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Item 1A. Risk Factors

2024-03-19 compared with 2023-03-31 · 1471 added, 737 removed, 49 unchanged (98% of the section changed)

investment in our securities involves a high degree of risk, and an investor should only purchase the Company’s securities if he

or she can afford to suffer the loss of his or her entire investment.

Certain factors may have a materially adverse effect on our business,

financial condition and results of operations, including the risk factors described below.

You should carefully consider all of the risks

and uncertainties described below and elsewhere in this Annual Report on Form 10-K, as well as those risks disclosed in the Company’s

other public filings, together with the other information contained in this report and the Company’s other public filings before

making an investment decision regarding the Company’s securities.

The risks and uncertainties described below are not the only

ones we face.

Additional risks and uncertainties not presently known to us or that we currently believe are not material may also become

important factors that could adversely affect our business, financial condition and results of operations, perhaps materially.

of the following risks actually occur, our business, financial condition, results of operation and future prospects could be materially

and adversely affected.

In that event, the trading price of shares of our common stock could decline, and you could lose part or all

your investment.

The risks discussed below also include forward-looking statements, and actual results and events may differ substantially

from those discussed or highlighted in those forward-looking statements.

For more information regarding forward-looking statements in

this Annual Report, please see the Section entitled “Cautionary Note Regarding Forward-Looking Statements” of this Annual

Report on Form 10-K.

Related to Our Company

have historically incurred significant losses, and may be unable to maintain profitability.

If we continue to incur significant losses,

we may have to curtail our operations, which may prevent us from successfully operating and expanding our business.

in our securities involves risks.

Before you make a decision to buy our securities, in addition to the risks and uncertainties discussed

above under “Cautionary Statement Regarding Forward-Looking Statements,” you should carefully consider the specific risks

set forth herein and the risks set forth in other filings we make with the SEC from time to time, together with other information in

this Annual Report.

If any of these risks actually occur, it may materially harm our business, financial condition, liquidity and results

of operations.

As a result, the market price of our securities could decline, and you could lose all or part of your investment.

Additionally,

the risks and uncertainties described in this Annual Report are not the only risks and uncertainties that we face.

Additional risks and

uncertainties not presently known to us or that we currently believe to be immaterial may become material and adversely affect our business.

Related to E&P Assets

Genesis Assets currently have no producing properties and there is no assurance that we will be able to successfully drill producing

If the Genesis Assets are not commercially productive of crude oil or natural gas, any funds spent on exploration and production

of the Genesis Assets are in the pre-production stage and there is no assurance that we will be able to obtain the requisite permits

to begin drilling or successfully drill producing wells.

The Genesis Assets are not currently connected to the electrical grid or transportation,

nor have we engaged service providers or contractors, necessary for the productive development of the assets and there is no assurance

that we will be able to obtain the electrification, transportation or services necessary at economic costs, if at all.

We are dependent

on establishing sufficient reserves at the Genesis Assets for additional cash flow and a return of our investment.

If the Genesis Assets

are not economic, all of the funds that we have invested, or will invest, will be lost.

In addition, the failure of the Genesis Assets

to produce commercially may make it more difficult for us to raise additional funds in the form of additional sale of our equity securities

or working interests in other property in which we may acquire an interest.

Central Weld Assets currently have both producing and undeveloped properties and there is no assurance that we will be able to further

develop and exploit the producing properties or successfully drill producing wells after closing the NRO Acquisition.

If we are unable

to further develop and exploit the producing properties or drill producing wells, any funds spent on the NRO Acquisition or in the exploration,

development and production of the Central Weld Assets may be lost.

of the Central Weld Assets are producing, permitted properties and certain of the Central Weld Assets are undeveloped.

Even if we are

able to successfully close the NRO Acquisition, there is no assurance that we will be able to further develop and exploit the producing

properties or successfully drill producing wells of the undeveloped properties, and we will be dependent on further developing, exploiting

and establishing sufficient reserves at the Central Weld Assets for additional cash flow and a return of our investment.

If we are unable

to further develop or exploit the Central Weld Assets or if the Central Weld Assets are not economic, all of the funds that we have invested,

or will invest, will be lost.

In addition, the failure of the Central Weld Assets to further produce commercially may make it more difficult

for us to raise additional funds in the form of additional sale of our equity securities or working interests in other property in which

we may acquire an interest.

The development of our estimated PUDs and estimated

possible undeveloped reserves may take longer and may require higher levels of capital expenditures than we currently anticipate.

our estimated PUDs and estimated possible undeveloped reserves may not ultimately be developed or produced.

All of the reserves attributable

to the Genesis Assets are undeveloped and all reserves associated therewith, other than in respect of the Genesis Bolt-on Assets that

were acquired in February 2024, are classified as possible reserves.

Development of proved undeveloped reserves and possible undeveloped

reserves may take longer and require higher levels of capital expenditures than we currently anticipate.

Delays in the development of

our reserves and those that we may ultimately acquire in the NRO Acquisition, increases in costs to drill and develop such reserves, or

decreases in commodity prices will reduce the value of our estimated PUDs, possible undeveloped reserves and future net revenues estimated

for such reserves and may result in some projects becoming uneconomic.

In addition, delays in the development of reserves could require

us to reclassify our PUDs as unproved reserves.

Company has no history of drilling producing oil and gas wells and there can be no assurance that we will successfully establish oil

and gas operations or profitably produce oil, natural gas or NGLs.

Company has not successfully drilled a producing oil and gas well nor successfully produced hydrocarbons, and we have no ongoing drilling

operations or revenues from drilling operations.

Oil and gas exploration and production has a high degree of risk.

The future development

of a significant portion of our properties will require obtaining permits and financing.

As a result, we are subject to all of the risks

associated with establishing new drilling operations and business enterprises, including, among others:

need to obtain necessary environmental and other governmental approvals and permits, the timing and conditions of those approvals

and permits, and litigation concerning those approvals and permits;

availability and cost of funds to finance the drilling and development of our properties;

timing and cost, which can be considerable, of the supporting infrastructure to our oil and gas drilling operations;

ability to obtain midstream offtake capacity for our future oil and gas production;

resulting from the development of offsetting properties from other operators in the area;

prices and our ability to find suitable customers for our future production;

and potential increases in costs of labor, power, supplies, services and other support;

availability of skilled labor and equipment to support our drilling operations.

is no assurance that our drilling activities will result in the successful production of oil, natural gas or NGLs.

Moreover, there is

no assurance that even if we are able to successfully produce oil, natural gas or NGLs that such production would be economical for commercial

Oil and gas production is dependent upon a number of factors and significantly influenced by the technical skill of our operations

personnel involved.

The commercial viability of our possible future production is also dependent upon a number of factors which are beyond

our control, including the quality of our oil, natural gas and NGLs, commodity prices, government policies and regulation, and environmental

protection requirements.

There is no certainty that the expenditures that have been made and may be made in the future by the Company

related to the acquisition and development of our properties will result in commercially viable production and the Company’s past

and future expenditures may be partially or entirely lost.

we have no operating history related to the exploration and production of oil and gas assets, investors have no basis to evaluate our

ability to operate profitably as an E&P business.

have not generated any revenue in the exploration and production of oil and gas assets to date which, following the Crypto Sale, is our

sole business segment.

We face many of the risks commonly encountered by other new businesses, including the lack of an established operating

history, need for additional capital and personnel, and competition.

There is no assurance that our business will be successful or that

we can ever operate profitably.

We may not be able to effectively manage the demands required of a new business, such that we may be

unable to implement our business plan or achieve profitability.

natural gas and NGLs prices are highly volatile.

An extended decline in commodity prices may adversely affect our business, financial

condition or results of operations and our ability to meet our capital expenditure obligations and financial commitments.

the acquisition and development of our existing and future E&P assets, our revenues, profitability and cash flows will depend upon the prices for oil,

natural gas and NGLs.

The prices we may receive for oil, natural gas and NGLs production are volatile and a decrease in prices can materially

and adversely affect our financial results and impede our growth, including our ability to maintain or increase our borrowing capacity,

to repay current or future indebtedness and to obtain additional capital on attractive terms.

Changes in oil, natural gas and NGLs prices

have a significant impact on the amount of oil, natural gas and NGLs that we can produce economically, the value of our reserves and

on our cash flows.

Historically, world-wide oil, natural gas and NGLs prices and markets have been subject to significant change and

may continue to change in the future.

During the year ended December 31, 2023, the average West Texas Intermediate (“WTI”)

spot price was $77.58, as compared to an average price of $94.90 for the year ended December 31, 2022 and $68.16 for the year ended December

The average Henry Hub natural gas spot price during the year ended December 31, 2023, was $2.54 as compared to an average of

$6.42 for the year ended December 31, 2022 and $3.60 for the year ended December 31, 2021.

for oil, natural gas and NGLs may fluctuate widely in response to relatively minor changes in supply and demand, market uncertainty and

a variety of additional factors that are beyond our control, such as:

domestic and foreign supply of and demand for oil, natural gas and NGLs;

price and quantity of foreign imports of oil, natural gas and NGLs;

ability of and actions taken by the Organization of the Petroleum Exporting Countries (“OPEC”) and Russia (together with

OPEC and other allied producing countries, “OPEC+”) and other oil-producing nations in connection with their arrangements

to maintain oil prices and production controls;

and economic conditions and events in foreign oil and natural gas producing countries, including embargoes, continued hostilities

in the Middle East and other sustained military campaigns, the armed conflict in Ukraine and associated economic sanctions on Russia,

conditions in South America, Central America, China and Russia, and acts of terrorism or sabotage;

proximity of our production to and capacity of oil, natural gas and NGLs pipelines and other transportation and storage facilities;

level of consumer product demand;

value of the dollar relative to the currencies of other countries;

impact of energy consumption, supply, and conservation policies and activities by governmental authorities, international agreements,

and non-governmental organizations to limit, restrict, suspend or prohibit the performance or financing of oil, natural gas and NGLs

exploration, production, development or marketing activities;

governmental regulations, including environmental initiatives and taxation;

domestic and global economic conditions;

impact on worldwide economic activity of an epidemic, outbreak or other public health events;

price and availability of alternative fuels;

technological

advances affecting energy consumption, energy conservation and energy supply;

activism or activities by non-governmental organizations to restrict the exploration, development and production of oil, natural

gas and NGLs to minimize emissions of carbon dioxide, a greenhouse gas;

plan to develop and operate our existing and future E&P assets will require substantial additional capital, which we may be unable to raise on acceptable

terms or at all in the future.

we currently expect to develop and operate our existing and future E&P assets utilizing cash flow from operations, we may be unable to do so.

permits and approvals, seismic data, as well as exploration, development and production activities entail considerable costs, and, to

the extent we are unable to fund such costs utilizing cash flow from operations, we may need to raise substantial additional capital,

through future private or public equity offerings, strategic alliances or other alternative arrangements.

future capital requirements will depend on many factors, including:

scope, rate of progress and cost of our exploration, appraisal, development and production activities;

and natural gas prices;

ability to obtain the requisite permits and approvals to begin drilling, and potential litigation related to obtaining such permits

and approvals;

ability to locate and acquire hydrocarbon reserves;

ability to produce oil or natural gas from those reserves;

terms and timing of any drilling and other production-related arrangements that we may enter into;

cost and timing of governmental approvals and/or concessions;

effects of competition by larger companies operating in the oil and gas industry.

we raise additional capital through equity financing, the ownership percentage of our existing stockholders would be diluted, and new

investors may demand rights, preferences or privileges senior to those of existing stockholders.

While we do not intend to finance our

operations by relying on debt financing, if we were to raise additional capital through debt financing, the financing may involve covenants

that restrict our business activities.

If we are not successful in raising additional capital, we may be unable to continue our future

exploration, development and production activities.

intend to enter into hedging arrangements as we grow our production and therefore we will be exposed to fluctuations in the price of

oil, natural gas and NGLs and will be affected by continuing and prolonged declines in such prices.

Any future hedging activities we

may engage in may result in financial losses or could reduce our income.

natural gas, and NGL prices are volatile.

We intend, in the future, to hedge a significant portion of oil and natural gas production

to reduce our exposure to adverse fluctuations in these prices.

We are currently not hedged and therefore are exposed to price volatility

once we have oil, natural gas and NGL production and may be subject to significant reduction in prices, which would have a material negative

impact on our results of operations.

In the future, we intend to enter into derivative arrangements for a portion of our oil, natural

gas, and NGL production, including swaps, collars and other instruments.

Derivative arrangements would expose us to the risk of financial

loss in some circumstances, including when:

(i) production is less than the volume covered by the derivative instruments;

(ii) the counterparty

to the derivative instrument defaults on its contract obligations;

or (iii) there is an increase in the differential between the underlying

price in the derivative instrument and actual prices received.

These types of derivative arrangements may limit the benefit we would

receive from increases in the prices for oil and natural gas and may expose us to cash margin requirements.

If oil, natural gas and NGL

prices upon settlement of derivative swap contracts exceed the price at which commodities have been hedged, we will be obligated to make

cash payments to counterparties, which could, in certain circumstances, be significant.

for and producing oil and gas wells is a high-risk activity with many uncertainties that could adversely affect our business, financial

condition or results of operations.

oil and gas wells, including development wells, involves numerous risks, including the risk that we may not encounter commercially productive

oil, natural gas and NGLs reserves (including “dry holes”).

We must incur significant expenditures to drill and complete

wells, the costs of which are often uncertain.

It is possible that we will make substantial expenditures on drilling and not discover

reserves in commercially viable quantities.

Specifically, we often are uncertain as to the future cost or timing of drilling, completing

and operating wells, and our drilling operations and those of our third-party operators may be curtailed, delayed or canceled.

of our drilling, completing and operating wells may increase and our results of operations and cash flows from such operations may be

impacted, as a result of a variety of factors, including:

drilling conditions;

or irregularities in formations;

protection and workplace safety, including equipment failures or accidents;

weather conditions, such as winter storms and flooding, and changes in weather patterns including due to climate change;

with, or changes in, environmental laws and regulations relating to climate change, air emissions, hydraulic fracturing and disposal

of produced water, drilling fluids and other wastes, laws and regulations imposing conditions and restrictions on drilling and completion

operations, including as related to induced seismicity, and other laws and regulations, such as tax laws and regulations;

availability and timely issuance of required governmental permits, approvals and licenses, or litigation concerning such permits,

approvals and licenses;

availability of, costs associated with and terms of contractual arrangements for properties, including mineral licenses and leases,

pipelines, rail cars, crude oil hauling trucks and qualified drivers and related services, facilities and equipment to gather, process,

compress, store, transport and market crude oil, natural gas and related commodities;

with environmental and other regulatory requirements;

environmental

hazards, such as natural gas leaks, oil and produced water spills, pipeline or tank ruptures, encountering naturally occurring radioactive

materials, and unauthorized discharges of brine, well stimulation and completion fluids, toxic gases or other pollutants into the

air, surface and subsurface environment.

failure to recover our investment in any E&P assets, increases in the costs of our drilling operations or those of third-party operators,

and/or curtailments, delays or cancellations of our drilling operations or those of our third-party operators in each case due to any

of the above factors or other factors, may materially and adversely affect our business, financial condition and results of operations.

intend to pursue the development of our properties in the DJ Basin through horizontal drilling and completion.

Horizontal development

operations can be more operationally challenging and costly relative to vertical drilling operations.

drilling is generally more complex and more expensive on a per well basis than vertical drilling.

As a result, there is greater risk

associated with a horizontal well program.

Risks associated with our horizontal drilling program include, but are not limited to, the

following, any of which could materially and adversely impact the success of our horizontal drilling program and, thus, our cash flows

and results of operations:

drilling and maintaining the wellbore to planned total depth;

our wellbore in the desired hydrocarbon reservoir;

controlling the level of pressure flowing from particular wells;

in the desired hydrocarbon reservoir while drilling horizontally through the formation;

our casing through the entire length of the wellbore;

tools and equipment consistently through the horizontal wellbore;

design and execution of the fracture stimulation process;

downhole communications with other wells, or, in the alternative, disruption from non-simultaneous operations;

cleaning out the wellbore after completion of the final fracture stimulation stage;

and maintaining efficient forms of artificial lift throughout the life of the well.

the success of these drilling and completion techniques can only be evaluated over time as more wells are drilled and production profiles

are established over a sufficiently long time period.

If our drilling results are less than anticipated or we are unable to execute our

drilling program because of capital constraints, lease expirations, access to gathering systems, limited takeaway capacity, or depressed

natural gas and oil prices, the return on our investment in these areas may not be as attractive as anticipated.

Further, as a result

of any of these developments, we could incur material impairments of our oil and gas properties and the value of our undeveloped acreage

could decline in the future.

pad drilling and project development may result in volatility in our operating results.

intend to utilize, and NRO has historically utilized, multi-well pad drilling and project development where practical.

Project development

may involve more than one multi-well pad being drilled and completed at one time in a relatively confined area.

Wells drilled on a pad

or in a project may not be brought into production until all wells on the pad or project are drilled and completed.

Problems affecting

one pad or a single well could adversely affect production from all of the wells on the pad or in the entire project.

As a result, multi-well

pad drilling and project development can cause delays in the scheduled commencement of production, or interruptions in ongoing production.

These delays or interruptions may cause declines or volatility in our operating results due to timing as well as declines in oil and

natural gas prices.

Further, any delay, reduction or curtailment of our development and producing operations, due to operational delays

caused by multi-well pad drilling or project development, or otherwise, could result in the loss of acreage through lease expirations.

Additionally,

infrastructure expansion, including more complex facilities and takeaway capacity, could become challenging in project development areas.

Managing capital expenditures for infrastructure expansion could cause economic constraints when considering design capacity.

locations that we decide to drill may not yield oil or natural gas in commercially viable quantities.

potential drilling locations are in various stages of evaluation, ranging from a location that is ready to drill to a location that will

require substantial additional evaluation.

There is no way to predict in advance of drilling and testing whether any particular location

will yield oil or natural gas in sufficient quantities to recover drilling or completion costs or to be economically viable.

drilling, the use of 2-D and 3-D seismic technologies, various other technologies, and the study of producing fields in the same area

will still not enable us to know conclusively whether oil or natural gas will be present or, if present, whether oil or natural gas will

be present in sufficient quantities to be economically viable.

In addition, the use of 2-D or 3-D seismic data and other technologies

requires greater pre-drilling expenditures than traditional drilling strategies, and we could incur greater drilling and testing expenses

as a result of such expenditures which may result in reduction in our returns or increase our losses.

Even if sufficient amounts of oil

or natural gas exist, we may damage the potentially productive hydrocarbon bearing formation or experience mechanical difficulties while

drilling or completing the well, resulting in a reduction in production from the well or abandonment of the well.

If we drill any dry

holes in our current or future drilling locations, our profitability and the value of our properties will likely be reduced.

assure you that the analogies we draw from available data from other wells, more fully explored locations, or producing fields will be

applicable to our drilling locations.

Further initial production rates reported by us or other operators may not be indicative of future

or long-term production rates.

In sum, the cost of drilling, completing, and operating any well is often uncertain, and new wells may

not be productive.

of the undeveloped leasehold acreage is subject to leases that will expire over the next several years unless production is established

on units containing the acreage.

terms of our oil and gas leases often stipulate that the lease will terminate if not held by production, rentals, or otherwise some

form of an extension payment to extend the term of the lease.

If production in paying quantities is not established on units

containing leases during the next year, then approximately 6,598 net acres of our Initial Genesis Assets will expire in 2024,

approximately 2,567 net acres of our Initial Genesis Assets will expire in 2025 and approximately 14,320 net acres of our Genesis

Assets will expire in 2026 and thereafter.

While some expiring leases may contain predetermined extension payments, other expiring

leases will require us to negotiate new leases at the time of lease expiration.

Further, existing leases which are currently held by

production may unexpectedly encounter operational, political, regulatory, or litigation challenges which could result in their

It is possible that market conditions at the time of negotiation could require us to agree to new leases on less

favorable terms to us than the terms of the expired leases or cause us to lose the leases entirely.

If our leases expire, we will

lose our right to develop the related properties.

future results of operations are highly dependent on our ability to find, develop or acquire additional reserves.

oil and natural gas reservoirs generally are characterized by declining production rates that vary depending upon reservoir characteristics

and other factors.

Unless we conduct successful ongoing exploration and development activities or continually acquire properties containing

proved reserves, our proved reserves will decline as those reserves are produced.

Our future reserves and production, and therefore our

future cash flow and results of operations, are highly dependent on our success in efficiently developing our current reserves and economically

finding or acquiring additional recoverable reserves.

We may not be able to develop, find, or acquire sufficient additional reserves

to replace our current and future production.

If we are unable to replace our current and future production, the value of our reserves

will decrease, and our business, financial condition, and results of operations would be materially and adversely affected.

estimated oil, natural gas and NGLs reserves are based on many assumptions that may prove to be inaccurate.

Any material inaccuracies

in the reserve estimates or the underlying assumptions will materially affect the quantities and present value of our reserves.

uncertainties are inherent in estimating quantities of oil, natural gas and NGLs reserves.

The process of estimating oil, natural

gas and NGLs reserves is complex, requiring significant decisions and assumptions in the evaluation of available geological,

engineering and economic data for each reservoir, including assumptions regarding future oil, natural gas and NGLs prices,

subsurface characterization, production levels and operating and development costs.

Our estimates of possible reserves for the

Initial Genesis Assets as of December 31, 2023 were prepared by CG&A.

CG&A conducted a detailed review of the Initial

Genesis Assets for the period covered by its reserve report using information provided by us.

time, we may make material changes to reserve estimates taking into account the results of actual drilling, testing and production.

a result of the uncertainties, estimated quantities of oil, natural gas and NGLs reserves and projections of future production rates

and the timing of development expenditures may prove to be inaccurate.

Any significant variance in our assumptions and actual results could greatly affect our estimates of reserves, the economically recoverable

quantities of oil, natural gas and NGLs attributable to any particular group of properties, the classifications of reserves based on

risk of non-recovery and estimates of future net cash flows.

As of December 31, 2023 all of our reported reserves and associated future cash

flows are deemed possible.

Estimates of possible reserves, and the future cash flows related to such estimates, are also inherently imprecise

and are more uncertain than estimates of proved and probable reserves, respectively, and the respective future cash flows related to

such estimates, but have not been adjusted for risk due to that uncertainty.

Because of such uncertainty, estimates of possible reserves,

and the future cash flows related to such estimates, may not be comparable to estimates of proved and probable reserves, respectively,

and the respective future cash flows related to such estimates, and should not be summed arithmetically with estimates of either proved

or probable reserves, respectively, and the respective future cash flows related to such estimates.

producing an estimate of the amount of oil, natural gas and NGLs that is recoverable from a particular reservoir, an estimated quantity

of possible reserves is an estimate that might be achieved, but only under more favorable circumstances than are likely.

possible reserves are also continually subject to revisions based on production history, results of additional exploration and development,

price changes and other factors.

When deterministic methods are used, the total quantities ultimately recovered from a project have a

low probability of exceeding proved plus probable plus possible reserves.

Possible reserves may be assigned to areas of a reservoir adjacent

to probable reserve where data control and interpretations of available data are progressively less certain.

Frequently, this will be

in areas where geoscience and engineering data are unable to define clearly the area and vertical limits of commercial production from

the reservoir.

Possible reserves also include incremental quantities associated with a greater percentage of recovery of the hydrocarbons

in place than the recovery quantities assumed for probable reserves.

Possible reserves may be assigned where geoscience and engineering

data identify directly adjacent portions of a reservoir within the same accumulation that may be separated from proved areas by faults

with displacement less than formation thickness or other geological discontinuities and that have not been penetrated by a wellbore,

and we believe that such adjacent portions are in communication with the known (proved) reservoir.

Possible reserves may be assigned

to areas that are structurally higher or lower than the proved area if these areas are in communication with the proved reservoir.

market our oil and natural gas production, we are dependent upon obtaining access to midstream infrastructure, including truck transportation,

pipelines, transmission and/or storage and processing facilities.

If we are unable to obtain such access on commercially reasonable terms

or at all, we would be unable to market and sell our production and our business and financial position would be materially and adversely

marketing of oil and natural gas production depends in large part on the availability, proximity and capacity of pipelines and storage

facilities, gathering systems and other transportation, processing, fractionation, refining and export facilities, as well as the existence

of adequate markets.

Transportation space on the gathering systems and pipelines we utilize is occasionally limited or unavailable due

to repairs or improvements to facilities or due to space being utilized by other companies that have priority transportation agreements.

Additionally, new fields may require the construction of gathering systems and other transportation facilities.

These facilities may

require us to spend significant capital that would otherwise be spent on drilling.

We rely, and expect to rely in the future, on facilities

developed and owned by third parties in order to store, process, transmit and sell our production.

Our plans to develop and sell our

reserves could be materially and adversely affected by the inability or unwillingness of third parties to provide sufficient facilities

and services to us on commercially reasonable terms or otherwise.

If these facilities are unavailable to us on commercially reasonable

terms or otherwise, we could be forced to shut in some production or delay or discontinue drilling plans and commercial production following

a discovery of hydrocarbons.

The availability of markets is beyond our control.

If market factors dramatically change, the impact on

our revenues could be substantial and could materially and adversely affect our ability to produce and market oil and natural gas.

access to transportation options can also be affected by U.S.

federal and state regulation of oil and natural gas production and transportation,

general economic conditions and changes in supply and demand.

The interstate transportation and sale for resale of natural gas are subject

to federal regulation, including regulation of the terms, conditions and rates for interstate transportation, storage and various other

matters, primarily by FERC.

Federal and state regulations govern the price and terms for access to natural gas pipeline transportation.

FERC’s regulations for interstate natural gas transmission in some circumstances may also affect the intrastate transportation

of natural gas.

FERC regulates the rates, terms and conditions applicable to the interstate transportation of natural gas by pipelines

under the NGA as well as under Section 311 of the NGPA.

Since 1985, FERC has implemented regulations intended to increase competition

within the natural gas industry by making natural gas transportation more accessible to natural gas buyers and sellers on an open-access,

nondiscriminatory basis.

sales of oil and NGLs are also affected by the availability, terms and costs of transportation.

The rates, terms, and conditions applicable

to the interstate transportation of oil and NGLs by pipelines are regulated by FERC under the Interstate Commerce Act.

FERC has implemented

a simplified and generally applicable ratemaking methodology for interstate oil and NGL pipelines to fulfill the requirements of Title

XVIII of the Energy Policy Act of 1992 comprised of an indexing system to establish ceilings on interstate oil and NGL pipeline rates.

Intrastate oil pipeline transportation rates are subject to regulation by state regulatory commissions.

The basis for intrastate oil

pipeline regulation, and the degree of regulatory oversight and scrutiny given to intrastate oil pipeline rates, varies from state to

Insofar as effective interstate and intrastate rates are equally applicable to all comparable shippers, we believe that the regulation

of oil transportation rates will not affect our operations in any materially different way than such regulation will affect the operations

of our competitors.

interstate and intrastate common carrier oil pipelines must provide service on a non-discriminatory basis.

Under this open access standard,

common carriers must offer service to all shippers requesting service on the same terms and under the same rates.

When oil pipelines

operate at full capacity, access is governed by prorationing provisions set forth in the pipelines’ published tariffs.

we believe that access to oil pipeline transportation services generally will be available to us to the same extent as to our competitors.

an alternative to pipeline transportation, any transportation of our crude oil and NGLs by rail will also be subject to regulation by

the Pipeline and Hazardous Materials Safety Administration (“PHMSA”) and the Federal Railroad Administration (“FRA”)

of the Department of Transportation under the Hazardous Materials Regulations at 49 CFR Parts 171-180, including Emergency Orders by

the FRA and new regulations being proposed by the PHMSA, arising due to the consequences of train accidents and the increase in the rail

transportation of flammable liquids.

will face strong competition from other oil and gas companies.

will encounter competition from other oil and gas companies in all areas of our operations, including the acquisition of exploratory

prospects and proven properties.

Our competitors include major integrated oil and gas companies and numerous independent oil and gas

companies, individuals and drilling and income programs.

Many of our competitors are large, well-established companies that have been

engaged in the oil and gas business much longer than we have and possess substantially larger operating staffs and greater capital resources

These companies may be able to pay more for exploratory projects and productive oil and gas properties and may be able to

define, evaluate, bid for and purchase a greater number of properties and prospects than our financial or human resources permit.

addition, these companies may be able to expend greater resources on the existing and changing technologies that we believe are and will

be increasingly important to attaining success in the industry.

Such competitors may also be in a better position to secure oilfield

services and equipment on a timely basis or on favorable terms.

These companies may also have a greater ability to continue drilling

activities during periods of low oil and gas prices, such as the current commodity price environment, and to absorb the burden of current

and future governmental regulations and taxation.

We may not be able to conduct our operations, evaluate and select suitable properties

and consummate transactions successfully in this highly competitive environment.

regulation and liability for oil and natural gas operations may adversely affect our business and results of operations.

exploration, production and development activities are subject to extensive federal, state, and local government regulations, which may

change from time to time.

Matters subject to regulation include discharge permits for drilling operations, drilling bonds and other financial

assurance, reports concerning operations, the spacing of wells, unitization and pooling of properties, and taxation.

From time to time,

regulatory agencies have imposed price controls and limitations on production by restricting the rate of flow of oil and natural gas

from wells below actual production capacity in order to conserve supplies of oil and natural gas.

These laws and regulations may affect

the costs, manner, and feasibility of our operations by, among other things, requiring us to make significant expenditures in order to

comply and restricting the areas available for oil and gas production.

Failure to comply with these laws and regulations may result in

substantial liabilities to third-parties or governmental entities.

We are also subject to changing and extensive tax laws, the effects

of which cannot be predicted.

The implementation of new, or the modification of existing, laws or regulations, could have a material

adverse effect on us, such as by imposing, penalties, fines and/or fees, taxes and tariffs on carbon that could have the effect of raising

prices to the end user and thereby reducing the demand for our products.

of our E&P assets are located in the DJ Basin, making us vulnerable to risks associated with operating primarily in a single geographic

of our current E&P assets are located in the DJ Basin in Colorado.

Because our assets are not as diversified geographically as many

of our competitors, the success of our operations and our profitability may be disproportionately exposed to the effect of any regional

events, including natural disasters, government regulations and midstream interruptions.

For example, bottlenecks in processing and transportation

have occurred in some recent periods in the Wattenberg Field in the DJ Basin and these adverse effects may be disproportionately severe

to us compared to our more geographically diverse competitors.

Similarly, the concentration of our assets within a small number of formations

exposes us to risks, such as changes in field-wide rules that could adversely affect development activities or production relating to

those formations.

Such an event could have a material adverse effect on our results of operations and financial condition.

the demand for, and cost of, drilling rigs, equipment, supplies, chemicals, personnel and oilfield services often increase as a result

of numerous factors including increases in exploration and production activity, supply chain problems, and labor shortages.

Any shortages

or increased costs could delay or adversely affect our development and exploration operations or cause us to incur significant expenditures

that are not provided for in our capital forecast, which could have a material adverse effect on our business, financial condition or

results of operations.

All of the producing properties and reserves included in the Central Weld Assets are located in the DJ Basin.

As a result, the transaction increases the risks we face with respect to the geographic concentration of our properties.

addition, seasonal weather conditions and natural disasters could severely disrupt normal operations and harm our business.

During periods

of heavy snow, ice, wind or rain, we may be unable to move our equipment between locations, thereby reducing our ability to provide services

and generate revenues, or we could suffer weather-related damage to our facilities and equipment, resulting in delays in operations.

Our exploration activities may also be affected during such periods of adverse weather conditions.

Additionally, extended drought conditions

in our operating regions could impact our ability or our customers’ ability to source sufficient water or increase the cost for

As a result, a natural disaster or inclement weather conditions could severely disrupt the normal operation of our business

and adversely impact our financial condition and results of operations.

climate change may result in various physical risks, such as the increased frequency or intensity of extreme weather events or changes

in meteorological and hydrological patterns, that could adversely impact our operations.

Such physical risks may result in damage to

our facilities or otherwise adversely impact our operations, such as if facilities are subject to water use curtailments in response

to drought, or demand for our products, such as to the extent warmer winters reduce the demand for energy for heating purposes, which

may ultimately reduce demand for the products we provide.

Such physical risks may also impact our suppliers, which may adversely affect

our ability to provide our products.

Extreme weather conditions can interfere with our operations and increase our costs, and damage

resulting from extreme weather may not be fully insured.

operations will be subject to federal, state and local laws and regulations related to environmental and natural resources protection

and occupational health and safety, which may expose us to significant costs and liabilities and result in increased costs and additional

operating restrictions or delays.

oil, natural gas and NGLs exploration, production and development operations will be subject to stringent federal, state, local and other

applicable laws and regulations governing worker health and safety, the release or disposal of materials into the environment or otherwise

relating to environmental protection.

Numerous governmental entities, including the EPA, the U.S.

Occupational Safety and Health Administration,

and analogous state agencies, including the CDPHE and the CECMC, have the power to enforce compliance with these laws and regulations.

These laws and regulations may, among other things, require the acquisition of permits to conduct drilling;

govern the amounts and types

of substances that may be released into the environment;

limit or prohibit construction or drilling activities in environmentally-sensitive

areas such as wetlands, wilderness areas or areas inhabited by endangered or threatened species;

require investigatory and remedial actions

to mitigate pollution conditions;

impose obligations to reclaim and abandon well sites and pits;

impose seasonal limitations on our ability

to conduct operations due to wildlife migration patterns or other similar concerns;

and impose specific criteria addressing worker protection.

Compliance with such laws and regulations may impact our operations and production, require us to install new or modified emission controls

on equipment or processes, incur longer permitting timelines, restrict the areas in which some or all operational activities may be conducted,

and incur significantly increased capital or operating expenditures, which costs may be significant.

The regulatory burden on the oil

and gas industry increases the cost of doing business in the industry and consequently affects profitability.

Additionally,

certain environmental laws impose strict, joint and several liability for costs required to remediate and restore sites where hydrocarbons,

materials or wastes have been stored or released.

Failure to comply with these laws and regulations may also result in the assessment

of sanctions, including administrative, civil and criminal penalties, the imposition of investigatory, remedial and corrective action

obligations or the incurrence of capital expenditures, the occurrence of restrictions, delays or cancellations in the permitting, development

or expansion of projects and the issuance of orders enjoining some or all of our operations in affected areas.

Moreover, accidental spills

or other releases may occur in the course of our operations, and we cannot assure you that we will not incur significant costs and liabilities

as a result of such spills or releases, including any third-party claims for damage to property, natural resources or persons.

not be able to fully recover such costs from insurance.

One or more of these developments that impact us, our service providers or our

customers could have a material adverse effect on our business, results of operations and financial condition and reduce demand for our

interest groups generally opposed to the development of oil and gas, and hydraulic fracturing in particular, have from time to time advanced

various options for ballot initiatives aimed at significantly limiting or preventing the development of oil and gas.

For example, following

the failure of several ballot initiatives to restrict oil and gas development, Colorado passed a law in April 2019 (Senate Bill 19-181)

that, among other things, changes the mission of the CECMC from fostering oil and gas development to instead focus on environmental protection,

directs the CECMC and various state agencies to consider new rules imposing stricter environmental controls on the oil and gas industry,

and provides local governments with the authority to promulgate their own regulations on oil and gas development.

Pursuant to this statutory

change, the CECMC has issued new rules relating to the agency’s new mission—formerly “fostering” oil and gas

development, now “regulating” it—including, among other things, increasing oil and gas setbacks to a minimum of 2,000

feet from schools and childcare facilities, prohibiting routine venting and flaring, and increasing wildlife protections.

rules will also address cumulative impacts through a new state regulatory program and will completely revise state permitting procedures.

In May 2023, Colorado passed a law (House Bill 1294) that requires the CECMC to promulgate rules addressing cumulative impacts of oil

and gas operations by April 28, 2024.

CECMC is currently assessing draft rules pursuant to this law, which, if finalized as proposed,

would require regulators to consider cumulative impacts of oil and gas operations in permitting decisions and increase scrutiny on the

project’s proximity to other industrial sites, residential areas and school areas, DI communities, and “cumulatively impacted

communities.” The draft rules would also set GHG emissions intensity targets for oil and gas operators and require regulators to

consider such targets in their cumulative impacts analysis, as well as the potential to restrict operations during the summer in Ozone

Nonattainment Areas.

While the ultimate impact of the new Colorado laws and related rules is currently unknown, these laws or passage

or enactment of other similar legislation could have a material adverse effect on our operations in Colorado.

general trend in environmental regulation is to place more restrictions and limitations on activities that may affect the environment.

There can be no assurance as to the amount or timing of future expenditures for environmental compliance or remediation, and actual future

expenditures may be materially different from the amounts we currently anticipate.

Revised or additional regulations that result in increased

compliance costs or additional operating restrictions, particularly if those costs are not fully recoverable from our customers, could

have a material adverse effect on our business, financial position, results of operations and prospects.

oil and gas exploration, production, and development activities may be subject to a series of risks related to climate change and energy

transition initiatives.

threat of climate change continues to attract considerable attention in the United States and around the world.

Numerous proposals have

been made and could continue to be made at the international, national, regional and state levels of government to monitor and limit

emissions of GHGs.

These efforts have included consideration of cap-and-trade programs, carbon taxes, GHG disclosure obligations and

regulations that directly limit GHG emissions from certain sources.

President Biden has identified addressing climate change as a priority

under his administration and has issued, and may continue to issue, executive orders related to that goal.

For example, in January 2024,

the Biden administration announced a temporary pause on the U.S.

Department of Energy’s (“DOE”) review of pending applications

for authorization to export LNG to countries that have not entered into free trade agreements (“FTAs”) with the United States

(so-called non-FTA countries) until the DOE updates its underlying analyses for such authorizations using more current data to account

for considerations like potential energy cost increases for consumers and manufacturers or the latest assessment of the impact of GHG

While this pause may not directly impact our exploration, production and development activities, it may affect the demand

for our products, which could have a material adverse effect on our business and financial position.

at the federal level, the EPA has adopted rules that, among other things, establish construction and operating permit reviews for GHG

emissions from certain large stationary sources, require the monitoring and annual reporting of GHG emissions from certain petroleum

and natural gas system sources, and impose new standards reducing methane emissions from oil and gas operations through limitations on

venting and flaring and the implementation of enhanced emission leak detection and repair requirements.

In December 2023 the EPA finalized

more stringent methane rules for new, modified, and reconstructed facilities, known as OOOOb, as well as standards for existing sources

for the first time ever, known as OOOOc.

Under the final rules, states have two years to prepare and submit their plans to impose methane

emission controls on existing sources.

The presumptive standards established under the final rules are generally the same for both new

and existing sources and include enhanced leak detection survey requirements using optical gas imaging and other advanced monitoring

to encourage the deployment of innovative technologies to detect and reduce methane emissions, reduction of emissions by 95% through

capture and control systems, zero-emission requirements for certain devices, and the establishment of a “super emitter” response

program that would allow third parties to make reports to the EPA of large methane emission events, triggering certain investigation

and repair requirements.

Fines and penalties for violations of these rules can be substantial.

In addition, the

Congress may continue to consider and pass legislation related to the reduction of GHG emissions, including methane and carbon

For example, the IRA, which appropriates significant federal funding for renewable energy initiatives and, for the first

time ever, imposes a fee on GHG emissions from certain facilities, was signed into law in August 2022.

The methane emissions charge

would start in calendar year 2024 at $900 per ton of methane, increase to $1,200 in 2025, and be set at $1,500 for 2026 and each

Calculation of the fee is based on certain thresholds established in the IRA.

In January 2024, the EPA issued a proposed

rule to implement the waste emissions charge with a proposed effective date in 2025 for reporting year 2024 emissions.

charge and the incentives for renewable energy infrastructure development could impose additional costs on our operations and

further accelerate the transition of the economy away from the use of oil and natural gas towards lower- or zero-carbon emissions

alternatives.

Furthermore, on March 6, 2024, the SEC finalized a rule requiring the reporting of climate-related risks and financial

impacts, as well as GHG emissions for larger companies.

Compliance dates under the final rule are phased in by registrant category.

Smaller reporting companies will be required to incorporate climate-related disclosures into their filings beginning in fiscal year

Accelerated filers will be required to incorporate the disclosures in fiscal year 2026, as well as disclosure of Scope 1 and 2

GHG emissions, if material, in fiscal year 2028, and limited assurance attestation reports related to the same by fiscal year 2031.

Large accelerated filers will be required to incorporate the disclosures in fiscal year 2025, with Scope 1 and 2 GHG emissions

disclosures, if material, in fiscal year 2026, and attestation reports by fiscal year 2029.

While we are still assessing our

obligations under the rule, complying with such obligations may result in increased costs.

have also implemented or are considering implementing laws and regulations that would require climate-related disclosures, which could

result in additional costs to comply with disclosure requirements as well as increase costs of and restrictions on access to capital.

Separately, enhanced climate related disclosure requirements could lead to reputational or other harm with customers, regulators, investors

or other stakeholders and could also increase our litigation risks relating to alleged climate-related damages resulting from our operations,

statements alleged to have been made by us or others in our industry regarding climate change risks, or in connection with any future

disclosures we may make regarding reported emissions, particularly given the inherent uncertainties and estimations with respect to calculating

and reporting GHG emissions.

From time to time, the SEC has also focused additional scrutiny on existing climate-change related disclosures

in public filings, increasing the potential for enforcement if the SEC were to allege an issuer’s existing climate disclosures

were misleading or deficient.

These ongoing regulatory actions and the emissions fee and funding provisions of the IRA could increase

operating costs within the oil and gas industry and accelerate the transition away from fossil fuels, which could in turn adversely affect

our business and results of operations.

the international level, the United Nations-sponsored Paris Agreement, though non-binding, calls for signatory nations to limit their

GHG emissions through individually-determined reduction goals every five years after 2020.

In February 2021, President Biden recommitted

the United States to long-term international goals to reduce emissions, including those under the Paris Agreement.

President Biden announced

in April 2021 a new, more rigorous nationally determined emissions reduction level of 50 to 52 percent from 2005 levels in economy-wide

net GHG emissions by 2030.

Moreover, the international community convenes annually at the Conference of the Parties to negotiate further

pledges and initiatives, such as the Global Methane Pledge (a collective goal to reduce global methane emissions by 30 percent from 2020

levels by 2030).

The impacts of these orders, pledges, agreements and any legislation or regulation promulgated to fulfill the United

States’ commitments under the Paris Agreement or other international agreements cannot be predicted at this time.

In December 2023,

at the 28th Conference of the Parties, the parties signed onto an agreement to transition away from fossil fuels in energy systems and

increase renewable energy capacity, though no timeline for doing so was set.

While non-binding, the agreements coming out of these conferences

could result in increased pressure among financial institutions and various stakeholders to reduce or otherwise impose more stringent

limitations on funding for, and increase potential opposition to, the exploration and production of fossil fuels.

risks are also increasing, as a number of states, municipalities, environmental organizations and other plaintiffs have sought to bring

suits against oil and natural gas exploration and production companies in state or federal court, alleging, among other things, that

such energy companies created public nuisances by producing fuels that contributed to global warming effects, such as rising sea levels,

and therefore, are responsible for roadway and infrastructure damages as a result, or alleging that the companies have been aware of

the adverse effects of climate change for some time but defrauded their investors by failing to adequately disclose those impacts.

in such a case, regardless of the substance of the allegations, could have adverse reputational and financial impacts and an unfavorable

ruling in any such case could significantly impact our operations and could have an adverse impact on our financial condition or operations.

are also increasing financial risks for oil and gas producers as certain shareholders, bondholders and lenders may elect in the future

to shift some or all of their investments into non-fossil fuel energy related sectors.

Certain institutional lenders who provide financing

to fossil-fuel energy companies have shifted their investment practices to those that favor “clean” power sources, such as

wind and solar, making those sources more attractive, and some of them may elect not to provide funding for fossil fuel energy companies

in the short or long term.

Many of the largest U.S.

banks have made “net zero” carbon emission commitments and have announced

that they will be assessing financed emissions across their portfolios and taking steps to quantify and reduce those emissions.

Additionally,

there is also the possibility that financial institutions will be pressured or required to adopt policies that limit funding for fossil

fuel energy companies.

For example, in 2021 the Glasgow Financial Alliance for Net Zero (“GFANZ”) announced that commitments

from over 450 firms across 45 countries had resulted in over $130 trillion in capital committed to net zero goals.

The various sub-alliances

of GFANZ generally require participants to set short-term, sector-specific targets to transition their financing, investing, and/or underwriting

activities to net zero by 2050.

Additionally, there is the possibility that financial institutions will be required to adopt policies

that limit funding for fossil fuel energy companies.

In late 2020, the Federal Reserve joined the Network for Greening the Financial

System, a consortium of financial regulators focused on addressing climate-related risks in the financial sector.

More recently, in November

2021, the Federal Reserve issued a statement in support of the efforts of the Network for Greening the Financial System to identify key

issues and potential solutions for the climate-related challenges most relevant to central banks and supervisory authorities.

2022, the Federal Reserve announced that six of the largest U.S.

largest banks will participate in a pilot climate scenario analysis

exercise, which took place throughout 2023, to enhance the ability of firms and supervisors to measure and manage climate-related financial

While we cannot predict what policies may result from these developments, such efforts could make it more difficult to secure funding

for exploration and production business activities on favorable terms, or at all.

Although there has been recent political support to

counteract these initiatives, these and other developments in the financial sector could lead to some lenders restricting access to capital

for or divesting from certain industries or companies, including the oil and gas sector, or requiring that borrowers take additional

steps to reduce their GHG emissions.

Any material reduction in the capital available to us or our fossil fuel-related customers could

make it more difficult to secure funding for exploration, development, production, transportation, and processing activities, which could

reduce the demand for our products and services.

oil and gas exploration, production, and development activities may be subject to physical risks related to potential climate change

concentrations of GHGs in the Earth’s atmosphere may produce climate changes that could have significant physical effects, such

as increased frequency and severity of storms, droughts, wildfires, and floods and other climatic events, as well as chronic shifts in

temperature and precipitation patterns.

These climatic developments have the potential to cause physical damage to our assets or those

of our vendors and suppliers and could disrupt our supply chains, and thus could have an adverse effect on our business, financial position,

operations and prospects.

Additionally,

changing meteorological conditions, particularly temperature, may result in changes to the amount, timing, or location of demand for

energy or its production.

While our operational consideration of changing climatic conditions and inclusion of safety factors in design

is intended to reduce the uncertainties that climate change and other events may potentially introduce, our ability to mitigate the adverse

impacts of these events depends in part on the effectiveness of our facilities and disaster preparedness and response and business continuity

planning, which may not have considered or be prepared for every eventuality.

business and ability to secure financing may be adversely impacted by increasing stakeholder and market attention to ESG matters.

across all industries are facing increasing scrutiny from stakeholders related to their ESG practices.

Businesses that are perceived

to be operating in contrast to investor or stakeholder expectations and standards, which are continuing to evolve, or businesses that

are perceived to have not responded appropriately to the growing concern for ESG issues, regardless of whether there is a legal requirement

to do so, may suffer from reputational damage and the business, financial condition, and/or stock price of such business entity could

be materially and adversely affected.

Increasing attention to climate change, societal expectations on companies to address climate change,

investor and societal expectations regarding voluntary ESG-related disclosures, increasing mandatory ESG disclosures, and consumer demand

for alternative forms of energy may result in increased operating and compliance costs, reduced demand for our products, reduced profits,

increased legislative and judicial scrutiny, investigations and litigation, reputational damage, and negative impacts on our access to

capital markets.

To the extent that societal pressures or political or other factors are involved, it is possible that we could be subject

to additional governmental investigations, private litigation or activist campaigns as stockholders may attempt to effect changes to

our business or governance practices.

we may elect to seek out various voluntary ESG targets in the future, such targets are aspirational.

We may not be able to meet such

targets in the manner or on such a timeline as initially contemplated, including as a result of unforeseen costs or technical difficulties

associated with achieving such results.

Similarly, while we may decide to participate in various voluntary ESG frameworks and certification

programs, such participation may not have the intended results on our ESG profile.

In addition, voluntary disclosures regarding ESG matters,

as well as any ESG disclosures currently required or required in the future, could result in private litigation or government investigation

or enforcement action regarding the sufficiency or validity of such disclosures.

Moreover, failure or a perception of failure to implement

ESG strategies or achieve ESG goals or commitments, including any GHG emission reduction or carbon intensity goals or commitments, could

result in private litigation and damage our reputation, cause investors or consumers to lose confidence in us, and negatively impact

our operations and goodwill.

Notwithstanding our election to pursue aspirational ESG-related targets in the future, we may receive pressure

from investors, lenders or other groups to adopt more aggressive climate or other ESG-related goals, but we cannot guarantee that we

will be able to implement such goals because of potential costs, technical or operational obstacles or other market or technological

developments beyond our control.

and regulations regarding hydraulic fracturing could result in increased costs, delays and cancellations in our planned oil, natural

gas and NGLs exploration, production and development activities.

operations will include hydraulic fracturing activities.

Hydraulic fracturing is typically regulated by state oil and gas commissions,

but the practice continues to attract considerable public, scientific and governmental attention in certain parts of the country, resulting

in increased scrutiny and regulation, including by federal agencies.

Many states have adopted rules that impose new or more stringent

permitting, public disclosure or well construction requirements on hydraulic fracturing activities.

For example, Colorado requires the

disclosure of chemicals used in hydraulic fracturing and recently extended setback requirements for drilling activities.

Local governments

may also impose, or attempt to impose, restrictions on the time, place, and manner in which hydraulic fracturing activities may occur.

Some state and local authorities have considered or imposed new laws and rules related to hydraulic fracturing, including temporary or

permanent bans, additional permit requirements, operational restrictions, and chemical disclosure obligations on hydraulic fracturing

in certain jurisdictions or in environmentally sensitive areas.

The EPA has also asserted federal regulatory authority over certain aspects

of hydraulic fracturing.

For example, in December 2023, the EPA issued final rules that update new source performance standard requirements

and that will impose more stringent controls on methane and volatile organic compounds emissions from oil and gas development and production

operations, including hydraulic fracturing and other well completion activity.

Additionally, certain federal and state agencies have

evaluated or are evaluating potential impacts of hydraulic fracturing on drinking water sources or seismic events.

These ongoing studies

could spur initiatives to further regulate hydraulic fracturing or otherwise make it more difficult and costly to perform hydraulic fracturing

Any new or more stringent federal, state, local or other applicable legal requirements such as presidential executive orders

or state or local ballot initiatives relating to hydraulic fracturing that impose restrictions, delays or cancellations in areas where

we plan to operate could cause us to incur potentially significant added costs to comply with such requirements or experience delays,

curtailment, or preclusion from the pursuit of exploration, development or production activities.

planned oil, natural gas and NGLs exploration and production activities could be adversely impacted by restrictions on our ability to

obtain water or dispose of produced water.

operations will require water for our planned oil and natural gas exploration during drilling and completion activities.

Our access to

water may be limited due to reasons such as prolonged drought, private third party competition for water in localized areas or our inability

to acquire or maintain water sourcing permits or other rights as well as governmental regulations or restrictions adopted in the future.

For example, the Governor of Colorado recently signed into law HB 1242 which places restrictions on the use of fresh water for oil and

gas operations and requires oil and gas operators to report their water use.

Any difficulty or restriction on locating or contractually

acquiring sufficient amounts of water in an economical manner could adversely impact our planned operations.

Additionally,

we must dispose of the fluids produced during oil and natural gas production, including produced water.

We may choose to dispose of produced

water into deep wells by means of injection, either directly ourselves or through third party contractors.

While we may seek to reuse

or recycle produced water instead of disposing of such water, our costs for disposing of produced water could increase significantly

as a result of increased regulation or if reusing and recycling water becomes impractical.

Disposal wells are regulated pursuant to the

UIC program established under the SDWA and analogous state laws.

The UIC program requires permits from the EPA or an analogous state

agency for construction and operation of such disposal wells, establishes minimum standards for disposal well operations, and restricts

the types and quantities of fluids that may be disposed.

recent years, wells used for the disposal by injection of flowback water or certain other oilfield fluids below ground into non-producing

formations have been associated with an increased number of seismic events, with research suggesting that the link between seismic events

and wastewater disposal may vary by region and local geology.

geological survey has recently identified Colorado as one of six

states with the most significant hazards from induced seismicity.

Concerns by the public and governmental authorities have prompted several

state agencies to require operators to take certain prescriptive actions or limit disposal volumes following unusual seismic activity.

The CECMC requires operators to monitor and evaluate for seismicity risks in certain situations.

Other states have from time to time

suspended disposal well permits or otherwise restricted activity in certain areas in response to seismic activity.

For example, in both

New Mexico and Texas, state regulatory agencies have implemented seismicity response programs that have resulted in state regulators

suspending or curtailing disposal well injection operations and imposing additional seismic monitoring and reporting requirements on

disposal well operators.

Restrictions on produced water disposal well injection activities or suspensions of such activities, whether

due to the occurrence of seismic events or other regulatory actions could increase our costs to dispose of produced water and adversely

impact our results of operations.

and regulations pertaining to the protection of threatened and endangered species and their habitats could delay, restrict or prohibit

our planned oil, natural gas and NGLs exploration and production operations and adversely affect the development and production of our

ESA and comparable state laws protect endangered and threatened species and their habitats.

Under the ESA, the U.S.

Fish and Wildlife

Service may designate critical habitat areas that it believes are necessary for survival of species listed as threatened or endangered.

Similar protections are offered to migratory birds under the Migratory Bird Treaty Act of 1918.

Such designations could require us to

develop mitigation plans to avoid potential adverse effects to protected species and their habitats, and our oil and gas operations may

be delayed, restricted or prohibited in certain locations or during certain seasons, such as breeding and nesting seasons, when those

operations could have an adverse effect on the species.

Moreover, the future listing of previously unprotected species as threatened

or endangered in areas where we are operating in the future could cause us to incur increased costs arising from species protection measures

or could result in delays, restrictions or prohibitions on our planned development and production activities.

federal income tax deductions currently available with respect to natural gas and oil exploration and development may be eliminated

as a result of future legislation.

time to time, legislation has been proposed that would, if enacted into law, make significant changes to U.S.

tax laws, including certain

federal income tax provisions currently available to oil and gas companies.

Such legislative changes have included, but have

not been limited to, (i) the repeal of the percentage depletion allowance for natural gas and oil properties, (ii) the elimination of

current deductions for intangible drilling and development costs and (iii) an extension of the amortization period for certain geological

and geophysical expenditures.

Although these provisions were largely unchanged with the enactment of the IRA, Congress could consider,

and could include, some or all of these proposals as part of future tax reform legislation.

Moreover, other more general features of

any additional tax reform legislation, including changes to cost recovery rules, may be developed that also would change the taxation

of oil and gas companies.

It is unclear whether these or similar changes will be enacted in future legislation and, if enacted, how soon

any such changes could take effect.

The passage of any legislation as a result of these proposals or any similar changes in U.S.

income tax laws could eliminate or postpone certain tax deductions that currently are available with respect to oil and gas development

or increase costs, and any such changes could have an adverse effect on our financial position, results of operations and cash flows.

Related to the NRO Acquisition

may not consummate the NRO Acquisition on the terms currently contemplated, or at all.

expect the NRO Acquisition to close in the first half of 2024, but such acquisition is subject to a number of closing conditions.

of some of these conditions is beyond our control.

If these conditions are not satisfied or waived, the NRO Acquisition will not be completed.

Certain of the conditions that remain to be satisfied include, but are not limited to:

accuracy of the representations and warranties of each party (subject to specified materiality standards);

compliance by each party in all material respects with their respective covenants;

no event of Force Majeure or Material Adverse Effect (in each case as defined in the NRO Agreement) shall have occurred, in each

case the result of which is that we are unable to secure satisfactory financing with respect to the NRO Acquisition.

a result, the NRO Acquisition may not close as scheduled, or at all.

Failure to complete the NRO Acquisition, including as a result of

failure to raise sufficient funds, or any delays in completing the NRO Acquisition could have significant adverse impacts on our business,

including the following:

may experience negative reactions from the financial markets, including a negative impact on our stock price;

may experience negative reactions from our current or future customers, distributors, suppliers, vendors, landlords, employees, joint

venture partners and other business partners;

will still be required to pay certain significant costs relating to the NRO Acquisition, such as legal, accounting, advisor and printing

may be unable to recover the Deposit (as defined below) depending on the circumstances of the failure to complete the NRO Acquisition;

may have foregone certain business opportunities, including other acquisitions and other aspects of our development plan, that, absent

the NRO Agreement, may have been pursued;

relating to the NRO Acquisition required and continue to require substantial commitments of time and resources by the Company’s

management, which may have resulted in the distraction of the Company’s management from other aspects of our development plan,

the beginning of the Company’s operations and the pursuit of other business opportunities that could have been beneficial to

that may arise as a result of any termination or delay in completion of the NRO Acquisition for failure to perform the Company’s

obligations under the NRO Agreement.

the NRO Acquisition is not completed, the risks described above may materialize and they may have a material adverse effect on our results

of operations, cash flows, financial position and stock price.

do not currently have sufficient funds or committed financing necessary to consummate the NRO Acquisition and the NRO Agreement does

not include a financing condition.

to the NRO Agreement, we deposited $9.0 million of the Purchase Price (the “Deposit”) into an escrow account on January 11,

Upon closing of the NRO Acquisition, the Deposit will be released to NRO with a corresponding credit to the Purchase Price.

the event the closing has not occurred in accordance with the terms of the NRO Agreement prior to June 17, 2024, and (i) such delay has

not occurred as a result of the failure of NRO to materially perform, when required, any of NRO’s covenants or obligations pursuant

to the NRO Agreement, (ii) all conditions precedent to the obligations of NRO, as set forth in the NRO Agreement, have been satisfied

or have been waived by NRO, and (iii) in our reasonable discretion, there has been no event of Force Majeure or Material Adverse Effect

(each as defined below), such that we are, or will be, unable to secure satisfactory financing with respect to the NRO Acquisition, then

the Deposit is subject to release to NRO, for so long as such foregoing conditions continue on such dates, in $3,000,000 installments

on each of June 17, 2024, July 15, 2024 and August 12, 2024.

In the event closing has not occurred prior to August 15, 2024 as a result

of the failure by us to materially perform any of our covenants or obligations under the NRO Agreement, NRO shall receive the entirety

of the Deposit, which shall be the sole and exclusive remedy available to NRO for any such failure to consummate the closing.

NRO Agreement contains customary representations, warranties, covenants and agreements.

As a condition to closing, we represented that

we will have, by the date of the closing, sufficient cash in immediately available funds with which to pay the cash component of the

Purchase Price and otherwise will be able to consummate the NRO Acquisition and perform our obligations under the NRO Agreement.

terminate the NRO Agreement at any time prior to the closing upon the occurrence of an event of Force Majeure or Material Adverse Effect,

in each case the result of which that we determine, in our reasonable discretion, that we are, or will be, unable to secure satisfactory

financing with respect to the NRO Acquisition.

an impediment to our ability to secure satisfactory financing with respect to the NRO Acquisition to constitute an event of “Force

Majeure,” the impediment must be an unforeseeable circumstance which is beyond the control of us or NRO, or any unavoidable event,

even if foreseeable, as a result of which we or NRO are unable to perform our obligations, in whole or in part, under the NRO Agreement.

Such circumstances include, but are not limited to:

(i) acts of God;

(ii) flood, fire, earthquake or explosion;

(iii) current or future

war, invasion, hostilities (whether war is declared or not), terrorist threats or acts, riots, or other civil unrest;

(iv) actions, embargoes,

or blockades in effect on or after the date of the NRO Agreement;

(v) declared national or regional emergency;

or (vi) epidemic, pandemic

or other similar outbreak or infection.

For such an impediment to constitute a “Material Adverse Effect,” such impediment

must be a change, development, or effect (individually or in the aggregate), whether foreseeable or unforeseeable, which, when taken

as a whole is, or is reasonably likely to be, materially adverse (a) to the business, assets, value, results of operations or conditions

(financial or otherwise) of us or NRO, the Central Weld Assets, or the assets or properties of us or NRO, or (b) to the ability of us

or NRO to perform on a timely basis any material obligation under the NRO Agreement or any agreement, instrument or document entered

into or delivered in connection therewith.

Changes, developments or effects relating to:

(x) the economy in general (including any effects

on the economy arising as a result of acts of terrorism), (y) changes in commodity prices for hydrocarbons or other changes affecting

oil and gas industry generally, or (z) the announcement of the NRO Acquisition, shall not be deemed to constitute a Material

Adverse Effect and shall not be considered in determining whether a Material Adverse Effect has occurred.

Neither any delay in completing

the proposed offering of our common stock, nor our inability, in and of itself, to satisfy our obligations to secure financing for the

NRO Acquisition, will constitute an event constituting a Material Adverse Effect.

expect to fund the transaction through a combination of public and/or private issuances of common stock, cash on hand, and proceeds

from exercises of currently outstanding warrants.

To the extent we are not able to fund the NRO Acquisition on a timely basis, whether due to a failure

to successfully complete a public or private equity offering or otherwise, we may be required to seek alternative financing arrangements,

and such financing may not be available on favorable terms, or at all, and the NRO Acquisition may be delayed or may not occur.

are unable to secure financing and an event of Force Majeure or Material Adverse Effect has not occurred, we will be in breach of the

NRO Agreement, will not receive the benefits of the Central Weld Assets and the Deposit will be released to NRO.

may be unsuccessful in integrating the Central Weld Assets or in realizing all or any part of the anticipated benefits of the NRO Acquisition.

believe that the NRO Acquisition will complement our growth strategy by providing operational and financial scale and increasing free

However, achieving these goals requires, among other things, realization of the targeted synergies expected from the acquisition,

and there can be no assurance that we will be able to successfully integrate the Central Weld Assets or otherwise realize the expected

benefits of the NRO Acquisition.

This growth and the anticipated benefits of the NRO Acquisition may not be realized fully or at all,

or may take longer to realize than expected.

Difficulties in integrating the Central Weld Assets may result in the Company performing

differently than expected, or in operational challenges or failures to realize anticipated efficiencies.

Potential difficulties in realizing

the anticipated benefits of the NRO Acquisition includes, but is not limited to, the following:

of relationships with customers, distributors, suppliers, vendors, landlords, joint venture partners and other business partners

as a result of uncertainty associated with the NRO Acquisition;

integrating our existing business with the Central Weld Assets in a manner that permits us to achieve the full revenue and cost savings

anticipated from the NRO Acquisition;

potential for unexpected costs, delays or challenges that may arise in integrating the Central Weld Assets into our existing business;

on our ability to realize any expected cost savings and operating synergies from the NRO Acquisition;

integrating vendors and business partners;

of previously unknown liabilities following the NRO Acquisition for which we cannot receive reimbursement under any applicable indemnification

shortfalls at the Company as a result of the diversion of management’s attention to integration efforts;

of, or the loss of momentum in, the Company’s ongoing business.

have incurred, and expect to continue to incur, a number of costs associated with completing the NRO Acquisition.

The elimination of

duplicative costs, as well as the realization of other efficiencies related to the integration of the Central Weld Assets, may not initially

offset integration-related costs or achieve a net benefit in the near term, or at all.

cannot assure you that our diligence review of the NRO Acquisition has identified all material risks associated with the transaction.

Additionally, following the consummation of the NRO Acquisition, if certain risks arise, the Company may be required to take write-downs

or write-offs, restructuring and impairment or other charges that could have a significant negative effect on its financial condition,

results of operations and stock price, which could cause you to lose some or all of your investment.

entering into the NRO Agreement, we performed a due diligence review of NRO and its business and operations, including an inspection

of the Central Weld Assets, which we believe to be generally consistent with industry practices;

however, we cannot assure you that our

due diligence review identified all material issues and our assessments of the Central Weld Assets and our estimates are inherently uncertain.

As a result, we may be forced to later write-down or write-off assets, restructure our operations or incur impairment or other charges

that could result in losses.

Even if our due diligence successfully identified certain risks, unexpected risks may arise and previously

known risks may materialize in a manner not consistent with our preliminary risk analysis.

These risks that may not have arisen in the

scope of our due diligence review of NRO, include, but are not limited to, title, production, environmental or other problems.

these charges may be non-cash items and may not have an immediate impact on our liquidity, the fact that we report charges of this nature

could contribute to negative market perceptions about the Company following the completion of the NRO Acquisition or its securities.

In addition, charges of this nature may impair our ability to obtain future financing on favorable terms or at all.

Moreover, the Company

may have limited recourse against NRO for certain risks or liabilities incurred after the consummation of the NRO Acquisition.

any of our stockholders who choose to remain stockholders of the Company following the NRO Acquisition could suffer a reduction in the

value of their shares.

Such stockholders are unlikely to have a remedy for such reduction in value.

may not achieve the perceived benefits of the Crypto Sale and the NRO Acquisition and the market price of our common stock following

these transactions may decline.

market price of our common stock may decline as a result of the Crypto Sale or the NRO Acquisition for a number of reasons, including

if investors react negatively to the prospects of the Company’s business;

the effect of the Crypto Sale or the NRO Acquisition

on the Company’s business and prospects is not consistent with the expectations of our management or of financial or industry analysts;

or the Company does not achieve the perceived benefits of the Crypto Sale or the NRO Acquisition as rapidly or to the extent anticipated

by our management or financial or industry analysts.

expect to incur significant transaction costs in connection with the NRO Acquisition, which may be in excess of those currently anticipated.

have incurred and are expecting to continue to incur a number of non-recurring costs associated with negotiating and completing

the NRO Acquisition, integrating the Central Weld Assets and achieving desired synergies.

These costs have been, and will continue to

be, substantial and, in many cases, will be borne by us whether or not the NRO Acquisition is consummated.

A substantial majority of non-recurring expenses

will consist of transaction costs and include, among others, fees paid to financial, legal, accounting and other advisors.

incur costs related to formulating and implementing integration plans, including facilities and systems consolidation costs.

continue to assess the magnitude of these costs, and additional unanticipated costs may be incurred in connection with the NRO Acquisition

and the integration of the Central Weld Assets.

While we have assumed that a certain level of expenses would be incurred, there are many

factors beyond our control that could affect the total amount or the timing of the expenses.

The elimination of duplicative costs, as

well as the realization of other efficiencies related to the integration of the Central Weld Assets, may not offset integration-related

costs and achieve a net benefit in the near term, or at all.

The costs described above and any unanticipated costs and expenses, many

of which will be borne by us even if the NRO Acquisition is not consummated, could have an adverse effect on our financial condition

and operating results.

NRO Acquisition may be completed on different terms from those contained in the NRO Agreement.

to the completion of the NRO Acquisition, we and NRO may, by mutual agreement, amend or alter the terms of the NRO Agreement, including

with respect to, among other things, the consideration payable by us to NRO or any covenants and agreements with respect to NRO’s

operations during the pendency thereof.

Any such amendments or alterations may have negative consequences to us.

market price for our common stock following the NRO Acquisition, if consummated, may be affected by factors different from those that

historically have affected or currently affect our common stock.

the NRO Acquisition is consummated, our financial position may differ from our financial position before the completion of the NRO Acquisition,

and our results of operations may be affected by some factors that are different from those currently affecting our results of operations

or those currently affecting the results of operations of NRO.

Accordingly, the market price and performance our common stock is likely

to be different from the performance of our common stock in the absence of the NRO Acquisition.

For a discussion of the business of NRO

and important factors to consider in connection with the business, see “ Business—NRO Acquisition .”

class action and derivative lawsuits may be brought against us in connection with the NRO Acquisition, which could result in substantial

class action lawsuits and derivative lawsuits are often brought against public companies that have entered into acquisition, merger or

other business combination agreements.

Even if such a lawsuit is without merit, defending against these claims can result in substantial

costs and divert management time and resources.

An adverse judgment could result in monetary damages, which could have a negative impact

on our liquidity and financial condition.

Related to the Company

have historically incurred significant losses, and may be unable to generate profitability.

Our ability to successfully operate and expand

our business is dependent on the consummation of the NRO Acquisition or our ability to raise additional capital to support our drilling

program on our existing assets.

Historically,

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significant losses and experienced negative cash flow.

For the years ended December 31, 2022 and 2021, we incurred a net loss of $13,418,814

and $17,270,703, respectively.

We had stockholders’ deficit of $6,525,056 as of December 31, 2022, and stockholders’ equity

of $4,197,847 as of December 31, 2021.

We cannot predict if we will be profitable.

We may continue to incur losses for an indeterminate

period of time and may be unable to sustain profitability.

An extended period of losses and negative cash flow may prevent us from successfully

operating and expanding our business.

We may be unable to sustain or increase our profitability on a quarterly or annual basis.

Merger is subject to closing conditions and may not be completed and the Merger Agreement may be terminated in accordance with its terms.

Merger is subject to closing conditions that must be satisfied or waived prior to the completion of the Merger.

Many of the closing conditions

are not within our control.

No assurance can be given that the required conditions to the closing of the Merger will be satisfied in

a timely manner or at all.

Any delay in completing the Merger could cause the combined company not to realize, or to be delayed in realizing,

some or all of the benefits that we expect to achieve if the Merger is successfully completed within its expected time frame.

Additionally,

either party may terminate the Merger Agreement under certain circumstances.

Moreover, if the Merger is not completed for any reason,

our ongoing business may be adversely affected and, without realizing any of the expected benefits of having completed the Merger, we

would be subject to a number of risks, including the following:

may experience negative reactions from the financial markets, including negative impacts on our stock price;

may experience negative reactions from our customers, suppliers, distributors and employees;

will be required to pay our costs relating to the Merger, such as financial advisory, legal, financing and accounting costs and associated

fees and expenses, whether or not the Merger is completed;

market price of our common stock could decline to the extent that the current market price reflects a market assumption that the

Merger will not be completed;

Merger Agreement places certain restrictions on the conduct of our business prior to completion of the transactions to be undertaken

in connection with the Merger and such restrictions, the waiver of which are subject to the consent of Prairie, may prevent us from

taking actions during the pendency of the Merger that would be beneficial;

relating to the Merger will require substantial commitments of time and resources by management, which could otherwise have been

devoted to day-to-day operations or to other opportunities that may have been beneficial to us as an independent company.

may waive one or more of the conditions to the Merger.

may agree to waive, in whole or in part, one or more of the conditions to our obligations to complete the Merger, to the extent permitted

by our Amended and Restated Certificate of Incorporation, bylaws and applicable laws.

For example, it is a condition to our obligation

to close the Merger that certain of Prairie’s representations and warranties be true and correct to the standards applicable to

such representations and warranties.

However, if the Board determines that it is in our best interests to proceed with the Merger, then

the Board may elect to waive that condition and close the Merger.

may not achieve the perceived benefits of the Transactions and the market price of our Common Stock following the Transactions may decline.

market price of our common stock may decline as a result of the Merger for a number of reasons, including if:

investors react negatively

to the prospects of the Company’s business;

the effect of the Merger on the Company’s business and prospects is not consistent

with the expectations of our management or of financial or industry analysts;

or the Company does not achieve the perceived benefits

of the Merger as rapidly or to the extent anticipated by our management or financial or industry analysts.

stockholders may not realize a benefit from the Merger commensurate with the ownership dilution they will experience in connection with

the Company is unable to realize the strategic and financial benefits currently anticipated from the Merger, our pre-closing stockholders

will have experienced substantial dilution of their ownership interests without receiving the expected commensurate benefit, or only

receiving part of the commensurate benefit to the extent the Company is able to realize only part of the expected strategic and financial

benefits currently anticipated from the Merger.

ability to continue as a going concern is contingent on the completion of the Merger or obtaining debt and/or equity financing, and if

the Merger is not completed for any reason, we may not be able to obtain sufficient financing and may be forced to sell our cryptocurrency

do not have sufficient capital to fund our future operations without significant additional capital investments.

If the Merger is not

completed and adequate additional financing is not available on reasonable terms or at all, we may be forced to sell our fixed assets,

specifically cryptocurrency miners, which would adversely affect our b usiness and prospects .

Such sales would materially adversely affect our ability to compete.

may require significant additional capital to fund our growing operations, we may not be able to obtain sufficient capital and may be

For the year ended December 31, 2023, we incurred a net loss of $79.1 million,

and for the year ended December 31, 2022, we incurred a net loss of $0.5 million.

We had stockholders’ equity of $40.2 million

and members’ deficit of $0.4 million as of December 31, 2023 and December 31, 2022, respectively.

Furthermore, we sold all of our

revenue-generating assets in the Crypto Sale.

We do not currently have sufficient capital to consummate the NRO Acquisition or to begin

development activities on any of our existing assets.

As a result, until we are able to raise additional capital to consummate the NRO

Acquisition or enable us to drill wells on our existing properties, we will be unable to generate any revenue.

We cannot predict if we

will be able to raise the necessary capital and, even if we are able to raise sufficient funds to complete the NRO Acquisition or commence

drilling operations and production on our assets, whether such production will be profitable.

We may continue to incur losses for an

indeterminate period of time and may be unable to sustain profitability.

An extended period of losses and negative cash flow may prevent

us from successfully operating and expanding our business.

We may be unable to sustain or increase our profitability on a quarterly or

annual basis.

See “ Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity

and Capital Resources .”

will require significant additional capital to fund our growing operations;

we may not be able to obtain sufficient capital and may be

forced to limit the scope of our operations.

may not have sufficient capital to fund our future operations without significant additional capital investments.

If adequate additional

financing is not available on reasonable terms or at all, we may not be able to carry out our corporate strategy and we would be forced

to modify our business plans (e.g., limit our growth, and/or decrease or eliminate capital expenditures), any of which may adversely

affect our financial condition, results of operations and cash flow.

Such reduction could materially adversely affect our business and

our ability to compete.

may need to undertake equity, equity-linked or debt financings to secure additional funds.

If we raise additional funds through future

issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities

may not have sufficient capital to fund our future operations without significant additional capital investments, including the planned

drilling of oil and gas wells.

If adequate additional financing is not available on reasonable terms or at all, we may not be able to

carry out our corporate strategy and we would be forced to modify our business plans (e.g., limit our growth, and/or decrease or eliminate

capital expenditures), any of which may adversely affect our financial condition, results of operations and cash flow.

Such reduction

could materially adversely affect our business and our ability to compete.

There can be no assurance that financing will be available

in a timely manner or in amounts or on terms acceptable to the Company, or at all.

Company’s ability to obtain external financing in the future may be subject to a variety of uncertainties, including its future

financial condition, results of operations, cash flows and the liquidity of international capital and lending markets.

We may need to

undertake equity, equity-linked or debt financings to secure additional funds.

If we raise additional funds through future issuances

of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities

we issue could have rights, preferences and privileges superior to those of holders of our common stock.

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This may make it more difficult for us to obtain additional capital and to pursue business opportunities.

We may not be able to obtain additional financing on terms favorable to us, if at all.

If we are unable to obtain adequate financing

or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and respond to business

A large amount of bank borrowings and other debt may result in a significant increase in interest expense while at the same time exposing

the Company to increased interest rate risks.

See “ Management’s Discussion and Analysis of Financial Condition and Results

of Operations — Liquidity and Capital Resources .”

may not be able to obtain additional financing on terms favorable to us, if at all.

If we are unable to obtain adequate financing or

financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and respond to business

challenges could be significantly impaired, and our business may be adversely affected.

capital needs will depend on numerous factors, including, without limitation, our profitability, and the amount of our capital expenditures,

including acquisitions.

Moreover, the costs involved may exceed those originally contemplated.

Failure to obtain intended economic benefits

could adversely affect our business, financial condition and operating performances.

cost of obtaining new cryptocurrency mining equipment is capital intensive, and may increase.

cost of obtaining new cryptocurrency mining equipment is capital intensive, and may increase in the future.

If we are unable to obtain

adequate numbers of new and replacement miners at scale, we may not be able to mine cryptocurrency as efficiently or in similar amounts

as our competition and, as a result, our business and financial results could suffer.

The price of new miners may be linked to the market

price of Bitcoin and other cryptocurrencies, and, our costs of obtaining new and replacement miners may increase, which may have a material

and adverse effect on our financial condition and results of operations.

reliance on a third-party mining pool service provider for our mining revenue payouts may have a negative impact on our operations.

receive cryptocurrency mining rewards from our mining activity through a third-party mining pool operator.

Mining pools allow miners

to combine their processing power, increasing their chances of solving a block and getting paid by the network.

The rewards are distributed

by the pool operator, proportionally to our contribution to the pool’s overall mining power, used to generate each block.

the pool operator’s system suffer downtime due to a cyber-attack, software malfunction or other similar issues, it will negatively

impact our ability to mine and receive revenue.

Furthermore, we are dependent on the accuracy of the mining pool operator’s record

keeping to accurately record the total processing power provided to the pool for a given Bitcoin mining application in order to assess

the proportion of that total processing power we provided.

If we are unable to consistently obtain accurate proportionate rewards from

our mining pool operators, we may experience reduced reward for our efforts, which would have an adverse effect on our business and operations.

is subject to halving;

and will halve several times in the future and Bitcoin value may not adjust to compensate us for the reduction

in the rewards we receive from our mining efforts.

primary currency for which we mine, Bitcoin, is subject to “halving,” which is the process by which the cryptocurrency reward

for solving a block is cut in half.

While Bitcoin prices have had a history of price fluctuations around the halving of their respective

cryptocurrency rewards, there is no guarantee that the price change will be favorable or would compensate for the reduction in mining

We plan to keep our operating costs low by, among other means, acquiring our own energy-producing assets and more efficient mining

machines, but there can be no assurance that the price of Bitcoin will sufficiently increase upon the next halving to justify the increasingly

high costs of mining for Bitcoin.

If a corresponding and proportionate increase in the trading price of these cryptocurrencies does not

follow these anticipated halving events, the revenue we earn from our mining operations would see a corresponding decrease, which would

have a material adverse effect on our business and operations.

Our capital needs will depend on numerous factors,

including, without limitation, our profitability, and the amount of our capital expenditures, including acquisitions.

Moreover, the costs

involved may exceed those originally contemplated.

Failure to obtain intended economic benefits could adversely affect our business,

financial condition and operating performances.

need to manage growth in operations to maximize our potential growth and achieve our expected revenues.

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Our failure to manage our growth could disrupt our operations and ultimately prevent us from generating the revenues

mining operating costs could outpace our mining revenues, which could materially impact our business.

mining operations expenses may increase in the future, and may not be offset by a corresponding increase in revenue.

Our expenses may

be greater than we anticipate, and our investments to make our business more efficient may not succeed and may outpace monetization efforts.

Increases in our costs without a corresponding increase in our revenue would increase our losses and could have a material adverse effect

on our business, results of operations and financial condition.

have substantial control over the Company, and they could delay or prevent a change in our corporate control even if our other stockholders

want it to occur.

of the date of this filing, our executive officers, and directors, collectively beneficially own approximately 90% of our outstanding

shares of common stock.

These stockholders are able to exercise significant control over all matters requiring stockholder approval,

including the election of directors and approval of significant corporate transactions.

This could delay or prevent an outside party

from acquiring or merging with our Company even if our other stockholders want it to occur.

This may also limit your ability to influence

the Company in other ways.

rely on a small number of cryptocurrency mining equipment suppliers, and the loss of any supplier might significantly reduce our revenue

and adversely affect our results of operations.

rely on a small number of cryptocurrency mining equipment suppliers, which is essential to our cryptocurrency mining revenue.

of any or all of these suppliers would significantly reduce our revenue, which would have a material adverse effect on our results of

We can provide no assurance that these suppliers will continue to supply us cryptocurrency mining equipment in the future.

are exposed to credit risk on our prepayments to cryptocurrency mining equipment suppliers.

This risk is heightened during periods when

economic conditions worsen.

have made prepayments to suppliers of cryptocurrency mining equipment, and there can be no assurance that we will effectively limit our

credit risk and avoid losses, which could have a material adverse effect on our business, results of operations and financial condition.

may not be able to secure adequate insurance, or any insurance at all, on our cryptocurrency mining equipment that are subject to physical

and environmental damage.

miners and mobile data centers are located in areas where we may not be able to secure adequate insurance, or any insurance at all.

miners and mobile data centers are subject to physical and environmental damage and any damage, including a complete loss, if it occurs

without being adequately insured, or insured at all, could have a material adverse effect on our business, results of operations and

financial condition.

Additionally,

although we seek to control our insurance risk and costs, the premiums we pay to obtain insurance coverage have increased over time and

are likely to continue to increase in the future.

These increases in insurance premiums can occur unexpectedly and without regard to

our efforts to limit them, and, because of these rising costs, we may not be able to obtain similar levels of insurance coverage on reasonable

terms, or at all.

If this occurs, we may choose or be forced to self-insure our assets, which could expose us to significant financial

risk due to the high cost of new miners.

If insurance costs become unacceptably high and we elect to self-insure, and we experience a

significant casualty event resulting in the loss of some or all of our miners, we could be forced to expend significant capital resources

to acquire new miners to replace those we lose.

if such casualty loss of our miners is not adequately covered by insurance and we do not have access to sufficient capital resources

to acquire replacement miners, we may not be able to compete in our rapidly evolving and highly competitive industry, which could materially

and adversely affect our financial condition and results of operations, and our business could suffer.

may lose our private key to our digital wallet, causing a loss of all of our digital assets.

assets, such as cryptocurrencies, are stored in a so-called “digital wallet”, which may be accessed to exchange a holder’s

digital assets, and is controllable by the processor of both the public key and the private key relating to this digital wallet in which

the digital assets are held, both of which are unique.

We will publish the public key relating to digital wallets in use when we verify

the receipt of transfers and disseminate such information into the network, but we will need to safeguard the private keys relating to

such digital wallets, which are stored in the possession of certain of our officers.

If the private key is lost, destroyed, or otherwise

compromised, we may be unable to access our cryptocurrencies held in the related digital wallet which will essentially be lost.

private key is acquired by a third party, then this third party may be able to gain access to our cryptocurrencies.

Any loss of private

keys relating to digital wallets used to store our cryptocurrencies could have a material adverse effect on our ability to continue as

a going concern or could have a material adverse effect on our business, prospects, financial condition, and operating results.

storage and custody of our Bitcoin assets and any other cryptocurrencies that we may potentially acquire or hold in the future are subject

to cybersecurity breaches and adverse software events.

addition to the risk of a private key loss to our digital wallet, see “—We may lose our private key to our digital wallet,

destroying all of our digital assets,” the storage and custody of our digital assets could also be subject to cybersecurity breaches

and adverse software events.

In order to minimize risk, we plan to establish processes to manage wallets, or software programs where

assets are held, that are associated with our cryptocurrency holdings.

“hot wallet” refers to any cryptocurrency wallet that is connected to the Internet.

Generally, hot wallets are easier to

set up and access than wallets in “cold” storage, but they are also more susceptible to hackers and other technical vulnerabilities.

“Cold storage” refers to any cryptocurrency wallet that is not connected to the Internet.

Cold storage is generally more

secure than hot storage, but is not ideal for quick or regular transactions and we may experience lag time in our ability to respond

to market fluctuations in the price of our digital assets.

plan to hold the majority of our cryptocurrencies in cold storage to reduce the risk of malfeasance;

however we may also use third-party

custodial wallets and, from time to time, we may use hot wallets or rely on other options that may develop in the future.

custodial wallet, there can be no assurance that such services will be more secure than cold storage or other alternatives.

and the constantly evolving state of cybercrime and hacking techniques may render present security protocols and procedures ineffective

in ways which we cannot predict.

of the storage method, the risk of damage to or loss of our digital assets cannot be wholly eliminated.

If our security procedures and

protocols are ineffective and our cryptocurrency assets are compromised by cybercriminals, we may not have adequate recourse to recover

our losses stemming from such compromise.

A security breach could also harm our reputation.

A resulting perception that our measures

do not adequately protect our digital assets could have a material adverse effect on our business, prospects, financial condition, and

operating results.

are subject to risks associated with our need for significant power for our miners.

Government regulators may potentially restrict the

ability of electricity suppliers to provide electricity to mining operations.

Bitcoin mining operations have required significant amounts of power, and, as we continue to expand, we anticipate our demand for power

will continue to grow.

If we are unable to continue to obtain sufficient power to operate our miners on a cost-effective basis, we may

not realize the anticipated benefits of our significant capital investments in new miners.

There may be significant competition for suitable

mine locations, and government regulators may potentially restrict the ability of electricity suppliers to provide electricity to mining

operations in times of electricity shortage, or may otherwise potentially restrict or prohibit the provision or electricity to mining

Additionally, our mining operations could be materially adversely affected by prolonged power outages.

Our cryptocurrency

mining operations require that our miners and mining equipment function without interruption.

If we experience and any unplanned or prolonged

outages that re not remediated in a timely manner, or at all, could disrupt our operations.

Given the power requirement, it would not

be feasible to run miners on back-up power generators in the event of a government restriction on electricity or a power outage.

are unable to receive adequate power supply and are forced to reduce our operations due to the availability or cost of electrical power,

it could have a material adverse effect on our business, results of operations and financial condition.

Interruptions

to our internet access could disrupt our operations, which could adversely affect our business and results of operations.

cryptocurrency mining operations require access to high-speed internet to be successful.

If we lose internet access for a prolonged period,

we may be required to reduce our operations or cease them altogether.

If this occurs, it could have a material adverse effect on our

business, results of operations and financial condition.

reliance primarily on a single model of miner may subject our operations to increased risk.

currently only use Bitmain Antminer type miners, if there are issues with those machines, such as a design flaw in the ASIC chips they

employ, our entire system could be affected.

Any system error or failure may significantly delay response times or even cause our system

Any disruption in our ability to continue mining could result in lower yields and harm our reputation and business.

Any exploitable

weakness, flaw, or error common to Bitmain miners affects all our miners;

therefore, if a defect or other flaw exists and is exploited,

our entire mine could go offline simultaneously.

Any interruption, delay or system failure could have a material adverse effect on our

business, results of operations and financial condition.

may not be able to find suitable locations, or any locations at all, for our mobile data centers.

mobile data centers are located close to natural gas wellheads, and we may be forced to leave our current location, not be able to find

suitable locations, or any locations at all, for our current and/or future mobile data centers.

If this occurs it could have a material

adverse effect on our business, results of operations and financial condition.

depend on the services of a small number of key personnel, and may not be able to operate and grow our business effectively if we lose

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They are critical to the overall management of

our company, and our strategic direction.

We rely heavily on them because they have substantial experience with our company and business

the Company, and our strategic direction.

We rely heavily on them because they have substantial experience with the Company and our business

Our ability to retain them is therefore very important to our future success.

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basis could adversely affect our ability to operate and grow our business.

future success depends upon, in large part, our continuing ability to attract and retain qualified personnel.

of our business and operations may require additional managers and employees with industry experience, in which case our success will

be dependent on our ability to attract and retain experienced management personnel and other employees.

There can be no assurance that

we will be able to attract or retain qualified personnel.

Competition may also make it more difficult and expensive to attract, hire

and retain qualified managers and employees.

If we fail to attract, train and retain sufficient numbers of the qualified personnel, our

prospects, business, financial condition and results of operations will be materially and adversely affected.

rely on key contracts and business relationships, and if our current or future business partners or contracting counterparties fail to

perform or terminate any of their contractual arrangements with us for any reason or cease operations, or should we fail to adequately

performance by members of the Company’s management team may not be indicative of an ability to complete the NRO Acquisition or

of future performance of the Company.

performance and operational experience of our management team and their affiliates is not a guarantee of the Company’s ability

to complete the NRO Acquisition nor, if consummated, a guarantee that the intended benefits of the NRO Acquisition will be achieved or

that we will be able to successfully develop and operate the Genesis Assets.

You should not rely on the historical record of our management

team or their affiliates’ performance as indicative of the future performance of the Company or of an investment in our common

will rely on key contracts and business relationships, and if our current or future business partners or contracting counterparties fail

to perform or terminate any of their contractual arrangements with us for any reason or cease operations, or should we fail to adequately

identify key business relationships, our business could be disrupted and our reputation may be harmed.

any of our business partners or contracting counterparties fails to perform or terminates their agreement(s) with us for any reason,

or if our business partners or contracting counterparties with which we have short-term agreements refuse to extend or renew the agreement

or enter into a similar agreement, our ability to carry on operations may be impaired.

In addition, we depend on the continued operation

of our long-term business partners and contracting counterparties and on maintaining good relations with them.

If one of our long-term

partners or counterparties is unable (including as a result of bankruptcy or a liquidation proceeding) or unwilling to continue operating

in the line of business that is the subject of our contract, we may not be able to obtain similar relationships and agreements on terms

acceptable to us or at all.

If a partner or counterparty fails to perform or terminates any of the agreements with us or discontinues

operations, and we are unable to obtain similar relationships or agreements, such events could have an adverse effect on our operating

results and financial condition.

of our data systems or unintended disclosure of data could result in large expenditures to repair or replace such systems, to remedy

any security breaches and to protect us from similar events in the future.

infrastructure may be vulnerable to physical or electronic break-ins, computer viruses, or similar disruptive problems.

In addition to

shutdowns, our systems are subject to risks caused by misappropriation, misuse, leakage, falsification and accidental release or loss

of information.

Disruptions or security compromises of our systems could result in large expenditures to repair or replace such systems,

to remedy any security breaches and protect us from similar events in the future.

We also could be exposed to negligence claims or other

legal proceedings, and we could incur significant legal expenses and our management’s attention may be diverted from our operations

in defending ourselves against and resolving lawsuits or claims.

In addition, if we were to suffer damage to our reputation as a result

of any system failure or security compromise, it could have a material adverse effect on our business, results of operations and financial

are exposed to risks associated with PCI compliance.

PCI Data Security Standard (“PCI DSS”) is a specific set of comprehensive security standards required by credit card brands

for enhancing payment account data security, including but not limited to requirements for security management, policies, procedures,

network architecture, and software design.

PCI DSS compliance is required in order to maintain credit card processing services.

does not guarantee a completely secure environment and notwithstanding the results of this assessment there can be no assurance that

payment card brands will not request further compliance assessments or set forth additional requirements to maintain access to credit

card processing services.

Compliance is an ongoing effort and the requirements evolve as new threats are identified.

In the event that

we were to lose PCI DSS compliance status (or fail to renew compliance under a future version of the PCI DSS), we could be exposed to

increased operating costs, fines and penalties and, in extreme circumstances, may have our credit card processing privileges revoked,

which would have a material adverse effect on our business.

failure to comply with the terms contained in our loan agreements could result in an event of default that could adversely affect our

financial condition and ability to operate our business as planned.

failure to comply with terms contained in our loan agreements in the future may adversely affect our ability to operate our business

and we may not be able to continue operations as planned, implement our planned growth strategy, or react to opportunities for, or downturns

in, our business.

regulations related to the Internet could increase our cost of doing business, affect our ability to grow or may otherwise negatively

affect our business.

agencies and federal and state legislatures have adopted, and may continue to adopt, new laws and regulatory practices in response to

the increasing use of the Internet and other online services.

These new laws may be related to issues such as online privacy and data

protection requirements, copyrights, trademarks and service mark, sales taxes, fair business practices, domain name ownership, and the

requirement that our operating units register to do business as foreign entities or otherwise be licensed to do business in jurisdictions

where they have no physical location or other presence.

In addition, these new laws, regulations or interpretations relating to doing

business through the Internet could increase our costs materially and adversely affect our revenue and results of operations.

changes or actions may restrict the use of cryptocurrencies in a manner that adversely affects an investment in us.

cryptocurrencies have grown in popularity and in market size, the Federal Reserve Board, U.S.

Congress and certain U.S.

agencies (e.g.,

the CFTC, the Commission, FinCEN and the Federal Bureau of Investigation) have begun to examine cryptocurrencies.

On March 9, 2022 President

Biden signed an executive order on cryptocurrencies.

While the executive order did not mandate any specific regulations, it instructs

various federal agencies to consider potential regulatory measures, including the evaluation of the creation of a U.S.

Central Bank digital

Future changes to existing regulations or entirely new regulations may affect our business in ways it is not presently possible

for us to predict with any reasonable degree of reliability.

assets currently face an uncertain regulatory landscape in not only the United States but also in such foreign jurisdictions as the European

Union and China.

While certain governments such as Germany, have issued guidance as to how to treat cryptocurrencies, most regulatory

bodies have not issued specific policy determinations.

changes to existing regulations or entirely new regulations may affect our business in ways it is not presently possible for us to predict

with any reasonable degree of reliability, but such change could be substantial and adverse to us and could adversely affect an investment

general economic conditions in the United States, Europe, Asia, or in other major markets could negatively impact our financial performance.

general economic conditions, such as a recession or economic slowdown in the United States, Europe, Asia, or in one or more of our other

major markets, could negatively affect demand for our services and our results of operations.

Under difficult economic conditions, businesses

may seek to reduce spending on our services, or shift away from our services to in-house alternatives.

encounter competition in our business, and any failure to compete effectively could adversely affect our results of operations.

anticipate that our competitors will continue to expand and aggressive expansion of our competitors or the entrance of new competitors

into our markets could have a material adverse effect on our business, results of operations and financial condition.

any of our current or future business partners or contracting counterparties fails to perform or terminates their agreement(s) with us

for any reason, or if our current or future business partners or contracting counterparties with which we have short-term agreements

refuse to extend or renew the agreement or enter into a similar agreement, our ability to carry on operations may be impaired.

we will depend on the continued operation of long-term business partners and contracting counterparties and on maintaining good relations

If one of our future long-term partners or counterparties is unable (including as a result of bankruptcy or a liquidation

proceeding) or unwilling to continue operating in the line of business that is the subject of our contract, we may not be able to obtain

similar relationships and agreements on terms acceptable to us or at all.

If a current or future partner or counterparty fails to perform

or terminates any of the agreements with us or discontinues operations, and we are unable to obtain similar relationships or agreements,

such events could have an adverse effect on our operating results and financial condition.

attacks, cyberattacks and threats could have a material adverse effect on our business, financial condition and results of operations.

attacks or cyberattacks may significantly affect the energy industry, including our operations and those of our suppliers and customers,

as well as general economic conditions, consumer confidence and spending and market liquidity.

Cyber incidents, including deliberate

attacks, have increased in frequency globally.

Strategic targets, such as energy related assets, may be at greater risk of future attacks

than other targets in the United States.

We depend on digital technology in many areas of our business and operations, including recording

financial and operating data, oversight and analysis of our operations and communications with the employees supporting our operations

and our customers or service providers.

We also collect and store sensitive data in the ordinary course of our business, including personally

identifiable information as well as our proprietary business information and that of our customers, suppliers, investors and other stakeholders.

The secure processing, maintenance and transmission of information is critical to our operations, and we monitor our key information

technology systems in an effort to detect and prevent cyberattacks, security breaches or unauthorized access.

Despite our security measures,

our information technology systems may undergo cyberattacks or security breaches including as a result of employee error, malfeasance

or other threat vectors, which could lead to the corruption, loss, or disclosure of proprietary and sensitive data, misdirected wire

transfers, and an inability to:

perform services for our customers;

complete or settle transactions;

maintain our books and records;

prevent environmental damage;

and maintain communications or operations.

Significant liability to the Company or third parties may result.

We are not able to anticipate, detect or prevent all cyberattacks, particularly because the methodologies used by attackers change frequently

or may not be recognized until an attack is already underway or significantly thereafter, and because attackers are increasingly using

technologies specifically designed to circumvent cybersecurity measures and avoid detection.

Cybersecurity attacks are also becoming

more sophisticated and include, but are not limited to, ransomware, credential stuffing, spear phishing, social engineering, use of deepfakes

(i.e., highly realistic synthetic media generated by artificial intelligence), and other attempts to gain unauthorized access to data

for purposes of extortion or other malfeasance.

information and operational technologies, systems and networks, and those of our vendors, suppliers, customers and other business partners,

may become the target of cyberattacks or information security breaches that result in the unauthorized release, gathering, monitoring,

misuse, loss or destruction of proprietary and other information, or adversely disrupt our business operations.

Advances in computer

capabilities, discoveries in the field of artificial intelligence, cryptography, or other developments may result in a compromise or

breach of the technology we use to safeguard confidential, personal, or otherwise protected information.

As cyberattacks continue to

evolve, we may be required to expend significant additional resources to continue to modify or enhance our protective measures or to

investigate and remediate any vulnerabilities to cyberattacks.

In particular, our implementation of various procedures and controls to

monitor and mitigate security threats and to increase security for our personnel, information, facilities and infrastructure may result

in increased capital and operating costs.

A cyberattack or security breach could result in liability resulting from data privacy or cybersecurity

claims, liability under data privacy laws, regulatory penalties, damage to our reputation, long-lasting loss of confidence in us, or

additional costs for remediation and modification or enhancement of our information systems to prevent future occurrences, all of which

could have a material and adverse effect on our business, financial condition or results of operations.

To date, we have not experienced

any material losses relating to cyberattacks;

however, there can be no assurance that we will not suffer such losses in the future.

security measure is infallible.

Consequently, it is possible that any of these occurrences, or a combination of them, could have a material

adverse effect on our business, financial condition and results of operations.

terms of indebtedness we may incur in the future, including our anticipated revolving credit facility, may restrict our future business

and operations.

we currently do not have any long-term debt obligations and our goal is to operate with limited leverage, we intend to enter into a

revolving credit facility primarily to support our hedging activities in connection with the consummation of the NRO Acquisition,

and may incur other indebtedness in the future.

The revolving credit facility may contain covenants limiting our ability to pay

dividends, incur indebtedness, grant liens, make acquisitions, make investments or dispositions, engage in transactions with

affiliates and enter into hedging and derivative arrangements, as well as covenants requiring us to maintain certain financial

ratios and tests.

In addition, the borrowing base under a credit facility may be subject to periodic review by our lenders.

Difficulties in the credit markets may cause the banks to be more restrictive when redetermining the borrowing base.

We can make no

assurances that we will be able to enter into a credit facility.

ability to pay interest and principal on our indebtedness and to satisfy our other obligations will depend on our future operating performance,

our financial condition and the availability of refinancing indebtedness, which will be affected by prevailing economic conditions and

financial, business and other factors, many of which are beyond our control.

We may not be able to generate sufficient cash flows to

pay the interest on our debt and future working capital, and borrowings or equity financing may not be available to pay or refinance

If we are unable to generate sufficient cash flows to satisfy our debt obligations or contractual commitments, or to refinance

our debt on commercially reasonable terms, our business and financial condition could materially and adversely be affected.

Acquisitions,

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may not derive the revenue improvements, cost savings and other intended benefits of any such transaction;

may be risks, exposures and liabilities of acquired entities or other third parties with whom we undertake a transaction, that may

may be risks, exposures and liabilities of acquired entities or other third parties with whom we undertake a transaction, which may

arise from such third parties’ activities prior to undertaking a transaction with us.

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or strategic relationships will be accretive to our business overall or will result in profitable operations.

COVID-19 pandemic could negatively impact our future operations and results.

are subject to risks and uncertainties as a result of the COVID-19 pandemic.

The extent of the impact of the COVID-19 pandemic on our

business is highly uncertain and difficult to predict, as the responses that we, other businesses and governments are taking continue

Furthermore, capital markets and economies worldwide have also been negatively impacted by the COVID-19 pandemic, and it is

possible that it could cause a local and/or global economic recession.

Policymakers around the globe have responded with fiscal policy

actions to support the healthcare industry and economy as a whole.

The magnitude and overall effectiveness of these actions remain uncertain.

severity of the impact of the COVID-19 pandemic on our business will depend on a number of factors, including, but not limited to, the

duration and severity of the pandemic and the extent and severity of the impact on our service providers and suppliers, all of which

are uncertain and cannot be predicted.

As of the date of issuance of our financial statements, the extent to which the COVID-19 pandemic

may in the future materially impact our financial condition, liquidity or results of operations is uncertain.

Certificate of Incorporation provides for indemnification of officers and directors at our expense and limits their liability, which

may result in a major cost to us and hurt the interests of our stockholders because corporate resources may be expended for the benefit

of officers and/or directors.

Certificate of Incorporation and applicable Delaware law provide for the indemnification of our directors and officers against attorney’s

fees and other expenses incurred by them in any action to which they become a party arising from their association with or activities

on our behalf.

may not realize the full benefit of the Crypto Sale for a variety of reasons, including the inability of the Crypto Purchaser to pay

the Deferred Purchase Price due to a decrease in the price of Bitcoin or the actions of third parties.

January 23, 2024, pursuant to the Crypto Divestiture Agreement, we sold all of our Mining Equipment and related assets for total consideration

of $2 million, including $1 million in cash and $1 million in deferred cash payments, to be paid out of (i) 20% of the net monthly revenues

received by the Crypto Purchaser associated with or otherwise attributable to the Mining Equipment until the aggregate amount of such

payments equals $250,000 and (ii) thereafter, 50% of the net monthly revenues received by the Crypto Purchaser associated with or otherwise

attributable to the Mining Equipment until the aggregate amount of such payments equals $1 million, plus accrued interest.

to the Mining Equipment, we assigned all our rights and obligations under the Atlas MSA to the Crypto Purchaser.

payment of the Deferred Purchase Price is dependent on the revenue generated by the Mining Equipment, we cannot predict the timing of

when we will receive the Deferred Purchase Price, if at all.

Our receipt of the Deferred Purchase Price is subject to numerous risks

outside of our control, including:

market price and liquidity of Bitcoin;

cost of energy;

global Bitcoin network processing hashrate;

and regulations that may adversely affect the use of Bitcoin as a crypto-currency;

actions of third parties, including Atlas.

we no longer have direct exposure to the fluctuation and volatility of Bitcoin prices, we will remain indirectly exposed to such volatility

until the Deferred Purchase Price has been paid in full.

If the market price of Bitcoin decreases to the point where the Crypto Purchaser

does not find it economically feasible to operate the Mining Equipment or if Atlas suspends operations of the Mining Equipment under

the terms of the Atlas MSA, the payment, if any, of the Deferred Purchase Price may be delayed.

Although the Crypto Divestiture Agreement

requires the Crypto Purchaser to operate the Mining Equipment in the ordinary course of business until the Deferred Purchase Price is

paid in full, delays in payment or failure to pay the Deferred Purchase Price due to the economic feasibility of mining Bitcoin or malfeasance

of a third party may result in costly litigation.

In addition, while we have a security interest in the Mining Equipment as collateral

security for the prompt and complete payment and performance in full of the Crypto Purchaser’s obligations under the Crypto Divestiture

Agreement, there can be no assurances that the remedies available to us in respect of such security interest will be sufficient.

risks and uncertainties may have a material adverse effect on our cash flows, business, results of operations and financial condition.

Charter provides for indemnification of officers and directors at our expense and limits their liability, which may result in a major

cost to us and harm the interests of our stockholders because corporate resources may be expended for the benefit of officers and/or

Charter and applicable Delaware law provide for the indemnification of our directors and officers against attorney’s fees and other

expenses incurred by them in any action to which they become a party arising from their association with or activities on our behalf.

This indemnification policy could result in substantial expenditures by us that we will be unable to recoup.

have been advised that, in the opinion of the SEC, indemnification for liabilities arising under federal securities laws is against public

policy as expressed in the Securities Act of 1933, as amended (the “Securities Act”), and is, therefore, unenforceable.

the event that a claim for indemnification for liabilities arising under federal securities laws, other than the payment by us of expenses

incurred or paid by a director, officer or controlling person in the successful defense of any action, suit or proceeding, is asserted

by a director, officer or controlling person in connection with the securities being registered, we will (unless in the opinion of our

counsel, the matter has been settled by controlling precedent) submit to a court of appropriate jurisdiction, the question whether indemnification

by us is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

process relating to this matter, if it were to occur, is likely to be very costly and may result in us receiving negative publicity,

either of which factors is likely to materially reduce the market and price for our shares if such a market ever develops.

Relating to Ownership of Our Common Stock

beneficial ownership by Mr.

Kessler, Executive Chairman of the Board, of our common stock and other convertible securities, will

likely limit the ability of minority stockholders to influence corporate matters.

Kessler, Executive Chairman of the Board, is the beneficial owner of a substantial amount of the issued and outstanding shares

of the Company’s common stock, Series A Convertible Preferred Stock, stock options and warrants, and a secured convertible debenture,

and beneficially owns approximately 78% of the shares of our Common Stock.

As a result, Mr.

Kessler has significant influence over most

matters that require approval by our stockholders, including the election of directors and approval of significant corporate transactions,

even if other stockholders oppose them.

This concentration of ownership might also have the effect of delaying or preventing a change

of control of our Company that other stockholders may view as beneficial.

order to raise sufficient funds to expand our operations, we may have to issue additional securities at prices which may result in substantial

dilution to our shareholders.

we raise additional funds through the sale of equity or convertible debt, our current stockholders’ percentage ownership will be

In addition, these transactions may dilute the value of our common shares outstanding.

We may also have to issue securities

that may have rights, preferences and privileges senior to our common stock.

common stock is quoted on the OTCQB, which may have an unfavorable impact on our stock price and liquidity.

common stock is quoted on the OTCQB.

The quotation of our shares on the OTCQB may result in a less liquid market available for existing

and potential stockholders to trade shares of our Common Stock, could depress the trading price of our common stock and could have a

long-term adverse impact on our ability to raise capital in the future.

is limited liquidity on the OTCQB, which enhances the volatile nature of our equity.

fewer shares of a security are being traded on the OTCQB, volatility of prices may increase and price movement may outpace the ability

to deliver accurate quote information.

Due to lower trading volumes in shares of our Common Stock, there may be a lower likelihood that

orders for shares of our Common Stock will be executed, and current prices may differ significantly from the price that was quoted at

the time of entry of the order.

stock price is likely to be highly volatile because of our limited public float.

market price of our common stock is likely to be highly volatile because there has been a relatively thin trading market for our stock,

which causes trades of small blocks of stock to have a significant impact on our stock price.

You may not be able to resell shares of

our Common Stock following periods of volatility because of the market’s adverse reaction to volatility.

Other factors that could

cause such volatility may include, among other things:

actual or anticipated fluctuations in our operating results;

the absence of securities

analysts covering us and distributing research and recommendations about us;

overall stock market fluctuations;

economic conditions generally;

announcements concerning our business or those of our competitors;

our ability to raise capital when we require it, and to raise such

capital on favorable terms;

conditions or trends in the industry;

changes in market valuations of other similar companies;

announcements by us or our competitors of significant contracts, acquisitions, strategic partnerships or joint ventures;

policy as expressed in the Securities Act and is, therefore, unenforceable.

In the event that a claim for indemnification for liabilities

arising under federal securities laws, other than the payment by us of expenses incurred or paid by a director, officer or controlling

person in the successful defense of any action, suit or proceeding, is asserted by a director, officer or controlling person in connection

with the securities being registered, we will (unless in the opinion of our counsel, the matter has been settled by controlling precedent)

submit to a court of appropriate jurisdiction, the question whether indemnification by us is against public policy as expressed in the

Securities Act and will be governed by the final adjudication of such issue.

The legal process relating to this matter, if it were to

occur, is likely to be very costly and may result in us receiving negative publicity, either of which factors is likely to materially

reduce the market and price for our shares if such a market ever develops.

may be conflicts of interest between certain of our officers and directors and our non-management stockholders.

of interest create the risk that management may have an incentive to act adversely to the interests of other stockholders.

conflict of interest may arise between our officers and directors’ personal pecuniary interests and their fiduciary duty to

our stockholders.

Furthermore, our officers and directors’ own pecuniary interests may not align with their fiduciary duties

to our stockholders.

Edward Kovalik (Chief Executive Officer and Chairman of the Board), Gary C.

Hanna (President and Director) and

Paul Kessler (Director) have certain overriding royalty interests in the Initial Genesis Assets.

To avoid any potential conflict of

interest with certain members of the Board and management owning certain overriding royalty interests under the Initial Genesis

Assets, all of the Company’s drilling programs will be approved by an independent committee of the Board on a quarterly

litigation or governmental proceedings could result in material adverse consequences, including judgments or settlements.

time to time, we may be involved in lawsuits, regulatory inquiries, governmental and other legal proceedings, such as title, royalty

or contractual disputes, our oil and gas development activities, environmental liabilities, regulatory compliance matters, personal injury,

property damage and employment litigation, in the ordinary course of our business.

Many of these matters raise difficult and complicated

factual and legal issues and are subject to uncertainties and complexities.

The timing of the final resolutions to these types of matters

is often uncertain.

Additionally, the possible outcomes or resolutions to these matters could include adverse judgments or settlements,

either of which could require substantial payments, adversely affecting our results of operations and liquidity.

Irrespective of the

outcome, legal proceedings or governmental investigations may adversely affect our business due to legal costs, diversion of resources

and the attention of our management and employees, and other factors.

to the recent listing of our common stock on Nasdaq, we will incur materially increased costs and become subject to additional regulations

and requirements.

to the recent listing of our common stock on Nasdaq, we will incur material legal, accounting and other expenses, including payment of

annual exchange fees, to satisfy the continued listing standards for Nasdaq.

In connection with the listing of our common stock on Nasdaq,

we now must meet certain financial and liquidity criteria to maintain our listing, as well as standards of Board independence, committee

composition and governance and Board diversity, only some of which criteria and standards include time periods to comply after listing.

If we fail to meet any of Nasdaq’s listing standards, our common stock may be delisted.

In addition, our Board may determine that

the cost of maintaining our listing on a national securities exchange outweighs the benefits of such listing.

A delisting of our common

stock from Nasdaq may materially impair our stockholders’ ability to buy and sell our common stock and could have an adverse effect

on the market price of, and the efficiency of the trading market for, our common stock.

The delisting of our common stock could significantly

impair our ability to raise capital and the value of your investment.

to achieve and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 could result in

a restatement of our financial statements, cause investors to lose confidence in our financial statements and our Company and have a

material adverse effect on our business and stock price.

produce our financial statements in accordance with GAAP.

Effective internal controls are necessary for us to provide reliable financial

reports to help mitigate the risk of fraud and to operate successfully as a publicly traded company.

As a public company, we are required

to document and test our internal control procedures in order to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of

2002, or Section 404.

Further, Section 404 requires annual management assessments of the effectiveness of our internal controls over

financial reporting.

Testing and maintaining internal controls can divert our management’s attention from other matters that are

important to our business.

We may not be able to conclude on an ongoing basis that we have effective internal controls over financial

reporting in accordance with Section 404.

If we are unable to conclude that we have effective internal controls over financial reporting,

investors could lose confidence in our reported financial information and our company, which could result in a decline in the market

price of our common stock, and cause us to fail to meet our reporting obligations in the future, which in turn could impact our ability

to raise additional financing if needed in the future.

requirements of being a public company, including compliance with the reporting requirements of the Exchange Act, and the requirements

of the Sarbanes-Oxley Act, may strain our resources, increase our costs and distract management, and we may be unable to comply with

these requirements in a timely or cost-effective manner.

a public company, we are required to comply with laws, regulations and requirements, certain corporate governance provisions of the Sarbanes-Oxley

Act of 2002, related regulations of the SEC and the requirements of Nasdaq.

Complying with these statutes, regulations and requirements

occupy a significant amount of time of our board of directors and management and significantly increase our costs and expenses.

a more comprehensive compliance function;

with rules promulgated by Nasdaq;

to prepare and distribute periodic public reports in compliance with our obligations under the federal securities laws;

internal policies, such as those relating to insider trading;

and retain outside counsel and accountants in the above activities.

we must comply with Section 404 of the Sarbanes Oxley Act of 2002 for our annual reports on Form 10-K, including the requirement to have

our independent registered public accounting firm attest to the effectiveness of our internal controls, unless we continue to be exempt from such

Our independent registered public accounting firm may

issue a report that is adverse in the event it is not satisfied with the level at which our controls are documented, designed, operated

Compliance with these requirements may strain our resources, increase our costs and distract management;

and we may be unable

to comply with these requirements in a timely or cost-effective manner.

are a “smaller reporting company” and the reduced disclosure requirements applicable to smaller reporting companies may make

our common stock less attractive to investors.

are a “smaller reporting company” as defined under the Securities Act and Exchange Act and expect to remain a “smaller

reporting company” for the foreseeable future.

We are therefore entitled to rely on certain reduced disclosure requirements, such

as the ability to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and

reduced disclosure obligations regarding executive compensation.

Additionally, as a “non-accelerated filer”, we currently

are not required to obtain an attestation report on internal control over financial reporting issued by our independent registered public

accounting firm.

have utilized these exemptions and expect to continue to utilize these exemptions while we remain a smaller reporting company and non-accelerated

These exemptions and reduced disclosures in our SEC filings due to our status as a smaller reporting company mean our auditors

do not review our internal control over financial reporting and may make it harder for investors to analyze our results of operations

and financial prospects.

We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions.

If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and

our common stock prices may be more volatile.

Our Charter and Bylaws

designate the state and federal courts located within the State of Delaware as the sole and exclusive forum for certain types of actions

and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial

forum for disputes with us or our directors, officers, employees or agents.

Our Charter and Bylaws provide that, unless we consent in writing to the selection of an alternative forum, the

Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware does not have jurisdiction, the Superior

Court of the State of Delaware, or, if the Superior Court of the State of Delaware does not have jurisdiction, the United States District

Court for the District of Delaware) will be the sole and exclusive forum for (i) any derivative action or proceeding brough t

on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, other employee

or agent or stockholder of the Company to the Company or the Company’s stockholders, (iii) any action against the Company arising

pursuant to any provision of the DGCL or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware,

or (iv) any action against the Company or any director, officer, other employee or agent of the Company asserting a claim governed by

the internal affairs doctrine, including, without limitation, any action to interpret, apply, enforce or determine the validity of the

Charter or the Bylaws, in each such case subject to such court’s having personal jurisdiction over the indispensable parties named

as defendants therein.

Our Charter and Bylaws further provide that, unless we consent in writing to the selection of an alternative forum,

the federal district courts of the United States of America will be the sole and exclusive forum for the resolution of any complaint

asserting a cause of action under the Securities Act.

Our Charter and Bylaws provisions do not apply to complaints asserting a cause

of action under the Exchange Act.

A stockholder may not waive compliance with the federal securities laws and the rules and regulations

Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock will be deemed to have

notice of the provisions of our Charter and Bylaws described in the preceding sentences.

This choice of forum provision may limit a stockholder’s

ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, employees or agents,

which may discourage such lawsuits against us and such persons.

Alternatively, if a court were to find these provisions of our Charter

and Bylaws inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur

additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial

condition or results of operations.

may not be able to use a portion of our net operating loss carryforwards and other tax attributes to reduce our future U.S.

state income tax obligations, which could adversely affect our cash flows.

currently have U.S.

federal and state net operating loss (“NOL”) carryforwards.

Our ability to use these tax attributes to

reduce our future U.S.

federal and state income tax obligations depends on many factors, including our future taxable income, which cannot

In addition, our ability to use NOL carryforwards and other tax attributes are subject to significant limitations under Section

382 and Section 383 of the Internal Revenue Code of 1986, as amended (the “Code”).

Under those sections of the Code, if a

corporation undergoes an “ownership change” (as defined in the Code), the corporation’s ability to use its pre-change

NOL carryforwards and other tax attributes may be substantially limited.

the limitations under Section 382 of the Code is technical and complex.

A corporation generally will experience an ownership change if

one or more stockholders (or groups of stockholders) who are each deemed to own at least 5% of the corporation’s stock increase

their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period.

the future undergo an ownership change under Section 382 of the Code.

If an ownership change occurs, our ability to use our NOL carryforwards

and other tax attributes to reduce our future U.S.

federal and state income tax obligations may be materially limited, which could adversely

affect our cash flows.

Related to Ownership of our Common Stock

conversion or exercise, as applicable, of the outstanding Series D Preferred Stock, Series E Preferred Stock, Series D PIPE Warrants,

Series E PIPE Warrants, Non-Compensatory Options and Exok Warrants could substantially dilute your investment and adversely affect the

market price of our common stock.

of March 13, 2024, the Series D Preferred Stock are convertible into an aggregate of 4,115,426 shares of common stock and the

Series D PIPE Warrants are exercisable for an aggregate of 4,613,028 shares of common stock.

The Series E Preferred Stock are convertible

into an aggregate of 4,000,000 shares of common stock and the Series E PIPE Warrants are exercisable for an aggregate of 8,000,000 shares

of common stock.

actions initiated by the SEC or other regulatory bodies;

and general market conditions.

Any of these factors could have

a significant and adverse impact on the market price of our common stock.

These broad market fluctuations may adversely affect the trading

price of our common stock.

common stock may be subject to significant price volatility which may have an adverse effect on your ability to liquidate your investment

in our common stock.

market for our common stock may be characterized by significant price volatility when compared to seasoned issuers, and we expect that

our share price will be more volatile than a seasoned issuer for the indefinite future.

The potential volatility in our share price is

attributable to a number of factors.

First, our common shares may be sporadically and/or thinly traded.

As a consequence of this lack

of liquidity, the trading of relatively small quantities of shares by our stockholders may disproportionately influence the price of

those shares in either direction.

The price for our shares could, for example, decline precipitously in the event that a large number

of our common shares are sold on the market without commensurate demand, as compared to a seasoned issuer that could better absorb those

sales without adverse impact on its share price.

Secondly, an investment in us is a speculative or “risky” investment due

to our lack of meaningful profits to date and uncertainty of future profits.

As a consequence of this enhanced risk, more risk-adverse

investors may, under the fear of losing all or most of their investment in the event of negative news or lack of progress, be more inclined

to sell their shares on the market more quickly and at greater discounts than would be the case with the stock of a seasoned issuer.

stock is thinly traded, so an investor may be unable to sell at or near ask prices or at all.

shares of our Common Stock are traded on the OTCQB and are thinly traded, meaning that the number of persons interested in purchasing

our common stock at or near ask prices at any given time may be relatively small or non-existent.

This situation is attributable to a

number of factors, including the fact that we are a smaller reporting company that is relatively unknown to stock analysts, stockbrokers,

institutional investors and others in the investment community who generate or influence sales volume.

Even in the event that we come

to the attention of such persons, they would likely be reluctant to follow an unproven company such as ours or purchase or recommend

the purchase of our shares until such time as we become more seasoned and viable.

As a consequence, our stock price may not reflect an

actual or perceived value.

Also, there may be periods of several days or more when trading activity in our shares is minimal or non-existent,

as is currently the case, as compared to a seasoned issuer that has a large and steady volume of trading activity that will generally

support continuous sales without an adverse effect on share price.

A broader or more active public trading market for our common shares

may not develop or if developed, may not be sustained.

Due to these conditions, you may not be able to sell your shares at or near ask

prices or at all if you need money or otherwise desire to liquidate your shares.

there is a limited public market for our securities, and there can be no assurances that any public market will ever develop and, even

if developed, it is likely to be subject to significant price fluctuations.

have a trading symbol for our common stock, namely ‘CRKR’.

However, our stock has been thinly traded, if at all.

Consequently,

there can be no assurances as to whether:

market for our shares will develop;

prices at which our common stock will trade;

extent to which investor interest in us will lead to the development of an active, liquid trading market.

Active trading markets

generally result in lower price volatility and more efficient execution of buy and sell orders for investors.

our common stock is fully distributed and an orderly market develops in our common stock, if ever, the price at which it trades is likely

to fluctuate significantly.

Prices for our common stock will be determined in the marketplace and may be influenced by many factors,

including the depth and liquidity of the market for shares of our Common Stock, developments affecting our business, including the impact

of the factors referred to elsewhere in these risk factors, investor perception of our Company and general economic and market conditions.

No assurances can be given that an orderly or liquid market will ever develop for the shares of our Common Stock.

cannot predict the extent to which an active public trading market for our common stock will develop or be sustained.

If an active public

trading market does not develop or cannot be sustained, you may be unable to liquidate your investment in our common stock.

cannot predict the extent to which an active public market for our common stock will develop or be sustained due to a number of factors,

including the fact that we are a small company that is relatively unknown to stock analysts, stock brokers, institutional investors,

and others in the investment community that generate or influence sales volume, and that even if we came to the attention of such persons,

they tend to be risk-averse and would be reluctant to follow an unproven company such as ours or purchase or recommend the purchase of

our shares of common stock until such time as we became more seasoned and viable.

As a consequence, there may be periods of several days

or more when trading activity in our shares is minimal or non-existent, as compared to a seasoned issuer which has a large and steady

volume of trading activity that will generally support continuous sales without an adverse effect on share price.

We cannot give you

any assurance that an active public trading market for our common stock will develop or be sustained.

If such a market cannot be sustained,

you may be unable to liquidate your investment in our common stock.

factors which could cause volatility in the market price of our common stock include, but are not limited to:

or anticipated fluctuations in our financial condition and operating results or those of companies perceived to be similar to us;

or anticipated changes in our growth rate relative to our competitors;

success and market acceptance of blockchain, Bitcoin and other cryptocurrencies;

by our competitors, such as new business initiatives, acquisitions and divestitures;

transactions undertaken by us;

of new businesses and opportunities into our existing business;

implementation

of new technologies in the industry;

The Exok Warrants are exercisable for an aggregate of 670,499 shares of common stock.

In addition, there are outstanding

Non-Compensatory Options to purchase an aggregate of 8,000,000 shares of common stock for $7.14 per share which are only exercisable

if specific production hurdles are achieved, pursuant to amended and restated non-compensatory Option Agreements entered into at the

Merger Effective Time.

addition, sales of a substantial number of shares of common stock issued upon the conversion or exercise, as applicable, of the outstanding

Series E Preferred Stock, Series E PIPE Warrants, Exok Warrants, Series D Preferred Stock, Series D PIPE Warrants, Non-Compensatory Options,

or even the perception that such sales could occur, could adversely affect the market price of our common stock.

The conversion or exercise

of such securities could result in dilution in the interests of our other stockholders and adversely affect the market price of our common

For example, as a result of the Warrant Exercise, the Company issued an additional 2,000,000 shares of common stock to the O’Neill

Trust, resulting in immediate dilution to existing stockholders of approximately 20%.

Board has broad discretion to issue additional securities, and in order to raise sufficient funds to expand our operations, we may have

to issue securities at prices which may result in substantial dilution to our stockholders.

are entitled under our Charter to issue up to 500,000,000 shares of common stock and 50,000,000 shares of preferred stock, although these

amounts may change in the future subject to stockholder approval.

Shares of our preferred stock provide our Board broad authority to

determine voting, dividend, conversion and other rights.

Any additional stock issuances could be made at a price that reflects a discount

or premium to the then-current market price of our common stock.

In addition, in order to raise capital, we may need to issue securities

that are convertible into or exchangeable for a significant amount of our common stock.

Our Board may generally issue those shares of

common stock and preferred stock, or convertible securities to purchase those shares, without further approval by our stockholders.

preferred stock we may issue could have such rights, preferences, privileges and restrictions as may be designated from time-to-time

by our Board, including preferential dividend rights, voting rights, conversion rights, redemption rights and liquidation provisions.

We may also issue additional securities to our directors, officers, employees and consultants as compensatory grants in connection with

their services, both in the form of stand-alone grants or under our stock incentive plans.

The issuance of additional securities may

cause substantial dilution to our stockholders.

securities or industry analysts do not publish research or reports about our business, if they adversely change their recommendations

regarding our common stock or if our operating results do not meet their expectations, our stock price could decline.

trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish about

us or our business.

If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could

lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.

Moreover, if one or

more of the analysts who cover our company downgrades our common stock or if our operating results do not meet their expectations, our

stock price could decline.

have substantial control over the Company, and they could delay or prevent a change in our corporate control even if our other stockholders

want it to occur.

of March 13, 2024, our executive officers and directors, collectively beneficially own approximately 40.51% of our outstanding

shares of common stock and the O’Neill Trust beneficially owns 25% of our outstanding shares of common stock.

These stockholders

are able to exercise significant control over all matters requiring stockholder approval, including the election of directors and approval

of significant corporate transactions.

This could delay or prevent an outside party from acquiring or merging with our Company even if

our other stockholders want it to occur.

This may also limit your ability to influence the Company in other ways.

In addition, certain

investors own significant numbers of convertible securities, that if exercised or converted, could result in ownership of a significant

portion of the outstanding shares of common stock of the Company.

For example, assuming full exercise or conversion, as applicable, of

their respective convertible securities and no exercise or conversion by other security holders, certain holders could acquire a controlling

position in the Company’s common stock.

The exercise or conversion, as applicable, of the Series D Preferred Stock, Series D PIPE

Warrants, Series E Preferred Stock and Series E PIPE Warrants are subject to a beneficial ownership limitation of 4.99% of the outstanding

shares of common stock, which may be increased by the holder upon written notice to the Company, to any specified percentage not in excess

The 9.99% beneficial ownership limitation may only be modified, amended or waived with the written consent of both the Company

and the security holder.

In November 2023, the O’Neill Trust entered into an agreement with the Company pursuant to which it amended

the terms of each of its Series D PIPE Warrants and Series E PIPE Warrants to increase the beneficial ownership limitation from 9.99%

to 25% and gave notice to the Company that it was increasing its beneficial ownership limitation to 25% with respect to each of its remaining

The beneficial ownership limitation on the Series D Preferred Stock and Series E Preferred Stock remains at 4.99%, subject

to increase to 9.99% by O’Neill Trust upon written notice to the Company.

If such beneficial ownership limitation were to be amended

or waived for the O’Neill Trust or other holders, certain holders would be able to convert their preferred shares or warrants for

a significant portion of the outstanding shares of common stock of the Company, and such holders would be able to exercise significant

control over all matters requiring stockholder approval.

See Exhibit 4.5 filed with this Annual Report for more information.

trading price of our common stock has been, and is likely to continue to be, volatile and could be subject to wide fluctuations in response

to various factors, some of which are beyond our control.

market price of our common stock has historically varied greatly, and is likely to continue to be volatile because of numerous factors,

disagreements or price wars amongst OPEC+ members, including the effect thereof on global oil supply, oil storage capacity and oil

domestic or global economic slowdown that could affect our financial results and operations and the economic strength of our customers;

ability to meet our working capital needs;

variations in operating results;

ability to successfully finance and consummate the NRO Acquisition on the anticipated timeline, or at all;

in financial estimates by us or securities analysts who may cover our stock or by our failure to meet the estimates made by securities

in market valuations of other similar companies;

announcements

by us or our competitors of new products or of significant technical innovations, contracts, acquisitions, divestitures, strategic

relationships or joint ventures;

in laws or regulations applicable to our business;

or departures of key personnel;

economic conditions;

of our common stock by our officers, directors or significant stockholders;

actions taken by our stockholders;

sales or issuances of equity or debt securities by us;

disruptions caused by earthquakes, tornadoes or other natural disasters;

proceedings involving our company, our industry or both;

in market valuations of companies similar to ours;

prospects of the industry in which we operate;

risks, uncertainties and factors described in this Annual Report on Form 10-K.

are subject to the “penny stock rules” which will make our securities more difficult to sell.

are subject to the SEC’s “penny stock” rules because our securities sell below $5.00 per share.

The penny stock rules

require broker-dealers to deliver a standardized risk disclosure document prepared by the SEC which provides information about penny

stocks and the nature and level of risks in the penny stock market.

The broker-dealer must also provide the customer with current bid

and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson, and monthly account statements showing

the market value of each penny stock held in the customer’s account.

In addition, the bid and offer quotations, and the broker-dealer

and salesperson compensation information must be given to the customer orally or in writing prior to completing the transaction and must

be given to the customer in writing before or with the customer’s confirmation.

the penny stock rules require that prior to a transaction, the broker dealer must make a special written determination that the penny

stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction.

The penny stock

rules are burdensome and may reduce purchases of any offerings and reduce the trading activity for our securities.

As long as our securities

are subject to the penny stock rules, the holders of such securities will find it more difficult to sell their securities.

in our capital structure, such as future issuances of debt or equity securities;

sales, hedging and other derivative transactions involving our capital stock;

limited public float and the relatively thin trading market for our common stock;

in our common stock, by directors, officers, affiliates and other major investors;

other factors described under “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements”

included in this Annual Report.

from time to time, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect

the market prices of equity securities of many companies.

These fluctuations often have been unrelated or disproportionate to the operating

performance of those companies.

broad market and industry fluctuations, as well as general economic, political and market conditions, such as recessions, interest rate

changes, international currency fluctuations or political unrest, may negatively impact the market price of our common stock.

past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation.

Any future securities litigation against us could result in substantial costs and divert our management’s attention and resources,

and harm our business, financial condition, and results of operations.

sales of our common stock, or the perception that such future sales may occur, may cause our stock price to decline.

of substantial amounts of our common stock in the public market, or the perception that these sales may occur, could cause the market

price of our common stock to decline.

In addition, the sale of such shares, or the perception that such sales may occur, could impair

our ability to raise capital through the sale of additional common stock or preferred stock.

have not paid cash dividends in the past and do not expect to pay cash dividends in the foreseeable future.

1 unchanged sentence

may be limited to increases in the market price of our common stock.

have never paid cash dividends on our common stock and do not anticipate paying cash dividends on our common stock in the foreseeable

The payment of dividends on our common stock will depend on our earnings, financial condition and other business and economic

factors affecting us at such time as the board of directors may consider relevant.

If we do not pay dividends, our common stock may be

less valuable because a return on your investment might only occur if the market price of our common stock appreciates.

board of directors has broad discretion to issue additional securities.

are entitled under our certificate of incorporation to issue up to 100,000,000 shares of common stock and 5,000,000 shares of preferred

stock, although these amounts may change in the future subject to stockholder approval.

Shares of our preferred stock provide our board

of directors’ broad authority to determine voting, dividend, conversion, and other rights.

Any additional stock issuances could

be made at a price that reflects a discount or premium to the then-current market price of our common stock.

In addition, in order to

raise capital, we may need to issue securities that are convertible into or exchangeable for a significant amount of our common stock.

Our board may generally issue those common and preferred shares, or convertible securities to purchase those shares, without further

approval by our stockholders.

Any preferred shares we may issue could have such rights, preferences, privileges and restrictions as may

be designated from time-to-time by our board, including preferential dividend rights, voting rights, conversion rights, redemption rights

and liquidation provisions.

We may also issue additional securities to our directors, officers, employees and consultants as compensatory

grants in connection with their services, both in the form of stand-alone grants or under our stock incentive plans.

The issuance of

additional securities may cause substantial dilution to our stockholders.

exercise of outstanding options and warrants to purchase our common stock could substantially dilute your investment.

the terms of our outstanding options and warrants to purchase our common stock issued to employees and others, the holders are given

an opportunity to profit from a rise in the market price of our common stock that, upon the exercise of the options and/or warrants,

could result in dilution in the interests of our other stockholders.

market price of our common stock and the value of your investment could substantially decline if our warrants or options are exercised

and our common stock is issued and resold into the market, or if a perception exists that a substantial number of shares will be issued

upon exercise of our warrants and option and then resold into the market.

the exercise prices of our warrants or options are lower than the price at which you made your investment, immediate dilution of the

value of your investment will occur.

In addition, sales of a substantial number of shares of common stock issued upon exercise of our

warrants and options, or even the perception that such sales could occur, could adversely affect the market price of our common stock.

You could, therefore, experience a substantial decline in the value of your investment as a result of both the actual and potential exercise

of our warrants or options.

to achieve and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 could result in

a restatement of our financial statements, cause investors to lose confidence in our financial statements and our company and have a

material adverse effect on our business and stock price.

produce our financial statements in accordance with accounting principles generally accepted in the United States, or GAAP.

internal controls are necessary for us to provide reliable financial reports to help mitigate the risk of fraud and to operate successfully

as a publicly traded company.

As a public company, we are required to document and test our internal control procedures in order to satisfy

the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404.

Further, Section 404 requires annual management assessments

of the effectiveness of our internal controls over financial reporting.

and maintaining internal controls can divert our management’s attention from other matters that are important to our business.

We may not be able to conclude on an ongoing basis that we have effective internal controls over financial reporting in accordance with

If we are unable to conclude that we have effective internal controls over financial reporting, investors could lose confidence

in our reported financial information and our company, which could result in a decline in the market price of our common stock, and cause

us to fail to meet our reporting obligations in the future, which in turn could impact our ability to raise additional financing if needed

in the future.

Related to the Price of Bitcoin

trading price of shares of our Common Stock has appeared at times to have a correlation with the trading price of Bitcoin, which may

be subject to pricing risks, including “bubble” type risks, and has historically been subject to wide swings.

the trading price of our common stock has appeared to have a correlation with the trading price of Bitcoin.

Specifically, we have experienced

adverse effects on our stock price when the value of Bitcoin has fallen, and we may experience similar outcomes if our stock price tracks

the general status of that cryptocurrency.

Furthermore, if the market for Bitcoin company stocks or the stock market in general experiences

a loss of investor confidence, the trading price of our stock could decline for reasons unrelated to our business, operating results

or financial condition.

The trading price of our common stock could be subject to arbitrary pricing factors that are not necessarily

associated with traditional factors that influence stock prices or the value of non-cryptocurrency assets such as revenue, cash flows,

profitability, growth prospects or business activity levels since the value and price, as determined by the investing public, may be

influenced by future anticipated adoption or appreciation in value of cryptocurrencies or blockchains generally, factors over which we

have little or no influence or control.

may face risks of Internet disruptions, which could have an adverse effect on the price of cryptocurrencies.

disruption of the Internet may affect the use of cryptocurrencies and subsequently the value of our securities.

Generally, cryptocurrencies

and our business of mining cryptocurrencies is dependent upon the Internet.

A significant disruption in Internet connectivity could disrupt

a currency’s network operations until the disruption is resolved and have an adverse effect on the price of cryptocurrencies and

our ability to mine cryptocurrencies.

impact of geopolitical and economic events on the supply and demand for cryptocurrencies is uncertain.

crises may motivate large-scale purchases of Bitcoin and other cryptocurrencies, which could increase the price of Bitcoin and other

cryptocurrencies rapidly.

This may increase the likelihood of a subsequent price decrease as crisis-driven purchasing behavior dissipates,

adversely affecting the value of our inventory following such downward adjustment.

Such risks are similar to the risks of purchasing

commodities in general uncertain times, such as the risk of purchasing, holding or selling gold.

Alternatively, as an emerging asset

class with limited acceptance as a payment system or commodity, global crises and general economic downturn may discourage investment

in cryptocurrencies as investors focus their investment on less volatile asset classes as a means of hedging their investment risk.

and/or widespread use of cryptocurrency is uncertain.

is a relatively limited use of any cryptocurrency in the retail and commercial marketplace, thus contributing to price volatility that

could adversely affect an investment in our securities.

Banks and other established financial institutions may refuse to process funds

for cryptocurrency transactions, process wire transfers to or from cryptocurrency exchanges, cryptocurrency-related companies or service

providers, or maintain accounts for persons or entities transacting in cryptocurrency.

The relative lack of acceptance of cryptocurrencies

in the retail and commercial marketplace, or a reduction of such use, limits the ability of end users to use them to pay for goods and

Such lack of acceptance or decline in acceptance could have a material adverse effect on our ability to continue as a going

concern or to pursue our new strategy at all, which could have a material adverse effect on our business, prospects or operations and

potentially the value of Bitcoin or any other cryptocurrencies we mine or otherwise acquire or hold for our own account.

markets for Bitcoin may be under-regulated and, as a result, the market price of Bitcoin may be subject to significant volatility or

manipulation, which could decrease consumer confidence in cryptocurrencies and have a materially adverse effect on our business and results

of operations.

Cryptocurrencies

that are represented and trade on a ledger-based platform and those who hold them may not enjoy the same benefits as traditional securities

available on trading markets and their investors.

Stock exchanges have listing requirements and vet issuers, requiring them to be subjected

to rigorous listing standards and rules, and monitor investors transacting on such platform for fraud and other improprieties.

conditions may not necessarily be replicated on a distributed ledger platform, depending on the platform’s controls and other policies.

The more lax a distributed ledger platform is about vetting issuers of cryptocurrency assets or users that transact on the platform,

the higher the potential risk for fraud or the manipulation of the ledger due to a control event.

We believe that Bitcoin is not a security

under federal and state law.

and other cryptocurrency market prices have historically been volatile, are impacted by a variety of factors, and are determined primarily

using data from various exchanges, over-the-counter markets and derivative platforms.

Furthermore, such prices may be subject to factors

such as those that impact commodities, more so than business activities, which could be subjected to additional influence from fraudulent

or illegitimate actors, real or perceived scarcity, and political, economic, regulatory or other conditions.

Pricing may be the result

of, and may continue to result in, speculation regarding future appreciation in the value of cryptocurrencies, or our share price, making

their market prices more volatile or creating “bubble” type risks for both Bitcoin and shares of our Common Stock.

factors may inhibit consumer trust in and market acceptance of cryptocurrencies as a means of exchange which could have a material adverse

effect on our business, prospects, or operations and potentially the value of any Bitcoin or other cryptocurrencies we mine or otherwise

may be illegal now, or in the future, to acquire, own, hold, sell or use Bitcoin, ether, or other cryptocurrencies, participate in blockchains

or utilize similar cryptocurrency assets in one or more countries, the ruling of which would adversely affect us.

currently cryptocurrencies generally are not regulated or are lightly regulated in most countries, several countries continue taking

regulatory actions in the future that could severely restrict the right to acquire, own, hold, sell or use these cryptocurrency assets

or to exchange for fiat currency.

Such restrictions may adversely affect us as the large-scale use of cryptocurrencies as a means of

exchange is presently confined to certain regions globally.

Such circumstances could have a material adverse effect on us, which could

have a material adverse effect on our business, prospects or operations and potentially the value of any Bitcoin or other cryptocurrencies

we mine or otherwise acquire or hold for our own account, and thus harm investors.

cryptocurrencies may be subject to loss, theft or restriction on access.

is a risk that some or all of our cryptocurrencies could be lost or stolen.

Access to our cryptocurrency assets could also be restricted

by cybercrime.

Hackers or malicious actors may launch attacks to steal, compromise or secure cryptocurrencies, The loss or destruction

of a private key required to access our digital wallets may be irreversible and we may be denied access for all time to our cryptocurrency

holdings or the holdings of others held in those compromised wallets.

Our loss of access to our private keys or our experience of a data

loss relating to our digital wallets could adversely affect our investments and assets.

Such events could have a material adverse effect

on our business.

has forked multiple times and additional forks may occur in the future which may affect the value of Bitcoin we hold or mine.

the extent that a significant majority of users and mining companies on a cryptocurrency network install software that changes the cryptocurrency

network or properties of a cryptocurrency, including the irreversibility of transactions and limitations on the mining of new cryptocurrency,

the cryptocurrency network would be subject to new protocols and software.

However, if less than a significant majority of users and

mining companies on the cryptocurrency network consent to the proposed modification, and the modification is not compatible with the

software prior to its modification, the consequence would be what is known as a “fork” of the network, with one prong running

the pre-modified software and the other running the modified software.

The effect of such a fork would be the existence of two versions

of the cryptocurrency running in parallel yet lacking interchangeability and necessitating exchange-type transaction to convert currencies

between the two forks.

Additionally, it may be unclear following a fork which fork represents the original cryptocurrency and which is

the new cryptocurrency.

Different metrics adopted by industry participants to determine which is the original asset include:

to the wishes of the core developers of a cryptocurrency, blockchains with the greatest amount of hashing power contributed by miners

or validators;

or blockchains with the longest chain.

A fork in the network of a particular cryptocurrency could adversely affect an

investment in our securities or our ability to operate.

August 1, 2017, Bitcoin’s blockchain was forked multiple times creating alternative versions of the cryptocurrency such as Bitcoin

Cash, Bitcoin Gold and Bitcoin SV.

The forks resulted in a new blockchain being created with a shared history, and a new path forward.

The value of the newly created versions including Bitcoin Cash, Bitcoin Gold and Bitcoin SV may or may not have value in the long run

and may affect the price of Bitcoin if interest is shifted away from Bitcoin to the newly created cryptocurrencies.

The value of Bitcoin

after the creation of a fork is subject to many factors including the value of the fork product, market reaction to the creation of the

fork product, and the occurrence of forks in the future.

As such, the value of Bitcoin could be materially reduced if existing and future

forks have a negative effect on Bitcoin’s value.

or fraudulent cryptocurrency transactions may be irreversible.

Cryptocurrency

transactions are irrevocable and stolen or incorrectly transferred cryptocurrencies may be irretrievable.

As a result, any incorrectly

executed or fraudulent cryptocurrency transactions could have a material adverse effect on our ability to continue as a going concern

or to pursue our new strategy at all, which could have a material adverse effect on our business, prospects or operations of and potentially

the value of any Bitcoin or other cryptocurrencies we mine or otherwise acquire or hold for our own account.

Cryptocurrencies,

including those maintained by or for us, may be exposed to cybersecurity threats and hacks.

in cryptocurrency codes may be exposed by malicious actors.

Several errors and defects have been found previously, including those that

disabled some functionality for users and exposed users’ information.

Exploitations of flaws in the source code that allow malicious

actors to take or create money have previously occurred.

Our devices, as well as our miners, computer systems and those of third parties

that we use in our operations, are vulnerable to cyber security risks, including cyber-attacks such as viruses and worms, phishing attacks,

denial-of-service attacks, physical or electronic break-ins, employee theft or misuse, and similar disruptions from unauthorized tampering

with our miners and computer systems or those of third parties that we use in our operations.

Such events could have a material adverse

effect on our business, prospects or operations and potentially the value of any Bitcoin or other cryptocurrencies we mine or otherwise

acquire or hold for our own account.

Unresolved Staff Comments

have not paid any cash dividends on our common stock to date.

We may retain future earnings, if any, for future operations, expansion

and debt repayment and have no current plans to pay cash dividends for the foreseeable future.

Any decision to declare and pay dividends

in the future will be made at the discretion of the Board and will depend on, among other things, our results of operations, financial

condition, cash requirements, contractual restrictions and other factors that the Board may deem relevant.

In addition, our ability to

pay dividends may be limited by covenants of any existing and future outstanding indebtedness we or our subsidiaries incur.

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 1A. Risk Factors