UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

For the Fiscal Year Ended December 31, 20182019

OR

Commission File No. 0-30746

FRONTIER OILFIELD SERVICES INC.

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including Area Code: (972) 243-2610(702) 330-2430

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock (Title of Each Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☐

Indicate by check mark whether the registrant (1) has filed all reports to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒  Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of 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, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 31(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act): ☐ Yes ☒  No

On December 31, 2018,2019, the aggregate market value of voting and non-voting common equity held by non-affiliates of the registrant was approximately $3,911,511.$1,071,042. The amount was calculated by subtracting the total number of common shares held by officers, directors, and stockholders owning in excess of 5% of the registrant’s common stock from the total number of shares and multiplying the remainder by the average of the bid and asked price for the registrant’s common stock on December 31, 20182019 as reported on the Over-The-Counter Pink SheetThe Venture Market. As of MarchMay 29, 2019,2020, the Company had 14,760,178100,000,000 issued and outstanding shares of common stock.

Documents Incorporated by Reference: None

TABLE OF CONTENTS

FRONTIER OILFIELD SERVICES, INC.

INDEX

PART I

Forward Looking Statements

This annual report on Form 10-K includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which can be identified by the use of forward-looking terminology such as “may,” “can,” “believe,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “estimate,” “will,” or “continue” or the negative thereof or other variations thereon or comparable terminology. All statements other than statements of historical fact included in this annual report on Form 10-K, including without limitation, the statements under “Item 1. Business” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and located elsewhere herein regarding the financial position and liquidity of the Company (defined below) are forward-looking statements. Although the Company believes the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Important factors with respect to any such forward-looking statements, including certain risks and uncertainties that could cause actual results to differ materially from the Company’s expectations (“Cautionary Statements”), are disclosed in this annual report on Form 10-K, including, without limitation, in conjunction with the forward-looking statements and under the caption “Risk Factors.” In addition, important factors that could cause actual results to differ materially from those in the forward-looking statements included herein include, but are not limited to, limited working capital, limited access to capital, changes from anticipated levels of sales, future national or regional economic and competitive conditions, changes in relationships with customers, difficulties in developing and marketing new products, marketing existing products, customer acceptance of existing and new products, , technological change, dependence on key personnel, availability of key component parts, vendors, contractors, product liability, casualty to or other disruption of the production facilities, delays and disruptions in the shipment of the Company’s products, and the ability of the Company to meet its stated business goals. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the Cautionary Statements. We do not undertake to update any forward-looking statements.

We do not have an operative web site upon which our periodic reports, proxy statements and Reports on Form 8-K appear. Our reports are available on the SEC’s EDGAR system and may be viewed athttp://www.sec.gov.

As used herein, references to the “Company” are to Frontier Oilfield Services, Inc. a Texas corporation and its subsidiaries (“Frontier”).

Our Business

TRICCAR, Inc. formerly known as Frontier Oilfield Services, Inc. a TexasNevada corporation (and collectively with its subsidiaries, “we”, “our”, “TRICCAR”, “Frontier”, “FOSI”, or the “Company”), was organized on March 24, 1995. The accompanying consolidated financial statements include the accounts of the Company as well as:

Frontier operates in the oilfield service industry and is currentlywas involved in the disposal of saltwater and other oilfield fluids in Texas. Frontier ownsowned eight disposal wells in Texas. Six of these disposal wells are located in the Barnett Shale region in north central Texas and two of these wells are located in east Texas near the Louisiana border. All wells have either been repossessed by the lessor or were transferred.

The Barnett Shale region is a productive shale formation with a concentration of successful oil and gas wells. These wells have been completed using hydraulic fracturing and directional drilling techniques. In east Texas, the producing oil and gas wells have typically been in place for many decades. Production stimulation techniques such as salt-water flood projects are used whereby salt water is injected into a producing formation to accelerate the migration of hydrocarbons to the well bore. The oil and gas wells in the Barnett Shale and in east Texas produce commercially viable volumes of hydrocarbons in the form of crude oil and natural gas. In addition, these wells produce significant volumes of salt water and other fluids as a by-product of the production of hydrocarbons. The salt water and fluids must be routinely removed from the well site on a daily, semiweekly or weekly basis depending on the flow rate of the wells.

The significant quantity of wells in the Barnett Shale and east Texas regions combined with the presence of salt water and other fluids in the production process creates demand for disposal services such as those services provided by Frontier.

We had one customerthree customers that represented approximately 32%95% and 81% of our revenue for each of the years ended December 31, 2019 and 2018, and 2017.respectively.

Recent Developments

None.On December 12, 2019, Frontier Oilfield Services, Inc. entered into a Reorganization and Stock Purchase Agreement (the “Agreement”) to change its corporate domicile from Texas to Nevada, assume the name TRICCAR, Inc. (“TRICCAR”), and to acquire 100% of the issued and outstanding equity of TRICCAR Holdings, Inc., a Nevada Corporation (“TRICCAR Holdings”).

Pursuant to the Agreement, effective on February 28, 2020, the parties closed the Agreement.

TRICCAR acquired 100% of the issued and outstanding equity of TRICCAR Holdings TRICCAR issued 80,000,000 shares of stock to acquire all the issued and outstanding equity stock of TRICCAR Holdings while TRICCAR shareholders retained 20,000,000 shares of stock.

TRICCAR’s management team and Board of Directors resigned and were replaced by TRICCAR Holdings management team and a new five member Board of Directors. At that time, Frontier Oilfield Services ceased operations in the oilfield services industry.

The Company is engaged in the development of bioceutical and pharmaceutical products designed to support those with common illnesses and diseases. Bioceuticals developed and tested to date include formulae designed to support human and animal health through antivirals, calcium deficiency and bone mass density loss; obesity and weight loss; diabetic nerve pain; blood performance; hypothyroidism; pain management; ADHD; mental acuity; endocannabinoid support; trigeminal neuralgia; menopause relief; endocannabinoid support for seizures; cellular hydration; persistent headache; cough; liver and kidney health; vision; and sleep. Pharmaceutical formulae include solutions that, pending FDA approval, may be brought to market to treat or cure amyotrophic lateral sclerosis; diabetic nerve pain; appetite stimulation for chemotherapy patients; and congenital toxoplasmosis.

As product development led to above average success rates in creating formulae to support those with illnesses and diseases, the investors behind the Company decided to bring these advancements to the public. On August 22, 2017, TRICCAR Holdings, Inc. was incorporated in the State of Nevada.

The Company is addressing human health care market and animal science market with a current pipeline of products. Five of the Company’s human-use products also have applications in animal science, primarily in the areas of performance, muscular recovery, joint care, and endocannabinoid support and will be sold through an as yet-to-be formed animal science subsidiary.

Development and Operating Activities

Economic conditions in the oil and gas industry are subject to volatility. The uncertain nature of these economic conditions combined with federal and state regulatory uncertainty in the energy industry requires operators to be flexible and adept at adjusting operations and strategy to achieve profitability. We intend to evaluate all conditions and risks affecting our operating activities and to respond to those conditions by employing resources in areas we believe to have the most potential for success. Over the past year, significant declines in the price of crude oil and natural gas have put economic pressure on oil producers, requiring them to seek expense reductions to offset the decline in their revenues. The oil field service industry has been and will continue to be affected by the volatility in oil and natural gas prices and may experience lower revenues as oil producers’ pressure oil field service providers for lower cost service.

The Company’s business requires capital to fund operations and growth. Management intends to conduct operations to generate sufficient capital for use in reduction of the Company’s outstanding debt. In order to adequately fund operating activities, reduce current liabilities, and pay interest and principal on the debt, we may need to secure additional capital from third parties or other debt or equity financing sources. There can be no assurance that we will be able to enter into additional financing arrangements on terms that are acceptable. There are also no assurances that we will be able to achieve profitability from our operations in the current market environment.

General Regulations

Both state and federal authorities regulate the transportation and disposal of salt water, produced fluids and drilling fluids. The executive and legislative branches of government at both the state and federal levels have periodically proposed the establishment of controls on salt water disposal, environmental protection, as well as various other related programs affecting the salt water disposal business. If any further legislation is promulgated related to the disposal of salt water, produced fluids or drilling fluids, such legislation could have a material effect on our operations.

Federal Regulatory Actions

Federal legislation has also been introduced which may have an effect on the use of hydraulic fracturing to increase oil and gas production, primarily in shale formations, due to concerns related to potential contamination of drinking water supplies.

The U.S. Environmental Protection Agency (“EPA”) has asserted federal regulatory authority pursuant to the federal Safe Drinking Water Act (“SDWA”) over certain hydraulic fracturing activities involving the use of diesel. In addition, Congress has considered legislation to provide for federal regulation generally of hydraulic fracturing in the United States under the SDWA and to require disclosure of the chemicals used in the hydraulic fracturing process.

The Company’s operations are located in areas where hydraulic fracturing is used as the primary method of establishing and developing oil and gas producing wells. These areas are also where the majority of the Company’s revenues are generated as these producing wells also generate salt water and other fluids as by-products of the oil and gas producing process. Any regulation inhibiting or prohibiting the use of hydraulic fracturing may have a material adverse effect on our operations.

State Regulatory Controls

The State of Texas (where we operate) regulates the operation and permitting associated with the transport and disposal of salt water and other produced fluids. Because we are primarily engaged in salt water, produced fluids and drilling fluid disposal activities, our operations are subject to inspection and permitting by authorities of the State of Texas. There have been recent regulatory and legislative proposals related to concerns with potential water supply contamination potentially be caused by hydraulic fracturing operations.

Environmental Regulations

Our salt water and other fluids disposal operations are subject to environmental protection regulations established by federal, state, and local agencies. We believe we are in compliance with the applicable environmental regulations established by these agencies with jurisdiction over our operations. Certain environmental regulations currently in effect could have a material adverse effect on our earnings or prospects for profitability if we received a determination from one of these agencies that our operations are not in compliance. The Texas Legislature has mandated a regulatory program for the management of hazardous wastes generated during crude oil and natural gas exploration and production, gas processing, oil and gas waste reclamation, salt water disposal and transportation operations. The disposal of these wastes, as governed by the Railroad Commission of Texas, is subject to the supervision of state of Texas authorities. Our disposal operations are also subject to inspection and regulation by state and federal environmental authorities.

Employees

Currently, we have nine full-time employees, with two full-time employees at our corporate office and seven full-time employees in operations.

Business Risks

Our business volume has declined, and our operations have lost a significant amount of money during the last two fiscal years.

Due to reductions in the volume of business and the decision to no longer provide transportation services to our customers combined with significant debt, the Company’s operations have not been profitable. We have made substantial changes in our operations including significant reductions in operating expenses and employees, the closing of our salt water disposal operations in east Texas, and sales of transportation assets to raise cash to reduce debt. There can be no assurance we will be successful in returning to profitability. If we are unable to return to profitability, we may be required to seek the protection of the United States Bankruptcy Court and liquidate or reorganize.

Our independent auditors have issued a report which raises the question about our ability to continue as a going concern. This report may impair our ability to raise additional financing and adversely affect the price of our common stock.

The report of our independent auditors contained in our financial statements for the year ended December 31, 20182019 includes a paragraph that explains that we have been experiencing financial and liquidity concerns. Per the report, these conditions raise substantial doubt about our ability to continue as a going concern. Reports of independent auditors questioning a company’s ability to continue as a going concern are generally viewed unfavorably by analysts and investors. This report, along with our recent financial results, may make it difficult for us to raise additional debt or equity financing necessary to conduct our operations.

We have a significant amount of debt and our operational losses may prevent the payment of our debt when due.

We currently have a significant amount of debt outstanding which requires us to meet certain operating and financial covenants and on which we are required to pay interest and repay principal. We have failed to meet the operational or financial covenants and have failed to pay interest and principal on our debt in a timely matter and are therefore in breach of certain of our loan agreements. Our secured creditors could foreclose on their collateral, which constitutes all of our assets. Due to our reduced business volume and operating losses, we have been dependent upon two of our significant shareholders who have purchased our equity and provided funds to make our debt payments. If we are unable to increase business volumes or otherwise return to profitability and we are unable to raise additional debt or equity capital, we may default on our debt and our creditors could foreclose on our assets. We would then cease operating as a going concern and you could potentially lose all of your investment in the Company.

Unanticipated obstacles to execution of business plan.

Our future success dependsproposed plan of operation and prospects will depend largely upon our ability to adaptsuccessfully establish Company’s and products’ presence in a timely fashion, retain and continue to changes in the oil services industry and successfully implement our business strategy.

Due to lower market prices for crude oilhire skilled management, technical, marketing and other changes occurring in the oil industry, many of our customers are seeking to reducing their costspersonnel; and to reduce their operations. We have begun implementing aattract and retain quality business plan with an emphasis on increasing the volumes of salt water, produced fluidspartners, medical clients, and drilling fluids we dispose of. The planned increase in business volume may require that we reduce prices for the services we perform for our customers due to the current economic environment in the oil and gas industry. We currently have limited financial resources and there can be no assurance we will be successful in gaining additional salt water disposal business from new and existing customers at prices and terms that would allow us to make a profit.

Federal legislation and state legislative and regulatory initiatives relating to hydraulic fracturing could result in increased costs and additional operating restrictions or delays as well as adversely affect our services.

Hydraulic fracturing is an important and commonly used process for the completion of oil and natural gas wells in formations with low permeability, such as shale formations. Hydraulic fracturing involves the pressurized injection of water, sand and chemicals into rock formations to stimulate production. Due to concerns surrounding the potential impacts of hydraulic fracturing activities on groundwater quality, certain legislative and regulatory proposals have been initiated in the United States to make permitting, public disclosure and construction and operational compliance requirements more stringent for hydraulic fracturing. While hydraulic fracturing typically is regulated in the United States by state oil and natural gas commissions, there have been developments indicating that more federal regulatory involvement may occur.

The EPA has asserted federal regulatory authority pursuant to the federal Safe Drinking Water Act, or SDWA, over certain hydraulic fracturing activities involving the use of diesel. In addition, the United States Congress has considered legislation to provide for federal regulation of hydraulic fracturing under the SDWA and to require disclosure of the chemicals used in the hydraulic fracturing process. At the state level, several states have adopted or are considering adopting legal requirements that could impose more stringent requirements on hydraulic fracturing activities. In the event new or more stringent federal or state legal restrictions relating to use of the hydraulic fracturing process in the United States are adopted in areas where our oil and natural gas exploration and production customers operate, those customers could incur potentially significant added costs to comply with requirements relating to permitting, construction, financial assurance, monitoring, recordkeeping, and/or plugging and abandonment, as well as could experience delays or curtailment in the pursuit of production or development activities, which could reduce demand for our water disposal services.

Other governmental agencies, including the U.S. Department of Energy and the U.S. Department of the Interior, are evaluating various other aspects of hydraulic fracturing. These ongoing or proposed studies, depending on their degree of pursuit and any meaningful results obtained, could spur initiatives to further regulate hydraulic fracturing under the SDWA or other regulatory mechanisms, which events could delay or curtail production of oil and natural gas by exploration and production operations, some of which are our customers, and thus reduce or eliminate demand for our services.

We are subject to extensive and costly environmental laws and regulations that may require actions that could adversely affect our results of operations.

Our operations are affected by stringent and complex federal, state and local laws and regulations governing the discharge of substances into the environment or otherwise relating to environmental protection. We could be exposed to liability for cleanup costs, natural resource damages and other damages because of our operating activities that were lawful at the time it occurred or the conduct of, or conditions caused by, prior operators or other third parties.

Environmental laws and regulations are subject to change in the future, possibly resulting in requirements that are more stringent. If existing regulatory requirements or enforcement policies change or are more stringently enforced, we may be required to make significant unanticipated capital and operating expenditures. Any failure to comply with applicable environmental laws and regulations may result in governmental authorities taking actions that could adversely affect our operations and financial condition, including the:

There are risks inherent in reworking, completing and operating disposal wells.

Reworking and completing saltwater disposal wells involves a degree of risk, and sometimes results in unsuccessful efforts, for a variety of reasons. We cannot control the outcome of operations entirely, and there can be no assurance that any operation will be successful. Even though a disposal well is permitted to accept a certain amount of water, there is no assurance that the disposal well or any specific zone in the well will be capable in fact of absorbing any specific amount of water. Disposal wells may also be ruined or rendered unusable during operations due to technical or mechanical difficulties. Should a well be successfully completed or perforated, there is still no assurance that the zone in which the well is completed or perforated will be able to absorb saltwater at a rate that will support profitable operations. Disposal wells can encounter problems that render the well unusable, even after a period of successful operation.consumer clients. There can be no assurance we will be able to successfully rework, complete or operate any specific well, or will be able to operate sufficient wells to achieve a consistent positive cash flow or to achieve profitability.

Our success will likely depend on the continuing availability of certain disposal wells.

We believe there will be available a number of existing disposal wells and sources of locations for the drilling of new wells necessary to provide us with sufficient disposal capacity at a reasonable cost. However, there can be no assurance that disposal wells or disposal well locations will always be available or available at a reasonable cost. There can be no assurance we will have the resources to drill and/or complete additional wells. If we are not able to obtain disposal wells or disposal well drilling locations or the wells or locations are available, but their cost is no longer reasonable, our finances would be directly impacted and we might not have the ability to continue as a going concern.

We may not be sufficiently insured or insured against all potential liabilities.

We could incur substantial liabilities in connection with reworking or operating disposal wells. We may not be able to insure against all such liabilities, may carry insurance in amounts not sufficient to cover all such liabilities or may elect to self-insure against such liabilities due to the premium costs involved or due to lack of available insurance coverage. Other parties with whom we contract for operations may carry liability insurance, but there is no assurance that the insured risks or the level of insurance coverage obtained by such parties will be sufficient to cover all potential liability we or such parties incur. Further, there may be occurrences resulting in expenses or liabilities to third parties that are of a nature that cannot now or may not in the future be insured. Uninsured liabilities to third parties could reduce the funds available to us, could exceed the value of our assets, and could result in the complete loss of property we own.

We may not be able obtain the necessary permits.

We are required to obtain certain permits, approvals or licenses in connection with our disposal well operations. We may not be able to obtain new or transferred permits, approvals or licenses on a timely basis or at all, which would result in material adverse consequences to our business and financial condition.

Our salt water disposal operations may be subject to liability or claims of environmental damages.

We operate existing salt water disposal wells and locations, which have received the necessary governmental permits for drilling a disposal well. Although the disposal wells have received certain governmental regulatory licenses, permits or approvals this does not shield us from potential claims from third parties claiming contamination of their water supply or other environmental damages. Remediation of environmental contamination or damages can be extremely costly and such costs, if we are found liable, could be of such a magnitude as to cause us to cease operating as a going concern.

Our business may fail.

There is limited operating history upon which to base an assumption that we will be able to achieve our revised business plans. Our salt water disposal operations are subject to all of the risks inherent in the establishment of a new business enterprise, including the lack of significant operating history and potential undercapitalization. There can be no assurance that future operations will be profitable. Revenues and profits, if any, will depend upon various factors, including our ability to acquire suitable assets and to maintain our existing customer base and attract new customers. There can be no assurance we will achieve our projected goals or accomplish our business plans; and such failure could have a material adverse effect on our operations and our stockholders. If we are not able to achieve and maintain operating revenues, we could fail and you could lose your entire investment.

We will require additional funding to implement our business plan.

Our estimates of the amounts required to fund our future operations are based upon assumptions that may not prove accurate. If we do not have adequate funds to cover operating expenses and working capital requirements, we will require debt and/or equity financing sources for additional working capital. We may further leverage our assets and may use the assets as collateral to secure financing. There is no assurance that we will be able to obtain additional debtsuccessfully implement our business plan or equity funding if necessary.develop or maintain future business relationships, or that unanticipated expenses, problems or technical difficulties which would result in material delays in implementation will not occur. 

Our business depends on domestic spending byThe COVID-19 pandemic.

In December 2019, when the oilfirst indications of SARS-CoV-2 were being reported from Wuhan, China, Management began implementing plans to incorporate work-from-home initiatives, acquiring face masks and gas industry.

Industry conditions are influenced by numerous factors over which we have no control,gloves for employees, and accumulating disinfectants such as alcohol and bleach. On January 27, 2020 the supply ofCompany formally put in place work-from-home efforts. On March 12, 2020, Nevada Governor Steve Sisolak implemented state-at-home orders for businesses and demand for oil and gas, domestic and worldwide economic conditions, political instabilityemployees which are still in oil and gas producing countries and merger and divestiture activity among oil and gas producers. The volatilityeffect. While our early identification of the oilrisks of SARS-CoV-2 have protected our employees with zero cases of COVID-19 infection to date, the global pandemic has delayed the Company’s plans to bring 11 of our products to market due to supplier and gas industry andtransportation limitations. Given the consequent impact on exploration and production activity could adversely affectcontinued challenges of the level of drilling and workover activity. This reduction may causepandemic, Management is unable to provide a declinedefinitive date when our first bioceutical products will be made available for public purchase. The pandemic has resulted in record unemployment in the demand for our services or adversely affect the price of our services. In addition, reduced discovery rates of new oilUnited States which impacts consumers’ financial ability to purchase bioceuticals and gas reservesthis retraction in our market areas alsoemployment and consumer confidence may have a negative long-termshort-term impact on our business, even in an environment of stronger oil and gas prices, to the extent existing production is not replaced and the number of producing wells for us to service declines.Company.

Competition may adversely affect us.

The salt water and production fluids disposal services industrymarket is highly competitivecompetitive. There are high barriers to entry, yet we expect that competition will intensify in the future. We believe that numerous factors, including price, client base, brand name, and fragmented and includes numerous small companies capable of competing effectively ingeneral economic trends (particularly unfavorable economic conditions adversely affecting consumer investment), will affect our markets on a local basis, as well as severalability to compete successfully. Our competitors include many large companies that possesshave substantially greater market presence and financial, technical, marketing and other resources than we do. Our larger competitors’ greaterThere can be no assurance that we will have the financial resources, could allow those competitorstechnical expertise or marketing and support capabilities to compete more effectively than we can.

Our operations are subject to inherent risks, some of which are beyond our control.

Our operations are subject to hazards inherent in the oil and gas industry, including, but not limited to, accidents, blowouts, explosions, craterings, fires and oil spills. These conditions can cause:

The occurrence of a significant event or adverse claim in excess of any insurance coverage that we maintain or that is not covered by insurance could have a material adverse effect on our financial condition and results of operations. Litigation arising from a catastrophic occurrence at a location where our equipment or services are being used may result in our being named as a defendant in lawsuits asserting substantial claims.

We may be exposed to certain regulatory and financial risks related to climate change.

Climate change is receiving increasing attention from scientists and legislators alike. The debate is ongoing as to the extent to which our climate is changing, the potential causes of this change and its potential impacts. Some attribute global warming to increased levels of greenhouse gases, including carbon dioxide, which has led to significant legislative and regulatory efforts to limit greenhouse gas emissions. A significant focus is being made on companies that are active producers of depleting natural resources.

There are a number of legislative and regulatory proposals to address greenhouse gas emissions, which are in various phases of discussion or implementation. The outcome of foreign, U.S. federal, regional, provincial and state actions to address global climate changesuccessfully. Increased competition could result in a variety of regulatory programs including potential new regulations, additional charges to fund energy efficiency activities, or other regulatory actions. These actions could:

Any adoption of these or similar proposals by foreign, U.S. federal, regional or state governments mandating a substantial reduction in greenhouse gas emissions and implementation of the Kyoto Protocol (the Copenhagen Accord,) or other foreign, U.S. federal, regional or state requirements or other efforts to regulate greenhouse gas emissions, could have far-reaching and significant impacts on the energy industry. Although it is not possible at this time to predict how legislation or new regulations that may be adopted to address greenhouse gas emissions would impact our business, any such future laws and regulationsturn could result in increased compliance costslower revenues, which could materially adversely affect our potential profitability.

Overreliance on management.

We depend on our senior management to work effectively as a team, to execute our business strategy and business plan, and to manage employees and consultants. Our success will be dependent on the personal efforts of key personnel. Any of our officers or additional operating restrictionsemployees can terminate his or her employment relationship at any time, and the loss of the services of such individuals could have a material adverse effect on our business or demandand prospects. The entire senior management team has worked together for our services.only a very short period of time, and may not work well together as a management team.

Currently proposed legislative changes, including changes

We will incur losses and there is no guarantee that we will ever become profitable.

We are a relatively newly formed company. There is no guarantee that we will ever become profitable. The costs for research, product development, machinery adaptation to tax lawscreate our product candidates and regulations,cannabis products and/or technologies, along with marketing and selling expenses, and the general and administrative expenses, will be principal causes of our costs and/or potential losses. We may never become profitable and if we do not become profitable your investment could materially,be harmed or lost completely.

We may need additional capital in the future in order to continue our operations.

We are undertaking a $15,000,000 PIPE financing, which we will use for operations and growth. However, if in the future we do not turn profitable or generate cash from operations and additional capital is needed to support operations, economic and market conditions may make it difficult or impossible to raise additional funds through debt or equity financings. If funds are not sufficient to support operations, we may need to pursue a financing or reduce expenditures to meet our cash requirements. If we do obtain such financing, we cannot assure that the amount or the terms of such financing will be as attractive as we may desire, and your equity interest in the company may be diluted considerably. If we are unable to obtain such financing when needed, or if the amount of such financing is not sufficient, it may be necessary for us to take significant cost saving measures or generate funding in ways that may negatively affect our business in the future. To reduce expenses, we may be forced to make personnel reductions or curtail or discontinue development programs. To generate funds, it may be necessary to monetize future royalty streams, sell intellectual property, divest of technology platforms or liquidate assets. However, there is no assurance that, if required, we will be able to generate sufficient funds or reduce spending to provide the required liquidity. Long term capital requirements will depend on numerous factors, including, but not limited to, the status of collaborative arrangements, the progress of research and development programs and the receipt of revenues from sales of products. Our ability to achieve and/or sustain profitable operations and financial results, increase the costsdepends on a number of doing business and decrease the demand for our products.

The current U.S. administration and Congress have proposed several new articles of legislation or legislative and administration changes, including changes to tax laws and regulations, which could have a material negative effect on our operations and financial results. Some of the proposed changes that could negatively affect us are:

We are subject to litigation risks that may not be covered by insurance.

In the ordinary course of business, we become the subject of various claims, lawsuits and administrative proceedings seeking damages or other remedies concerning our commercial operations, employees and other matters, including potential claims from individuals due to accidents or other mishaps involving our operations. We maintain insurance to coverfactors, many of our potential losses, and we are subject to various self-retentions and deductibles under our insurance policies. It is possible, however, that a judgment could be rendered against us in cases in which we could be uninsured and beyond the amounts that we currently have reserved or anticipate incurring for such matters.

Our concentration of customers in a single industry may affect our overall exposure to credit risk.

All of our customers operate in the energy industry. This concentration of operations and customers in a single industry may affect our overall exposure to credit risk, either positively or negatively, in that customers may be similarly affected by changes in economic and industry conditions.

Oil and natural gas prices are volatile. A substantial decrease in oil prices could adversely affect our financial results.

Our future financial condition may be impacted by the level of oil and natural gas market prices. Oil and natural gas prices historically have been volatile and likely will continue to be volatile in the future, especially given world geopolitical conditions. In addition, our cash flow from operations is somewhat dependent on the prices that we receive for oil sold from our disposal operations. The price volatility in the oil and natural gas market also affects the cash flow and operations of our customers and their ability to purchase our services. The prices for oil and natural gas are subject to a variety of additional factors that are beyond our control. These factors include:

control, including:

These factors and the volatility of the energy markets generally make it extremely difficultWe intend to predict future oil and natural gas price movements with any certainty. Declineslaunch our first products in oil and natural gas prices would reduce revenuelate 2020 and as a company, we have limited sales experience.

We intend to begin marketing our products in late Fall 2020, and although we have highly qualified personnel with specialized expertise, as a company, we have limited experience commercializing products. In order to commercialize the products business, we have to build our sales, marketing, distribution, managerial and other nontechnical capabilities and make arrangements with third parties to perform these services when needed. We have to hire sales representatives to fill and manage sales territories. To the extent we are relying on third parties to commercialize our business, we may receive less revenues or incur more expenses than if we had commercialized the products ourselves. In addition, we may have limited control over the sales efforts of any third parties involved in our commercialization efforts. If we are unable to successfully implement our commercial plans and drive adoption by patients and physicians of our products through our sales, marketing and commercialization efforts, or if our partners fail to successfully commercialize our products, then we may not be able to generate sustainable revenues from product sales which will have a material adverse effect on our business and future product opportunities. Similarly, we may not be successful in establishing the necessary commercial infrastructure, including sales representatives, wholesale distributors, legal and regulatory affairs teams. The establishment and development of commercialization capabilities to market our products has been and will continue to be expensive and time consuming.

As we continue to develop these capabilities, we will have to compete with other companies to recruit, hire, train and retain sales and marketing personnel. If we have underestimated the necessary sales and marketing capabilities or have not established the necessary infrastructure to support successful commercialization, or if our efforts to do so take more time and expense than anticipated, our ability to market and sell our products may be adversely affected.

United States Government regulation and enforcement may adversely affect the implementation of products that contain extracts of cannabis and/or cannabis adult use laws and regulations may negatively impact our revenues and profits.

Although legislation in the United States continues to evolve, there are currently 44 states in the United States, plus the District of Columbia that have laws and/or regulations that recognize in one form or another legitimate medical uses for cannabis and consumer use of cannabis in connection with medical treatment. Eleven states have laws and/or regulations that allow cannabis use by adults for nonmedical purposes, often referred to as “recreational use”. More states are considering permitting cannabis use. Around the world there are countries that are enacting medical and/or adult use cannabis regulations almost weekly.

Conversely, under the Controlled Substance Act (the “CSA”), the policy and regulations of the federal government and its agencies is that cannabis containing THC (“CCTHC”) has no medical benefit and a range of activities including cultivation and use of CCTHC for personal use is prohibited. Until Congress amends the CSA with respect to CCTHC or there is an outcome of the current lawsuit against the unconstitutional application of CCTHC in the CSA, there is a risk that federal authorities may enforce current federal law, and we may be deemed to be facilitating the selling or distribution of drug paraphernalia in violation of federal law. Active enforcement of the current federal regulatory position on cannabis may thus indirectly and adversely affect revenues and profits of the Company. The risk of strict enforcement of the CSA in light of congressional activity, judicial holdings and stated federal policy remains uncertain. The DOJ (Department of Justice) has not historically devoted resources to prosecuting individuals whose conduct is limited to possession of small amounts of marijuana for use on private property but relied on state and local law enforcement to address marijuana activity. In the event the DOJ reverses stated policy and begins strict enforcement of the CSA in states that have laws legalizing medical marijuana and recreational marijuana in small amounts, there may be a direct and adverse impact to our revenue and profits.

TRICCAR operates under the assumption that the strain of cannabis commonly referred to as marijuana is and will remain a federally illegal drug for the foreseeable future. Our efforts to secure licenses from the Drug Enforcement Administration, which would allow the Company to conduct marijuana research, may not be awarded, thus preventing us from pursing commercialization of eleven of our formulae. We assume the current status of marijuana as an illegal substance at the federal level will not change in the foreseeable future and these eleven formulae, which require FDA approval, may not receive such approval.

Federal regulation and enforcement may adversely affect the implementation of adult use/medical cannabis laws and regulations may negatively impact our revenues and profits. Even in states where marijuana use is state sanctioned, state laws are in conflict with the federal Controlled Substances Act, which makes marijuana use and possession illegal on a national level. Both the Obama and Trump administrations have effectively stated that it is not an efficient use of resources to direct law federal law enforcement agencies to prosecute those lawfully abiding by state designated laws allowing the use and distribution of medical cannabis. In May 2017, Congress unveiled their new budget bill and as such, lawmakers included a provision, known as the Rohrabacher Farr amendment, which allows states to carry on with crafting their own medical marijuana policies without fear of federal intervention. This bill was passed and as a result, no federal monies have been approved or appropriated to be used to enforce federal law in these cannabis program participating states. Investors should understand that there is no guarantee that the Trump administration will not attempt to change this again in the future. Additionally, any new administration that follows could change this policy and decide to enforce the federal laws strongly. Any such change in the federal government’s enforcement of current federal laws could cause significant financial damage to the Company and its shareholders. Though we anticipate 20% of our product sales revenue may be related to extracts of industrial hemp and/or marijuana, we may be irreparably harmed by a change in enforcement by the federal or state governments.

In the United States, variations in state and local regulation and enforcement in states that have legalized medical/adult use cannabis that may restrict cannabis-related activities, including activities related to adult use/medical cannabis may negatively impact our revenues and profits.

Although we intend to operate within the letter of the law and work with the Drug Enforcement Administration and Food & Drug Administration where required, certain of our products, such as products containing cannabidiol and intended for use in certain geographic areas, may not be deemed legal for consumption in the United States. Individual state laws do not always conform to the federal standard or to other states laws and courts have historically ruled that federal law trumps state law in regard to cannabis regulation. Prospective customers may be deterred from doing business with a company with significant nationwide online presence because of fears of federal or state enforcement of laws prohibiting possession and sale of medical or adult use cannabis.

Commercialization of our products will require significant resources, and if we do not achieve the sales expected, we may lose the substantial investment made in our products.

We have made and are continuing to make substantial expenditures commercializing our products. We are devoting substantial resources to building our manufacturing and extraction equipment for cannabis and other products as well as continued investment in commercial supply inventories to support commercialization, including our inclusion of sale, operational and scientific managers. We have and expect to continue to devote substantial resources to establish and maintain a marketing capability for our products. If we are unsuccessful in our commercialization efforts and do not achieve the sales levels of our products that we expect, we may be unable to recover the large investment we have made in research, development, manufacturing, inventory and marketing efforts, and our business and financial condition could be materially adversely affected.

We will rely on third parties to perform many necessary services for our products, including services related to the distribution, invoicing, storage and transportation of our products, broadband, customer support, and cloud-based and site-based computer servers and services.

We intend to retain and partner with third-party service providers to perform a variety of functions related to the sale and distribution of our products, key aspects of which are out of our direct control. If these third-party service providers fail to comply with applicable laws and regulations, fail to meet expected deadlines, or otherwise do not carry out their contractual duties to us, or encounter physical damage or natural disaster at their facilities, our ability to deliver product to meet commercial demand would be significantly impaired. In addition, we may utilize third parties to perform various other services for us relating to sample accountability and regulatory monitoring, including adverse event reporting, safety database management and other product maintenance services. If the quality or accuracy of the data maintained by these service providers is insufficient, our ability to continue to market our products could be jeopardized or we could be subject to regulatory sanctions. We do not currently have the internal capacity to perform these important commercial functions, and we may not be able to maintain commercial arrangements for these services on reasonable terms.

The failure of any of our third-party distributors and/or retailers to market, distribute and sell our products as planned may result in us not meeting revenue and profit targets.

If one or more of these distributors and/or retailers fail to pursue the development or marketing of the products as planned, our revenues and profits may not reach expectations or may decline. The success of the marketing organizations of our partners, as well as the level of priority assigned to the marketing of the products by these entities, which may differ from our priorities, may determine the success of the product sales. Competition in this market could also force us to reduce the prices of our products below currently planned levels, which could adversely affect our revenues and future profitability.

We will depend on a large number of customers for the majority of our revenue, and the loss of these customers could substantially reduce our revenue and impact our liquidity.

The loss of any customers or reduction in our business activities, whether due to recalls, changes in consumer tastes, economic changes, or natural disasters such as floods, earthquakes or pandemics such as COVID-19 could cause our revenues to decrease significantly and increase our continuing losses from operations. If our products are not successful and we cannot broaden our customer base, we may face financial challenges. Additionally, if we are unable to negotiate favorable business terms with these customers in the future, our revenues and gross profits may be insufficient to allow us to achieve and/or sustain profitability or continue operations.

If we cannot develop and market our products as rapidly or cost effectively as competitors, we may never be able to achieve profitable operations.

Our success depends, in part, upon maintaining a competitive position in the development of products.

If we cannot maintain competitive products and technologies, our current and potential distribution partners may choose to adopt the products of our competitors. We face competition with respect to our products from major nutraceutical and pharmaceutical companies and smaller firms worldwide. Our competitors may develop products that are safer, more effective, have fewer side effects, or are less costly than our products. Some of our competitors have significantly greater financial resources and expertise in research and development, manufacturing, and marketing and distribution than we do.

If we cannot access ingredients for our products due to environmental factors such as drought, hurricane, tornado, flooding, or other natural disasters or acts of war, or the presence of pandemics, including novel coronavirus, we may not be able to manufacture our products thus resulting in lack of sales.

Our success depends, in part, upon maintaining a list of ingredient manufacturers from around the world, including China, for the manufacture of products. If we cannot obtain ingredients due to environmental factors, natural disasters, acts of war, or pandemics, we may not be able to manufacture enough products for sale in order to meet our financial goals.

Others may bring infringement claims against us, which could be time consuming and expensive to defend.

While we do not believe we infringe on any patents, third parties may claim that the manufacture, use or sale of our products, or use of our technologies, infringe their patent rights. As with any litigation where claims may be asserted, we may have to seek licenses, defend infringement actions or challenge the validity of those patents in the patent office or the courts. If these are not resolved favorably, we may not be able to continue to develop and commercialize our product candidates. Even if we were able to obtain rights to a third party’s intellectual property, these rights may be nonexclusive, thereby giving our competitors potential access to the same intellectual property. If we are found liable for infringement or are not able to have these patents declared invalid or unenforceable, we may be liable for significant monetary damages, encounter significant delays in bringing products to market or be precluded from participating in the manufacture, use or sale of products or methods of drug delivery covered by patents of others. Any litigation could be costly and time consuming and could divert the attention of our management and key personnel from our business operations. We may not have identified, or be able to identify in the future, U.S. or foreign patents that pose a risk of potential infringement claims. Ultimately, we may be unable to commercialize some of our product candidates as a result of patent infringement claims, which could potentially harm our business.

If we do not have adequate insurance for product liability, then we may be subject to significant expenses relating to these claims.

Our business entails the risk of product liability.

Although we have not experienced any material claims to date, any such claims could have a material adverse impact on our business. Insurance coverage is expensive and may be difficult to obtain and may not be available in the future on acceptable terms, or at all. We shall maintain product liability insurance and evaluate our insurance requirements on an ongoing basis. If we are subject to a product liability claim, our product liability insurance may not reimburse us, or may not be sufficient to reimburse us, for any expenses or losses that may have been suffered. A successful product liability claim against us, if not covered by, or if in excess of our product liability insurance, may require us to make significant compensation payments, which would be reflected as expenses on our statement of operations. Adverse claim experience for our products or insurance industry trends may make it difficult for us to obtain product liability insurance or we may be forced to pay very high premiums, and there can be no assurance that insurance coverage will continue to be available on commercially reasonable terms or at all. Additionally, if the coverage limits of the product liability insurance are not adequate, a claim brought against us, whether covered by insurance or not, could have a material adverse effect uponon our financial condition,business, results of operations, financial condition and cash flows.

If we make any acquisitions, we will incur a variety of costs and might never successfully integrate the carrying valuesacquired product or business into ours.

We might attempt to acquire products or businesses that we believe are a strategic complement to our business model.

We might encounter operating difficulties and expenditures relating to integrating an acquired product or business. These acquisitions might require significant management attention that would otherwise be available for ongoing development of our properties. business. In addition, we might never realize the anticipated benefits of any acquisition. We might also make dilutive issuances of equity securities, incur debt or experience a decrease in cash available for our operations, or incur contingent liabilities and/or amortization expenses relating to goodwill and other intangible assets, in connection with future acquisitions.

Our business could be harmed if we fail to comply with regulatory requirements and, as a result, are subject to sanctions.

If we, or companies with whom we are developing technologies or who are manufacturing products on our behalf, fail to comply with applicable regulatory requirements, the oil industry experiences significant price declines,companies, and we, may among other things, be unablesubject to meet our financial obligations or make planned expenditures.sanctions, including the following:

Loss of key employees and sponsors could adversely affect our business.

Our success is dependent upon the continued services and skills of our key employees and certain large stockholders. The loss of services or participation of any of these key individuals could have a negative impact on our business because of their skills and industry experience and the difficulty of promptly finding qualified replacements.

Risks Related to Ourour Common Stock

OurFuture conversions or exercises by holders of options could dilute our common stock.

Purchasers of our common stock is thinly traded which is likelywill experience dilution of their investment upon creation and exercise of the employee stock option program, employee stock grants, and other stock options or issued common shares used to result in volatile swings in our stock price.conduct the normal course of business, including but not limited to, acquisitions, partnerships, property leases or purchases, and investments.

Our stock is thinly traded as much

Sales of our issued and outstandingcommon stock is held by our officers and directors may lower the market price of our common stock.

Our officers and directors shall beneficially own a small numbersignificant aggregate of stockholders. Consequently, untilshares of our outstanding common stock. If our officers and directors, or other stockholders, sell a substantial amount of our common stock, is more widely held and actively traded small sales or purchases will likelyit could cause the market price of our common stock to fluctuate dramatically up or down without regarddecrease.

We do not expect to our financial health, net worth or business prospects.pay dividends in the foreseeable future.

We may issue additionalintend to retain any earnings in the foreseeable future for our continued growth and, thus, do not expect to declare or pay any cash dividends in the foreseeable future.

The Company currently intends to retain its earnings for future growth and, therefore, does not anticipate declaring any dividends in the foreseeable future. The Company would expect that determinations to pay dividends on its shares would be based primarily upon the financial condition, results of preferred stock.operations, regulatory and business capital requirements, any restrictions contained in financing or other agreements binding upon the Company, and other factors that the board of directors deems relevant.

Pursuant to our

Antitakeover effects of certain certificate of incorporation and bylaw provisions could discourage, delay or prevent a change in control.

Our certificate of incorporation and bylaws could discourage, delay or prevent persons from acquiring or attempting to acquire us. Our certificate of incorporation authorizes our board of directors, haswithout action of our stockholders, to designate and issue preferred stock in one or more series, with such rights, preferences and privileges as the board of directors shall determine. In addition, our bylaws grant our board of directors the authority to issue additional seriesadopt, amend or repeal all or any of preferred stockour bylaws, subject to the power of the stockholders to change or repeal the bylaws. In addition, our bylaws limit who may call meetings of our stockholders.

Our President and to determine the rightsChief Executive Officer and restrictionsChief Financial Officer, through their ownership of 27,500,000 shares of those seriesClass B common stock represents 550,000,000 votes which, while providing additional protection against takeovers, could be viewed negatively due to voting control held in the hands of two individuals. Our establishment of Class B shares with twenty-to-one voting rights was designed to ensure the Company can operate according to our business plan without the approval of our stockholders. The rightsinterference from persons or firms that may seek a hostile takeover of the holdersCompany. The high concentration of the current series of common stock may be junior to the rights of common stock that may be issuedvoting shares in the future. In addition, any future serieshands of preferred stock could be convertible into shares of our common stock, whichtwo key executives could result in dilution to your investment.

There may be future dilution of our common stock.

We may pursue an acquisition strategy, which is likely to require the issuance of common shares as a componentbusiness decisions being made that are not supported by voting members of the purchase price for the acquisitions. Any such issuance will result in dilutionBoard of our common stock. In addition,Directors which could lead to the extent options to purchase common stock under employee and director stock option plans are exercised, holders of our common stock will be diluted. If available funds and cash generated from our operations are insufficient to satisfy our needs, we may be compelled to sell additional equity or convertible debt securities. The sale of additional equity or convertible debt securities could result in additional dilution to our stockholders.negative financial results.

SalesDependence upon Management and Key Personnel

The Company is, and will be, heavily dependent on the skill, acumen and services of the management of the Company. The loss of the services of any or all of these individuals or any other key individuals for any substantial amountslength of our common stock may adversely affect our stock pricetime would materially and make future offerings to raise more capital difficult.

Sales of a large number of shares of our common stock in the market or the perception that sales may occur could adversely affect the trading priceCompany’s results of our common stock. We may issue restricted securities or register additional sharesoperation and financial position. (See “Management”).

Reorganization effects on GAAP

As a result of common stockthe Reorganization Agreement and the change in business and operations of the Company, a discussion of the past financial results of the Company, formally known as Frontier Oilfield Services, Inc., is not pertinent, and, under generally accepted accounting principles in the futureUnited States the historical financial results of TRICCAR Holdings, Inc., the acquired company for our use in connection with future acquisitions. Except for volume limitations and certain other regulatory requirements applicableaccounting purposes, prior to affiliates, such shares may be freely tradable unless we contractually restrict their resale. The availability for sale, or sale,the Reorganization Agreement are considered the historical financial results of the shares of common stock eligible for future sale could adversely affect the market price of our common stock.Company.

There are no unresolved comments from the staff of the Securities and Exchange Commission.

Our principal executive offices are located at 220 Travis St.848 N. Rainbow Blvd., Shreveport, Louisiana 71101.#3254, Las Vegas, Nevada 89107.

CTT

TRICCAR formerly known as Frontier has three operatingceased operations in the oilfield services industry. All wells near Chico, Texas. Two of these well locations have small buildings for well monitoring and operations. We also own 7.49 acres in Harrison County, Texas on which three of our disposal wells are located, along with a small office and repair shop foreither been repossessed by the operation of these wells.lessor or were transferred. 

We are obligated under long-termOn December 28, 2019, Company exchanged two Brunson Saltwater Disposal Wells and its related operating assets in Chico, Texas for Mr. Kenneth Owen’s cancelling any and all debt owed to him by Company and returning his 2,701,168 shares of common shares to Company’s treasury. Company also defaulted the other five leases forand convert the use of land where seven of our disposal wells are located. The leases are for extended periods. The firstownership back to the lease expires on February 7, 2023 (with two options to renew for an additional 10 years each). The second lease expires on December 1, 2034 with a one-year renewal option. The aggregate monthly lease payments for the disposal well leases are $9,000.holders. 

Disposal Wells. We currently have seven disposal wells licensed by the State of Texas for the disposal of salt water and certain drilling fluids. We receive fees from the use of our wells from our own operations or by third parties who contract for the use of our disposal wells. Our disposal wells and their locations are as follows:

TBD

PART II

Prices for our common stock are quoted in the over-the-counter Pink SheetsThe Venture Market maintained by the National Quotation Bureau (NQB) owned Pink SheetThe Venture Market OTC Market, Inc. and our ticker symbol is FOSI.PK.FOSI.QB. The following table shows the high and low bid information for our common stock for each quarter during the indicated periods.

The above information was obtained from the Pink SheetVenture Market OTC Market, Inc. web site. Because these are over-the-counter market quotations, these quotations reflect inter-dealer prices, without retail mark-up, markdown or commissions and may not represent actual transactions.We have 974 shareholders of record for our common stock as of December 31, 2018.

2019.

Not applicable as we are a smaller reporting company.

Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Twelve Months Ended December 31, 20182019 and 2017.2018.

Cautionary Statement

Statements in this report, which are not purely historical facts, including statements regarding the Company’s anticipations, beliefs, expectations, hopes, intentions or strategies for the future, may be forward-looking statements within the meaning of Section 21E of the Securities Act of 1934, as amended. All forward-looking statements in this report are based upon information available to us on the date of the report. Any forward-looking statements involve risks and uncertainties that could cause actual results or events to differ materially from events or results described in the forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements.

Recent Financial Developments 

None.  

Results of Operations

For the year ended December 31, 2018,2019, we reported a net loss of approximately $0.9$4.2 million as compared to a net loss of approximately $1.4$0.9 million for the year ended December 31, 2017.2018.

Revenue. Total revenue was flat at approximately $1.1$0.9 million for the year ended December 31, 20182019 compared to approximately $1.1 million for the year ended December 31, 2017.2018.

Expenses.The components of our costs and expenses for the years ended December 31, 20182019 and 20172018 are as follows:

Lower repair and maintenance expenses caused a decrease in operating expenses for the year ended December 31, 2018.2019.

The increase in general and administrative costs for the year ended December 31, 2018 is caused by stock compensation expense. Stock compensation was $356,556 for the year ended December 31, 2018 compared to $0 for the year ended December 31, 2017.

During 2017, the Company suspended operations at one of the disposal wells in East Texas. The well is no longer operational, and the net book value of the disposal well was written-off in 2017. The write-off of the net book value resulted in a loss of $248,358 recorded in 2017.

Other (Income) Expense. Other (income) expenses for the year ended December 31, 20182019 included $439,305$904,983 of interest expense compared to $871,260$439,305 of interest expense for the year ended December 31, 2017.2018. Other (income) expense for the year ended December 31, 20182019 and December 31, 20172018 included gains of $438,596$585,815 and $525,522,$438,596, respectively for extinguishment of debt. These gains were due to the reduction of accounts payable with vendors through write offs of dormant accounts.

We have not recorded federal income tax expense for the years ended December 31, 20182019 and 20172018 because of our net operating loss carry forwards. In addition, since there is continued uncertainty as to the realization of a deferred tax asset, we have not recorded any deferred tax benefits.

Liquidity and Capital Resources

Cash Flows and Liquidity

As of December 31, 2018,2019, we had total current assets of $101,211.$70,273. Our total current liabilities as of December 31, 20182019 were approximately $10.7 million, including approximately $8.0 million of debt classified as current liabilities.$161,091. We had a working capital deficit of approximately $10.6 million$90,818 as of December 31, 20182019 compared to a working capital deficit of approximately $10.6 million as of December 31, 2017.

Management is working closely with our current lenders to fund operations through current cash flows and pay interest costs when excess cash becomes available. Management also plans to work with our current lenders and debt holders to lower our cost of borrowing by renegotiating the terms of our existing debt and potentially offering debt holders an opportunity to exchange their debt for equity in the Company. There can be no assurance that management’s plan will succeed.2018.

Our ability to obtain access to additional capital through third parties or other debt or equity financing arrangements is contingent upon our ability to locate adequate financing or equity investments on commercially reasonable terms. There can be no assurance that we will be able to obtain such financing on acceptable terms.

The following table summarizes our sources and uses of cash for the years ended December 31, 20182019 and 2017:2018:

As of December 31, 2018,2019, we had $26,158 ina cash and cash equivalents, an increasebalance of $9,002$0, a decrease of $26,158 from December 31, 2017.2018. The increasedecrease was due to cash provided by investing activities of $29,413 offset by cash used byin operating activities of $10,656$27,015 and cash usedprovided by financing activities of $9,755. Net cash used in financing activities was $0 for the year ended December 31, 2017.$857.

As a smaller reporting company, we are not required to complete this item.

FRONTIER OILFIELD SERVICES, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

TheTo the Board of Directors and Stockholders

of Frontier Oilfield Services, Inc. and its subsidiaries

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Frontier Oilfield Services, Inc. and its subsidiaries (the “Company”), as of December 31, 20182019 and 20172018 and the related consolidated statements of operations, changes in stockholders’ deficit and cash flows for the years then ended, December 31, 2018 and 2017. These consolidated financial statements are the responsibility ofrelated notes (collectively referred to as the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States)“financial statements”). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration 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 on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Frontier Oilfield Services, Inc. and its subsidiariesthe Company as of December 31, 20182019 and 20172018, and the results of theirits consolidated operations and its consolidated cash flows for the years then ended, December 31, 2018 and 2017, in conformity with accounting principles generally accepted in the United States of America.

Explanatory Paragraph – Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has suffered recurring losses from consolidated operations since inception and has a working capital deficiency both of which raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included 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 include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Turner, Stone & Company, L.L.P.

Dallas, Texas

May 29, 2020

We have served as the Company’s auditor since 2006.

FRONTIER OILFIELD SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS