Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended: June 30, 2023

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

Commission File Number: 333-232845

CoJax Oil and Gas Corporation

(Exact Name of registrant as specified in its charter)

 

Virginia	46-1892622
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

3033 Wilson Blvd, Suite E-605 Arlington, VA	22201
(Address of principal executive offices)	(Zip Code)

[phone]

(Registrant’s telephone number, including area code)

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

Title of each Class	Trading Symbol	Name of each exchange on which registered
None	N/A	N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☐ Yes ☒ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

☐ Yes ☒ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

☐ Yes ⌧ No

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

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CoJax Oil and Gas Corporation

Form 10-Q

For the Quarter Ended June 30, 2023

 

TABLE OF CONTENTS

 

PART I – FINANCIAL INFORMATION
Item 1.  Financial Statements.	3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3. Quantitative and Qualitative Disclosures About Market Risk	23
Item 4. Controls and Procedures	24
PART II – OTHER INFORMATION
Item 1. Legal Proceedings	26
Item 1A. Risk Factors	26
Item 2. Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities	26
Item 3. Defaults Upon Senior Securities	26
Item 4. Mine Safety Disclosures	26
Item 5. Other Information	26
Item 6. Exhibits	26
SIGNATURES	27

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PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

 

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

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COJAX OIL AND GAS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

 

	June 30, 2023	December 31, 2022
	(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents	$116,882	$37,750
Accounts receivable	180,488	52,050
Total Current Assets	297,370	89,800
Properties and Equipment
Oil and natural gas properties at cost	5,385,080	5,385,080
Less: Accumulated depletion	(215,772)	(39,623)
Total Properties and Equipment	5,169,308	5,345,457
Total Assets	5,466,678	5,435,257
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable	97,397	105,057
Workover expense payable	178,969	234,396
Accrued salaries and payroll taxes	697,115	1,642,612
Current portion of notes payable	10,242	10,242
Notes payable – related party	103,001	113,001
Total Current Liabilities	1,086,724	2,105,308
Long-term Liabilities
Asset retirement obligations	98,679	92,241
Note payable, net of current portion	25,794	30,724
Total long-term liabilities	124,473	122,965
Total Liabilities	1,211,197	2,228,273
Stockholders' Equity
Preferred stock, $0.10 par value, 50,000,000 current shares authorized, 105,000 and 55,000 shares issued and outstanding, at June 30, 2023 and December 31, 2022, respectively.	1,050	550
Common stock, $0.01 par value, 300,000,000 current shares authorized, 9,304,305 and 9,114,446 shares issued and outstanding, at June 30, 2023 and December 31, 2022, respectively.	93,042	91,144
Subscriptions payable	10,000	-
Additional paid-in capital	13,712,219	12,249,429
Accumulated deficit	(9,560,830)	(9,134,139)
Total Stockholders’ Equity	4,255,481	3,206,984
Total Liabilities and Stockholders' Equity	$5,466,678	$5,435,257

 

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

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COJAX OIL AND GAS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	For the Three Months		For the Six Months
	Ended June 30,		Ended June 30,
	2023	2022	2023	2022
Revenues	$188,623	$-	$417,341	$-
Operating costs and expenses:
Lease operating expenses	58,738	27,459	117,877	28,885
General and administrative expense	171,112	171,200	542,466	642,372
Depletion and accretion on discounted liabilities	84,143	622	182,587	1,244
Total operating costs and expenses	313,993	199,281	842,930	672,501
Loss from Operations	(125,370)	(199,281)	(425,589)	(672,501)
Other Income (Expense)
Interest expense, net	(546)	(288)	(1,102)	(1,250)
Net Other Income (Expense)	(546)	(288)	(1,102)	(1,250)
Net Loss	$(125,916)	$(199,569)	$(426,691)	$(673,751)
Net loss per common share - basic and diluted	$(0.01)	$(0.03)	$(0.05)	$(0.12)
Weighted average number of common shares outstanding during the period - basic and diluted	9,271,542	5,980,342	9,239,438	5,835,417

 

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

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COJAX OIL AND GAS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(UNAUDITED)

 

						Additional		Total
	Preferred stock		Common stock		Subscriptions	paid-in	Accumulated	Stockholder’s
	Shares	Amount	Shares	Amount	Payable	capital	deficit	Equity (Deficit)
Balance, December 31, 2021	30,000	$300	5,780,577	$57,806	$-	$4,803,049	$(2,896,524)	$1,964,631
Share-based vendor payments and settlements	-	-	170,000	1,700	-	338,300	-	340,000
Share-based payment to Board member for services	-	-	10,000	100	-	19,900	-	20,000
Preferred stock issued for accrued officer compensation	25,000	250	-	-	-	499,750	-	500,000
Net (loss) for the three months ending March 31, 2022	-	-	-	-	-	-	(474,182)	(474,182)
Balance, March 31, 2022	55,000	$550	5,960,577	$59,606	-	$5,660,999	$(3,370,706)	$2,350,449
Share-based vendor payments and settlements	-	-	31,554	316	-	62,792	-	63,108
Net (loss) for the three months ending June 30, 2022	-	-	-	-	-	-	(199,569)	(199,569)
Balance, June 30, 2022	55,000	$550	5,992,131	$59,922	-	$5,723,791	$(3,570,275)	$2,213,988
Balance, December 31, 2022	55,000	$550	9,114,446	$91,144	$-	$12,249,429	$(9,134,139)	$3,206,984
Common stock issued for services	-	-	140,642	1,406	-	298,161	-	299,567
Cash received for stock subscriptions payable	-	-	-	-	10,000	-	-	10,000
Preferred shares issued for accrued officer compensation	50,000	500	-	-		1,064,500	-	1,065,000
Net (loss) for the three months ending March 31, 2023	-	-	-	-		-	(300,775)	(300,775)
Balance, March 31, 2023	105,000	$1,050	9,255,088	$92,550	$10,000	$13,612,090	$(9,434,914)	$4,280,776
Common stock issued for services	-	-	49,217	492	-	100,129	-	100,621
Net (loss) for the three months ending June 30, 2023	-	-	-	-	-	-	(125,916)	(125,916)
Balance, June 30, 2023	105,000	$1,050	9,304,305	$93,042	$10,000	$13,712,219	$(9,560,830)	$4,255,481

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

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                                                            COJAX OIL AND GAS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

For the Six Months Ended June 30,	2023	2022
Cash flows from operating activities:
Net loss	$(426,691)	$(673,751)
Adjustments to reconcile Net loss to net cash provided by (used in) operations:
Depletion expense	176,148	-
Accretion of asset retirement obligation	6,438	1,244
Common stock issued for services and salaries	400,188	423,108
Changes in operating assets and liabilities:
Accounts receivable	(128,439)	-
Prepaid expense	-	50,000
Accounts payable and accrued liabilities	56,418	166,368
Net cash provided by (used in) operating activities	84,062	(33,031)
Cash flows from investing activities:	-	-
Cash flows from financing activities:
Proceeds from loans payable – related party	-	38,000
Payments on loans payable – related party	(10,000)
Payments of loan payable - SBA PPP loan	(4,930)	(4,121)
Proceeds for stock subscriptions payable	10,000	-
Net cash provided by (used in) financing activities	(4,930)	33,879
Net increase (decrease) in cash	79,132	848
Cash at beginning of period	37,750	12,098
Cash at end of period	$116,882	$12,946
Supplemental disclosure of non-cash activities:
Cash paid for interest and taxes	$197	$-
Supplemental disclosure of non-cash investing and financing activities:
Preferred shares issued for accrued compensation	$1,065,000	$500,000

 

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

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COJAX OIL AND GAS CORPORATION 

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

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

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

Nature of Operations

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

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

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

Condensed Consolidated Financial Statements 

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

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

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GAAP for complete financial statements.  Therefore, these financial statements should be read in conjunction with the Company's annual report on Form 10-K for the year ended December 31, 2022.

 

NOTE 2 – GOING CONCERN DISCLOSURE

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

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

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidation

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

Use of Estimates 

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

Reclassifications

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

Accounts Receivable and Allowance for Doubtful Accounts

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Accounts receivable will consist primarily of oil and gas sales, net of a valuation allowance for doubtful accounts. At both June 30, 2023, and December 31, 2022, the allowance for doubtful accounts was $0.

Oil and Gas Producing Activities

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

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

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

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

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

Fair Values of Financial Instruments 

The Company had no financial instruments for the six months ended June 30, 2023, or for the year ended December 31, 2022.

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

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

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

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

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

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of June 30, 2023, and December 31, 2022. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments.

Revenue Recognition

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

Under ASC 606, oil and natural gas sales revenues are recognized when control of the product is transferred to the customer, the performance obligations under the terms of the contracts with customers are satisfied and collectability is reasonably assured. All the Company’s oil and natural gas sales are made under contracts with customers. The performance obligations for the Company’s contracts with customers are satisfied at a point in time through the delivery of oil and natural gas to its customers. Accordingly, the Company’s contracts do not give rise to contract assets or liabilities. The Company typically receives payment within 30 days of the month of delivery. The Company’s contracts for oil and natural gas sales are standard industry contracts that include variable consideration based on the monthly index price and adjustments that may include counterparty-specific provisions related to volumes, price differentials, discounts, and other adjustments and deductions.

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

	For the Three Months		For the Six Months
	Ended June 30,		Ended June 30,
	2023	2022	2023	2022
Crude oil revenues	$186,209	$-	$412,024	$-
Gas revenues	$2,414	-	$5,317	-
Total revenues	$188,623	$-	$417,341	$-

 

All revenues are from production from the Gulf State Drilling Region.

 

Income Taxes

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

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

Because of the implementation of this standard, the Company performed a review of its material tax positions in accordance with recognition and measurement standards established by ASC 740 and concluded that it had no uncertain tax positions as of June 30, 2023, or as of December 31, 2022.

Basic and Diluted Earnings per Share 

 

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

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Asset Retirement Obligations

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

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

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

Concentration of Credit Risk

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

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

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

 

NOTE 4 – RECENT ACCOUNTING PRONOUNCEMENTS

New and Recently Adopted Accounting Pronouncements

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

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

NOTE 5 –ROYALTY INTERESTS IN OIL AND GAS PROPERTIES

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

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

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

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

The Company did not execute any acquisitions during the three months ended June 30, 2023

Balance, December 31, 2022	$5,345,456
Depletion expense	(176,148)
Balance, June 30, 2023	$5,169,308

 

The Company recorded depletion expense of $176,148 and $0 for the six months ended June 30, 2023 and 2022, respectively.

NOTE 6 – ASSET RETIREMENT OBLIGATION

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

 

Balance, December 31, 2022	$92,241
Accretion expense	3,219
Balance, March 31, 2023	$95,460
Accretion expense	3,219
Balance, June 30, 2023	$98,679

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NOTE 7 – RELATED PARTY TRANSACTIONS

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

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

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

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

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

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

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

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

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

NOTE 8 – STOCKHOLDERS' DEFECIT

Authorized Capital

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

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Preferred Stock

Refer to Note 7 for details on convertible preferred stock issuances to the Company’s CEO and CFO.

Common Stock

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

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

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

On June 1, 2023, the Company issued 14,217 shares for vendor payments at $2.40 per share.

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

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

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

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

Capital Contributions

During the periods ending June 30, 2023, and June 30, 2022, the Company did not receive any capital contributions.

NOTE 9 – CONTINGENCIES AND COMMITMENTS

Operating Lease Commitments

The Company has no lease obligations at June 30, 2023, and December 31, 2022. The Company has a month-to-month rental agreement for an office share in Arlington, Virginia beginning on April 1, 2018, for $50 per month. Additionally, the Company has no known contingencies as of June 30, 2023, and December 31, 2022.

Purchase Commitments

The Company has no purchase obligations at June 30, 2023.

Legal Matters

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

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NOTE 10 – SUBSEQUENT EVENTS

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

Issuance of Common Stock

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

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

Related Party Notes Payable

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

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

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

Overview

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

Business Description and Plan of Operation

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

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

Executive Summary - First Quarter 2023 Developments and Highlights

Risks and Uncertainties

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

Results of Operations – For the Three and Six Months Ended June 30, 2023, and 2022

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
			Change	Change			Change	Change
	2023	2022	Amount	%	2023	2022	Amount	%
Revenues	$188,623	$-	$188,623	100%	$417,341	$-	$417,341	100%
Lease operating expenses	58,738	27,459	31,279	113.9%	117,877	28,885	88,992	308.1%

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General & administrative expenses	171,112	171,200	(66,588)	(38.9%)	542,466	642,372	(166,406)	(25.9%)
Depletion and accretion on discounted liabilities	84,143	622	83,521	*	182,587	1,244	181,343	*
Loss from operations	(125,370)	(199,281)	73,911	37.1%	(425,589)	(672,501)	246,912	(36.7%)
Other expense	(546)	(288)	(258)	89.6%	(1,102)	(1,250)	148	(11.8%)
Net loss	$(125,916)	$(199,569)	$73,653	36.9%	$(426,691)	$(673,751)	$247,060	(36.7%)

* In excess of 1,000%

 

Revenues

Revenues were $417,341 for the six months ended June 30, 2023, and $0 for the same period during 2022. For the three months ended June 30, 2023, revenues were $188,623. There were no sales of oil and natural gas during the three months ended June 30, 2022. The Company is an early-stage company having just begun to acquire assignments of hydrocarbon revenues and underlying oil and gas exploration and production rights, and therefore has just begun producing significant revenue in 2023.

Lease Operating Expenses  

Lease operating expenses were $117,877 for the six months ended June 30, 2023, and $28,885 for the six months ended June 30, 2022. Lease operating expenses were $58,738 for the three months ended June 30, 2023, and $27,459 for the three months ended June 30, 2022. The increase in expenses from each period in 2022 to the same periods in 2023 was due to additional operating expenses resulting from acquisitions of oil and gas properties.

General and Administrative Expenses

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

Depletion and Accretion on Discounted Liabilities  

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

Loss from Operations

Total operating loss was $425,589 for the six months ended June 30, 2023, and $672,501 for the six months ended June 30, 2022. The decreased loss was primarily driven by the $417,341 increase in revenues during the six months ended June 30, 2023. The increase in revenue was partially offset by the $88,992 and $181,343 increases in lease operating expenses and depletion and accretion expense, respectively, over the same period.

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

Other Expense

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

Net Loss

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

Sales volumes and commodity prices received

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

	For the Three Months		For the Six Months
	Ended June 30,		Ended June 30,
	2023	2022	2023	2022
Oil volume (Bbls)	2,746	-	5,895	-
Natural gas volume (Mcf)	1,215	-	2,795	-
Total Production (Boe)	2,948	-	6,360	-
Average Sales Price
Oil price (per Bbl)	$71.24	-	$72.22	-
Gas price (per Mcf)	2.09	-	2.29	-
Total per BOE	$67.53	-	$68.63	-

 

Capital Resources and Liquidity

The Company had cash on hand of $116,882 at June 30, 2023, compared to $37,750 at December 31, 2022.  For the six months ended June 30, 2023, the Company had net cash provided by operating activities of $84,062, compared to net cash used in operating activities of $33,031 for the same period of 2022. The increase in cash provided by operating activities for the six months ended June 30, 2023, was driven by the $435,033 net increase in adjustments for non-cash items and changes in the balances of accounts receivables, prepaid expenses, accounts payables, and accrued expenses, in addition to the $247,060 decrease in net loss from operations, compared to the same period of 2022.  

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

Net cash used in financing activities was $4,930 for the six months ended June 30, 2023, compared to net cash provided by financing activities of $33,879 for the same period in 2022. The decrease in cash provided

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

Capital Resources for Future Acquisition and Development Opportunities

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

Effects of Inflation and Pricing

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

Off Balance Sheet Arrangements

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

Disclosures About Market Risks

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

Oil and Gas Prices

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

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

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

Transportation of Oil and Natural Gas

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

Competition in the Oil and Natural Gas Industry

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

Retention of Key Personnel

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

Environmental and Regulatory Risks

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

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

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

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

 

Going Concern

 

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

 

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

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

The Company is currently not subject to market risk exposure related to changes in interest rates on its indebtedness.

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

Commodity Price Risk

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

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

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

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

Currency Exchange Rate Risk

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

 

Item 4. Controls and Procedures

Evaluation of disclosure controls and procedures

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

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

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

Changes in internal control over financial reporting

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

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

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition, or operating results.

 

Item 1A. Risk Factors

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

 

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

None.

 

Item 3. Defaults Upon Senior Securities

 

None.

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other Information

 

None.

Item 6. Exhibits

		Incorporated by Reference
Exhibit Number	Exhibit Description	Form	File No.	Exhibit	Filing Date	Filed Here-with
31.1	Rule 13a-14(a) Certification by Chief Executive Officer					X
31.2	Rule 13a-14(a) Certification by Chief Financial Officer					X
32.1	Section 1350 Certification by Chief Executive Officer					X
32.2	Section 1350 Certification by Chief Financial Officer					X

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

	CoJax Oil and Gas Corporation
Date: November 22, 2023	By:	/s/ Jeffrey J. Guzy
		Jeffrey J. Guzy
		Chief Executive Officer and Director
		(Principal Executive Officer)
Date: November 22, 2023	By:	/s/ Wm. Barrett Wellman
		Wm. Barrett Wellman
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

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Exhibit 31.1

 

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Jeffrey J. Guzy, certify that:

 

1.	I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, of CoJax Oil and Gas Corporation;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.					The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
					a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
					b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
					c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
					d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.					The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
		a.		All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	b.		Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 22, 2023 /s/ JEFFREY J. GUZY Jeffrey J. Guzy Chief Executive Officer (Principal Executive Officer)

 

Exhibit 31.2

 

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

 

I, Wm. Barrett Wellman, certify that:

 

1.	I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, of CoJax Oil and Gas Corporation;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d.	Disclosed in this report is any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

	a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: November 22, 2023

/s/ Wm. Barrett Wellman
Wm. Barrett Wellman
Chief Financial Officer
(Principal Accounting Officer)

 

Exhibit 32.1

 

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with this quarterly report of CoJax Oil and Gas Corporation (the “Company”) on Form 10-Q for the quarter ended June 30, 2023, as filed with the Securities and Exchange Commission (the “Report”), the undersigned principal executive officer of the Company, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1)

the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: November 22, 2023

/s/ JEFFREY J. GUZY

Jeffrey J. Guzy Chief Executive Officer (Principal Executive Officer)

 

 

Exhibit 32.2

 

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with this quarterly report of CoJax Oil and Gas Corporation (the “Company”) on Form 10-Q for the quarter ended June 30, 2023, as filed with the Securities and Exchange Commission (the “Report”), the undersigned principal financial officer of the Company, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1)

the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: November 22, 2023

/s/ WM. BARRETT WELLMAN

Wm. Barrett Wellman

Chief Financial Officer

(Principal Financial Officer)

 

 

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