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Item 8. Financial Statements and Supplementary Data

2023-11-20 compared with 2022-06-14 · 313 added, 214 removed, 250 unchanged (68% of the section changed)

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Report of Independent Registered Public Accounting Firm

Report s of Independent Registered Public Accounting Firm s

Financial Statements:

1 unchanged sentence

Consolidated Statements of Operations for the years ended December 31, 2022 , and December 31, 2021

Consolidated Statements of Cash Flows for the years ended December 31, 2021, and December 31, 2020

Consolidated Statements of Stockholders ’ Deficit for the years ended December 31, 2022 , and 2021

Consolidated Statements of Cash Flows for the years ended December 31, 2022, and December 31, 2021

Notes to Consolidated Financial Statements

REPORT OF I N DEPE N DENT REGISTERED P UBLIC ACCOUNT I NG FIRM

To t he Bo a r d of Di r ec t o rs and Shareholders of Co Jax Oil and Gas Corporation:

Opinion on t he Financia l Statements

We h ave a ud it ed t he acc ompa n y in g consolidated ba l ance sheet o f CoJax Oil and Gas Corporation ("t he Company"

) as of December 3 1 , 2022, t he re l ated conso li da t ed statements o f ope rati ons, stock h o ld ers' equity, a n d cash flow s for t he year ended December 3 1 , 2022 and the r e l a t ed n o t es (collec t iv e l y referred to as t he "fin a n cia l s t atements"

I n our opinion , the fi n ancia l statements referred to above present f ai rl y, in all m a t e ri a l respects, t he fin a nci a l position of t he Company as of December 31, 2022 , and t h e r esu l t s of i t s operations and i ts cash flow s for the year ended Dece m ber 31, 2022 , in conformity with accou n t in g p ri n c ipl es generally accep t ed in t he U n it ed States of Amer i ca .

Ex p l a n a t ory Parag ra p h Regarding Going Concern

The accompanying financial statements h ave bee n prepared assuming t h a t t h e Company w i ll continue as a go i ng concern .

As di scus sed in N o te 2 t o the fin a n c i al statements, t h e Company has suffered recurring losses from operations and has a net capital deficiency w hich raise substantial do u b t abou t its ability to continue as a go i ng concern .

M a n a gemen t's p l a n s in regard to t he se m atters are also described in Note 2.

The financial sta t emen t s do n o t i n cl u de any adjustmen t s tha t might r esu l t from t he outcome of t h i s u ncerta i n ty .

Basis for Opinion

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

/s/ Sad l e r , G i bb & Associates , LLC

We ha v e se rv ed as t h e Company's auditor since 2022 .

November 17, 2023

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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Opinion on 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.

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 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

We have audited the accompanying balance sheets of CoJax Oil & Gas Corporation (the Company) as of December 31, 2021, and the related consolidated statements of operations, stockholders’ deficit, and cash flows for the year 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 the results of its operations and its cash flows for the year ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

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/s/ Haynie & Company

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

Salt Lake City, Utah

June 13, 2022

November 17, 2023

We began serving as the Company’s auditor in 2019.

In 2022, we became the predecessor auditor.

CoJax Oil and Gas Corporation

Consolidated Balance Sheets

As of December 31, 2021, and December 31, 2020

December 31, 2022

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Current assets:

Accounts receivable

Prepaid expenses

Total current assets

Other assets:

Barrister property rights

Barrister asset retirement obligation - net

Total other assets

LIABILITIES and STOCKHOLDERS ’ DEFICIT

Property and Equipment :

Oil and gas properties at cost

Accumulated depletion

Total property and equipment - net

LIABILITIES and STOCKHOLDERS ’ EQUITY

Current liabilities:

Accounts payable

Accrued interest payable

Accrued M&A expense payable

Notes payable – SBA PPP – current portion

Notes payable – related party

Workover expense payable

Accrued salaries and payroll taxes

Current portion of notes payable

Notes payable – related party

Total current liabilities

Long -term liabilities:

Barrister asset retirement obligation

Notes payable – SBA PPP

Note payable – Barrister acquisition

Asset retirement obligations

Notes payable, net of current portion

Tota l long -term liabilities

Total liabilities

Stockholders ’ deficit:

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.

2 , 22 8 , 273

Stockholders ’ equity :

Preferred stock, $0.10 par value, 50,000,000 current shares authorized, 55,000 and 30,000 Series A shares, $0.01 par value issued and outstanding at December 31, 2022 and 2021, respectively.

Common stock, $0.01 par value, 300,000,000 current shares authorized, 9,114,446 and 5,780,577 shares issued and outstanding at December 31, 2022 and 2021, respectively.

Additional paid-in capital

1 unchanged sentence

Total stockholders ’ equity

3 , 206 , 984

Total liabilities and stockholders ’ equity

2 unchanged sentences

Consolidated Statements of Operations

For the years ending December 31, 2021, and December 31, 2020

For the Year Ended

2 unchanged sentences

December 31, 2021

General & administrative expenses

Operating expenses

Accretion expense

Total expenses

Operating costs and expenses:

Lease operating expenses

General and administrative expenses

Depletion and accretion on discounted liabilities

Impairment expense

Total operating costs and expenses

Loss from operations

Other income (expense):

Interest income

Miscellaneous expense

Gain on forgiveness of debt

Other income and expense

Interest expense

6 unchanged sentences

CoJax Oil and Gas Corporation

Consolidated Statements of Cash Flows

For the years ending December 31, 2021, and December 31, 2020

December 31, 2021

December 31, 2020

Cash flows from operating activities:

$ (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

Accounts payable

Prepaid expense

Accrued M&A expense

Accrued salaries and payroll taxes

Accrued interest payable

Total adjustments to reconcile net loss to net cash provided by operations

Net cash used in operating activities

( 108 , 618 )

Cash flows from investing activities :

Cash flows from financing activities:

Proceeds from loans payable – related party

Proceeds from loans payable – SBA PPP loan

Proceeds from sale of common stock

Net cash provided by financing activities

Net increase (decrease) in cash

Cash at beginning of period

Cash at end of period

Supplemental disclosure of non-cash investing and financing activities:

Note payable – 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

Preferred stock issued for accrued compensation

See accompanying notes to consolidated financial statements.

CoJax Oil and Gas Corporation

Consolidated Statements of Stockholder’s (Deficit)

Consolidated Statements of Stockholder’s Equity

For the years ending December 31, 2022, and December 31, 2021

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Balance, December 31, 2020

Sale of common stock for cash

Shares issued - Barrister acquisition

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

$ (1,406,328)

Balance, December 31, 2020

$ (1,388,326)

Sale of common stock for cash

Share-based vendor payments and compensation

1, 355 , 67 3

Preferred shares issued for accrued compensation

7 unchanged sentences

$ (2,896,524)

Common stock issued for services

Preferred stock issued for accrued officer compensation

Shares issued for acquisitions

Net loss for the year ending December 31, 2022

Balance, December 31 , 2022

$ ( 9 , 134 ,139 )

2 unchanged sentences

CoJax Oil and Gas Corporation

Consolidated Statements of Cash Flows

December 31, 2022

December 31, 2021

Operating Activities:

$ (6,2 37 ,615)

$ (1,490,196)

Adjustments to reconcile net loss to net cash used in operating activities:

Impairment loss on oil and gas properties

Depletion expense

Gain on forgiveness of debt

Accretion of asset retirement obligations

Common stock issued for services and salaries

Changes in operating assets and liabilities:

Accounts receivable

Prepaid expense

Accounts payable and accrued liabilities

Net cash used in operating activities

Investing Activities:

Net cash used in investment activities

Financing Activities:

Proceeds from loans payable – related party

Proceeds from loans payable – SBA PPP loan

Payments of loans payable – SBA PPP Loan

Proceeds from the issuance of common stock

Net cash provided by financing activities

Net change in cash

Cash - beginning of period

Cash - end of period

Supplemental disclosure of non-cash investing and financing activities:

Common stock issued for acquisitions

Common stock issued for note payable debt exchange

Common stock issued for related party notes payable and interest

Common stock issued for accrued expenses

Preferred stock issued for accrued compensation

See accompanying notes to consolidated financial statements.

CoJax Oil and Gas Corporation

Notes to Consolidated Financial Statements

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CoJax Oil & Gas Corporation, a Virginia corporation (“Company”), was incorporated on November 13, 2017.

The Company is based in Arlington Virgina, with a wholly owned subsidiary, Barrister Energy LLC (‘Barrister Energy’), registered in Mississippi and based in Laurel, Mississippi .

Nature of Operations

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.

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 exploration and production (“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 periods covered by this current report.

The company has begun to acquire assignments of hydrocarbon revenues and underlying oil and gas exploration and production rights as covered by this current report.

The company runs all operations of 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, working interests, real property interests and mineral rights and royalties and are generally not regarded as the acquisition of securities, but rather real property interests.

As an owner, the Company has the right to receive a portion of the production from the leased acreage (or of the proceeds of the sale thereof).

As an owner, the Company also has and obligation for its share of lease operating costs.

On March 11, 2020, the World Health Organization declared COVID-19 a global pandemic.

This contagious disease outbreak and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, leading to an economic downturn.

The impact on the Company has not been significant but management continues to monitor the situation.

Basis of Presentation

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NOTE 2 – GOING CONCERN DISCLOSURE

The Company’s 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.

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

The Company’s consolidated financial statements are prepared in accordance with U.S.

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

course of business.

There can be no assurance that the Company will be able to achieve its business plan, raise any additional capital, or secure the additional financing necessary to implement its current operating plan.

The accompanying 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 accompanying consolidated financial statements do not include any adjustments that might be necessary if the Company is unable 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.

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NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidation

The accompanying condensed 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.

The preparation of financial statements in conformity U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period.

Significant areas of estimate include the impairment of assets and rates for amortization, accrued liabilities, future income tax obligations, and the inputs used in calculating stock-based compensation and transactions.

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

Reclassifications

Certain prior period amounts have been reclassified to conform with the current year presentation.

Reclassifications include combining or further disaggregation of certain line items in the consolidated balance sheets, consolidated statements of operations, and consolidated statements of cash flows.

Such reclassifications had no significant impact on our reported net loss, current assets, total assets, current liabilities, total liabilities, shareholders’ equity or cash flows.

Cash and Cash Equivalents

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Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable will consist primarily of oil and gas sales, net of a valuation allowance for doubtful accounts.

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

Accounts receivable consists of oil and gas sales, net of a valuation allowance for doubtful accounts.

As of December 31, 2022 and 2021, the allowance for doubtful accounts was $0 and $0, respectively.

Oil and Gas Producing Activities

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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.

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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

During the year ended December 31, 2022, the Company recorded impairments of $3,909,700 on oil and gas properties.

There were no impairments recorded during the year ended December 31, 2021.

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.

When necessary, impaired assets are written down to estimated fair value based on the best information available.

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.

1 unchanged sentence

Accordingly, actual results could vary significantly from such estimates.

The Company did not recognize any impairment losses as of December 31, 2021, or December 31, 2020.

The Company did not recognize any impairment losses on long-lived assets during the years ended December 31, 2022 or 2021.

Fair Value of Financial Instruments

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

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2021, and December 31, 2020.

The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments.

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2022 and 2021.

The respective carrying values of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments.

Revenue Recognition

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.

On January 1, 2018, the Company adopted ASC 606, Revenue from Contracts with Customers.

As the Company had no sales at the time of adoption, 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 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.

Once operational, all the Company’s oil and natural gas sales will be made under contracts with customers.

The performance obligations for the Company’s contracts with customers will be satisfied at a point in time through the delivery of oil and natural gas to its customers.

Accordingly, the Company’s contracts will not give rise to contract assets or liabilities.

The Company will typically receive payment within 30 days of the month of delivery.

The Company’s contracts for oil and natural gas sales will be 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.

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 30 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.

Revenues consist of the following:

December 31, 2022

December 31, 2021

Crude oil revenues

Total revenues

Stock-Based Compensation

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The Company recognized consulting expense and a corresponding increase to additional paid-in-capital related to stock issued for services.

Income taxes are accounted for under the liability method of accounting for 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.

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.

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.

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Basic and Diluted Income per Share

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

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Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.

The Company did not have any dilutive securities as of December 31, 2021, and December 31, 2020.

As of December 31, 2022 and 2021, the Company had 550,000 and 300,000 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'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.

NOTE 4 – RECENT ACCOUNTING PRONOUNCEMENTS

Management does not believe any recently issued but not yet effective accounting pronouncements if adopted, would have a material effect on the Company’s present or future financial statements.

NOTE 5 – ACQUISITION

NOTE 5 –ROYALTY INTERESTS IN OIL AND GAS PROPERTIES

2022 Transactions

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.

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.

2020 Transactions

On November 17, 2020, the Company completed the acquisition of Barrister Energy, LLC and the oil and gas properties of Barrister Energy, LLC, (the “Acquisition”).

1 unchanged sentence

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.

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.

2 unchanged sentences

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

Historical Cost of consideration given;

Assets acquired:

Barrister property rights

Liabilities assumed:

Asset retirement obligations

Total Identifiable Net Assets

NOTE 6 – 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

At December 31, 2021, and December 31, 2020, the Company had the following accrued expenses:

December 31, 2021

December 31, 2020

Accrued interest

Accrued salaries and payroll taxes

Accrued M&A expenses

Accrued expenses

During the year ended December 31, 2022, this property was impaired by $1,824,600.

At December 31, 2022, and December 31, 2021, through the Company’s acquisition of Barrister Energy, LLC had leased oil and gas properties assets valued at $5,505,457 and $2,779,802, respectively.

As of December 31, 2022

As of December 31, 2021

Beginning balance

Additions to proved reserves

Revisions of prior year ARO estimates

Depletion expense

Impairment expense

Ending Balance

We recorded depletion expense of $0.04 million and $0.0 million for the years ended December 31, 2022, and 2021, respectively.

In connection with fair value assessments for oil and gas proved properties, we recorded long-lived asset impairments of $3.9 million in our consolidated statement of operations.

NOTE 6 – NOTES PAYABLE

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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 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

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

At December 31, 2021, and December 31, 2020, notes payable consisted of the following:

At December 31, 2022, and 2021, notes payable consisted of the following:

December 31 ,

On January 24, 2022, the Company's Executive Chairman loaned $20,000 to the Company, and the Company issued a promissory note for such amount.

The promissory note is unsecured and bears interest at 2% per annum principal and accrued interest matures on January 24, 2023.

On April 21, 2022, the Company's Executive Chairman loaned $18,000 to the Company, and the Company issued a promissory note for such amount.

The promissory note is unsecured and bears interest at 2% per annum principal and accrued interest matures on April 21, 2023.

On August 23, 2022, the Company's Executive Chairman loaned $20,000 to the Company, and the Company issued a promissory note for such amount.

The promissory note is unsecured and bears interest at 2% per annum principal and accrued interest matures on August 23, 2023.

On September 15, 2022, the Company's Executive Chairman loaned $15,000 to the Company, and the Company issued a promissory note for such amount.

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

The promissory note is unsecured and bears interest at 2% per annum principal and accrued interest matures on September 16, 2023.

On October 25, 2022, the Company's Executive Chairman loaned $20,000 to the Company, and the Company issued a promissory note for such amount.

The promissory note is unsecured and bears interest at 2% per annum principal and accrued interest matures on October 25, 2023.

On December 8, 2022, the Company's Executive Chairman loaned $20,000 to the Company, and the Company issued a promissory note for such amount.

The promissory note is unsecured and bears interest at 2% per annum principal and accrued interest matures on December 8, 2023.

Notes payable – related party

On October 10, 2023, all outstanding notes with the Company’s CEO and Executive Chairman were extended to have a maturity date of May 13, 2024.

During the years ended December 31, 2022 and 2021 the Company recorded interest expense of $956 and $2,455, respectively.

NOTE 7 – RELATED PARTY TRANSACTIONS

For the year ending December 31, 2022, there were six related party transactions (see NOTE 6) 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.

For the year ending December 31, 2021, there were no related party transactions (see NOTE 6) between the Company’s Executive Chairman and the Company.

1 unchanged sentence

On January 4, 2022, the Company issued 12,500 shares of Series A convertible preferred stock to Jeffrey J.

Guzy, the CEO, and 10,000 shares of Series A convertible stock to Wm.

Barrett Wellman, the CFO.

Guzy, the Company’s CEO, and 12,500 shares of Series A convertible stock to Wm.

Barrett Wellman, the Company’s CFO.

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

1 unchanged sentence

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

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.

NOTE 10 – STOCKHOLDER’S DEFICIT

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

Guzy, the Company’s CEO, and 10,000 shares of Series A convertible stock to Wm.

Barrett Wellman, the Company’s 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 2021 the fair value of $600,000 ($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.

NOTE 8 – STOCKHOLDER’S EQUITY

Authorized Capital

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.

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

The Company had 9,114,446 and 5,780,576 shares of Common Stock issued and outstanding as of December 31, 2022 and 2021, respectively.

The Company had 55,000 and 30,000 shares of Preferred Stock issued and outstanding as of December 31, 2022 and 2021, respectively.

Preferred Stock

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, 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.

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 shares is convertible into ten common shares.

During the year ending December 31, 2022, the Company issued 25,000 shares of Series A convertible preferred stock to its officers for accrued compensation (see NOTE 7).

During the year ending December 31, 2021, the Company issued 30,000 shares of Series A convertible preferred stock to its officers for accrued compensation (see NOTE 7).

On October 1, 2022, the Company issued 1,600,000 shares as part of the NONOP acquisition.

On October 15, 2022, the Company issued 1,500,000 shares as part of the Buckley acquisition.

Additionally during the year ended December 31, 2022, the Company issued 180,000 shares, 31,554 shares, and 22,315 shares for vendor payments at share prices of $2.00 per share, $2.12 per share, and $2.10 per share, respectively.

During the year ending December 31, 2021, the Company issued 1,350,000 at $2.00 per share in a debt exchange.

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

During the years ending December 31, 2021, and December 31, 2020, the Company did not receive any capital contributions.

NOTE 11 – PROVISION FOR INCOME TAXES

The Company provides for income taxes using the liability method in accordance with FASB ASC Topic 740 “Income Taxes”.

During the year ended December 31, 2021, the Company issued 17,500 shares at a share price of $2.00 for cash proceeds of $35,000.

NOTE 9 - INCOME TAXES

The Company provides for income taxes using the liability method in accordance with ASC 740 “Income Taxes”.

Deferred income taxes arise from the differences in the recognition of income and expenses for tax purposes.

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

There were no deferred tax assets or liabilities at December 31, 2022 and 2021.

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.

7 unchanged sentences

As of December 31, 2022, the tax years that remain subject to examination are 2021, 2020, 2019, 2018, and 2017 for Federal and 2021, 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.

The Company will apply the federal and state net operating loss (“NOL”) carry-forward in FY 2022 and later years.

On December 22, 2017, the United States Government passed new tax legislation that, among other provisions, will lower the corporate tax rate from 35% to 21%.

7 unchanged sentences

Loss before income taxes

$ (6,237,615)

$ (1,490,196)

Non-deductible expenses

Expected approximate tax recovery on net loss, before income tax

$ (6,237,615)

$ (1,490,196)

Expected approximate tax recovery on net loss

$ (1,309,899)

Changes in valuation allowance

4 unchanged sentences

Net operating losses carried forward

Total gross deferred income tax assets

valuation allowance

Deferred income tax assets

Net deferred tax asset

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

2 unchanged sentences

Operating Lease Commitments

The Company has no lease obligations at December 31, 2021, and December 31, 2020.

The Company has no lease obligations at December 31, 2022 and 2021.

The Company has a month-to-month rental agreement for an office share in Arlington, Virginia beginning on April 1, 2018, for $50 per month.

1 unchanged sentence

Purchase Commitments

The Company has no purchase obligations at December 31, 2021.

The Company has no purchase obligations at December 31, 2022 and 2021.

Significant Risks and Uncertainties

1 unchanged sentence

At December 31, 2022, and December 31, 2021, the Company had no exposure in excess of insurance.

Concentration of Credit Risk – Accounts Receivable – The Company had no revenue-generating operations and therefore no accounts receivable as of the date of these financial statements.

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

Legal Matters

4 unchanged sentences

There are no known legal proceedings against the Company or its officers and directors in their capacity as officers and directors of the Company.

On January 30, 2020, the World Health Organization declared the coronavirus outbreak a "Public Health Emergency of International Concern"

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, 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:

Difficulty in communicating with potential acquisition targets.

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 affected in the near term as a result of these conditions, including the ability to raise additional funding.

NOTE 11 – ASSET RETIREMENT OBLIGATION

The Company provides for the obligation to plug and abandon oil and gas wells at the dates 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 estimated cash flows.

The asset retirement obligation incurred at the time of drilling was computed using the annual credit-adjusted risk-free discount rate at the applicable dates.

Changes in the asset retirement obligation were as follows:

Balance, November 17, 2020

Liabilities acquired

Liabilities incurred

Liabilities settled

Accretion expense

Balance, December 31, 2020

As of December 31, 2022

As of December 31, 2021

Beginning balance

Liabilities acquired

2 unchanged sentences

Accretion expense

Balance, December 31, 2021

Ending Balance

NOTE 12 – RESERVE AND RELATED FINANCIAL DATA - UNAUDITED

Disclosure of Reserves

The table below summarizes our estimated net proved reserves, as of December 31, 2022, based on a reserve report prepared by Netherland Sewell & Associates, Inc.

(NSAI), our third-party independent reserve engineers.

In preparing its report, NSAI evaluated properties representing all of our proved reserves at December 31, 2022 in accordance with the rules and regulations of the SEC applicable to companies involved in oil and natural gas producing activities.

Our estimated net proved reserves in the table below do not include probable or possible reserves and do not in any way include or reflect our commodity derivatives.

As of December 31, 2022

Proved Reserves

Natural Gas (Mmcf)

Total Proved Reserves (BOE)

The table above values oil and natural gas reserve quantities as of December 31, 2022, assuming constant realized prices of $92.01 per barrel of oil and $6.957 per Mcf of natural gas.

Under SEC guidelines, these prices represent the average prices per barrel of oil and per Mcf of natural gas at the beginning of each month in the 12-month period prior to the end of the reporting period, after adjustment to reflect applicable transportation and quality differentials.

Standardized Measure

The standardized measure of discounted future net cash flows and changes in such cash flows are prepared using assumptions required by the Financial Accounting Standards Board.

Such assumptions include using 12-month average prices for oil and gas, based on the first-day-of-the-month price for each month in the period, and year-end costs for estimated future development and production expenditures to produce year-end estimated proved reserves.

Discounted future net cash flows are calculated using a 10% rate.

Estimated future income taxes are calculated by applying year-end statutory rates to future pre-tax net cash flows, less the tax basis of related assets and applicable tax credits.

The estimated well abandonment costs are deducted from the standardized measure using year-end costs and discounted at 10%.

Such abandonment costs are recorded as a liability on the consolidated balance sheet, using estimated values as the projected abandonment date and discounted using a risk-adjusted rate when the well is drilled or acquired.

The standardized measure does not represent management’s estimate of the Company’s future cash flows or the value of proved oil and gas reserves.

Probable and possible reserves, which may become proved in the future, are excluded from the calculations.

Furthermore, prices used to determine the standardized measure are influenced by supply and demand as affected by recent economic conditions and other factors and may not be the most representative in estimating future revenues or reserve data.

The table below reflects the standardized measure of discounted future net cash flows related to the Company’s interest in proved reserves.

Year Ended December 31, 2022

(in thousands)

Future cash inflows

Future production costs

Future development and abandonment costs

Future tax expense

Future net cash flows

10% annual discount for estimated timing of cash flows

Standardized measure of discounted future net cash flows

The principal changes in the standardized measure of discounted future net cash flows attributable to the Company's proved reserves are as follows:

Year Ended December 31, 2022

(in thousands)

Balance at December 31, 2021

Purchase of minerals in place

Net change due to extensions, discoveries and improved recovery

Balance at December 31, 2022

NOTE 13 - SUBSEQUENT EVENTS

1 unchanged sentence

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 25, 2023, the Company issued 25,000 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.

Guzy, the Company’s CEO, and 25,000 shares of Series A convertible stock to Wm.

Barrett Wellman, the Company’s 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.

Since these shares were not issued until 2023 the total fair value of $1,064,500 ($21.30

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 ($2.13 per share) multiplied by 10.

Issuance of Common Stock

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

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

The recent oscillations in the price of oil will force us to re-evaluate our current acquisition strategy as the price of natural gas and oil fluctuate in the future.

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 economic costs are critical to the long-term success of the Company.

On March 1, 2023, the Company issued 5,000 shares of common stock at $2.00 per share.

On June 1, 2023, the Company issued 14,217 shares for vendor payments at $2.20 per share.

On June 12, 2023, the Company issued 35,000 shares for payment to William R.

Downs at $2.00 per share.

On July 23, 2023, the Company issued 7,107 shares for vendor payments at $2.20 per share.

On August 20, 2023, the Company issued 4,409 shares for vendor payments at $1.00 per share.

Related Party Notes Payable

On October 10, 2023, all outstanding notes with the Company’s CEO and Executive Chairman were extended to have a maturity date of May 13, 2024.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data