UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: June 30March 31, 2024, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 333333-232845-232845

CoJax Oil and Gas Corporation

(Exact Name of registrant as specified in its charter)

(703) 216-8606

(703)216-8606

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act

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☐ 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 whether the registrant is a large, accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large, accelerated filer,”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 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12-b-2 of the Exchange Act).

☐ Yes ⌧No

The registrant has one class of common stock of which 9,315,90210,465,902 shares were outstanding as of November 22, 2023.May 10, 2024. 

CoJax Oil and Gas Corporation

Form 10-Q

For the Quarter Ended March 31, 2024June 30, 2023

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

The accompanying unaudited consolidated condensed consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain disclosures required by accounting principles generally accepted in the United States and normally included in annual reportsAnnual Reports on Form 10-K have been omitted. Although management believes that our disclosures are adequate to make the information presented not misleading, these unaudited consolidated condensed interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related footnotes included in its most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (“Annual Report”). The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year.10-K.

COJAX OIL AND GAS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

COJAX OIL AND GAS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

COJAX OIL AND GAS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(UNAUDITED)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

COJAX OIL AND GAS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

COJAX OIL AND GAS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1 – ORGANIZATION, NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Organization

CoJax Oil & Gas Corporation, a Virginia corporation (“Company”), was incorporated on November 13, 2017. The Company is based in Arlington Virginia, with a wholly owned subsidiary, Barrister Energy LLC (‘Barrister Energy’), registered in Mississippi and based in Laurel, Mississippi.

Nature of Operations

The Company is a growing U.S. energy company, engaged in the acquisition and development of lower risk onshore oil and gas producing properties within the Southeastern U.S. The Company’s focused growth strategy relies primarily on leveraging management’s expertise to acquire both operated and non-operated interests in producing properties with the goal of assembling a large oil and gas portfolio. Through this strategy of acquisition of operated and non-operated properties, the Company has the unique ability to benefit from the technical and scientific expertise of world-class E&P companies operating in the area.

Since the company’s inception, it has been engaged in organizational activities and had no revenue-generating operations until the period covered by this current report. The company has begun to acquire assignments of hydrocarbon revenues and underlying oil and gas exploration and production rights as covered by this current report. The companyCompany outsources all operations of it’s current acquisitions through Barrister Energy LLC, the operational subsidiary.

The Company focuses on the acquisition of and exploitation of upstream energy assets, specifically targeting select oil and gas mineral interests. These acquisitions are structured primarily as acquisitions of leases, real property interests and mineral rights and royalties and are generally not regarded as the acquisition of securities, but rather real property interests. As an owner, the Company has the right to receive a portion of the production from the leased acreage (or of the proceeds of the sale thereof).

Condensed Consolidated Financial Statements

The accompanying condensed consolidated financial statements prepared by CoJax Oil and Gas Corporation (the "Company"“Company” or "CoJax"“CoJax”) have not been audited by an independent registered public accounting firm. In the opinion of the Company'sCompany’s management, the accompanying unaudited financial statements contain all adjustments necessary for a fair presentation of the results of operations for the periods presented, which adjustments were of a normal recurring nature, except as disclosed herein. The results of operations for the sixthree months ended June 30, 2023,March 31, 2024, are not necessarily indicative of the results to be expected for the full year ending December 31, 2023,2024, for various reasons, including as a result of the impact of fluctuations in prices received for oil and natural gas, natural production declines, the uncertainty of exploration and development drilling results, fluctuations in the fair value of derivative instruments, the impacts of COVID-19 and other factors.

These unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP"(“U.S. GAAP”) for interim financial information, and, accordingly, do not include all of the information and footnotes required by

U.S. GAAP for complete financial statements. Therefore, these financial statements should be read in conjunction with the Company'sCompany’s annual report on Form 10-K for the year ended December 31, 2022.2023.

NOTE 2 – GOING CONCERN DISCLOSURE

The Company’s condensed consolidated financial statements are prepared using U.S. GAAP applicable to a going concern that contemplates the realization of assets and liquidation of liabilities in the normal course of business. There can be no assurance that the Company will be able to achieve its business plan, raise any additional capital, or secure the additional financing necessary to implement its current operating plan. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

The Company has yet to achieve profitable operations, expects to incur further losses in the development of its business, has negative cash flows from operating activities, and is dependent upon future issuances of equity or other financings to fund ongoing operations, all of which raises substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing from stockholders or other sources to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has no formal plan in place to address this concern but considers that the Company will be able to obtain additional funds by equity financing and/or related party advances, however, there is no assurance of additional funding being available or on acceptable terms, if at all.

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidation

The accompanying consolidated financial statements include the accounts of the Company and of its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles (“U.S. GAAP”)GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant areas of estimate include the impairment of assets and rates for amortization, accrued liabilities, future income tax obligations, and the inputs used in calculating stock-based compensation and transactions.compensation. Actual results could differ from those estimates and would affect future results of operations and cash flows.

Reclassifications

Certain prior period amounts have been reclassified to conform with the current year presentation. Such reclassifications had no significant impact on our reported net income (loss), current assets, total assets, current liabilities, total liabilities, shareholders’ equity or cash flows.

Accounts ReceivableCash and Allowance for Doubtful AccountsCash Equivalents

Accounts receivable will consist primarily

The Company considers all highly liquid temporary cash investments with an original maturity of oil and gas sales, net of a valuation allowance for doubtful accounts.three months or less to be cash equivalents. At both June 30, 2023,March 31, 2024 and December 31, 2022,2023, the allowance for doubtful accounts was $0.Company had no cash equivalents.

Oil and Gas Producing Activities

The Company uses the successful efforts method of accounting for oil and gas activities. Under this method, the costs of productive exploratory wells, all development wells, related asset retirement obligation assets, and productive leases are capitalized and amortized, principally by field, on a units-of-production basis over the life of the remaining proved reserves. Exploration costs, including personnel costs, geological and geophysical expenses, and delay rentals for oil and gas leases are charged to expense as incurred. Exploratory drilling costs are initially capitalized but charged to expense if and when the well is determined not to have found reserves in commercial quantities.

Estimates of oil and gas reserves, as determined by independent petroleum engineers, are continually subject to revision based on price, production history and other factors. Depletion expense, which is computed based on the units of production method, could be significantly impacted by changes in such estimates. Additionally, US GAAP requires that if the expected future undiscounted cash flows from an asset are less than its carrying cost, that asset must be written down to its fair market value. As the fair market value of an oil and gas property will usually be significantly less than the total undiscounted future net revenues expected from that asset, slight changes in the estimates used to determine future net revenues from an asset could lead to the necessity of recording a significant impairment of that asset.

Unproved oil and gas properties will be assessed annually to determine whether they have been impaired by the drilling of dry holes on or near the related acreage or other circumstances, which may indicate a decline in value. When impairment occurs, a loss will be recognized. When leases for unproved properties expire, the costs thereof, net of any related allowance for impairment, will be removed from the accounts and charged to expense.

The Company will review its proved oil and natural gas properties for impairment whenever events and circumstances indicate that a decline in the recoverability of its carrying value may have occurred. It estimates the undiscounted future net cash flows of its oil and natural gas properties and compares such undiscounted future cash flows to the carrying amount of the oil and natural gas properties to determine if the carrying amount is recoverable. If the carrying amount exceeds the estimated undiscounted future cash flows, the Company will adjust the carrying amount of the oil and natural gas properties to fair value.

During the year ended December 31, 2022,2023, the Company recorded impairments of $3,909,700$875,400 on oil and gas properties. There were no impairments recorded during the sixthree months ended June 30, 2023March 31, 2024 and 2022.2023.

Long-Lived Assets

The Company accounts for the impairment or disposal of long-lived assets according to the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 360 “Property, Plant and Equipment”. ASC 360 clarifies the accounting for the impairment of long-lived assets and for long-lived assets to be disposed of, including the disposal of business segments and major lines of business. Long-lived assets are reviewed when facts and circumstances indicate that the carrying value of the asset may not be recoverable. When necessary, impaired assets are written down to estimated fair value based on the best information available. Estimated fair value is generally based on either appraised value or measured by discounting estimated future cash flows. Considerable management judgment is necessary to estimate discounted future cash flows. Accordingly, actual results could vary significantly from such estimates. The Company did not recognize any impairment losses on long-lived assets during the three months ended March 31, 2024 and 2023.

Fair Values of Financial Instruments

The Company had no financial instruments for the sixthree months ended June 30, 2023,March 31, 2024, or for the year ended December 31, 2022.2023.

ASC 820 “Fair Value Measurements and Disclosures” defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources

(observable (observable inputs) and (2) a reporting entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which give the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means; and

Level 3 – Fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of June 30, 2023,March 31, 2024, and December 31, 2022.2023. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments.

Revenue Recognition

To determine

The Company accounts for revenue recognition for contracts with customers, the Company performs the following steps described inunder ASC 606 Revenue“Revenue from Contracts with Customers: (1) identifies the contract with the customer, or Step 1, (2) identifies the performance obligations in the contract, or Step 2, (3) determines the transaction price, or Step 3, (4) allocates the transaction price to the performance obligations in the contract, or Step 4, and (5) recognizes revenue when (or as) the entity satisfies a performance obligation, or Step 5.

Customers.” Under ASC 606, oil and natural gas sales revenues are recognized when control of the product is transferred to the customer, the performance obligations under the terms of the contracts with customers are satisfied and collectability is reasonably assured. All the Company’s oil and natural gas sales are made under contracts with customers. The performance obligations for the Company’s contracts with customers are satisfied at a point in time through the delivery of oil and natural gas to its customers. Accordingly, the Company’s contracts do not give rise to contract assets or liabilities. The Company typically receives payment within 3090 days of the month of delivery. The Company’s contracts for oil and natural gas sales are standard industry contracts that include variable consideration based on the monthly index price and adjustments that may include counterparty-specific provisions related to volumes, price differentials, discounts, and other adjustments and deductions.

The following table presents revenues disaggregated by product for the three and six months ended June 30, 2023,March 31, 2024, and 2022:2023:

All revenues are from production from the Gulf State DrillingStates Drill Region.

Accounts Receivable

Accounts receivable consists of oil and natural gas receivables. Ongoing evaluations of collectability are performance and an allowance for expected credit losses is provided against the portion of accounts receivable that is estimated to be uncollectible. The Company did not recognize any write-offs during the three months ended March 31, 2024 and 2023. At both March 31, 2024, and December 31, 2023, the allowance for expected credit losses was $0.

Stock-Based Compensation

The Company accounts for Stock-Based Compensation under ASC 718 “Compensation – Stock Compensation”, which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains employee services in share-based payment transactions. Generally accepted accounting principles require measurement of the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. Incremental compensation costs arising from subsequent modifications of awards after the grant date must be recognized.

The Company issues stock to consultants for various services. The costs for these transactions are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The value of the common stock is measured at the earlier of (i) the date at which a firm commitment for performance by the counterparty to earn the equity instruments is reached or (ii) the date at which the counterparty’s performance is complete. The Company recognized consulting expense and a corresponding increase to additional paid-in-capital related to stock issued for services.

Income Taxes

Income taxes are accounted for under ASC 740 using the liability method of accounting for income taxes. Under the liability method, future tax liabilities and assets are recognized for the estimated future tax consequences attributable to differences between the amounts reported in the financial statement carrying amounts of assets and liabilities and their respective tax bases. Future tax assets and liabilities are measured using enacted or substantially enacted income tax rates expected to apply when the asset is realized, or the liability settled. The effect of a change in income tax rates on future income tax liabilities and assets is recognized in income in the period that the change occurs. Future income tax assets are recognized to the extent that they are considered more likely than not to be realized.

The FASB has issued ASC 740 “Income Taxes”.

ASC 740 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. This standard requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based on the technical merits of the position. If the more-likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements.

Because of the implementation of this standard, the Company performed a review of its material tax positions in accordance with recognition and measurement standards established by ASC 740 and concluded that it had no uncertain tax positions as of June 30, 2023,March 31, 2024, or as of December 31, 2022.2023.

Basic and Diluted Earnings per Share

The Company computes income per share in accordance with ASC 260, "Earnings“Earnings per Share"Share”, which requires the presentation of both basic and diluted earnings per share (“EPS”) on the face of the statement of operations. Basic EPS is computed by dividing income available to common stockholders by the weighted average number of shares outstanding during the period. Diluted EPS gives effect to all dilutive potential shares of common stock outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. As of June 30,March 31, 2024 and December 31, 2023, and 2022, the Company had 1,050,0000 and 550,0001,050,000 potentially dilutive common shares outstanding, respectively

Asset Retirement Obligations

The Company records the estimated fair value of obligations associated with the retirement of tangible, long-lived assets in the period in which they are incurred. When a liability is initially recorded, the Company capitalizes the cost by increasing the carrying amount of the related long-lived asset. Over time, the liability is accreted to its present value, and the capitalized cost is depleted over the useful life of the related asset.

Revisions to estimated asset retirement obligations will result in an adjustment to the related capitalized asset and corresponding liability. Upon settlement of the liability, the Company either settles the obligation for its recorded amount or incurs a gain or loss. The Company’s asset retirement obligation relates to the plugging, dismantling, removal, site reclamation, and similar activities of its oil and gas properties.

Asset retirement obligations are estimated at the present value of expected future net cash flows and are discounted using the Company’s credit adjusted risk free rate. The Company uses unobservable inputs in the estimation of asset retirement obligations that include, but are not limited to: costs of labor, costs of materials, profits on costs of labor and materials, the effect of inflation on estimated costs, and discount rate. Due to the subjectivity of assumptions and the relative long lives of the Company’s leases, the costs to ultimately retire the Company’s obligations may vary significantly from prior estimates. Assumptions used in determining estimates are reviewed annually.

Concentration of Credit Risk

Our revenue can be materially affected by current economic conditions and the price of oil and natural gas. However, based on the current demand for crude oil and natural gas and the fact that alternative purchasers are readily available, we believe that the loss of our marketing agents and/or any of the purchasers identified by our marketing agents would not have a long term material adverse effect on our financial position or results of international operations. The continued economic disruption resulting from Russia’s invasion of Ukraine, a potential global recession, and other varying macroeconomic conditions could materially impact the Company'sCompany’s business in future periods. Any potential disruption will depend on the duration and intensity of these events, which are highly uncertain and cannot be predicted at this time.

Concentration of Credit Risk – Cash – The Company maintains cash and cash equivalent balances at a single financial institution that are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000.$250,000. At June 30, 2023,March 31, 2024, and December 31, 2022,2023, the Company had no exposure in excess of insurance.

Concentration of Credit Risk – Accounts Receivable – All of the Company’s outstanding accounts receivable was with one party, Taxodium Energy, LLC.

NOTE 4 – RECENT ACCOUNTING PRONOUNCEMENTS

New and Recently Adopted Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed,

and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

NOTE 5 –ROYALTY INTERESTS IN OIL AND GAS PROPERTIES

On November 8, 2022, the Company approved and authorized, by unanimous written consent, the issuance of 1,600,000 shares of common stock, $0.01 par value per share, valued at $2.10 per share, to Taxodium Energy LLC, a Mississippi limited liability company (“Taxodium”), in consideration for the sale and assignment of various mineral and oil and gas royalty interests in and to certain properties located in Mississippi and Alabama to Barrister Energy LLC, a wholly-owned subsidiary of the Company organized under the laws of Mississippi.  At the request and the instructions of Taxodium, the Company issued the Shares to all members of Taxodium on the pro rata basis of their ownership interest in Taxodium. This acquisition was effective as of October 1, 2022.

During the year ended December 31, 2022, this property was impaired by $2,085,100.  

On December 2, 2022, the Company approved and authorized, by unanimous written consent, the issuance of 1,500,000 shares of common stock, $0.01 par value per share, valued at $2.10 per share, to Taxodium. At the request and the instructions of Taxodium, the Company issued the Shares to all members of Taxodium on the pro rata basis of their ownership interest in Taxodium. 

The Shares were issued by the Company in consideration of the sale and assignment of the wells, facilities, and all of the Assignor’s title, rights, and interest in and to certain properties located in Mississippi, collectively known as “Buckley,” to Barrister Energy LLC, a wholly-owned subsidiary of the Company organized under the laws of Mississippi.  The Assignment was completed on December 2, 2022, with an effective date of October 15, 2022, for accounting purposes.

The Company did not execute any acquisitions during the three months ended June 30, 2023March 31, 2024. At March 31, 2024, the Company had leased oil and gas properties assets valued at $4,022,906.

Scheduled leased oil and gas properties assets

The CompanyWe recorded depletion expense of $176,148$81,324 and $0$95,224 for the sixthree months ended June 30,March 31, 2024 and 2023, and 2022, respectively.

NOTE 6 – ASSET RETIREMENT OBLIGATION

The Company records the obligation to plug and abandon oil and gas wells at the dates the properties are either acquired or the wells are drilled. The asset retirement obligation is adjusted each quarter for any liabilities incurred or settled during the period, accretion expense, and any revisions made to the costs or timing estimates. The asset retirement obligation is incurred using an annual credit-adjusted risk-free discount rate at the applicable dates. Changes in the asset retirement obligation were as follows:

NOTE 7 – NOTES PAYABLE

Notes payable consisted of the following:

NOTE 8 – RELATED PARTY TRANSACTIONS

For the sixthree months ending June 30,March 31, 2024 and the year ending 2023, and 2022, the following related party transactions occurred between any of the Company’s directors or executive officers or any person nominated or chosen by the Company to become a director or executive officer:

On January 4, 2022, the Company issued 12,500 shares of Series A convertible preferred stock to Jeffrey J. Guzy, the CEO, and 12,500 shares of Series A convertible stock to Wm. Barrett Wellman, the CFO. Each share is convertible at the option of the holder to ten (10) shares of common stock. The fair value of $500,000 ($20 per share) has been recorded as part of the settlement of accrued salaries and payroll taxes.  The fair value was based on the value assigned to common stock ($2 per share) multiplied by 10.

On January 13, 2022, the Company's Executive Chairman loaned $10,000 to the Company, and the Company issued a promissory note for such an amount. The promissory note is unsecured and bears interest at 2% per annum principal and accrued interest matures on December 31, 2022.

On January 24, 2022, the Company's Executive Chairman loaned $10,000 to the Company, and the Company issued a promissory note for such an amount. The promissory note is unsecured and bears interest at 2% per annum principal and accrued interest matures on December 31, 2022.

On February 1, 2022, the Company issued 170,000 shares of common stock at $2.00 per share to three individual investors in settlement of claims and for strategic consulting services totaling $340,000.

On February 15, 2022, the Company issued 10,000 shares of common stock at $2.00 per share to William Allan Bradley for services as a Board member totaling $20,000.

On January 25, 2023, the Company issued 25,000 shares of its Series A convertible preferred stock to Jeffrey J. Guzy, the Company’s former CEO, and 25,000 shares of Series A convertible stock to Wm. Barrett Wellman, the Company’s former CFO. Each share is convertible at the option of the holder to ten (10) shares of common stock. The total fair value of $1,065,000$1,065,000 ($21.30 per share) was recorded as part of accrued salaries and payroll taxes for the year ended December 31, 2022 as service was provided in thatthe year. The accrual was reversed upon issuance of the shares in January 2023. The fair value was based on the value assigned to common stock ($2.13 per share) multiplied by 10.

On February 14, 2023, the Company entered into a new employment agreement with Mr. Guzy (the “Guzy 2023 Employment Agreement”), pursuant to which Mr. Guzy will continuecontinued serving the Company as Chief Executive Officer, President and Chairman of the Company.

On March 14, 2023, Mr. Wellman’s Employment Agreement has been extended to a termination date of August 16, 2024.Mr. Wellman will continue serving

Effective as of January 10, 2024, the board of directors of the Company (the “Board”) increased the size of the Board from two to three directors and appointed William R. Downs to the Board.

On January 10, 2024, Jeffrey J. Guzy resigned from serving as Chief FinanceExecutive Officer, President and Chairman of the Board. Immediately upon Mr. Guzy’s resignation from these offices, the Board appointed Mr. Downs to positions of Chief Executive Officer, President and Chairman of the Board. Also on January 10, 2024, Wm. Barrett Wellman resigned as Chief Financial officer and Secretary of the Company. Effective immediately upon Mr. Wellman’s resignation, the Board appointed Mr. Guzy as the Company’s Chief Financial officer and Secretary.

On January 10, 2024, the Company issued 100,000 common shares at $0.99 per share to William R. Downs in connection with his appointment as the Company’s new Chief Executive Officer. The issuance of 100,000 shares was recognized at the share price on the date of the employment agreement.

On January 26, 2024, the holders of the Company’s Series A convertible preferred stock converted all 105,000 shares issued and outstanding into common shares at a conversion rate of one to ten. The conversion occurred at the rate specified in the initial issuance agreement and therefore no gain or loss was recognized on the conversion. In connection with the exercise of the conversion option, the Company issued 575,000 and 475,000 common shares to Jeffrey J. Guzy and Wm. Barrett Wellman, respectively.

NOTE 89 – STOCKHOLDERS' DEFECITSTOCKHOLDERS’ EQUITY

Authorized Capital

As of June 30, 2023, March 31, 2024, the Company has 300,000,000 authorized shares of Common Stock at $0.01$0.01 par value and 50,000,000 authorized shares of Preferred Stock at a par value of $0.10.

$0.10, and Series A convertible shares at a par value of $0.01.

Preferred Stock

The holders of Preferred Stock are entitled to receive dividends equal to the amount of the dividend or distribution per share of common stock payable multiplied by the number of shares of common stock the shares of Series A preferred shares held by such holder are convertible into. Each Series A preferred share is convertible into ten common shares.

The company classified the Series A Preferred Stock as permanent equity as the terms do not provide for an obligation to buy back the shares in exchange for cash or other assets of the Company. The shares are not considered debt under ASC 480 “Distinguishing Liabilities from Equity” as the shares do not represent an obligation that must or may be settled with a variable number of shares. No other redemption features exist within the terms of the instrument.

Refer to Note 78 for details on convertible preferred stock issuances to the Company’s CEO and CFO.officers.

Common Stock

On January 31, 2023, the Company issued 20,642 shares for vendor payments at $2.13$2.13 per share.

On February 1, 2023, the Company issued 120,000 shares for consulting fees at $2.13$2.13 per share.

On March 1, 2023, the Company received $10,000$10,000 for stock subscriptions payable of 5,000 shares of common stock.

On June 1, 2023,

Refer to Note 8 for details on common share issuances to the Company issued 14,217 shares for vendor payments at $2.40 per share.Company’s officers.

On June 12, 2023, the Company issued 35,000 shares for payment to William R. Downs at $1.90 per share.

On February 1, 2022, the Company issued 170,000 shares for settlements and consulting fees at $2.00 per share.

On February 15, 2022, the Company issued 10,000 shares for payment to William A. Bradley, Board member at $2.00 per share.

The above shares of capital stock are restricted securities under Rule 144 and were issued in reliance on an exemption from the registration requirements of the Securities Act.

Capital Contributions

During the periods ending June 30,March 31, 2024, and March 31, 2023, and June 30, 2022, the Company did not receive any capital contributions.contributions in excess of the $10,000 received for stock subscriptions payable.

NOTE 910 – CONTINGENCIES AND COMMITMENTS

Operating Lease Commitments

The Company has no lease obligations at June 30, 2023,March 31, 2024, and December 31, 2022.2023. The Company has a month-to-month rental agreement for an office share in Arlington, Virginia beginning on April 1, 2018, for $50$50 per month. Additionally, the Company has no known contingencies as of June 30, 2023,March 31, 2024, and December 31, 2022.2023.

Purchase Commitments

The Company has no purchase obligations at June 30,March 31, 2024 and December 31, 2023.

Legal Matters

During the course of business, litigation commonly occurs. From time to time, the Company may be a party to litigation matters involving claims against the Company. The Company operates in a highly regulated industry and employs personnel, which may inherently lend itself to legal matters. Management is aware that litigation has associated costs and that results of adverse litigation verdicts could have a material effect on the Company'sCompany’s financial position or results of operations. There are no known legal proceedings against the Company or its officers and directors in their capacity as officers and directors of the Company.

NOTE 1011 – SUBSEQUENT EVENTS

The Company has evaluated all events that occurred after the balance sheet date through the date when the financial statements were issued to determine if they must be reported. The management of the Company determined that there were no reportable subsequent events to be disclosed beyond the following:

Issuance of Common Stock

On July 24, 2023, the Company issued 7,107 Common Shares, at $0.99 per share, to Intelligent Investments I, LLC, a Florida limited liability company, for legal services.

On August 21, the Company issued 4,490 Common Shares, at $0.99 per share, to Intelligent Investments I, LLC, a Florida limited liability company, for legal services.

Related Party Notes Payable

On October 10, 2023,April 25, 2024, all outstanding notes with the Company’s CEO and Executive ChairmanCFO (refer to NOTE 7) were extended to have a maturity date of May 13,December 31, 2024.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management'sManagement’s Discussion and Analysis of Financial Condition and Results of Operations analyzes the major elements of our balance sheets and statements of operations. This section should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2022,2023, and our interim unaudited financial statements and accompanying notes to these financial statements.

Overview

NOTE ABOUT FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The statements contained in this report that are not historical facts are forward-looking statements that represent management’s beliefs and assumptions based on currently available information. Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, need for financing, competitive position, and potential growth opportunities. Our forward-looking statements do not consider the effects of future legislation or regulations. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words “believes,” “intends,” “may,” “should,” “anticipates,” “expects,” “could,” “plans,” “estimates,” “projects,” “targets” or comparable terminology or by discussions of strategy or trends. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we cannot give any assurances that these expectations will prove to be correct. Such statements by their nature involve risks and uncertainties that could significantly affect expected results, and actual future results could differ materially from those described in such forward-looking statements.

Among the factors that could cause actual future results to differ materially are the risks and uncertainties discussed in this report and in our annual report on Form 10-K for the year ended December 31, 2023. While it is not possible to identify all factors, we continue to face many risks and uncertainties including, but not limited to: 

Forward-looking statements speak only as to the date hereof. Except as otherwise required by applicable law, we disclaim any intention or obligation to update publicly or revise such statements whether as a result of new information, future events or otherwise.

There may also be other risks and uncertainties that we are unable to predict at this time or that we do not now expect to have a material adverse impact on our business.

Overview

CoJax is a growth-oriented independent exploration and production company based in Arlington, Virginia, and is engaged in oil and natural gas development, production, acquisition, and exploration activities currently focused inon the Gulf States Drill Region.

Business Description and Plan of Operation

CoJax is currently engaged in oil and natural gas acquisition, exploration, development, and production in Mississippi and Alabama. We focus on developing our existing properties while continuing to pursue acquisitions of oil and gas properties with upside potential in the Gulf States Region.Drill Region.

Our goal is to increase stockholder value by investing in oil and natural gas projects with attractive rates of return on capital employed. We plan to achieve this goal by exploiting and developing our existing oil and natural gas properties and pursuing strategic acquisitions of additional properties, while remaining cash flow positive, maintaining low operating costs, and striving to show a gain in annual production while reducing the Company'sCompany’s debt.

Executive Summary - First Quarter 20232024 Developments and Highlights

Risks and Uncertainties

Since March 2020, and throughout the last two years, global markets and commodity prices have been extremely volatile due to the impacts from the COVID-19 pandemic, with further impacts on volatility caused by the war in Ukraine that began in February 2022. Commodity prices remained steady during the fourth quarter of 2022 as demand has continued to outpace relative supply. While recessionary concerns have placed some downward pressure on commodity prices, causing oil and gas prices to decline in the first quarter of 2023 from their earlier highs in 2022, worldwide commodity demand continues to exceed pre COVID-19 pandemic levels. Although supply has increased and we have seen continued recovery in commodity prices since the beginning of the pandemic, there is still an element of volatility and uncertainty that we expect to continue at least for the near-term and possibly longer, in part by the impact of the Russian-Ukrainian military conflict on global commodity and financial markets, and the associated effect of trade sanctions on imports of

The oil and natural gas from Russia.industry is a global market impacted by many factors, including government regulations, particularly in the areas of trade sanctions, taxation, energy, climate change and the environment, geopolitical instability, and military conflicts (including the Russian-Ukrainian conflict in the Middle East), fluctuations in worldwide commodity demand, and the extent to which members of OPEC and other oil exporting nations manage oil supply through export quotas. In general, natural gas prices are determined by North American supply and demand and are affected by the import and export of liquefied natural gas. Oil and natural gas prices have been, and are expected to continue to be, volatile. This volatility could negatively impact future prices for oil, natural gas, petroleum products, and industrial products.

Results of Operations – For the Three andSix Months Ended June 30, March 31, 2024, and 2023, and 2022

* In excess of 1,000%

Revenues

Revenues were $417,341$182,052 for the six months ended June 30, 2023, and $0 for the same period during 2022. For the three months ended June 30, 2023, revenues were $188,623. There were no sales of oil and natural gas duringMarch 31, 2024, compared to $228,718 for the three months ended June 30, 2022.March 31, 2023. The Company is an early-stage company, having just begun to acquire assignments of hydrocarbon revenues and underlying oil and gas exploration and production rights, and therefore has just begun producing significant revenue in 2023. The decrease in revenue of 20.4% was primarily driven by a decrease in production.

Lease Operating Expenses

Lease operating expenses were $117,877 for the six months ended June 30, 2023, and $28,885 for the six months ended June 30, 2022. Lease operating expenses were $58,738$47,341 for the three months ended June 30, 2023, and $27,459March 31, 2024, compared to $59,139 for the three months ended June 30, 2022.March 31, 2023, representing a decrease of 19.9% or $11,798. The increasedecrease in expenses from each period in 2022expense was primarily attributable to the same periodsdecrease in 2023production, which is in line with the decrease in revenue.

Loss from Operations

Total operating loss was due to additional operating expenses resulting from acquisitions of oil and gas properties.

General and Administrative Expenses

General and administrative expenses decreased $99,906 to $542,466 for the six months ended June 30, 2023, as compared to $642,372 for the six months ended June 30, 2022, and similarly,$303,408 for the three months ended June 30, 2023, decreased to $171,112 as compared to $171,200March 31, 2024, and $300,219 for the three months ended June 30, 2022. March 31, 2023. The decrease in general and administrative expense is primarily attributable to stock-based vendor and compensation-related expenses.

Depletion and Accretion on Discounted Liabilities

Depletion and accretion expenses were $182,877 for the six months ended June 30, 2023, and $1,244 for the six months ended June 30, 2022. Depletion and accretion expenses were $84,143 for the three months ended June 30, 2023, and $622 for the three months ended June 30, 2022. The increase resulted from acquisitions of oil and gas properties.

Loss from Operations

Total operating loss was $425,589 for the six months ended June 30, 2023, and $672,501 for the six months ended June 30, 2022. The decreasedincreased loss was primarily driven by the $417,341 increase$46,666 decrease in revenues during the six months ended June 30, 2023. The increase in revenuerevenues.

Other Expense, Net

Other expense, net was partially offset by the $88,992 and $181,343 increases in lease operating expenses and depletion and accretion expense, respectively, over the same period.

Total operating loss was $125,370$78 for the three months ended June 30, 2023, and $199,281March 31, 2024, as compared to $556 for the three months ended June 30, 2022. The decreased loss was primarily driven by the $188,623March 31, 2023, due to an increase in revenues over the same period partially offset by a $31,279 increase in lease operating expenses and an increase of 83,521 in depletion and accretion.interest income.

OtherExpense

Other expense was $1,102 for the six months ended June 30, 2023, as compared to $1,250 for the six months ended June 30, 2022; and was $546 for the three months ended June 30, 2023, as compared to $288 for the three months ended June 30, 2022. These changes were primarily driven by changes in interest expense.

Net Loss

As a result of the above factors, for the sixthree months ended June 30, 2023,March 31, 2024, the Company had a net loss of $426,691,$303,486 as compared to a net loss of $673,751 for the six months ended June 30, 2022. For the three months ended June 30, 2023, the Company had a net loss of $125,916, as compared to a net loss of $199,569$300,775 for the three months ended June 30, 2022.March 31, 2023.

Sales volumes and commodity prices received

The following table presents our sales volumes and received pricing information for the three and six-monththree-month periods ended June 30, 2023,March 31, 2024, and 2022:2023:

Liquidity and Capital Resources and

Sources of Liquidity

The Company had cash on hand of $116,882$69,223 at June 30, 2023,March 31, 2024, compared to $37,750$75,908 at December 31, 2022.2023. For the sixthree months ended June 30, 2023,March 31, 2024, the Company had net cash provided by operating activities of $84,062, compared to net cash used in operating activities of $33,031$4,201, compared to $21,353 for the same period of 2022.2023. The increasedecrease in cash provided byused in operating activities for the six months ended June 30, 2023, was driven by the $435,033 net$200,567 decrease in the adjustment for the noncash issuance of common stock for services and salaries, offset by the $234,922 increase in adjustments for non-cash items and changes in the balances of accounts receivables,receivable, prepaid expenses, accounts payables,payable, and accrued expenses, in addition to the $247,060 decrease in net loss from operations, compared to the same period of 2022.  liabilities.

Net cash used in investing activities was $0 for the sixthree months ended June 30, 2023,March 31, 2024, and June 30, 2022.  March 31, 2023.

Net cash used in financing activities was $4,930$2,484 for the sixthree months ended June 30, 2023,March 31, 2024, compared to net cash provided by financing activities of $33,879$7,537 for the same period in 2022.2023. The decrease in cash provided

by financing activities is due to proceeds from related party loansstock subscriptions payable of $38,000$10,000 during the period ended June 30, 2022,March 31, 2023, compared to $14,930 in payments on related party and SBA PPP loans payable$0 during the same period in 2023. 2024.

Capital Resources for Future Acquisition and Development Opportunities

We continuously evaluate potential acquisitions and development opportunities. To the extent possible, we intend to acquire producing properties and/or developed undrilled properties rather than exploratory properties. We do not intend to limit our evaluation to any one state. We presently have no intention to evaluate offshore properties or properties located outside of the United States.

Effects of Inflation and Pricing

The oil and natural gas industry is very cyclical and the demand for goods and services of oil field companies, suppliers, and others associated with the industry puts pressure on the economic stability and pricing structure within the industry. Typically, as prices for oil and natural gas increase, so do all associated costs. Material changes in prices impact the current revenue stream, estimates of future reserves, borrowing base calculations of bank loans, and the value of properties in purchase and sale transactions. Material changes in prices can impact the value of oil and natural gas companies and their ability to raise capital, borrow money and retain personnel. We anticipate business costs will vary in accordance with commodity prices for oil and natural gas, and the associated increase or decrease in demand for services related to production and exploration.

Off Balance Sheet Arrangements

The Company does not have any off balanceoff-balance sheet arrangements, and it is not anticipated that the Company will enter into any off-balance sheet arrangements.

Disclosures About Market Risks

Like other natural resource producers, the Company faces certain unique market risks associated with the exploration and production of oil and natural gas. The most salient risk factors are the volatile prices of oil and gas, operational risks, the ability to integrate properties and businesses, and certain environmental concerns and obligations.

Oil and Gas Prices

The price we receive for our oil and natural gas will heavily influence our revenue, profitability, access to capital, and future rate of growth. Oil and natural gas are commodities and, therefore, their prices are subject to wide fluctuations in response to relatively minor changes in supply and demand. The prices we receive for our production depend on numerous factors beyond our control. These factors include, without limitation, the following: worldwide and regional economic conditions impacting the global supply and demand for oil and natural gas; the price and quantity of imports of foreign oil and natural gas; the level of global oil and natural gas inventories; localized supply and demand fundamentals; the availability of refining capacity; price and availability of transportation and pipeline systems with adequate capacity; weather conditions, natural disasters, and public health threats; governmental regulations; speculation as to the future price of oil and the speculative trading of oil and natural gas futures contracts; price and availability of competitors’ supplies of oil and natural gas; energy conservation and

environmental measures; technological advances affecting energy consumption; the price and availability of alternative fuels and energy sources; and domestic and international drilling activity.

A substantial or extended decline in oil or natural gas prices may result in impairments of our proved oil and gas properties and may materially and adversely affect our future business, financial condition, cash flows, and results of operations.

Transportation of Oil and Natural Gas

CoJax is presently committed to using the services of the existing gatherers in its present areas of production. This gives such gatherers certain short-term relative monopolistic powers to set gathering and transportation costs. Obtaining the services of an alternative gathering company would require substantial additional costs since an alternative gatherer would be required to lay a new pipelinespipeline and/or obtain new rights-of-way.

Competition in the Oil and Natural Gas Industry

We operate in a highly competitive environment for developing and acquiring properties, marketing oil and natural gas, and securing equipment and trained personnel. As a relatively small oil and natural gas company, many large producers possess and employ financial, technical, and personnel resources substantially greater than ours. Those companies may be able to develop and acquire more prospects and productive properties than our financial or personnel resources permit. It is also significant that more favorable prices can usually be negotiated for larger quantities of oil and/or gas products, such that CoJax views itself as having a price disadvantage compared to larger producers.

Retention of Key Personnel

We depend to a large extent on the services of our officers. These individuals have extensive experience in the energy industry, as well as expertise in evaluating and analyzing producing oil and natural gas properties and drilling prospects, maximizing production from oil and natural gas properties, and developing and executing financing strategies. The loss of any of these individuals could have a material adverse effect on our operations and business prospects. Our success may be dependent on our ability to continue to hire, retain and utilize skilled executive and technical personnel.

Environmental and Regulatory Risks

Our business and operations are subject to and impacted by a wide array of federal, state, and local laws and regulations governing the exploration for and development, production, and marketing of oil and natural gas, the operation of oil and natural gas wells, taxation, and environmental and safety matters. Many laws and regulations require drilling permits and govern the spacing of wells, rates of production, water, waste use and disposal, prevention of waste hydraulic fracturing, and other matters. From time to time, regulatory agencies have imposed price controls and limitations on production in order to conserve supplies of oil and natural gas. In addition, the production, handling, storage, transportation, and disposal of oil and natural gas, byproducts thereof, and other substances and materials produced or used in connection with oil and natural gas operations are subject to regulation under federal, state, and local laws and regulations.

Compliance with these regulations may constitute a significant cost and effort for CoJax. To date, no specific accounting for environmental compliance has been maintained or projected by CoJax. CoJax does

not presently know of any environmental demands, claims, adverse actions, litigation, or administrative proceedings in which it or the acquired properties are involved or subject to or arising out of its predecessor operations.

In the event of a violation of environmental regulations, these environmental regulatory agencies have a broad range of alternative or cumulative remedies including ordering a cleanup of any spills or waste material and restoration of the soil or water to conditions existing prior to the environmental violation; fines; or enjoining further drilling, completion or production activities.

Going Concern

There can be no assurance that the Company will be able to achieve its business plan, raise additional capital, or secure the additional financing necessary to implement its current operating plan. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

The Company has yet to achieve profitable operations, expects to incur further losses in the development of its business, has negative cash flows from operating activities, and is dependent upon future issuances of equity or other financings to fund ongoing operations, all of which raises substantial doubt about the Company'sCompany’s ability to continue as a going concern. The Company'sCompany’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations or to obtain the necessary financing from shareholders or other sources to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has no formal plan in place to address this concern. Still, it considers that the Company will be able to obtain additional funds by equity financing or related party advances. However, there is no assurance of additional funding being available or on acceptable terms, if at all.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

The Company is currentlyWe are a smaller reporting company and are not subjectrequired to market risk exposure related to changes in interest rates on its indebtedness.provide this information.

Currently, the Company does not use interest rate derivative instruments to manage exposure to interest rate changes.

Commodity Price Risk

Our major market risk exposure is in the pricing applicable to our oil and natural gas production. Market risk refers to the risk of loss from adverse changes in oil and natural gas prices. Realized pricing is primarily driven by the prevailing domestic price for crude oil and spot prices applicable to the region in which we produce natural gas. Historically, prices received for oil and natural gas production have been volatile and unpredictable. We expect pricing volatility to continue.

The prices we receive depend on many factors outside of our control.  A significant decline in the prices of oil or natural gas could have a material adverse effect on our financial condition and the results of operations.  In order to reduce commodity price uncertainty and increase cash flow predictability relating

to the marketing of our crude oil and natural gas, we may enter into crude oil and natural gas price hedging arrangements with respect to a portion of our expected production.

The Company’s revenues, profitability, and future growth depend substantially on prevailing prices for oil and natural gas.  Prices also affect the amount of cash flow available for capital expenditures and CoJax’s ability to borrow and raise additional capital. The amount the Company can borrow under its Credit Facility is subject to periodic redetermination based in part on changing expectations of future prices. Lower prices may also reduce the amount of oil and natural gas that the Company can economically produce. CoJax currently sells all of its oil and natural gas production under price-sensitive or market price contracts.

Currency Exchange Rate Risk

Foreign sales accounted for none of the Company’s sales; further, the Company accepts payment for its commodity sales only in U.S. dollars.  CoJax is therefore not exposed to foreign currency exchange rate risk on these sales.

Item 4. Controls and Procedures

Evaluation of disclosure controls and procedures

Our management, with the participation of Jeffrey J. Guzy,William R. Downs, our principal executive officer, and Wm. Barrett Wellman,Jeffrey J. Guzy, our principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2024, the end of the period covered by this Quarterly Report, pursuant to Rule 13a-15 under the Exchange Act. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Based on management’s evaluation, Messrs. GuzyDowns and WellmanGuzy concluded that our disclosure controls and procedures as of the end of the period covered by this report were not effective in ensuring that information required to be disclosed by us in reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and (ii) is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

We will continue to monitor and evaluate the effectiveness of our disclosure controls and procedures and our internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.

Changes in internal control over financial reporting

We regularly review our system of internal control over financial reporting and make changes to our processes and systems to improve controls and increase efficiency, while ensuring that we maintain an effective internal control environment. Changes may include such activities as implementing new, more efficient systems, consolidating activities, and migrating processes.

There were no changes in our internal control over financial reporting that occurred during the sixthree months ended June 30, 2023,March 31, 2024, that have materially affected or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, we may become involved in various lawsuits and

There are no pending legal proceedings to which arisethe Company is a party or in which any director, officer or affiliate of the ordinary courseCompany, any owner of business. However, litigation is subject to inherent uncertainties, and an adverse result in theserecord or other matters may arise from time to time that may harm our business. We are currently not awarebeneficially of more than 5% of any such legal proceedingsclass of voting securities of the Company, or claims that we believe will havesecurity holder is a party adverse to the Company or has a material interest adverse effect on our business, financial condition, or operating results.to the Company. The Company’s property is not the subject of any legal proceedings.

Item 1A. Risk Factors

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. However, there have been no material changes to the risks described in “Item 1A. Risk Factors” in the 2023 Form 10-K.

Item 2. Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities.

None.

Except as set forth below, there were no sales of equity securities sold during the period covered by this Report that were not registered under the Securities Act and were not previously reported in a Current Report on Form 8-K filed by the Company.

On January 26, 2024, the Company issued 575,000 shares of common stock to Jeffrey J. Guzy upon conversion of 57,600 shares of Series A preferred stock and 475,000 shares of common stock to Wm. Barrett Wellman upon conversion of 47,500 shares of Series A preferred stock.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits