What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-06-14 compared with 2021-05-14 · 150 added, 124 removed, 314 unchanged (47% of the section changed)

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Opinion on the Financial Statements

We have audited the accompanying balance sheets of CoJax Oil & Gas Corporation (the Company) as of December 31, 2020 and 2019, and the related statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2020, and the related notes (collectively referred to as the financial statements).

We have audited the accompanying consolidated balance sheets of CoJax Oil & Gas Corporation (the Company) as of December 31, 2021 and 2020, and the related consolidated statements of operations, stockholders’ equity (deficit), and cash flows for each of the years in the two-year period ended December 31, 2021, and the related notes (collectively referred to as the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

Consideration of the Company’s Ability to Continue as a Going Concern

Substantial Doubt about the Company’s Ability to Continue as a Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 1 to the financial statements, the Company has recurring net losses, negative cash flows from operations, and negative working capital.

This raises substantial doubt about the Company's ability to continue as a going concern.

Management's plans in regard to these matters are also described in Note 2 to the financial statements.

As discussed in Note 2 to the financial statements, the Company has suffered recurring losses from operations and has a negative working capital that 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

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\s\ Haynie & Company

Haynie & Company Salt Lake City, Utah May 13, 2021

We have served as the Company’s auditor since 2019.

Salt Lake City, Utah

June 13, 2022

CoJax Oil and Gas Corporation

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Current assets:

Prepaid expenses

Total current assets

Other assets:

Barrister proved property

Barrister proved property asset retirement obligation - net

Barrister property rights

Barrister asset retirement obligation - net

Total other assets

10, 079 , 802

$ 10, 123 , 853

LIABILITIES and STOCKHOLDERS ’ DEFICIT

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Accrued M&A expense payable

Notes payable – PPP

Notes payable – SBA PPP – current portion

Notes payable – related party

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Barrister asset retirement obligation

Notes payable – SBA PPP

Note payable – Barrister acquisition

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Stockholders ’ deficit:

Preferred stock, $0.10 par value, 50,000,000 current shares authorized, no shares issued and outstanding, respectively.

Preferred stock, $0.10 par value, 50,000,000 current shares authorized, 30,000 Series A shares, $0.01 par value issued and outstanding, respectively.

Common stock, $0.01 par value, 300,000,000 current shares authorized, 5,780,576 and 3,659,001 shares issued and outstanding, respectively.

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Total liabilities and stockholders ’ equity

$ 10, 123 , 853

See accompanying notes to consolidated financial statements.

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Operating expenses

Accretion expenst

Accretion expense

Total expenses

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Other income (expense):

Other income – EIDL grant

Interest income

Miscellaneous expense

Interest expense

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$ (1,490,196)

$ ( 1 , 36 3 ,296)

Net loss per common share - basic and diluted

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$ (1,490,196)

$ (1,363,296)

Common stock issued for services and salaries

Adjustments to reconcile net loss to net cash used in operations:

Amortization of asset retirement obligation

Accoutnts payable

Accounts payable

Prepaid expense

Accrued M&A expense

Accrued salaries and payroll taxes

Deferred offering costs – write off

Accrued interest payable

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Net cash used in operating activities

( 108 , 618 )

Cash flows from investing activities :

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Proceeds from loans payable – related party

Payments on loans payable – related party

Proceeds from loans payable – SBA PPP loan

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Net cash provided by financing activities

Net increase in cash

Net increase (decrease) in cash

Cash at beginning of period

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Note payable – Barrister acquisition

Common stock for Barrister acquisition

Common stock issued for note payable debt exchange

Common stock issued for related party notes payable and interest

Common stock issued for accrued expenses

Addition of asset retirement obligation

Interest paid, net of capitalized interest

Preferred stock issued for accrued compensation

See accompanying notes to consolidated financial statements.

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Balance, December 31, 2019

Sale of common stock for cash

Shares issued - Barrister acquisition

Net (loss) for the year ending December 31, 2020

( 1 , 363 ,296)

Balance, December 31, 2020

$ (1,406,328)

$ (1,388,326)

Sale of common stock for cash

Shares issued - Barrister acquisition

Share-based vendor payments and compensation

1, 355 , 67 3

Preferred shares issued for accrued compensation

Share-based compensation

Shares issued – note payable debt exchange

Shares issued – note payable debt exchange – related party

Net (loss) for the year ending December 31, 2021

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$ (2,896,524)

$ 1, 964 , 631

See accompanying notes to consolidated financial statements.

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Nature of Operations

We are an early development stage company, and we have no revenue generating operations.

From November 13, 2017, we have been engaged in organizational activities and had no revenue generating operations.

We intend to acquire assignments of hydrocarbon revenues and underlying oil and gas exploration and production rights.

We are an early development stage company.

From November 13, 2017, we have been engaged in organizational activities and had no revenue-generating operations until the period covered by this current report.

We have begun to acquire assignments of hydrocarbon revenues and underlying oil and gas exploration and production rights.

Basis of Presentation

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) which contemplate continuation of the Company as a going concern.

NOTE 2 – GOING CONCERN DISCLOSURE

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GAAP applicable to a going concern that contemplates the realization of assets and liquidation of liabilities in the normal course of business.

During 2020, the Company has acquired Barrister Energy with identified proven or probable reserves and correspondingly expects to be generating revenue during its exploration stage.

During 2020, the Company has acquired Barrister Energy and correspondingly expects to be generating revenue during its exploration stage.

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 financing 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 shareholders or other sources to meet its obligations and repay its liabilities arising from normal business operations when they come due.

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.

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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.

Actual results could differ from those estimates and would impact future results of operations and cash flows.

Actual results could differ from those estimates and would affect future results of operations and cash flows.

Cash and Cash Equivalents

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As of December 31, 2021, and the year ended December 31, 2020, the allowance for doubtful accounts was $0.

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.

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.

Impairment or Disposal of 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.

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.

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ASC 820 “Fair Value Measurements and Disclosures” defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources

(observable inputs) and (2) a reporting 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 gives 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).

ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) a reporting 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:

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On January 1, 2018, the Company adopted Accounting Standards Codification Topic 606, Revenue from Contracts with Customers, (“ASC 606”).

As the Company has no sales, the adoption did not require an adjustment to opening retained earnings for the cumulative effect adjustment and did not affect the Company’s previously reported results of operations, nor its ongoing consolidated and combined balance sheets, statements of cash flow or statements of changes in equity.

As the Company has no sales, the adoption did not require an adjustment to opening retained earnings for the cumulative effect adjustment and did not affect the

Company’s previously reported results of operations, nor its ongoing consolidated and combined balance sheets, statements of cash flow, or statements of changes in equity.

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.

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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.

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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 upon the technical merits of the position.

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 they had no uncertain tax positions as of December 31, 2020 or as of December 31, 2019.

Because of the implementation of this standard, the Company performed a review of its material tax positions in accordance with recognition and measurement standards established by ASC 740 and concluded that it had no uncertain tax positions as of December 31, 2021, or as of December 31, 2020.

Basic and Diluted Income per Share

The Company computes income per share in accordance with ASC 260, "Earnings per Share", which requires 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 shareholders by the weighted average number of shares outstanding during the period.

The Company computes income per share in accordance with ASC 260, "Earnings per Share", which requires the presentation of both basic and diluted earnings per share (“EPS”) on the face of the 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.

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The acquired properties consist of 700 gross acres and include a 95% average working interest and a 79% average net revenue interest.

The Acquisition was recognized as a business combination whereby CoJax recorded the assets acquired and the liabilities assumed at their fair values as of June 16, 2020, which is the date the Company obtained control of the properties and was the acquisition date for financial reporting purposes.

Revenues and related expenses for the Acquisition are included in our consolidated statement of operations beginning June 16, 2020.

The estimated fair value of the acquired properties approximated the consideration paid, which the Company concluded approximated the fair value that would be paid by a typical market participant.

The $2.7 million, zero interest, long-term note is payable to Central Operating, LLC at the signing of the Purchase and Sale Agreement on June 16, 2020.

The Acquisition payable to be settled through equity was settled at the closing on November 17, 2020 through the issuance of 3,650,000 shares of common stock.

The Acquisition was recognized as an asset acquisition whereby CoJax recorded the assets acquired and the liabilities assumed at the historical cost to Barrister as of November 17, 2020.

Revenues and related expenses for the Acquisition are included in our consolidated statement of operations beginning June 16, 2020, which is the date the Company obtained control of the properties.

The $2.7 million, zero interest, long-term note was payable to Central Operating, LLC at the signing of the Purchase and Sale Agreement on June 16, 2020.

The note payable was settled through a debt exchange agreement on November 19, 2021, with the issuance of 1,350,000 shares of common stock.

The Acquisition payable was settled at the closing on November 17, 2020, through the issuance of 3,650,000 shares of common stock.

The Company incurred $620,500 in non-capitalizable acquisition-related costs, which were recognized in general and administrative expense during the year ended December 31, 2020.

The Company will continue to evaluate the fair value of the assets and liabilities reflected above and will record any adjustments, if needed, in future periods.

The estimated fair value of the acquired properties approximated the consideration paid, which the Company concluded approximated the fair value that would be paid by a typical market participant.

The following table summarizes the fair values of the assets acquired and the liabilities assumed:

Fair Value of consideration given;

The following table summarizes the historical costs of the assets acquired and the liabilities assumed:

Historical Cost of consideration given;

Assets acquired:

Proved oil and natural gas properties

Barrister property rights

Liabilities assumed:

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Total Identifiable Net Assets

(Due to the limited operations of Barrister Energy the proforma consolidated results of operations were not considered material as if the acquisition occurred on January 1, 2019.)

NOTE 6 – LONG-LIVED ASSETS

At December 31, 2020 through the Company’s acquisition of Barrister Energy, LLC had leased oil and gas properties assets valued at $10,000,000 and at December 31, 2019, the Company had no other long-lived assets.

At December 31, 2021, and December 31, 2020, through the Company’s acquisition of Barrister Energy, LLC had leased oil and gas properties assets valued at $2,700,000.

NOTE 7 – ACCRUED EXPENSES

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On June 10, 2020, the SBA PPP loan was approved and transferred to the Company to be used for payment of accrued payroll and related payroll taxes.

On November 29, 2021, the Company was notified that the request for forgiveness was denied.

The note has been converted to a five-year loan at 1% interest beginning on January 1, 2022.

On May 4, 2021, the Company applied for a Small Business Association (SBA) loan under the Paycheck Protection Program (PPP).

The Company met all the necessary qualifications to apply for a $41,665 loan.

On May 9, 2021, the SBA PPP loan was approved and transferred to the Company to be used for payment of accrued payroll and related payroll taxes.

We do not expect to be required to repay any portion of the loan.

100% of the funds were disbursed for salaries and payroll taxes in 2021.

The $2.7 million long-term note is payable to Central Operating, LLC at the signing of the Barrister Purchase and Sale Agreement in June 16, 2020.

The $2.7 million long-term note is payable to Central Operating, LLC at the signing of the Barrister Purchase and Sale Agreement on June 16, 2020.

The Company’s obligation to repay the full amount of the note was discharged pursuant to a debt exchange transaction on November 19, 2021, in exchange for the issuance of common stock.

Notes payable

current Portion

Notes payable net of current portion

Related Party

The Company is a party to several loans with related parties.

The Company was a party to several loans with related parties.

The note holder is the CEO and Executive Chairman of the Company.

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On September 1, 2019, the Company's Executive Chairman loaned $42,000 to the Company, and the Company issued a promissory note for such amount.

The promissory note is unsecured and bears interest at 2% per annum principal and accrued interest mature on February 19, 2022.

The promissory note is unsecured and bears interest at 2% per annum principal and accrued interest matures on February 19, 2022.

This note and associated interest was settled with the issuance of common stock in a debt exchange on December 17, 2021.

On November 15, 2019, the Company's Executive Chairman loaned $20,000 to the Company, and the Company issued a promissory note for such amount.

The promissory note is unsecured and bears interest at 2% per annum principal and accrued interest mature on February 19, 2022.

The promissory note is unsecured and bears interest at 2% per annum principal and accrued interest matures on February 19, 2022.

This note and associated interest was settled with the issuance of common stock in a debt exchange on December 17, 2021.

On February 19, 2020, the Company's Executive Chairman loaned $28,400 to the Company, and the Company issued a promissory note for such amount.

The promissory note is unsecured and bears interest at 2% per annum principal and accrued interest mature on February 19, 2022.

The promissory note is unsecured and bears interest at 2% per annum principal and accrued interest matures on February 19, 2022.

This note and associated interest was settled with the issuance of common stock in a debt exchange on December 17, 2021.

On July 15, 2020, the Company's Executive Chairman loaned $37,215 to the Company, and the Company issued a promissory note for such amount.

The promissory note is unsecured and bears interest at 2% per annum principal and accrued interest mature on July 15, 2022.

The promissory note is unsecured and bears interest at 2% per annum principal and accrued interest matures on July 15, 2022.

This note and associated interest was settled with the issuance of common stock in a debt exchange on December 17, 2021.

Notes payable – related party

NOTE 9 – RELATED PARTY TRANSACTIONS

For the year ending December 31, 2020, there were four related party transactions (see NOTE 8) between the Company’s Executive Chairman and the Company.

For the year ending December 31, 2021, there were no related party transactions (see NOTE 8) between the Company’s Executive Chairman and the Company.

There were no other related party transactions 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.

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The fair value was based on the value assigned to common stock ($2 per share) multiplied by 10.

For the year ending December 31, 2019, there were two related party transactions (see NOTE 8) between the Company’s Executive Chairman and the Company.

For the year ending December 31, 2020, there were four related party transactions (see NOTE 8) between the Company’s Executive Chairman and the Company.

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Authorized Capital

As of December 31, 2020, the Company has 300,000,000 authorized shares of Common Stock at $0.01 par value and 50,000,000 authorized shares of Preferred Stock at a par value of $0.10.

As of December 31, 2021, the Company has 300,000,000 authorized shares of Common Stock at $0.01 par value and 50,000,000 authorized shares of Preferred Stock at a par value of $0.10, and Series A convertible shares at a par value of $0.01.

Preferred Stock

During the year ending December 31, 2020, the Company accrued 30,000 shares of Series A convertible preferred stock of it’s officers (see NOTE 9).

During the year ending December 31, 2021, the Company issued 30,000 shares of Series A convertible preferred stock of its officers (see NOTE 9).

During the year ending December 31, 2020, the Company issued no shares of Preferred Stock.

During the year ending December 31, 2020, the Company issued 3,650,000 at $2.00 per share for the Barrister acquisition and issued 9,000 shares at a share price of $2.00 for cash proceeds.

During the year ending December 31, 2019, no shares of Common Stock were issued.

During the years ending December 31, 2020 and December 31, 2019, the Company did not repurchase any shares.

During the year ending December 31, 2021, the Company issued 1,350,000 at $2.00 per share in a debt exchange, and on November 17, 2020, the Company issued 3,650,000 shares as part of the Barrister acquisition.

As mentioned in NOTE 5 the acquisition was accounted for as an asset acquisition and the transfer of assets and liabilities occurs at historical cost which resulted in no value being allocated to the shares being issued.

Additionally, the Company issued 677,836 shares for vendor payments, 10,000 shares for stock-based compensation, and 66,240 shares for related party note payable debt exchange, all 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.

During the year ended December 31, 2021, the Company issued 17,500 shares at a share price of $2.00 for cash proceeds, and during the year ending December 31, 2020, the Company issued 9,000 shares at a share price of $2.00 for cash proceeds.

During the years ending December 31, 2021, and December 31, 2020, the Company did not repurchase any shares.

Capital Contributions

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There were no deferred tax assets or liabilities at December 31, 2021, and December 31, 2020.

Management has reviewed the provisions regarding assessment of their valuation allowance on deferred tax assets and based on that criteria determined that it would not have sufficient taxable income to realize those assets.

Management has reviewed the provisions regarding the assessment of their valuation allowance on deferred tax assets and based on those criteria determined that it would not have sufficient taxable income to realize those assets.

Therefore, management has assessed the realization of the deferred tax assets and has determined that it is more likely than not that they will not be realized and has provided a full valuation allowance against the deferred tax asset.

The Company recognizes the financial statement impact of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit.

The Company recognizes the financial statement effect of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit.

For tax positions meeting the more-likely-than-not threshold, the amount recognized in the consolidated financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority.

The Company is subject to income taxes in the U.S.

federal jurisdiction and the state Virginia.

The tax regulations within each jurisdiction are subject to interpretation of related tax laws and regulations and require significant judgment to apply.

federal jurisdiction and the state of Virginia.

The tax regulations within each jurisdiction are subject to the interpretation of related tax laws and regulations and require significant judgment to apply.

The Company is not presently undergoing any tax audits.

As of December 31, 2020, the tax years that remain subject to examination are 2020, 2019, 2018, and 2017 for Federal and 2020, 2019, 2018, and 2017 for state.

As of December 31, 2021, the tax years that remain subject to examination are 2020, 2019, 2018, and 2017 for Federal and 2020, 2019, 2018, and 2017 for the state.

The Company will apply the federal and state NOL carry-forward in FY 2021 and later years.

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In addition to applying the new lower corporate tax rate in 2018 and thereafter to any taxable income we may have, the legislation affects the way we can use and carry forward net operating losses previously accumulated and results in a revaluation of deferred tax assets recorded on our balance sheet.

Given that the deferred tax assets are offset by a full valuation allowance, these changes have no net impact on the Company’s financial position and net loss.

Given that the deferred tax assets are offset by a full valuation allowance, these changes have no net effect on the Company’s financial position and net loss.

However, when we become profitable, we will receive a reduced benefit from such deferred tax assets.

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Deferred income tax assets

The Company has a valuation allowance against the full amount of its net deferred tax assets due to the uncertainty of realization of the deferred tax assets.

The Company has a valuation allowance against the full amount of its net deferred tax assets due to the uncertainty of the realization of the deferred tax assets.

At December 31, 2021, and December 31, 2020, the Company has incurred accumulated net operating losses in the United States of America totaling $2,896,524 and $1,406,328 respectively which are available to reduce taxable income in future taxation years.

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and on March 10, 2020, declared it to be a pandemic.

Actions taken around the world to help mitigate the spread of the coronavirus include restrictions on travel, and quarantines in certain areas, and forced closures for certain types of public places and businesses.

The coronavirus and actions taken to mitigate it have had and are expected to continue to have an adverse impact on the economies and financial markets of many countries, including the geographical area in which the Company operates.

Actions taken around the world to help mitigate the spread of the coronavirus include restrictions on travel, quarantines in certain areas, and forced closures for certain types of public places and businesses.

The coronavirus and actions taken to mitigate it have had and are expected to continue to have an adverse effect on the economies and financial markets of many countries, including the geographical area in which the Company operates.

While it is unknown how long these conditions will last and what the complete financial effect will be to the company, to date, the Company is not expecting to experience any adverse effects other than:

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Fund-raising events may be limited.

Additionally, it is possible that estimates made in the financial statements have been, or will be, materially and adversely impacted in the near term as a result of these conditions, including the ability to raise additional funding.

Additionally, it is possible that estimates made in the financial statements have been, or will be, materially and adversely affected in the near term as a result of these conditions, including the ability to raise additional funding.

NOTE 13 – ASSET RETIREMENT OBLIGATION

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Changes in the asset retirement obligation were as follows:

Balance, June 15, 2020

Balance, November 17, 2020

Liabilities acquired

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Balance, December 31, 2020

Liabilities acquired

Liabilities incurred

Liabilities settled

Accretion expense

Balance, December 31, 2021

NOTE 14 - 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 no reportable subsequent events to be disclosed beyond the following:

Issuance of Common Shares

On January 4, 2021 the company issued 310,250 shares of common stock to Newbridge Securities Corporation in settlement of $620,500 in M&A fees for the Barrister acquisition.

On February 23, 2021 the company issued 42,500 shares of common stock to various vendors in settlement of $85,000 in strategic consulting fees.

On February 23, 2021 the company issued 15,000 shares of common stock to various vendors in settlement of $30,000 in board consulting fees.

On February 23, 2021 the company issued 42,500 shares of common stock to various vendors in settlement of $85,000 in accounting consulting fees.

During the first quarter of 2021 the company issued 17,500 shares of common stock for sale of shares for cash.

Issuance of Common Shares to Officers

On January 4, 2021 the Company issued 5,000 shares of common stock to Jeffrey J.

Guzy, the CEO.

On January 4, 2021 the Company issued 5,000 shares of common stock to Wm.

Barrett Wellman, the CFO.

Issuance of Preferred Shares to Officers

On January 4, 2021 the Company issued 20,000 shares of Series A convertible preferred stock to Jeffrey J.

Guzy, the CEO.

Each share is convertible at the option of the holder to ten (10) shares of common stock

On January 4, 2021 the Company issued 10,000 shares of Series A convertible preferred stock to Wm.

The management of the Company determined that there were no reportable subsequent events to be disclosed beyond the following:

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 April 21, 2022, the Company's Executive Chairman loaned $18,000 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.

Issuance of Preferred Stock

On January 4, 2022, the Company issued 12,500 shares of its 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.

Since these shares were not issued until 2022 the fair value of $500,000 ($20 per share) has been recorded as part of accrued salaries and payroll taxes.

The fair value was based on the value assigned to common stock ($2 per share) multiplied by 10.

Issuance of Common Stock

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

On March 14, 2022, the Company issued 10,000 shares for payment to William A.

Bradley, Board member at $2.00 per share.

On May 5, 2022, the Company issued 31,554 shares for vendor payments at $2.00 per share.

Appointment of Independent Board Member

On March 7, 2022, William A.

Bradley was offered and accepted the position of an independent member of the Board of Directors.

Bradley, 56, has over fifteen years of leadership, business consulting, financial, and management experience for publicly traded and private companies.

Since June 2011, Mr.

Bradley served as M&A/Business Consulting Managing Director and Chief Financial Officer at Global Advisors Inc.

where he provided business consulting services, reviewed client’s financial position and managed relationships, conducted financial reviews, including the PCAOB or IFRS audit process, and provided his consulting business advice on restructuring and potential mergers and acquisitions.

Since September 2018 he has served as the Chairman of the Board of Magagram Social Media Inc., a Toronto-based private company, from December 2006 to June 2011 as Chief Executive Officer of Ocean to Ocean Inc., and from January 2002 until November 2006, as Vice President of Gourmet Foods International.

Bradley graduated from York University in 1998 in Finance and Economics and received his undergraduate degree with honors in 1991 in Business Finance from Sandford College.

Oil Price Fluctuations and Uncertainty

Our financial results depend on many factors, particularly the price of natural gas and crude oil and our ability to market our production on economically attractive terms.

Commodity prices are affected by many factors outside of our control, including changes in market supply and demand, which are impacted by weather conditions, pipeline capacity constraints, inventory storage

levels, basis differentials and other factors.

Commodity prices are

affected by many factors outside of our control, including changes in market supply and demand, which are affected by weather conditions, pipeline capacity constraints, inventory storage levels, basis differentials, and other factors.

As a result, we cannot accurately predict future commodity prices and, therefore, we cannot determine with any degree of certainty what effect increases or decreases in these prices will have on our drilling program, production volumes, or revenues.

1 unchanged sentence

We expect oil and natural gas to remain volatile.

The ability to find and develop sufficient amounts of natural gas and crude oil reserves at economical costs are critical to our long-term success of the Company.

CoJax Oil and Gas Corporation

Supplemental Information on Oil and Natural Gas Producing Activities

Results of Operations from Oil and Natural Gas Producing Activities – The Company’s results of operations from oil and natural gas producing activities exclude interest expense, gain from change in fair value of put options, and other financing expense.

Income taxes are based on statutory tax rates, reflecting allowable deductions.

The consoloidated results of operations for the year ended 2020 were immaterial for the financial statements as a whole.

Reserve Quantities Information – The following estimates of proved and proved developed reserve quantities and related standardized measure of discounted future net cash flow are estimates only, and do not purport to reflect realizable values or fair market values of the Company’s reserves.

The Company emphasizes that reserve estimates are inherently imprecise and that estimates of new discoveries are more imprecise than those of producing oil and natural gas properties.

Accordingly, these estimates are expected to change as future information becomes available.

All of the Company’s reserves are located in the United States of America.

Proved reserves are estimated reserves of crude oil (including condensate and natural gas liquids) and natural gas that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions.

Proved developed reserves are those expected to be recovered through existing wells, equipment and methods.

The standardized measure of discounted future net cash flows is computed by applying the price according to the SEC guidelines for oil and natural gas to the estimated future production of proved oil and natural gas reserves, less estimated future expenditures (based on year-end costs) to be incurred in developing and producing the proved reserves, less estimated future income tax expenses (based on year-end statutory tax rates) to be incurred on pretax net cash flows less tax basis of the properties and available credits, and assuming continuation of existing economic conditions.

The estimated future net cash flows are then discounted using a rate of 10 percent per year to reflect the estimated timing of the future cash flows.

For the Year Ended December 31,

Natural Gas (1)

Proved Developed at end of year

Proved Undeveloped at end of year

1 Oil reserves are stated in barrels;

natural gas reserves are stated in thousand cubic feet.

Standardized Measure of Discounted Future Net Cash Flows

Future cash flows

Future production costs

Future development costs

Future income taxes

Future net cash flows

10% annual discount for estimated timing of cash flows

Standardized Measure of Discounted Future Net Cash Flows

The ability to find and develop sufficient amounts of natural gas and crude oil reserves at economic costs are critical to the long-term success of the Company.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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What changed 10-K

Item 8. Financial Statements and Supplementary Data