What changed in this filing

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Item 1. Financial Statements

2021-05-17 compared with 2020-11-16 · 690 added, 566 removed, 152 unchanged (89% of the section changed)

1 unchanged sentence

PETROLEUM CORPORATION

BALANCE SHEETS

September 30, 2020

CONDENSED CONSOLIDATED BALANCE SHEETS

March 31, 2021

December 31, 2020

1 unchanged sentence

Accounts Receivable

Unrealized Gain on Derivative Instruments

Acquisition Deposit Receivable (see Note 4)

Total Current Assets

2 unchanged sentences

Accumulated Depreciation, Depletion and Impairment

Other Property and Equipment, net of $4,184 and $1,830 Accumulated Depreciation, respectively

(15,324,596 )

(15,148,444 )

Other Property and Equipment, net

Total Property and Equipment, net

4 unchanged sentences

Accrued Expenses

Unrealized Loss on Derivative Instruments

Contingent Payment (see Note 4)

Current Portion of Lease Liability

Current Portion of Long-term Notes Payable

Total Current Liabilities

Long Term Portion of Unrealized Loss on Derivative Instruments

Long-Term Notes Payable

Contingent Payments (see Note 5)

Long Term Lease Liability

Asset Retirement Obligations

Total Liabilities

Stockholders' Deficit:

Commitments and Contingencies (Note 12)

Stockholders' Equity (Deficit):

Common Stock - $.001 Par Value 150,000,000 Shares Authorized,

57,515,920 and 24,892,277 Shares Issued and Outstanding, Respectively

Common Stock Subscribed

Additional Paid-in Capital

2 unchanged sentences

(40,618,381 )

Total Stockholders' Deficit

Total Liabilities and Stockholders' Deficit

accompanying notes to unaudited consolidated financial statements

Total Stockholders' Equity (Deficit)

(12,953,516 )

(18,441,038 )

Total Liabilities and Stockholders' Equity (Deficit)

See accompanying notes to unaudited condensed consolidated

financial statements

PETROLEUM CORPORATION

STATEMENTS OF OPERATIONS

Three Months Ended

Nine Months Ended

September 30,

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended March 31,

Operating Revenue and Other:

Oil and Gas Sales

Net realized and unrealized Gain (Loss) on Derivatives

Gain (Loss) on Derivatives (net)

Total Revenue

Costs and Expenses:

Taxes - Production

Depletion, Depreciation & Amortization

Operating Expenses

Oil and Gas Production

Production Taxes

Depletion, Depreciation and Amortization

Impairment of Oil and Natural Gas Properties

Accretion of Asset Retirement Obligation

Accretion of Discount on Asset Retirement Obligation

General and Administrative

Total Cost and Expenses

Operating Loss

Total Operating Expenses

Operating Income (Loss)

Other Income and (Expense):

1 unchanged sentence

Interest Expense

$ (1,641,372 )

$ (3,026,542 )

$ (3,540,515 )

Net Loss per Common Share, Basic & Diluted

Net Income (Loss)

Net Income (Loss) per Common Share, Basic & Diluted

Weighted Average Number of Common Shares Outstanding,

Basic & Diluted

accompanying notes to unaudited consolidated financial statements

accompanying notes to unaudited condensed consolidated financial statements

PETROLEUM CORPORATION

STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT

the Nine Months Ended September 30, 2020 and 2019

CONDENSED CONSOLIDATED STATEMENTS

OF CHANGES IN STOCKHOLDERS' DEFICIT

For the three months ended March 31, 2021 and 2020

Balances, December 31, 2020

1 unchanged sentence

$ (18,441,038 )

Shares, Options, Warrants

and Conversion Features Issued

Warrants Exercised

Issuance of Common Stock and Warrants

Balances, March 31, 2021

1 unchanged sentence

(12,953,516 )

Shares, Options, Warrants

and Conversion Features Issued

Balances, June 30, 2020

(25,168,118 )

Shares, Options, Warrants

and Conversion Features Issued

Balances, September 30, 2020

$ (26,809,490 )

$ (6,931,447 )

Balances, December 31, 2019

(23,782,948 )

Shares, Options, Warrants

and Conversion Features Issued

Conversion of Convertible Notes

Balances, March 31, 2020

(22,194,933 )

Shares, Options, Warrants

and Conversion Features Issued

Balances, June 30, 2019

(19,721,908 )

Balances, September 30, 2019

$ (20,668,861 )

$ (1,874,568 )

accompanying notes to unaudited consolidated financial statements

accompanying notes to unaudited condensed consolidated financial statements

PETROLEUM CORPORATION

STATEMENTS OF CASH FLOWS

Nine Months Ended September 30,

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended March 31,

Cash Flows From Operating Activities:

$ (3,026,542 )

$ (3,540,515 )

Adjustments to Reconcile Net Loss to Net Cash

Provided by (used in) Operating Activities:

Gain on Sales of Assets

Value of warrants and options granted

Amortization of Warrant Value and Conversion Feature on

Convertible Notes

Net Income (Loss)

Adjustments to Reconcile Net Income (Loss) to Net Cash

Used in Operating Activities:

Gain on Sale of Assets

Amortization of Loan Issue Costs

2 unchanged sentences

Accretion of Asset Retirement Obligation

Cash paid to Ovintiv (see Note 4)

Loss relating to Ovintiv Purchase Deposit (see Note 4)

Unrealized (Gain) Loss on Derivatives

Change in Right of Use Assets, net

Deposit paid to Ovintiv (see Note 4)

Change in Operating Assets and Liabilities:

Accounts Receivable

Unrealized Gain on Derivative Instruments

Prepaids, Current

Utility Deposits

Accounts Payable

3 unchanged sentences

Acquisition of Oil and Natural Gas Properties

Earnest Deposit for Acquisition of Oil and Natural Gas Properties

Purchase of Other Fixed Assets

Proceeds from Sale of Oil and Natural Gas Properties

Net Cash Used in Investing Activities

Net Cash Provided by (Used in) Investing Activities

Cash Flows from Financing Activities:

1 unchanged sentence

Principal Payments of Debt

Proceeds from Stock and Warrant Issuance

Proceeds from Warrant Exercise

Proceeds from Issuance of Common Stock and Warrants

Net Cash Provided by Financing Activities

5 unchanged sentences

Non-cash Investing and Financing Activities:

Non-cash Additions to Asset Retirement Obligations

Common Stock Issued in Exchange for Outstanding Notes Payable

Purchases of oil and natural gas properties and deposits in accounts and notes payable, royalty suspense, and contingent payable to seller

Equipment purchased utilizing note payable

Note Payable issued - PIE Agreement (see Note 6)

accompanying notes to unaudited consolidated financial statements

accompanying notes to unaudited condensed consolidated financial statements

EMPIRE PETROLEUM CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2020

OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited consolidated financial

statements of Empire Petroleum Corporation ("Empire"

or the "Company") have been prepared in accordance with

United States generally accepted accounting principles for interim financial information and the instructions to Form 10-Q.

they do not include all of the information and footnotes required by United States generally accepted accounting principles for

complete financial statements.

In the opinion of management, all adjustments considered necessary for a fair presentation of the

Company's financial position, the results of operations, and the cash flows for the interim period are included.

All adjustments

are of a normal, recurring nature.

Operating results for the interim period are not necessarily indicative of the results that

may be expected for the year ending December 31, 2020.

The information contained in this Form 10-Q

should be read in conjunction with the audited financial statements and related notes for the year ended December 31, 2019 which

are contained in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission (the "SEC")

on March 30, 2020.

The Company has incurred significant losses

in recent years.

The continuation of the Company as a going concern is dependent upon the ability of the Company to attain future

profitable operations and/or additional debt or equity financing until profitable operations are achieved.

These financial statements

have been prepared on the basis of United States generally accepted accounting principles applicable to a company with continuing

operations, which assume that the Company will continue in operation for the foreseeable future and will be able to realize its

assets and discharge its obligations in the normal course of operations.

Management believes the going concern assumption to be

appropriate for these financial statements.

If the going concern assumption were not appropriate for these financial statements,

then adjustments might be necessary to adjust the carrying value of assets and liabilities and reported expenses.

The Company’s impairment assessment

of proved and unproved mineral properties is based on several factors including oil and gas spot market prices and estimated futures

prices that existed at September 30, 2020.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

March 31, 2021

OF PRESENTATION AND GOING CONCERN

The accompanying unaudited condensed consolidated

financial statements of Empire Petroleum Corporation ("Empire"

or the "Company") have been prepared in accordance

with United States generally accepted accounting principles (“GAAP”) for interim financial information and the instructions

to Form 10-Q.

Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.

In the opinion of management, all adjustments considered necessary for a fair presentation of the Company's financial position, the results

of operations, and the cash flows for the interim period are included.

All adjustments are of a normal, recurring nature.

Operating results

for the interim period are not necessarily indicative of the results that may be expected for the year ending December 31, 2021.

The information contained in this Form 10-Q should

be read in conjunction with the audited financial statements and related notes for the year ended December 31, 2020 which are contained

in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission (the "SEC") on March 31, 2021.

The Company has incurred significant losses in recent

The continuation of the Company as a going concern is dependent upon the ability of the Company to attain future profitable operations

and/or additional debt or equity financing until profitable operations are achieved.

The ultimate recoverability of the Company's investment

in oil and natural gas interests is dependent upon the existence and discovery of economically recoverable oil and natural gas reserves,

the ability of the Company to obtain necessary financing to further develop the interests, and the ability of the Company to attain future

profitable production.

As of March 31, 2021, the Company had

$3,914,678 of cash and working capital deficit of $7,047,930, which includes the net balance of the Senior Revolver Loan Agreement

of $7,849,500.

The Senior Revolver Loan Agreement matures March 27, 2022 and, as of March 31, 2021, the Company is not in compliance

with its financial covenants under the Loan Agreement (See Note 8).

The Company has proved reserves which have been acquired within

the last two years.

The Company plans to continue to look for oil and natural gas investments and will use a combination of debt and

equity financing to fund the acquisitions.

The Company expects to also incur costs related to evaluating and acquiring oil and

natural gas acquisitions for the foreseeable future.

It is expected that management will attempt to raise additional capital for

future investment and working capital opportunities.

However, there can be no assurances the Company will

be able to refinance or restructure its existing indebtedness, raise sufficient capital to fund its strategic development plans, and meet

its various capital needs.

As a result of these uncertainties, management has concluded there is substantial doubt regarding the Company’s

ability to continue as a going concern.

These financial statements have been prepared on

the basis of United States generally accepted accounting principles applicable to a company with continuing operations, which assume that

the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its obligations

in the normal course of operations.

Management believes the going concern assumption to be appropriate for these financial statements.

If the going concern assumption were not appropriate for these financial statements, then adjustments might be necessary to adjust the

carrying value of assets and liabilities and reported expenses.

The Company’s impairment assessment of

proved and unproved mineral properties is based on several factors including oil and gas spot market prices and estimated futures

prices that existed at March 31, 2021.

In 2020, crude oil prices in both the spot market

and futures market experienced significant volatility.

For the nine months ended September 30, 2020 the Company recorded an impairment

For the year ended December 31, 2020 the Company recorded an impairment

expense of $8,671,303 as a result of the decline in oil prices (See Note 3).

Further, the effect of lower crude oil prices on the

Company’s future financial position or results of operations is not currently determinable due to broader economic and industry

uncertainties, including the impact to the operators and other working interest owners of the properties in which the Company owns

mineral interests.

In the event crude oil or natural gas prices remain low, there is

the risk that, among other things:

· the Company’s revenues, cash flows and profitability may decline substantially, which

could also indirectly impact expected production by reducing the amount of funds available to acquire future mineral interests;

· reserves relating to the Company’s proved properties may become uneconomic to produce resulting

in impairment of proved properties;

· operators and other working interest owners are unable to execute their drilling and exploration

programs resulting in lower production or inability to prove reserves on unproved properties

The occurrence of certain of these events may have a

material adverse effect on the Company's business, results of operations and financial condition.

In early March 2020 there was a global outbreak

of COVID-19 that continued into the second and third quarters and has resulted in changes in global supply and demand of certain

mineral and energy products.

These changes, including the magnitude and length of the economic downturn and any potential resulting

direct and indirect negative impact to the Company cannot be determined, but they could have a prospective material impact to the

Company’s acquisition and project development activities, and cash flows and liquidity.

Reclassification of prior

year presentation.

Certain prior year amounts have been reclassified for consistency with the current year presentation.

These reclassifications had no effect on the reported results of operations.

An adjustment has been made to the Consolidated Balance

Sheet for the year ended December 31, 2019 to reclassify certain utility and other deposits in the amount of $118,177 which had

previously been included in prepaids.

The continuation of the Company is dependent

upon the ability of the Company to raise capital and attain future profitable operations.

The ultimate recoverability of the Company's

investment in oil and natural gas interests is dependent upon the existence and discovery of economically recoverable oil and natural

gas reserves, the ability of the Company to obtain necessary financing to further develop the interests, and the ability of the

Company to attain future profitable production.

As of September 30, 2020, the Company had $134,374

of cash and working capital deficit of $10,140,110, which includes the net balance of the Senior Revolver Loan Agreement of $8,368,000

which matures March 27, 2021.

The Company has proved reserves which have been acquired within the last two years.

The Company plans

to continue to look for oil and natural gas investments and will use a combination of debt and equity financing to fund the acquisitions.

The Company expects to also incur costs related to evaluating and acquiring oil and natural gas acquisitions for the foreseeable

It is expected that management will attempt to raise additional capital for future investment and working capital opportunities.

Compensation of Officers and Employees

As of September 30, 2020, the Company had

twelve employees.

No independent Board members received compensation from the Company in the first nine months of 2020 or

For the nine months ended September 30, 2020, the Company paid its officers, Mr.

Company’s future financial position or results of operations is not currently determinable due to broader economic and

industry uncertainties, including the impact to the operators and other working interest owners of the properties in which the

Company owns mineral interests.

In the event crude oil or natural gas prices remain low, there is the

risk that, among other things:

· the Company’s revenues, cash flows and profitability may decline

substantially, which could also indirectly impact expected production by reducing the amount of funds available to acquire future mineral

· reserves relating to the Company’s proved properties may become

uneconomic to produce resulting in impairment of proved properties;

· operators and other working interest owners are unable to execute their

drilling and exploration programs resulting in lower production or inability to prove reserves on unproved properties

The occurrence of certain of these events may have a material

adverse effect on the Company's business, results of operations and financial condition.

In early March 2020 there was a global outbreak of

COVID-19 which has continued and resulted in changes in global supply and demand of certain mineral and energy products.

These changes,

including the magnitude and length of the economic downturn and any potential resulting direct and indirect negative impact to the Company

cannot be determined, but they could have a prospective material impact to the Company’s acquisition and project development activities,

and cash flows and liquidity.

As of March 31, 2021, the Company had six employees.

No independent Board members received compensation from the Company in the first three months of 2021 or 2020.

For the three months ended

March 31, 2021, the Company paid its officers, Mr.

Morrisett and Mr.

Pritchard, $249,417

each for services rendered.

For the nine months ended September 30, 2019, the Company paid Mr.

Pritchard, $62,500 each for services rendered.

For the three months

ended March 31, 2020, the Company paid Mr.

Morrisett and Mr.

Pritchard $183,950 for services rendered excluding the value of options awarded.

In addition, as of September 30, 2020 Mr.

Pritchard $63,500 each for services rendered excluding the value of options

In addition, as of March 31, 2021 Mr.

Pritchard has outstanding advances of $26,871.

Pritchard has an agreement with the

Company to repay the outstanding advance on or before June 30, 2021.

OF SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidation.

The consolidated financial statements of the Company include the accounts of the Company and its wholly owned subsidiaries, Empire

Louisiana, LLC ("Empire Louisiana"), Empire North Dakota, LLC ("Empire North Dakota"), and Empire Texas, LLC

(“Empire Texas”).

All material intercompany balances and transactions have been eliminated.

The condensed consolidated financial statements of the Company include the accounts of the Company and its wholly owned subsidiaries,

Empire Louisiana, LLC ("Empire Louisiana"), Empire North Dakota, LLC ("Empire North Dakota"), Empire New Mexico, LLC

(“Empire New Mexico”), Empire ND Acquisitions, LLC (“Empire ND Acquisitions”), Empire Texas, LLC (“Empire

Texas”), and Pardus Oil & Gas Operating, LP (“Pardus”).

All material intercompany balances and transactions have

been eliminated.

Use of estimates in the preparation

of financial statements.

Preparation of financial statements in conformity with generally accepted accounting principles

in the United States of America ("U.S.

GAAP") requires management to make estimates and assumptions that affect the reported

amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements

and the reported amounts of revenues and expenses during the reporting periods.

Preparation of financial statements in conformity with generally accepted accounting principles in the

United States of America ("U.S.

GAAP") requires management to make estimates and assumptions that affect the reported amounts

of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported

amounts of revenues and expenses during the reporting periods.

Actual results could differ from these estimates.

Depletion of oil and natural gas properties is determined using estimates of proved oil and natural gas reserves.

There are numerous

uncertainties inherent in the estimation of quantities of proved reserves and in the projection of future rates of production and

the timing of development expenditures.

Similarly, evaluations for impairment of proved and unproved oil and natural gas properties

are subject to numerous uncertainties including, among others, estimates of future recoverable reserves, commodity price outlooks

and prevailing market rates of other sources of income and costs.

Other significant estimates include, but are not limited to,

asset retirement obligations, fair value of assets purchased in acquisitions, and taxes.

Depletion of oil and

natural gas properties is determined using estimates of proved oil and natural gas reserves.

There are numerous uncertainties inherent

in the estimation of quantities of proved reserves and in the projection of future rates of production and the timing of development expenditures.

Similarly, evaluations for impairment of proved and unproved oil and natural gas properties are subject to numerous uncertainties including,

among others, estimates of future recoverable reserves, commodity price outlooks and prevailing market rates of other sources of income

Other significant estimates include, but are not limited to, asset retirement obligations, fair value of assets purchased in

business combinations, and taxes.

Interim financial statements.

The accompanying consolidated financial statements of the Company have not been audited by the Company's independent registered

The accompanying condensed consolidated financial statements of the Company have not been audited by the Company's independent registered

public accounting firm.

In preparing the accompanying consolidated financial statements, management has made certain estimates

and assumptions that affect reported amounts in the consolidated financial statements and disclosures of contingencies.

In preparing the accompanying condensed consolidated financial statements, management has made certain estimates

and assumptions that affect reported amounts in the condensed consolidated financial statements and disclosures of contingencies.

results may differ from those estimates.

1 unchanged sentence

Certain disclosures have been condensed

in or omitted from these consolidated financial statements.

Accordingly, these condensed notes to the consolidated financial statements

should be read in conjunction with the audited consolidated financial statements and notes included in the Company's Annual Report

on Form 10-K for the year ended December 31, 2019.

Inventory Inventory

consists of oil in tanks which has not been delivered and is valued at the contract price to the buyer and pipe which has not yet

been put into production.

in or omitted from these condensed consolidated financial statements.

Accordingly, these condensed notes to the condensed consolidated

financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company's

Annual Report on Form 10-K for the year ended December 31, 2020.

Inventory Inventory consists

of oil in tanks which has not been delivered and is valued at the contract price to the buyer.

Revenue recognition.

The Company recognizes revenues from the sales of oil and natural gas to its customers and presents them aggregated on the Company's

consolidated statements of operations.

The Company enters into contracts with customers to sell its oil and natural gas production.

Company recognizes revenues from the sales of oil and natural gas to its customers and presents them aggregated on the Company's

condensed consolidated statements of operations.

The Company enters into contracts with customers to sell its oil and natural gas

Revenue on these contracts is recognized in accordance with the five-step revenue recognition model prescribed in ASC

Specifically,

revenue is recognized when the Company's performance obligations under these contracts are satisfied, which generally occurs with

the transfer of control of the oil and natural gas to the purchaser.

Control is generally considered transferred when the following

criteria are met:

(i) transfer of physical custody, (ii) transfer of title, (iii) transfer of risk of loss and (iv) relinquishment

of any repurchase rights or other similar rights.

Given the nature of the products sold, revenue is recognized at a point in time

based on the amount of consideration the Company expects to receive in accordance with the price specified in the contract.

Consideration

under the oil and natural gas marketing contracts is typically received from the purchaser one to two months after production.

At September 30, 2020, the Company had receivables related to contracts with customers of approximately $610,000.

Specifically, revenue is recognized when the Company's performance obligations under these contracts are satisfied, which

generally occurs with the transfer of control of the oil and natural gas to the purchaser.

Control is generally considered

transferred when the following criteria are met:

(i) transfer of physical custody, (ii) transfer of title, (iii) transfer of

risk of loss and (iv) relinquishment of any repurchase rights or other similar rights.

Given the nature of the products sold,

revenue is recognized at a point in time based on the amount of consideration the Company expects to receive in accordance with the

price specified in the contract.

Consideration under the oil and natural gas marketing contracts is typically received from the

purchaser one to two months after production.

At March 31, 2021, the Company had receivables related to contracts with customers of

approximately $855,000, joint interest billings of approximately $383,000 and other receivables of approximately $44,000.

Fair value measurements.

Financial Accounting Standards Board ("FASB") fair value measurement standards define fair value, establish a consistent

framework for measuring fair value and establish a fair value hierarchy based on the observability of inputs used to measure fair

Convertible debt - The carrying

value of the convertible debt approximate fair value as of December 31, 2019.

As of September 30, 2020 all of the convertible debt

had been converted to shares of the Company’s common stock.

Management's estimates are based on the assessment of qualitative

factors that are considered Level 3 measurements in the fair value hierarchy as required by FASB ASC 820.

Oil and natural gas properties

- The fair value of proved and unproved oil and natural gas properties was measured using valuation techniques that convert

The Financial

Accounting Standards Board ("FASB") fair value measurement standards define fair value, establish a consistent framework for

measuring fair value and establish a fair value hierarchy based on the observability of inputs used to measure fair value.

Impairment of oil and natural gas

properties - The fair value of proved and unproved oil and natural gas properties was measured using valuation techniques that convert

the future cash flows to a single discounted amount.

Significant inputs to the valuation of proved and unproved oil and natural

gas properties include estimates of:

Significant inputs to the valuation of proved and unproved oil and natural gas properties

include estimates of:

(i) recoverable reserves;

1 unchanged sentence

(iii) future operating and development costs;

(iv) future commodity prices;

(iv) future commodity

and (v) a market-based weighted average costs of capital.

The Company utilized a combination of the

New York Mercantile Exchange ("NYMEX") strip pricing and consensus pricing to value the reserves, then applied various

discount rates depending on the classification of reserves and other risk characteristics.

For significant purchases, management

utilized the assistance of a third-party valuation expert to estimate the value of the oil and natural gas properties acquired.

The fair value of asset retirement

obligations is included in proved oil and natural gas properties with a corresponding liability in the table above.

The fair value

was determined based on a discounted cash flow model, which included assumptions of the estimated current abandonment costs, discount

rate, inflation rate and timing associated with the incurrence of these costs.

The inputs used to value oil and

natural gas properties for impairments and asset retirement obligations require significant judgment and estimates made by management

and represent Level 3 inputs.

The Company utilized a combination of the New York Mercantile Exchange

("NYMEX") strip pricing and consensus pricing to value the reserves, then applied various discount rates depending on the classification

of reserves and other risk characteristics.

For significant acquisitions, management utilized the assistance of a third-party valuation

expert to estimate the value of the oil and natural gas properties acquired.

The fair value of asset retirement obligations

is included in proved oil and natural gas properties with a corresponding liability.

The fair value was determined based on a discounted

cash flow model, which included assumptions of the estimated current abandonment costs, discount rate, inflation rate and timing associated

with the incurrence of these costs.

The inputs used to value oil and natural

gas properties for impairments and asset retirement obligations require significant judgment and estimates made by management and represent

Level 3 inputs.

NYMEX strip prices experienced significant volatility

in 2020, resulting in a significant decrease in value of the Company’s economically recoverable proved oil and natural gas reserves.

As such, the carrying amount of the Company’s proved oil and natural gas properties exceeded the expected undiscounted future net

cash flows for certain leases, resulting in impairment charges against earnings of $800,452 for the quarter ended March 31, 2020.

Company did not recognize an impairment of proved oil and natural gas properties during the three months ended March 31, 2021.

Derivative instruments - The

fair value of the Company’s derivative instruments are measured at fair value using third party pricing services and represent

Level 2 inputs.

Financial instruments and other-

1 unchanged sentence

value due to their short-term nature.

Related Party Transactions.

between related parties are considered to be related party transactions even though they may not be given accounting recognition.

ASC 850, Related Party Disclosures (“FASB ASC 850”) requires that transactions with related parties that

would make a difference in decision making shall be disclosed so that users of the financial statements can evaluate their significance.

Related party transactions typically occur within the context of the following relationships:

affiliates of the entity;

entities for which

investments in their equity securities is typically accounted for under the equity method by the investing entity;

trusts for the benefit

of employees;

principal owners of the entity and members of their immediate families;

management of the entity and members of their immediate

and other parties that can significantly influence the management or operating policies of the transacting parties and can significantly

influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

AND EQUIPMENT

In March 2019, the Company, through its subsidiary,

Empire North Dakota, LLC, purchased oil and natural gas properties in Montana and North Dakota (See Note 7).

On January 27, 2020, the Company, through its

wholly owned subsidiary, Empire North Dakota, LLC, entered into a Bill of Sale and Assignment to purchase lease interests in approximately

4,936 acres in Montana for $500,000.

On February 10, 2020, the Company, through

its wholly owned subsidiary, Empire North Dakota, LLC, sold overriding royalty interests for leases it owned in Montana for up

to $325,000 to a consultant of the Company, $200,000 of which was purchased in the first quarter of 2020 and the final $125,000

was purchased in the third quarter of 2020.

On February 17, 2020 the Company, through its

wholly owned subsidiary, Empire North Dakota, LLC, sold all of its interest in leases of approximately 337 acres in Montana for

On April 6, 2020 the Company, through its wholly

owned subsidiary, Empire Texas, LLC, purchased oil and natural gas properties in Texas (see Note 5).

During the nine months ended September 30,

2020, NYMEX strip prices experienced significant volatility, resulting in a significant decrease in value of the Company’s

economically recoverable proved oil and natural gas reserves.

As such, the carrying amount of the Company’s proved oil and

natural gas properties exceeded the expected undiscounted future net cash flows for certain leases, resulting in impairment charges

against earnings of $800,452 for the quarter ended March 31, 2020.

These impairment charges are included in impairments of long-lived

assets on the consolidated statement of operations for the nine months ended September 30, 2020.

The Company did not recognize

an impairment of proved oil and natural gas properties during the nine months ended September 30, 2019.

The aggregate capitalized costs

of oil and natural gas properties as of September 30, 2020, are as follows:

On January 27, 2020, the Company purchased lease

interests in approximately 4,936 acres in Montana for $500,000.

In February, 2020, the Company in two transactions

sold all of its interest in leases of approximately 337 acres in Montana for $1,210,400.

The Company recognized a gain on the transactions

of $1,193,760.

On April 6, 2020 the Company purchased oil and natural

gas properties in Texas (see Note 5).

The aggregate capitalized costs of oil

and natural gas properties as of March 31, 2021, are as follows:

Proved producing wells

5 unchanged sentences

accumulated depreciation, depletion and impairment

Other property and equipment consists of office

furniture and equipment.

(15,324,596 )

Other property and equipment consists of operating

lease asset (See Note 9), vehicles, office furniture and equipment.

Other property and equipment, at cost

2 unchanged sentences

OIL AND NATURAL GAS PROPERTIES

On March 3, 2020 the Company, through its wholly

owned subsidiary, Empire North Dakota, LLC, entered into a Purchase and Sale Agreement (“the Agreement”) with Ovintiv

and several related companies to purchase certain oil and natural gas properties in Montana and North Dakota comprising

26,600 net acres with 94 active wells.

The purchase price was $8,500,000, subject to adjustments with an effective date of January

1, 2020 and a closing date of April 30, 2020.

The Company made an $850,000 deposit relating

to the purchase.

Due to the COVID pandemic and governmental state of emergency orders related thereto, the Company was unable to

meet with and obtain financing to complete the purchase from its lenders.

The Agreement has been terminated and the parties have

agreed to settle with Empire receiving a $50,000 return of its deposit.

The Company had estimated a loss on the deposit of $725,000

in the quarter ending June 30, 2020.

The remainder of the loss has been recorded in the quarter ending September 30, 2020.

On March 3, 2020 the Company entered into a Purchase

and Sale Agreement (“the Ovintiv Agreement”) with Ovintiv USA, Inc.

and several related companies to purchase certain oil

and natural gas properties in Montana and North Dakota.

The purchase price was $8,500,000, subject to adjustments with an effective date

of January 1, 2020 and a closing date of April 30, 2020.

The Company made an $850,000 deposit relating to

the purchase.

Due to the COVID-19 pandemic and governmental state of emergency orders related thereto, the Company was unable to meet

with and obtain financing to complete the purchase from its lenders.

The Ovintiv Agreement was terminated and the parties agreed to settle

with the Company receiving a $50,000 return of its deposit.

The Company estimated a loss on the deposit of $725,000 in the quarter ending

June 30, 2020 with the remainder recorded in the quarter ending September 30, 2020.

No amounts were outstanding as of December 31, 2020.

OF PARDUS OIL AND NATURAL GAS PROPERTIES

On April 6, 2020 the Company, through its wholly

owned subsidiary, Empire Texas, LLC, entered into a Purchase and Sale Agreement (“the Agreement”) with Pardus Oil &

Gas, LLC and Pardus Oil & Gas Operating GP, LLC (collectively “the Seller”) to purchase certain oil and natural

gas properties in Texas comprising 139 gross wells and approximately 30,000 net acres, 77.3 miles of gathering lines and pipelines

and related facilities and equipment, and all general and limited partner interest in Pardus Oil & Gas Operating, LP.

price included the assumption of certain obligations and a contingent payment not to exceed $2,000,000 reduced by certain revenue

suspense amounts.

The contingent payment is based on monthly oil production in excess of a specified level from the purchased properties

and an average monthly realized oil price of $40 or more per barrel of oil through December 31, 2022.

The transaction closed on

April 7, 2020.

The following table sets forth the

Company's purchase price allocation:

owned subsidiary, Empire Texas, entered into a Purchase and Sale Agreement (“the Pardus Agreement”) with Pardus Oil &

Gas, LLC and Pardus Oil & Gas Operating GP, LLC to purchase certain oil and natural gas properties in Texas comprising 139 gross wells

and approximately 30,000 net acres, 77.3 miles of gathering lines and pipelines and related facilities and equipment, and all general

and limited partner interest in Pardus Oil & Gas Operating, LP.

The purchase price, as amended, included the assumption of certain

obligations totaling $1,584,042 and a cash payment of $40,000 for a total purchase price of $1,624,042.

The transaction closed on April

The cash payment was made in January 2021.

The following table sets forth the Company's

purchase price allocation:

Fair Value of Assets Acquired

Oil and natural gas properties

Accounts receivable

Inventory of oil in tanks

Equipment and gathering lines

Asset retirement obligation asset

Oil and natural gas properties

Total Assets Acquired

Fair Value of Liabilities Assumed

Accounts payable, net

Accounts payable –

Note payable –

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Total liabilities assumed

Total consideration

The fair values of assets acquired

and liabilities assumed were based on the following key inputs:

Purchase Price

The fair values of assets acquired and liabilities

assumed were based on the following key inputs:

Oil and natural gas properties

The fair value of proved oil and natural

gas properties was measured using valuation techniques that convert the future cash flows to a single discounted amount.

inputs to the valuation of proved oil and natural gas properties include estimates of:

(i) recoverable reserves;

(ii) production

(iii) future operating and development costs;

(iv) future commodity prices;

and (v) a market-based weighted average

costs of capital.

The Company utilized a combination of the New York Mercantile Exchange ("NYMEX") strip pricing and

consensus pricing to value the reserves, then applied various discount rates depending on the classification of reserves and other

risk characteristics.

Management utilized the assistance of a third-party valuation expert to estimate the value of the oil and

natural gas properties acquired.

The fair value of asset retirement

obligations totaled $9,508,484 and is included with a corresponding liability in the table above.

The value of oil and gas properties was

based on an allocation of the purchase price which included assignment of values to the other identifiable assets acquired and liabilities

The fair value of asset retirement obligations

are included in proved oil and natural gas properties with a corresponding liability in the table above.

The fair value was determined

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rate and timing associated with the incurrence of these costs.

The total consideration consists of

a contingent payment to the seller which is due based on monthly production of oil and natural gas through December 31, 2022 and

a monthly average price of $40 or higher per barrel.

The inputs used to value oil and natural

gas properties and asset retirement obligations require significant judgment and estimates made by management and represent Level

Financial instruments and other

The fair values determined for accounts

payable - trade were equivalent to the carrying value due to their short-term nature.

Accounts payable - trade includes $20,456 of

liabilities primarily related to well activity prior to close.

OF WARHORSE OIL AND NATURAL GAS PROPERTIES

On September 10, 2019, the Company received a process verbal

and related sheriff's deed dated as of May 29, 2019 (the "Sheriff's Deed") pertaining to two wells in St.

Landry Parish

purchased from Business First Bancshares, Inc.

d/b/a Business First Bank ("Business First").

Pursuant to the Sheriff's Deed, the Company acquired certain

oil and natural gas properties located in St.

Landry Parish, Louisiana, including operated working interest in two producing wells.

The Company purchased Business First's position as the superior lienholder and seizing creditor of such oil and natural gas properties,

which were owned by Warhorse Oil & Gas, LLC, for $450,000 plus $16,993 sheriff fees.

The payment was paid from loan proceeds

under the loan agreement with CrossFirst Bank (see Note 9).

The Company treated the acquisition

as an asset purchase.

An amount equal to $73,968 was allocated to lease and well equipment and $378,110 was allocated to producing

An asset retirement obligation of $19,732 was recorded in conjunction with the purchase.

OF ENERGYQUEST II ASSETS

On March 28, 2019, the Company purchased oil

producing properties from EnergyQuest II, LLC ("EnergyQuest") for a purchase price of $5,600,000.

The effective date

of the transaction was January 1, 2019.

After certain adjustments related to the effective date, the total proceeds paid to EnergyQuest

were $5,646,126.

Such proceeds were paid from borrowing on notes payable and sales of unregistered securities of the Company.

The following table sets forth the

Company's purchase price allocation:

Fair Value of Assets Acquired

Accounts receivable

Inventory of oil in tanks

Oil properties

Total Assets Acquired

Fair Value of Liabilities Assumed

Accounts payable –

Asset retirement obligations

Total liabilities assumed

Total consideration paid

The fair values of assets acquired

and liabilities assumed were based on the following key inputs:

Oil and natural gas properties

The fair value of proved oil and natural

gas properties was measured using valuation techniques that convert the future cash flows to a single discounted amount.

inputs to the valuation of proved oil and natural gas properties include estimates of:

(i) recoverable reserves;

(ii) production

(iii) future operating and development costs;

(iv) future commodity prices;

and (v) a market-based weighted average

costs of capital.

The Company utilized a combination of the New York Mercantile Exchange ("NYMEX") strip pricing and

consensus pricing to value the reserves, then applied various discount rates depending on the classification of reserves and other

risk characteristics.

Management utilized the assistance of a third-party valuation expert to estimate the value of the oil and

natural gas properties acquired.

The fair value of asset retirement

obligations totaled $5,117,939 and is included in proved oil and natural gas properties with a corresponding liability in the table

The fair value was determined based on a discounted cash flow model, which included assumptions of the estimated current

abandonment costs, discount rate, inflation rate and timing associated with the incurrence of these costs.

The inputs used to value oil and natural

gas properties and asset retirement obligations require significant judgment and estimates made by management and represent Level

gas properties and asset retirement obligations require significant judgment and estimates made by management and represent non-recurring

Level 3 inputs

Financial instruments and other

The fair values determined for accounts

receivable and accounts payable - trade were equivalent to the carrying value due to their short-term nature.

Accounts payable - trade includes $1,861,433

of liabilities primarily related to well activity prior to close.

The fair values determined for accounts payable -

trade were equivalent to the carrying value due to their short-term nature and include liabilities primarily related to well activity

prior to close.

Inventory acquired as a part of the acquisition

was based on oil in tanks at the date of acquisition multiplied by the day’s spot price.

DEVELOPMENT AGREEMENT

On August 6, 2020 the Company, through its

wholly owned subsidiary, Empire Texas, LLC (“ET”), entered into a joint development agreement (the “Agreement”)

with Petroleum & Independent Exploration, LLC and related entities (“PIE”) dated August 1, 2020.

Under the terms

of the Agreement, PIE will perform recompletion or workover on specified mutually agreed upon wells (“Workover Wells”)

To fund the work, PIE entered into a term loan agreement with ET dated August 1, 2020, whereby PIE will loan up to

wholly owned subsidiary, Empire Texas, entered into a joint development agreement (the “JDA”) with Petroleum &

Independent Exploration, LLC and related entities (“PIE”) dated August 1, 2020.

Under the terms of the JDA, PIE will

perform recompletion or workover on specified mutually agreed upon wells (“Workover Wells”) owned by Empire Texas.

fund the work, PIE entered into a term loan agreement with Empire Texas dated August 1, 2020, whereby PIE will loan up to

$2,000,000, at an interest rate of 6% per annum, maturing August 7, 2024 unless terminated earlier by PIE.

Proceeds of the loan

will be used for recompletion or workover of the Workover Wells.

As of September 30, 2020 approximately $70,000 has been advanced

from the loan.

As part of the Agreement, ET will assign to PIE a combined 85% working and revenue interest in the Workover Wells;

an assignment was completed in October 2020 for the initial three Workover Wells.

Of the assigned interest, 70% working and revenue

interest will be used to repay the obligations under the term loan agreement.

Once the term loan is repaid, PIE will reassign a

35% working and revenue interest to ET in each of the Workover Wells and retain a 50% working and revenue interest (See Note 10).

In addition, PIE and Empire entered into a

Securities Purchase Agreement (“Securities Agreement”) whereby PIE purchased for $525,000 (a) 3,500,000 shares of Empire

common stock, (b) warrants to purchase 2,625,000 shares of Empire common stock at an exercise price of $0.20 per share, (c) warrants

to purchase 1,800,000 shares of Empire common stock at an exercise price of $0.25 per share, (d) warrants to purchase 8,136,518

shares of Empire common stock at an exercise price of $0.10 per share, and (e) warrants to purchase up to 11,066,667 shares of

Empire common stock at an exercise price of $0.141 per share.

PIE is obligated to exercise the $0.20 warrants within 45 days of

when 3 month trailing average production from the Empire Texas properties have increased by 20% over the trailing 3 month trailing

average production as of July 2020.

PIE can only exercise the $0.25 warrants once all existing non-PIE outstanding warrants to

purchase Empire common stock have been exercised or lapsed.

For the $0.141 warrants, PIE may initially acquire 7,533,333 shares

of Empire common stock, however the amount may be increased if any existing non-PIE warrants are exercised prior to December 31,

2020 (See Note 11).

Proceeds of the loan will

be used for recompletion or workover of the Workover Wells.

As of March 31, 2021 approximately $446,000 has been advanced from the

loan and is presented as corresponding other long-term assets and long-term notes payable.

As part of the JDA, Empire Texas will

assign to PIE a combined 85% working and revenue interest in the Workover Wells;

an assignment was completed in October 2020 for the

initial three Workover Wells.

Of the assigned interest, 70% working and revenue interest will be used to repay the obligations under

the term loan agreement.

Once the term loan is repaid, PIE will reassign a 35% working and revenue interest to Empire Texas in each

of the Workover Wells and retain a 50% working and revenue interest (See Note 10).

Activity resulting from the JDA is being treated

as a conveyance.

In addition, PIE and Empire entered into a Securities

Purchase Agreement (“Securities Agreement”) whereby PIE purchased for $525,000 (a) 3,500,000 shares of Empire common stock,

(b) warrants to purchase 2,625,000 shares of Empire common stock at an exercise price of $0.20 per share, (c) warrants to purchase 1,800,000

shares of Empire common stock at an exercise price of $0.25 per share, (d) warrants to purchase 8,136,518 shares of Empire common stock

at an exercise price of $0.10 per share, and (e) warrants to purchase up to 11,066,667 shares of Empire common stock at an exercise price

of $0.141 per share.

Pursuant to the Securities Agreement, PIE was obligated to exercise the $0.20 warrants within 45 days of when 3 month

trailing average production from the Empire Texas properties have increased by 20% over the trailing 3 month trailing average production

as of July 2020.

PIE can only exercise the $0.25 warrants once all existing non-PIE outstanding warrants to purchase Empire common stock

have been exercised or lapsed.

For the $0.141 warrants, PIE may initially acquire 7,533,333 shares of Empire common stock, however the

amount could be increased if any existing non-PIE warrants were exercised prior to December 31, 2020.

On March 11, 2021 the Company amended

the Securities Agreement to remove the vesting provisions for the warrants and PIE exercised all of its warrants for an aggregate exercise

price of $3,349,052 (See Note 10).

FINANCIAL INSTRUMENTS

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to manage its exposure to commodity price fluctuations.

Commodity derivative instruments are used to reduce the effect of volatility

of price changes on the oil and natural gas the Company produces and sells.

The Company’s derivative financial instruments

consist of oil gas swaps.

The Company does not enter into derivative

financial instruments for speculative or trading purposes.

The Company does not designate its derivative

instruments to qualify for hedge accounting.

Accordingly, the Company reflects changes in the fair value of its derivative instruments

in its consolidated statements of operations as they occur.

Unrealized gains and losses related to the swap contracts are recognized

and recorded as an asset or liability on the Company’s balance sheet.

The following table summarizes the net realized

and unrealized amounts reported in earnings related to the commodity derivative instruments for the three and nine months ended

September 30, 2020 and 2019:

Three months ended

September 30,

Nine months ended

September 30,

Commodity derivative instruments are used to reduce the effect of volatility of

price changes on the oil and natural gas the Company produces and sells.

The Company does not enter into derivative financial instruments

for speculative or trading purposes.

The Company’s derivative financial instruments consist of oil swaps.

The Company does not designate its derivative instruments

to qualify for hedge accounting.

Accordingly, the Company reflects changes in the fair value of its derivative instruments in its condensed

consolidated statements of operations as they occur.

Unrealized gains and losses related to the swap contracts are recognized and recorded

as an asset or liability on the Company’s condensed consolidated balance sheets.

The following table summarizes the net realized and

unrealized amounts reported in earnings related to the commodity derivative instruments for the three months ended March 31, 2021 and

Three months ended March 31,

Gain (loss) on derivatives:

Oil derivatives

Natural gas derivatives

The following represents the Company’s

net cash receipts from derivatives for the three and nine months ended September 30, 2020 and 2019:

Three months ended

September 30,

Nine months ended

September 30,

The following represents the Company’s net cash

receipts from (payments on) derivatives for the three months ended March 31, 2021 and 2020:

Three months ended March 31,

Net cash received from payments on derivatives

Oil derivatives

Natural gas derivatives

The following table sets forth the Company’s

outstanding derivative contracts at September 30, 2020.

The Company has no outstanding natural gas derivatives.

All of the Company’s

derivatives are expected to settle by October 2021:

Volume (MBbl)

Price per Bbl

Volume (MBbl)

following table sets forth the Company’s outstanding derivative contracts at March 31, 2021.

The Company has no outstanding natural

gas derivatives.

Quarterly volume (MBbl)

Price per Bbl

In February 2019, the Company entered into

five unsecured promissory note agreements with accredited investors totaling $90,000.

The notes were due May 1, 2019, and accrued

interest at 8%.

One of the notes, in the amount of $15,000 was issued to Michael R.

Morrisett, the Company's President.

and the related interest were paid in May 2019.

On September 20, 2018 the Company entered into

a Senior Revolver Loan Agreement (“the Agreement”) with CrossFirst Bank (“CrossFirst”).

The Agreement was

amended March 27, 2019 and September 30, 2020 (effective as of June 30, 2020) (the “Amended Agreement”).

Agreement commitment amount is $8,700,000 which is reduced by $180,000 per calendar quarter ($8,520,000 at September 30, 2020)

and the maximum amount that can be advanced under the Agreement is $20,000,000 and includes interest at Wall Street Journal Prime

plus 150 basis points (4.75% as of September 30, 2020).

The Agreement matures on March 27, 2021.

Collateral for the loan is a lien

on all of the assets of the Company’s wholly owned subsidiaries, Empire Louisiana and Empire North Dakota, and a first priority

mortgage lien, pledge of and security interest in not less than 80% of Empire Louisiana’s and Empire North Dakota’s

producing oil, gas and other leasehold and mineral interests.

The Agreement requires Empire Louisiana, beginning December 31, 2018

to maintain certain covenants including an EBITDAX to interest expense of at least 3:1 and funded debt to EBITDAX of 4:1 on a trailing

twelve month basis.

The Company is not in compliance with these covenants of the Agreement at September 30, 2020.

As of September

30, 2020, the Company has an outstanding loan balance of $8,397,000 under the Agreement.

In January 2020 three of the Senior Unsecured

Promissory Note investors exercised the conversion feature and converted their $102,500 notes for 1,025,000 shares of the Company's

common stock.

All of the Senior Unsecured Promissory Notes have been converted to common stock of the Company as of March 31, 2020.

On March 10, 2021 the Company entered into the Third

Amendment to its Senior Revolver Loan Agreement (“the Amended Agreement”) with CrossFirst Bank (“CrossFirst”).

The Amended Agreement commitment amount is $8,520,000 which is reduced by $180,000 per calendar quarter beginning March 31, 2021 and the

maximum amount that can be advanced under the Agreement is $20,000,000 and includes interest at Wall Street Journal Prime plus 150 basis

points (4.75% as of March 31, 2021).

The Amended Agreement matures on March 27, 2022.

Collateral for the loan is a lien on all of the

assets of the Company’s wholly owned subsidiaries, Empire Louisiana and Empire North Dakota, and a first priority mortgage lien,

pledge of and security interest in not less than 80% of Empire Louisiana’s and Empire North Dakota’s producing oil, gas and

other leasehold and mineral interests.

The Amended Agreement requires the Company maintain commodity derivatives at certain thresholds

based on projected production and, beginning March 31, 2021, to maintain certain covenants including an EBITDAX to interest expense of

at least 3:1 and funded debt to EBITDAX of 6:1 on a trailing twelve month basis and reducing quarterly to 4:1 as of March 31, 2022 and

The Company is not in compliance with these covenants of the Amended Agreement at March 31, 2021.

As of March 31, 2021, the

Company has an outstanding loan balance of $7,849,500 under the Amended Agreement.

During 2016 and 2017, the Company issued $260,000

of Senior Unsecured Promissory Notes which contained a conversion feature allowing the investors to convert the Notes into shares of the

Company’s common stock.

In 2019, all but three of the Note holders converted their notes with a balance of $157,500 into 1,575,000

shares of the Company’s common stock.

In January 2020, three of the Senior Unsecured Promissory Note investors exercised the conversion

feature and converted their $102,500 notes for 1,025,000 shares of the Company's common stock.

All of the Senior Unsecured Promissory

Notes have been converted to common stock of the Company as of March 31, 2020.

On April 1, 2020, in conjunction with the purchase

of assets from Pardus Oil & Gas, LLC (see Note 5), the Company entered into a unsecured promissory note agreement with the

seller in the amount of $378,000.

The note is payable in one installment on April 1, 2021 and bears interest at the one-year LIBOR

rate (1% as of September 30, 2020).

On May 5, 2020, the Company, through its wholly

owned subsidiary, Pardus Oil & Gas Operating, LP, received an SBA Payroll Protection Plan (“PPP”) loan for $160,700.

of assets from Pardus Oil & Gas, LLC (see Note 5), the Company entered into a unsecured promissory note agreement with the seller

in the amount of $378,000.

The note is payable in one installment on April 1, 2021 and bears interest at the one-year LIBOR rate (1% as

of March 31, 2021).

The note was paid on April 1, 2021 (See Note 12).

On May 5, 2020, the Company received an SBA Payroll

Protection Plan (“PPP”) loan for $160,700.

The loan matures on May 5, 2022 and has an interest rate of 1%.

There are no payments due until ten months after the covered period

which ended October 20, 2020, at which time the payment amount will be determined based on the portion of the loan which has not

been forgiven under criteria established by the SBA, using an eighteen-month amortization.

The Company expects that the majority

of the loan amount will be forgiven based on currently published guidelines of the United States Small Business Administration.

There are no payments

due until ten months after the covered period which ended October 20, 2020, at which time the payment amount will be determined based

on the portion of the loan which has not been forgiven under criteria established by the SBA, using an eighteen-month amortization.

April 26, 2021 the Company filed its application for forgiveness of the entire PPP loan, which is subject to SBA approval.

In August 2020, concurrent with the Joint Development

Agreement with Petroleum and Independent Exploration, LLC (“PIE”), the Company entered into a term loan agreement dated

August 1, 2020, whereby PIE will loan up to $2,000,000, at an interest rate of 6% per annum, maturing August 7, 2024 unless terminated

earlier by PIE.

Agreement with Petroleum and Independent Exploration, LLC (“PIE”), the Company entered into a term loan agreement dated August

1, 2020, whereby PIE will loan up to $2,000,000, at an interest rate of 6% per annum, maturing August 7, 2024 unless terminated earlier

The loan proceeds will be used for recompletion or workover of certain designated wells.

In addition, the Company

assigned a 70% working and revenue interest to PIE in the designated wells which will be applied to repayment of the loan.

September 30, 2020, approximately $70,000 has been advanced from the loan (See Note 8).

Diluted Earnings per Share ("EPS")

gives effect to all dilutive potential common shares outstanding during the period.

The computation of Diluted EPS does not assume

conversion, exercise or contingent exercise of securities that would have an anti-dilutive effect on losses.

As a result, if there

is a loss from continuing operations, Diluted EPS is computed in the same manner as Basic EPS.

At September 30, 2020 and 2019,

the Company had 5,004,167 and 4,167 respectively, options outstanding that were not included in the calculation of earnings per

share for the periods then ended.

Such financial instruments may become dilutive and would then need to be included in future calculations

of Diluted EPS.

At September 30, 2020 and 2019, the outstanding options were considered anti-dilutive since the strike prices were

above the market price and since the Company has incurred losses year to date.

In March 2019, 1,446,668 outstanding $0.15

warrants were converted to shares of common stock of the Company.

Proceeds received from the conversion was $217,000 including

$50,000 of notes payable conversion by Mr.

Kamin, a board member.

During May 2019, the Company issued warrants

to purchase 300,000 shares of its common stock for $0.17 per share which expire on December 31, 2021 to a former employee for business

assistance provided.

The value allocated to the warrants was the fair value determined using the Black-Scholes option valuation

with the following assumptions:

no dividend yield, expected annual volatility of 217%, risk free interest rate of 1.92% and

an expected useful life of 31 months.

The fair value of the warrants of $58,380 was recorded as compensation expense and allocated

to Paid in Capital.

On April 3, 2019, the Board of Directors of

the Company adopted the Empire Petroleum Corporation 2019 Stock Option Plan (the "Stock Option Plan").

The total number

of shares of common stock that may be issued pursuant to stock options under the Stock Option Plan is 10,000,000.

Further, on April

3, 2019 the Company granted Mr.

In addition, the Company assigned a 70%

working and revenue interest to PIE in the designated wells which will be applied to repayment of the loan.

As of March 31, 2021, approximately

$446,000 has been advanced from the loan (See Note 6).

As a lessee, the Company leases its corporate office

headquarters in Tulsa, Oklahoma.

The lease expires on December 31, 2025 and has an option to renew for an additional five-year term.

option to renew the lease is generally not considered reasonably certain to be exercised.

Therefore, the period covered by such optional

period is not included in the determination of the term of the lease and the lease payments during these periods are similarly excluded

from the calculation of right-of-use lease asset and lease liability balances.

The Company recognizes right-of use lease

expense on a straight-line basis, except for certain variable expenses that are recognized when the variability is resolved,

typically during the period in which they are paid.

Variable right-of-use lease payments typically include charges for property

taxes, insurance, and variable payments related to non-lease components, including common area maintenance.

Right of use lease expense was $34,989 for the three

months ended March 31, 2021.

Cash paid for right of use lease was $31,775 for the period.

Supplemental balance sheet information related to

the right of use leases as of March 31, 2021:

Operating lease asset (included in Other Property and Equipment

Current portion of lease liability

Long term lease liability

Total right of use lease liabilities

The weighted average remaining term for the Company’s

right of use leases is 4.75 years.

Maturities of lease liabilities as of March 31, 2021:

Total lease payments

Less imputed interest

Total lease obligation

Diluted Earnings per Share ("EPS") gives

effect to all dilutive potential common shares outstanding during the period.

The computation of Diluted EPS does not assume conversion,

exercise or contingent exercise of securities that would have an anti-dilutive effect on losses.

As a result, if there is a loss from

continuing operations, Diluted EPS is computed in the same manner as Basic EPS.

At March 31, 2021 and 2020, the Company had 10,000,000

and 5,004,167 respectively, options outstanding that were not included in the calculation of earnings per share for the periods then ended.

Such financial instruments may become dilutive and would then need to be included in future calculations of Diluted EPS.

2021 and 2020, the outstanding options were considered anti-dilutive because the strike prices were above the market price and the Company

has incurred operating losses year to date.

On April 3, 2019, the Board of Directors of the Company

adopted the Empire Petroleum Corporation 2019 Stock Option Plan (the "Stock Option Plan").

The total number of shares of common

stock that may be issued pursuant to stock options under the Stock Option Plan is 10,000,000.

Further, on April 3, 2019 the Company granted

Pritchard and Mr.

Morrissett each, options to purchase 2,500,000 shares of common stock of the

Company at an exercise price of $0.33 per share.

The options vest in three installments with 1,250,000 vesting immediately and

625,000 vesting each in April 2020 and April 2021.

Morrissett each, options to purchase 2,500,000 shares of common stock of the Company at an exercise price of $0.33

The options vest in three installments with 1,250,000 vesting immediately and 625,000 vesting each in April 2020 and April

All of the options expire in April, 2029.

The value allocated to the vested

options was the fair value determined using the Black-Scholes option valuation with the following assumptions:

yield, expected annual volatility of 213%, risk free interest rate of 2.32% and an expected useful life of 5.375 years.

value of the vested options of $812,500 was recorded as compensation expense and allocated to Paid in Capital in 2019.

the fair value of the options which vested in April 2020 of $406,250 was recorded as compensation expense and allocated to Paid

The fair of the remaining unvested options is $406,250 as of September 30, 2020.

On April 3, 2019 the Board of Directors of

the Company amended certain warrant certificates which had been issued to Mr.

Kamin covering 3,000,000 warrants to purchase common

stock of the Company.

The original warrants expired on December 31, 2021 and had exercise prices of $0.15 and $0.25 for 500,000

and 2,500,000 shares, respectively.

The warrants were extended to expire on April 2, 2029.

The value allocated to the vested options was the fair value determined using the

Black-Scholes option valuation with the following assumptions:

no dividend yield, expected annual volatility of 213%, risk free

interest rate of 2.32% and an expected useful life of 5.375 years.

The fair value of the vested options of $812,500 was recorded as compensation

expense and allocated to Paid in Capital in 2019.

In 2020, the fair value of the options which vested in April 2020 of $406,250 was recorded

as compensation expense and allocated to Paid in Capital.

The fair of the remaining unvested options is $406,250 as of March 31, 2021.

On August 7, 2020 concurrently with the Joint Development

Agreement with Petroleum & Independent Exploration, LLC and related entities (“PIE”), the companies entered into a Securities

Purchase Agreement (“Securities Agreement”) whereby PIE purchased for $525,000 (a) 3,500,000 shares of Empire common stock,

(b) warrants to purchase 2,625,000 shares of Empire common stock at an exercise price of $0.20 per share, (c) warrants to purchase 1,800,000

shares of Empire common stock at an exercise price of $0.25 per share, (d) warrants to purchase 8,136,518 shares of Empire common stock

at an exercise price of $0.10 per share, and (e) warrants to purchase up to 11,066,667 shares of Empire common stock at an exercise price

of $0.141 per share.

PIE is obligated to exercise the $0.20 warrants within 45 days of when 3 month trailing average production from the

Empire Texas properties have increased by 20% over the trailing 3 month trailing average production as of July 2020.

PIE can only exercise

the $0.25 warrants once all existing non-PIE outstanding warrants to purchase Empire common stock have been exercised or lapsed.

$0.141 warrants, PIE may initially acquire 7,533,333 shares of Empire common stock, however the amount may be increased if any existing

non-PIE warrants are exercised prior to December 31, 2020.

The value allocated to the warrants was the fair value determined using

the Black-Scholes option valuation with the following assumptions:

no dividend yield, expected annual volatility of 147%, risk free

interest rate of .19% and an expected useful life of 4 years.

The fair value of the warrants of $450,848 was allocated to Paid in Capital

(See Note 8).

On March 11, 2021 the Company amended the Securities Agreement to remove the vesting provisions for the warrants and PIE

exercised the warrants for an aggregate exercise price of $3,349,052 (See Note 6).

During February and March 2021, the Company issued

to a group of accredited investors 8,993,858 shares of its common stock and warrants to purchase 8,993,858 shares of its common stock

for $.50 per share which expires on December 31, 2022.

Proceeds from the sale were $3,147,850.

The value allocated to the warrants

was the fair value determined using the Black-Scholes option valuation with the following assumptions:

no dividend yield,

expected annual volatility of 213%, risk free interest rate of 2.32% and an expected useful life of 5 years.

The fair value of

the warrants of $620,750 was recorded as compensation expense and allocated to Paid in Capital.

On August 7, 2020 concurrently with the Joint

Development Agreement with Petroleum & Independent Exploration, LLC and related entities (“PIE”), the companies

entered into a Securities Purchase Agreement (“Securities Agreement”) whereby PIE purchased for $525,000 (a) 3,500,000

shares of Empire common stock, (b) warrants to purchase 2,625,000 shares of Empire common stock at an exercise price of $0.20 per

share, (c) warrants to purchase 1,800,000 shares of Empire common stock at an exercise price of $0.25 per share, (d) warrants to

purchase 8,136,518 shares of Empire common stock at an exercise price of $0.10 per share, and (e) warrants to purchase up to 11,066,667

shares of Empire common stock at an exercise price of $0.141 per share.

PIE is obligated to exercise the $0.20 warrants within

45 days of when 3 month trailing average production from the Empire Texas properties have increased by 20% over the trailing 3

month trailing average production as of July 2020.

PIE can only exercise the $0.25 warrants once all existing non-PIE outstanding

warrants to purchase Empire common stock have been exercised or lapsed.

For the $0.141 warrants, PIE may initially acquire 7,533,333

shares of Empire common stock, however the amount may be increased if any existing non-PIE warrants are exercised prior to December

The value allocated to the warrants was the fair value determined using the Black-Scholes option valuation with

the following assumptions:

no dividend yield, expected annual volatility of 147%, risk free interest rate of .19% and an

expected useful life of 4 years.

The fair value of the warrants of $450,848 was allocated to Paid in Capital (See Note 8).

no dividend yield, expected

annual volatility of 180%, risk free interest rate of .14% and an expected useful life of 21 months.

The fair value of the warrants of

$2,350,407 was allocated to Paid in Capital.

RELATED PARTY

In March 2021, the majority owner of Petroleum &

Independent Exploration, LLC and related entities (“PIE”), through the exercise of warrants, became an owner of approximately

24% of the Company’s outstanding shares of stock (See Note 10).

The Company has a joint development agreement with PIE to perform

recompletion or workover on specified mutually agreed upon wells (See Notes 6 and 8).

As of March 31, 2021, the Company has incurred obligations

of $445,611 as a part of the joint development agreement.

COMMITMENTS AND CONTINGENCIES

From time to time, the Company is subject to various

legal proceedings arising in the ordinary course of business, including proceedings for which the Company may not have insurance coverage.

While many of these matters involve inherent uncertainty, as of the date hereof, the Company does not currently believe that any such

legal proceedings will have a material adverse effect on the Company's business, financial position, results of operations or liquidity.

The Company is subject to extensive federal,

state and local environmental laws and regulations.

These laws, among other things, regulate the discharge of materials into the environment

and may require the Company to remove or mitigate the environmental effects of the disposal or release of petroleum or chemical substances

at various sites.

Management believes no materially significant liabilities of this nature existed as of March 31,

SUBSEQUENT EVENTS

On October 1, 2020 the Company entered into

a new office lease agreement.

The term of the lease is 63 months commencing October 1, 2020 through December 31, 2025 with lease

rates ranging from $0 per month for the first three months to $13,038 per month for the final year.

The Company is accounting for

the lease as an operating lease.

In October 2020 the Company entered into a

$306,000 Letter of Credit agreement, utilizing the commitment under its Senior Revolver Loan Agreement (see Note 10).

On March 12, 2021 the Company, through its wholly

owned subsidiary Empire New Mexico entered into a purchase and sale agreement with XTO Holdings, LLC (a subsidiary of ExxonMobil) (the

“Seller’) to acquire, among other things, certain oil and natural gas properties in New Mexico.

The purchase price is $17,800,000

subject to customary adjustments.

The Company wired a deposit of $1,780,000 to the Seller on March 12, 2021.

As a part of the transaction,

the Company established Empire New Mexico, LLC.

The effective date of the transactions contemplated by the purchase and sale agreement

is January 1, 2021 and the transaction closed on May 14, 2021.

As a condition of the sale, the Company purchased a $5,000,000 performance

bond for the benefit of the seller for proper plugging, abandonment and restoration of the purchased properties.

The performance bond

is collateralized with a letter of credit in the amount of $3,750,000 which is collateralized with a bank certificate of deposit.

the Company is required to deposit $100,000 per month, up to $1,250,000, into a sinking fund to be held by the surety.

On May 10, 2021

the Company entered into a Promissory Note Agreement with Bank of Oklahoma, NA in the amount of $3,750,000 which is due on demand with

an interest rate established by the Bank, currently at 4 percent.

The Note is collateralized with a certificate of deposit in a similar

amount at Bank of Oklahoma.

On March 22, 2021 the Company, through its wholly owned

subsidiary, Empire ND Acquisitions, LLC, entered into a purchase and sale agreement with 31 Group, LLC to acquire among other things,

certain oil and gas properties in North Dakota.

The purchase price is $900,000, payable one year from the closing date, and is reduced

by certain expenses which the Company may incur relating to the properties or assessment of certain wells as uneconomic for up to one

year from the closing date.

As a part of the transaction, the Company established Empire ND Acquisition, LLC.

The transaction closed on

On April 26, 2021, the Company filed for forgiveness

of its Paycheck Protection Program (“PPP”) loan.

The application seeks forgiveness of the entire amount and is subject to

approval of the U.S.

Small Business Administration.

On April 30,2021 the Company received a Second

Draw SBA Payroll Protection Plan (“PPP”) loan for $106,850.

The loan matures on April 30, 2026 and has an interest rate

There are no payments due until ten months after the covered period at which time the payment amount will be determined based

on the portion of the loan which has not been forgiven under criteria established by the SBA, using an amortization of the remaining

term of the loan.

The Company will seek forgiveness for the entire loan amount subject to approval of the United States Small

Business Administration.

On April 1, 2021, the Company paid its $378,000 unsecured

loan to the previous owners of Pardus Oil & Gas as per the terms on the Note (See Note 8).

On May 14, 2021 the Company entered into a Senior Secured

Convertible Note Agreement (the “Note”) in the amount of $16,250,000 with Energy Evolution Master Fund, LLC (“Energy

Evolution”).

The Note is collateralized by all assets of Empire New Mexico, matures on December 31, 2021 and bears an interest rate

The Note provides that up to 40% of the balance can be converted into the Company’s common stock at the lesser of $1.25

per share or the offering price if the Company has a subsequent capital raise.

Additionally, the conversion price is reduced by $0.25

per share if any amount is due on the Note as of October 1, 2021 or the Company has not filed a registration statement with the United

States Securities and Exchange Commission within 120 days of the Note.

If the registration statement described above is not filed within

120 days, Energy Evolution has the option to convert 50% of the Note amount into common stock of the Company at a rate of $1.00 per share.

The Note also provides that Energy Evolution, which is an affiliated organization of Petroleum & Independent Exploration, LLC and

related entities (“PIE”), or its affiliated organization may appoint an additional member to the Company’s Board of

Directors, for a total of three appointed members, and that one of the appointed members shall be appointed as Chairman of the Board of

Energy Evolution received a closing fee for the Note of 1,500,000 shares of the Company’s common stock and warrants to

purchase 3,000,000 shares of common stock for $1.00 per share which expire on May 14, 2022.

In May, 2021 the Company entered into $3,243,000 of Unsecured

Convertible Notes (the “Unsecured Notes”) with a group of accredited investors.

The Unsecured Notes mature on May 9, 2022

with a single payment and bear interest at 5%.

The Unsecured Note holders may convert their notes to common stock of the Company at the

lesser of $1.25 per share or the price per share offered by the Company if the Company has a future capital raise.

In April 2021, the Company’s Board of Directors

approved a resolution granting non-employee directors’

compensation in the amount of $48,000 per year.

The Company has two non-employee

In April and May 2021, warrants to

purchase 1,845,714 shares of the Company’s common stock were exercised.

The Company realized $823,857 from the exercise.

MANAGEMENT'S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL TO ALL PERIODS

RESULTS OF OPERATIONS

The Company's primary business is the exploration

and development of oil and natural gas interests.

The Company has incurred significant losses from operations, and there is no assurance

that it will achieve profitability or obtain the funds necessary to finance its operations.

For all periods presented, the Company's effective

tax rate is 0%.

The Company has generated net operating losses since inception, which would normally reflect a tax benefit in the condensed

consolidated statement of operations and a deferred asset on the condensed consolidated balance sheet.

However, because of the current

uncertainty as to the Company's ability to achieve profitability, a valuation reserve has been established that offsets the amount of

any tax benefit available for each period presented in the condensed consolidated statements of operations.

The following table sets forth a summary of our production

and operating data for the three month periods ended March 31, 2021 and 2020.

Because of normal production declines, increased or decreased

drilling activities, fluctuations in commodity prices and the effects of acquisitions or divestitures, the historical information presented

below should not be interpreted as being indicative of future results.

Three months ended March 31,

Production and operating data:

Net Production volumes:

Oil (Bbl) (a)

Natural gas (Mcf) (b)

Total (Boe) (c)

Average price per unit:

Oil (Bbl) (a)

Natural gas (Mcf) (b)

Total (Boe) (c)

(a) Bbl - One stock tank barrel, of 42 U.S.

liquid volume, used herein in reference to oil, condensate or natural gas liquids.

(b) Mcf –

One thousand cubic feet of natural gas.

Boe - One barrel of oil equivalent, a standard convention

used to express oil and natural gas volumes on a comparable oil equivalent basis.

Natural gas equivalents are determined under the relative

energy content method by using the ratio of 6.0 Mcf of natural gas to 1.0 Bbl of oil or condensate.

Three months ended March 31,

Operating costs and expenses per Boe:

Oil and natural gas production

Production taxes

Depreciation, depletion, amortization and accretion

Impairment of oil and natural gas properties

General and administrative

THREE-MONTH PERIOD ENDED MARCH 31, 2021 COMPARED TO

THREE-MONTH PERIOD ENDED MARCH 31, 2020.

For the three months ended March 31, 2021 and 2020,

revenues from oil and natural gas sales were $ 2,456,458 and $1,314,399 respectively.

In 2020, due to COVID and other economic factors,

prices of oil and natural gas declined, resulting in the Company reducing volumes produced.

In 2021, the Company included revenue from

the Pardus properties of approximately $960,000, which were not owned in the first quarter of 2020.

Operating expenses, production taxes, depreciation

and depletion and amortization and accretion increased to $2,052,847 cumulatively for the three months ended March 31, 2021 from $1,916,885

for the same period in 2020.

The increase was primarily due to increased production taxes due to higher prices for oil and natural gas

sold and higher accretion of asset retirement obligation due to the addition of the Pardus properties in 2021.

Net realized and unrealized gain (loss) on derivatives

decreased to $(357,915) for the three months ended March 31, 2021, from $2,509,045 in the same period 2020 due primarily to increases

in oil prices in 2021 and decreases in oil prices during the same period in 2020, respectively, for those contracts in existence at that

General and administrative expenses increased by

$377,065 to $906,048 for the three months ended March 31, 2021, from $528,983 for the same period in 2020.

The increase was primarily

due to an increased number of employees and professional fees related to the XTO and 31 Group acquisitions in 2021.

Interest expense was $136,828 and $132,869 for the

three months ended March 31, 2021 and 2020, respectively.

The increase in interest expense of $3,959 resulted primarily from higher debt

levels in 2021.

For the reasons discussed above, the previous period

net income decreased by $2,585,195 from $1,588,015 for the three months ended March 31, 2020 to net loss of $(997,180) for the three months

ended March 31, 2021.

LIQUIDITY AND CAPITAL RESOURCES

As of March 31, 2021, the Company had $3,914,678

The Company has proved reserves which have been acquired within the last two years.

The Company plans to continue to

look for oil and natural gas investments and will use a combination of debt and equity financing to fund the acquisitions.

Company expects to incur costs related to future oil and natural gas acquisitions for the foreseeable future.

It is expected that

management will attempt to raise additional capital for future investment and working capital opportunities.

See Notes 5, 6, 10 and 13 to the financial

statements for information regarding the purchase and development agreements the Company entered into in 2020 and 2021 to purchase

and develop existing oil and natural gas properties and mineral interests.

The Company is also actively pursuing the acquisition of

other operated and non-operated oil and natural gas properties.

It is anticipated that such acquisitions will be financed through

equity or debt transactions.

Lower oil and natural gas prices present challenges

to our industry and our Company.

The economic impact of the COVID-19 pandemic have caused oil price volatility in 2020.

In the first three

quarters of 2020, gains on settled derivatives offset a large portion of the impact of the recent decline in prices and slower production,

and we currently have derivative positions in place for a substantial amount of our expected remaining 2020 production.

There can be no

assurance that we will be able to add derivative positions to cover the remainder of our expected production at favorable prices.

The Impact of COVID-19 on Our Business

In 2020, there was a global outbreak of COVID-19

which has resulted in changes in global supply and demand of certain mineral and energy products.

Decreased transportation, manufacturing and general

economic activity levels prompted by COVID-19 and related governmental and societal actions reduced the demand for oil-based products

such as gasoline, jet fuel and other refined products, which prompted purchasers of oil and condensate to reduce purchase levels.

situations led to production greater than storage capacity at some points during the year.

To the extent that this decreased demand for

our commodities continues and our margins are not at acceptable levels or storage for our production is not available, we may have to

reduce production from or completely shut in portions of our currently producing wells.

The inability to sell our production or the decision

to potentially reduce or shut in our production could materially and adversely affect our operating results and our ability to comply

with the financial covenants under our Credit Facility.

There is uncertainty around the continuing extent

and duration of the disruption.

The degree to which the COVID-19 pandemic or any other public health crisis adversely impacts our results

will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to, the duration and

spread of the outbreak, its severity, the actions to contain the virus or treat its impact, its impact on the economy and market conditions,

and how quickly and to what extent normal economic and operating conditions can resume.

Therefore, while we expect this matter will likely

continue to disrupt our operations, the degree of the adverse financial impact cannot be reasonably estimated at this time.

FORWARD-LOOKING INFORMATION

This Quarterly Report on Form 10-Q, including this

section, includes certain statements that may be deemed "forward-looking statements"

within the meaning of federal securities

All statements, other than statements of historical facts, that address activities, events or developments that the Company expects,

believes or anticipates will or may occur in the future, including future sources of financing and other possible business developments,

are forward-looking statements.

Such statements are subject to a number of assumptions, risks and uncertainties and could be affected

by a number of different factors, including the Company's failure to secure short and long-term financing necessary to sustain and grow

its operations, increased competition, changes in the markets in which the Company participates and the technology utilized by the Company

and new legislation regarding environmental matters.

These risks and other risks that could affect the Company's business are more fully

described in reports the Company files with the SEC, including its Form 10-K for the year ended December 31, 2020.

Actual results may

vary materially from the forward-looking statements.

The Company undertakes no duty to update any of the

forward-looking statements in this Form 10-Q.

MATERIAL RISKS

The Company has incurred significant losses from operations

and there is no assurance that it will achieve profitability or obtain the funds necessary to finance continued operations.

material risks, see the Company's Form 10-K for the year ended December 31, 2020, which was filed on March 31, 2021.

QUANTITATIVE AND QUALITATIVE

DISCLOSURES ABOUT MARKET RISK

Not applicable.

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-Q

Item 1. Financial Statements