plugged iii) SI - Shut-In (c) - Product i) O - Oil production ii) NG - Natural Gas production iii) O/NG - Both Oil & Natural Gas production Kentucky,Keller Energy, LLC (“Keller”). Keller is currently re-entering each of the wells to replace downhole pumping parts, flowlines and a licensecertain tank batteries. The Company anticipates that each of the wells will be placed into production during the third quarter of 2019.perform as an "Operator"Soligen Technologies, Inc. (“Soligen”) are still under the bond of wells in the state of West Virginia. E 3 Petroleum Corp, a wholly owned subsidiary is the operator of the Company'sCompany. Soligen’s plan is to re-enter each well to determine what downhole work is needed to place the wells back into production and to stimulate increased production. We anticipate that 3-4 of the wells will be re-entered, re-worked and placed into production by the end of the first calendar quarter of 2020. Please seeNOTE E - OIL AND GAS ROYALTY INTERESTS and NOTE F – OIL AND GAS OPERATING BONDS for further information.- 5 - statesState of Kentucky and West Virginia and actsFlorida on February 8, 2010. E3’s sole business activity is to act as the bonding entity for thesethe Company’s oil and natural gas wells.Research & As a bonding entity, E3 places funds with the Kentucky Department of Natural Resources to cover the reclamation costs in the event the wells under its bond are deemed abandoned by the State of Kentucky. Please seeNOTE F – OIL AND GAS OPERATING BONDS for further information.For 2010 fiscal year, our expenses were minimal for research and development. We anticipate thatresearch andoperations will be concentrated on the development expenses will increase during 2011 as we prepare to permit wells to be drilled on our leaseholds withinof the next two years. In addition,1.1 acre tract of commercial land purchased in Santa Rosa County, FL.plans to haveentered into a reserves report preparedCommercial Sales Contract for the purchase of the 1.1 acre tract of land located in Santa Rosa County, FL. The purchase price for the land was $17,500. The transaction closed on its Kentucky and West Virginia leaseholds as it prepares to initiate drilling activities.5Compliance ExpensesOur company incurs annual expenses to comply with state and federal licensing requirements. We estimate these costs to be under $2,000 per year. Once we begin our drilling program, we anticipate annual expenditures of approximately $25,000 per well related to environmental costs including water drainage and land development. ItNovember 4, 2019.difficult to estimate these environmental expenses while we are still a development stage company as they are largely dependent on many factors for each drilled well. We anticipate that these costs may rise substantiallywholly owned subsidiary formed in the stateState of West VirginiaFlorida on July 24, 2019. RCMG’s future operations are concentrated on the development of the .92 acres acre tract of commercial land purchased in Bibb County, GA.proposed legislation. See “Government Regulation” and “Environmental Regulation” below.Natural GasU.S. Natural Gas Consumption. EIA expects total natural gas consumption to increase by 1.9 percent to 63.8 Bcf/d in 2010 and decline by 0.6 percent in 2011. Total U.S. heating degree-days (HDDs) during the first quarter 2010 were about 0.7 percent higher than last year. However, in the South region, first-quarter HDDs were about 20 percent higher than the same period last year. The cold weather helped boost year-over-year natural gas consumption in the electric power sector, adding to the increase in industrial sector consumption brought about by the improved economic conditions.In last month's Outlook, EIA revised upward the forecast for natural gas consumption in the electric power sector for this year largely because of the higher space heating demand due to cold weather in the South. This month's Outlook includes another upward revision to the electric power sector consumption forecast. However, this revision reflects EIA's expectation that lower natural gas prices relative to coal prices will increase the utilization of natural-gas-fired generating facilities in the baseload power supply.EIA's forecast for 2011 includes consumption declines in all sectors except the industrial sector. The projected return to near-normal weather reduces consumption in the residential and commercial sectors, while higher natural gas prices reverse the coal-to-gas switching trend observed in 2009 and forecast to continue in 2010. Consumption in the industrial sector, supported by continued economic growth, is projected to increase by 1.7 percent in 2011.U.S. Natural Gas Production and Imports. EIA expects total marketed natural gas production to increase by 0.4 Bcf/d (0.7 percent) to 60.9 Bcf/d in 2010 and decrease by 0.7 Bcf/d (1.2 percent) in 2011. In last month's Outlook, domestic production growth was forecast to decline by 0.5 Bcf/d in 2010, reflecting the lagged effect of lower drilling rates last year. The higher production forecast in this Outlook reflects the latest January 2010 production estimate from the EIA-814 survey and the continuing increase in the number of working natural gas rigs over the last month. No significant revision to estimated January 2010 natural gas production would affect this forecast. The number of working natural gas rigs has increased by almost 200 since the end of last year. With no further increase from the current 950 natural gas rigs currently working, EIA expects production to begin to show month-to-month declines beginning in the second quarter this year. However, production is not expected to begin to show year-over-year declines until the first quarter of 2011.EIA expects U.S. net natural gas imports to decline in 2010 as higher imports of liquefied natural gas (LNG)--and lower pipeline exports--are more than offset by a steep decline in pipeline imports as Canadian natural gas production drops off. The global LNG market appears to be well supplied in 2010. In addition to the ramp-up of new global liquefaction capacity brought on-stream last year, about 3 Bcf/d of new capacity is set to start up this year. Spain, which relies on LNG in part for electricity generation, currently has hydroelectric reserves 34 percent above last year and 47 percent above the previous 5-year average. While EIA currently expects U.S. LNG imports to increase by about 0.5 Bcf/d this year over last, the failure of global demand to keep pace with increased global supply could lead to even higher U.S. LNG imports than currently forecast. EIA expects that an increase in global LNG demand next year will keep U.S. LNG imports roughly unchanged from 2010.U.S. Natural Gas Inventories. On March 26, 2010, working natural gas in storage was 1,638 Bcf, 160 Bcf above the previous 5-year average (2005-2009) and 16 Bcf below the level during the corresponding week last year. Warmer-than-normal weather in March (HDDs were 10 percent below the 30-year normalCompany’s President for the month) contributed to an estimated monthly storage withdrawalpurchase of about 49 Bcf, or around 116 Bcf below the previous 5-year averagea .92 acre of land located in Bibb County, GA. The purchase price for the month. Natural gas stocks atland was $40,000. On this same date, the end of March (the end of the withdrawal season) are estimated to be 1,656 Bcf,Company entered into an amount comparable to stocks at the end of March last year. EIA expects continued production strength to contribute to high inventories again this fall. The current forecastAsset Purchase Agreement with its President for the endpurchase of October is 3,771 Bcf, only slightly below the record storage volume reached last fall. The forecast injection of 2,063 Bcf between Marchall architectural and November is about 5 percent below the stock build that occurred over the corresponding period last year, but it is more than 6 percent above the previous 5-year average.6U.S. Natural Gas Prices. The Henry Hub spot price averaged $4.29 per MMBtu in March, $1.03 per MMBtu lower than the average spot price in February and $0.64 per MMBtu lower than the forecast for March in last month's Outlook. In the same way that colder-than-normal weather contributed to higher prices in January and February, warmer-than-normal weather contributed to lower prices in March. In particular, prices touched a 4-month low during the final days of the month as lower demand and higher production resulted in storage injections. EIA expects prices to remain low for the next several months. With strong production and the absence of meaningful space-heating demand, lower-priced natural gas will once again compete with coal for a share of the baseload electricity supply—particularly in the spring and fall. Sustained low prices could reduce drilling activity over time. As a result, EIA expects production to decline and prices to increase in 2011. The Henry Hub spot price forecast averages $4.44 per MMBtu in 2010 and $5.33 per MMBtu in 2011.Volatility in the June 2010 futures and options markets trended lower during the first half of March but rose in the second half as natural gas spot prices fell to $4 per MMBtu. For the 5-day period ended April 1, implied volatility for June 2010 natural gas options averaged 41 percent per annum, while June 2010 futures prices averaged $4.04 per MMBtu. The lower and upper limits of the 95-percent confidence interval, therefore, were $3.00 and $5.50 per MMBtu, respectively.A year earlier, natural gas delivered to the Henry Hub in June 2009 was trading at $3.90 per MMBtu and implied volatility averaged about 63 percent. This generated a lower and upper limit for the 95-percent confidence interval of $2.45 and $6.20 per MMBtu, respectively.Despite the increase in the implied volatilities during March, the probability of the Henry Hub realized price rising above $6.50 million Btu in December 2010 fell from 30 percent last month to 19 percent this monthCrudeCrude Oil Prices. WTI crude oil spot prices averaged $81 per barrel in March 2010, almost $5 per barrel above the prior month's average and $3 per barrel higher than forecast in last month's Outlook. Oil prices rose from a low this year of $71.15 per barrel on February 5 to $80 per barrel by the end of February, generally on news of robust economic and energy demand growth in non-OECD Asia and the Middle East, and held near $81 until rising to $85 at the start of April. EIA expects WTI prices to average above $81 per barrel this summer, slightly less than $81 for 2010 as a whole, and $85 per barrel by the fourth quarter 2011. As always, these energy price forecasts are highly uncertain, as both recent experience and the sizable participation in near-term futures options contracts (with a wide range of strike prices) clearly demonstrate that prices can move within a wide range in a relatively short period.Over the 5-day period ending April 1, June 2010 WTI futures contracts averaged $83.07 per barrel. Over the same 5-day period, the lower and upper limits for the 95-percent confidence interval for June 2010 futures were $68 and $101 per barrel, respectively, based on the June 2010 implied volatility of 28 percent calculated from New York Mercantile Exchange (NYMEX) near-the-money options on WTI futures. One year ago, futures contracts for WTI delivered into Cushing, Oklahoma, in June 2009 averaged about $45 per barrel and implied volatility, at 74 percent, was more than twice the rate now trading in the options markets.The market's assessment of the probability of the realized WTI spot price exceeding $100 per barrel during 2010 increases from 3 percent for the June 2010 contract to 21 percent for the December 2010 contract. These probabilities showed little change across the forward curve in March. The probability for each month is calculated using the futures price for that contract, its implied volatility, and it's time to expiration. Like the confidence intervals reported by EIA, this is a market-based probability estimate derived using traded futures and options prices. _________________________________________________________________1 http://www.eia.doe.gov/emeu/steo/pub/contents.html2 The US Annual Energy Outlook 2010 released December 14, 2009 is available at http://www.eia.doe.gov/oiaf/aeo/index.html.3 This information is from the Annual Energy Outlook 2010 with Projections to 2035 at http://www.eia.doe.gov/oiaf/aeo/index.html4 Id.5 Id.6 Id.7 Id.8 Id.9 Id.10 Id.11 Id.12 The Energy Information Administration Short Term Energy Outlook released April 6, 2010 can be found at http://www.eia.doe.gov/emeu/steo/pub/contents.html7Labor and Other SuppliesWe contract all laborengineering plans for the development of leasehold acreagea storage facility to be constructed on the .92 acre of land. The purchase price for these assets was $35,000.- 6 - drilling, as well assix months and the drillingCompany is to be paid compensation of $7,500.completion crews. Our employees monitoridentification of potential qualifying transaction candidates. The term of the wellsAgreement is for six months and the Company is to be paid compensation of $50,000 through the issuance of ten (10) shares of the GTLL’s Series L Preferred Stock. Please seeNOTE H – ACQUISITION OF GLOBAL TECHNOLOGIES, LTD (ENTITY CONTROLLED BY WAYNE ANDERSON) SERIES L CONVERTIBLE PREFERRED STOCK for further information.- 7 - daily basis, replacewholly owned subsidiary that was acquired through a Lender acquisition Agreement with SLMI Holdings, LLC in September 2009. The sole purpose of the completion components, repairacquisition of SLMI was to hold three commercial notes issued by Wilon Resources, Inc., (formerly “Wilon Resources of Tennessee, Inc.”) in the gathering system,years 2005 through 2007. There has been no additional operational activity of SLMI. SLMI was administratively dissolved in 2015.any other day-to-day maintenance. In West Virginia, our employees operateoutstanding common stockCompany's swab rig to remove fluidCompany until October 2, 2017, payment date for the spin-off. At December 31, 2018, the Company held 2,956,650 shares of common stock of AMDAQ. As of the date of this filing, the Company holds 2,956,650 (9.1% ownership of the issued and outstanding common shares) shares of common stock of AMDAQ.the well bore in an effort to increase production. We purchase all supplies,inception through August 31, 2017 concentrated on alternative investments including but not limited to the steel casing for each well, rods, tubing, valves, regulators, 1”, 2”, 3” gathering lines, and all other supplies from local distributors. In times of heavy demand, such as when many other local natural gas producers are drilling, we may have difficulty obtaining supplies in a timely fashion. Also during times of heavy demand, prices for our drilling supplies are escalated, therefore affecting our profit margins.Principal Products or Services and MarketsThe principal markets for the Company’s crude oil are local refining companies. The principal markets for the Company’s natural gas production are local utilities, private industry end-users, and gas marketing companies.Gas production from the West Virginia natural gas development project can presently be delivered through the Company’s completed pipeline to the Company's tap into Columbia Gas Transmission's Line P-20 as well as gas marketing companies. The Company has acquired all necessary regulatory approvals and necessary property rights for the pipeline system. The Company’s pipeline can provide transportation service not only for gas produced from the Company’s wells, but also for small independent producers in the local area as well or other pipelines that may be connected to the Company’s pipeline in the future.At present, crude oil producedto:● Buying and selling of domestic equities ● Purchase of third-party debt issued by publicly traded entities ● Purchase of mineral rights ● Direct Stock Purchase participation with other publicly traded entities ● Consulting capacity ● Purchase of Royalty or Working Interests in Crude and Natural Gas Producing wells in Kentucky is sold at or nearacquired AMDAQ Ltd, a corporation formed under the wells to Sunoco, Inc.; Regal Petroleum is solely responsibleRegistrar of Companies for transportation to Sunoco's refineries for the oil they purchase. The Company may sell some or all of its production to one or more additional refineriesEngland and Wales, in order to maximize revenuesdiversify its business model to enter into the rapidly expanding sectors of blockchain technology.purchases prices offered by the refineries fluctuate from time to time. Crude oil produced by the Company in West Virginia is sold to the Appalachian Oil Purchasers and is transported to the refinery by contracted truck delivery attransfer of ownership but also automated voting mechanisms for each specific situation that requires governance decisions.expense.Drilling EquipmentThe Company currently owns a swab rig utilized in its West Virginia operations and will take delivery of a workover rig during April to be utilized mainly onfilings with the Securities and Exchange Commission, please visit its oil wells in Kentucky. The Company obtains drilling services as required from time to time from various companies as available and various drilling contractors in Kentucky and West Virginia.Distribution Methods of Products or ServicesCrude oil is normally delivered to refineries in Kentucky and West Virginia by tank truck and natural gas is distributed and transported by pipeline.Commodity Price VolatilityOil and natural gas prices are volatile and subject to a number of external factors. Prices are cyclical and fluctuate as a result of shifts in the balance between supply and demand for oil and natural gas, world and North American market forces, conflicts in Middle Eastern countries, inventory and storage levels, OPEC policy, weather patterns and other factors. OPEC supply curtailment, tensions in the Middle East, increased demand in China and low North American crude stocks have kept crude oil prices high. Natural gas prices are greatly influenced by market forces in North America since the primary source of supply is contained within the continent.Market forces include the industry’s ability to find new production and reserves to offset declining production, economic factors influencing industrial demand, weather patterns affecting heating demandcorporate website at www.amdaq.com and the pricewebsite of oil its subsidiary, AMDAQ, Ltd., at www.amdaq.market. Please see NOTE G - INVESTMENTS IN AND ADVANCES TO SPUN-OFF FORMER SUBSIDIARIES for fuel switching.SeasonalityThe exploration for oil and natural gas reserves depends on access to areas where operations are to be conducted. Seasonal weather variations, including freeze-up and break-up affect access in certain circumstances. According to the American Petroleum Institute, more than 60 million U.S. households use natural gas for water heating, space heating, or cooking. In total, natural gas accounts for more than 50 percent of the fuel used to heat U.S. homes. Residential and commercial heating demand for natural gas is highly weather-sensitive, making weather the biggest driver of natural gas demand in the short term. As a result, natural gas demand is highly “seasonal” in nature, with significant “peaks” in the winter heating season.Seasonality and the natural gas in storage also play a prominent role in natural gas prices. Because natural gas consumption is seasonal but production is not, natural gas inventories are built during the summer for use in the winter. This seasonality leads to higher winter prices and lower summer prices. In addition, inventories above the seasonal average depress prices, and inventories below the seasonal average boost prices.Governmental RegulationOperations are or will be subject to various types of regulation at the federal, state and local levels. Such regulation includes requiring permits for the drilling of wells; maintaining bonding requirements in order to drill or operate wells; implementing spill prevention plans; submitting notification and receiving permits relating to the presence, use and release of certain materials incidental to oil and gas operations; and regulating the location of wells, the method of drilling and casing wells, the use, transportation, storage and disposal of fluids and materials used in connection with drilling and production activities, surface usage and the restoration of properties upon which wells have been drilled, the plugging and abandoning of wells and the transporting of production.Operations are or will also be subject to various conservation matters, including the regulation of the size of drilling and spacing units or proration units, the number of wells which may be drilled in a unit, and the unitization or pooling of oil and gas properties.In this regard, some states allow the forced pooling or integration of tracts to facilitate exploration while other states rely on voluntary pooling of lands and leases, which may make it more difficult to develop oil and gas properties. In addition, state conservation laws establish maximum rates of production from oil and gas wells, generally limit the venting or flaring of gas, and impose certain requirements regarding the ratable purchase of production. The effect of these regulations is to limit the amounts of oil and gas we may be able to produce from the wells and to limit the number of wells or the locations at which we may be able to drill.Business is affected by numerous laws and regulations, including energy, environmental, conservation, tax and other laws and regulations relating to the oil and gas industry. We plan to develop internal procedures and policies to ensure that operations are conducted in full and substantial environmental regulatory compliance.8Failure to comply with any laws and regulations may result in the assessment of administrative, civil and criminal penalties, the imposition of injunctive relief or both. Moreover, changes in any of these laws and regulations could have a material adverse effect on business. In view of the many uncertainties with respect to current and future laws and regulations, including their applicability to us, we cannot predict the overall effect of such laws and regulations on future operations. We believe that operations comply in all material respects with applicable laws and regulations and that the existence and enforcement of such laws and regulations have no more restrictive an effect on operations than on other similar companies in the energy industry. We do not anticipate any material capital expenditures to comply with federal and state environmental requirements.Environmental RegulationThe oil and gas industry is extensively regulated by federal, state and local authorities. The scope and applicability of legislation is constantly monitored for change and expansion. Numerous agencies, both federal and state, have issued rules and regulations binding on the oil and gas industry and its individual members, some of which carry substantial penalties for noncompliance. To date, these mandates have had no material effect on our capital expenditures, earnings or competitive position.Legislation and implementing regulations adopted or proposed to be adopted by the Environmental Protection Agency and by comparable state agencies, directly and indirectly, affect our operations. We are required to operate in compliance with certain air quality standards, water pollution limitations, solid waste regulations and other controls related to the discharging of materials into, and otherwise protecting the environment. These regulations also relate to the rights of adjoining property owners and to the drilling and production operations and activities in connection with the storage and transportation of natural gas and oil.We may be required to prepare and present to federal, state or local authorities data pertaining to the effect or impact that any proposed operations may have upon the environment. Requirements imposed by such authorities could be costly, time-consuming and could delay continuation of production or exploration activities. Further, the cooperation of other persons or entities may be required for us to comply with all environmental regulations. It is conceivable that future legislation or regulations may significantly increase environmental protection requirements and, as a consequence, our activities may be more closely regulated which could significantly increase operating costs. However, management is unable to predict the cost of future compliance with environmental legislation. As of the date hereof, management believes that we are in compliance with all present environmental regulations. Further, we believe that our oil and gas explorations do not pose a threat of introducing hazardous substances into the environment. If such event should occur, we could be liable under certain environmental protection statutes and laws.We presently carry insurance for environmental liability. Our exploration and development operations are subject to various types of regulation at the federal, state and local levels. Such regulation includes the requirement of permits for the drilling of wells, the regulation of the location and density of wells, limitations on the methods of casing wells, requirements for surface use and restoration of properties upon which wells are drilled, and governing the abandonment and plugging of wells. Exploration and production are also subject to property rights and other laws governing the correlative rights of surface and subsurface owners.We are subject to the requirements of the Occupational Safety and Health Act, as well as other state and local labor laws, rules and regulations. The cost of compliance with the health and safety requirements is not expected to have a material impact on our aggregate production expenses. Nevertheless, we are unable to predict the ultimate cost of compliance.market placemarket-place for smaller producers of natural gas and oil and for operators of smaller natural gas transmission systems.- 8 - - 9 - 9had sevenhave one full time employees, includingemployee that serves in the role of President, Vice President, Chief Financial OfficerTreasurer and Field Supervisor.Director. Our sole officer and director also serve as the President and Chairman of the Board of Global Technologies, Ltd., a publicly traded company listed on the OTC Markets “PINK” under the symbol “GTLL” and serves as the sole officer and director of AMDAQ Corp. We plan to expand our management team within the next 12 months to include a Chief Operations Officercertain officers for our currently active subsidiaries and additional field staff in both Kentucky and West Virginia as our operations grow. We currently utilize several outside firms and consultants to identify mineral rights for possible leaseholds, as well as for potential acquisition targets.any new subsidiaries or operational activities management deems necessary. We consider our relations with our employees and consultants to be in good standing.- 10 - We arefilefiled annual, quarterly and other reports and information with the Securities and Exchange Commission. The public may read and copy these reports, statements, or other information we file at the SEC'sSEC’s public reference room at 100 F Street, NE., Washington, DC 20549 on official business days during the hours of 10 a.m. to 3 p.m. State that the public may obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. The Commission maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the Commission at (http:(http://www.sec.gov)www.sec.gov).ITEM 1A. RISK FACTORSITEM 1A. RISK FACTORS. as well astogether with the other information provided to youset forth in this document, including information in the section of this document entitled “Forward Looking Statements.”report, which could materially affect our business, financial condition and future results. The risks and uncertainties described below are not the only onesrisks facing the Company. Additional risksour company. Risks and uncertainties not presentlycurrently known to the Companyus or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and operating results.CompanyWorld Health Organization declared the outbreak of COVID-19 as a pandemic, which continues to be spread throughout the United States and the world. The impact from the COVID-19 outbreak is uncertain and may impact our business and results of operations and could impact our financial condition in the future. We are unable to accurately predict the full impact that COVID-19 may have due to numerous uncertainties, including the severity, duration and spread of the outbreak, and actions that may be taken by governmental authorities.● our ability to raise additional capital, ● our ability to enter into licensing agreements, ● our technology development plans and timelines, ● significant declines in revenue due to supply chain disruptions, ● our operating effectiveness resulting from employees working remotely or being ill and unable to work, ● and our ability to complete a sale or merger of the Company. - 11 - ● ● ● ● ● ● believes are immaterial mayserves in the role as President and Chairman of another publicly traded entity, Global Technologies, Ltd. (a non-reporting publicly traded company “GTLL” on the OTC Markets “PINK”). Mr. Anderson also impairserves as the President and Chairman of one of the Company’s former wholly owned subsidiaries, AMDAQ Corp. As such, Mr. Anderson may not be able to dedicate the required time to the Company.operations.and our strategic direction. If we lose key management or significant personnel, cannot recruit qualified employees, directors, officers, or other personnel or experience increases in our compensation costs, our business may materially suffer.following risks actually occur,personnel necessary for the development of our business. Because of this competition, our compensation costs may increase significantly.● Establish definitive business strategies, goals and objectives; ● Maintain a system of management controls; and ● Attract and retain qualified personnel, as well as, develop, train and manage management-level and other employees. - 12 - materiallytaken, and a resulting loss of investor confidence in the reliability of our financial statements could occur.affected, the value of the Company common stock could decline, and you may lose all or part of your investment.RISKS RELATED TO THE BUSINESS AND FINANCIAL CONDITION- 13 - majority of ourwells we maintain a royalty interest are located throughout Kentucky properties areor Tennessee and considered in the exploration stage, where we currently have 14 wells in production. The majority of our West Virginia properties were acquired in the acquisition of Wilon Resources in 2010. Currently, we have placed 61 of the previously drilled wells into production. Each of the wells we have placed into production was at one time or another operated by another entity and in production. We may not establish commercial discoveries on any of the properties.stage. Failure to make commercial discoveries on any of these properties would prevent our company from earning revenue and could lead to the failure of our business.We rely on highly skilled personnel and, if we are unable to retain or motivate key personnel or hire qualified personnel, we may not be able to grow effectively.Our performance largely depends on the talents and efforts of highly skilled individuals. Our future success depends on our continuing ability to identify, hire, develop, motivate and retain highly skilled personnel for all areas of our organization. Our continued ability to compete effectively depends on our ability to attract new technology developers and to retain and motivate our existing contractors. Failure to attract and retain qualified personnel could result in a slower and less efficient development of our company.10We will need significant additional capital, which we may be unable to obtain.Our capital requirements will be significant. We cannot assure you that our business will generate sufficient cash flow from operations or that future borrowings will be available to us in an amount sufficient to enable us to continue our operations, and there can be no assurance that financing will be available in amounts or on terms acceptable to us, if at all. If we are unable to obtain additional financing, our exploration activities will be curtailed. To date, the majority of expenses have been paid directly by the President, Vice-President, or through outside financing. If either party elects to cease paying operating expenses, and the Company is unsuccessful in obtaining additional outside financing, the Company may not be able to continue its existence.Our independent auditors have expressed doubt about our ability to continue as a going concern, and the amounts recorded in our financial statements may require adjustments if the assumption that the entity is a going concern proves untrue, which may hinder our ability to obtain future financing.Our independent auditors stated that our financial statements were prepared assuming that we would continue as a going concern. As a result of the going concern qualification, we may find it much more difficult to obtain financing in the future, if required. Further, any financing we do obtain may be on less favorable terms. Moreover, if the Company should fail to continue as a going concern, there is a risk of total loss of any monies invested in the Company, and it is also possible that, in such event, our shares would be of little or no value.Failure to properly manage our potential growth would be detrimental to our business. Any growth in our operations will place a significant strain on our resources and increase demands on our management and on our operational and administrative systems, controls and other resources. There can be no assurance that our existing personnel, systems, procedures or controls will be adequate to support our operations in the future or that we will be able to successfully implement appropriate measures consistent with our growth strategy. As part of this growth, we may have to implement new operational and financial systems, procedures and controls to expand, train and manage our employee base and maintain close coordination among our staff. We cannot guarantee that we will be able to do so, or that if we are able to do so, we will be able to effectively integrate them into our existing staff and systems. We may fail to adequately manage our anticipated future growth. We will also need to continue to attract, retain and integrate personnel in all aspects of our operations. Failure to manage our growth effectively could hurt our business.11- 14 - 17,0001,300 acres we currently hold. If we are unable to acquire further leaseholds, our drilling activities will be restricted to the acreage we currently maintain, which will in turn limit our growth and revenue.12- 15 - RISKS RELATED TO COMMON STOCKcurrentlyno guarantee that they will be successful in identifying viable companies or successful in acquiring any companies.limited public market formaterial adverse effect on the ability of the Company to continue as a going concern or to pursue this segment at all, which would have a material adverse effect on the business, prospects or operations of the Company.- 16 - Common Stock. Failurefinancial results.developa wide variety of attacks on their networks on an ongoing basis. In addition to traditional computer “hackers,” malicious code (such as viruses and worms), phishing attempts, employee theft or maintain a trading market could negatively affect its valuemisuse, and makedenial of service attacks, sophisticated nation-state and nation-state supported actors now engage in intrusions and attacks (including advanced persistent threat intrusions) and add to the risks to our internal networks and the information they store and process. Despite significant efforts to create security barriers to such threats, it difficult oris virtually impossible for youthem to sell your shares.has beenare no guarantees that they will be able to find such insurances in the future, or that the cost will be affordable to them. If they are forced to go without such insurances, it may prevent them from entering into certain business sectors, may inhibit our growth, and may expose them to additional risk and financial liabilities. AMDAQ Corp will carry general liability insurance. They do not currently hold any other forms of insurance, including directors’ and officers’ insurance. Because they do not have any other types of insurance, if they are made a limited public market for our Common Stock and an active public market for our Common Stockparty of a legal action, they may not develop. Failurehave sufficient funds to developdefend the litigation. If that occurs a judgment could be rendered against them that could cause them to cease operations.maintainallowed users to create multiple views of the Ethereum Network. Such flaws have been discovered and quickly corrected by the Core Developers or the Ethereum community, thus demonstrating one of the advantages of opensource codes that are available to the public: opensource codes rely on transparency to promote community-sourced identification and solution of problems within the code.active trading market couldattack whereby such actor gains control of more than half of the Ethereum Network’s processing power or “hashrate.” Computer scientists and cryptographers believe that the immense collective processing power of the Ethereum Network makes it impracticable for an actor to gain control of computers representing a majority of the processing power on the Ethereum Network.difficultis added to the Blockchain before a target user’s legitimate transaction can be included in a block. All double-spend attacks require that the miner sequence and execute the steps of its attack with sufficient speed and accuracy. Users and merchants can dramatically reduce the risk of a double-spend attack by waiting for you to sell your shares or recover any part of your investment in us. Even ifmultiple confirmations from the Ethereum Network before settling a market for our Common Stock does develop, the market price of our Common Stocktransaction. The Ethereum Network still may be highly volatile.used to execute instantaneous, low-value transactions without confirmation to the extent the recipient of Ether determines that a malicious miner would be unwilling to carry out a double-spend attack for low-value transactions because the reward from mining would be higher than the small profit gained from double-spending. Users and merchants can take additional precautions by adjusting their Ethereum Network software programs to connect only to other well-connected nodes and to disable incoming connections. These precautions reduce the risk of double-spend attacks involving manipulation of a target’s connectivity to the Ethereum Network.- 17 - uncertainties relatingpatent applications, the Company relies on a combination of trade secrets, nondisclosure agreements and other contractual provisions to protect its intellectual property rights. Nevertheless, these measures may be inadequate to safeguard the Company’s underlying technologies. If these measures do not protect the intellectual property rights, third parties could use the Company’s technologies, and its ability to compete in the market would be reduced significantly.operating performancethe Company may be required to protect or enforce its patents and the profitability of operations, factorspatent rights through patent litigation against third parties, such as variationsinfringement suits or interference proceedings. These lawsuits could be expensive, take significant time, and could divert management’s attention from other business concerns. These actions could put the Company’s patents at risk of being invalidated or interpreted narrowly, and any patent applications at risk of not issuing. In defense of any such action, these third parties may assert claims against the Company. The Company cannot provide any assurance that it will have sufficient funds to vigorously prosecute any patent litigation, that it will prevail in any of these suits, or that the damages or other remedies awarded, if any, will be commercially valuable. During the course of these suits, there may be public announcements of the results of hearings, motions and other interim financial resultsproceedings or various, as yet unpredictable, factors, many ofdevelopments in the litigation, which are beyond our control, may have acould result in the negative effect onperception by investors, which could cause the market price of ourthe Company’s common stock to decline dramatically.Stock.13OTCQBOTC Bulletin Board which would limit the ability of broker-dealers to sell our securities in the secondary market.listedtrading on the OTCQB, such as us,Over the Counter Bulletin Board must be reporting issuers under Section 12 of the Securities Exchange Act of 1934, as amended, and must be current in their reports under Section 13, in order to maintain price quotation privileges on the OTCQB.OTC Bulletin Board. As a result, the market liquidity for our securities could be severely adversely affected by limiting the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market. In addition, we may be unable to get relisted on the OTCQB,OTC Bulletin Board, which may have an adverse material effect on the Company. Please see "Subsequent Events, Note M" for an explanation of the change in trading platform from the OTC Bulletin Board and OTCQB to only the OTCQB.stockstock.. In September 2009, the CompanyAt present, we have authorized and issued two Series of Preferred in connection with the acquisition of SLMI Options, LLC. There are currently 1.0 million shares of Series A Preferred3,000,000 and 300,000 shares of Series B Preferred.On September 4, 2009, the Company entered into a Lender Acquisition Agreement (the “Agreement”) with SLMI Holdings LLC (“Holdings”) and SLMI Options, LLC (“Options”). Pursuant to the Agreement, the Company acquired all of the outstanding ownership units (the “Ownership Units”) of Options from Holdings. As part of the agreement, the Company agreed to issue to Holdings 1,000,000 shares, of Series A Preferred Stock of the Company, which shares shall be convertible into 10,000,000 shares of common stock upon the occurrence of an event of default under the Agreement. The Holders of the Series A Preferred shall have the right to one vote for each one sharerespectively, of Series A Preferred stock owned. and authorized and issued 500,000 and 100 shares, respectively, of Series D Preferred stock. Please see NOTE L - CAPITAL STOCK for further information.- 18 - Agreement providesCompany arbitrarily determined the offering price and terms of the Shares offered through this Prospectus.default,loan.Holdersshares of larger, more established companies that trade on a national securities exchange and have large public floats. The volatility in our share price will be attributable to a number of factors. First, our common stock will be compared to the shares of such larger, more established companies, sporadically and thinly traded. As a consequence of this limited liquidity, the trading of relatively small quantities of shares by our shareholders may disproportionately influence the price of those shares in either direction. The price for our shares could decline precipitously in the event that a large number of shares of our common stock are sold on the market without commensurate demand. Second, we are a speculative or “risky” investment due to our limited operating history and lack of profits to date, and uncertainty of future market acceptance for our potential products. As a consequence of this enhanced risk, more risk-adverse investors may, under the fear of losing all or most of their investment in the event of negative news or lack of progress, be more inclined to sell their shares on the market more quickly and at greater discounts than would be the case with the stock of a larger, more established company that trades on a national securities exchange and has a large public float. Many of these factors are beyond our control and may decrease the market price of our common stock, regardless of our operating performance. We cannot make any predictions or projections as to what the prevailing market price for our common stock will be at any time. Moreover, the OTC Bulletin Board is not a liquid market in contrast to the major stock exchanges. We cannot assure you as to the liquidity or the future market prices of our common stock if a market does develop. If an active market for our common stock does not develop, the fair market value of our common stock could be materially adversely affected.- 19 - Series A Preferred Stock shall have the right to appoint 3 additional members to the Company’s Board of Directors. In addition, thepreferred stock without seeking any further approval from holders of the Series A Preferred Stock shallCompany’s common stock. Any preferred stock that is issued may rank ahead of the Company’s common stock in terms of dividends, priority and liquidation premiums and may have greater voting rights than the rightCompany’s common stock.appoint an observerSarbanes-Oxley, have required changes in corporate governance practices, internal control policies and audit committee practices of public companies. Although the Company is a relatively small public company, these rules, regulations, and requirements for the most part apply to the same extent as they apply to all major publicly traded companies. As a result, they have significantly increased the Company’s legal, financial, compliance and administrative costs, and have made certain other activities more time consuming and costly, as well as requiring substantial time and attention of our senior management. The Company expects its continued compliance with these and future rules and regulations to continue to require significant resources. These rules and regulations also may make it more difficult and more expensive for the Company to obtain director and officer liability insurance in the future and could make it more difficult for it to attract and retain qualified members for the Company’s Board of Directors, who will act as tie breaking vote upon the occurrence of an event of default and the subsequent increase in the size of the Boardparticularly to six members. The Company also agreed to issue 300,000serve on its audit committee.of Series B Preferred Stock to Holdings in consideration for the issuance of a promissory note in the principal amount of $300,000 which is due on the fifth anniversary of the Agreement and which is secured by the Series B Preferred Stock. The Series B Preferred Stock is convertible into 3,000,000 shares of common stock of the Company.Our common stock isare subject to the U.S. “Penny Stock” Rules and investors who purchase our common stockshares may have difficulty re-selling their shares as the liquidity of the market for our common stockshares may be adversely affected by the impact of the “Penny Stock” Rules.listedtraded on the OTCQBOTC Bulletin Board, but thereit is no current regular trading in ourthe Company’s plan that the common stock.shares be quoted on the OTC Bulletin Board. A “penny stock” is generally defined by regulations of the U.S. Securities and Exchange Commission (“SEC”) as an equity security with a market price of less than US$5.00 per share. However, an equity security with a market price under US$5.00US $5.00 will not be considered a penny stock if it fits within any of the following exceptions:(i) the equity security is listed on NASDAQ or a national securities exchange;(ii) the issuer of the equity security has been in continuous operation for less than three years, and either has (a) net tangible assets of at least US$5,000,000, or (b) average annual revenue of at least US$6,000,000; or(iii) the issuer of the equity security has been in continuous operation for more than three years, and has net tangible assets of at least US$2,000,000.(i) the equity security is listed on NASDAQ or a national securities exchange; (ii) the issuer of the equity security has been in continuous operation for less than three years, and either has (a) net tangible assets of at least US $5,000,000, or (b) average annual revenue of at least US $6,000,000; or (iii) the issuer of the equity security has been in continuous operation for more than three years and has net tangible assets of at least US $2,000,000. 14- 20 - RISKS RELATED TO OUR SECURITIES PURCHASE AGREEMENT WITH TANGIERS INVESTORS, LPOn September 24, 2009, we entered into a Securities Purchase Agreement with Tangiers Investors, LP (“Tangiers”). Pursuant to the Securities Purchase Agreement the Company may, at its discretion, periodically sell to Tangiers sharesitsour common stock forhas a total purchasenegative effect on the amount and percentage of transaction costs paid by individual shareholders. The low price of upour common stock also limits our ability to $3,000,000. For eachraise additional capital by issuing additional shares. There are several reasons for these effects. First, the internal policies of certain institutional investors prohibit the purchase of low-priced stocks. Second, many brokerage houses do not permit low-priced stocks to be used as collateral for margin accounts or to be purchased on margin. Third, some brokerage house policies and practices tend to discourage individual brokers from dealing in low-priced stocks. Finally, broker’s commissions on low-priced stocks usually represent a higher percentage of the stock price than commissions on higher priced stocks. As a result, the Company’s shareholders may pay transaction costs that are a higher percentage of their total share value than if our share price were substantially higher.purchased underpurchasers of our common stock may incur immediate dilution and experience further dilution.Securities Purchase Agreement, Tangiers will payauthority to cause us 90%to issue additional shares of common stock and to determine the rights, preferences and privileges of such shares, without consent of any of our stockholders. Consequently, the stockholders may experience more dilution in their ownership of our stock in the future.lowest volume weighted average priceCompany’s Series A Preferred Stock, Series D Preferred Stock, convertible notes and exercises of outstanding options and warrants.Company'sthird-party notes, conversion of our Series A Preferred Stock and Series D Preferred Stock will result in further dilution of your investment. In addition, you may experience additional dilution if we issue common stock as quoted by Bloomberg, LP onin the Over-the-Counter Bulletin Board or other principal market on whichfuture. As a result of this dilution, you may receive significantly less in net tangible book value than the Company'sfull purchase price you paid for the shares in the event of liquidation.is traded for the five days immediately following the notice date. The price paid by Tangiers for the Company's stock shall be determined as of the date of each individual request for an advance under the Securities Purchase Agreement. Tangiers’ obligation to purchase shares of the Company's common stock under the Securities Purchase Agreement is subject to certain conditions, including the Company obtaining an effective registration statementor securities convertible into or exercisable for shares of the Company's common stock sold underfollowing this offering, as well as the Securities Purchase Agreementexercise of options and is limited to $250,000 per ten consecutive trading days afterwarrants outstanding, will dilute your ownership interests and may adversely affect the advance notice is provided to Tangiers. The Securities Purchase Agreement shall terminate and Tangiers shall have no further obligation to make advances under the Securities Purchase Agreement at the earlier of the passing of 18 months after the date that the Securities and Exchange Commission declares the Company’s registration statement effective or the Company receives advances from Tangiers equal to the $3,000,000. Upon the execution of the Securities Purchase Agreement, Tangiers received a one-time commitment fee equal to $150,000 of the Company's common stock divided by the lowest volume weighted average price of the Company's common stock during the 10 business days immediately following the date of the Securities Purchase Agreement, as quoted by Bloomberg, LP. The following risks relate to our Securities Purchase Agreement with Tangiers.Existing stockholders will experience significant dilution from our sale of shares under the Securities Purchase Agreement.The sale of shares pursuant to the Securities Purchase Agreement will have a dilutive impact on our stockholders. As a result, thefuture market price of our common stock.decline significantly,be dilutive to stockholders if they do not invest in future offerings. We may seek additional capital through a combination of private and public offerings in the future. we sell shares pursuant to the Securities Purchase Agreement. In addition, formarket price of the Company’s shares of Common Stock, whether any particular advance,trading market will provide liquidity to investors, or whether any trading market will be sustained. Furthermore, because our shares of Common Stock are traded on the OTC Pink Sheet market, the shares of our Common Stock may only be offered and sold by Selling Shareholders at a fixed price of $0.044 per share until our Common Stock is quoted on the OTCQB tier of the OTC Markets, and thereafter at prevailing market prices or privately negotiated prices or in transactions that are not in the public market. We cannot assure you that our Common Stock will be quoted on the OTCQB tier notwithstanding our belief that we will needsatisfy the eligibility standards for admission to, issueand our intention to make application for quotation on the OTCQB.greaterstockholder’s ability to buy and sell our stock.- 21 - underthrough another class of capital stock that may be converted into common stock. Our President owns all issued and outstanding shares of the Securities Purchase Agreement asCompany’s Series D Preferred Stock, which has voting rights equal to four times the sum of: i) the total number of shares of Common Stock which are issued and outstanding at the time of voting, plus ii) the total number of shares of Series A, plus Series B, plus Series C Preferred Stocks which are issued and outstanding at the time of voting. As of the date of this filing, our President would have voting rights equal to 1,572,265,383 shares (1,568,974,540 voting shares through the Series D Preferred Stock and 3,290,843 shares of common stock price declines. Ifheld) or 80.04% of the shares available to vote for a matter brought before shareholders. In the event our President were to convert all 100 shares of Series D Preferred stock price is lower, then our existing stockholdersinto shares of common stock and exercise an option for 25,000 shares, he would experience greater dilution.The investor underbe issued.416,691,667 shares of common stock for a total ownership of 419,990,510 or 51.98% of the Securities Purchase Agreement will pay less than the then-prevailing market priceissued and outstanding common stock.common stockThe common stockbusiness for the foreseeable future, you will likely not receive any dividends for the foreseeable future.be issued under the Securities Purchase Agreement will be issued at 90% of the daily volume weighted average price ofretain our future earnings to support operations and to finance expansion and therefore we do not anticipate paying any cash dividends on our common stock duringin the five consecutive trading days immediately followingforeseeable future.send an advance noticecannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.ITEM 1B. UNRESOLVED STAFF COMMENTS. investorExchange Act and are not required to provide the information under this item.ITEM 2. PROPERTIES. subjectlocated at 501 1st Ave N., Suite 901, St. Petersburg, FL 33701. We are currently entered into a month to month lease and our monthly rent is $475.00. We believe we will be at our current office space for the foreseeable future.reduction providedinformation.Securities Purchase Agreement. These discounted sales could also causeCompany’s current plans are to initiate the pricedevelopment of a storage facility on site during calendar 2021. Please seeNOTE D – PROPERTY AND EQUIPMENT for further information.common stock to decline.The sale offacilities are adequate for our stock under the Securities Purchase Agreement could encourage short sales by third parties, which could contribute to the further decline of our stock price.The significant downward pressure on the price of our common stock caused by the sale of material amounts of common stock under the Securities Purchase Agreement could encourage short sales by third parties. Such an event could place further downward pressure on the price of our common stock.We may be limited in the amount we can raise under the Securities Purchase Agreement because of concerns about selling more shares into the market than the market can absorb without a significant price adjustment.The Company intends to exert its best efforts to avoid a significant downward pressure on the price of its common stock by refraining from placing more shares into the market than the market can absorb. This potential adverse impact on the stock price may limit our willingness to use the Securities Purchase Agreement. Until there is a greater trading volume, it seems unlikelycurrent needs and that, if required, we will be able to access the maximum amount we can draw without an adverse impact on the stock price15We will not be able to use the Securities Purchase Agreement if the shares to be issued in connection with an advance would result in Tangiers owning more than 9.9% ofexpand our outstanding common stock.Under the terms of the Securities Purchase Agreement, we may not request advances if the shares to be issued in connection with such advances would result in Tangiers and its affiliates owning more than 9.9% of our outstanding common stock. We are permitted under the terms of the Securities Purchase Agreement to make limited draws on the Securities Purchase Agreement so long as Tangiers beneficial ownership of our common stock remains lower than 9.9%. A possibility exists that Tangiers and its affiliates may own more than 9.9% of our outstanding common stock (whether through open market purchases, retention of shares issued under the Securities Purchase Agreement,current space or otherwise) at a time when we would otherwise plan to obtain an advance under the Securities Purchase Agreement. As such, by operation of the provisions of the Securities Purchase Agreement, the Company may be prohibited from procuring additional funding when necessary due to these provisions discussed above.The Securities Purchase Agreement will restrict our ability to engage in alternative financings.The structure of transactions under the Securities Purchase Agreement will result in the Company being deemed to be involved in a near continuous indirect primary public offering of our securities. As long as we are deemed to be engaged in a public offering, our ability to engage in a private placement will be limited because of integration concerns and therefore limits our ability to obtain additional funding if necessary. If we do not obtain the necessary, funds required to maintain the operations of the business and to settle our liabilities on a timely manner, the business will inevitable suffer. We may be limited in the amount we can raise under the Securities Purchase Agreement because of concerns about selling more shares into the market than the market can absorb without a significant price adjustment.The Company intends to exert its best efforts to avoid a significant downward pressure on the price of its common stock by refraining from placing more shares into the market than the market can absorb. This potential adverse impact on the stock price may limit our willingness to use the Securities Purchase Agreement. Until there is a greater trading volume, it seems unlikely that we will be able to access the maximum amount we can draw without an adverse impact on the stock price.ITEM 2. DESCRIPTION OF PROPERTYLeases for Company HeadquartersOur corporate headquarters is located in a leasedlocate suitable new office space at 1717 Dr. Martin Luther King Jr. St. N, St. Petersburg, Florida. We entered intoand obtain a two-year leasesuitable replacement for this property on February 7, 2011our executive and the term commenced on March 1, 2011. The annual rent for year one is $10,657 and $11,556 for year two. The lease includes a right to renew for one additional two-year period commencing March 1, 2013, at an annual rent of $11,556. This lease also includes an option to purchase clause at a fixed price of $135,000. We believe that our existing facilities are suitable and adequate to meet our current business requirements.administrative headquarters.- 22 - Leased Acreage for Drilling ProgramThe Company maintains leases on mineral rights on approximately 5000 acres in South Central Kentucky. In West Virginia, the Company maintains leases on approximately 12,000 acres of mineral rights. The majority of the leases in West Virginia were obtained in the 2010 Wilon Resources, Inc. acquisition. E 2 Investments, LLC, a wholly owned subsidiary of the Company, owns 280 acres of mineral rights in Wayne County West Virginia.The Company will continue to lease additional mineral rights acreage in and around the operational areas in the states of Kentucky and West Virginia.Recently Acquired PropertyOn March 19, 2010, the Company's shareholders approved the acquisition of US Natural Gas Corp WV ("WV") (f/k/a Wilon Resources, Inc.). On May 28, 2010, the Company received notification from the appropriate state agencies that the acquisition of Wilon Resources was effective. On June 3, 2010, final approval was given by FINRA for the share exchange between the Company and WV. The newly acquired WV became a wholly owned subsidiary of the Company. WV currently maintains 12,000 acres of mineral rights leases in Wayne County, West Virginia. Our combined entities now have approximately 17,000 acres of mineral rights leases in the states of Kentucky and West Virginia, 121 natural gas wells, and 31 oil wells. 16Recently Constructed PropertyIn November 2010, US Natural Gas Corp WV retained an outside contractor to construct a 1200 square foot storage facility on the 199 acres owned by US Natural Gas Corp. The project was completed the beginning of December 2010. ITEM 3. LEGAL PROCEEDINGSITEM 3. LEGAL PROCEEDINGS. managementManagement of the Company does not believe that there are any proceedings to which any director, officer, or affiliate of the Company, any owner of record of the beneficially or more than five percent of the common stock of the Company, or any associate of any such director, officer, affiliate of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company.ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSMarch 19, 2010,May 1, 2018, Beaufort Capital Partners, LLC (‘Plaintiff”) filed a complaint against the Company held a special meeting(“Defendant”) with the Supreme Court of its shareholders. The meeting was heldNew, County of New York, alleging that the Defendant failed to vote onpay principal, interest and other amounts due and owing pursuant to certain agreements between Plaintiff and Defendant, including but not limited to those certain Senior Secured Convertible Notes dated October 19, 2016 and other related instruments in the following proposals set forth below (the “Proposals”).Proposals:1. To approve a share exchange betweenamount of $197,128.64. On October 5, 2018, the Company and Wilon Resources, Inc.,the Plaintiff entered into a Tennessee corporation (“Wilon”Debt Settlement Agreement (the “Agreement”) whereby the Company would acquire allwas to pay the Plaintiff the sum of Fifteen Thousand and NO/100 Dollars ($15,000)(the outstanding shares of Wilon and hold Wilon“Settlement Amount”) as a wholly-owned subsidiary. For each share of common stock of Wilonone-time lump sum payment to be exchanged, the Company would issue one share of the Company’s common stock plus one warrant to purchase one additional share of common stock of the Company at an exercise price of $.25 (25 cents) per share to be exercisable for a period of 5 years from the date of issue.2. To approve an amendment to the Company’s Articles of Incorporation to change the name ofsatisfy all financial obligations by the Company to US Natural Gas Corp.3. To approve an amendmentthe Plaintiff for all Convertible Notes issued to the Company’s Articles of Incorporation to delete Article 8 thereof, which states “allPlaintiff. On October 10, 2018, the Company made full payment of the shares ofSettlement Amount.may be subject(“Defendant”) with the Circuit Court of Pinellas County, Florida, alleging that the Defendant failed to pay the Plaintiff for public relation services in the amount of $4,175. On February 18, 2014, the Court issued a Shareholders’ Restrictive Agreement.” No such agreement was everFinal Judgment against the Company in the amount of $4,175 principal, costs in the sum of $350 for a total of $4,525. Said total is to draw interest at the legal rate of 4.75% interest per annum. As of December 31, 2019, $4,525 principal plus all inherit interest remain due.shareholdersPlaintiffs and there is no current intent to enter into any such agreement at the present time.The Company’s shareholders approved eacha subsidiary of the Proposals with 16,611,138 votes for and 0 votes against.19, 2010, Wilon Resources, Inc. held a special meeting of its shareholders. The meeting1, 2017, the case was helddismissed with prejudice by the Court for failure to vote onprosecute and stricken from the following proposal set forth below (the “Proposal”).Proposal:1. To approve a share exchange between the Company and Adventure Energy, Inc., a Florida corporation (“Adventure”) whereby Adventure would acquire alldocket of the outstanding common sharescourt.Company and holdDefendant with an amount due of $1,568 with costs of $268.92. On October 11, 2011, the Company asCourt issued a wholly-owned subsidiary. For each shareFinal judgment in the amount of $1793.90 with interest at 4.75%. As of December 31, 2019, $1,793.90 plus all inherit interest remain due to the Company's common stock to be exchanged, Adventure would issue one share of its common stock plus one warrant to purchase one additional share of common stock at an exercise price of $.25 (25 cents) per share to be exercisable for a period of 5 years from the date of issue.Company.ITEM 4. MINE SAFETY DISCLOSURES. - 23 - The shareholders approved Proposal #1 with 27,843,109 votes for and 0 votes against.17ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESOTC Bulletin Board ConsiderationsMARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERSOur common stock is listed on the OTCQB under the trading symbol “UNGS”. ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. following table sets forth the high and low bid prices for our common stock for the periods noted, as reported by the National Daily Quotation Service and the OTCQB. Quotations reflect inter-dealer prices, without retail mark-up, markdown or commission and may not represent actual transactions. Our stock began trading on April 3, 2009.Fiscal Year 2010 High Low HoldersAs of April 12, 2011, the approximate number of stockholders of record of the Common Stock of the Company was 279. Quarterly period High Low Fiscal year ended December 31, 2019: First Quarter $ 0.59 $ 0.0041 Second Quarter $ 0.06 $ 0.0057 Third Quarter $ 0.0465 $ 0.005 Fourth Quarter $ 0.05 $ 0.0021 Fiscal year ended December 31, 2018: First Quarter $ 0.80 $ 0.40 Second Quarter $ 0.40 $ 0.04 Third Quarter $ 0.40 $ 0.042 Fourth Quarter $ 0.40 $ 0.04 Equity Compensation Plan Informationfollowing table includesCompany paid a stock dividend to its shareholders in the spin-off of its wholly owned subsidiary, The Greater Cannabis Company, Inc. (“GCAN”). GCAN is currently trading on the OTCQB under the symbol “GCAN.”regardingwith respect to transactions in such securities is provided by the Company’s 2009 Flexible Stock Planexchange or system. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that: (a) contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading, (b) contains a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to a violation of such duties or other requirements of the securities laws, (c) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price, (d) contains a toll-free telephone number for inquiries on disciplinary actions, (e) defines significant terms in the disclosure document or in the conduct of trading in penny stocks, and (f) contains such other information and is in such form, including language, type size and format, as the SEC shall require by rule or regulation.April 12, 2011.Equity Compensation Plan Information- 24 - Plan categoryNumber of securities to be issued upon exercise of outstanding options, warrants and rights(a)Weighted-average exercise price of outstanding options, warrants and rights(b)Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))(c)Equity compensation plans approved by security holders 10,566,039Equity compensation plans not approved by security holders NONE N/A N/ATotal10,566,039The Company has establishedPlanpenny stock rules require that prior to attract, retain, motivatea transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and reward employees and other individuals, to encourage ownershipreceive the purchaser’s written acknowledgment of the Company'sreceipt of a risk disclosure statement, a written agreement as to transactions involving penny stocks, and a signed and dated copy of a written suitability statement.stock by employeesstock. Therefore, stockholders may have difficulty selling their shares of our common stock.other individuals,accordingly we have no shares authorized for issuance under an equity compensation plan.to promote and further the best interestswere not previously disclosed in a Current Report on Form 8-K as listed below. Except where noted, all of the Company. Thesecurities discussed in this Item 5 were issued in reliance on the exemption under Section 4(a)(2) of the Securities Act.is authorized to issue 20 millionissued 37,500 shares of its common stock under(with a fair value of $14,959) in satisfaction of $15,000 in accounts payable due a consultant.Plan. Stock under that Plan may be granted only to consultantsprior owner of AMDAQ, Ltd and employeesthe prior owners of the Company.18Recent SalesAMDAQ tokens agreed to a reduction in the number of Unregistered SecuritiesDuringcommon shares of AMDAQ Corp that they would retain. Of the fiscal year ended December 31, 2010,15,000,000 shares of AMDAQ Corp common stock issued to the Company has hadprior owner of AMDAQ, Ltd, 7,500,000 were returned to AMDAQ Corp to be retired. Of the following unregistered sales3,000,000 shares of its securities:In January 2010,AMDAQ Corp common stock issued for the purchase of the AMDAQ tokens, 1,500,000 were returned to AMDAQ Corp to be retired.453,000594,066 shares of its common stock at $.06 per share to Chris Daviesa convertible noteholder in satisfaction of $642 accrued interest. The $59,418 excess of the $60,060 fair value of the 594,066 shares over the $642 liability reduction was charged to loss on behalfconversion of Atlas Capital Holdingsdebt in exchange for legal services.In January 2010,On February 14, 2019, the Company issued 900,0003,000,000 shares of its common stock at $.06 per share to Around the Clock Partners, LPValvasone Trust as payment for reimbursement of expenses paidservices rendered on behalf of the company.In January 2010,Company. The $300,000 fair value of the 3,000,000 shares was charged to professional fees in the three months ended March 31, 2019.350,0001,500,000 shares of its common stock at $.05 per share to Chris Davies on behalf of Atlas Capital Holdings in exchangea Valvasone Trust affiliate as payment for legal services.In February 2010, the Company issued 200,000 shares of common stock at $.04 per share to Around the Clock Partners, LP for reimbursement of expenses paidservices rendered on behalf of the company.InCompany. The $150,000 fair value of the 1,500,000 shares was charged to professional fees in the three months ended March 2010,31, 2019.350,000536,585 shares of its common stock at $.10 per share to Chris Daviesa convertible noteholder in satisfaction of $1,100 notes payable. The $52,559 excess of the $53,659 fair value of the 536,585 shares over the $1,100 liability reduction was charged to loss on behalfconversion of Atlas Capital Holdingsdebt in exchange for legal services.Inthe three months ended March 31, 2019.2010,17, 2019, the Company issued 175,000116,822 shares of its common stock at $.05 per share to Ron FerlisiWayne Anderson, the Company’s chief executive officer and sole officer and director of the Company, in exchange for satisfaction of notes payable.In April 2010,$10,000 director’s stock-based compensation for the first quarter of calendar year 2019.825,000583,523 shares of its common stock at $.05 per share to BuzzBahna convertible noteholder in exchange for satisfaction of notes payable.In April 2010,$345 principal and $851 interest against an outstanding note. The $7,557 excess of the $8,753 fair value of the 583,523 shares over the $1,196 liability reduction was charged to loss on conversion of debt in the three months ended September 30, 2019.250,0001,226,583 shares of its common stock at $.05 per share to BuzzBahna convertible noteholder in exchange for investor relation services.In April 2010,satisfaction of $1,300 interest against an outstanding note. The $10,966 excess of the $12,266 fair value of the 1,226,583 shares over the $1,300 liability reduction was charged to loss on conversion of debt in the three months ended September 30, 2019.120,00010,000,000 shares of restricted common stock at $.05 per share to Jody Samuelsfor the purchase of $100,000 in exchange inventory. Please seeNOTE C – INVENTORY for legal services.In April 2010,further information.98,7666,000,000 shares of restricted common stock at $.069 per share to Tangiers Investors LP for equity funding.the purchase of $60,000 in inventory. Please seeNOTE C – INVENTORY for further information.- 25 - In April 2010,100,0001,248,390 shares of its common stock at $.04 per share to KYTX, LLC in exchange for an extension on a note payment.In May 2010, the Company issued 300,926 sharesconvertible noteholder as a partial cashless exercise of common stock at $.04 per share and 169,263 shares of common stock at $.033 per share to Tangiers Investors LP for equity funding.In May 2010, the Company issued 300,000 shares of common stock at $.04 per share to SLMI Holdings, LLC in exchange for an extension on a note payment.In May 2010, the Company issued 412,698 shares of common stock at $.04 per share to Cassel Family Trust as per the stock purchase agreement.In May 2010, the Company issued 100,000 shares of common stock at $.04 per share to White Oak Land and Minerals Development, LLC for consulting services.In May 2010, the Company issued 800,000 shares of common stock at $.01 per share to Ron Ferlisi in exchange for satisfaction of notes payable.In May 2010, the Company issued 500,000 shares of common stock at $.01 per share to Rui Figueiredo in exchange for satisfaction of notes payable.In May 2010, the Company issued 500,000 shares of common stock at $.01 per share to Maria Rothman in exchange for satisfaction of notes payable.In May 2010, the Company issued 200,000 shares of common stock at $.01 per share to Jody Samuels in exchange for satisfaction of notes payable.In May 2010, the Company issued 500,000 shares of common stock at $.01 per share to Faith Capital NY LLC in exchange for satisfaction of notes payable.19In May 2010,warrant.at $.01 per share to Jeff Schwartza convertible noteholder in exchange for satisfaction of notes payable.In May 2010,$3,700 principal and $500 in fees against an outstanding note. The $5,800 excess of the $10,000 fair value of the 1,000,000 shares over the $4,200 liability reduction was charged to loss on conversion of debt in the three months ended December 31, 2019.500,0002,072,133 shares of common stock at $.01 per share to Steven Reiss in exchange for satisfaction of notes payable.In May 2010, the Company issued 333,333 shares of common stock at $.03 per share to Charles and Mary Crum as per the stock purchase agreement.In June 2010, the Company issued 150,000 shares of common stock at $.05 per share to Jeff Parker in exchange for consulting services.In June 2010, the Company issued 500,000 shares of common stock at $.05 per share to Jim Anderson as a reduction of debt for expenses paid on behalf of the company.In June 2010, the Company issued 348,189 shares of common stock at $.03 per share to Tangiers Investors LP for equity funding.In June 2010, the Company issued 833,333 shares of common stock at $.03 per share to Wayne Anderson as payment towards accrued wages.In June 2010, the Company issued 666,667 shares of common stock at $.03 per share to Cassel Family Trust as per the stock purchase agreement.In July 2010, the Company issued 25,000 shares of common stock at $.03 per share to James Crum for a lease bonus payment.In July 2010, the Company issued 25,000 shares of common stock at $.03 per share to Charles and Mary Crum for a lease bonus payment.In July 2010, the Company issued 500,000 shares of common stock at $.03 per share to Del Mar Corporate Consulting, LLC for consulting and marketing services.In July 2010, the Company issued 625,000 shares of common stock at $.04 per share to Wayne Anderson as payment towards accrued wages.In July 2010, the Company issued 476,191 shares of common stock at $.02 per share to Tangiers Investors LP as payment towards a convertible debenture.In July 2010, the Company issued 714,285 shares of common stock at $.07 per share to Chris Davies on behalf of Atlas Capital Holdings for legal services.In July 2010, the Company issued 710,901 shares of common stock at $.02 per share to Tangiers Investors LP as payment towards a convertible debenture.In July 2010, the Company issued 170,940 shares of common stock at $.06 per share to Tangiers Investors LP for equity funding.In July 2010, the Company issued 130,000 shares of common stock at $.09 per share to White Oak Land and Minerals Development, LLC for consulting services.In July 2010, the Company issued 1,000,000 shares of common stock at $.001 per share to Bull In Advantage. The shares will be returned in full due to failure of the shareholder to satisfy the terms of the debt transaction.In August 2010, the Company issued 395,061 shares of common stock at $.04 per share to Tangiers Investors LP for equity funding.In August 2010, the Company issued 2,423,311 shares of common stock at $.015 per share to ARRG Corp as payment towards a note.In August 2010, the Company issued 2,423,311 shares of common stock at $.015 per share to Caesar Capital Group, LLC as payment towards a note.In August 2010, the Company issued 2,300,000 shares of common stock at $.01 per share to Mazuma Funding Corp as payment towards a note.In August 2010, the Company issued 1,225 shares of common stock at $.25 per share to Horace Womack as per the Common Stock Purchase Warrant subscription agreement.20In September 2010, the Company issued 4,500,000 shares of common stock at $.01 per share to Caesar Capital Group, LLC as payment towards a note.In September 2010, the Company issued 100,000 shares of common stock at $.02 per share to Ron Ferlisi as per the stock purchase agreement.In September 2010, the Company issued 800,000 shares of common stock at $.01 per share to Doug Miglino as payment towards a note.In September 2010, the Company issued 200,000 shares of common stock at $.025 per share to Brian Feingold for financing services.In September 2010, the Company issued 380,518 shares of common stock at $.02 per share to Tangiers Investors LP for equity funding.In September 2010, the Company issued 765,000 shares of common stock at $.01 per share to Ron Ferlisi as payment towards a note.In September 2010, the Company issued 765,000 shares of common stock at $.01 per share to Vincent Bardong as payment towards a note.In September 2010, the Company issued 300,000 shares of common stock at $.01 per share to SLMI Holdings LLC for extending a note due date.In September 2010, the Company issued 1,500,000 shares of common stock at $.015 per share to Rui Figueiredo as payment towards a note.In September 2010, the Company issued 1,500,000 shares of common stock at $.015 per share to First Barrington Group as payment towards a note.In October 2010, the Company issued 380,518 shares of common stock at $.02 per share to Tangiers Investors LP for equity funding.In October 2010, the Company issued 1,100,000 shares of common stock at $.0135 per share to John R. Rogers as per the stock purchase agreement.In October 2010, the Company issued 1,100,000 shares of common stock at $.0135 per share to John R. Rogers as per the stock purchase agreement.In October 2010, the Company issued 750,000 shares of common stock at $.01 per share to First Barrington Group as payment towards a note.In October 2010, the Company issued 750,000 shares of common stock at $.01 per share to Rui Figueiredo as payment towards a note.In November 2010, the Company issued 1,190,476 shares of common stock at $.02 per share to Tangiers Investors LP for equity funding.In November 2010, the Company issued 4,325,000 shares of common stock at $.01 per share to Mazuma Funding Corp as payment towards a note.In November 2010, the Company issued 2,500 shares of common stock at $.02 per share to Matthew Holden for participation in drilling/re-work program.In November 2010, the Company issued 2,500 shares of common stock at $.02 per share to Adam Holden for participation in drilling/re-work program.In November 2010, the Company issued 50,000 shares of common stock at $.02 per share to Brian Warshaw as per the terms of a promissory note dated January 2010.21In November 2010, the Company issued 50,000 shares of common stock at $.02 per share to Jim Gallucio as per the terms of a promissory note dated January 2010.In November 2010, the Company issued 2,500,000 shares of common stock at $.01 per share to Rui Figueiredo as payment towards a note.In November 2010, the Company issued 2,500,000 shares of common stock at $.01 per share to Dave Miller as payment towards a note.In November 2010, the Company issued 600,000 shares of common stock at $.02 per share to Dave Matheny as per the Common Stock Purchase Warrant subscription agreement.In November 2010, the Company issued 4,000,000 shares of common stock at $.01 per share to Dave Matheny as payment towards a note.In November 2010, the Company issued 1,000,000 shares of common stock at $.01 per share to Howard Matheny as payment towards a note.In November 2010, the Company issued 5,340,909 shares of common stock at $.015 per share to Caesar Capital Group, LLC as payment towards a note.In November 2010, the Company issued 300,000 shares of common stock at $.01 per share to SLMI Holdings LLC for extending a note due date.In November 2010, the Company issued 1,169,590 shares of common stock at $.02 per share to Tangiers Investors LP for equity funding.In December 2010, the Company issued 35,000 shares of common stock at $.01 per share to Wayne Anderson as compensation as a Director.In December 2010, the Company issued 35,000 shares of common stock at $.01 per share to Jim Anderson as compensation as a Director.In December 2010, the Company issued 6,500,000 shares of common stock at $.01 per share to Mazuma Funding Corp as payment towards a note.In December 2010, the Company issued 7,041,158 shares of common stock at $.01 per share to Jim Anderson as a reduction of debt for expenses paid on behalf of the company.In December 2010, the Company issued 2,000,000 shares of common stock at $.01 per share to White Oak Land and Minerals Development, LLC for consulting services.Warrants outstanding at December 31, 2010 and December 31, 2009 are 61,113,415 and 6,190,000, respectively. Each warrant enables the holder to acquire one share of the Company's common stock at a specified exercise price for a term of three to five years. Warrants outstanding at December 31, 2010 have vesting dates through May 2012 and expiration dates through May 2017.Warrants issued for the year and the three months ending December 31, 2010 are 56,674,640 and 3,300,000, respectively. Warrants exercised or canceled for the year and the three months ending December 31, 2010 are 1,751,225 and 600,000, respectively.On June 3, 2010 in consideration for the acquisition of Wilon Resources, Inc. (see Note B) each Wilon shareholder received one share of the Company's common stock plus one warrant to purchase one additional share of common stock of the Company at an exercise price of $.25 per share to be exercisable for a period of 5 years from the date of issue. The total shares of common stock and warrants issued for the acquisition were 49,207,973 each. In July 2010, the Company canceled 1,000,000 shares of common stock and 1,000,000 warrants it obtained through the Wilon acquisition. The cancelation of common stock was accounted for as a reduction in the acquisition price for Wilon.22All of the above offerings and sales were deemed to be exempt under rule 506 of Regulation D and Section 4(2) of the Securities Act of 1933, as amended. No advertising or general solicitation was employed in offering the securities. The offerings and sales were made to a limited number of persons, all of whom were accredited investors, business associates of the Company or executive officers of the Company, and transfer was restricted by the Company in accordance with the requirements of the Securities Act of 1933. In addition to representations by the above-referenced persons, we have made independent determinations that all of the above-referenced persons were accredited or sophisticated investors, and that they were capable of analyzing the merits and risks of their investment, and that they understood the speculative nature of their investment. Furthermore, all of the above-referenced persons were provided with access to our Securities and Exchange Commission filings.Issuer Purchases of Equity SecuritiesNone as of December 31, 2010.On January 11, 2011, the Company's Board of Directors approved a share repurchase plan. Under terms of the plan, the Company is authorized to repurchase up to an aggregate of $250,000 of its common stock to a convertible noteholder in satisfaction of $605 principal and $721 in accrued interest against an outstanding note. The $19,395 excess of the $20,721 fair value of the 2,072,133 shares over the next 12 months. Acquisitions$1,326 liability reduction was charged to loss on conversion of stock under the repurchase plan will be made from time to time at prices prevailingdebt in the open market or in privately negotiated transactions as permitted by securities laws and other legal requirements, and subject to market conditions and other factors. The repurchase program will be funded by the Company's available cash and may be commenced or suspended at any time or from time to time. The plan will continue as long as periodic management reviews determine it to be fiscally feasible and may be discontinued at any time. As of April 12, 2011,three months ended December 31, 2019.reacquired 641,356issued 893,006 shares of its issued and outstanding common stock. In addition,stock to a convertible noteholder as a partial cashless exercise of a warrant.returned 1,209,628issued 772,133 shares of its issued and outstanding common stock to treasury stock which were received upon fulla convertible noteholder in satisfaction of $400 principal, $721 in accrued interest and $500 in fees against an outstanding note. The $2,240 excess of the $50,000$3,861 fair value of the 772,133 shares over the $1,621 liability reduction was charged to loss on conversion of debt in the three months ended December 31, 2019.debenture held by Tangiers Investors, LP.noteholder in satisfaction of $1,875 principal and $39 in accrued interest against an outstanding note. The $9.077 excess of the $10,991 fair value of the 3,545,487 shares over the $1,914 liability reduction was charged to loss on conversion of debt in the three months ended December 31, 2019.- 26 - ITEM 6. SELECTED FINANCIAL DATANot applicable.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.ITEM 6. SELECTED FINANCIAL DATA. ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. the consolidatedour financial statements and the related notes, and other financial information included in this report.appearare historical facts, but also statements that are forward-looking. Forward-looking statements are, by their very nature, uncertain and risky. Forward-looking statements are often identified by words like: “believe”, “expect”, “estimate”, “anticipate”, “intend”, “project” and similar expressions, or words that, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this prospectus. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions. These risks and uncertainties include international, national, and local general economic and market conditions; our ability to sustain, manage, or forecast growth; our ability to successfully make and integrate acquisitions; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; change in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; the risk of foreign currency exchange rate; and other risks that might be detailed from time to time in our filing with the Securities and Exchange Commission. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this prospectus.report.We began operationsare engagedredomiciled in Florida on April 26, 2010; (iii) E 3 Petroleum Corp (“E 3”) a corporation incorporated in Florida on February 2, 2010; (iv) 1720 RCMG, LLC (“1720”) a limited liability company formed in the oilState of Florida on July 24, 2019; and natural gas industry focusing(v) 5496 NRMF, LLC (“5496”) a limited liability company formed in the State of Florida on exploration, development,October 12, 2019.production. We operateNOTE R- SUBSEQUENT EVENTS for further information.we ownwere sold to a third party in 2018. Please seeNOTE E - OIL AND GAS ROYALTY INTERESTS for further information.- 27 - majorityyear ended December 31, 2019, the Company recorded revenues of $2,500 compared to revenues of $3,000 for the working interest,year ended December 31, 2018. Revenues for the years ended December 31, 2019 and are presently re-working2018 were from consulting services.completing oilNet Lossnatural gas wells on our current leaseholds in Kentuckydirector compensation and West Virginia. We maintain leaseholds covering approximately 5,000 acres in South Central Kentucky and 12,000 acres in Wayne County, West Virginia and are presently expanding our leasehold interests in both states. Our first revenue from production was generated in July 2009. We have incurredprofessional fees during the year ended December 31, 2019.$341,626$7,710,990 or $2.82 loss per share for the fiscal year ended December 31, 2010.Our Kentucky properties, operated by our wholly owned subsidiary US Natural Gas Corp KY ("KY"), are focused2018. The increase in net income for the year ended December 31, 2019 is attributed to the Company’s derivative liability income in the South Central regionamount of $7,659,285 versus a derivative liability loss for the year ended December 31, 2018 in the amount of $7,722,369. Year ended
December 31, 2019 Year ended
December 31, 2018 Current Assets 67 28,005 Current Liabilities 4,069,581 11,548,595 Working Capital (Deficit) (4,069,514 ) (11,520,590 ) - 28 - state encompassingCompany’s derivative liability and a decrease in accrued officer and director compensation as compared to the countiesyear ended December 31, 2018.Allen, Monroe, Metcalfe, Green, Hart, Adair,the Company’s derivative liability expense. Year ended
December 31, 2019 Year ended
December 31, 2018 Cash Flows from (used in) Operating Activities (202,435 ) (29,252 ) Cash Flows from (used in) Investing Activities (35,039 ) - Cash Flows from (used in) Financing Activities 209,536 57,255 Net Increase Decrease in Cash During Period (27,938 ) 28,003 Barren. repaid $13,000 on outstanding notes payable.the majority Working Interest in 31 oil wellsno external sources of which 14liquidity, such as arrangements with credit institutions or off-balance sheet arrangements that will have or are currently in production. Of these 14, the average daily production is 6 barrels of oil per day (BOD). reasonably likely to have a current or future effect on our financial condition or immediate access to capital.currently reworking 3dependent on our product sales to fund our operations and may require the sale of additional common stock to maintain operations. Our officers and directors have made no written commitments with respect to providing a source of liquidity in the oil wells not in production and anticipate thatform of cash advances, loans, and/or financial guarantees.have them in production during the second calendar quarter of 2011.We also maintain the majority Working Interest in 3 previously producing natural gas wells in Kentucky. One well located in Eastern Kentucky is currently shut-in due to issues with the receiving transmission pipeline. We anticipate that if we elect to expand our operations in this region, we can satisfactorily resolve this issue and place this well back into production. We are currently identifying delivery options for the two gas wells for which we maintain a 100% Working Interest in Hart County, Kentucky. When we initiate the rework of two previously producing oil wells on the same leasehold, our plan is to construct a pipeline for delivery of natural gas producedseek alternative financing through other means, such as borrowings from these wells.Our West Virginia properties, operated by our wholly owned subsidiary US Natural Gas Corp WV ("WV"), are concentrated in Wayne County, West Virginia. We currently have the majority Working Interest in 121 natural gas wells of which 61 are currently in production.23We acquired all wells, and the majority of all leaseholds and right of ways located in West Virginia through the acquisition of Wilon Resources, Inc. in 2010. We are currently addressing the remaining 60 wells through re-entry, swabbing, and completion procedures to place those capable of producing commercially viable natural gas into production. We anticipate that we will complete addressing each of the remaining wells during 2011.We expect to generate long-term reserve and production growth through drilling activities, re-entry and completion projects, and further acquisitions. We believe that our management’s experience and expertise will enable it to identify, evaluate, and develop our oil and natural gas projects.We continue to seek to identify oil and natural gas wells for possible acquisition. However, thereinstitutions or private individuals. There can be no assurance that we will be able to enter into agreementsraise the capital we need for our operations from the acquisitionsale of our securities. We have not located any sources for these oil wells upon terms that are satisfactoryfunds and may not be able to do so in the Company.long-term reserve and production growth through drilling activities, re-entry and completion projects, and further acquisitions. We believesufficient revenues to fund our operations. If we are unsuccessful at raising sufficient funds, for whatever reason, to fund our operations, we may be forced to cease operations. If we fail to raise funds, we expect that our management’s experience and expertise will enable us to identify, evaluate, and develop oil and natural gas projects.While we anticipate the majority of future capital expenditures will be expended on the acquisition of previously drilled wells, reworking of wells, and drilling of wells, we intendrequired to use our experience and regional expertise to add leasehold interests to the inventory of leases for future drilling activities, as well as property acquisitions.seek protection from creditors under applicable bankruptcy laws.a) - 29 - b) c) d) e) f) g) h) - 30 - Recent Developmentsi) k) l) On July 24, 2019, the Company executed a Convertible Note (the “Convertible Note”) payable to BHP Capital NY Inc. (“BHP”) in the principal amount of $15,400. The Convertible Note is convertible, in whole or in part, at any time and from time to time before maturity (July 24, 2020) at the option of the holder. The conversion price for the principal and interest in connection with voluntary conversions by the Holder shall be 70% multiplied by the Market Price (as defined herein)(representing a discount rate of 30%), subject to adjustment as described herein (“Conversion Price”). Market Price” means the lowest one (1) Trading Prices (as defined below) for the Common Stock during the twenty (20) Trading Day period ending on the last complete Trading Day prior to the Conversion Date. “Trading Prices” means, for any security as of any date, the lowest traded price on the Over-the Counter Pink Marketplace, OTCQB, or applicable trading market (the “OTCQB”) as reported by a reliable reporting service (“Reporting Service”) designated by the Holder (i.e. www.Nasdaq.com) or, if the OTCQB is not the principal trading market for such security, on the principal securities exchange or trading market where such security is listed or traded or, if the lowest intraday trading price of such security is not available in any of the foregoing manners, the lowest intraday price of any market makers for such security that are quoted on the OTC Markets. The Convertible Note has a term of one (1) year and bears interest at 8% annually. As part of the transaction, BHP was also issued a warrant granting the holder the right to purchase up to 256,667 shares of the Company’s common stock at an exercise price of $.08 for a term of 5-years. Please see NOTE J - NOTES PAYABLE, THIRD PARTIES for further information. n) - 31 - o) p) q) r) s) t) - 32 - u) On July 3, 2014, the Company executed a Convertible Note (the “Note”) payable to Tangiers Investment Group, LLC (“TANGIERS”), in the principal amount of $50,000. The Note is convertible, in whole or in part, at any time and from time to time before maturity (July 3, 2015) at the option of the holder at the Variable Conversion Price, which shall mean the lesser of 50% multiplied by the Market Price (as defined). “Market Price” means the lowest Trading Prices (as defined below) for the Common Stock during the twenty (20) Trading Day period ending on the last complete Trading Day prior to the Conversion Date. The Note has a term of one (1) year and bears interest at 10% annually. Please see NOTE J - NOTES PAYABLE, THIRD PARTIES for further information. v) On June 2, 2014, the Company executed a Convertible Note (the “Note”) payable to Tangiers Investment Group, LLC (“TANGIERS”), in the principal amount of $28,500. The Note is convertible, in whole or in part, at any time and from time to time before maturity (June 2, 2015) at the option of the holder at the Variable Conversion Price, which shall mean the lesser of 50% multiplied by the Market Price (as defined). “Market Price” means the lowest Trading Prices (as defined below) for the Common Stock during the twenty (20) Trading Day period ending on the last complete Trading Day prior to the Conversion Date. The Note has a term of one (1) year and bears interest at 10% annually. Please see NOTE J - NOTES PAYABLE, THIRD PARTIES for further information. w) On April 2, 2014, the Company executed a Convertible Note (the “Note”) payable to Tangiers Investment Group, LLC (“TANGIERS”), in the principal amount of $5,500. The Note is convertible, in whole or in part, at any time and from time to time before maturity (April 2, 2015) at the option of the holder at the Variable Conversion Price, which shall mean the lesser of 50% multiplied by the Market Price (as defined). “Market Price” means the lowest Trading Prices (as defined below) for the Common Stock during the twenty (20) Trading Day period ending on the last complete Trading Day prior to the Conversion Date. The Note has a term of one (1) year and bears interest at 8% annually. Please see NOTE J - NOTES PAYABLE, THIRD PARTIES for further information. x) On February 18, 2013, the Company executed a Debt Purchase and Conversion Agreement (the “Agreement”) with Tangiers Investment Group, LLC (“TANGIERS”), whereby TANGIERS purchased the balance of the principal on a Convertible Note (the “Note”) issued to a third party of December 14, 2010 with a maturity date of December 14, 2011. The remaining principal amount due under the Note was $10,750. The Agreement allows for the conversion of the acquired Note at the option of the holder at the Conversion Price, which shall equal forty percent (40%) of the closing bid price, as provided by NASDAQ, on the date the Notice of Conversion is submitted to the Company. The Note bears interest at 0% annually. Please see NOTE J - NOTES PAYABLE, THIRD PARTIES for further information. y) On January 9, 2019, the Company executed a Convertible Note (the “Note”) payable to Darling Investments, LLC, (“DARLING”) in the principal amount of $12,500. The Note is convertible, in whole or in part, at any time and from time to time before maturity (January 9, 2020) at the option of the holder at the Variable Conversion Price, which shall mean the lesser of 40% multiplied by the Market Price (as defined). “Market Price” means the lowest Trading Prices (as defined below) for the Common Stock during the twenty-five (25) Trading Day period ending on the last complete Trading Day prior to the Conversion Date. The Note has a term of one (1) year and bears interest at 12% annually. Please see NOTE J - NOTES PAYABLE, THIRD PARTIES for further information. z) On March 7, 2017, the Company executed a Convertible Note (the “Note”) payable to Darling Investments, LLC, (“DARLING”) in the principal amount of $10,000. The Note is convertible, in whole or in part, at any time and from time to time before maturity (March 7, 2018) at the option of the holder at the Variable Conversion Price, which shall mean the lesser of 20% multiplied by the Market Price (as defined). “Market Price” means the lowest Trading Prices (as defined below) for the Common Stock during the twenty-five (25) Trading Day period ending on the last complete Trading Day prior to the Conversion Date. The Note has a term of one (1) year and bears interest at 12% annually. Please see NOTE J - NOTES PAYABLE, THIRD PARTIES for further information. - 33 - (aa) On February 13, 2017, the Company executed a Convertible Note (the “Note”) payable to Darling Capital, LLC, (“DARLING”) in the principal amount of $10,000. The Note is convertible, in whole or in part, at any time and from time to time before maturity (October 13, 2017) at the option of the holder at the Variable Conversion Price, which shall mean the lesser of 40% multiplied by the Market Price (as defined). “Market Price” means the lowest Trading Prices (as defined below) for the Common Stock during the twenty-five (25) Trading Day period ending on the last complete Trading Day prior to the Conversion Date. The Note has a term of nine (9) months and bears interest at 12% annually. Please see NOTE J - NOTES PAYABLE, THIRD PARTIES for further information. (bb) On February 2, 2017, the Company executed a Convertible Note (the “Note”) payable to Darling Capital, LLC, (“DARLING”) in the principal amount of $9,200. The Note is convertible, in whole or in part, at any time and from time to time before maturity (October 2, 2017) at the option of the holder at the Variable Conversion Price, which shall mean the lesser of 40% multiplied by the Market Price (as defined). “Market Price” means the lowest Trading Prices (as defined below) for the Common Stock during the twenty-five (25) Trading Day period ending on the last complete Trading Day prior to the Conversion Date. The Note has a term of nine (9) months and bears interest at 12% annually. Please see NOTE J - NOTES PAYABLE, THIRD PARTIES for further information. (cc) On January 28, 2017, the Company executed a Convertible Note (the “Note”) payable to Darling Capital, LLC, (“DARLING”) in the principal amount of $7,500. The Note is convertible, in whole or in part, at any time and from time to time before maturity (September 28, 2017) at the option of the holder at the Variable Conversion Price, which shall mean the lesser of 40% multiplied by the Market Price (as defined). “Market Price” means the lowest Trading Prices (as defined below) for the Common Stock during the twenty-five (25) Trading Day period ending on the last complete Trading Day prior to the Conversion Date. The Note has a term of nine (9) months and bears interest at 12% annually. Please see NOTE J - NOTES PAYABLE, THIRD PARTIES for further information. (dd) On January 10, 2017, the Company executed a Convertible Note (the “Note”) payable to Darling Capital, LLC, (“DARLING”) in the principal amount of $5,000. The Note is convertible, in whole or in part, at any time and from time to time before maturity (September 10, 2017) at the option of the holder at the Variable Conversion Price, which shall mean the lesser of 40% multiplied by the Market Price (as defined). “Market Price” means the lowest Trading Prices (as defined below) for the Common Stock during the twenty-five (25) Trading Day period ending on the last complete Trading Day prior to the Conversion Date. The Note has a term of nine (9) months and bears interest at 12% annually. Please see NOTE J - NOTES PAYABLE, THIRD PARTIES for further information. (ee) On December 2, 2016, the Company executed a Convertible Note (the “Note”) payable to Darling Capital, LLC, (“DARLING”) in the principal amount of $15,000. The Note is convertible, in whole or in part, at any time and from time to time before maturity (August 2, 2017) at the option of the holder at the Variable Conversion Price, which shall mean the lesser of 40% multiplied by the Market Price (as defined). “Market Price” means the lowest Trading Prices (as defined below) for the Common Stock during the twenty-five (25) Trading Day period ending on the last complete Trading Day prior to the Conversion Date. The Note has a term of nine (9) months and bears interest at 12% annually. Please see NOTE J - NOTES PAYABLE, THIRD PARTIES for further information. - 34 - On December 20, 2010, the Company, through its wholly owned subsidiary E 2 Investments, LLC (‘E 2”), enteredNotes in Generalan Amendment to Securities Purchase Agreement (“Amendment”) to amend that certain securities purchase agreement, dated November 10, 2009, by and between E 2 and Harlis Trust. The original securities purchase agreement was filed as an exhibit on the Company’s Quarterly Report on Form 10-Q filed with the SEC on November 16, 2009. The Amendment amends the securities purchase agreement to provide an updated payment schedule to the Seller by the reduction in the amount due from $396,500.00 to $20,000.00, the exchange of assignments pertaining to leases and right of ways, and the exchange of three deeds of trust pertaining to commercial loans executed by the Seller. On October 27, 2010, US Natural Gas Corp WV ("WV"), a wholly owned subsidiary of the Company, entered into a purchase agreement with SEI Energy, LLC ("SEI") for the period of November 1, 2010 through October 31, 2015. Under the agreement, SEI will purchase the Company's production at the designated Delivery Point located in Wayne County, West Virginia. SEI shall pay WV ninety-eight percent of SEI's weighted average sales price at the designated meter less ten cents per MMBtu ("$0.10/MMBtu").On August 31, 2010, the Company filed an S-1 Registration statement to register 41,098,650 shares of common stock and 41,098,650 shares of common stock underlying warrants issued to the shareholders of the Company under an Agreement and Plan of Share Exchange dated March 22, 2010 between the Company and Wilon Resources, Inc. On September 13, 2010, the S-1 Registration was deemed effective by the securities and Exchange Commission.On August 4, 2010, KYTX Oil and Gas, LLC (‘KYTX”) filed a complaint in the Adair County, Kentucky Circuit Court for failure to pay $40,000.00 owed pursuant to the asset purchase agreement dated November 5, 2009. Subsequently, an Order was issued on October 12, 2010 by the court whereby the Company was ordered to pay the remaining principal amount of $40,000.00, prejudgment interest of $1,122.19, post-judgment interest of 12% per annum, and KYTX’s attorney’s fees. On November 9, 2010, the Company fully satisfied the financial obligations due per the Court Order.On July 15, 2010, the Company entered into an employment agreement with Mr. Chuck Kretchman to serve as the Company’s Chief Financial Officer upon the terms and provisions and, subject to the conditions set forth in the Agreement, for a term, commencing on July 15, 2010, and terminating on December 31, 2011 unless earlier terminated as provided in the Agreement. The Agreement included options to the Chief Financial Officer to purchase 600,000 shares of common stock at an average price of $.15 per share. The Executive agrees to accept an annual salary of $50,000 through September 30, 2010, increasing to $65,000 through December 31, 2010, then $90,000 effective January 1, to December 31, 2011. The Agreement contains a six month non-solicitation clause and a confidentiality clause.On July 10, 2010, E2 Investments, LLC purchased the mineral rights located on real property in Wayne County, West Virginia consisting of approximately 112 acres for a total purchase price of $20,000 paid at closing.24On July 9, 2010, the Company entered into an agreement with Del Mar Corporate Consulting, LLC to provide investor relation services related to generating market awareness for the Company. Pursuant to the Agreement, unless terminated upon ten (10) days written notice by the Company, the Consultant will receive $20,000 in cash and One Million shares of the Company’s common stock currently valued at $35,000.00. The Consultant will also receive 500,000 warrants priced at $0.20 that will expire in three years. In addition, the Company will issue the Consultant a bonus in the amount of One Million shares of the Company’s common stock in the event that the Consultant meets certain bench marks as agreed by the parties.On May 28, 2010, the Company received notification from the appropriate state agencies that the acquisition of Wilon Resources, Inc. by the Company was effective. Subsequently on June 3, 2010, the Company received notification from FINRA that Wilon Resources, Inc. will no longer trade as a standalone entity. Since this date, the Company has worked with DTCC (the Depository Trust & Clearing Corporation) to help facilitate a smooth transition in the exchange of shares and issuance of warrants as per the share exchange agreement between the two companies.On May 5, 2010, E 3 Petroleum Corp, a wholly owned subsidiary, entered into an Agreed Consent Order with the West Virginia Department of Environmental Protection Office of Oil & Gas, whereby the Company provided to the Office of Oil & Gas a schedule to abate all current violations and bring non-producing wells into production. In addition, the Company agreed to pay a civil administrative penalty in the amount of Twenty Five Thousand Dollars ($25,000.00) prior to April 1, 2011. On April 14, 2010, the name change became effective along with a change in the Company's trading symbol from "ADVE" to "UNGS".On April 12, 2010, the Company retained Louis Gutberlet, CPA of LGG & Associates, PC as the Company's new independent registered public accounting firm. The Board approved of the dismissal of Michael T. Studer, CPA, P.C. and the engagement of Louis Gutberlet, CPA of LGG & Associates, PC as its independent auditor.On March 25, 2010, Wilon Resources, Inc filed an amendment to its Articles of Incorporation to change its name to US Natural Gas Corp WV.On March 22, 2010, the Company amended the Articles of Incorporation to effectively change its name to US Natural Gas Corp. On March 22, 2010, the Company amended the Articles of Incorporation for US Natural Gas Corp, a wholly owned subsidiary, to change the name of US Natural Gas Corp to US Natural Gas Corp KY.On March 19, 2010, the Company's shareholders approved with 16,611,138 votes for and zero votes against to a share exchange between the Company and Wilon Resources, Inc. (Wilon), a Tennessee corporation whereby the Company acquired all of the outstanding shares of Wilon and hold Wilon as a wholly-owned subsidiary. For each share of common stock of Wilon exchanged, the Company issued one share of the Company's common stock plus one warrant to purchase one additional share of common stock of the Company based upon a discount to the market price. The conversion terms of these Convertible Notes are based upon a discount to the then-prevailing average of the lowest trading bid prices (as described above for each separate note) and, as a result, the lower the stock price at an exercisethe time the holders convert the Convertible Notes, the more shares of our common stock the holders will receive. The number of shares of common stock issuable upon conversion of these Convertible Notes is indeterminate. If the trading price of $.25 (25 cents) per share to be exercisable for a period of 5 years fromour common stock is lower when the date of issue. The shareholders for Wilon approved of the share exchange with 27,843,109 votes for and zero votes against.On March 19, 2010, the Company's shareholders approved an amendment to its Articles of Incorporation changing the name of the Company to US Natural Gas Corp and an amendment deleting Article 8 thereof eliminating reference to a non-existent "Shareholders' Restrictive Agreement." Simultaneously, a majority of the shareholders of Wilon approved an amendment to its Articles of Incorporation changing its name to US Natural Gas Corp WV. On March 1, 2010, E2 Investments, LLC purchased the mineral rights located on real property in Wayne County, West Virginia consisting of approximately 160 acres for a total purchaseconversion price of $35,000 paid at closing.On February 28, 2010, the Company and Wilon executedthese Convertible Notes is determined, we would be required to issue a planhigher number of share exchange between the two companies that was placed before the shareholders for a vote on March 19, 2010.On February 9, 2010, Wilon Resources, Inc. (Wilon), a wholly owned subsidiary of the Company, merged with and into Wilon Resources of Tennessee, Inc. (WRT), a Tennessee Corporation. All of the stock of Wilon's shareholders was acquired by WRT for consideration equal to 1000 shares of WRT for every one share of Wilon held by Wilon shareholders. The name of WRT remained the same after the filing of the merger and Wilon approved the use of its name by WRT.On February 2, 2010, the Company formed E3 Petroleum Corp, a wholly owned subsidiary organized under the laws of the State of Florida. E3 Petroleum will be the operating and bonding subsidiary for wells operated in Kentucky and West Virginia.25On January 12, 2010, the Company engaged Michael T. Studer, CPA, P.C. as its independent accountant. During the two most recent fiscal years and the interim periods preceding the engagement and through January 12, 2010, the Company did not consult Michael T. Studer, CPA, P.C. regarding any of the matters set forth in Item 304(a)(2) of Regulation S-K.On January 11, 2010, the Board dismissed Paula Morelli CPA, P.C. as its independent registered public accounting firm. During the Company’s two most recent fiscal years and through January 11, 2010, there were no disagreements with Paula Morelli, CPA P.C. whether or not resolved, on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure,our common stock, which if not resolvedcould cause substantial dilution to Paula Morelli, CPA P.C.’s satisfaction, would have caused it to make reference to the subject matter of the disagreement in connection with any report on the Company’s financial statements.Going ConcernThe Company is a development stage Company. The Company had revenues of $589,029 and has incurred losses of $2,729,891 for the period March 28, 2008 (inception) to December 31, 2010 and negative working capital aggregating $2,038,944. These factors raise substantial doubt about the Company’s ability to continue as a going concern. There can be no assurance that sufficient funds required during the next year or thereafter will be generated from operations or that funds will be available from external sources such as debt or equity financings or other potential sources. The lack of additional capital resulting from the inability to generate cash flow from operations or to raise capital from external sources would force the Company to substantially curtail or cease operations and would, therefore, have a material adverse effect on its business. Furthermore, there can be no assurance that any such required funds,our stockholders. In addition, if available, will be available on attractive terms or that they will not have a significant dilutive effect on the Company’s existing stockholders.The Company intends to overcome the circumstances that impact its ability to remain a going concern through a combination of the commencement of revenues, with interim cash flow deficiencies being addressed through additional equity and debt financing. The Company anticipates raising additional funds through public or private financing, strategic relationships or other arrangements in the near future to support its business operations; however the Company may not have commitments from third parties for a sufficient amount of additional capital. The Company cannot be certain that any such financing will be available on acceptable terms, or at all, and its failure to raise capital when needed could limit its ability to continue its operations. The Company��s ability to obtain additional funding will determine its ability to continue as a going concern. Failure to secure additional financing in a timely manner and on favorable terms would have a material adverse effect on the Company’s financial performance, results of operations and stock price and require it to curtail or cease operations, sell off its assets, seek protection from its creditors through bankruptcy proceedings, or otherwise. Furthermore, additional equity financing may be dilutive to the holders opt to convert these Convertible Notes into shares of the Company’sour common stock and debt financing, if available, may involve restrictive covenants,sell those shares it could result in an imbalance of supply and strategic relationships, if necessary to raise additional funds,demand for our common stock and may require thatresulting in lower trading prices for our common stock as reported by the Company relinquish valuable rights.Recent Accounting PronouncementsIn July 2010,OTC Pink Sheets. The further our stock price declines, the “Dodd-Frank Wall Street Reform and Consumer Protection Act” (“Wall Street Reform Act”) was signed into law. The Wall Street Reform Act permanently exempts small public companies with less than $75 million in market capitalization (nonaccelerated filers) fromfurther the requirement in Section 404(b)adjustment of the Sarbanes-Oxleyconversion price will fall and the greater the number of shares we will have to issue upon conversion.ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. of 2002 that requires a registrantand are not required to provide an attestation reportthe information under this item.- 35 - ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. - 36 - management’s assessmentthe Financial Statementsinternal controls over financial reporting bySylios Corp and its subsidiaries (the “Company”) as of December 31, 2019 and 2018 and the registrant’s external auditor. Disclosurerelated consolidated statements of management’s assessment of internal controls over financial reporting under existing Section 404(a) is still requiredoperations, stockholders’ deficiency, and cash flows for nonaccelerated filers.February, 2010, the FASB issued Accounting Standards Update (“ASU”) 2010-09, effective immediately, which amended ASC Topic 855, Subsequent Events. The amendment was made to address concerns about conflicts with SEC guidance and other practice issues. Among the provisions of the amendment, the FASB defined a new type of entity, termed an “SEC filer,” which is an entity required to file with or furnish its financial statements to the SEC. Entities other than registrants whose financial statements are included in SEC filings (e.g., businesses or real estate operations acquired or to be acquired, equity method investees, and entities whose securities collateralize registered securities) are not SEC filers. While an SEC filer is still required by U.S. GAAP to evaluate subsequent events through the date its financial statements are issued, it is no longer required to disclose inour opinion, the financial statements that it has done so orpresent fairly, in all material respects, the date through which subsequent events have been evaluated. The Company does not believefinancial position of Sylios Corp and its subsidiaries as of December 31, 2019 and 2018 and the changes have a material impact on its results of its operations or financial position.In January 2010, the FASB issued ASU 2010-06, “Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements”. This update requires more robust disclosures about valuation techniques and inputs to fair value measurements. The update is effective for interim and annual reporting periods beginning after December 15, 2009. This update had no material effect on the Company’s consolidated financial statements.In July 2009, the FASB issued ASC 855-10-50, “Subsequent Events”, which requires an entity to recognize in the financial statements the effects of all subsequent events that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the preparation of the financial statements. The final rules were effective for interim and annual reports issued after June 15, 2009. The Company has adopted the policy effective September, 2009. There was no material effect on the Company’s consolidated financial statements as a result of the adoption.26In June 2009, the FASB issued ASC 105, Codification which establishes FASB Codification as the source of authoritative U.S. GAAP recognized by the FASB to be applied by nongovernmental entities. The final rule was effective for interim and annual reports issued after September 15, 2009. The Company has adopted the policy effective September 30, 2009. There was no material effect on the presentation of the Company’s consolidated financial statements as a result of the adoption of ASC 105.On December 31, 2008, the SEC published the final rules and interpretations updating its oil and gas reporting requirements (“Modernization of Oil and Gas Reporting”). In January 2010, the FASB released ASU 2010-03, Extractive Activities - Oil and Gas (“Topic 932”); Oil and Gas Reserve Estimation and Disclosures, aligning U.S. GAAP standards with the SEC’s new rules. Many of the revisions were updates to definitions in the existing oil and gas rules to make them consistent with the petroleum resource management system, which is a widely accepted standardcash flows for the management of petroleum resources that was developed by several industry organizations. Key revisions include: (a) changes to the pricing used to estimate reserves utilizing a 12-month average price rather than a single day spot price which eliminates the ability to utilize subsequent prices to the end of a reporting period when the full cost ceiling was exceeded and subsequent pricing exceeds pricing at the end of a reporting period; (b) the ability to include nontraditional resources in reserves; (c) the use of new technology for determining reserves; and (d) permitting disclosure of probable and possible reserves. The SEC requires companies to comply with the amended disclosure requirements for registration statements filed after January 1, 2010, and for annual reports on Form 10-K for fiscal years ending on or after December 15, 2009. ASU 2010-03 is effective for annual periods ending on or after December 31, 2009. Adoption of Topic 932 did not have a material impact on the Company’s results of operations or financial position. In April 2010, the FASB issued ASU 2010-14, Accounting for Extractive Activities-Oil & Gas: Amendments to Paragraph 932-10-S99-1. This ASU amends terminology as defined in Topic 932-10-S99-1. Adoption of this amendment did not have a material impact on the Company’s results of operations or financial position.Results of OperationsThis discussion should be read in conjunction with our financial statements included elsewhere in this report.RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2010 COMPARED TO THE YEAR ENDED DECEMBER 31, 2009Revenues for the yearthen ended December 31, 2010 and December 31, 2009 were $544,838 and $44,191, respectively. The Company had revenues of $589,029 for period from March 28, 2008 (inception) through December 31, 2010. The increase of $500,637 compared to 2009 revenues consists of an increase in oil and gas production sales of $38,609 and an increase in net gains from the sale of working interests in the oil and gas properties of $411,881. Additionally, new in 2010, were well management fees of $30,367 and other income of $19,790. Over the next twelve months, the Company anticipates an increase in revenue from the Company’s newly acquired subsidiary, US Natural Gas Corp WV. In addition, the Company expects to generate additional revenue as it reworks, reopens, or drills new wells through its other wholly owned subsidiary, US Natural Gas Corp KY.Operating Expenses for the year ended December 31, 2010 and December 31, 2009 were $1,152,804 and $1,548,458, respectively. The Company had operating expenses of $3,452,414 for the period from March 28, 2008 (inception) through December 31, 2010. The decrease of $395,654 compared to 2009 operating expenses consists primarily of a decrease in stock issued for consulting and other services of $1,001,852 offset by an increase in selling, general and administrative of $473,773 and an increase in depreciation, depletion and amortization of $122,596. The Company anticipates that its operating expenses will increase over the next twelve months for both operating subsidiaries as it continues to bring additional wells online and into production.Net Loss for the year ended December 31, 2010 and 2009 was $341,626 and $1,638,715, respectively. The Company incurred a net loss of $2,861,890 for the period from March 28, 2008 (inception) through December 31, 2010. The decrease of $1,297,089 compared to 2009 was attributable to the explanations listed for revenues and operating expenses. In addition, the Company's net loss decreased compared to 2009 with an increase in net gains from the sale of marketable equity securities and investments of $358,880, an increase in interest expense of $271,978, and in 2010 had forgiveness of debt income of $375,868.Liquidity and Capital ResourcesAt December 31, 2010 and December 31, 2009 cash and cash equivalents totaled $1 and $26,488, respectively. For the year ended December 31, 2010 and 2009, cash used by operating activities was $577,796 and $192,049, respectively. For the period from March 28, 2008 (inception) through December 31, 2010, cash used by operating activities was $790,596. A total of $2,154,698 was expensed from the issuance of common stock for services, leases and reimbursements for the period from March 28, 2008 (inception) through December 31, 2010. For the year ended December 31, 2010 cash from investing activities was $91,880. For the year ended December 31, 2009 cash used by investing activities was $206,182. For the period from March 28, 2008 (inception) through December 31, 2010, cash used by investing activities was $126,752. The increase of $298,062 in cash from investing activities compared to 2009 consists primarily of proceeds received from the sale of various assets exceeded purchases of assets.For the year ended December 31, 2010 and 2009, cash from financing activities was $459,429 and $404,420, respectively. For the period from March 28, 2008 (inception) through December 31, 2010, cash from financing activities was $917,349. This consisted of net borrowings on debt instruments of $690,193 and the issuance of common stock and warrants for cash of $227,156.Recent FinancingsFor the year ended December 31, 2010 and 2009, the Company received $156,156 and $17,500, respectively in private financing from accredited investors. For the period from March 28, 2008 (inception) through December 31, 2010, the Company received $227,156 in private financing from accredited investors. The investors purchased common stock from the Company at prices ranging between $.001 through $.35 per share. These funds were utilized for the daily operating of the Company.27For a detailed list of financings, refer to Note I (note payable), Note K (common stock issuances/warrants), Note L (loans payable – other), and Note M (convertible debenture payable). These notes are located on pages F-14 - F-23 of the Notes to the Consolidated Financial Statements.On September 24, 2009 we entered into a Securities Purchase Agreement with Tangiers. Pursuant to the Securities Purchase Agreement the Company may, at its discretion, periodically sell to Tangiers shares of its common stock for a total purchase price of up to $3,000,000. For each share of common stock purchased under the Securities Purchase Agreement, Tangiers will pay us 90% of the lowest volume weighted average price of the Company's common stock as quoted by Bloomberg, LP on the Over-the-Counter Bulletin Board or other principal market on which the Company's common stock is traded for the five days immediately following the notice date. The price paid by Tangiers for the Company's stock shall be determined as of the date of each individual request for an advance under the Securities Purchase Agreement. Tangiers’ obligation to purchase shares of the Company's common stock under the Securities Purchase Agreement is subject to certain conditions, including the Company obtaining an effective registration statement for shares of the Company's common stock sold under the Securities Purchase Agreement and is limited to $250,000 per ten consecutive trading days after the advance notice is provided to Tangiers. The Securities Purchase Agreement shall terminate and Tangiers shall have no further obligation to make advances under the Securities Purchase Agreement at the earlier of the passing of 18 months after the date that the Securities and Exchange Commission declares the Company’s registration statement effective or the Company receives advances from Tangiers equal to the $3,000,000. Upon the execution of the Securities Purchase Agreement, Tangiers received a one-time commitment fee equal to $150,000 of the Company's common stock divided by the lowest volume weighted average price of the Company's common stock during the 10 business days immediately following the date of the Securities Purchase Agreement, as quoted by Bloomberg, LP.Off Balance Sheet ArrangementsNone.Critical Accounting EstimatesThe preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of theStates.andare the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.Effect of Recently Issued Accounting PronouncementsManagement does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the accompanying financial statements.Application of Critical Accounting PoliciesOur discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to impairment of property, plant and equipment, intangible assets, deferred tax assets and fair value computation using the Black Scholes option-pricing model. We base our estimates on historical experience and on various other assumptions, such as the trading value of our common stock and estimated future undiscounted cash flows, that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions; however, we believe that our estimates, including those for the above-described items, are reasonable.Use of EstimatesIn accordance with accounting principles generally accepted in the United States, management utilizes estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. These estimates and assumptions relate to recording net revenue, collectability of accounts receivable, useful lives and impairment of tangible and intangible assets, accruals, income taxes, inventory realization, stock-based compensation expense and other factors. Management believes it has exercised reasonable judgment in deriving these estimates. Therefore, a change in conditions could affect these estimates.28ITEM 8. FINANCIAL STATEMENTS.All financial information required by this Item is attached hereto at the end of this report beginning on page F-1 and is hereby incorporated by reference.ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.On July 15, 2009, our Board of Directors dismissed Drakeford and Drakeford, LLC (“Drakeford”) as the Company’s independent registered public accounting firm. The Board’s decision to dismiss Drakeford was based upon the revocation of the registration of Drakeford by the Public Company Accounting Oversight Board.During the fiscal year ended December 31, 2008, Drakeford’s reports on the Company's financial statements did not contain an adverse opinion or disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope or accounting principles except, Drakeford’s audit reports for the year ended December 31, 2008 stated that several factors raised substantial doubt about the Company’s ability to continue as a going concern and that the financial statements do not include any adjustments that might result from the outcome of this uncertainty.During the fiscal year ended December 31, 2008 and the subsequent interim period through July 15, 2009, (i) there were no disagreements between the Company and Drakeford on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure which, if not resolved to the satisfaction of Drakeford would have caused Drakeford to make reference to the matter in its reports on the Company's financial statements; and (ii) there were no reportable events as the term described in Item 304(a)(1)(iv) of Regulation S-K.On August 20, 2009, the Company provided Drakeford with a copy of the disclosures it is making in response to Item 4.01 on this Form 8-K/A, and requested that Drakeford furnish it with a letter addressed to the Securities and Exchange Commission stating whether it agrees with the above statements. A copy of the letter, dated August 20, 2009, is filed as Exhibit 16.1 (which is incorporated by reference herein) to the Company’s Form 8-K filed with the SEC on August 20, 2009.Following the dismissal of Drakeford, the Board retained Paula Morelli, CPA, P.C. as its independent registered public accounting firm. Subsequently, on January 11, 2010, the Board dismissed Paula Morelli, CPA, P.C.. On January 12, 2010, the accounting firm of Michael T. Studer, CPA, P.C. was engaged as the Company’s new independent registered public accounting firm. The Board approved of the dismissal of Paula Morelli, CPA P.C. and the engagement of Michael T. Studer, CPA, P.C. as its independent auditor.During the Company’s two most recent fiscal years and through January 11, 2010, there were no disagreements with Paula Morelli, CPA P.C. whether or not resolved, on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to Paula Morelli, CPA, P.C.’s satisfaction, would have caused it to make reference to the subject matter of the disagreement in connection with any report on the Company’s financial statements.Paula Morelli, CPA P.C. had been engaged as the Company’s independent registered public accounting firm since July 28, 2009 and had performed review procedures in connection with our unaudited financial statements included in our reports on Form 10-Q for the quarterly periods ended June 30, 2009 and September 30, 2009, but never audited anyresponsibility of the Company’s financial statements.The Company has requested that Paula Morelli, CPA, P.C. furnish it with a letter addressed to the Securities and Exchange Commission stating whether it agrees with the above statements. The letter was attached as an exhibit to the Company’s Form 8-K filed on January 14, 2010.On January 12, 2010, the Company engaged Michael T. Studer, CPA, P.C. as its independent accountant. During the two most recent fiscal years and the interim periods preceding the engagement and through January 12, 2010, the Company did not consult Michael T. Studer, CPA, P.C. regarding any of the matters set forth in Item 304(a)(2) of Regulation S-K.On April 12, 2010, the Company retained Louis Gutberlet, CPA of LGG & Associates, PC as the Company's new independent registered public accounting firm. The Board approved of the dismissal of Michael T. Studer, CPA, P.C. and the engagement of Louis Gutberlet, CPA of LGG & Associates, PC as its independent auditor. Michael T. Studer, CPA, P.C. had been engaged as the Company’s independent registered public accounting firm since January 12, 2010 and had performed a review of the Company's 2008 audited financials.29During the Company’s two most recent fiscal years and through April 12, 2010, there were no disagreements with Michael T. Studer, CPA, P.C. whether or not resolved, on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to Michael T. Studer, CPA, P.C.’s satisfaction, would have caused it to make reference to the subject matter of the disagreement in connection with any report on the Company’s financial statements.ITEM 9A. CONTROLS AND PROCEDURESThe Company’s Chief Executive Officer and Chief Financial Officer, and other members of management team have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)).Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures, as of the end of the period covered by this Report, were adequate and effective to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.The effectiveness of a system of disclosure controls and procedures is subject to various inherent limitations, including cost limitations, judgments used in decision making, assumptions about the likelihood of future events, the soundness of internal controls, and fraud. Due to such inherent limitations, there can be no assurance that any system of disclosure controls and procedures will be successful in preventing all errors or fraud, or in making all material information known in a timely manner to the appropriate levels of management.Managements Annual Report on Internal Control Over Financial ReportingManagement of the Company is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in the Securities Exchange Act of 1934 Rules 13a-15(f) and 15d-15(f). Internal control over financial reporting refers to the process designed by, or under the supervision of the Company’s Chief Executive Officer and Chief Financial Officer, and effected by the Company’s Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, and includes those policies and procedures that:·Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets;·Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of the Company’s management and directors; and·Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the company’s financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness into 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.Under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, the Company’s management conducted an evaluation of the effectiveness of the Company internal control over financial reporting as of December 31, 2010. In making this assessment, the Company’s management used the criteria set forth in the framework in “Internal Control- Integrated- Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on the evaluation conducted under the framework in “Internal Control- Integrated Framework,” issued by COSO the Company’s management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2010.Changes in Internal Control Over Financial ReportingDuring 2010, the Company changed accounting systems to one that offered stronger access and validation controls than those included in the previous accounting system. There have been no other changes to the Company’s system of internal control over financial reporting during the year ended December 31, 2010 that have materially affected, or are reasonably likely to materially affect, the Company’s system of controls over financial reporting.As part of a continuing effort to improve the Company’s business processes, Management is evaluating its internal controls and may update certain controls to accommodate any modifications to its business processes or accounting procedures.ITEM 9B. OTHER INFORMATION.None.30PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE.The following table sets forth information about our executive officers, key employees and directors as of December 31, 2010. The board of directors elects our executive officers annually. A majority vote of the directors who are in office is required to fill vacancies. Each director will serve until his or her successor is elected and qualified, or until his or her earlier resignation or removal.NameAgePositionDate of ElectionOr Appointment as aDirectorWayne Anderson45President and ChairmanMarch 2008Jim Anderson71Vice-Pres. and DirectorMarch 2008Chuck Kretchman50Chief Financial OfficerWayne Anderson, President and ChairmanWayne Anderson has served as the President and Chairman of the Board of Us Natural Gas since the incorporation of the company, under the name of Adventure Energy, Inc., in March 2008. Prior to founding Adventure Energy, Wayne Anderson acted as the Managing Member and a founding partner of Around the Clock Trading & Capital Management, LLC, an investment management company, and the General Partner of Around the Clock Partners, LP from January 2000 through 2008. Through the fund Around the Clock Partners, LP, Mr. Anderson has made significant key investments within the natural resources sector.Mr. Anderson has been a vital source in negotiating and executing transactions for several small to mid-sized companies. From June 1997 through December 1999, Mr. Anderson was a proprietary equities trader. Mr. Anderson practiced as a Podiatric physician from May 1993 through June 1997. Mr. Anderson studied biology at the University of Georgia from 1984 to 1987 and then attended the Temple University School of Podiatric Medicine (formerly the Pennsylvania College of Podiatric Medicine) where he received a doctorate of podiatric medicine (DPM) in 1991.Jim Anderson, Vice President and DirectorJim Anderson is the acting Vice President and serves as a Director of US Natural Gas. Jim Anderson has been involved in commercial and residential real estate for more than 35 years. He brings a diversified business background in mergers and acquisitions, site selection, project planning and business strategy. From June 1991 through March of 2008, Mr. Anderson served as the President of National Hotel Investment. He was responsible for negotiating and acquiring properties in the hospitality industry. Prior to Mr. Anderson’s commercial and residential real estate career, he worked at Ashland Oil for 12 years. While at Ashland Oil, he was in charge of leaseholds, land acquisitions, and site selection. Mr. Anderson attended Middle Georgia College for two quarters before leaving to serve in the US Army.Chuck Kretchman, Chief Financial OfficerOn July 15, 2010, the Company entered into an employment agreement with Mr. Chuck Kretchman to serve as the Company’s Chief Financial Officer. Mr. Kretchman, who is age 50, has more than 23 years of financial leadership experience and comes to US Natural Gas Corp from Suncoast Roofers Supply, Inc., where he served as Controller from October 1993 to February 2009. From September 1987 to September 1993, Mr. Kretchman served as Audit Supervisor at Gregory, Sharer & Stuart. CPAs. Mr. Kretchman is a certified public accountant and received a Bachelor of Science, Business Administration in Accounting at Florida Southern College. There are no transactions between the Company and Mr. Kretchman reportable under Item 404(a) of Regulation S-K.COMMITTEES OF THE BOARD OF DIRECTORSWe have not established any committees, including an Audit Committee, a Compensation Committee, a Nominating Committee, or any committee performing a similar function. The functions of those committees are being undertaken by the entire board as a whole.FAMILY RELATIONSHIPSWayne Anderson is the son of Jim Anderson.31Code of Business Conduct and EthicsWe have adopted a code of business conduct and ethics, which is attached as an exhibit to the 2008 Annual Report on Form 10-K.ITEM 11. EXECUTIVE COMPENSATION.OverviewThe following is a discussion of our program for compensating our named executive officers and directors. Currently, we do not have a compensation committee, and as such, our Board of Directors is responsible for determining the compensation of our named executive officers.Compensation Program Objectives and PhilosophyThe primary goals of our policy of executive compensation are to attract and retain the most talented and dedicated executives possible, to assure that our executives are compensated effectively in a manner consistent with our strategy and competitive practice and to align executives compensation with the achievement of our short- and long-term business objectives.The board of directors considers a variety of factors in determining compensation of executives, including their particular background and circumstances, such as their training and prior relevant work experience, their success in attracting and retaining savvy and technically proficient managers and employees, increasing our revenues, broadening our product line offerings, managing our costs and otherwise helping to lead our Company through a period of rapid growth.In the near future, we expect that our board of directors will form a compensation committee charged with the oversight of executive compensation plans, policies and programs of our Company and with the full authority to determine and approve the compensation of our chief executive officer and make recommendations with respect to the compensation of our other executive officers. We expect that our compensation committee will continue to follow the general approach to executive compensation that we have followed to date, rewarding superior individual and company performance with commensurate cash compensation.Elements of CompensationOur compensation program for the named executive officers consists primarily of base salary and equity compensation. There is no retirement plan, long-term incentive plan or other such plans. The base salary we provide is intended to equitably compensate the named executive officers based upon their level of responsibility, complexity and importance of role, leadership and growth potential, and experience.Base SalaryOur named executive officers receive base salaries commensurate with their roles and responsibilities. Base salaries and subsequent adjustments, if any, are reviewed and approved by our board of directors annually, based on an informal review of relevant market data and each executive’s performance for the prior year, as well as each executive’s experience, expertise and position. The base salaries paid to our named executive officers in 2010 are reflected in the Summary Compensation Table below.Stock-Based Awards under the Equity Incentive Plan We provide equity awards as a component of compensation. Our 2009 Flexible Stock Plan permits the granting of stock options to its employees, directors, consultants and independent contractors for up to eight million shares of our common stock. We believe that such awards encourage employees to remain employed by the Company and also to attract persons of exceptional ability to become employees of the Company.32Summary Compensation Table Salary Bonus Stock Awards Option Awards Non-Equity Incentive Plan Compensation Change in Pension Value & Non-Qualified Deferred Compensation Earnings Total Name and Principal Position Year ($) ($) ($) ($) ($) ($) ($) ($) (a) (b) (c) (d)(3) (e) Wayne Anderson, President, Secretary, Chairman 2010 115,000 0 0 0 0 0 541 115,541 (1) 2009 90,000 50,000 500,000 125,000 0 0 7,500 722,500 2008 0 0 0 0 0 0 0 0 Jim Anderson, Vice President (2) 2010 30,000 0 0 0 0 0 541 30,541 2009 45,000 25,000 250,000 62,500 0 0 7,500 390,000 2008 0 0 0 0 0 0 0 0 Chuck Kretchman, CFO (4) 2010 42,400 0 0 90,000 0 0 0 132,400 (1)Effective upon the execution of the employment agreement dated April 1, 2009, Mr. Wayne Anderson served in the capacity as President, Treasurer, and Secretary. Effective July 15, 2010, Mr. Anderson no longer served in the capacity of treasurer.(2)Effective upon the execution of the employment agreement dated April 1, 2009, Mr. Jim Anderson served in the capacity of Vice President.(3)The values shown in this column represent the aggregate grant date fair value of equity-based awards granted during the fiscal year, in accordance with ASC 718, “Share Based-Payment”. The fair value of the stock options at the date of grant was estimated using the Black-Scholes option-pricing model, based on the assumptions described in the Notes to Financial Statements included in this Annual Report.(4)Effective upon the execution of the employment agreement dated July 15, 2010, Mr. Chuck Kretchman served in the capacity of Vice President. Mr. Kretchman's employment agreement called for an eighteen month term with an initial base salary of $50,000 increasing to $60,000 effective September 30, 2010, and then increasing to $90,000 effective January 1, 2011. Mr. Kretchman was issued options to purchase 600,000 of the Company's common stock at an average price of $.15.(a)Accrued salary and salary paid(b)Accrued bonus to employee for execution of employment agreement(c)Delivery of common stock to employee for execution of employment agreements. Mr. Wayne Anderson received Two Million shares of the Company's common stock and Mr. Jim Anderson received One Million shares of the Company's common stock.(d)Options issued to employee for execution of employment agreement. More details on Options noted under Employment Agreements section below.(e)Equity compensation received as a Director of the CompanyWe have not issued our executives any stock options or maintained any stock options under any other incentive plans other than our 2009 Flexible Stock Plan. Our executives have received a total of 4,916,676 shares under our 2009 Flexible Stock Plan from inception of the Flexible Stock Plan through April 12, 2011. We have no plans in place and have never maintained any plans that provide for the payment of retirement benefits or benefits that will be paid primarily following retirement including, but not limited to, tax qualified deferred benefit plans, supplemental executive retirement plans, tax-qualified deferred contribution plans and nonqualified deferred contribution plans.Except as indicated below, we have no contracts, agreements, plans or arrangements, whether written or unwritten, that provide for payments to the named executive officers listed above.332010 Outstanding Equity Awards at Fiscal Year-End Option Awards Name Exercisable Unexercisable ($) Date (1) These options vest immediately upon execution of employment agreement dated April 1, 2009(2) These options vest on May 1, 2010(3) These options vest on May 1, 2011(4) These options vest on May 1, 2012(5) These options were awarded Mr. Kretchman as per the employment agreement dated July 15, 2010(6) These options vest on December 31, 2010(7) These options vest on June 30, 201134COMPENSATION OF DIRECTORSDirector Compensation for year ending December 31, 2010The Company’s directors currently serve without cash compensation. Directors receive 5,000 shares of common stock for their services per quarter.The following table sets forth with respect to the named director, compensation information inclusive of equity awards and payments made in the year ended December 31, 2010.Name (a) (b) (c) (d) (e) (f) (g) (h) (1) These stock awards were awarded in their capacity as Directors. The Company awarded the Directors common stock for the second, third and fourth quarters of 2009 and all four quarters of 2010 which aggregated $500.00 worth of stock.Employment Agreements with Named Executive OfficersThe Company entered into an employment agreement with Chuck Kretchman to serve as the Chief Financial Officer commencing on July 15, 2010 and terminating on December 31, 2011. In consideration of Mr. Kretchman's execution and delivery of this agreement, the Company shall issue to Mr. Kretchman options to purchase 600,000 shares of the Company's common stock at a strike price of $0.15 over the eighteen month agreement term. Pursuant to the agreement, Mr. Kretchman will receive a base annual salary of $50,000 through September 30, 2010, increasing to $65,000 through December 31, 2010, then $90,000 from January 1, 2011 through December 31, 2011. Mr. Kretchman shall be entitled to additional options or bonuses in amounts and under terms as determined by the Board of Directors, or the Compensation committee if the Company so forms one. Mr. Kretchman is entitled to participate in any and all benefit plans, from time to time, in effect for the Company's employees, along with vacation, sick and holiday pay in accordance with policies established and in effect from time to time.The Company entered into an employment agreement with Wayne Anderson to serve as the President, Treasurer, and Secretary commencing on April 1, 2009 and terminating on March 31, 2012. In consideration of Mr. Anderson's execution and delivery of this agreement, the Company agreed to issue 2,000,000 shares of the Company's common stock and agreed to pay a sign on bonus of $50,000. In addition, the Company shall issue to Mr. Anderson options to purchase 1,250,000 shares of the Company's common stock at varying strike prices over the three year agreement term. Pursuant to the agreement, Mr. Anderson will receive an annual compensation of $120,000 in year one. After the first year during the employment term, the annual salary for each successive year will be increased by the lesser of 10% or the percentage increase, if any, in the CPI for each year just completed measured for the entire twelve month period, plus three percent. The Company shall pay Mr. Anderson a monthly stipend of $1,000 to cover automobile expenses. Mr. Anderson is entitled to participate in any and all benefit plans, from time to time, in effect for the Company's employees, along with vacation, sick and holiday pay in accordance with policies established and in effect from time to time. In the event that the employment agreement is ended due to Mr. Anderson's death, incapacity or termination, the Company shall pay any accrued and unpaid salary for a one year period from the date of the event plus any performance bonus that would be payable for the one year period and unreimbursed business expenses.35The Company entered into an employment agreement with Jim Anderson to serve as the Vice President commencing on April 1, 2009 and terminating on March 31, 2012. In consideration of Mr. Anderson's execution and delivery of this agreement, the Company agreed to issue 1,000,000 shares of the Company's common stock and agreed to pay a sign on bonus of $25,000. In addition, the Company shall issue to Mr. Anderson options to purchase 625,000 shares of the Company's common stock at varying strike prices over the three year agreement term. Pursuant to the agreement, Mr. Anderson will receive an annual compensation of $60,000 in year one. After the first year during the employment term, the annual salary for each successive year will be increased by the lesser of 10% or the percentage increase, if any, in the CPI for each year just completed measured for the entire twelve month period, plus three percent. The Company shall pay Mr. Anderson a monthly stipend of $500 to cover automobile expenses. Mr. Anderson is entitled to participate in any and all benefit plans, from time to time, in effect for the Company's employees, along with vacation, sick and holiday pay in accordance with policies established and in effect from time to time. In the event that the employment agreement is ended due to Mr. Anderson's death, incapacity or termination, the Company shall pay any accrued and unpaid salary for a one year period from the date of the event plus any performance bonus that would be payable for the one year period and unreimbursed business expenses.Equity Compensation, Pension or Retirement PlansNo retirement, pension, profit sharing, stock option or insurance programs or other similar programs have been adopted by the Company for the benefit of its employees.Options/SARS Grants During Last Fiscal YearNone.36ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSThe following table sets forth certain information, as of April 6, 2011, with respect to any person (including any “group”, as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) who is known to us to be the beneficial owner of more than five percent (5%) of any class of our voting securities, and as to those shares of our equity securities beneficially owned by each of our directors and executive officers and all of our directors and executive officers as a group. Unless otherwise specified in the table below, such information, other than information with respect to our directors and executive officers, is based on a review of statements filed with the Securities and Exchange commission (the “Commission”) pursuant to Sections 13 (d), 13 (f), and 13 (g) of the Exchange Act with respect to our common stock. As of April 6, 2011, there were 187,361,092 shares of our common stock outstanding.The number of shares of common stock beneficially owned by each person is determined under the rules of the Commission and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares as to which such person has sole or shared voting power or investment power and also any shares which the individual has the right to acquire within sixty (60) days after the date hereof, through the exercise of any stock option, warrant or other right. Unless otherwise indicated, each person has sole investment and voting power (or shares such power with his or her spouse) with respect to the shares set forth in the following table. The inclusion herein of any shares deemed beneficially owned does not constitute an admission of beneficial ownership of those shares.The table also shows the number of shares beneficially owned as of April 6, 2011 by each of our individual directors and executive officers, by our nominee directors and executive officers and by all our current directors and executive officers as a group.Name of Beneficial Owner (1) Common Stock Beneficially Owned % of Common Stock 06.34 07.67 00.19 % 00.04 26,673,938 14.21 01.83 06.69 37ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.At December 31, 2010, the Company has notes receivables from an officer in the amount of $110,597. The notes are due on demand with a 4% interest rate.At December 31, 2010, the Company has accrued wages due officers in the amount of $260,000.For the year ended December 31, 2010, the Company issued 7,541,158 shares of common stock for payment on a loan from an officer. At December 31, 2009, the Company owed an officer $85,100 at no interest.ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.Audit FeesThe aggregate fees billable to us by our audit firm for the year ending December 31, 2010 for the audit and reviews of our annual and quarterly consolidated financial statements totaled $37,500.Audit-Related FeesWe did not incur any assurance and audit-related fees in connection with the audit of the financial statements of the Company for the year ended December 31, 2010, other than as set forth in “Audit Fees” above.Tax FeesThe aggregate fees billable to us by our CPA firm for the year ending December 31, 2010 for federal and state tax preparation totaled $10,000.All Other FeesThe aggregate fees billable to us by our audit firm for the year ending December 31, 2010, for consultation with Form S-1, totaled $3,500.As of the date of this filing, our current policy is to not engage our independent auditors to provide, among other things, bookkeeping services, appraisal or valuation services, or international audit services. The policy provides that we engage our independent audit firms to provide audit, tax, and other assurance services, such as review of SEC reports or filings. AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURESThe board of directors acts as the audit committee, and consults with respect to audit policy, choice of auditors, and approval of out of the ordinary financial transactions.38ITEM 15. EXHIBITS.Exhibits required by Item 601 of Regulation S-K 3.1Articles of Incorporation (filed with Form S-1 (File No. 333-154799) on October 29, 2008 and incorporated by reference)3.2Articles of Incorporation (amended and restated) (filed with Form S-1/A (File No. 333-154799) on December 9, 2008 and incorporated by reference)3.3By-Laws (filed with Form S-1/A (File No. 333-154799) on December 9, 2008 and incorporated by reference)3.4Amended and Restated Articles of Incorporation filed with the Secretary of State on October 21, 2009.3.5*Articles of Amendment to Articles of Incorporation filed with the Florida Department of State Division of Corporations on March 19, 2010.3.6*Articles of Merger filed with the Florida Department of State Division of Corporations on May 27, 201010.10Employment Agreement between Wayne Anderson and Adventure Energy, Inc. dated as of April 1, 2009 (Previously filed with Current Report on Form 8-K filed with the SEC on July 7, 200910.11Employment Agreement between Jim Anderson and Adventure Energy, Inc. dated as of April 1, 2009 (Previously filed with Current Report on Form 8-K filed with the SEC on July 7, 2009)10.12Lender Acquisition Agreement dated as of September 4, 2009 among Adventure Energy. Inc., SLMI Holdings, LLC and SLMI Options, LLC. (Previously filed with Current Report on Form 8-K filed with the SEC on September 11, 2009)10.13Securities Purchase Agreement between Tangiers Investors, LP and Adventure Energy, Inc. dated as of September 24, 2009. (Previously filed on the Quarterly Report on Form 10-Q with the SEC on November 16, 2009)10.14Pledge and Escrow Agreement among Atlas Capital Partners, LLC, Adventure Energy Inc. and Atlas Capital Partners, LP, as escrow agent, dated as of September 24, 2009. (Previously filed on the Quarterly Report on Form 10-Q with the SEC on November 16, 2009)10.15Debenture Securities Purchase Agreement between Atlas Capital Partners, LLC and Adventure Energy, Inc. (Previously filed on the Quarterly Report on Form 10-Q with the SEC on November 16, 2009)10.16Securities Purchase Agreement by and among, E 2 Investments, LLC and Harlis Trust dated as of November 10, 2009. (Previously filed on the Quarterly Report on Form 10-Q with the SEC on November 16, 2009)10.17Secured Convertible Debenture issued to Atlas Capital Partners, LLC. (Previously filed on the Quarterly Report on Form 10-Q with the SEC on November 16, 2009)10.18Security Agreement between Adventure Energy, Inc. and Atlas Capital Partners, LLC. (Previously filed on the Quarterly Report on Form 10-Q with the SEC on November 16, 2009)10.19Consent Order issued to E 3 Petroleum Corp by the West Virginia Department of Environmental Protection Office of Oil & Gas dated as of May 5, 2010. (Previously filed on the Quarterly Report on Form 10-Q with the SEC on August 16, 2010)3910.20Convertible Promissory Note between Asher Enterprises, Inc. and US Natural Gas Corp dated as of June 18, 2010. (Previously filed on the Quarterly Report on Form 10-Q with the SEC on August 16, 2010)10.21Securities Purchase Agreement between Asher Enterprises, Inc. and US Natural Gas Corp dated as of June 18, 2010. (Previously filed on the Quarterly Report on Form 10-Q with the SEC on August 16, 2010)10.22Consulting Agreement between Del Mar Corporate Consulting, LLC and US Natural Gas Corp dated as of July 9, 2010. (Previously filed on the Quarterly Report on Form 10-Q with the SEC on August 16, 2010)10.23Employment Agreement between Chuck Kretchman and US Natural Gas Corp dated as of July 15, 2010. (Previously filed on the Quarterly Report on Form 10-Q with the SEC on August 16, 2010)10.24Convertible Promissory Note between Asher Enterprises, Inc. and US Natural Gas Corp dated as of July 30, 2010. (Previously filed on the Quarterly Report on Form 10-Q with the SEC on August 16, 2010)10.25Securities Purchase Agreement between Asher Enterprises, Inc. and US Natural Gas Corp dated as of July 30, 2010. (Previously filed on the Quarterly Report on Form 10-Q with the SEC on August 16, 2010)10.26Convertible Promissory Note between Caesar Capital Group, LLC and US Natural Gas Corp dated as of August 6, 2010. (Previously filed on the Quarterly Report on Form 10-Q with the SEC on August 16, 2010)10.27Amendment to Common Stock Purchase Warrant Agreement between Caesar Capital Group, LLC and US Natural Gas Corp dated as of August 6, 2010. (Previously filed on the Quarterly Report on Form 10-Q with the SEC on November 15, 2010)10.28Amendment to Common Stock Purchase Warrant Agreement between ARRG Corp and US Natural Gas Corp dated as of August 6, 2010. (Previously filed on the Quarterly Report on Form 10-Q with the SEC on November 15, 2010)10.29Convertible Promissory Note between ARRG Corp and US Natural Gas Corp dated as of August 6, 2010. (Previously filed on the Quarterly Report on Form 10-Q with the SEC on August 16, 2010)10.30Common Stock Purchase Warrant Agreement between Caesar Capital Group, LLC and US Natural Gas Corp dated as of August 6, 2010. (Previously filed on the Quarterly Report on Form 10-Q with the SEC on August 16, 2010)10.31Common Stock Purchase Warrant Agreement between ARRG Corp and US Natural Gas Corp dated as of August 6, 2010. (Previously filed on the Quarterly Report on Form 10-Q with the SEC on August 16, 2010)10.32Convertible Promissory Note between Caesar Capital Group, LLC and US Natural Gas Corp dated as of September 7, 2010. (Previously filed on the Quarterly Report on Form 10-Q with the SEC on November 15, 2010)10.33Common Stock Purchase Warrant Agreement between Caesar Capital Group, LLC and US Natural Gas Corp dated as of September 7, 2010. (Previously filed on the Quarterly Report on Form 10-Q with the SEC on November 15, 2010)10.34Convertible Promissory Note between Asher Enterprises, Inc. and US Natural Gas Corp dated as of October 8, 2010. (Previously filed on the Quarterly Report on Form 10-Q with the SEC on November 15, 2010)10.35Securities Purchase Agreement between Asher Enterprises, Inc. and US Natural Gas Corp dated as of October 8, 2010. (Previously filed on the Quarterly Report on Form 10-Q with the SEC on November 15, 2010)10.36Amendment to Securities Purchase Agreement dated November 10, 2009 by and between E 2 Investments, LLC and Harlis Trust dated December 20, 2010. (Previously filed with Current Report on Form 8-K filed with the SEC on December 22, 2010)10.37*Convertible Promissory Note between Asher Enterprises, Inc. and US Natural Gas Corp dated as of January 19, 201110.38*Securities Purchase Agreement between Asher Enterprises, Inc. and US Natural Gas Corp dated as of January 19, 201110.39*Consulting Agreement between E 2 Investments, LLC and Fitt Highway Products, Inc. dated as of January 24, 201110.40*Convertible Promissory Note between Asher Enterprises, Inc. and US Natural Gas Corp dated as of February 3, 201110.41*Securities Purchase Agreement between Asher Enterprises, Inc. and US Natural Gas Corp dated as of February 3, 201110.42*Articles of Termination and Articles of Dissolution filed for B.T.U. Pipeline, Inc with the Tennessee Secretary of State dated March 4, 201110.43*Term Sheet between Madison Brothers Investments, LLC and US Natural Gas Corp dated March 16, 201121.1*List of Subsidiaries31.1*Certification of Principal Executive Officer pursuant to Section 302 the Sarbanes-Oxley Act of 200231.2*Certification of Principal Financial Officer pursuant to Section 302 the Sarbanes-Oxley Act of 200232.1*Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2*Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002* Filed herewith40SIGNATURESPursuant 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.US Natural Gas CorpDate: April 7, 2011By:/s/ Wayne AndersonWayne AndersonPresident and Director (Principal Executive Officer)By:/s/ Jim AndersonVice President and DirectorBy:/s/ Chuck KretchmanChief Financial OfficerPursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons in the capacities and on the date indicated:SignatureTitleDate/s/ Wayne AndersonPresident and Director (Principal Executive Officer)April 7, 2011Wayne Anderson/s/ Jim AndersonVice-President, and DirectorApril 7, 2011Jim Anderson/s/ Chuck KretchmanChief Financial OfficerApril 7, 2011Chuck Kretchman41INDEX TO FINANCIAL STATEMENTSFinancial StatementsReport of Independent Registered Certified Public Accounting FirmsF-2Consolidated Balance Sheets as of December 31, 2010 and 2009F-3Consolidated Statements of Operations for years ended December 31, 2010, and 2009F-4 and for March 28, 2008 (Inception) through December 31, 2010Consolidated Statements of Changes in Stockholders’ Equity for the periodF-5 March 28, 2008 (Inception) through December 31, 2010Consolidated Statements of Cash Flows for years ended December 31, 2010, and 2009,F-6 and for March 28, 2008 (Inception) through December 31, 2010Notes to Consolidated Financial StatementsF-8 - F-27F-1REPORT OF INDEPENDENT REGISTERED CERTIFIED PUBLIC ACCOUNTING FIRMTo the Stockholders and Board of DirectorsUS NATURAL GAS CORP (Effective March 22, 2010)St Petersburg, FloridaIn accordance with the terms and objectives of our engagement, we have audited the accompanying consolidated balance sheets of US NATURAL GAS CORP (Effective March 22, 2010) (Formally Adventure Energy, Inc.) (A Development Stage Enterprise) as of December 31, 2010 and 2009, and the related consolidated statements of operations and cash flows for the years then ended and from inception (March 28, 2008) through December 31, 2010, and the related consolidated statement of changes in stockholders’ equity from inception (March 28, 2008) through December 31, 2010. US NATURAL GAS CORP’s management is responsible for these consolidated financial statements. Our responsibility is to express an opinion on these consolidatedthe Company’s financial statements based on our audits.As disclosedaudit. 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 Note R to these consolidated financial statements, US NATURAL GAS CORP restated its consolidated balance sheet asaccordance with the U.S. federal securities laws and the applicable rules and regulations of December 31, 2009 to include a $300,000 note receivable inadvertently omitted on the issuance of Series B Preferred Stock. This restatement had no effect of either operations or cash flows forSecurities and Exchange Commission and the year ended December 31, 2009 or from inception (March 28, 2008) through December 31, 2010. In addition, as disclosed in Note S to these consolidated financial statements, US NATURAL GAS CORP has restated its Statement of Changes in Stockholders’ Equity for the period from inception (March 28, 2008) through December 31, 2008 to retrospectively apply certain corrections to various immaterial errors which occurred in 2008.auditsaudit in accordance with the standards of the Public Company Accounting Oversight Board (United States).PCAOB. Those standards require that we plan and perform anthe audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. US NATURAL GAS CORPmisstatement, whether due to error or fraud. The Company is not required at this time to have, nor were we engaged to perform, an audit of its internal control over financial reporting. OurAs part of our audit, included considerationwe are required to obtain an understanding of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion ofon the effectiveness of US NATURAL GAS CORP’s the Company’s internal control over financial reporting. Accordingly, we express no such opinion.Analso includesincluded performing procedures to assess the risks of material misstatement of the 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 supportingregarding the amounts and disclosures in the consolidated financial statements, assessingstatements. Our audit also included evaluating the accounting principles used and significant estimates made by the management, of US NATURAL GAS CORP, as well as evaluating the overall consolidatedpresentation of the financial statement presentation.statements. We believe that our audits provideaudit provides a reasonable basis for our opinion.In our opinion, the consolidatedin the first paragraph of this report present fairly, in all material respects, the consolidated financial position of US NATURAL GAS CORP at December 31, 2010 and 2009, and the consolidated results of its operations and its consolidated cash flows for the years then ended, and from inception (March 28, 2008) through December 31, 2010 in conformity with accounting principles generally accepted in the United States of America.In addition, we audited the prior period adjustments to the statement of changes in stockholder’s equity for the period from inception (March 28, 2008) through December 31, 2008 as disclosed in Note S to the consolidated financial statements. In our opinion, such adjustments are appropriate and have been applied properly. We will continue to report on these prior period adjustments as long as US NATURAL GAS CORP is a development stage enterprise and is required to disclose changes in its stockholder’s equity from inception (March 28, 2008) through the current year reported upon.The accompanying consolidated financial statementsabove have been prepared and are presented assuming that US NATURAL GAS CORPthe Company will continue as a going concern. As discussed in the notesNote Q to the consolidated financial statements, US NATURAL GAS CORP has incurred significant operating losses for the years ended December 31, 2010 and 2009, and from inception (March 22, 2008) through December 31, 2010. In addition, although US NATURAL GAS CORP has commenced planned principal business operations there are insignificant revenues from oil and natural gas production and sales and its current liabilities substantially exceed its current assets. These factors raiseCompany’s present financial situation raises substantial doubt about US NATURAL GAS CORP’s its ability to continue as a going concern. US NATURAL GAS CORP management’sManagement’s plans regarding these mattersin regard to this matter are also described in the notes to the consolidated financial statements and elsewhere in this Form 10-K. In accordance with accounting principles generally accepted in the United States of America, the accompanying consolidatedNote Q. The financial statements do not at this time, include any adjustments that might result from the resolutionoutcome of this significant uncertainty./s/ Michael T. Studer CPA P.C. Michael T. Studer CPA P.C. /s/ LGG & Associates, PC LGG & Associates, PCCertified Public Accountants andManagement ConsultantsLawrenceville, Georgia - April 7, 2011F-2 US NATURAL GAS CORP(Formerly Adventure Energy, Inc.) (A Development Stage Enterprise)December 31, 2010 and 2009 2010 2009 ASSETS CURRENT ASSETS Cash and cash equivalents $ 1 $ 26,488 Accounts receivable: Joint interest billing 227,036 - Other 17,432 97,900 Marketable equity securities 6,793 - Materials and supplies - 15,000 Prepaid expenses 33,008 21,000 Notes receivable, current 115,474 50,000 Notes receivable, stockholder 110,597 - Total current assets 510,341 210,388 PROPERTY AND EQUIPMENT Oil and gas properties and equipment, net 4,557,661 224,474 OTHER ASSETS Notes receivable 557,726 1,525,000 Debenture escrow 99,190 99,190 Investments - 72,900 Miscellaneous 150,910 150,173 TOTAL ASSETS $ 5,875,828 $ 2,282,125 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable and accrued expenses $ 1,030,505 282,745 Accounts payable, revenue distribution 7,924 - Advances due related parties, net - 86,752 Notes payable, current 1,224,870 595,868 Loans payable, other 5,986 23,000 Loans payable, stockholders - 85,100 Convertible debentures payable 280,000 50,000 Total current liabilities 2,549,285 1,123,465 LONG-TERM LIABILITIES Notes payable 550,000 900,000 STOCKHOLDERS' EQUITY Preferred stock: Series A 1,000 1,000 Series B 300 300 Common Stock 148,947 22,186 Additional paid in capital 5,356,187 2,623,439 Deficit accumulated during the development stage (2,729,891 ) (2,388,265 ) Total stockholders' equity (deficit) 2,776,543 258,660 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 5,875,828 $ 2,282,125 December 31, 2019 December 31, 2018 ASSETS CURRENT ASSETS Cash $ 67 $ 28,005 Inventory - - Total current assets 67 28,005 PROPERTY AND EQUIPMENT, net 97,801 76,814 OTHER ASSETS Global Technologies, Ltd (entity controlled by Jimmy Wayne Anderson)(“GTLL”) Series L Convertible Preferred Stock - - Loans receivable from GTLL 13,326 - Oil and gas royalty interests - - Oil and gas operating bonds 24,500 24,500 -Investments in and advances to spun-off former subsidiaries: The Greater Cannabis Company, Inc. - - AMDAQ Corp - - TOTAL ASSETS $ 135,694 $ 129,319 LIABILITIES AND STOCKHOLDERS’ (DEFICIENCY) CURRENT LIABILITIES Accounts payable $ 60,134 $ 29,585 Accrued officer and director compensation 539,464 804,335 Accrued interest on notes payable 526,694 439,414 Notes payable, third parties 1,533,519 1,440,242 Notes payable, related parties 138,000 148,000 Loans, related parties 19,848 3,762 Derivative liability 1,251,922 8,683,257 Total current liabilities 4,069,581 11,548,595 Asset Retirement Obligations (ARO’s) 64,500 64,500 TOTAL LIABILITIES 4,134,081 11,613,095 STOCKHOLDERS’ DEFICIENCY Preferred stock: 5,000,000 shares authorized, par value $.001, as of December 31, 2019 and December 31, 2018, there are the following shares outstanding: Series A: 1,000,000 and 1,000,000, respectively 1,000 1,000 Series B: 0 and 0, respectively - - Series C: 0 and 0, respectively - - Series D: 100 and 100, respectively - - Common stock: 750,000,000 shares authorized, par value $.001, as of December 31, 2019 and December 31, 2018, there are 49,209,761 and 5,909,113 shares outstanding, respectively. 49,210 5,909 Additional paid in capital 10,619,106 8,981,912 Accumulated Deficit (14,667,703 ) (20,472,597 ) Total stockholders’ (deficiency) (3,998,387 ) (11,483,776 ) TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIENCY $ 135,694 $ 129,319 .F-3US NATURAL GAS CORP(Formerly Adventure Energy, Inc.)(A Development Stage Enterprise)Years Ended20102019 and 2009 and from March 28, 2008 (Inception) through December 31, 2010 Inception through 2010 2009 December 31, 2010 Revenue earned Oil and gas production sales $ 44,350 $ 5,741 $ 50,091 Net gain on sale of oil and gas properties and equipment 450,331 38,450 488,781 Well management Fees 30,367 - 30,367 Other 19,790 - 19,790 Total revenue earned 544,838 44,191 589,029 Cost of oil and gas operations 133,767 57,380 191,147 Gross profit (loss) 411,071 (13,189 ) 397,882 Operating Expenses Selling, general and administrative 726,817 253,044 1,002,214 Stock issued for legal services 135,680 125,851 699,031 Stock issued for consulting and other services 146,050 1,147,902 1,585,251 Depreciation, depletion and amortization 144,257 21,661 $ 165,918 Total operating expenses 1,152,804 1,548,458 3,452,414 Loss from operations (741,733 ) (1,561,647 ) (3,054,532 ) Other Income (expenses) Net gain (loss) from sale of marketable equity securities and investments 292,639 (66,241 ) 228,000 Forgiveness if debt 375,868 - 375,868 Interest income 14,405 - 14,405 Interest expense (282,805 ) (10,827 ) (293,632 ) Loss before provision for income taxes (341,626 ) (1,638,715 ) (2,729,891 ) Provision for income taxes (Note J) - - - Net loss $ (341,626 ) $ (1,638,715 ) $ (2,729,891 ) Basic loss per common share $ (0.01 ) $ (0.10 ) Diluted loss per common share $ (0.01 ) $ (0.10 ) Weighted average common shares outstanding - basic 71,627,014 16,416,412 Weighted average common shares outstanding - diluted (see Note A) - - December 31, 2019 December 31, 2018 Revenue earned Consulting fees $ 2,500 $ 3,000 Total revenue earned 2,500 3,000 Operating Expenses Officer and director compensation, including stock-based compensation of $326,000 and $306,000, respectively 646,000 337,942 Professional fees, including stock based compensation of $491,400 and $0, respectively 586,900 958 Other operating expenses 126,247 40,353 Total operating expenses 1,359,147 379,253 Loss from operations (1,356,647 ) (376,253 ) Other income (expenses) Income from modification of convertible and non-convertible notes payable - 462,513 Loss on conversions of notes payable (183,000 ) - Gain from settlement of convertible notes payable - 198,398 Loss on write-off of advances to spun-off former subsidiaries - (93,498 ) Derivative liability income (expense) 7,659,285 (7,722,369 ) Amortization of debt discounts (190,762 ) (12,699 ) Gain from marketable securities 9,782 - Interest expense (133,764 ) (167,082 ) Total other income (expenses) 7,161,541 (7,334,737 ) Net income (loss) before provision for income taxes 5,804,894 (7,710,990 ) Provision for income taxes - - Net income (loss) $ 5,804,894 $ (7,710,990 ) Basic $ $ (2.82 ) Diluted $ 0.01 $ (2.82 ) Weighted average common shares outstanding: Basic Diluted The accompanying notes are an integral part of these consolidated financial statements.F-4US NATURAL GAS CORP(Formerly Adventure Energy, Inc.)(A Development Stage Enterprise)CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITYFrom March 28, 2008 (Inception) through December 31, 2010 Preferred stock Common Stock Shares Amount Shares Amount Capital Development Total $ - 10,000,000 $ 10,000 $ - $ - $ 10,000 854,236 854 290,445 291,299 1,250,000 1,250 436,250 437,500 135,715 136 43,364 43,500 (749,550 ) (749,550 ) - - 12,239,951 12,240 770,059 (749,550 ) 32,749 1,300,000 1,300 299,700 301,000 9,565,959 9,566 1,428,209 1,437,775 380,000 380 125,471 125,851 F-5(Formerly Adventure Energy, Inc.) (A Development Stage Enterprise)CASH FLOWSYears EndedSTOCKHOLDERS’ (DEFICIENCY)20102019 and 2009 and from March 28, 2008 (Inception) through20182010 Inception through 2010 2009 December 31, 2010 OPERATING ACTIVITIES: Net loss $ (341,626 ) $ (1,638,715 ) $ (2,729,891 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation, depletion and amortization 144,257 21,661 165,918 Forgiveness of debt (375,868 ) - (375,868 ) Net (gain) loss from sale of marketable equity securities and investments (292,639 ) 66,241 (228,000 ) Net gain from sale of oil and gas properties and equipment (450,331 ) (38,450 ) (488,781 ) Issuance of common stock for services, leases, and reimbursements 273,229 1,151,068 2,154,698 Changes in operating assets and liabilities: Accounts receivable, joint interest billing (40,661 ) - (40,661 ) Accounts receivable, other 58,623 (19,900 ) 38,723 Materials and supplies 15,000 (15,000 ) - Prepaid expenses 5,779 - 5,779 Other assets (81,074 ) (1,700 ) (82,774 ) Accounts payable and accrued expenses 499,591 282,746 782,337 Accounts payable, revenue distribution 7,924 - 7,924 Net cash flows from operating activities (577,796 ) (192,049 ) (790,596 ) INVESTING ACTIVITIES: Purchase of investments (218,240 ) (78,000 ) (296,240 ) Proceeds from sale of investments 33,830 26,400 60,230 Purchases of marketable equity securities (2,322,403 ) - (2,328,853 ) Proceeds from sale of marketable equity securities 2,676,021 20,308 2,696,329 Collections on notes receivable 101,755 - 101,755 Lending on notes receivable, stockholder (110,597 ) - (110,597 ) Purchase of property and equipment (484,586 ) (213,340 ) (703,926 ) Proceeds from sale of oil and gas properties and equipment 416,100 38,450 454,550 Net cash flows from investing activities 91,880 (206,182 ) (126,752 ) FINANCING ACTIVITIES: Issuance of common stock and warrants for cash 156,156 17,500 227,156 Borrowings from notes payable - 142,068 142,068 Payments on notes payable (30,000 ) - (30,000 ) Net borrowings from loans payable - stockholders 34,406 85,100 119,506 Net borrowings from loans payable - other 36,229 23,000 59,229 Borrowing from related entity, net 7,638 86,752 94,390 Borrowings from convertible debentures 255,000 50,000 305,000 Net cash flows from financing activities 459,429 404,420 917,349 �� NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (26,487 ) 6,189 1 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 26,488 20,299 - CASH AND CASH EQUIVALENTS, END OF PERIOD $ 1 $ 26,488 $ 1 F-6 US NATURAL GAS CORP(Formerly Adventure Energy, Inc.) (A Development Stage Enterprise)CONSOLIDATED STATEMENTS OF CASH FLOWS (continued) Years Ended2019: Series A Preferred Series D Preferred Additional stock stock Common Stock Paid in Accumulated Shares Amount Shares Amount Shares Amount Capital Deficit Total Balances at December 31, 2018 1,000,000 $ 1,000 100 $ - 5,909,113 $ 5,909 $ 8,981,912 $ (20,472,597 ) $ (11,483,776 ) Issuance of common stock in satisfaction of convertible debt and accrued interest - - - - 1,130,651 1,131 112,588 - 113,719 Issuance of common stock to consultant in satisfaction of account payable to consultant - - - - 37,500 37 14,963 - 15,000 Issuance of common stock chargeable as professional fees to Valvasone Trust and affiliate for services of independent financial advisor (7% stockholder of Company) - - - - 4,500,000 4,500 445,500 - 450,000 Transfer of 750,000 shares of The Greater Cannabis Company, Inc. common stock ($157,500 fair value) to Valvasone Trust in satisfaction of $107,000 notes payable and $9,100 accrued interest - - - - - - 157,500 - 157,500 Transfer of 4,000,000 shares of The Greater Cannabis Company, Inc. common stock ($840,000 fair value) in satisfaction of $544,000 accrued officer’s compensation - - - - - - 840,000 - 840,000 Round up shares after reverse split - - - - 509 1 (1 ) - - Net income for the three months ended March 31, 2019 - - - - - - - 6,473,414 6,473,414 Balances at March 31, 2019 1,000,000 $ 1,000 100 $ - 11,577,773 $ 11,578 $ 10,552,462 $ (13,999,183 ) $ (3,434,143 ) Issuance of restricted common stock to Company chief executive officer for director compensation for 1st quarter 2019 - - - - 116,822 117 9,883 - 10,000 Net loss for the three months ended June 30, 2019 - - - - - - - (189,678 ) (189,678 ) Balances at June 30, 2019 1,000,000 $ 1,000 100 $ - 11,694,595 $ 11,695 $ 10,562,345 $ (14,188,861 ) $ (3,613,821 ) Issuance of common stock in satisfaction of convertible debt and accrued interest - - - - 1,810,106 1,810 19,207 - 21,017 Issuance of common stock for purchase of inventory - - - - 16,000,000 16,000 (16,000 ) - - Net loss for the three months ended September 30, 2019 - - - - - - - (252,018 ) (252,018 ) Balances at September 30, 2019 1,000,000 $ 1,000 100 $ - 29,504,701 $ 29,505 10,565,552 $ (14,440,879 ) $ (3,844,822 ) Issuance of common stock in satisfaction of convertible debt and accrued interest - - - - 17,563,664 17,564 55,695 - 73,259 Issuance of common stock in connection with cashless exercise of warrants - - - - 2,141 (2,141 ) - - Net loss for the three months ended December 31, 2019 - - - - - - - (226,824 ) (226,824 ) Balances at December 31, 2019 1,000,000 $ 1,000 100 $ - 49,209,761 $ 49,210 10,619,016 $ (14,677,703 ) $ (3,998,387 ) 2010 and 2009 and from March 28, 2008 (Inception) through December 31, 2010 Inception through 2010 2009 December 31, 2010 Supplemental Disclosures of Cash Flow Information: Taxes paid - - - Interest paid - - - Issuance of common stock for reduction of convertible debenture $ 25,000 - $ 25,000 Issuance of common stock for purchase of equipment - - $ 5,585 Issuance of common stock for acquisition of SLMI Options, LLC - - $ 99,600 Issuance of preferred stock for acquisition of SLMI Options, LLC - - $ 1,300 Issuance of common stock for funding of debenture escrow - - $ 99,190 Issuance of common stock for funding of prepaid expenses $ 18,000 - $ 39,000 Issuance of common stock for funding of other assets - - $ 169,683 Issuance of common stock for reduction of accounts payable and accrued expenses $ 90,100 - $ 90,100 Issuance of common stock for reduction of loans payable, shareholder $ 88,370 - $ 88,370 Issuance of common stock for reduction of loans payable, other $ 31,300 - $ 31,300 Issuance of common stock for reduction of notes payable $ 490,074 - $ 490,074 Issuance of common stock for acquisition of Wilon Resources, Inc. $ 1,687,279 - $ 1,687,279 Financing the sale of oil and gas properties with a note receivable $ 300,000 - $ 300,000 Note receivable for Series B convertible preferred stock $ - $ 300,000 $ 300,000 Series A Preferred Series D Preferred Additional stock stock Common Stock Paid in Accumulated Shares Amount Shares Amount Shares Amount Capital Deficit Total Balances at December 31, 2017 1,000,000 $ 1,000 100 $ - 2,737,471 $ 2,737 $ 8,875,084 $ (12,761,607 ) $ (3,882,786 ) Net loss for the three months ended March 31, 2018 - - - - - - - (243,480 ) (243,480 ) Balances at March 31, 2018 1,000,000 $ 1,000 100 $ - 2,737,471 $ 2,737 $ 8,875,084 $ (13,005,087 ) $ (4,126,266 ) Net income for the three months ended June 30, 2018 - - - - - - - 204,550 204,550 Balances at June 30, 2018 1,000,000 $ 1,000 100 $ - 2,737,471 $ 2,737 $ 8,875,084 $ (12,800,537 ) $ (3,921,716 ) Net loss for the three months ended September 30, 2018 - - - - - - - (174,461 ) (174,461 ) Balances at September 30, 2018 1,000,000 $ 1,000 100 $ - 2,737,471 $ 2,737 8,875,084 $ (12,974,998 ) $ (4,096,177 ) Issuance of restricted common stock to Company chief executive officer in satisfaction of accrued director compensation - - - - - Issuance of restricted common stock to Company chief executive officer in satisfaction of accrued director compensation - - - - 995 39,005 - Net loss for the three months ended December 31, 2018 - - - - - - - (7,497,559 ) (7,497,599 ) Balances at December 31, 2018 1,000,000 $ 1,000 100 $ - 5,909,113 $ 5,909 8,981,912 $ (20,472,597 ) $ (11,483,776 ) F-7(Formerly Adventure Energy, Inc.) (A Development Stage Enterprise) December 31, 2019 December 31, 2018 OPERATING ACTIVITIES: Net income (loss) $ 5,804,894 $ (7,710,990 ) Adjustments to reconcile net income (loss) to net cash used from operating activities: Depreciation 726 967 Stock-based professional fees relating to Valvasone Trust and affiliate 450,000 - Excess of fair value of The Greater Cannabis Company, Inc. common stock transferred to the Company CEO over accrued officer compensation settled charged to officer and director compensation 296,000 - Excess of fair value of The Greater Cannabis Company, Inc. common stock transferred to Valvasone Trust over notes payable and accrued interest settled charged to professional fees 41,400 - Issuance of notes payable to Valvasone Trust for professional fees 20,000 - Writeoff of oil and gas royalty interests charged to other operating expenses Income from modification of convertible and non-convertible notes payable - (462,513 ) Gain from settlement of debt - ) Loss on writeoff of advances to spun-off subsidiaries - Loss on conversion of notes payable 183,000 - Derivative liability expense (income) (7,659,285 ) 7,722,369 Amortization of debt discounts 190,762 12,699 Changes in operating assets and liabilities: Inventory - - Accounts payable 47,175 3,485 Accrued officer and director compensation 289,129 337,942 Accrued interest on notes payable 133,764 161,689 Net cash provided (used) from operating activities (202,435 ) (29,252 ) INVESTING ACTIVITIES: Computer software and hardware additions (4,160 ) - Advances to GTLL (13,326 ) - Acquisition of land in Santa Rosa County, Florida (17,553 ) - Advances to spun-off former subsidiary, The Greater Cannabis Company, Inc. - Net cash used by investing activities (35,039 ) - FINANCING ACTIVITIES: Loans, related parties, net 16,086 2,255 Proceeds from notes payable 206,450 75,000 Payment to lender in connection with gain from settlement of convertible notes payable - ) Repayment of note payable, related party (10,000 ) ) Repayment of note payable, third party (3,000 ) - Net cash provided from financing activities 209,536 57,255 NET INCREASE (DECREASE) IN CASH (27,938 ) 28,003 CASH, BEGINNING OF PERIOD 28,005 2 CASH, END OF PERIOD $ 67 $ 28,005 Supplemental Disclosures of Cash Flow Information: Taxes paid $ - $ - Interest paid $ - $ - Non-cash investing and financing activities: Acquisition of land and storage facility development plans in exchange for secured promissory note payable to Company CEO $ - $ Initial derivative liability charged to debt discounts $ 176,450 $ Issuance of notes payable to Valvasone Trust for professional services $ 20,000 $ - Transfer of 750,000 shares of The Greater Cannabis Company, Inc. common stock ($157,500 fair value) to Valvasone Trust in satisfaction of $107,000 notes payable and $9,100 accrued interest $ 157,500 $ - Transfer of 4,000,000 shares of The Greater Cannabis Company, Inc. common stock ($840,000 fair value) in satisfaction of $544,000 accrued officer’s compensation $ 840,000 $ - Issuance of common stock for the purchase of surplus inventory $ - $ - Issuance of common stock (total fair value of $207,995 in 2019) to convertible noteholders in satisfaction of: Principal on notes payable $ 18,148 $ - Accrued interest 4,347 - Fees 2,500 - Subtotal 24,995 - Loss on conversions of notes payable 183,000 - Total fair value of common stock issued $ 207,995 $ - Issuance of common stock to consultant in settlement of account payable to consultant $ 15,000 $ - Issuance of common stock in satisfaction of accrued director’s compensation $ 10,000 $ From Inception (March 28, 2008) through2010–SUMMARY– ORGANIZATIONNatureOperationsUS Natural Gas Corp (the “Company”) (formerly “Adventure Energy, Inc.”) was incorporated in the stateConsolidationFlorida on March 28, 2008. The Company is an independent oil and natural gas operator engaged in exploration, development and production activities in the Appalachian Basin, particularly in Kentucky and West Virginia. The Company's business strategy focuses primarily on the drilling and acquisitionSignificant Accounting Policiesproved developed and undeveloped properties and on the enhancement and development of those properties.On July 20, 2009, the Company formed E 2 Investments, LLC ("E 2") to actively make equity investments in private and publically owned companies and to acquire energy related holdings.On August 25, 2009, the Company formed Wilon Resources, Inc. in the state of Tennessee. On February 9, 2010, Wilon Resources, Inc. ("Wilon") merged with and into Wilon Resources of Tennessee, Inc. ("WRT"), a publically owned Tennessee Corporation. All of the stock of Wilon owned by the Company was acquired by WRT for consideration equal to 1,000 shares of WRT for every one share of Wilon held by the Company. Subsequent to the merger, Wilon approved the use of the name Wilon Resources, Inc. by WRT.On September 4, 2009, the Company entered into a lender acquisition agreement with SLMI Holdings, LLC, a Nevada Limited Liability Company. Through this agreement, the Company acquired SLMI Options, LLC. The sole purpose of this acquisition of SLMI Options, LLC is to hold the three commercial notes issued by Wilon Resources, Inc., (formerly "Wilon Resources of Tennessee, Inc.') in the years 2005 through 2007.On February 1, 2010, the Company formed US Natural Gas Corp in the state of Florida. Subsequently, on March 22, 2010 the Company changed the name to US Natural Gas Corp KY. With this name change, all assets held in the state of Kentucky were transferred from US Natural Gas Corp to US Natural Gas Corp KY.On February 2, 2010, the Company formed E 3 Petroleum Corp ("E 3") in the state of Florida. E 3 acts as the operator and bonding entity for the Company’s wells in the states of Kentucky and West Virginia. On March 19, 2010, the shareholders of Adventure Energy, Inc. (now US Natural Gas Corp) approved an amendment to its Articles of Incorporation changing the namesignificant accounting policies of the Company is presented to US Natural Gas Corp,assist in understanding the Company’s financial statements. The financial statements and an amendment deleting Article 8 thereof to eliminate reference to a non-existent Shareholders' Restrictive Agreement. Wilon simultaneously completed a name change to US Natural Gas Corp WV. On April 13, 2010, the Company received approval from FINRA recognizing the name change and approving a corresponding changenotes are representations of the Company's trading symbol from "ADVE"Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to "UNGS". On March 19, 2010,accounting principles generally accepted in the Company's shareholders approved with 16,611,138 votes "for"United States and zero votes "against" to an exchange of shares betweenhave been consistently applied in the Company and Wilon Resources, Inc. ("Wilon"), whereby the Company acquired allpreparation of the outstanding shares of Wilon. For each share of common stock of Wilon exchanged, the Company issued one share of the Company's common stock plus one warrant to purchase one additional share of common stock of the Company at an exercise price of $.25 (25 cents) per share to be exercisable for a period of 5 years from the date of issue. Wilon's shareholders approved the share exchange with 27,843,109 votes "for" and zero votes "against". On June 3, 2010, the Financial Industry Regulatory Authority (FINRA) made the final approval of the share exchange. The Company accounted for the acquisition of Wilon using the purchase method on June 3, 2010.US Natural GasSylios Corp and its wholly owned subsidiaries, US Natural Gas Corp WV,KY, US Natural Gas Corp KY, SLMI Options, LLC, E2 Investments, LLC, E3WV, E 3 Petroleum Corp, 5496 NRMF, LLC and B.T.U. Pipeline, Inc.1720 RCMG, LLC. All significant intercompany accountsinter-company balances and transactions have been eliminated in consolidation.F-6 F-8US NATURAL GAS(Formerly Adventure Energy, Inc.) (A Development Stage Enterprise)From Inception (March 28, 2008) through2010A –B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)Cash and The Company considers all liquid debt securities withMarketable Equity SecuritiesMarketable equity securities are stated at lower of cost or market value For the periods presented, the Company had no cash equivalents. unrealized gains and losses included in operations. The Company has classified its marketable equity securities as trading securities.Recently Enacted Accounting StandardsOn December 31, 2008, Codification (ASC) 740 - Income Taxes, the SEC published its final rulesprovision for income taxes is computed using the asset and interpretations updating its oilliability method. The asset and gas reporting requirements. Many of the revisions are updates to definitionsliability method measures deferred income taxes by applying enacted statutory rates in the existing oil and gas rules to make them consistent with the petroleum resource management system, which is a widely accepted standard for the management of petroleum resources that was developed by several industry organizations. Key revisions include changes to the pricing used to estimate reserves utilizing a 12-month average price rather than a single day spot price which eliminates the ability to utilize subsequent prices to the end of a reporting period when the full cost ceiling was exceeded and subsequent pricing exceeds pricingeffect at the end of a reporting period, the ability to include nontraditional resources in reserves, the use of new technology for determining reserves, and permitting disclosure of probable and possible reserves. The SEC requires companies to comply with the amended disclosure requirements for registration statements filed after January 1, 2010, and for annual reports on Form 10-K for fiscal years ending on or after December 15, 2009. Early adoption was not permitted. The Company is currently assessing the impact that the adoption will have on the Company’s disclosures, operating results, financial position and cash flows.In June 2009, the FASB issued guidance now codified as ASC 105, Generally Accepted Accounting Principles as the single source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with U.S. GAAP, aside from those issued by the SEC.ASC 105 does not change current U.S. GAAP, but is intended to simplify user access to all authoritative U.S. GAAP by providing all authoritative literature related to a particular topic in one place. The adoption of ASC 105 did not have a material impact on the company’s consolidated financial statements, but did eliminate all references to pre-codification standards.In May 2009, FASB issued ASC 855, Subsequent Events, which establishes general standards for the evaluation, recognition and disclosure of events, and transactions that occur after the balance sheet date. Although there is new terminology,date to the standard is based ondifferences between the same principles as those that currently exist in the auditing standards. The standard, which includes a new required disclosure of the date through which an entity has evaluated subsequent events, is effective for interim or annual periods ending after June 15, 2009. Materials and SuppliesMaterials and supplies consist primarily of parts and accessories necessary to maintain the oil and gas properties. They are presented at the lower of cost or market value.Use of EstimatesThe preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amountstax basis of assets and liabilities and disclosuretheir reported amounts on the financial statements. The resulting deferred tax assets or liabilities are adjusted to reflect changes in tax laws as they occur. A valuation allowance is provided when it is not more likely than not that a deferred tax asset will be realized.contingent assets and liabilities atan uncertain tax position only after considering the date ofprobability that a tax authority would sustain the position in an examination. For tax positions meeting a “more-likely-than-not” threshold, the amount to be recognized in the financial statements and reported amountswill be the benefit expected to be realized upon settlement with the tax authority. For tax positions not meeting the threshold, no financial statement benefit is recognized. As of revenue and expenses during the reporting period. Actual results could differ from those estimates. (See Note B - Acquisition of Wilon Resources, Inc.)F-9US NATURAL GAS CORP(Formerly Adventure Energy, Inc.) (A Development Stage Enterprise)NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFrom Inception (March 28, 2008) through December 31, 2010NOTE A –SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)Concentration of Credit Riskinstruments which potentially subject the Company to a concentration of credit risk consists primarily of trade accounts receivable from a variety of local, national,Instruments and international oil and natural gas companies. Such credit risk is considered by management to be limited due to the financial resources of those oil and natural gas companies.Risk FactorsThe Company operates in an environment with many financial risks including, but not limited to, the ability to acquire additional economically recoverable gas reserves, the continued ability to market drilling programs, the inherent risks of the search for, development of and production of gas, the ability to sell natural gas at prices which will provide attractive rates of return, the volatility and seasonality of gas production and prices, and the highly competitive nature of the industry as well as worldwide economic conditions.The Company defines thefinancial instrumentframework for measuring fair value and expands disclosure about such fair value measurements.amount at which the instrument couldprice that would be exchangedreceived to sell an asset or paid to transfer a liability in a currentan orderly transaction between willing parties. Financial instruments included inmarket participants at the Company's financial statements include cashmeasurement date. Additionally, ASC Topic 820 requires the use of valuation techniques that maximize the use of observable inputs and cash equivalents, short-term investments, accounts receivable, other receivables, other assets, accounts payable, notes payable and due to affiliates. Unless otherwise disclosed inminimize the notes to the financial statements,use of unobservable inputs. These inputs are prioritized below:Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions. instruments is considered to approximateassets and liabilities recorded at fair value dueis measured on a recurring or nonrecurring basis. Financial assets and liabilities measured on a recurring basis are those that are adjusted to the short maturity and characteristics of those instruments. The carrying value of debt approximates fair value as terms approximateeach time a financial statement is prepared. Financial assets and liabilities measured on a non-recurring basis are those currently availablethat are adjusted to fair value when a significant event occurs. Except for similar debt instruments.ReclassificationsCertain amounts in the consolidatedderivative liability, we had no financial statements were reclassified to conform toassets or liabilities carried and measured at fair value on a recurring or nonrecurring basis during the December 31, 2010 presentation. Unproved gas properties that are significant are periodically assessed for impairment of value, if any,a loss is recognized at the time of impairment by providing an impairment allowance. Other unproven properties are expensed when surrendered or expired.Company'sCompany’s current proved properties and, to a lesser extent, certain future net cash flows related to operating and related fees due the Company related to its management of various partnerships.fees. The Company follows U.S. GAAP in Accounting for Impairments.an unproveda proved property, gain or loss is recognized, taking into consideration the amount of any recorded impairment. If a partial interest in an unproveda proved property is sold, the amount received is treated as a reduction of the cost of the interest retained. (Please seeNOTE E - OIL AND GAS ROYALTY INTERESTS for further information.).F-8 F-10US NATURAL GAS(Formerly Adventure Energy, Inc.) (A Development Stage Enterprise)From Inception (March 28, 2008) through2010A –SUMMARYB - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) from product sales is recognized when all of the following criteria are met: (1) persuasive evidence of an arrangement exists, (2) the price is fixed or determinable, (3) collectability is reasonably assured, and (4) delivery has occurred.Stock-Based CompensationStock-based compensation is accounted for at fair valueU.S. GAAP.Income TaxesIncome taxesFASB ASC 260. The ASC specifies the computation, presentation and disclosure requirements for loss per share for entities with publicly held common stock.accounted for undercomputed by dividing the assets and liability method described in SFAS NO. 109, "Accounting For Income Taxes". Currentnet income taxes are provided in accordance with(loss) by the lawsweighted average number of the respective taxing authorities. Deferred income taxes are provided for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is not more likely than not that some portion or all of the deferred tax assets will be realized.Net Income (Loss) per Common ShareBasic netcommon shares outstanding. Diluted income (loss) per common share is computed based on the weighted average numberbasis of common shares outstanding during the period.Diluted net income (loss) per common share is computed based on the weighted average number of common shares and dilutive securities (such as stock options, warrants and convertible securities) outstanding. Dilutive securities having an anti-dilutive effect on diluted net income (loss) per share and are excluded from the calculation.At For the year ended December 31, 2010, diluted weighted average common shares outstanding exclude 61,113,415 shares issuable on exercise of the 61,113,415 warrants outstanding at December 31, 2010.NOTE B - ACQUISITION OF WILON RESOURCES, INC.On May 28, 2010,2018, the Company received notification from the appropriate state agencies that the acquisition of Wilon Resources by the Company was effective. On June 3, 2010, final approval was given by FINRA excluded 216,001,429 shares, relating to convertible notes payable to third parties (Please see NOTE J - NOTES PAYABLE, THIRD PARTIES for the share exchange between the Company and Wilon Resources. The Company issued one share of common stock for each share of Wilon stock outstanding (49,207,973 shares) plus one warrant to purchase an additional share exercisable for a period of 5 years from the issue date. In July 2010, the Company canceled 1,000,000further information), 7,800,000 shares, of common stock relating to the Wilon acquisition. TheseSeries A Preferred stock and 15,547,264 shares, were owned byrelating to the Company. The Company's commonSeries D Preferred stock at June 3, 2010 had a valuefrom the calculation of $.035 per share making the acquisition price $1,687,279.The Company accounted for the business combination using the purchase method. The estimated fair market value of Wilon's net assets (assets less liabilities) was recorded at the value of the acquisition price of $1,687,279. Management reduced its original estimate of the fair market value. This reduction in the estimate had no effect on the recorded amount of the transactiondiluted shares outstanding as the excess fair market value over the acquisition price reduced the recorded valueeffect of oil and gas properties and equipment. The oil and gas properties consist of 115 natural gas wells, 12,000 acres of mineral rights leases and the gathering system interconnecting the wells. The Company intends to retain a third party to complete a Reserve Report covering the 12,000 acres located in Wayne County, West Virginia substantiating proven and unproven wells. The estimates used by the Company in recording the acquisition could change significantly pending the valuation results of the third party.F-11US NATURAL GAStheir inclusion would be anti-dilutive.(Formerly Adventure Energy, Inc.) (A Development Stage Enterprise)From Inception (March 28, 2008) through2010C—RELATED PARTY TRANSACTIONSNotes receivable, shareholder totals $110,597B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)2010. Interest receivable on the note is $2,832 at December 31, 2010. The notes are due on demand with a 4% interest rate.is indebted to its officersdefines the fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. Financial instruments included in the amount of $85,100 at no interest for various expenses as of December 31, 2009.Included withinCompany’s financial statements include cash, accounts payable and accrued expenses, are wages due officersaccrued interest payable, loans payable to related parties, notes payable to third parties, notes payable to related parties and shareholders of $260,000 and $210,000 as of December 31, 2010 and December 31, 2009.NOTE D – GOING CONCERNThe Company is a development stage enterprise and although it has commenced planned principal business operations, there are insignificant revenues there from. The Company has incurred losses of $2,729,891for the period March 28, 2008 (inception) through December 31, 2010 and has negative working capital balance aggregating $2,038,944. These factors raise substantial doubt about the Company’s ability to continue as a going concern.There can be no assurance that sufficient funds required during the next year, or thereafter, will be generated from operations or that funds will be available from external sources such as debt or equity financings or other potential sources. The lack of additional capital resulting from the inability to generate cash flow from operations or to raise capital from external sources would force the Company to substantially curtail or cease operations and therefore would have a material adverse effect on its business. Furthermore, there can be no assurance that any such required funds, if available, will be available on attractive terms or that they will not have a significant dilutive effect on the Company’s existing stockholders.The Company intends to overcome the circumstances that affect its ability to remain a going concern through a combination of the commencement of revenues, with interim cash flow deficiencies being addressed through additional equity and debt financing. The Company anticipates raising additional funds through public or private financing, strategic relationships or other arrangementsderivative liability. Unless otherwise disclosed in the near future to support its business operations; however the Company may not have commitments from third parties for a sufficient amount of additional capital. The Company cannot be certain that any such financing will be available on acceptable terms, or at all, and its failure to raise capital when needed could limit its ability to continue its operations. The Company’s ability to obtain additional funding will determine its ability to continue as a going concern. Failure to secure additional financing in a timely manner and on favorable terms would have a material adverse effect on the Company’s financial performance, results of operations and stock price and require it to curtail or cease operations, sell off its assets, seek protection from its creditors through bankruptcy proceedings, or otherwise. Furthermore, additional equity financing may be dilutivenotes to the holders of the Company’s common stock, and debt financing, if available, may involve restrictive covenants, and strategic relationships, if necessary to raise additional funds, and may require that the Company relinquish valuable rights.The accompanying financial statements, do not include any adjustments relatedthe carrying value of financial instruments is considered to approximate fair value due to the recoverability or classificationshort maturity and characteristics of asset-carrying amounts or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.NOTE E - MARKETABLE EQUITY SECURITIESAt December 31, 2010, marketable equity securities consisted of equity securities held through Transcend Capital LP with a cost and fair marketthose instruments. The carrying value of $6,793. For the period March 28, 2008 (inception) to December 31, 2010, the net gain from marketable equity securities was $344,000.F-12US NATURAL GAS CORP(Formerly Adventure Energy, Inc.) (A Development Stage Enterprise)NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFrom Inception (March 28, 2008) through December 31, 2010F – PROPERTY AND EQUIPMENTProperty and equipmentC - INVENTORY 12/31/2010 12/31/2009 December 31,
2019December 31,
2018Squeezee scrubbers - - Ampt earbuds - - Totals $ - $ - December 31, 2019 December 31, 2018 Land in Macon, GA and storage facility costs development plans (pledged as security for promissory note of $75,000). Please see NOTE – K for further information)(i) 75,000 75,000 17,553 - Computer Software and Hardware 24,160 20,000 Furniture, Fixtures and Equipment 10,828 10,828 Total 127,541 105,828 Accumulated depreciation and depletion (29,740 ) (29,014 ) Net property and equipment $ 97,801 $ 76,814 (i) On October 6, 2018, the Company entered into a Commercial Real Estate Purchase and Sale Agreement with the Company’s President for the purchase of a .92 acre of land located in Bibb County, GA. The purchase price for the land was $40,000. On this same date, the Company entered into an Asset Purchase Agreement with its President for the purchase of all architectural and engineering plans for the development of a storage facility to be constructed on the .92 acre of land. The purchase price for these assets was $35,000. The Company issued its President a Note in the amount of $75,000 on this same date. The Note has a term of one year and bears interest at 3%. The Company’s first payment in the amount of $15,000 was due within 90 days of an effective reverse stock split. As of the date of issuance of these Financial statements, except for a $5,000 payment made by the Company to the Company’s president on November 12, 2018, the Company has not made any payment against the Note. (ii) On October 9, 2019, the Company entered into a Commercial Sales Contract for the purchase of a 1.1 acre tract of land located in Santa Rosa County, Florida. The purchase price for the land was $17,500. The transaction closed on November 4, 2019. fieldfurniture, fixtures and transportation equipment with anover the estimated useful life ranging from three to twenty years. The Company useslives of the straight-line method of depletion for oil and gas properties with an estimated useful life ranging from seven to twenty-five years. Included inrespective assets. For the years ended December 31, 2010 balances are the estimated fair market values of2019 and 2018, depreciation expense relating to property and equipment acquired from Wilon Resources during the year. These estimates could change significantly pending a valuation by third parties. (See Note B - Acquisition of Wilon Resources, Inc.)NOTE G - NOTES RECEIVABLENotes receivable consist of the following at: 12/31/2010 12/31/2009 At December 31, 2009, Wilon Resources of Tennessee, Inc. owed the company $1,225,000. That amount has been eliminated in the December 31, 2010 consolidation, as the Company acquired Wilon Resources during the year.NOTE H - OTHER ASSETSOther assets consist of the following at: 12/31/2010 12/31/2009 Loan commitment fee is amortized over the life of the agreement using a straight line method.F-13US NATURAL GASwas $726 and $967, respectively.(Formerly Adventure Energy, Inc.) (A Development Stage Enterprise)From Inception (March 28, 2008) through2010IE - NOTES PAYABLENotes payable consistsOIL AND GAS ROYALTY INTERESTSDecember 31, 2019 December 31, 2018 Royalty interests in 13 wells located in Kentucky, acquired in 2009, shut-in since 2014, and sold to Soligen Technologies, Inc. on May 10, 2018 (1) $ - $ - Royalty interest in oil well located in Fentress County, Tennessee, acquired in September 2015 and shut-in since September 2015. (2) - - Royalty interest in oil well located in Cumberland County, Kentucky, acquired in September 2015 and shut-in since September 2015. (3) - - Totals $ - $ - (1) Pursuant to an Asset Purchase Agreement dated May 10, 2018, USNG KY was granted a royalty interest resulting from the sale of these wells equal to 30% of the gross proceeds of production from the 13 wells and 10% of the gross proceeds of production from any new drilled wells on the sold leases up to a maximum of $140,000. From 2014 to the date of issuance of these financial statements, there has been no production from these wells. following at: 12/31/2010 12/31/2009 Current maturities of long-term debt atsale as the wells were fully impaired prior to the year ended December 31, 2010 are $1,224,870 in 2011, $300,000 in 2012, and $250,000 in 2013.(2) Represents a 79.5% royalty interest up to $11,500 and a 15% royalty interest thereafter. From September 2015 to the date of issuance of these financial statements, there has been no production from this well. Effective December 31, 2018, the Company recognized an impairment loss of $7,500 and reduced the carrying cost of this asset from $7,500 to $0. (3) Represents a 5% royalty interest. From September 2015 to the date of issuance of these financial statements, there has been no production from this well. Effective December 31, 2018, the Company recognized an impairment loss of $2,500 and reduced the carrying cost of this asset from $2,500 to $0. J - INCOME TAXESaccountsis required to put up for income taxes usingbond either cash or a Surety bond for each well it elects to act as operator. The amount of the assetbond is calculated based on the total depth of the well. In the event the Company were to abandon the wells, the Kentucky Department of Natural Resources would claim the cash bond and liability method described in SFAS No. 109, “Accounting For Income Taxes”,use the objective of which isfunds for reclamation.establish deferred tax assets and liabilitiesreclaim the cash bonds totaling $24,500 for the temporary differences between13 wells sold in the financial reporting and the tax basis ofAsset Purchase Agreement with Soligen Technologies, Inc. when Soligen replaces the Company’s assets and liabilitiescash bonds by funding with its own bond, which has not yet occurred at the enacted tax rates expected to bedate of issuance of these financial statements. Please seeNOTE E - OIL AND GAS ROYALTY INTERESTS for further information.effect when such amounts are realized or settled. A valuation allowance related to deferred tax assets is recorded when it is more likely than not that some portion or allconnection with a partial spin-off of the deferred tax assets will not be realized. In recognition of the uncertainty regarding the ultimate amount of income tax benefits to be derived,The Greater Cannabis Company, Inc. (“GCAN”) from the Company, has recorded a full valuation allowance at December 31, 2010 and December 31, 2009.The provision (benefit) for income taxes includes income taxes currently payable and those deferred because of temporary differences between the financial statement and tax bases of assets and liabilities. The provision (benefit) for income taxes consists of the following at: 12/31/2010 12/31/2009 F-14US NATURAL GAS CORP(Formerly Adventure Energy, Inc.) (A Development Stage Enterprise)NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFrom Inception (March 28, 2008) through December 31, 2010NOTE J - INCOME TAXES (continued)Significant components of the Company's deferred tax assets and liabilities calculated at an estimated effective tax rate of 21% are as follows: 12/31/2010 12/31/2009 NOTE K - COMMON STOCK ISSUANCES/WARRANTSDuring the past three years, the Company had the following unregistered sale of its securities:On March 28, 2008, the Company sold a total of 10,000,000 post split shares (6,000,000 shares to Around the Clock Partners, LP (“ACP”), 3,000,000 shares to Jim Anderson, and 1,000,000 shares to Around the Clock Trading & Capital Management, LLC (“ACT”)) at a price of $.001 per share, or $10,000 total. Wayne Anderson, a director and chief executive officer of the Company, owns ACT and ACT is the general partner of ACP. Jim Anderson is a director and secretary of the Company.On April 1, 2008, the Company amended its certificate of incorporation to increase the authorized number of shares to 50,000,000 shares of common stock at $0.001 par value and 5,000,000 shares of preferred stock at $0.001 par value and also affected a 1,000:1 forward stock split. All shares and per share amounts have been revised to retroactively reflect this stock split.In June 2008, the Company issued a total of 90026,905,969 shares of GCAN common stock. 5,378,476 shares were issued to itself (representing 19.9% of the issued and outstanding shares of GCAN common stock after the spin-off) and 21,527,493 shares were issued to the stockholders of record of the Company on February 3, 2017 on the basis of one share of GCAN common stock for each 500 shares of the Company’s common stock held (representing 80.1% of the issued and outstanding shares of GCAN common stock after the spin-off). The related Registration Statement on Form S-1 was declared effective by the Securities and Exchange Commission on August 31, 2017. The Financial Industry Regulatory Authority (“FINRA”) cleared the quotation of GCAN common stock on July 10, 2018 under the symbol “GCAN.”ASSETS $ - LIABILITIES Notes payable to Sylios $ 104,557 Accrued interest on notes payable to Sylios 7,604 Loans payable to related parties: Due to Chief Executive Officer of Sylios 1,477 Due to two subsidiaries of Sylios 284 Total liabilities 113,922 Net Assets $ (113,922 ) nine landownersWayne Anderson to satisfy liabilities of $544,000. Also, on January 9, 2019 the Company transferred 750,000 shares of GCAN common stock (fair value of $157,500) to Valvasone Trust to satisfy liabilities of $116,100.seven leases for mineral rights and two rights of way for a pipeline.In July 2008, the Company sold 40,00015,000,000 shares of AMDAQ common stock to Jim Anderson at(representing approximately 46% of the 32,552,818 issued and outstanding shares of AMDAQ common stock after the transaction). As of the September 1, 2017 acquisition date. Limited had no assets and no liabilities.pricepartial spin-off of $.25 per share, or $10,000.In July 2008,AMDAQ from the Company, the Company issued a total of 76,83717,552,626 shares of AMDAQ common stock. 2,956,650 shares were issued to itself (representing 9.1% of the 32,552,818 issued and outstanding shares of AMDAQ common stock (52,473after the spin-off) and 14,595,976 shares were issued to Wayne Andersonthe stockholders of record of the Company on September 15, 2017 on the basis of one share of AMDAQ common stock for each 750 shares of the Company’s common stock held (representing 44.8% of the 32,552,818 issued and 24,364outstanding shares of AMDAQ common stock after the spin-off).Jim Anderson) valuedbe recorded based on the carrying value of the subsidiary. The partial spin-off was recorded at $.25 per share in reimbursementthe carrying value of expenses totaling $19,209.F-15US NATURAL GASAMDAQ’s net assets which was a deficit of $21,319 as of October 2, 2017, as follows:ASSETS Loans receivable from USNG KY $ 41,714 Total assets 41,714 LIABILITIES Loans payable to Sylios: $ 63,033 Total liabilities 63,033 Net Assets $ (21,319 ) (Formerly Adventure Energy, Inc.) (A Development Stage Enterprise)From Inception (March 28, 2008) through2010KG - COMMON STOCK ISSUANCES/WARRANTSINVESTMENTS IN AND ADVANCES TO SPUN-OFF FORMER SUBSIDIARIES (continued)From June 2008 to December 2008,a total of 776,49910 shares of GTLL Series L Convertible Preferred Stock to the Company. Wayne Anderson, the Chief Executive Officer of the Company, has voting control of GTLL through his ownership of Series K Super Voting Preferred Stock which he acquired on August 2, 2019.to awhich are issued and outstanding at the time of voting, plus ii) the total number of consultantsshares of all GTLL preferred stock which are issued and service providers (including 10,000outstanding at the time of voting. Each share of GTLL Preferred Stock is convertible into the number of shares of GTLL common stock equal to 5,000 divided by .50 times the lowest closing price of GTLL’s common stock for the immediate five-day period prior to the receipt of the Notice of Conversion.10,000 shares to Jim Anderson for director services) for services rendered. The 776,499 shares were valued at $.35 per share, or $271,775 total.In July 2008,of the Company, issued 1,250,000 sharesand consists of: December 31, 2019 December 31, 2018 Pursuant to April 1, 2015 Employment Agreement $ 6,964 $ 561,835 Pursuant to April 1, 2018 Employment Agreement 472,500 202,500 Pursuant to January 2, 2018 Board of Directors Service Agreement 60,000 40,000 Total $ 539,464 $ 804,335 common stock to its law firm for legal services rendered. The 1,250,000 shares were valued at $.35 per share, or $437,500 total.In Juneaccrued officer and July 2008, the Company sold a total of 28,572 shares of common stock to four investors at a price of $.35 per share, or $10,000 total. In October 2008, the Company sold a total of 30,000 shares to three investors at a price of $.35 per share, or $10,500 total. In December 2008, the Company sold 37,143 shares of common stock at a price of $.35 per share and a warrant to purchase 15,000 shares exercisable at $.50 per share with an expiration date of December 2, 2013 to an investor, or $13,000.In April 2009, the Company issued an aggregate of 170,100 shares for consulting services.In April 2009, the Company issued warrants to Wayne Anderson to purchase 1,250,000 at an average price of $.55director compensation changed as per the executed employment agreement.In April 2009, the Company issued warrants to Jim Anderson to purchase 625,000 at an average price of $.55 as per the executed employment agreement.In May 2009, the Company issued 162,400 shares to an accredited investor at a price of $0.25 per share.In May 2009, the Company issued an aggregate of 2,005,000 to its President and 1,005,000 shares to its Vice-President as compensation pursuant to the employment agreements and for board service. The stock was $.30 per share upon issuance.In August, 2009 the Company issued 50,000 shares of our common stock at $.11 per share to John Richardson for the purchase of a generator.In August 2009, the Company issued an aggregate of 30,000 shares of common stock at a per share price of $0.11 to two participants who purchased a working interest in one of the Company’s wells.In August, 2009 the Company issued 25,000 shares of our common stock of $0.11 to Republic Exploration in exchange for consulting servicesIn September, 2009 the Company issued 1,500,000 shares of our common stock of $0.06 to SLMI Holdings, LLC in connection with the acquisition of SLMI Options, LLCIn September 2009, the Company issued an aggregate of 950,000 shares of common stock at an average per share price of $0.12 in exchange for consulting services.In September 2009, the Company issued 1,209,628 shares of common stock at a per share price of $0.08 to Tangiers, LP as collateral for the DebentureIn September 2009, the Company issued 1,696,833 shares of common stock at a per share price of $0.10 to Tangiers, LP as a commitment fee for a financing transaction.In September 2009, the Company issued warrants to Del Mar Corporate Consulting to purchase 300,000 at an average price of $.18 with an expiration date of September 23, 2012.F-16US NATURAL GASfollows: Pursuant to
Employment
Agreements Pursuant to
Board of
Directors
Services
Agreements Total Balance, December 31, 2017 506,393 70,000 576,393 Officer’s/director’s compensation for year ended December 31, 2018 257,942 80,000 337,942 Issuance of 2,176,617 restricted shares of common stock (with a fair value of $87,500 at a $70,000 agreed reduction of the liability) on December 31, 2018 - (70,000 ) (70,000 ) Issuance of 995,025 restricted shares of common stock (with a fair value of $40,000) on December 31, 2018 - (40,000 ) (40,000 ) Balance, December 31, 2018 764,335 40,000 804,335 Officer’s/director’s compensation for three months ended March 31, 2019 67,500 20,000 87,500 Transfer of 4,000,000 shares of The Greater Cannabis Company, Inc. (“GCAN”) common stock from the Company to the Company’s sole officer and director (544,000 ) - (544,000 ) Balance March 31, 2019 (unaudited) 287,835 60,000 347,835 Officer’s/director’s compensation for three months ended June 30, 2019 67,500 20,000 87,500 Cash payments to Officer/Director during the three months ended June 30, 2019 (10,871 ) (12,500 ) (23,371 ) Issuance of 116,822 restricted shares of common stock (with a fair value of $10,000) on April 10, 2019 - (10,000 ) (10,000 ) Balance June 30, 2019 (unaudited) $ 344,464 $ 57,500 $ 401,964 Officer’s/director’s compensation for three months ended September 30, 2019 67,500 20,000 87,500 Cash payments to Officer/Director during the three months ended September 30, 2019 - (8,000 ) (8,000 ) Balance September 30, 2019 (unaudited) $ 411,964 $ 69,500 $ 481,464 Officer’s/director’s compensation for three months ended December 31, 2019 67,500 20,000 87,500 Cash payments to Officer/Director during the three months ended December 31, 2019 - (29,500 ) (29,500 ) Balance, December 31, 2019 $ $ $ (Formerly Adventure Energy, Inc.) (A Development Stage Enterprise)From Inception (March 28, 2008) through2010KJ - COMMON STOCK ISSUANCES/WARRANTS (continued)In December 2009, the Company issued 300,000 shares of common stock at a per share price of $0.07NOTES PAYABLE, THIRD PARTIESSLMI Holdings, LLC for a financing transaction.In December 2009, the Company issued 200,000 shares of common stock at $.07 per share to White Oak Land and Minerals Development, LLC in exchange for consulting services.In December 2009, the Company issued 100,000 shares of common stock at $.07 per share to Valvasone Trust in exchange for consulting services.In January 2010, the Company issued 453,000 shares of common stock at $.06 per share to Chris Davies on behalf of Atlas Capital Holdings in exchange for legal services. In January 2010, the Company issued 900,000 shares of common stock at $.06 per share to Around the Clock Partners, LP for reimbursement of expenses paid on behalf of the company.In January 2010, the Company issued 350,000 shares of common stock at $.05 per share to Chris Davies on behalf of Atlas Capital Holdings in exchange for legal services.In February 2010, the Company issued 200,000 shares of common stock at $.04 per share to Around the Clock Partners, LP for reimbursement of expenses paid on behalf of the company.In March 2010, the Company issued 350,000 shares of common stock at $.10 per share to Chris Davies on behalf of Atlas Capital Holdings in exchange for legal services.In April 2010, the Company issued 175,000 shares of common stock at $.05 per share to Ron Ferlisi in exchange for satisfaction of notes payable.In April 2010, the Company issued 825,000 shares of common stock at $.05 per share to BuzzBahn in exchange for satisfaction of notes payable.In April 2010, the Company issued 250,000 shares of common stock at $.05 per share to BuzzBahn in exchange for investor relation services.In April 2010, the Company issued 120,000 shares of common stock at $.05 per share to Jody Samuels in exchange for legal services.In April 2010, the Company issued 98,766 shares of common stock at $.069 per share to Tangiers Investors LP for equity funding.In April 2010, the Company issued 100,000 shares of common stock at $.04 per share to KYTX, LLC in exchange for an extension on a note payment.In May 2010, the Company issued 300,926 shares of common stock at $.04 per share and 169,263 shares of common stock at $.033 per share to Tangiers Investors LP for equity funding.In May 2010, the Company issued 300,000 shares of common stock at $.04 per share to SLMI Holdings, LLC in exchange for an extension on a note payment.In May 2010, the Company issued 412,698 shares of common stock at $.04 per share to Cassel Family Trust as per the stock purchase agreement.In May 2010, the Company issued 100,000 shares of common stock at $.04 per share to White Oak Land and Minerals Development, LLC for consulting services.F-17US NATURAL GASthird parties consist of: December 31, 2019 December 31, 2018 Unsecured Convertible Promissory Note payable to Armada Investment Fund, LLC (“Armada”), with interest at 8% payable at maturity with principal (default interest rates ranging from 18% to 24%); convertible into shares of common stock at a variable conversion price equal to 50%-60% of the Market Price which is defined as the lowest Trading Price for the common stock during the 20-trading day period prior to the Conversion Date: Issue date October 9, 2018, maturity date of October 9, 2019, in technical default- net of unamortized debt discount of $0 and $23,178 at December 31, 2019 and December 31, 2018, respectively 30,000 6,822 Issue date December 31, 2018, maturity date of December 31, 2019, in technical default - net of unamortized debt discount of $0 and $33,000 at December 31, 2019 and December 31, 2018, respectively 33,000 - Amended and Restated Replacement Convertible Promissory Note, Issue date February 12, 2019, maturity date of February 12, 2019, in technical default - net of amounts converted into Sylios common stock and net of unamortized debt discount of $0 and $0 at December 31, 2019 and December 31, 2018, respectively 20,400 - Issue date February 18, 2019, maturity date of February 18, 2020 - net of unamortized debt discount of $368 and $0 at December 31, 2019 and December 31, 2018 respectively 2,432 - Issue date June 5, 2019, maturity date of June 5, 2020 - net of unamortized debt discount of $7,053 and $0 at December 31, 2019, December 31, 2018, respectively 9,447 - Issue date July 2, 2019, maturity date of June 5, 2020 - net of unamortized debt discount of $7,053 and $0 at December 31, 2019, December 31, 2018, respectively 9,447 - Issue date July 24, 2019, maturity date of July 24, 2020 - net of unamortized debt discount of $8,649 and $0 at December 31, 2019, December 31, 2018, respectively 6,751 - Issue date October 30, 2019, maturity date of October 30, 2020 - net of unamortized debt discount of $21,004 and $0 at December 31, 2019, December 31, 2018, respectively 4,296 - Issue date December 13, 2019, maturity date of December 13, 2020 - net of unamortized debt discount of $15,688 and $0 at December 31, 2019, December 31, 2018, respectively 812 - Subtotal Armada 116,585 6,822 Unsecured Convertible Promissory Notes payable to Darling Capital, LLC and its affiliate Darling Investments, LLC (“Darling”), all in technical default (except the January 9, 2019 note), with interest at 12% payable at maturity with principal (default interest rates ranging from 18% to 22%); convertible into shares of common stock at a variable conversion price equal to 20-40% of the Market Price, which is defined as the lowest Trading Price for the common stock during the 25 trading day period prior to the Conversion Date. Issue date December 2, 2016, maturity date August 2, 2017 15,000 - Issue date January 10, 2017, maturity date September 10, 2017 5,000 - Issue date January 28, 2017, maturity date September 28, 2017, net of amounts converted into Sylios common stock 2,397 3,984 Issue date February 2, 2017, maturity date November 30, 2017, net of amounts converted into Sylios common stock 4,742 4,742 Issue date February 13, 2017, maturity date November 30, 2017 10,000 10,000 Issue date March 7, 2017, maturity date March 7, 2018, - net of amounts converted into Sylios common stock 10,000 10,000 Issue date January 9, 2019, maturity date January 9, 2020, -net of unamortized debt discount of $308 and $0 at December 31, 2019 and December 31, 2018, respectively 12,192 - Subtotal Darling 59,331 28,726 Unsecured Convertible Promissory Notes payable to Tangiers Investment Group, LLC (“Tangiers”), all in technical default, with interest ranging from 0% to 15% payable at maturity with principal (default interest rates ranging from 0% to 20%); except for the March 16, 2016 Promissory Note, convertible into shares of common stock at a variable conversion price equal to 50% of the Market Price (40% for the note due April 25, 2014), which is defined as the lowest Trading Price for the common stock during the 20 trading day period prior to the Conversion Date. Issue date April 2, 2014, maturity date April 2, 2015, net of amounts converted into Sylios common stock 5,500 3,086 Issue date February 18, 2013 (original issue date December 14, 2010), maturity date December 14, 2011, net of amounts converted into Sylios common stock 521 521 Issue date June 2, 2014, maturity date June 2, 2015, net of amounts converted into Sylios common stock 26,086 26,086 (Formerly Adventure Energy, Inc.) (A Development Stage Enterprise)From Inception (March 28, 2008) through2010KJ - COMMON STOCK ISSUANCES/WARRANTSNOTES PAYABLE, THIRD PARTIES (continued)In May 2010, the Company issued 800,000 shares of common stock at $.01 per share to Ron Ferlisi in exchange for satisfaction of notes payable.In May 2010, the Company issued 500,000 shares of common stock at $.01 per share to Rui Figueiredo in exchange for satisfaction of notes payable.In May 2010, the Company issued 500,000 shares of common stock at $.01 per share to Maria Rothman in exchange for satisfaction of notes payable.In May 2010, the Company issued 200,000 shares of common stock at $.01 per share to Jody Samuels in exchange for satisfaction of notes payable.In May 2010, the Company issued 500,000 shares of common stock at $.01 per share to Faith Capital NY LLC in exchange for satisfaction of notes payable.In May 2010, the Company issued 1,000,000 shares of common stock at $.01 per share to Jeff Schwartz in exchange for satisfaction of notes payable.In May 2010, the Company issued 500,000 shares of common stock at $.01 per share to Steven Reiss in exchange for satisfaction of notes payable.In May 2010, the Company issued 333,333 shares of common stock at $.03 per share to Charles and Mary Crum as per the stock purchase agreement.In June 2010, the Company issued 150,000 shares of common stock at $.05 per share to Jeff Parker in exchange for consulting services.In June 2010, the Company issued 500,000 shares of common stock at $.05 per share to Jim Anderson as a reduction of debt for expenses paid on behalf of the company.In June 2010, the Company issued 348,189 shares of common stock at $.03 per share to Tangiers Investors LP for equity funding.In June 2010, the Company issued 833,333 shares of common stock at $.03 per share to Wayne Anderson as payment towards accrued wages.In June 2010, the Company issued 666,667 shares of common stock at $.03 per share to Cassel Family Trust as per the stock purchase agreement.In July 2010, the Company issued 25,000 shares of common stock at $.03 per share to James Crum for a lease bonus payment.In July 2010, the Company issued 25,000 shares of common stock at $.03 per share to Charles and Mary Crum for a lease bonus payment.In July 2010, the Company issued 500,000 shares of common stock at $.03 per share to Del Mar Corporate Consulting, LLC for consulting and marketing services.In July 2010, the Company issued 625,000 shares of common stock at $.04 per share to Wayne Anderson as payment towards accrued wages.In July 2010, the Company issued 476,191 shares of common stock at $.02 per share to Tangiers Investors LP as payment towards a convertible debenture.F-18US NATURAL GASIssue date August 12, 2014, maturity date August 12, 2015 112,500 112,500 Issue date July 3, 2014, maturity date July 3, 2015 50,000 50,000 Issue date June 3, 2015, maturity date June 3, 2016 17,250 17,250 Issue date March 16, 2016, maturity date June 14, 2016 17,500 17,500 Issue date January 27, 2017, maturity date January 27, 2018 55,000 55,000 Subtotal Tangiers 284,357 281,943 Unsecured Convertible Promissory Notes payable to Bullfly Trading Company, Inc. (“Bullfly”), all in technical default until assigned to Armada on February 12, 2019, with interest at 15% payable at maturity with principal, convertible into shares of common stock at a conversion price equal to a 50% discount to the 5-day moving bid average: Issue date June 1, 2016, maturity date December 1, 2016 - 4,000 Issue date July 11, 2016, maturity date January 11, 2017 - 4,000 Subtotal Bullfly - 8,000 Unsecured Convertible Promissory Notes payable to Mountain Properties, Inc. (“Mountain”), all in technical default until assigned to Armada on February 12, 2019, with interest at 15% payable at maturity with principal, convertible into shares of common stock at a conversion price equal to a 50% discount to the 5-day moving bid average: Issue date February 24, 2016, maturity date August 24, 2016 - 7,500 Subtotal Mountain - 7,500 Secured Renewal Notes payable to SLMI Energy Holdings, LLC (“SLMI”), with interest at 3% payable on demand with principal, secured by substantially all assets of the Company per UCC filing dated June 30, 2015: Issue date June 6, 2018 (renewing note dated September 4, 2009) 790,000 790,000 Issue date June 6, 2018 (renewing note dated November 12, 2009) 120,000 120,000 Subtotal SLMI 910,000 910,000 Secured Note payable to MTEL Investment and Management (“MTEL”) in technical default, with interest of $50,000 payable at maturity with principal: Issue date January 11, 2010, maturity date July 10, 2010 100,000 100,000 Subtotal MTEL 100,000 100,000 Unsecured Notes payable to Valvasone Trust (“Valvasone”), all in technical default until satisfied on January 9, 2019, with interest at 3% payable at maturity with principal: Issue date October 7, 2013, maturity date January 31, 2014 - 10,000 Issue date March 30, 2014, maturity date June 30, 2014 - 15,000 Issue date January 11, 2016, maturity date March 31, 2016 - 22,000 Issue date July 1, 2017, maturity date September 30, 2017 - 40,000 Subtotal Valvasone - 87,000 Unsecured Note payable to Mt. Atlas Consulting (“Atlas”) in technical default, with interest at 20% payable at maturity with principal: Issue date November 17, 2017, maturity date April 17, 2018 4,000 4,000 Subtotal Atlas 4,000 4,000 Unsecured Promissory Note payable to Jefferson Street Capital (“Jefferson”), with interest at 8% payable at maturity with principal: Issue date February 18, 2019, maturity date February 18, 2020- net of unamortized debt discount of $1,032 and $0 at December 31, 2019 and December 31, 2018, respectively 6,818 - Issue date May 2, 2019, maturity date February 3, 2020- net of unamortized debt discount of $1,025 and $0 at December 31, 2019 and December 31, 2018, respectively 9,975 - Subtotal Jefferson 16,793 Unsecured Promissory Note payable to BHP Capital NY, Inc. (“BHP”), with interest at 8% payable at maturity with principal (default interest rates ranging from 18% to 24%); convertible into shares of common stock at a variable conversion price equal to 50%-60% of the Market Price which is defined as the lowest Trading Price for the common stock during the 20-trading day period prior to the Conversion Date: Issue date February 18, 2019, maturity date February 18, 2020- net of unamortized debt discount of $1,550 and $0 at December 31, 2019 and December 31, 2018, respectively 10,000 - Issue date May 2, 2019, maturity date February 3, 2020- net of unamortized debt discount of $1,025 and $0 at December 31, 2019 and December 31, 2018, respectively 9,975 - Issue date July 24, 2019, maturity date of July 24, 2020- net of unamortized debt discount of $8,649 and $0 at December 31, 2019, December 31, 2018, respectively 6,751 - Issue date October 16, 2019, maturity date of October 16, 2020- net of unamortized debt discount of $10,887 and $0 at December 31, 2019, December 31, 2018, respectively - Subtotal BHP 29,589 - Unsecured Promissory Note payable to Fourth Man, LLC. (“FOURTH”), with interest at 8% payable at maturity with principal (default interest rate of 18%); convertible into shares of common stock at a variable conversion price equal to 60% of the Market Price which is defined as the lowest Trading Price for the common stock during the 20-trading day period prior to the Conversion Date: Issue date July 24, 2019, maturity date of July 24, 2020- net of unamortized debt discount of $8,649 and $0 at December 31, 2019, December 31, 2018, respectively 6,751 - Issue date October 16, 2019, maturity date of October 16, 2020- net of unamortized debt discount of $10,887 and $0 at December 31, 2019, December 31, 2018, respectively 2,863 - Subtotal FOURTH 9,614 - Unsecured Promissory Note payable to Pacific Stock Transfer Company (“Pacific”) in technical default, with interest at 5% payable at maturity with principal: Issue date August 11, 2017, maturity date November 11, 2017 3,250 6,250 Subtotal Pacific 3,250 6,250 Total $ 1,533,519 $ 1,440,242 (Formerly Adventure Energy, Inc.) (A Development Stage Enterprise)From Inception (March 28, 2008) through2010KJ - COMMON STOCK ISSUANCES/WARRANTSNOTES PAYABLE, THIRD PARTIES (continued)In July 2010, SLMI Tangiers Other Total December 31, 2019 Promissory notes payable, net of discount $ 910,000 $ 284,357 $ $ 1,533,519 Accrued interest: Stated interest 306,584 103,077 Additional default interest - - 23,474 Total accrued interest 306,584 103,077 Total debt $ 1,216,584 $ 387,434 $ $ 2,060,213 December 31, 2018 Promissory notes payable, net of discount $ 910,000 $ 281,943 $ 248,299 $ 1,440,242 Accrued interest: Stated interest 279,284 79,145 80,985 439,414 Additional default interest - - - - Total accrued interest 279,284 79,145 80,985 439,414 Total debt $ 1,189,284 $ 361,088 $ 329,284 $ 1,879,656 Year Ended December 31, 2019 December 31, 2018 Stated interest $ 110,290 $ 71,446 Additional default interest 95,636 Amortization of debt discounts 190,762 12,699 Totals $ 324,526 $ 179,781 Company issued 714,285 shares of common stock at $.07 per share to Chris Davies on behalf of Atlas Capital Holdings for legal services.In July 2010, the Company issued 710,901 shares of common stock at $.02 per share to Tangiers Investors LP as payment towards a convertible debenture.In July 2010, the Company issued 170,940 shares of common stock at $.06 per share to Tangiers Investors LP for equity funding.In July 2010, the Company issued 130,000 shares of common stock at $.09 per share to White Oak Land and Minerals Development, LLC for consulting services.In July 2010, the Company issued 1,000,000 shares of common stock at $.001 per share to Bull In Advantage. The shares will be returned in full due to failure of the shareholder to satisfy the terms of the debt transaction.In August 2010, the Company issued 395,061 shares of common stock at $.04 per share to Tangiers Investors LP for equity funding.In August 2010, the Company issued 2,423,311 shares of common stock at $.015 per share to ARRG Corp as payment towards a note.In August 2010, the Company issued 2,423,311 shares of common stock at $.015 per share to Caesar Capital Group, LLC as payment towards a note.In August 2010, the Company issued 2,300,000 shares of common stock at $.01 per share to Mazuma Funding Corp as payment towards a note.In August 2010, the Company issued 1,225 shares of common stock at $.25 per share to Horace Womack as per the Common Stock Purchase Warrant subscription agreement.In September 2010, the Company issued 4,500,000 shares of common stock at $.01 per share to Caesar Capital Group, LLC as payment towards a note.In September 2010, the Company issued 100,000 shares of common stock at $.02 per share to Ron Ferlisi as per the stock purchase agreement.In September 2010, the Company issued 800,000 shares of common stock at $.01 per share to Doug Miglino as payment towards a note.In September 2010, the Company issued 200,000 shares of common stock at $.025 per share to Brian Feingold for financing services.In September 2010, the Company issued 380,518 shares of common stock at $.02 per share to Tangiers Investors LP for equity funding.In September 2010, the Company issued 765,000 shares of common stock at $.01 per share to Ron Ferlisi as payment towards a note.In September 2010, the Company issued 765,000 shares of common stock at $.01 per share to Vincent Bardong as payment towards a note.In September 2010, the Company issued 300,000 shares of common stock at $.01 per share to SLMI Holdings LLC for extending a note due date.In September 2010, the Company issued 1,500,000 shares of common stock at $.015 per share to Rui Figueiredo as payment towards a note.In September 2010, the Company issued 1,500,000 shares of common stock at $.015 per share to First Barrington Group as payment towards a note.F-19US NATURAL GASfollowing lenders: Year Ended December 31, 2019 December 31, 2018 SLMI $ $ Stated Interest 27,042 Additional default interest - 30,667 Total SLMI 57,709 Tangiers: Stated Interest 23,600 Additional default interest - 49,958 Total Tangiers 73,558 Other lenders Stated Interest 20,804 Additional default interest 15,011 Total others 82,532 35,815 Totals Stated Interest 110,290 71,446 Additional default interest 95,636 Total all Lenders $ 133,764 $ 167,082 (Formerly Adventure Energy, Inc.) (A Development Stage Enterprise)From Inception (March 28, 2008) through2010KJ - COMMON STOCK ISSUANCES/WARRANTSNOTES PAYABLE, THIRD PARTIES (continued)In October 2010, Year Ended December 31, 2019 December 31, 2018 Waiver of prior and future additional default interest pursuant to debt modifications with SLMI Energy Holdings, LLC on June 8, 2018 (1) $ �� - $ 343,540 Waiver of prior and future additional default interest pursuant to debt modifications with Darling Capital, LLC on December 6, 2018 (2) - 9,366 Waiver of prior and future additional default interest pursuant to debt modifications with Tangiers Investment Group, LLC on December 18, 2018 (2) - 109,607 Total $ - $ 462,513 Year Ended December 31, 2019 December 31, 2018 (Unaudited) Company payment of $15,000 on October 5, 2018 in full and final settlement of $130,298 debt and $83,100 accrued interest due Beaufort Capital Partners, LLC $ - $ 198,398 Total $ - $ 198,398 380,518the following shares of common stock at $.02 per share to Tangiers Investors LP for equity funding.In October 2010,upon the Company issued 1,100,000 sharesconversions of common stock at $.0135 per share to John R. Rogers as perportions of the stock purchase agreement.In October 2010, the Company issued 1,100,000 sharesConvertible Notes: Principal Interest Fees Total Conversion Shares Issued Date Conversion Conversion Conversion Conversion Price Issued to 2/7/2019 $ - $ 642 $ - $ 642 $ 0.00106 594,066 Darling 2/20/2019 1,100 - - 1,100 0.00205 536,585 Armada 8/26/2019 345 851 - 1196 0.002 583,523 Armada 9/9/2019 - 1,300 - 1,300 0.00106 1,226,583 Darling 10/28/2019 3,700 - 500 4,200 0.00402 1,000,000 Jefferson 11/25/2019 605 721 - 1,326 0.00064 2,072,133 Darling 12/5/2019 400 721 500 1,621 0.00210 772,133 Armada 12/10/2019 1,875 39 - 1,914 0.00054 3,545,487 Darling 12.12.2019 3,150 17 500 3,667 0.00189 1,940,268 Armada 12/20/2019 2,600 16 500 3116 0.00154 2,023,234 Armada 12/26/2019 1,773 28 - 1,801 0.00044 4,093,514 Darling 12/30/2019 2,600 12 500 3,112 0.00147 2,116,895 Armada $ 18,148 $ 4,347 $ 2,500 $ 24,995 22,645,817 common stock at $.0135 per share to John R. Rogers as per the stock purchase agreement.In October 2010, the Company issued 750,000 shares of common stock at $.01 per share to First Barrington Group as payment towards a note.In October 2010, the Company issued 750,000 shares of common stock at $.01 per share to Rui Figueiredo as payment towards a note.In November 2010, the Company issued 1,190,476 shares of common stock at $.02 per share to Tangiers Investors LP for equity funding.In November 2010, the Company issued 4,325,000 shares of common stock at $.01 per share to Mazuma Funding Corp as payment towards a note.In November 2010, the Company issued 2,500 shares of common stock at $.02 per share to Matthew Holden for participation in drilling/re-work program.In November 2010, the Company issued 2,500 shares of common stock at $.02 per share to Adam Holden for participation in drilling/re-work program.In November 2010, the Company issued 50,000 shares of common stock at $.02 per share to Brian Warshaw as per the terms of a promissory note dated January 2010.In November 2010, the Company issued 50,000 shares of common stock at $.02 per share to Jim Gallucio as per the terms of a promissory note dated January 2010.In November 2010, the Company issued 2,500,000 shares of common stock at $.01 per share to Rui Figueiredo as payment towards a note.In November 2010, the Company issued 2,500,000 shares of common stock at $.01 per share to Dave Miller as payment towards a note.In November 2010, the Company issued 600,000 shares of common stock at $.02 per share to Dave Matheny as per the Common Stock Purchase Warrant subscription agreement.In November 2010, the Company issued 4,000,000 shares of common stock at $.01 per share to Dave Matheny as payment towards a note.In November 2010, the Company issued 1,000,000 shares of common stock at $.01 per share to Howard Matheny as payment towards a note.In November 2010, the Company issued 5,340,909 shares of common stock at $.015 per share to Caesar Capital Group, LLC as payment towards a note.In November 2010, the Company issued 300,000 shares of common stock at $.01 per share to SLMI Holdings LLC for extending a note due date.F-20US NATURAL GASnotes payable consists of: Year ended December 31, 2019 December 31, 2018 Armada convertible notes $ (70,322 ) $ - Jefferson convertible notes (5,800 ) - Darling convertible notes (106,878 ) - Total $ (183,000 ) $ - (Formerly Adventure Energy, Inc.) (A Development Stage Enterprise)From Inception (March 28, 2008) through2010COMMON STOCK ISSUANCES/WARRANTS (continued)In November 2010, the Company issued 1,169,590 shares of common stock at $.02 per shareNOTES PAYABLE, RELATED PARTIESTangiers Investors LP for equity funding.In December 2010, the Company issued 35,000 shares of common stock at $.01 per sharerelated parties consist of: December 31, 2019 December 31, 2018 Secured Promissory Note dated October 6, 2018 payable to Wayne Anderson, CEO of the Company, interest at 3%, due October 6, 2019 $ 70,000 $ 70,000 Unsecured Promissory Note dated September 15, 2017, payable to Around the Clock Partners, LP (entity controlled by Wayne Anderson), interest at 3%, due September 15, 2018 68,000 78,000 Total $ $ 148,000 as compensation as(originally in the amount of $75,000) is secured by a Director.In December 2010,Deed to Secure Debt, Assignment of Rents and Security Agreement relating to the property located in Macon, Georgia (Please see NOTE D – PROPERTY AND EQUIPMENT for further information). The Note provides for the Company issued 35,000 sharesto make a first payment of common$15,000 within 90 days of an effective reverse stock at $.01 per share to Jim Anderson as compensation as a Director.Insplit, which occurred on December 2010, the Company issued 6,500,000 shares28, 2018. As of common stock at $.01 per share to Mazuma Funding Corp as payment towards a note.In December 2010, the Company issued 7,041,158 shares of common stock at $.01 per share to Jim Anderson as a reduction of debt for expenses paid on behalf of the company.In December 2010, the Company issued 2,000,000 shares of common stock at $.01 per share to White Oak Land and Minerals Development, LLC for consulting services.Warrants outstanding at December 31, 2010 and December 31, 2009 are 61,113,415 and 6,190,000, respectively. Each warrant enables the holder to acquire one share of the Company's common stock at a specified exercise price for a term of three to five years. Warrants outstanding at December 31, 2010 have vesting dates through May 2012 and expiration dates through May 2017.Warrants issued for the year and the three months ending December 31, 2010 are 56,674,640 and 3,300,000, respectively. Warrants exercised or canceled for the year and the three months ending December 31, 2010 are 1,751,225 and 600,000, respectively.On June 3, 2010 in consideration for the acquisition of Wilon Resources, Inc. (see Note B) each Wilon shareholder received one share of the Company's common stock plus one warrant to purchase one additional share of common stock of the Company at an exercise price of $.25 per share to be exercisable for a period of 5 years from the date of issue. The total sharesissuance of common stock and warrants issuedthese Financial statements, except for the acquisition were 49,207,973 each. In July 2010,a $5,000 payment made by the Company canceled 1,000,000 shares of common stock and 1,000,000 warrants it obtained throughto Mr. Anderson on November 12, 2018, the Wilon acquisition. The cancelation of common stock was accounted for as a reduction inCompany has not made any payments against the acquisition price for Wilon.Note.F-19 NOTE L – LOANS PAYABLE-OTHERLoans payable with no interest to potential investors aggregated $5,985 and $23,000 as of December 31, 2010 and December 31, 2009.NOTE M – CONVERTIBLE DEBENTURE PAYABLEConvertible debentures payable consist of the following at: 12/31/2010 12/31/2009 F-21US NATURAL GAS(Formerly Adventure Energy, Inc.) (A Development Stage Enterprise)From Inception (March 28, 2008) through2010M – CONVERTIBLE DEBENTURE PAYABLE (continued)On November 16, 2010, the Company entered into a Convertible Promissory Note ("Promissory Note") with Caesar Capital Group, LLC, ("Caesar Capital") in the amount of Twenty Five Thousand Dollars ($25,000) and a Securities Purchase Agreement. L - DERIVATIVE LIABILITYPromissory Note was fully funded on November 19, 2010. The Promissory Note is convertible, in whole or in part, at any time from time to time before maturity at the option of the holder at a per share price equal to Sixty Percent (60%) of the average of the last Five (5) trading days closing volume weighted average price. The Promissory Note has a term of six (6) months and accrues interest at a rate equal to twelve percent (12%) per year. The balance owedderivative liability at December 31, 2010 is $25,000On October 8, 2010, the Company entered into a Convertible Promissory Note ("Promissory Note") with Asher Enterprises, ("Asher") in the amount of Forty Thousand Dollars ($40,000)2019 and a Securities Purchase Agreement. The Promissory Note was fully funded on October 14, 2010. The Promissory Note is convertible, in whole or in part, at any time from time to time before maturity at the option of the holder at the Variable Conversion Price which shall mean 58% of the Market Price. The Market Price is defined as the average of the three (3) lowest Trading Prices for the common stock during the ten (10) Trading Day period ending one Trading Day prior to the date the Conversion Notice is sent. The Promissory Note has a term of nine (9) months and accrues interest at a rate equal to eight percent (8%) per year. The balance owed at December 31, 2010 is $40,000.On September 7, 2010, the Company entered into a Convertible Promissory Note ("Promissory Note") with Caesar Capital Group, LLC, ("Caesar Capital") in the amount of Fifty Thousand Dollars ($50,000) and a Securities Purchase Agreement. The Promissory Note was fully funded on September 10, 2010. The Promissory Note is convertible, in whole or in part, at any time from time to time before maturity at the option of the holder at a per share price equal to Sixty Percent (60%) of the average of the last Five (5) trading days closing volume weighted average price. The Promissory Note has a term of six (6) months and accrues interest at a rate equal to twelve percent (12%) per year. The balance owed at December 31, 2010 is $50,000.On September 3, 2010, the Company amended the Common Stock Purchase Warrant Agreement issued to Caesar Capital Group, LLC on August 6, 2010 by granting the holder the right to purchase up to 500,000 shares of the Company's common stock at an Exercise price of Two and One Half cents ($0.025). The warrant is exercisable at anytime commencing six months after the date of issuance until February 6, 2014.On September 3, 2010, the Company amended the Common Stock Purchase Warrant Agreement issued to ARRG Corp on August 6, 2010 by granting the holder the right to purchase up to 500,000 shares of the Company's common stock at an Exercise price of Two and One Half cents ($0.025). The warrant is exercisable at anytime commencing six months after the date of issuance until February 6, 2014.On August 6, 2010, the Company entered into a Convertible Promissory Note (“Promissory Note”) with Caesar Capital Group, LLC, (“Caesar”) in the amount of Twenty Five Thousand Dollars ($25,000). The Promissory Note was fully funded on August 10, 2010. The Promissory Note is convertible, in whole or in part, at any time and from time to time before maturity at the option of the holder at a price per share equal to Sixty Percent (60%) of the average of the last Five (5) trading days closing volume weighted average price ("VWAP"). The Promissory Note has a term of six (6) months and accrues interest at a rate equal to twelve percent (12%) per year. In addition, the Company issued to Caesar a Common Stock Purchase Warrant Agreement granting the holder the right to purchase up to 500,000 shares of the Company's common stock at an Exercise price of Five cents ($0.05). The warrant is exercisable at anytime commencing six months after the date of issuance until February 6, 2014. The balance owed at December 31, 2010 is $25,000.On August 6, 2010, the Company entered into a Convertible Promissory Note (“Promissory Note”) with ARRG Corp, (“ARRG”) in the amount of Twenty Five Thousand Dollars ($25,000). The Promissory Note was fully funded on August 10, 2010. The Promissory Note is convertible, in whole or in part, at any time and from time to time before maturity at the option of the holder at a price per share equal to Sixty Percent (60%) of the average of the last Five (5) trading days closing volume weighted average price ("VWAP"). The Promissory Note has a term of six (6) months and accrues interest at a rate equal to twelve percent (12%) per year. In addition, the Company issued to ARRG a Common Stock Purchase Warrant Agreement granting the holder the right to purchase up to 500,000 shares of the Company's common stock at an Exercise price of Five cents ($0.05). The warrant is exercisable at anytime commencing six months after the date of issuance until February 6, 2014. The balance owed at December 31, 2010 is $25,000.F-22US NATURAL GAS2018 consisted of: December 31, 2019 December 31, 2018 Convertible Promissory Notes payable to Armada Investment Fund, LLC. Please see NOTE J – NOTES PAYABLE, THIRD PARTIES for further information $ 297,868 $ 1,076,786 Convertible Promissory Notes payable to Darling Capital, LLC and its affiliate Darling Investments, LLC. Please see NOTE J – NOTES PAYABLE, THIRD PARTIES for further information 2,248,272 Convertible Promissory Notes payable to Tangiers Investment Group, LLC. Please see NOTE J – NOTES PAYABLE, THIRD PARTIES for further information 5,354,400 Convertible Promissory Notes payable to Bullfly Trading Company, Inc. Please see NOTE J – NOTES PAYABLE, THIRD PARTIES for further information - 1,960 Convertible Promissory Note dated February 24, 2016 payable to Mountain Properties, Inc. Please see NOTE J – NOTES PAYABLE, THIRD PARTIES for further information - 1,838 Convertible Promissory Note payable to Jefferson Street Capital, LLC. Please see NOTE J – NOTES PAYABLE, THIRD PARTIES for further information 24,431 - Convertible Promissory Note payable to BHP Capital NY, Inc. Please see NOTE J – NOTES PAYABLE, THIRD PARTIES for further information 83,012 - Convertible Promissory Note dated July 24, 2019 payable to Fourth Man, LLC. Please see NOTE J – NOTES PAYABLE, THIRD PARTIES for further information 54,301 - Total derivative liability $ $ 8,683,257 (Formerly Adventure Energy, Inc.) (A Development Stage Enterprise)From Inception (March 28, 2008) through2010M – CONVERTIBLE DEBENTURE PAYABLEL - DERIVATIVE LIABILITY (continued)On July 30, 2010, the Company entered into aNote ("Promissory Note"Notes (the “Notes”) with Asher Enterprises, ("Asher") incontain a variable conversion feature based on the amount of Forty Thousand Dollars ($40,000) and a Securities Purchase Agreement. The Promissory Note was fully funded on August 6, 2010. The Promissory Note is convertible, in whole or in part, at any time from time to time before maturity at the optionfuture trading price of the holder atCompany’s common stock. Therefore, the Variable Conversion Price which shall mean 58%number of the Market Price. The Market Price is defined as the average of the three (3) lowest Trading Prices for the common stock during the ten (10) Trading Day period ending one Trading Day prior to the date the Conversion Notice is sent. The Promissory Note has a term of nine (9) months and accrues interest at a rate equal to eight percent (8%) per year. The balance owed at December 31, 2010 is $40,000.On June 18, 2010, the Company entered into a Convertible Promissory Note (“Promissory Note”) with Asher Enterprises, (“Asher”) in the amount of Fifty Thousand Dollars ($50,000) and a Securities Purchase Agreement. The Promissory Note was fully funded on June 18, 2010. The Promissory Note is convertible, in whole or in part, at any time and from time to time before maturity at the option of the holder at the Variable Conversion Price, which shall mean 58% of the Market Price. The Market Price is defined as the average of the three (3) lowest Trading Prices for the common stock during the 10 (ten) Trading Day period ending one Trading Day prior to the date the Conversion Notice is sent. The Promissory Note has a term of nine (9) months and accrues interest at a rate equal to eight percent (8%) per year. The balance owed at December 31, 2010 is $50,000.On September 25, 2009, the Company entered into a Debenture Securities Purchase Agreement (“Debenture Agreement”) with Atlas Capital Partners, LLC, (“Atlas”) pursuant to which the Company issued to Atlas Fifty Thousand Dollars ($50,000) in secured convertible debentures (the “Debentures”) dated of even date with the Debenture Agreement. The Debentures were fully funded on September 25, 2009. The Debentures are convertible, in whole or in part, at any time and from time to time before maturity at the option of the holder at the lower of (a) $0.25 or (b) seventy percent (70%) of the two lowest volume weighted average prices of common stock for ten (10) trading days immediately preceding the conversion date. The Debentures have a term of nine (9) months, piggyback registration rights and accrue interest at a rate equal to seven percent (7%) per year. The Debentures are secured by certain pledged assets of the Company. The Parties have also entered into an Investor Registration Rights Agreement, pursuant to which the Company has agreed, if required by Atlas, to provide certain registration rights under theSecurities Act of 1933, as amended, and the rules and regulations thereunder, and applicable state securities laws. In July 2010, Tangiers Investors, LP acquired the debenture from Atlas and received 1,187,092 shares of common stock issuable upon conversion of the Notes is indeterminate. Accordingly, we have recorded the fair value of the embedded conversion features as a derivative liability at $.021 per share, as partial payment towards the debenture.respective issuance dates of the notes and charged the applicable amounts to debt discounts (limited to the face value of the respective notes) and the remainder to other expenses. The balance owedincrease (decrease) in the fair value of the derivative liability from the respective issue dates of the notes to the measurement dates is charged (credited) to other expense (income).20102019 and December 31, 2009 is $25,000 and $50,000, respectively. NOTE N – COMMITMENTS AND CONTINGENCIESThe Company has an operating lease for office premises in St. Petersburg. The three-year lease was entered into on February 1, 2008 and commenced on April 1, 2008. The Company amended2018 using the original lease in December 2009 increasing the monthly rent from $600 to $1,353 monthly. The Company renewed the lease through November 2011. Effective December 1, 2010 the monthly rent increased to $1,404.The Company entered into an operating lease in January 2010 for field equipment. The lease is for a term of 24 months with a monthly rent of $3,100 plus applicable taxes.On March 1, 2011, the Company entered into an operating lease for office space. The lease term is for two years with monthly rent totaling $888 in year one and $963 in year two.Rent expense on all operating leasesBlack Scholes option pricing model. Assumptions used for the periodcalculation of March 28, 2008 (inception)the derivative liability of the Notes at December 31, 2019 were (1) stock price of $0.0028 per share, (2) conversion prices ranging from $0.00042 to $0.00147 per share, (3) terms ranging from 39 days to 347 days, (4) expected volatility of 284.00%, and (5) risk free interest rates ranging from 1.48% to 1.60%. Assumptions used for the calculation of the derivative liability of the Notes at December 31, 2018 were (1) stock price of $0.0402 per share, (2) conversion prices ranging from $0.0008 to $0.164 per share, (3) terms ranging from 6 months to 12 months, (4) expected volatility of 1080%, and (5) risk free interest rates ranging from 2.56% to 2.63%. Year ended December 31, 2019 December 31, 2018 Beaufort convertible notes $ - $ 220,382 Armada convertible notes 902,168 (1,103,786 ) Darling convertible notes 2,052,935 (2,041,937 ) Tangiers convertible notes 4,769,927 (4,914,831 ) Other convertible notes (65,745 ) 27,803 Total $ $ (7,722,369 ) 2010 was $50,300. Future minimum rental2019.at December 31, 2010 are $71,165 in 2011 and $6,802 in 2012.On July 15, 2010 the Company entered into an employment agreement with Mr. Chuck Kretchman to serve as the Company’s Chief Financial Officer upon the terms and provisions and, subjectrelating to the conditions set forth in13 wells and we will write-off the Agreement, for a term, commencing on July 15, 2010, and terminating on December 31, 2011 unless earlier terminated as provided inthen balance of the Agreement. The Agreement included options to the Chief Financial Officer to purchase 600,000 shares of common stock at an average price of $.15 per share. The Executive agrees to accept $50,000 until September 30, 2010, then $65,000 from September 30, 2010, then $90,000 from January 1, to December 31, 2011. The Agreement contains a six month non-solicitation clause and a confidentiality clause.F-23US NATURAL GAS CORP(Formerly Adventure Energy, Inc.) (A Development Stage Enterprise)NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFrom Inception (March 28, 2008) through December 31, 2010– COMMITMENTS AND CONTINGENCIES (continued)As of April 1, 2009, the Company executed an employment contract for the President, Vice-President, Treasurer, and Secretary of the Company upon the terms and provisions and, subject to the conditions set forth in the Agreement, for a term of three (3) years, commencing on April 1, 2009, and terminating on September 30, 2012, unless earlier terminated as provided in the Agreement. The Agreement included options to the President to purchase 500,000 shares of common stock at an average price of $.75 per share and 250,000 shares to the Vice-President. In addition, the Vice-President can be issued annual grants of 125,000 options on May 1 of each year of employment throughout the duration of the term at an average price of $.75.Executives agree to accept, for the first year of the Employment Term a salary at an annual rate of $120,000 for the President and $60,000 for the Vice-President, payable in accordance with the Company's regular payroll practices as from time to time in effect, less all withholdings and other deductions required to be deducted in accordance with any applicable federal, state, local or foreign law, rule or regulation. After the first year during the Employment Term, the annual salary for each successive year will be increased by the lesser of (i) 10% or (ii) the percentage increase, if any, in the CPI for each year just completed measured for the entire twelve (12) month period, plus three percent (3%).NOTE O- LENDER ACQUISITION AGREEMENTA lender acquisition agreement was entered into on September 4, 2009 by US Natural Gas Corp and SLMI Holdings, LLC. Through the agreement, US Natural Gas Corp acquired SLMI Options, LLC, a Nevada Limited Liability Company. SLMI Options, LLC is the secured lender of the three commercial notes defined below. This Agreement is made with respect to loans made by SLMI Holdings, LLC to Harry Thompson (“Thompson”), Harlis Trust (“Trust”), Wilon Resources Inc. (“Wilon”) and/or Wilon Gathering System Inc. Purchase PricePreferred Stock. US Natural Gas Corp agrees to pay the following consideration herewith in return for conveyance of the Lender Units:$500,000 in financing given May 6, 2005 for construction of a natural gas gathering system in Kentucky (the “Gathering System Loan”), $300,000 mortgage on the Wilon business offices given October 13, 2005 (the “Office Loan”), $175,000 in financing given on October 24, 2006 to finance 176 acres of land in West Virginia and to finance the placement of a natural gas treatment station (the “WV Loan”); these loans include that certain Amendment to Loan Agreements dated August 2, 2006, that certain Receipt for Shares Pledged as Collateral dated December 8, 2007 and that certain Second Amendment to Loan Agreements dated January 27, 2009 (with 7.8 million Wilon shares attached and pledged as additional collateral). Further, the Borrowers and SLMI have agreed to special terms for assignment of loan rights by SLMI and subsequent holders of the loans pursuant to that Acknowledgment by Borrowers delivered Jan. 5, 2009. At December 31, 2009 the notes receivable balance was $925,000. At December 31, 2010 the notes receivable balance was eliminated through consolidation (See Note G).$1,000,000 in financing was made payable by secured promissory note. By December 31, 2010, US Natural Gas Corp shall have paid at least $250,000 in cash toward the Secured Note. By December 31, 2011, US Natural Gas Corp shall have paid at least $250,000 more. By December 31, 2012, US Natural Gas Corp shall have paid at least $250,000 more. All unpaid principal and interest shall be due no later than December 31, 2013. To the extent, US Natural Gas Corp tenders proceeds from dispositions of real estate collateral on the SLMI Loans (which dispositions shall require the written consent of Owner), said payments shall be applied toward the Secured Note, but they shall not reduce the minimum installments required for years 2010 through 2012. From January 2010 to December 2013, a minimum monthly cash installment of $4,000 shall be paid by US Natural Gas Corp on the Secured Note until it is paid in full. Additional Security and Collateral for the Secured Note and the covenants hereunder: At December 31, 2010 and December 31, 2009 the notes payable balances were $980,000 and $1,000,000, respectively (See Note I).F-24US NATURAL GAS CORP(Formerly Adventure Energy, Inc.) (A Development Stage Enterprise)NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFrom Inception (March 28, 2008) through December 31, 2010NOTE P- STOCKHOLDERS' EQUITY20102019 and December 31, 2009,2018, there are 1,000,000 and 1,000,000 shares issued and outstanding.Two Million (2,000,000)Three Hundred Thousand (300,000) shares. At December 31, 20102019 and December 31, 2009,2018 there are 300,0000 and 0 shares issued and outstanding, respectively.statedpar value of $0.001 per share at December 31, 2019 and December 31, 2018 is Two Hundred Million (200,000,000).750,000,000 and 750,000,000, respectively. At December 31, 20102019 and December 31, 2009,2018, there are 148,947,37849,209,761 and 22,185,9105,909,113 shares of common stock issued and outstanding, respectively.F-23 QN - SUBSEQUENT EVENTSOn March 16, 2011, US Natural Gas Corp KY, a wholly owned subsidiaryCAPITAL STOCK (continued)the Comapny, executed a term sheet for the acquisitionwarrants and options activity follows: Shares Equivalent Options Warrants Total Balance, January 1, 2017 25,000 - 25,000 Granted in year ended December 31, 2017 - - - Balance December 31, 2017 25,000 - 25,000 Options (exercisable at $0.40 per share) granted to Wayne Anderson in connection with April 1, 2018 Employment Agreement 25,000 - 25,000 Warrants (exercisable at $0.40 per share) issued to Armada Investment Fund, LLC in connection with sale of $30,000 Promissory Note on October 9, 2018 - 62,500 62,500 Warrants (exercisable at $0.40 per share) issued to Armada Investment Fund, LLC in connection with sale of $33,000 Promissory Note on December 31, 2018 - 82,500 82,500 Balance, December 31, 2018 50,000 145,000 195,000 Warrants (exercisable at $0.025 per share) issued to Darling Capital, LLC in connection with sale of $12,500 Promissory Note dated January 9, 2019 - 3,000,000 3,000,000 Warrants (exercisable at $.10 per share) issued to Armada Investment Fund, LLC in connection with sale of $11,550 Promissory Note dated February 20, 2019 - 26,250 26,250 Warrants (exercisable at $.10 per share) issued to Jefferson Street Capital, LLC in connection with sale of $11,550 Promissory Note dated February 20, 2019 - 26,250 26,250 Warrants (exercisable at $.10 per share) issued to BHP Capital NY Inc. in connection with sale of $11,550 Promissory Note dated February 20, 2019 - 26,250 26,250 Balance March 31, 2019 50,000 3,223,750 3,273,350 Warrants (exercisable at $.10 per share) issued to BHP Capital NY Inc. in connection with sale of $11,000 Promissory Note dated May 2, 2019 - 50,000 50,000 Warrants (exercisable at $.10 per share) issued to Jefferson Street Capital, LLC in connection with sale of $11,000 Promissory Note dated May 2, 2019 - 50,000 50,000 Warrants (exercisable at $.075 per share) issued to Armada Investment Fund, LLC in connection with sale of $16,500 Promissory Note dated June 5, 2019 - 220,000 220,000 Balance, June 30, 2019 50,000 3,543,750 3,593,750 Warrants (exercisable at $.075 per share) issued to Armada Investment Fund, LLC in connection with sale of $16,500 Promissory Note dated July 2, 2019 - 220,000 220,000 Warrants (exercisable at $.08 per share) issued to Armada Investment Fund, LLC in connection with sale of $15,400 Promissory Note dated July 24, 2019 - 256,667 256,667 Warrants (exercisable at $.08 per share) issued to BHP Capital NY Inc in connection with sale of $15,400 Promissory Note dated July 24, 2019 - 256,667 256,667 Warrants (exercisable at $.08 per share) issued to Fourth Man, LLC in connection with sale of $15,400 Promissory Note dated July 24, 2019 - 256,667 256,667 Balance, September 30, 2019 50,000 4,533,751 4,583,751 Warrants (exercisable at $.024 per share) issued to BHP Capital NY Inc in connection with sale of $13,750 Promissory Note dated October 16, 2019 - 761,958 761,958 Warrants (exercisable at $.024 per share) issued to Fourth Man, LLC in connection with sale of $13,750 Promissory Note dated October 16, 2019 - 761,958 761,958 Warrants (exercisable at $.024 per share) issued to Armada Investment Fund, LLC in connection with sale of $25,300 Promissory Note dated October 30, 2019 - 1,402,000 1,402,000 Warrants (exercisable at $.024 per share) issued to Armada Investment Fund, LLC in connection with sale of $16,500 Promissory Note dated December 13, 2019 - �� 841,200 841,200 Exercise of warrants (exercisable at $.10 per share) issued to Armada Investment Fund, LLC in connection with sale of $11,550 Promissory Note dated February 20, 2019 ) ) Balance, December 31, 2019 50,000 8,274,617 8,324,617 certain assets of Madison Brothers Investments, LLC located in Edmonson County, Kentucky. Under the terms, the Company is to receive, via deed, assignment, and transfer, approximately 182 acres of mineral rights, twenty five equipped oil wells, two water injection wells, and five oil and gas leases. The purchase price for the transaction is Two Hundred Thousand Dollars ($200,000.00) of whichDecember 31, 2019, the Company has paid Ten Thousand Dollars ($10,000.00)nineteen warrants and options issued and outstanding granting the holders the right to purchase up to a total of 8,324,617 shares of its common stock.Number Outstanding At December 31, 2019 Exercise Price Expiration Date 25,000 $ 0.80 April 1, 2020 25,000 $ 0.40 April 1, 2023 62,500 $ 0.40 October 9, 2023 82,500 $ 0.40 December 31, 2023 3,000,000 $ 0.025 January 9, 2024 52,500 $ 0.10 February 20, 2024 100,000 $ 0.10 May 2, 2024 440,000 $ 0.075 June 5, 2024 770,001 $ 0.08 July 24, 2024 1,523,916 $ 0.024 October 16, 2024 1,402,000 $ 0.024 October 30, 2024 841,200 $ 0.024 December 13, 2024 8,324,617 Year Ended December 31, 2019 December 31, 2018 Expected tax $ 1,219,028 $ (1,619,308 ) Non-deductible stock-based compensation 171,654 - Non-deductible loss on conversion of notes payable and accrued interest 38,430 - Non-deductible loss (nontaxable income) from derivative liability (1,608,450 ) 1,621,697 Non-deductible amortization of debt discounts 40,060 2,667 Increase (decrease) in Valuation allowance 139,278 (5,056 ) Provision for (benefit from) income taxes $ - $ - December 31, 2019 December 31, 2018 Unpaid accrued officer and director compensation $ 113,287 $ 168,910 Net operating loss carry-forwards 2,257,245 2,062,344 Valuation allowance (2,370,532 ) (2,231,254 ) Net non-current deferred tax asset $ - $ - Seller upon executionfuture utilization of the term sheet.$539,464 timing difference relating to unpaid officer and director compensation and the $10,748,786 net operating loss carryforward as of December 31, 2019 will be realized. Accordingly, the Company has provided a 100% allowance against the deferred tax asset in the financial statements at December 31, 2019. The transaction is scheduledCompany will continue to close on or before April 30, 2011.On February 23, 2011,review this valuation allowance and make adjustments as appropriate. $10,072,705 of the Company’s stock quotation platform changednet operating loss carryforward expires in varying amounts from year 2026 to year 2037.OTC Bulletin Board (“OTCBB”) and OTCQBamount of loss available to solely the OTCQB. Thebe offset against future taxable income when a substantial change in stock quotationownership occurs. Therefore, the amount available to strictlyoffset future taxable income may be limited.OTCQB was caused by the dynamic changes within the OTCBB itselfyears ended December 31, 2019 and the market makers who elect to quote on this platform. The change will in no way affect, nor is it a reflection upon, the Company's operations, financials, or business plan. The OTCQB is one of three tiers established by OTC Markets Group, Inc., which operates one of the world's largest electronic interdealer quotation systems for broker-dealers to trade securities not listed on a national exchange. The OTCQB designation is meant to identify companies that are reporting with the SEC or a U.S. banking regulator, making it easy for investors to identify companies that are current in their reporting obligations. Quotes and company information can be viewed at 2018www.otcmarkets.comNOTE P - COMMITMENTS AND CONTINGENCIES.February 3, 2011,August 28, 2019, the Company entered into a lease to rent office space located at 501 1st Ave N, Suite 901, St. Petersburg, FL 33701. The lease is for a term of one year and has a monthly rental rate of $480. The Company’s future rental obligation at December 31, 2019 is $3,840.F-27 (“Promissory Note”) with Asher Enterprises, (“Asher”(the “Note”) in the amount of Forty Thousand Dollars$18,425 ($40,000) and a Securities Purchase Agreement. The Promissory Note was fully funded on February 11, 2011. The Promissory Note is convertible, in whole or in part, at any time and from time to time before maturity at the option of the holder at the Variable Conversion Price, which shall mean 58% of the Market Price. The Market Price is defined as the average of the three (3) lowest Trading Prices for the common stock during the 10 (ten) Trading Day period ending one Trading Day prior to the date the Conversion Notice is sent. The Promissory1,675 OID). Each Note has a term of nine (9) monthsone (1) year (due on January 10, 2021) and accruesbears interest at a rate equal to eight percent (8%) per year. On January 24, 2011, E 2 Investments, LLC ("E 2"), a wholly owned subsidiary8% annually. As part and parcel of the Company, entered into an agreement with FITT Highway Products, Inc., whereby E 2 would provide consulting services relatedforegoing transaction, Armada and FM were each issued a warrant granting the holder the right to joint ventures, acquisitions, and financing. Pursuantpurchase up to the Agreement, unless terminated by written notice from either party, the E 2 will receive Four Hundred Thousand free trading921,250 shares of the Company’s common stock fromat an exercise price of $0.024 for a third party non-affiliate and Three Hundred Thousandterm of 5-years. The transactions closed on January 13, 2020. In addition, 32,000,000 shares of the Company’s common stock issued byhave been reserved at Pacific Stock Transfer Corporation, our transfer agent, for each of Armada and FM for possible issuance upon the Company currently valued at $35,000.00.conversion of each Note into shares of our common stock. The agreement has a term of eight weeks.F-25US NATURAL GAS CORP(Formerly Adventure Energy, Inc.) (A Development Stage Enterprise)NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFrom Inception (March 28, 2008) through December 31, 2010NOTE Q - SUBSEQUENT EVENTS (continued)19, 2011,13, 2020, the Company entered into a Securities Purchase Agreement (the “Agreement”) with Deep Green Waste & Recycling, Inc. (hereinafter “Deep Green”) wherein Deep Green issued the Company a Convertible Promissory Note (“Promissory Note”) with Asher Enterprises, (“Asher”(the “Note”) in the amount of Forty Thousand Dollars$35,000 ($40,000) and a Securities Purchase Agreement.5,000 OID). The Promissory Note was fully funded on January 12, 2011. The Promissory Note is convertible, in whole or in part, at any time and from time to time before maturity at the option of the holder at the Variable Conversion Price, which shall mean 58% of the Market Price. The Market Price is defined as the average of the three (3) lowest Trading Prices for the common stock during the 10 (ten) Trading Day period ending one Trading Day prior to the date the Conversion Notice is sent. The Promissory Note has a term of nine (9) monthsone (1) year (due on January 13, 2021) and accruesbears interest at 8% annually. As part and parcel of the foregoing transaction, the Company was issued a rate equalwarrant granting the holder the right to eight percent (8%purchase up to 262,500 shares of Deep Green’s common stock at an exercise price of $0.04 for a term of 5-years. As part of the Note, the Company executed a Registration Rights Agreement (the “RRA”) per year. 11, 2011,9, 2021, the Company issued 34,368,854 shares of its common stock to a convertible noteholder in satisfaction of $12,500 of principal and $3,997 of interest against an outstanding note. The $86,610 excess of the $103,107 fair value of the 34,368,854 shares over the $16,497 liability reduction will be charged to loss on conversion of debt.ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. ITEM 9A. CONTROLS AND PROCEDURES. - 37 - - Insufficient number of qualified accounting personnel governing the financial close and reporting process - Lack of independent directors - Lack of proper segregation of duties ITEM 9B. OTHER INFORMATION. ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE. Name Age Position and Term Jimmy Wayne Anderson 54 President, Principal Financial Officer and Chairman of the Board (Since 2008) - 38 - A. A petition under the Federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing; B. Convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses); C. The subject of 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, the following activities; 1. Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity; 2. Engaging in any type of business practice; or 3. Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws; D. The subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph 3.i in the preceding paragraph or to be associated with persons engaged in any such activity; E. Was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated; F. Was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated; - 39 - G. Was the 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: 1. Any Federal or State securities or commodities law or regulation; or 2. Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or 3. Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or H. Was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. stock repurchase program permittingcorporate code of ethics. We believe our code of ethics is reasonably designed to deter wrongdoing and promote honest and ethical conduct; provide full, fair, accurate, timely and understandable disclosure in public reports; comply with applicable laws; ensure prompt internal reporting of code violations; and provide accountability for adherence to the Company to repurchase up to $250,000 in sharescode. A copy of its outstanding common stock, par value $.001 per share, over the next 12 months. The sharescode of common stock may be repurchased from time to time in open market transactions or privately negotiated transactions at the Company’s discretion. An 8-Kethics was filed as Exhibit 14.1 on our Form S-1 Registration Statement as filed with the Securities and Exchange Commission on January 12, 2011.April 11, 2019.- 40 - ITEM 11. EXECUTIVE COMPENSATION. Name and Principal Position Year Salary- Paid or accrued
($) Bonus
($) Stock Awards
($)(2) Option Awards
($) Non-Equity Incentive Plan Compensation
($) Change in Pension Value & Non-Qualified Deferred Compensation Earnings
($)
($) Total
($) (a) (b) (c) (d)(5) (e) 2019 270,000 0 0 0 0 80,000 646,000 2018 257,942 0 0 0 0 0 80,000 337,942 (1) Effective upon the execution of the employment agreement dated April 1, 2018, Mr. Wayne Anderson served in the capacity as President, Treasurer, and Secretary. In consideration of Mr. Anderson’s execution and delivery of the agreement, the Company issued to Mr. Anderson a warrant granting the holder the right to purchase 100,000,000 shares of the Company’s common stock at a fixed strike price of $.0001. Pursuant to the agreement, Mr. Anderson receives annual compensation of $270,000 for each of the three years of the employment agreement. (2) On January 9, 2019, the Company transferred 4,000,000 shares of GCAN common stock (fair value of $840,000) to Wayne Anderson to satisfy liabilities of $544,000. (3) The values shown in this column represent the aggregate grant date fair value of equity-based awards granted during the fiscal year, in accordance with ASC 718, “Share Based-Payment”. The fair value of the stock options at the date of grant was estimated using the Black-Scholes option-pricing model, based on the assumptions described in the Notes to Financial Statements included in this Annual Report. (a) Accrued salary and salary paid. Please seeNOTE I - ACCRUED OFFICER AND DIRECTOR COMPENSATION for further information. (b) Accrued bonus to employee for execution of employment agreement. (c) Stock awards. (d) Options issued to employee for execution of employment agreement. More details on Options noted under Employment Agreements section below. (e) Equity compensation received as a Director of the Company. - 41 - Option Awards Name Exercisable Unexercisable ($) Date Wayne Anderson 25,000 (1) - - 0.80 04/01/2020 President, Secretary, Treasurer and Chairman 25,000 (2) - 0.40 04/01/2023 (1) These options vest immediately upon execution of employment agreement dated April 1, 2015. (2) These options vest immediately upon execution of employment agreement dated April 1, 2018. (3) The number of shares the warrants/options are exercisable into as well as the exercise price have been adjusted for the Company’s 1:4000 reverse stock split effective on December 28, 2018. 11,2, 2018, the Company executed a new Board of Directors Service Agreement with Wayne Anderson. Under the terms of the Agreement, commencing January 2, 2018 the Company is to pay Mr. Anderson $10,000 per quarter for which Mr. Anderson serves on the Board of Directors. In addition to cash compensation, the Company is to issue Mr. Anderson the equivalent of $10,000 of the Company’s common stock on the last calendar day of each quarter. The calculation for the number of shares to be issued to Mr. Anderson shall be as follows: $10,000/(Closing stock price on the last trading day of each quarter x .80).- 42 - Name Stock Awards ($) Option Awards ($) Non-Equity Incentive Plan Compensation ($) All Other Compensation ($) (b) (c) (d) (e) (f) (g) (h) Wayne Anderson (2019)(1) $ 40,000 $ 40,000 - - - - $ 80,000 Wayne Anderson (2018)(2) $ 40,000 $ 40,000 - - - - $ 80,000 (1) The Company’s sole director, Wayne Anderson, was not paid any stock compensation as per the terms of the Board of Directors Service Agreement dated January 5, 2011 for serving on the Board of Directors. As of December 31, 2017, Mr. Anderson was due $70,000 in stock for serving on the Board for the years 2011, 2012, 2013, 2014, 2015, 2016 and 2017. On December 31, 2018, Mr. Anderson was issued 2,176,617 shares of the Company’s common stock as part of his compensation for serving on the Board for the years ended 2011, 2012, 2013, 2014, 2015, 2016 and 2017. Please seeNOTE I - ACCRUED OFFICER AND DIRECTOR COMPENSATION for further information. (2) The Company’s sole director, Wayne Anderson, was not paid any cash compensation as per the terms of the Board of Directors Service Agreement dated January 3, 2018 for serving on the Board of Directors. At December 31, 2018, Mr. Anderson accrued $40,000 in cash compensation for the fiscal year 2018. On December 31, 2018, Mr. Anderson was issued 995,025 shares of the Company’s common stock as part of his compensation for serving on the Board for the year ended 2018. Please seeNOTE I - ACCRUED OFFICER AND DIRECTOR COMPENSATION for further information. B.T.U. Pipeline, Inc. ("BTU"),such rules) as a wholly owned subsidiarybenchmark for determining which, if any, of its directors are independent, solely in order to comply with applicable SEC disclosure rules. However, this is for disclosure purposes only. It should be understood that, as a corporation whose shares are not listed for trading on any securities exchange, our Company is not required to have any independent directors at all on its Board of Directors, or any independent directors serving on any particular committees of the Board of Directors.elected to dissolvedoes not have any independent directors within the corporation. BTU was organized undermeaning of the state of Tennessee and was acquired in the Wilon Resources, Inc. acquisition in 2010. BTU's sole purpose of existence wasNasdaq listing rule cited above.the bonding companyincentive for performance at this time.operatorBylaws of the Company's West Virginia natural gas wells. Any remaining assetscorporation, we may indemnify an officer or director who is made a party to any proceeding, including a law suit, because of BTU were assignedhis position, if he acted in good faith and in a manner he reasonably believed to US Natural Gas Corp WVbe in our best interest. We may advance expenses incurred in defending a proceeding. To the extent that the officer or director is successful on January 11, 2011the merits in a proceeding as to which he is to be indemnified, we must indemnify him against all expenses incurred, including attorney’s fees. With respect to a derivative action, indemnity may be made only for expenses actually and appropriate documentation filed withreasonably incurred in defending the County Clerkproceeding, and if the officer or director is judged liable, only by a court order. The indemnification is intended to be to the fullest extent permitted by the laws of Wayne County, West Virginia. The Articles of Dissolution and Articles of Termination were filed with the State of Tennessee DepartmentNevada.State on March 4, 2011 after1933, which may be permitted to directors or officers under Nevada law, we are informed that, in the Company's Certificateopinion of Tax Clearance was received from the Tennessee Department of Revenue. The corporation was effectively terminatedSecurities and dissolved on March 15, 2011Exchange Commission, indemnification is against policy, as expressed in the Act and is, therefore, unenforceable.- 43 - ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS. Tennessee Secretaryrules of State.● An indeterminate number of shares of common stock issuable upon conversion of the Company’s Series D Preferred Stock Common Stock Beneficially Percentage of Name of Beneficial Owner (1) Owned Common Stock (2) Jimmy Wayne Anderson (3)(4) 3,315,843 0.81 % Officers and Directors as a Group 3,315,843 0.81 % NOTE R – PRIOR PERIOD ADJUSTMENT(1) (2) (3) Included within Wayne Anderson’s beneficial ownership includes 2,379 shares of common stock issued to Mr. Anderson for past accrued wages, 25,000 shares issuable to Mr. Anderson under the option issued to Mr. Anderson under the terms of his 2018 Employment Agreement with the Company, 2,176,617 shares issued to Mr. Anderson for compensation due as a Board member for the years 2011-2017, 995,025 shares issued to Mr. Anderson for compensation due as a Board member for the year 2018, 116,822 shares issued to Mr. Anderson for director’s compensation for the first quarter of 2019. (4) The address for Mr. Anderson is 501 1st Ave N., Suite 9, St. Petersburg, FL 33701. Series A Preferred Stock Percentage of Beneficially Series A Name of Beneficial Owner Owned (1) Preferred Stock (2) SLMI Energy Holdings, LLC (3) 1,000,000 100.00 % Total 1,000,000 100.00 % (1) The holders of Series A Preferred Stock shall be entitled to vote on all matters submitted to a vote of the Shareholders of the Company and shall have such number of votes equal to the number of shares of Series A Preferred Stock held on a one per one share basis. Upon the availability of a sufficient number of authorized but unissued and unreserved shares of common stock, the holders of any Series A Preferred Stock shall be entitled to convert such shares in to fully paid and non-assessable shares of common stock at the rate of 7.8 shares of common stock for each share of Series A Preferred Stock only if the Company has failed to satisfy all financial obligations by the designated time inclusive of the cure period. (2) The number of Series A Preferred shares outstanding used in computing the percentage is 1,000,000. (3) The address for SLMI Energy Holdings, LLC is 1377 Old Riverside Rd, Roswell, GA 30076. Percentage of Beneficially Series D Name of Beneficial Owner Owned (1) Preferred Stock (2) Jimmy Wayne Anderson (3) 100 100.00 % Total 100 100.00 % (1) The holders of Series D Preferred Stock shall not be entitled to vote on any matters submitted to a vote of the Shareholders of the Company. If at least one share of Series D Preferred Stock is issued and outstanding, then the total aggregate issued shares of Series D Preferred Stock at any given time, regardless of their number, shall have voting rights equal to four times the sum of: i) the total number of shares of Common Stock which are issued and outstanding at the time of voting, plus ii) the total number of shares of Series A, plus Series B, plus Series C Preferred Stocks which are issued and outstanding at the time of voting. Each share of the Company’s Series D Preferred stock can be converted into shares of the Company’s Class A Common stock based on the following formula: $5,000 divided by .80 times the lowest closing price of the Company’s Common Stock for the immediate five-day period prior to the receipt of the Notice of Conversion. (2) The number of Series D Preferred shares outstanding used in computing the percentage is 100. (3) The address for Mr. Anderson is 501 1st Ave N., Suite 901, St. Petersburg, FL 33701. In September 2009,- 44 - ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE. 300,000its President a Secured Note in the amount of $75,000. The Note has a term of one year and bears interest at 3%. The Company’s first payment in the amount of $15,000 was due within 90 days of an effective reverse stock split. As of the date of issuance of these Financial statements, except for a $5,000 payment made by the Company to the Company’s president on November 12, 2018, the Company has not made any payment against the Note.B ConvertibleD Preferred Stock in exchange for a $300,000 note receivable due into its President. As of the date of this filing, all issued and outstanding shares of the Company’s Series D Preferred Stock are held by its President.2014, plus interest at three percent (3%) per annum. The note receivable has been included15, 2017, the Company issued an unsecured Promissory Note in the consolidated balance sheet at December 31, 2009 with an offsetting increaseamount $70,000 to additional paid in capital of $299,700. There was no affectAround the Clock Partners, LP for funds advanced to the consolidated statement of operations or cash flowsCompany. Around the Clock Partners, LP is an entity controlled by Wayne Anderson, the Company’s President.- 45 - ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES. yearyears ended December 31, 2009.F-26US NATURAL GAS CORP (A Development Stage Company)NOTES TO FINANCIAL STATEMENTS (continued)2019 $ 24,000 Michael T. Studer CPA, P.C. 2019 $ 25,000 Michael T. Studer CPA, P.C. 2019 $ 0 Michael T. Studer CPA, P.C. 2018 $ 0 Michael T. Studer CPA, P.C. 2019 $ 0 Michael T. Studer CPA, P.C. 2018 $ 0 Michael T. Studer CPA, P.C. 2019 $ 0 Michael T. Studer CPA, P.C. 2018 $ 0 Michael T. Studer CPA, P.C. 2010NOTE S – RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (continued)The effect2019 and as of the restatement adjustmentsdate of this report, the Company does not maintain an audit committee and therefore does not have an audit committee pre-approval policy in place.- 46 - ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES. - 47 - - 48 - - 49 - - 50 - SYLIOS CORP (the “Registrant”) BY: /s/ Jimmy Wayne Anderson President, Chief Executive Officer and Director (Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer) balance sheet at December 31, 2008 follows:dates indicated.Name Position Date /s/ Jimmy Wayne Anderson President, Chief Executive Officer and Director (Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer) March 17, 2021 - 51 - As Restated The effect of the restatement adjustments on the statement of operations for the period March 28, 2008 (inception) to December 31, 2008 follows: As Restated F-27