DELAWARE
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001-16653
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73-1238709
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(State or Other Jurisdiction
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(Commission
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(I.R.S. Employer
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of Incorporation or Organization)
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File Number)
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Identification No.)
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Large accelerated filer ☐
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Accelerated filer ☐
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Non-accelerated filer ☐
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Smaller reporting company ☒
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(Do not check if a smaller reporting company)
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Emerging growth Company ☐
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PART I.
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FINANCIAL INFORMATION
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Page No.
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Item 1.
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Financial Statements
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Balance Sheets at June 30, 2018 (Unaudited) and December 31, 2017
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4
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Statements of Operations – For the three months and six months ended June 30, 2018 and 2017 (Unaudited)
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5
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Statement of Changes in Shareholders' Equity (Deficit)
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6 | |
Statements of Cash Flows – For the six months ended June 30, 2018 and 2017 (Unaudited)
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7
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Notes to Financial Statements
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8-11
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Item 2.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
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12-13
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Item 3.
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Quantitative and Qualitative Disclosures About Market Risk
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13
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Item 4.
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Controls and Procedures
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13
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PART II.
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OTHER INFORMATION
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Item 1.
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Legal Proceedings
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14
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Item 1A.
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Risk Factors
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14
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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14
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Item 3.
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Defaults Upon Senior Securities
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14
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Item 4.
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Mine Safety Disclosures
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14
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Item 5.
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Other Information
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14
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Item 6.
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Exhibits
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14
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Signatures
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15
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Three Months Ended
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Six Months Ended
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|||||||||||||||
June 30,
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June 30,
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|||||||||||||||
2018
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2017
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2018
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2017
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Revenue:
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||||||||||||||||
Petroleum sales
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$
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0
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0
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0
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0
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|||||||||||
Costs and expenses:
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||||||||||||||||
General and administrative
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210,402
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26,926
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437,079
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113,010
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||||||||||||
210,402
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26,926
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437,079
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113,010
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Operating loss
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(210,402
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)
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(26,926
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)
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(437,079
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)
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(113,010
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)
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Other expense:
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Interest expense
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19,845
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16,628
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39,473
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34,914
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Total other expense
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19,845
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16,628
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39,473
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34,914
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Net loss
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$
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(230,247
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)
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(43,554
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)
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(476,552
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)
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(147,924
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)
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Net loss per common share, basic & diluted
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$
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(0.02
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)
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(0.01
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)
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(0.04
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)
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(0.02
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)
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Weighted average number of common shares outstanding basic and diluted
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11,248,942
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8,710,609
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11,071,720
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8,710,609
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Common Stock
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Common Stock Subscribed, not yet issued
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Stock Subscription Receivable
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Additional Paid in Capital |
Accumulated Deficit
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Total | |||||||||||||||||||||||
Shares
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Par Value
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|||||||||||||||||||||||||||
Balances, December 31, 2017
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8,803,942
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8,803
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3,225
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(5,000
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)
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16,232,381
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(16,111,215
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)
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128,194
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Net loss
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(476,552
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)
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(476,552
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)
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Shares, options, warrants and conversion features issued
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2,525,000
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2,525
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(1,225
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)
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5,000
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245,768
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0
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252,068
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Balances June 30, 2018
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11,328,942
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$
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11,328
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$
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2,000
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$
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0
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$
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16,478,149
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$
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(16,587,767
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)
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$
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(96,290
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)
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Six Months Ended June 30,
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||||||||
2018
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2017
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Cash flows from operating activities:
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Net loss
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$
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(476,552
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)
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$
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(147,924
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)
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Adjustments to reconcile net loss to net cash used in operating activities:
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Value of warrants granted
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117,068
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0
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Amortization of warrant value and conversion feature on convertible notes
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31,630
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29,162
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Change in operating assets and liabilities:
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Prepaids
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0
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(23,894
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)
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Accounts payable and accrued liabilities
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111,466
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26,229
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Accrued interest payable
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7,843
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7,014
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Net cash used in operating activities
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(208,545
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)
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(109,413
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)
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Cash flows from financing activities:
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Proceeds from convertible notes issued
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0
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62,500
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Proceeds from stock issuance
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135,000
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0
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Net cash provided by financing activities
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135,000
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62,500
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Net change in cash
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(73,545
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)
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(46,913
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)
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Cash - Beginning of period
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77,780
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68,743
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Cash - End of period
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$
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4,235
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$
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21,830
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2018
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Current
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Long Term
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Total
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Convertible Notes Outstanding
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$
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195,000
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$
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65,000
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$
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260,000
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Debt Issue Costs – Warrants and Conversion Feature
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(30,553
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)
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(13,195
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)
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(43,748
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)
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Convertible Notes Outstanding, Net
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$
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164,447
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$
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51,805
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$
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216,252
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Item 2.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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Item 3.
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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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Item 4.
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CONTROLS AND PROCEDURES
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Item 1.
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Legal Proceedings
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Item 1A.
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Risk Factors
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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Item 3.
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Defaults Upon Senior Securities
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Item 4.
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Mine Safety Disclosures
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Item 5.
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Other Information
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Item 6.
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Exhibits
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10.1 |
Purchase and Sale Agreement dated as of July 12, 2018, by and between Exodus Energy, Inc. and Empire Louisiana LLC (incorporated herein by reference to Exhibit 2.1 of Empire's Current Report on Form 8-K filed on July 19, 2018).
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10.2 |
Purchase and Sale Agreement dated as of July 23, 2018, by and between Cardinal Exploration and Production Company and Empire Louisiana LLC (incorporated herein by reference to Exhibit 2.1 of Empire's Current Report on Form 8-K filed on July 25, 2018).
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31.1
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Certification of Thomas Pritchard, Chief Executive Officer, pursuant to Rules 13a - 14 (a) and 15(d) - 14(a) promulgated under the Securities Exchange Act of 1934, as amended, and Item 601(1) (31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (submitted herewith).
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31.2 |
Certification of Michael R. Morrisett, President and principal financial officer, pursuant to Rules 13a - 14 (a) and 15(d) - 14(a) promulgated under the Securities Exchange Act of 1934, as amended, and Item 601(1) (31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (submitted herewith).
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32.1 |
Certification of Thomas Pritchard, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (submitted herewith).
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32.2
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Certification of Michael R. Morrisett, President and principal financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (submitted herewith).
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101
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Financial Statements for XBRL format (submitted herewith).
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Empire Petroleum Corporation
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Date: August 14, 2018
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By:
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/s/ Michael R. Morrisett
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Michael R. Morrisett
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President
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(principal
financial officer
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Date: August 14, 2018
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By:
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/s/ Thomas Pritchard
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Thomas Pritchard
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Chief Executive Officer
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NO. | DESCRIPTION |
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101
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Financial Statements for XBRL format (submitted herewith).
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1.
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I have reviewed this quarterly report on Form 10‑Q of Empire Petroleum Corporation;
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2.
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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;
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3.
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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;
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4.
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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:
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(a)
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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;
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(b)
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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;
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(c)
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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
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(d)
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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
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5.
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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):
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(a)
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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
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(b)
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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.
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August 14, 2018
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/s/ Thomas Pritchard | ||
Thomas Pritchard
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Chief Executive Officer
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1.
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I have reviewed this quarterly report on Form 10‑Q of Empire Petroleum Corporation;
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2.
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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;
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3.
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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;
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4.
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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:
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(a)
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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;
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(b)
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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;
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(c)
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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
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(d)
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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
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5.
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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):
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(a)
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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
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(b)
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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.
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August 14, 2018
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/s/ Michael R. Morrisett | ||
Michael R. Morrisett
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President (principal financial officer)
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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August 14, 2018
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/s/ Thomas Pritchard | ||
Thomas Pritchard
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Chief Executive Officer
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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August 14, 2018
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/s/ Michael R. Morrisett | ||
Michael R. Morrisett | |||
President (principal financial officer)
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