Recent Issuances of Unregistered Securities

During the last three (3) years, we have sold the following unregistered securities:

On May 23, 2019, we and an investor (“May 2019 Investor”) entered into an exchange agreement (“May 2019 Exchange Agreement”) and a side-letter agreement (“Side-Letter Agreement”) related to the private placement of a $12.0 million principal amount secured convertible note and a warrant to purchase 1,800,000 shares of Common Stock in May 2015 (the “May 2015 Private Placement”). Under the May 19 Exchange Agreement, the May 2019 Investor exchanged all of its rights under the original securities issued in the May 2015 Private Placement for 770,485 shares of Common Stock (which was amended to 605,816 shares of Common Stock pursuant to Amendment No.1 to the May 2019 Exchange Agreement, dated May 30, 2019) and certain rights to acquire additional securities in the future, which may be exercised for additional shares of Common Stock. Pursuant to the provisions of the Side-Letter Agreement, dated November 23, 2019, the parties agreed to the issuance of 567,348 shares of Common Stock and a warrant to purchase up to 61,380 shares of Common Stock at an exercise price of $0.50 per share, which expires on June 19, 2026. Pursuant to the Side-Letter Agreement, we also agreed that from the execution date of the May 2019 Exchange Agreement until twelve (12) months from such date, we will not raise capital at a price that is below $0.10 per share of Common Stock (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations and similar events) without the consent of the May 2019 Investor. Such shares of Common Stock and rights to acquire additional securities were issued in reliance on Section 3(a)(9) of the Securities Act.

On June 4, 2019, we and WestPark Capital, Inc. (“WestPark”) executed an exchange agreement, pursuant to which WestPark received a new warrant to purchase up to 50,000 shares of Common Stock (post-split basis) with an exercise price of $0.50 per share and a seven-year term in exchange for its original warrant in connection with the May 2015 Private Placement. The new warrant does not contain any price protection provisions. Such new warrant was issued in reliance on Section 3(a)(9) of the Securities Act.

On June 19, 2019, we and a private, third-party lender entered into an exchange agreement whereby such lender received a warrant to purchase up to 570,000 shares of Common Stock (post-split basis) with an exercise price of $0.50 per share and a seven-year term in exchange for its two convertible notes payable issued on November 8, 2016 and November 7, 2017, respectively, and accrued interest thereon. The warrant does not contain any price protection provisions. Such warrant was issued in reliance on Section 3(a)(9) of the Securities Act.

During August 2019 through October 2019, we issued a total of 1,425,000 shares of Common Stock at $0.10 per share for a total of $142,500 pursuant to a private placement memorandum to certain accredited investors. We used the proceeds to pay the $50,000 nonrefundable deposit required for the Option from Core, to purchase the production and mineral rights/leasehold on the Properties and for general working capital purposes. We relied on the exemption provided by Section 4(a)(2) of the Securities Act and Regulation D thereunder in issuing the shares of Common Stock in the private placement. We paid no commission or other similar compensation in connection with the transactions.

On August 19, 2020, we entered into a securities purchase agreement (the “August Purchase Agreement”) with one investor (the “August Investor”), pursuant to which we issued to the August Investor, in consideration for an aggregate of $325,000, (i) a senior unsecured convertible note payable due August 19, 2021 (the “August Note”), which was, subject to certain conditions, convertible into an aggregate of 3,943,820 shares of Common Stock, at a price of $0.10 per share; and (ii) a common stock purchase warrant (the “August Warrant”), which is immediately exercisable upon issuance and on a cashless basis if the August Warrant has not been registered 180 days after the date of issuance for up to 800,000 shares of Common Stock at an exercise price of $0.50 per share, subject to customary adjustments. Pursuant to the August Purchase Agreement, the August Note and August Warrant were issued to the August Investor in a private placement transaction pursuant to an exemption from the registration requirements of the Securities Act provided in Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder. Pursuant to the August Purchase Agreement, the August Investor was also granted certain piggy-back registration rights, whereby we agreed to register the resale of the shares of Common Stock underlying the August Warrant and the August Note. We repaid the August Note on March 26, 2021. On August 5, 2021, the Company has filed a registration statement on Form 424B4 to register for resale all of the shares of Common Stock issuable upon exercise of the August Warrant issued to the August Investor.

The exercise of the August Warrant is subject to a beneficial ownership limitation such that the August Investor may not exercise the August Warrant to the extent that such exercise would result in the August Investor being the beneficial owner in excess of 4.99% (or, upon election of the August Investor, 9.99%) of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon such exercise, which beneficial ownership limitation may be increased or decreased up to 9.99% upon notice to us, provided that any increase in such limitation will not be effective until 61 days following notice to us.

Additionally, pursuant to the August Purchase Agreement, for so long as the August Note or August Warrant is outstanding, the August Investor has a right to participate in any issuance of the Common Stock, Common Stock Equivalents (as defined in the August Purchase Agreement), conventional debt, or a combination of such securities and/or debt (a “Subsequent Financing”), up to an amount equal to 35% of the Subsequent Financing.

We used the proceeds of the August Note to pay off $60,125 in principal balance of notes payable that were in default, to pay the $100,000 required by the SKM Exchange Agreement (as defined below) and for general working capital.

On August 19, 2020, we granted certain of our executive officers, directors and affiliate thereof and consultant, outside of our existing equity compensation plans, and pursuant to the August 2020 Restricted Stock Agreements, an aggregate of 5,000,000 shares of Common Stock, subject to the restrictions contained therein, as compensation for their services to the Company. Such individuals were granted such shares pursuant to the exemption provided by Section 4(a)(2) of the Securities Act.

On September 24, 2020, we entered into an exchange and settlement agreement (the “SKM Exchange Agreement”) with SKM Partnership, Ltd. (“SKM”), pursuant to which SKM agreed to exchange an 8% promissory note issued by us to SKM, dated as of December 27, 2013, in the original principal amount of $1,050,000, representing outstanding principal balance of $1,000,000 and accrued and unpaid interest thereon of $481,000, for (i) a cash payment in the amount of $100,000 and (ii) 737,532 newly issued shares of Common Stock. The issuance of the 737,532 shares is being made without any restrictive legends upon reliance on the exemptions from the registration requirements of the Securities Act afforded by Section 3(a)(9) of the Securities Act and Rule 144 promulgated thereunder. The closing of the exchange occurred on September 24, 2020.

On March 26, 2021, we entered into securities purchase agreements (collectively, the “March Purchase Agreements”) with certain investors (the “March Investors”), pursuant to which, in consideration for an aggregate of $2,050,000, we issued an aggregate of 22,776 shares of Series A Preferred Stock and common stock purchase warrants (the “March Warrants”) exercisable for up to 5,256,410 shares of Common Stock six (6) months following issuance and for five (5) years after such date. Holders of the March Warrants may exercise them on a cashless basis pursuant to the formula provided in the March Warrants if there is not an effective registration statement for the sale of the shares of Common Stock underlying the March Warrants within six (6) months following the Closing Date, as defined in the March Warrants. Such securities were issued to March Investors in a private placement transaction pursuant to an exemption from the registration requirements of the Securities Act provided in Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder.

In connection with the March Purchase Agreement, we and the March Investors entered into that certain registration rights agreement (the “Registration Rights Agreement”), pursuant to which we agreed to file a registration statement to register such shares of Common Stock issuable upon conversion of the Series A Preferred Stock and such shares of Common Stock underlying the March Warrants. In order to satisfy such obligations, on August 5, 2021, the Company filed a registration statement to register for resale all of the Preferred Shares and Warrant Shares issuable upon conversion of the shares of Series A Preferred Stock and upon exercise of the March Warrants issued to the March Investors.

The closing of the private placement in connection with the March Purchase Agreements took place on March 26, 2021.

We used the proceeds of the offering of the Series A Preferred Stock to complete the acquisition of the Properties and intend to use the remaining proceeds to complete development of the Properties, to pay-off all outstanding convertible notes payable and for general working capital.

On March 31, 2021, we entered into entered into the Debt Settlement Agreements with six creditors of the Company (collectively, the “Creditors”), pursuant to which the Creditors agreed to extinguish an aggregate of $2,866,497 of debt and liabilities of the Company owed to such Creditors in consideration for the issuance to each Creditor of (i) an aggregate of approximately $28,665 in the 3% Notes , which are, subject to certain conditions, convertible at any time at the option of the Creditors into an aggregate of 65,930 shares of Common Stock (including accruable interest), at a price of $0.50 per share and (ii) common stock purchase warrants (the “Creditor Warrants”) which are immediately exercisable for up to an aggregate of 5,732,994 shares of Common Stock and for five (5) years thereafter. We also granted the Creditors certain piggy-back registration rights pursuant to the Notes and the Creditor Warrants, which were satisfied by the Company filing the registration statement on Form 424B4 on August 5, 2021. Such securities were issued to the Creditors in a private placement transaction pursuant to an exemption from the registration requirements of the Securities Act provided in Section 4(a)(2) of the Securities Act.

The 3% Notes bear interest at a rate of 3% per annum, may be voluntarily repaid in cash in full or in part by us at any time in an amount equal to the face amount plus any accrued and unpaid interest on the 3% Notes (or portion thereof) being prepaid, and mature on March 30, 2026.

On April 1, 2021, the Company and the holder of a $50,000 outstanding convertible note (the “April 2021 Creditor #1”) entered into a settlement agreement pursuant to which the Company issued to such holder 145,000 shares of Common Stock in consideration for the extinguishment of the outstanding principal and accrued interest on such note and the cancellation of common stock purchase warrants of the Company issued in connection with the issuance of such note. The 145,000 shares of Common Stock issued to such holder pursuant to such settlement agreement were valued at $40,600 based on the closing market price of the Common Stock on the date of such extinguishment and cancellation. Such securities were issued to the April 2021 Creditor #1 in a private placement transaction pursuant to an exemption from the registration requirements of the Securities Act provided in Section 3(a)(9) of the Securities Act.

Also on April 1, 2021, the Company and the holder of a $35,000 outstanding convertible note (the “April 2021 Creditor #2”) entered into a settlement agreement pursuant to which the Company issued to such holder 100,000 shares of Common Stock in consideration for the extinguishment of the outstanding principal and accrued interest on such note and the cancellation of common stock purchase warrants of the Company issued in connection with the issuance of such note. The 100,000 shares of Common Stock issued to such holder pursuant to such settlement agreement were valued at $28,000 based on the closing market price of the Common Stock on the date of such extinguishment and cancellation. Such securities were issued to the April 2021 Creditor #2 in a private placement transaction pursuant to an exemption from the registration requirements of the Securities Act provided in Section 3(a)(9) of the Securities Act.

On June 4, 2021, our Board authorized the grant of stock options to purchase up to (i) 500,000 shares of Common Stock to Mr. Ross, (ii) 100,000 shares of Common Stock to Mr. Richie, (iii) 100,000 shares of Common Stock to Mr. Hutchins, (iv) 350,000 shares of Common Stock to Mr. Loeffelbein, and (v) a total of 750,000 shares of Common Stock to three Company consultants. All such stock options vest on June 4, 2022, contingent upon the holder of such options continuing to serve the Company on such date, have 10-year terms and are exercisable at $0.50 per share. Such individuals were granted such stock options pursuant to the exemption provided by Section 4(a)(2) of the Securities Act in consideration for the time and efforts such individuals devoted to assisting the acquisition of the Properties and its drilling program.

On August 30, 2021, the Company entered into an agreement with an accredited investor (the “8% Note Investor”) for the Company’s 8% Note, with an aggregate principal face amount of $100,000. The 8% Note is, subject to certain conditions, convertible into an aggregate of 200,000 shares of Common Stock, at a price of $0.50 per share. The Company also issued a five-and-one-half-year common stock purchase warrant to purchase up to 200,000 shares of Common Stock at an exercise price of $0.50 per share, subject to customary adjustments (the “8% Note Warrant”), which is immediately exercisable. The 8% Note Investor purchased the 8% Note and 8% Note Warrant from the Company for an aggregate purchase price of $100,000. The Company also granted the 8% Note Investor certain piggy-back registration rights whereby the Company has agreed to register for resale the shares underlying the 8% Note Warrant and the conversion of the 8% Note unless the shares of the Company commences trading on the NYSE American; the Nasdaq Capital Market; the Nasdaq Global Market; the Nasdaq Global Select Market; or the New York Stock Exchange, within 120 days after the closing date of such transaction.

The 8% Note bears interest at a rate of 8% per annum, may be voluntarily repaid in cash in full or in part by the Company at any time in an amount equal to 120% of the principal amount of the 8% Note and any accrued and unpaid interest. 50% of the 8% Note shall be mandatorily repaid in cash in an amount equal to 120% of the principal amount of the 8% Note and any accrued and unpaid interest in the event of the consummation by the Company of any public or private offering or other financing pursuant to which the Company receives gross proceeds of at least $2,000,000 and 100% of the 8% Note, plus accrued interest shall be mandatorily repaid in an amount equal to 120% of outstanding principal and interest in cases in which the Company receives gross proceeds of at least $3,000,000. In addition, pursuant to the 8% Note, so long as the 8% Note remains outstanding, the Company cannot enter into any financing transactions pursuant to which the Company sells its securities at a price lower than $0.50 per share without written consent of the 8% Note Investor.

The conversion of the 8% Note and the exercise of the 8% Note Warrant are each subject to its applicable beneficial ownership limitation.

The 8% Note and the 8% Note Warrant were issued to the 8% Note Investor pursuant to Section 4(a)(2) of the Securities Act, because the 8% Note Investor represented that it had sufficient sophistication and knowledge of the Company, and the issuance did not involve any form of general solicitation or general advertising. Furthermore, the 8% Note Investor made representations that the securities issued to extinguish the obligations were taken for investment purposes and not with a view to resale.

On October 29, 2021, the Company entered into a securities purchase agreement (the “November Purchase Agreement”) with three additional accredited investors (the “November Investors”) for the Company’s Senior Unsecured Convertible Promissory Notes due October 29, 2022 (the “November Notes”), with an aggregate principal face amount of $550,000. The November Notes are, subject to certain conditions, convertible into 1,100,000 shares (the “November Conversion Shares”) of Common Stock, at a price per share of $0.50 (“November Conversion Price”). Pursuant to the November Purchase Agreement, the Company also issued a five-and-one-half-year common stock purchase warrant (the “November Warrant”) to purchase up to 1,650,000 shares of Common Stock (the “November Warrant Shares” and collectively with the November Notes, the November Conversion Shares, and the November Warrant, the “November Securities”) at an exercise price of $0.50 per share, subject to customary adjustments. The November Investors purchased the November Securities for an aggregate purchase price of $850,000. The Company has also granted the November Investors certain piggy-back registration rights whereby the Company has agreed to register the resale by the November Investors of the November Warrant Shares and November Conversion Shares. The Company relied on the exemption from the registration requirements of the Securities Act, provided in Section 4(a)(2) of the Securities Act.

The November Notes bear interest at a rate of 8% per annum, may be voluntarily repaid in cash in full or in part by the Company at any time (subject to the occurrence of an event of default) in an amount equal to 120% of the principal amount of each November Note and any accrued and unpaid interest, and shall be mandatorily repaid in cash in an amount equal to a) 50% of the then outstanding principal amount equal to 120% of the principal amount of each November Note and any accrued and unpaid interest in the event of the consummation by the Company of any public or private offering or other financing pursuant to which the Company receives gross proceeds of at least $2,000,000 but not greater than $3,000,000; or b) 100% of the then outstanding principal amount equal to 120% of the principal amount of a November Note and any accrued and unpaid interest in the event of the consummation by the Company of any public or private offering or other financing pursuant to which the Company receives gross proceeds of in excess of $3,000,000. In addition, pursuant to the November Notes, so long as a November Note remains outstanding, the Company shall not enter into any financing transactions pursuant to which the Company sells its securities at a price lower than the November Conversion Price, subject to certain adjustments, without written consent of the November Investors.

The conversion of the November Notes and the exercise of the November Warrants are each subject to Beneficial Ownership Limitation.

Pursuant to the November Purchase Agreement, for a period of twelve (12) months after the Closing Date (as defined in the November Purchase Agreement), the November Investors have a right to participate in Subsequent Financing, up to an amount equal to thirty-five percent (35%) of the Subsequent Financing. The transaction completed by the November Purchase Agreement closed on November 1, 2021.

On November 9, 2021, the Company entered into a USNG Letter Agreement, pursuant to which USNG will provide consulting services to the Company for exploration, testing, refining, production, marketing and distribution of various potential reserves of noble gases and rare earth element/minerals on the Properties. The USNG Letter Agreement would cover all of the noble gas, specifically helium, and rare earth elements/minerals potentially existing on the Properties and the future acquisitions of the Company, if any.

The USNG Letter Agreement required the Company to establish a four-member Board of Advisors, which will help attract both industry partners and financial partners for developing a large helium, noble gas and/or rare earth element/mineral resources that may exist in the region where the Company currently operates. The industry partners would include helium, noble gas and/or rare earth element/mineral purchasers and exploration and development companies from the energy industry. The financial partners may include large family offices or small institutions.

The Company also is required to pay USNG a $8,000 monthly cash fee beginning at the onset of commercial helium or minerals production and sales, subject to certain thresholds. Such monthly fees will become due and payable for any month that AMGAS receives cash receipts in excess of $25,000 derived from the sale of noble gases and/or rare earth elements/minerals.

In consideration of the foregoing and pursuant to the terms of the USNG Letter Agreement, on November 9, 2021, the Company also issued warrants (the “November 9 Warrants”), exercisable for five (5) years, to purchase, in the aggregate, 2,000,000 shares of Common Stock, at an exercise price of $0.50 per share, subject to customary adjustments (the “November 9 Exercise Price”) to three of USNG’s principal consultants. The Company also issued November 9 Warrants to purchase, in the aggregate, 1,200,000 shares of Common Stock at the November 9 Exercise Price to the four members of the Board of Advisors and options to acquire 60,000 shares of Common Stock to various support personnel at the November 9 Exercise Price. The Company therefore granted a total of 3,260,000 November 9 Warrants to purchase its Common Stock for a price of approximately $1.6 million in connection with the USNG Letter Agreement and the arrangements described therein. In issuing the November 9 Warrants, the Company relied on an exemption from registration under Section 4(a)(2) of the Securities Act. Each holder of the November 9 Warrants has advised the Company that they are sophisticated and can bear the risks associated with the November 9 Warrants, and the Company has not engaged in general solicitation in connection with the offer or sale of the November 9 Warrants.

On June 8, 2022, the Company issued to an accredited investor an unsecured convertible note due September 15, 2022 (the “June 2022 Note”), with an aggregate principal face amount of $350,000. The June 2022 Note is, subject to certain conditions, convertible into an aggregate of 700,000 shares of Common Stock, at a price of fifty cents ($0.50) per share. The Company also issued a five-year Common Stock purchase warrant to purchase up to 700,000 shares of Common Stock at an exercise price of fifty cents ($0.50) per share, subject to customary adjustments (the “June 2022 Warrants”) which are immediately exercisable. The investor purchased the June 2022 Note and June 2022 Warrant from the Company for an aggregate purchase price of $350,000 and the proceeds were used for drilling and completion costs on the initial well drilled under the Hugoton Gas Field participation agreement and general working capital purposes. The Company also granted the investor certain piggy-back registration rights whereby the Company has agreed to register for resale the shares of Common Stock underlying the June 2022 Warrant and the conversion of the June 2022 Note unless the shares of the Company commence to trade on the NYSE American; the Nasdaq Capital Market; the Nasdaq Global Market; the Nasdaq Global Select Market; or the New York Stock Exchange, within one hundred twenty (120) days after the closing date.

The June 2022 Note bears interest at a rate of eight percent (8%) per annum, may be voluntarily repaid in cash in full or in part by the Company at any time in an amount equal to the remaining principal amount of the underlying note and any accrued and unpaid interest.

The note has matured and therefore the remaining unamortized discount relative to the June 2022 Notes was $-0- as of December 31, 2022.

On May 5, 2023, the Company reached an agreement with the holder of two separate convertible notes payable in the aggregate principal face amount of approximately $450,000 (including the June 2022 Note), which the Company did not pay by their maturity dates. The Company and the holder of the two convertible notes payable entered into a new convertible promissory note (the “New Note”), exchanging the outstanding principal amount of the old convertible notes payable into the New Note, with a maturity date of September 30, 2023. Upon issuance of the New Note, the old convertible notes payable were cancelled and the repayment defaults under the prior convertible notes payable were cured with the entry into the New Note. The conversion price of the New Note was reduced from $0.50 per share to $0.40 per share however, the interest rate and other significant terms of the New Note are the same as those of the prior convertible notes payable.

In May 2022 the Company entered into a securities purchase agreement with two accredited investors (the “Investors”) for the Company’s 8% convertible notes payable due June 29, 2022 (the “May 2022 Notes”), with an aggregate principal amount of $850,000. The May 2022 Notes are, subject to certain conditions, convertible into an aggregate of 2,125,000 shares of Common Stock, at a price of forty cents ($0.40) per share. The Company also issued an aggregate of 425,000 shares of Common Stock as commitment shares (“Commitment Shares” and, together with the May 2022 Notes and Conversion Shares, the “Securities”) to the Investors as additional consideration for the purchase of the May 2022 Notes. The closing of the offering of the Securities occurred on May 13, 2022, when the Investors purchased the Securities for an aggregate purchase price of $850,000. The Company has also granted the Investors certain automatic and piggy-back registration rights whereby the Company has agreed to register the resale by the Investors of the Conversion Shares. The proceeds of this offering of Securities were used to purchase the Company’s membership interests in GMDOC.

The May 2022 Notes bear interest at a rate of eight percent (8%) per annum, may be voluntarily repaid in cash in full or in part by the Company at any time (subject to the occurrence of an event of default) in an amount equal to 120% of the principal amount of each May 2022 Note and any accrued and unpaid interest, and shall be mandatorily repaid in cash in an amount equal to a) fifty percent (50%) of the then outstanding principal amount equal to 120% of the principal amount of each May 2022 Note and any accrued and unpaid interest in the event of the consummation by the Company of any public or private offering or other financing pursuant to which the Company receives gross proceeds of at least $2,000,000 but not greater than $3,000,000; or b) one hundred percent (100%) of the then outstanding principal amount equal to 120% of the principal amount of a May 2022 Note and any accrued and unpaid interest in the event of the consummation by the Company of any public or private offering or other financing pursuant to which the Company receives gross proceeds of in excess of $3,000,000. In addition, pursuant to the May 2022 Notes, so long as such May 2022 Notes remain outstanding, the Company shall not enter into any financing transactions pursuant to which the Company sells its securities at a price lower than the $0.40 per share conversion price, subject to certain adjustments, without the written consent of the Investors.

The conversion of the May 2022 Notes are each subject to beneficial ownership limitations such that the Investors may not convert the May 2022 Notes to the extent that such conversion or exercise would result in an Investor being the beneficial owner in excess of 4.99% (or, upon election of the Investor, 9.99%) of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon such conversion, which beneficial ownership limitation may be increased or decreased up to 9.99% upon notice to the Company, provided that any increase in such limitation will not be effective until 61 days following notice to the Company.

The Company paid half of the May 2022 Notes principal balance upon its maturity on June 29, 2022 and an additional $112,500 in September 2022 and the remaining balance remains due and payable and is therefore in technical default.

With respect to the two May 2022 Notes with an aggregate outstanding principal balance of $312,500 as of December 31, 2022 the Company has reached an agreement with the two Investors. On January 10, 2023, the Company amended each of those notes by entering into a letter agreement between the Investors and the Company.The Letter Agreement modifies the terms of the notes by extending each note’s respective maturity date to September 30, 2023. In consideration for the extension, the Company amended the Fixed Conversion Price (as defined in each note) to $0.10, subject to any future adjustments as provided in each of the notes.

During May 2022, the Board of Directors granted 1,550,000 shares of restricted stock awards to our officers, directors and consultants. In addition, during August 2020 the Board of Directors granted 5,000,000 shares of restricted stock awards to our officers, directors and a consultant. Restricted stock awards are valued on the date of grant and have no purchase price for the recipient. Restricted stock awards typically vest over a period of time generally corresponding to yearly anniversaries of the grant date. Unvested shares of restricted stock awards may be forfeited upon the termination of service of employment with the Company, depending upon the circumstances of termination. Except for restrictions placed on the transferability of restricted stock, holders of unvested restricted stock have full stockholder’s rights, including voting rights and the right to receive cash dividends.

Item 6. [Reserved.]

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation.

The following information should be read in conjunction with the Financial Statements and Notes presented elsewhere in this Annual Report on Form 10-K. See Note 1 – “Summary of Significant Accounting Policies,” to the Financial Statements for the Years Ended December 31, 20212022 and 2020.2021.

Overview

The Company is anhas assessed various opportunities and strategic alternatives involving the acquisition, exploration and development of oil and gas exploration, development and production company, which is primarilyoil producing properties in the businessUnited States, including the possibility of drilling and operatingacquiring businesses or assets that provide support services for the production of oil and gas wells. From 2009 to 2020, the Company had pursued the exploration of potential oil and gas resources in the Concession – Perlas and Tyra concession blocks offshore Nicaragua in the Caribbean Sea, containing a total of approximately 1.4 million acres. However, in January 2020, the Company abandoned the Concessions.United States.

As a result, we are now involved with the following oil and gas producing properties:

Central Kansas Uplift - On April 1, 2021, we completed the acquisition of the Central Kansas Uplift Properties, under the same terms of the Asset Purchase Agreement which providedfor a purchase price of $900,000. The Company raised approximately $2.05 million on March 26, 2021 throughCentral Kansas Uplift Properties include the issuance of Series A Convertible Preferred Stock with detachable common stock purchase warrants.

production and mineral rights/leasehold for oil and gas properties, subject to overriding royalties to third parties, in the Central Kansas Uplift geological formation covering over 11,000 contiguous acres (the “Properties”). The purchase of the Properties included the existing production equipment, infrastructure and ownership of 11 square miles of existing 3-D seismic data on the acreage. The Properties include a horizontal producing well, horizontal saltwater injection well, conventional saltwater disposal well and two conventional vertical producing wells, which currently produce from the Reagan Sand Zone with an approximate depth of 3,600 feet.

We have commenced rework of the existing production wells immediately after completion of the acquisition of the Properties and have performed testing and evaluation of the existence of noble gas reserves on the Properties including helium, argon and other rare earth minerals and minerals/gases. Testing of the Properties for noble gas reserves has provided encouraging but not yet conclusive results and the Company haswe have yet to determine the possibility of commercializing the noble gas reserves on the Properties. The Company plans to assess the Properties’ existing oil and gas reserves, onincluding the Properties, while continuing the evaluation ofexploration for the existence of new oil and gas zones and other mineral reserves, and specificallyin particular, the noble gas reserves that the Properties may hold.

During the year ended December 31, 2022, the Company changed its strategy regarding the Central Kansas Uplift considering the reduced net cash flows from the sale of crude oil production. The reduction in net cash flows was attributable to lower spot crude oil prices during 2022 compared to 2021 and higher than anticipated operating costs related to the operation of the horizontal wells on the Properties. The Company has shut down the horizontal production wells as of December 31, 2022 and is considering the deepening of the conventional wells on the property to explore for helium and other noble gases that may be present in deeper producing zones. Accordingly, the Company has recorded an impairment charge of $712,812 to reduce the capitalized tangible and intangible costs related to its Central Kansas Uplift properties to zero as of December 31, 2022.

Hugoton Gas Field Farm-Out - On April 4, 2022, the Company acquired a 40% participation in a Farmout Agreement by and between Sunflower Exploration, LLC as the Farmee and Scout Energy Partners as Farmor with regards to its oil and gas interests in the Hugoton Gas Field, located in Haskell and Finney Counties, Kansas. The Company has joined three other parties to explore for and develop potential oil, natural gas, noble gases and brine minerals on the properties underlying the Farmout Agreement (collectively the “Hugoton JV”).

The Farmout Agreement covers drilling and completion of up to 50 wells, with the first exploratory well spudded on May 7, 2022. The Hugoton JV will utilize Scout’s existing infrastructure assets including water disposal, gas gathering and helium processing. The Farmout Agreement provides the Hugoton JV with rights to take in-kind and market its share of helium at the tailgate of Jayhawk Gas Plant, which will enable the Hugoton JV to market and sell the helium produced at prevailing market prices.

WeThe Hugoton JV also acquired the right to all brine minerals subject to a ten percent (10%) royalty to Scout, across Finney and Haskell Counties. Brine minerals are harvested from the formation water produced from active, and to be drilled, oil and gas wells and may find it necessaryinclude a variety of dissolved minerals including bromine and iodine. The Hugoton JV plans to obtain new sourcestarget brine minerals with commercial quantities of debt and/or equity capitalbromine and iodine. The Company through the Hugoton JV is currently developing proprietary technology to fundrecover brine minerals, particularly with respect to bromine, which is well underway and has demonstrated recovery efficiency and is expected to be available for use in existing and future development wells.

The Hugoton JV believes that its unconventional theory has not previously been targeted for exploration by historical operations in the explorationfield. The initial exploratory well was spud on May 7, 2022 near Garden City, Kansas, with production casing set after testing and developmentcompletion logs identified at least two potential zones with substantial gas and helium reserves. The initial well was completed upon the successful perforation across two lower intervals of the Properties enumerated above, asChase group of formations. The fracture stimulation was completed in two stages during June 2022. The well aswas connected to satisfy our existing debt obligations. We can provide no assurance that we will be ablethe pipeline and commenced commercial production and sales of natural gas, natural gas liquids and helium on August 17, 2022. The Company is continuing to obtain sufficient new debt/equity capitalevaluate the initial flows of both natural gas, natural gas liquids and helium to fund our planned developmentdetermine its plan for additional wells on the farmout.

The Company performed the ceiling test to assess potential impairment of the Properties.capitalized costs relative to its Hugoton Gas Field Project. The ceiling test indicated an impairment charge of $192,762 was required to reduce the total capitalized costs to $88,687 as of December 31, 2022. Accordingly, the Company has recorded an impairment charge of $192,762 to reduce the capitalized tangible and intangible costs related to its Hugoton Gas Field properties to $88,687 as of December 31, 2022.

Investment in GMDOC, LLC - On May 3, 2022, the Company entered into an operating agreement (the “Operating Agreement”) pursuant to which the Company acquired 17 (or 60.7143%) of 28 limited liability membership interests (the “Interests”) in GMDOC, LLC, a Kansas limited liability company (“GMDOC”), for an aggregate purchase price of $4,037,500, and was subsequently admitted as a member of GMDOC.

With respect to its cash capital contribution, the Company paid a non-refundable cash deposit for the membership interests in the amount of $50,000 on May 3, 2022. The Company paid the remainder of the cash contribution for the membership interests, or $800,000, on May 16, 2022. The remainder of the Company’s capital contribution, or $3,187,500, was financed by the Bank Loan (as defined below).

GMDOC had previously acquired 70% of the working interests (the “Acquisition”) in certain oil and gas leases (the “GMDOC Leases”) from Castelli Energy, L.L.C., an Oklahoma limited liability company. The GMDOC Leases cover approximately 10,000 acres located in Southern Kansas near the Oklahoma border. The GMDOC Leases currently produce approximately 100 barrels of oil per day and 1.5 million cubic feet of natural gas per day on a gross basis.

GMDOC is managed by two members: Darrah Oil Company, LLC, and Grand Mesa Operating Company, (collectively the “Managing Members”), which also serve as the operating companies under the GMDOC Leases.

Name Change and Reincorporation Matters

At the Company’s Annual Meeting of Stockholders held on October 13, 2021, the stockholders approved an amendment to the Company’s Certificate of Incorporation, changing the Company’s name to American Noble Gas Inc. The stockholders also approved an amendment to the Company’s Certificate of Incorporation, removing the provision providing that any action taken by the stockholders by written consent in lieu of a meeting requires that all of the Company’s stockholders entitled to vote on such action consent in writing thereto. Finally, the stockholders approved the 2021 Plan and we reserved 5,000,000 shares of the Company’s Common Stock, par value $0.0001 per share (the “Common Stock”) for issuance under the 2021 Plan.

Reincorporation in Nevada

On December 7, 2021, pursuant to the Agreement and Plan of Merger, the PredecessorAmerican Noble Gas, Inc., a Delaware corporation, merged with and into its wholly owned subsidiary, AMGAS-NevadaAmerican Noble Gas Inc., a Nevada corporation (“AMGAS-Nevada” and/or the “Company”) with AMGAS-Nevada continuing as the surviving corporation. In conjunction with the merger, AMGAS-Nevada succeeded to the assets, continued the business and assumed the rights and obligations of the Predecessorpredecessor Delaware corporation existing immediately prior to the merger. The merger was consummated by the filing of a Certificate of Merger on December 7, 2021 with the Secretary of State of the State of Delaware and Articles of Merger with the Secretary of State of the State of Nevada. The Agreement and Plan of Merger and transactions contemplated thereby were adopted by the holders of a majority of the outstanding shares of the Predecessor’s Common Stockpredecessor’s common stock, par value $0.0001 per share, and/or Series A Convertible Preferred Stock, par value $0.0001 per share, on an as-converted common stock basis, by written consent in lieu of a special meeting of stockholders, in accordance with the Delaware General Corporation Law.

Pursuant to the Agreement and Plan of Merger, (i) each outstanding share of the Predecessor’s common stock automatically converted into one share of common stock, par value $0.0001 per share,Common Stock of AMGAS-Nevada, (ii) each outstanding share of the Predecessor’spredecessor’s Series A Convertible Preferred Stock automatically converted into one share of Series A Convertible Preferred Stock, par value $0.0001 per share, of AMGAS-Nevada (the “Series A Convertible Preferred Stock”), and (iii) each outstanding option, right or warrant to acquire shares of the Predecessorpredecessor common stock converted into an option, right or warrant to acquire an equal number of shares of AMGAS-Nevada common stockCommon Stock under the same terms and conditions as the original options, rights or warrants.

Similar to the shares of common stock of the Predecessor prior to the merger, the shares of AMGAS-Nevada common stock areCommon Stock were quoted on the OTCQB tier operated by the OTC Markets Group Inc. under the symbol “IFNY”. In accordance with the Agreement and Plan of Merger, each outstanding certificate previously representing shares of the Predecessor’spredecessor’s common stock or Series A Convertible Preferred Stock automatically represents, without any action of the Predecessor’spredecessor’s stockholders, the same number of shares of AMGAS-Nevada common stockCommon Stock or Series A Convertible Preferred Stock, as applicable.

Pursuant to the Agreement and Plan of Merger, the directors and officers of the Predecessorpredecessor immediately prior to the merger became the directors and officers of AMGAS-Nevada and continued their respective directorship or services with the Company on the same terms as their respective directorship or services with the Predecessorpredecessor immediately prior to the merger.

As a result of the merger, the internal affairs of the Company ceased to be subject to the Delaware General Corporation Law or governed by the Predecessor’spredecessor’s Certificate of Incorporation, as amended, and its bylaws. As of the December 7, 2021, effective date of the merger, the Company is now subject to the Nevada Revised Statutes and is governed by the Company’s Articles of Incorporation.Incorporation as filed in the State of Nevada and the Company’s Bylaws.

All references to the Company in this Annual Report on Form 10-K refer to the Predecessorpredecessor prior to the merger, and AMGAS-Nevada subsequent to the merger.

20212023 Operational and Financial Objectives

COVID–19 PANDEMIC

The financial statements contained in this Annual Report on Form 10-K as well as the description of our business contained herein, unless otherwise indicated, principally reflect the status of our business and the results of our operations as of and for the year ended December 31, 2021.2022. Economies throughout the world have been and continue to be disruptedsuffer disruptions by the continuing effects of the COVID-19 pandemic, includingquarantines, business closures and the recent risereluctance of individuals to leave their homes as a result of the new Omicron variant.COVID-19 pandemic. In particular, the oil and gas market has been severely adversely impacted by the effects of the COVID-19 pandemic because of the substantial and abrupt decrease in the demand for oil and gas globally followed by the recent resurgence in oil and natural gas prices. In addition, the capital markets have experienced periods of disruption and our efforts to raise necessary capital in the future may be adversely impacted by the continuing effects of the COVID-19 pandemic and investor sentiment and we cannot forecast with any certainty when the lingering uncertainty caused by the COVID-19 pandemic will cease to impact our business and the results of our operations. In reading this Annual Report on Form 10-K, including our discussion of our ability to continue as a going concern set forth herein, in each case, consider the additional uncertainties caused by the COVID-19 pandemic.

Corporate Activities

The Company’s 20212023 operating objectives haveare focused on: 1) raising the necessary funds to complete the acquisitionfinance exploration and development of the Properties,Hugoton Gas Field through the Hugoton JV, 2) completingraising the acquisitionnecessary funds for repayment of obligations that become due, or are in default and/or past due, 3) raising the Properties, 3) commencing rework onfunds necessary to explore and develop the Properties, including testing and evaluation of noble gas reserves in additional to the oil and gas producing zones, 4) raising the funds necessary to allow the Company to compete for new oil and 4) resolvinggas properties that become available for acquisition purposes, and 5) funding our daily operations and the repayment of other obligations that become due, or are in default and/or past due.

Recent financings – –

Issuance of Series AB Convertible Preferred Stock

May 2023 Issuance - On March 26, 2021,May 4, 2023, the Company issuedentered into a securities purchase agreement with three (3) accredited investors providing for an aggregate investment of $750,000 by the investors for the issuance by the Company to them of (i) 7,500 shares of Series AB Convertible Preferred Stock with a stated/liquidation value of $100 per share (the “May 2023 Series B Convertible Preferred Stock”); and (ii) warrants, with a term of five and a half (5.5) years, exercisable six (6) months after issuance, to purchase an aggregate principal face amount of up to approximately $2,500,000 subject to a 10% original issue discount. The Series A Convertible Preferred Stock is, subject to certain conditions, convertible into15,000,000 shares of Common Stock at a rate of $0.32 per share and will be subject to a 10% dividend rate per annum, payable quarterly in cash or registered Common Stock, subject to equity conditions. The holders were also granted demand registration rights. The Company also issued warrants along-side of the Convertible Preferred Stock investors to purchase up to 6,410,250 shares (assuming the $2.5 million offering is fully subscribed) of Common Stock at an exercise price of $0.39five ($0.05) cents per share, subject to customary adjustments.adjustments thereunder. The common stock purchase7,500 shares of May 2023 Series B Convertible Preferred Stock are convertible into an aggregate of up to 15,000,000 shares of Common Stock. Holders of the warrants are exercisable commencingmay exercise the warrants by paying the applicable cash exercise price or, if there is not an effective registration statement for the sale of the shares of Common Stock underlying the warrants within six (6) months after issuancefollowing the closing date, as defined in the warrants, by exercising on a cashless basis pursuant to the formula provided in the warrants. The Company intends to use the proceeds of the May 2023 Series B Convertible Preferred Stock offering for development of Hugoton Gas Field and Central Kansas Uplift Properties and for general working capital purposes.

The Company also entered into that certain registration rights agreement, pursuant to which the Company agreed to file a registration statement within forty-five (45) days following the closing of the May 2023 Series B Convertible Preferred Stock transaction, to register the shares of Common Stock issuable upon the conversion of the May 2023 Series B Convertible Preferred Stock and the common stock underlying the warrants. The Company is to use its best efforts to cause such registration statement to be declared effective within forty-five (45) days after the filing thereof, but in any event no later than the ninetieth (90^th) calendar day following the closing of the issuance of the May 2023 Series B Convertible Preferred Stock.

On May 5, 2022, Ozark Capital, LLC (“Ozark”) acquired 2,500 shares of Series B Preferred Stock (convertible into 5,000,000 shares of Common Stock), together with warrants to acquire 5,000,000 shares of Common Stock at five cents ($0.05) per share for a total cash contribution of $250,000. Ozark and its affiliates hold over 10% of the holders’ discretion with a termshares of five (5) years. the Company’s Common Stock as of December 31, 2022. Accrued dividends on the Class A Convertible Preferred Stock attributable to Ozark were $11,080 and $8,523 for the years ended December 31, 2022 and 2021, respectively. The Company has outstanding accrued and unpaid preferred dividends totaling $5,601 and $ — relative to Ozark’s Series A Preferred Stock as of December 31, 2022 and 2021, respectively.

Issuances of Series A Convertible Preferred Stock

March 2021 Issuance - On March 26, 2021, the Company entered into a securities purchase agreement with five (5) accredited investors purchasedproviding for an aggregate investment of $2,050,000 by the investors for the issuance by the Company to them of (i) 22,776 shares of Series A Convertible Preferred Stock with a stated/liquidation value of $100 per share (the “March 2021 Series A Convertible Preferred Stock”); and (ii) warrants, with a term of five and a half (5.5) years, exercisable six (6) months after issuance, to purchase an aggregate cash purchase price of $2,050,000 together with warrantsup to purchase a total of 5,256,410 shares of Common Stock at an exercise price of thirty-nine ($0.39) per share, subject to customary adjustments thereunder. The March 2021 Series A Convertible Preferred Stock is convertible into an aggregate of up to 7,117,500 shares of Common Stock.

Holders of the warrants may exercise them by paying the applicable cash exercise price or, if there is not an effective registration statement for the sale of the shares of Common Stock underlying the warrants within six (6) months following the closing date, as defined in the warrants, by exercising on a cashless basis pursuant to the formula provided in the warrants. Net proceeds from the issuance of March 2021 Series A Convertible Preferred Stock wastotaled $1,929,089 after deducting the placement agent fee and other expenses of the offering. The Company used the proceeds of the March 2021 Series A Convertible Preferred Stock offering to complete the acquisition and development of the Properties, to pay-off allcertain outstanding convertible notes payable (see Note 4) and for general working capital.capital purposes.

The Company also entered into that certain registration rights agreement, pursuant to which the Company agreed to file a registration statement within forty-five (45) days following the closing of the acquisition of the Properties, which occurred on April 1, 2021, to register the shares of Common Stock underlying the warrants. The Company is to use its best efforts to cause such registration statement to be declared effective within forty-five (45) days after the filing thereof, but in any event no later than the ninetieth (90^th) calendar day following the closing of the acquisition of the Properties, which occurred on April 1, 2021. The Company completed the required registration of these shares on Form S-1, which the Securities and Exchange Commission declared effective on August 4, 2021.

The holders of the March 2021 Series A Convertible Preferred Stock agreed to a 4.99% beneficial ownership cap that limits the investors’ ability to convert its March 2021 Series A Convertible Preferred Stock and/or exercise its Common Stock purchase warrants. Such limitation can be raised to 9.99% upon 60 days advance notice to the Company.

The Company has accrued preferred dividends totaling $199,300 and $174,449 relative to the March 2021 Series A Convertible Preferred Stock which was charged to additional paid in capital during the years ended December 31, 2022 and 2021, respectively. The Company has outstanding accrued and unpaid preferred dividends totaling $44,805 and $ — relative to the March 2021 Series A Convertible Preferred Stock as of December 31, 2022 and 2021, respectively.

The holders of March 2021 Series A Convertible Preferred Stock exercised their rights to convert a total of 3,000 shares of March 2021 Series A Convertible Preferred Stock into 937,500 shares of Common Stock during the year ended December 31, 2022. The holders exercised their rights to convert a total of 700 shares of March 2021 Series A Convertible Preferred Stock into 218,750 shares of Common Stock during the year ended December 31, 2021.

On March 26, 2021, Ozark acquired 1,111 shares of March 2021 Series A Convertible Preferred Stock (convertible into 347,188 shares of Common Stock), together with warrants to acquire 256,410 shares of Common Stock at fifty cents ($0.50) per share for a total cash of $100,000. Ozark and its affiliates hold over 10% of the shares of the Company’s Common Stock as of December 31, 2022. Accrued dividends attributable to Ozark were $11,080 and $8,523 for the years ended December 31, 2022 and 2021 respectively. The Company has outstanding accrued and unpaid preferred dividends totaling $2,800 and $ — relative to the Ozark’s Series A Convertible Preferred Stock as of December 31, 2022 and 2021, respectively.

The holders converted a total of 3,000 and 700 shares of Series A Preferred Stock into common stock during the years ended December 31, 2022 and 2021, respectively.

All holders of the March 2021 Series A Convertible Preferred Stock, including Ozark, have agreed to a 4.99% beneficial ownership cap that limits the investors’ ability to convert its Series A Convertible Preferred Stock and/or exercise its Common Stock purchase warrants. Such limitation can be raised to 9.99% upon 60 days’ advance notice to the Company.

June 2022 Issuance of 8% Note with Detachable Warrants – - On August 30, 2021,June 15, 2022, the Company entered into a securities purchase agreement with an accredited investor providing for an aggregate investment of $500,000 by the investor for the issuance by the Company of (i) 5,000 shares of Series A Convertible Preferred Stock with a stated/liquidation value of $100 per share (the “June 2022 Series A Convertible Preferred Stock”); and (ii) warrants, with a term of five and a half (5.5) years, exercisable six (6) months after issuance, to purchase an aggregate of up to 1,666,667 shares of Common Stock at an exercise price of thirty cents ($0.30) per share, subject to customary adjustments thereunder. The June 2022 Series A Convertible Preferred Stock is convertible into an aggregate of up to 1,562,500 shares of Common Stock. The holder of the warrants may exercise them by paying the applicable cash exercise price or, if there is not an effective registration statement for the sale of the shares of Common Stock underlying the warrants within six (6) months following the closing date, as defined in the warrants, by exercising on a cashless basis pursuant to the formula provided in the warrant. Net proceeds from the issuance of the June 2022 Series A Convertible Preferred Stock totaled $500,000. The Company used the proceeds of the June 2022 Series A Convertible Preferred Stock offering to pay-off certain outstanding convertible notes payable and for general working capital purposes.

The Company also entered into that certain registration rights agreement, pursuant to which the Company agreed to file a registration statement within forty-five (45) days following the closing of the of the June 2022 Series A Preferred Stock, which occurred on June 15, 2022, to register the shares of Common Stock underlying the warrants. The Company is to use its best efforts to cause such registration statement to be declared effective within forty-five (45) days after the filing thereof, but in any event no later than the ninetieth (90^th) calendar day following the closing of the offering, which occurred on June 15, 2022.

The holders of the June 2022 Series A Convertible Preferred Stock agreed to a 4.99% beneficial ownership cap that limits the investors’ ability to convert its June 2022 Series A Convertible Preferred Stock and/or exercise its Common Stock purchase warrants. Such limitation can be raised to 9.99% upon 60 days advance notice to the Company.

The Company has accrued preferred dividends totaling $27,260 and $-0- relative to the June 2022 Series A Convertible Preferred Stock which was charged to additional paid in capital during the years ended December 31, 2022 and 2021, respectively. The Company has outstanding accrued and unpaid preferred dividends totaling $27,260 and $ — relative to the June 2022 Series A Convertible Preferred Stock as of December 31, 2022 and 2021, respectively.

There were no conversions during the years ended December 31, 2022 and 2021.

August/September 2022 Issuances – During August and September 2022, the Company entered into a securities purchase agreement with three accredited investors providing for an aggregate investment of $145,000 by the investors for the issuance by the Company of (i) 1,450 shares of Series A Convertible Preferred Stock with a stated/liquidation value of $100 per share (the “August/September 2022 Series A Convertible Preferred Stock”); and (ii) warrants, with a term of five and a half (5.5) years, exercisable six (6) months after issuance, to purchase an aggregate of up to 483,332 shares of Common Stock at an exercise price of thirty ($0.30) per share, subject to customary adjustments thereunder. The August/September 2022 Series A Convertible Preferred Stock is convertible into an aggregate of up to 453,125 shares of Common Stock. The holders of the warrants may exercise them by paying the applicable cash exercise price or, if there is not an effective registration statement for the sale of the shares of Common Stock underlying the warrants within six (6) months following the closing date, as defined in the warrants, by exercising on a cashless basis pursuant to the formula provided in the warrant. Net proceeds from the issuance of the August/September 2022 Series A Convertible Preferred Stock totaled $145,000. The Company used the proceeds of the August/September 2022 Series A Convertible Preferred Stock offering to pay-off certain outstanding convertible notes payable and for general working capital purposes.

The holders of the August/September 2022 Series A Convertible Preferred Stock agreed to a 4.99% beneficial ownership cap that limits the investors’ ability to convert its August/September 2022 Series A Convertible Preferred Stock and/or exercise its Common Stock purchase warrants. Such limitation can be raised to 9.99% upon 60 days advance notice to the Company.

The Company has accrued preferred dividends totaling $5,059 and $-0- relative to the August/September 2022 Series A Convertible Preferred Stock which was charged to additional paid in capital during the years ended December 31, 2022 and 2021, respectively. The Company has outstanding accrued and unpaid preferred dividends totaling $5,059 and $ — relative to the August/September 2022 Series A Convertible Preferred Stock as of December 31, 2022 and 2021, respectively.

There were no conversions during the years ended December 31, 2022 and 2021.

Issuances of Convertible Notes Payable

8% Convertible Notes Payable due September 15, 2022 (in default) - On June 8, 2022, the Company issued to an accredited investor an unsecured convertible note payable due September 15, 2022 (the “June 2022 Note”), with an aggregate principal face amount of approximately $350,000. The June 2022 Note Investoris, subject to certain conditions, convertible into an aggregate of 700,000 shares of Common Stock, at a price of fifty cents ($0.50) per share. The Company also issued a five-year Common Stock purchase warrant to purchase up to 700,000 shares of Common Stock at an exercise price of fifty cents ($0.50) per share, subject to customary adjustments (the “June 2022 Warrants”) which are immediately exercisable. The investor purchased the June 2022 Note and June 2022 Warrant from the Company for an aggregate purchase price of $350,000 and the proceeds were used for drilling and completion costs on the initial well drilled under the Hugoton Gas Field participation agreement and general working capital purposes. The Company also granted the investor certain piggy-back registration rights whereby the Company has agreed to register for resale the shares of Common Stock underlying the June 2022 Warrant and the conversion of the June 2022 Note unless the shares of the Company commence to trade on the NYSE American; the Nasdaq Capital Market; the Nasdaq Global Market; the Nasdaq Global Select Market; or the New York Stock Exchange, within one hundred twenty (120) days after the closing date.

The June 2022 Note bears interest at a rate of eight percent (8%) per annum, may be voluntarily repaid in cash in full or in part by the Company at any time in an amount equal to the remaining principal amount of the underlying note and any accrued and unpaid interest.

The underlying notes and warrants contain customary events of default, representations, warranties, agreements of the Company and the investors and customary indemnification rights and obligations of the parties thereto, as applicable.

The Company did not pay the principal balance due on the June 2022 Note upon its maturity on September 15, 2022 and the remaining balance remains due and payable and is therefore in technical default as of December 31, 2022.

On May 5, 2023, the Company reached an agreement with the holder of two separate convertible notes payable in the aggregate principal face amount of approximately $450,000 (including the June 2022 Note), which the Company did not pay by their maturity dates. The Company and the holder of the two convertible notes payable entered into a new convertible promissory note (the “New Note”), exchanging the outstanding principal amount of the old convertible notes payable into the New Note, with a maturity date of September 30, 2023. Upon issuance of the New Note, the old convertible notes payable were cancelled and the repayment defaults under the prior convertible notes payable were cured with the entry into the New Note. The conversion price of the New Note was reduced from $0.50 per share to $0.40 per share however, the interest rate and other significant terms of the New Note are the same as those of the prior convertible notes payable.

8% Convertible Notes Payable due June 29, 2022 (in default) - The Company entered into a securities purchase agreement with two accredited investors for the Company’s 8% convertible notes payable due June 29, 2022 (the “May 2022 Notes”), with an aggregate principal amount of $850,000. The May 2022 Notes are, subject to certain conditions, convertible into an aggregate of 2,125,000 shares of Common Stock, at a price of forty cents ($0.40) per share. The Company also issued an aggregate of 425,000 shares of Common Stock as commitment shares (“Commitment Shares” and, together with the May 2022 Notes and Conversion Shares, the “Securities”) to the investors as additional consideration for the purchase of the May 2022 Notes. The closing of the offering of the Securities occurred on May 13, 2022, when the investors purchased the Securities for an aggregate purchase price of $850,000. The Company has also granted the investors certain automatic and piggy-back registration rights whereby the Company has agreed to register the resale by the Investors of the Conversion Shares. The proceeds of this offering of Securities was used to purchase the Company’s membership interests in GMDOC.

The May 2022 Notes bear interest at a rate of eight percent (8%) per annum, may be voluntarily repaid in cash in full or in part by the Company at any time (subject to the occurrence of an event of default) in an amount equal to 120% of the principal amount of each May 2022 Note and any accrued and unpaid interest, and shall be mandatorily repaid in cash in an amount equal to a) fifty percent (50%) of the then outstanding principal amount equal to 120% of the principal amount of each May 2022 Note and any accrued and unpaid interest in the event of the consummation by the Company of any public or private offering or other financing pursuant to which the Company receives gross proceeds of at least $2,000,000 but not greater than $3,000,000; or b) one hundred percent (100%) of the then outstanding principal amount equal to 120% of the principal amount of a May 2022 Note and any accrued and unpaid interest in the event of the consummation by the Company of any public or private offering or other financing pursuant to which the Company receives gross proceeds of in excess of $3,000,000. In addition, pursuant to the May 2022 Notes, so long as such May 2022 Notes remain outstanding, the Company shall not enter into any financing transactions pursuant to which the Company sells its securities at a price lower than the $0.40 per share conversion price, subject to certain adjustments, without the written consent of the investors.

The conversion of the May 2022 Notes are each subject to beneficial ownership limitations such that the investors may not convert the May 2022 Notes to the extent that such conversion or exercise would result in an Investor being the beneficial owner in excess of 4.99% (or, upon election of the Investor, 9.99%) of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon such conversion, which beneficial ownership limitation may be increased or decreased up to 9.99% upon notice to the Company, provided that any increase in such limitation will not be effective until 61 days following notice to the Company.

Pursuant to the purchase agreement for the Securities, for a period of twelve (12) months after the closing date, the investors have a right to participate in any issuance of the Company’s Common Stock, Common Stock equivalents, conventional debt, or a combination of such securities and/or debt, up to an amount equal to thirty-five percent (35%) of the subsequent financing.

The Company also entered into that certain registration rights side letter, pursuant to which, in the event the Company’s shares of Common Stock have not commenced trading on the NYSE American; the Nasdaq Capital Market; the Nasdaq Global Market; the Nasdaq Global Select Market; or the New York Stock Exchange, within one hundred twenty (120) days after the closing date, and, thereafter, the Company agreed to file a registration statement under the Securities Act to register the offer and sale, by the Company, of Common Stock underlying the May 2022 Notes in the event that such notes are not repaid prior to such 120-day period.

The Company paid half of the May 2022 Notes principal balance upon its maturity on June 29, 2022 and an additional $112,500 in September 2022 and the remaining balance remains due and payable and is therefore in technical default. With respect to the two May 2022 Notes with an aggregate outstanding principal balance of $312,500 as of December 31, 2022 the Company has reached an agreement with the two investors. On January 10, 2023, the Company amended each of those notes by entering into a letter agreement between the investors and the Company. The Letter Agreement modifies the terms of the May 2022 Notes by extending each note’s respective maturity date to September 30, 2023. In consideration for the extension, the Company amended the Fixed Conversion Price (as defined in each note) to $0.10, subject to any future adjustments as provided in each of the notes.

8% Convertible Notes Payable due October 29, 2022 (in default) - On August 30, 2021, the Company issued to an accredited investor (the “8% Note Investor”) an unsecured convertible note payable due October 29, 2022 (the “8% Note”), with an aggregate principal face amount of approximately $100,000. The 8% Note is, subject to certain conditions, convertible into an aggregate of 200,000 shares of Common Stock, at a price of $0.50fifty cents ($0.50) per share. The Company also issued a 8% Note Warrantfive and one half-year Common Stock purchase warrant to purchase up to 200,000 shares of Common Stock at an exercise price of $0.50fifty cents ($0.50) per share.share, subject to customary adjustments (the “8% Note Warrant”) which are immediately exercisable. The 8% Note Investor purchased the 8% Note and 8% Note Warrant from the Company for an aggregate purchase price of $100,000.$100,000 and the proceeds were used for general working capital purposes. The Company also granted the 8% Note Investor certain piggy-back registration rights whereby the Company has agreed to register thefor resale by the 8% Note Investor of the shares underlying the 8% Note Warrant and the conversion of the 8% Note unless the shares of the Company commences to trade on the NYSE American; the Nasdaq Capital Market; the Nasdaq Global Market; the Nasdaq Global Select Market; or the New York Stock Exchange, within one hundred twenty (120) days after the Closing Date, as defined in the 8% Note and 8% Note Warrant.closing date.

Issuance of 3% Notes with Detachable Warrants - On March 31,October 29, 2021, the Company entered into Debt Settlement Agreements with six creditors (five of which were related parties) which extinguished accountsissued to three accredited investors (the “October 8% Note Investors”) unsecured convertible notes payable and accrued liabilities totaling $2,866,497 in exchange for the issuance of $28,665 in principal balance of the 3% Notes with detachable warrants to purchase 5,732,994 shares of Common Stock for $0.50 per share. The 3% Notes allows for prepayment at any time with all principal and accrued interest becoming due and payable at maturity on March 30, 2026. The 3% Notes are convertible as to principal and any accrued interest, at the option of holder, into shares of the Common Stock at any time after the issue date and prior to the close of business on the business day preceding March 30, 2026 at the rate of fifty cents ($0.50) per share, subject to normal and customary adjustments. The warrants to purchase 5,732,994 shares of Common Stock issued pursuant to the Debt Settlement Agreements were valued at $1,605,178 using the Black-Scholes methodology.

Issuance of August Notes - On August 19, 2020, we entered into the August Purchase Agreement with the August Investor for August Note,October 29, 2022 (the “October 8% Notes”), with an aggregate principal face amount of approximately $365,169.$550,000. The August Note is,October 8% Notes are, subject to certain conditions, convertible into an aggregate of 3,943,8201,100,000 shares of Common Stock, at a price of $0.10fifty cents ($0.50) per share (the “Fixed Conversion Price”). Weshare. The Company also issued the five-year August Warrantfive and one half-year Common Stock purchase warrants to purchase up to 800,0001,650,000 shares of Common Stock at an exercise price of $0.50 per share.share, subject to customary adjustments (the “October 8% Note Warrants”) which are immediately exercisable. The August InvestorOctober 8% Note Investors purchased such securitiesthe October 8% Notes and October 8% Note Warrants from the Company for an aggregate purchase price of $325,000. We$550,000 and the proceeds were used for general working capital purposes. The Company also granted the August InvestorOctober 8% Note Investors certain automatic and piggy-back registration rights whereby wethe Company has agreed to register thefor resale by the August Investor of the shares underlying the August WarrantOctober 8% Note Warrants and the conversion of the August Note, which was satisfied on August 5, 2021 by filing a registration statement on Form 424B4 to register for resale all ofOctober 8% Notes unless the shares of Commonthe Company commences to trade on the NYSE American; the Nasdaq Capital Market; the Nasdaq Global Market; the Nasdaq Global Select Market; or the New York Stock issuable upon exercise ofExchange, within one hundred twenty (120) days after the August Warrant issued to the August Investorclosing date.

The August8% Note bearsand the October 8% Notes all bear interest at a rate of eight percent (8%) per annum, with 12 months guaranteed, may be voluntarily repaid in cash in full or in part by usthe Company at any time in an amount equal to 115%120% of the principal amount of the August Noteunderlying notes and any accrued and unpaid interest,interest. Fifty percent (50%) of the 8% Note and the October 8% Notes shall be mandatorily repaid in cash in an amount equal to 115%120% of the principal amount of the August Noteunderlying notes and any accrued and unpaid interest in the event of the consummation by usthe Company of any public or private offering or other financing pursuant to which we receivethe Company receives gross proceeds of at least $2,500,000. The August Note is convertible at any time by the August Investor$2,000,000 and we shall have the right to request that the August Investor convert the August Note in full or in part at the Fixed Conversion Price in the event that the VWAP (as defined in the August Note)one-hundred percent (100%) of the Common Stock exceeds $0.75 for twenty consecutive trading days.underlying notes plus accrued interest shall be mandatorily repaid in an amount equal to 120% of outstanding principal and interest in cases in which the Company receives gross proceeds of at least $3,000,000. In addition, pursuant to the August8% Notes Note and the October 8% Notes, so long as the August Note remainsunderlying notes remain outstanding, we shall notthe Company cannot enter into any financing transactions pursuant to which the Company sells its securities at a price lower than $0.50 cents per share without the Fixed Conversion Price, without written consent of the August8% Note Investor.

The conversion of the August8% Note and the October 8% Notes and the exercise of the August Warrantunderlying warrants are each subject to beneficial ownership limitations such that the August8% Note Investor and the October 8% Note Investors may not convert the August Noteunderlying notes or exercise the August Warrantunderlying warrants to the extent that such conversion or exercise would result in any of the August Investorinvestors being the beneficial owner in excess of 4.99% (or, upon election of the August Investor,investors, 9.99%) of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon such conversion or exercise, which beneficial ownership limitation may be increased or decreased up to 9.99% upon notice to us,the Company, provided that any increase in such limitation will not be effective until 61 days following notice to us.the Company.

We usedThe Company, the proceeds8% Note Investor and the October 8% Note Investors have agreed that for so long as the underlying warrants remain outstanding, the investors have the right to participate in any issuance of Common Stock, conventional debt, or a combination of such securities and/or debt, up to an amount equal to thirty-five percent (35%) of such subsequent financing.

The Company did not pay the August Noteprincipal balance due on the 8% Notes and the October 8% Notes upon their maturity on October 29, 2022 and the remaining balance remains due and payable and is therefore in technical default as of December 31, 2022. With respect to pay off $60,125 inthe two October 8% Notes with an outstanding aggregate principal balance of $550,000 as of December 31, 2022, the Company has reached an agreement with the two October 8% Note Investors. On January 10, 2023, the Company amended each of these October 8% Notes by entering into Letter Agreement between the October 8% Investors and the Company. The Letter Agreement modifies the terms of the October 8% Notes by extending each note’s respective maturity date to September 30, 2023. In consideration for the extension, the Company amended the Fixed Conversion Price (as defined in each note) to $0.10, subject to any future adjustments as provided in each of the notes.

On May 5, 2023, the Company reached an agreement with the holder of two separate convertible notes payable thatin the aggregate principal face amount of approximately $450,000 (including $100,000 principal balance of the notes payable due October 29, 2022 and $350,000 principal balance of the note payable due September 15, 2022), which the Company did not pay by their maturity dates. The Company and the holder of the two convertible notes payable entered into the New Note, exchanging the outstanding principal amount of the old convertible notes payable into the New Note, with a maturity date of September 30, 2023. Upon issuance of the New Note, the old convertible notes payable were in default,cancelled and the repayment defaults under the prior convertible notes payable were cured with the entry into the New Note. The conversion price of the New Note was reduced from $0.50 per share to pay$0.40 per share however, the $100,000 required byinterest rate and other significant terms of the SKM Exchange Agreement and for general working capital.New Note are the same as those of the prior convertible notes payable.

3% Convertible Notes Payable due March 31, 2026 - On March 26,31, 2021, the Company exercised its right to retire the August Noteentered into Debt Settlement Agreements with six creditors (five of which were related parties) which extinguished accounts payable and accrued liabilities totaling $2,866,497 in conjunction withexchange for the issuance of Series A Convertible Preferred Stock. In accordance$28,665 in principal balance of 3% convertible notes payable (the “3% Notes”) with thedetachable warrants to purchase 5,732,994 shares of Common Stock for fifty cents ($0.50) per share (the 3% Note Warrants”). The 3% Notes allow for prepayment provisions contained in the August Note, the Company paidat any time with all principal and accrued interest becoming due and payable at maturity on March 30, 2026 (the “Maturity Date”). The 3% Notes are convertible as to principal and any accrued interest, at the 15% prepayment premium which totaled $453,539.option of holder, into shares of the Common Stock at any time after the issue date and prior to the close of business on the business day preceding the Maturity Date at the rate of fifty cents ($0.50) per share, subject to normal and customary adjustments. The 3% Note Warrants were valued at $1,605,178 using the Black-Scholes methodology.

Extinguishment of liabilities –

Debt Settlement Agreements - On March 31, 2021, the Company entered into Debt Settlement Agreements with six creditors (five of which were related parties) which extinguished accounts payable and accrued liabilities totaling $2,866,497 in exchange for the issuance of $28,665 in principal balance of the 3% Notes with detachable warrants to purchase 5,732,994 shares of Common Stock for $0.50 per share.the 3% Note Warrants. The 3% Notes allow for prepayment at any time with all principal and accrued interest becoming due and payable at maturity on March 30, 2026.the Maturity Date. The 3% Notes are convertible as to principal and any accrued interest, at the option of holder of the 3% Notes, into shares of the Common Stock at any time after the issue date and prior to the close of business on the business day preceding March 30, 2026 at the rate of fifty cents ($0.50) per share, subject to normal and customary adjustment. The warrants to purchase 5,732,994 shares of Common Stock issued pursuant to the Debt Settlement Agreements3% Note Warrants were valued at $1,605,178 using the Black-Scholes methodology.

Extinguishment of Convertible Note Payable - On March 26, 2021, the Company exercised its right to retire the August Notea convertible note payable originally issued in August 2020 (the “August 2020 Note”) in conjunction with the issuance of the March 2021 Series A Convertible Preferred Stock. In accordance with the prepayment provisions contained in the August 2020 Note, the Company paid $453,539 to retire all principal, accrued interest and the 15% prepayment premium.

Extinguishment of Notes Payable – On April 1, 2021, the Company and the holderholders of a $50,000 outstanding convertible notetwo notes payable aggregating $85,000 that were in default reached a settlement pursuant to whichwhereby the Company issued to such holder a total of 145,000245,000 shares of Common Stock in exchange for the extinguishment of the outstanding principal, accrued interest and associated common stockCommon Stock purchase warrants, which totaled $72,874$123,830, as of April 1, 2021. The 145,000 shares of Common Stock issued to extinguish the debt obligations were valued at $40,600 based on the closing market price on the date of the extinguishment. The extinguishment of the debt obligations resulted in a gain of $32,274,$55,230, which was recorded in the year ended December 31, 2021.

On April 1, 2021, the Company and the holder of the $35,000 outstanding convertible note reached a settlement, pursuant to which the Company issued a total of 100,000 shares of Common Stock in exchange for the extinguishment of the outstanding principal, accrued interest and associated common stock purchase warrants, which totaled $50,956 as of April 1, 2021. The 100,000 shares issued to extinguish the debt obligations were valued at $28,000 based on the closing market price on the date of the extinguishment. The extinguishment of the debt obligations resulted in a gain of $22,956, which was recorded in the year ended December 31, 2021.

Acquisition of Oil and Gas PropertiesUSNG Letter Agreement –

On July 31, 2019, weNovember 9, 2021, the Company entered into a letter agreement (the “USNG Letter Agreement”) with U.S. Noble Gas, LLC (“USNG”), pursuant to which USNG provides consulting services to the Company for exploration, testing, refining, production, marketing and distribution of various potential reserves of noble gases and rare earth element/minerals on the Company’s recently acquired 11,000-care oil and gas properties in the Option from Core to purchase the production and mineral rights/leasehold forOtis Albert Field located on the Properties. We paid a non-refundable depositThe USNG Letter Agreement would cover all of $50,000 to bind the Option, which provided us the right to acquirenoble gases, specifically helium, and rare earth elements/minerals potentially existing on the Properties for $2.5 million prior to December 31, 2019. The Company was not able to exercise the Option prior to December 31, 2019. On September 2, 2020, the Company acquired a new option from Core under similar terms as the Option. The newly acquired option, however, now permits the Company to purchase the Properties at a reduced price of $900,000 at any time prior to November 1, 2020 and the Company has agreed to immediately conduct a capital raise of between approximately $2 to $10 million to fund its acquisition and development ofCompany’s future acquisitions, if any, including the Properties. On December 14, 2020, the parties executed the Asset Purchase and Sale Agreement, which extended the new option to January 11, 2021, which has expired.Hugoton Gas Field.

We, Core, and Seller entered into the Side Letters on September 2, 2020 and March 31, 2021, pursuantThe USNG Letter Agreement also provided that USNG would supply a large vessel designed for flows up to which we and Core agreed to set the closing date5,000 barrels of the acquisition of the Properties under the Asset Purchase Agreement to April 1, 2021. Pursuant to the Side Letters,water per day at low pressures, known as a gas extraction/separator unit. The gas extraction/separator unit is a dewatering vessel that the Company is responsiblemay use for reimbursing Coremultiple wells in the future.

The USNG Letter Agreement required the Company to establish a four-member board of advisors (the “Board of Advisors”) comprised of various experts in noble gas and rare earth elements/minerals. The Board of Advisors will help attract both industry partners and financial partners for certain prorated revenuesdeveloping a large helium, noble gas and/or rare earth element/mineral resources that may exist in the region where the Company currently operates. The industry partners would include helium, noble gas and/or rare earth element/mineral purchasers and expensesexploration and development companies from January 1, 2021 through April 1, 2021.the energy industry. The financial partners may include large family offices or small institutions.

On April 1, 2021, we completedPursuant to the acquisitionUSNG Letter Agreement, the Company will pay USNG a $8,000 monthly cash fee beginning at the onset of commercial helium or minerals production and sales, subject to certain thresholds. Such monthly fees will become due and payable for any month that the Properties, underCompany receives cash receipts in excess of $25,000 derived from the same termssale of noble gases and/or rare earth elements/minerals. The Company has not yet achieved the Asset Purchase Agreement, which provided a purchase price of $900,000.$25,000 cash receipts threshold, therefore, there has been no payment or accrual liability relative to this cash fee provision through December 31, 2022.

The acquisition included the existing production equipment, infrastructure and ownershipUSNG Letter Agreement has an initial term of 11 square miles5 years, which shall thereafter continue for successive one-year periods, provided that there is no uncured breach, unless otherwise terminated by either party upon a written notice of existing 3-D seismic data on the acreage. The Properties include a horizontal producing well, horizontal saltwater injection well, conventional saltwater disposal well and two conventional vertical producing wells, which currently produce from the Reagan Sand Zone with an approximate depth of 3,600 feet.intent to non-renew.

FollowingIn consideration for the acquisition, we have commenced reworkconsulting services to be rendered and pursuant to the terms of the existing production wellsUSNG Letter Agreement, the Company issued warrants to purchase, in the aggregate, 2,060,000 shares of Common Stock, at an exercise price of fifty ($0.50) to three of USNG’s principal consultants and have performed testing and evaluationfour third-party service providers. The Company also issued warrants to purchase, in the aggregate, 1,200,000 shares of Common Stock at fifty cents ($0.50) per share exercise price to three members of the existenceBoard of noble gas reserves onAdvisors. The Company granted a total of 3,260,000 warrants to purchase its Common Stock with an exercise price of fifty cents ($0.50) per share in connection with the Properties, including helium, argonUSNG Letter Agreement and other rare earth minerals/gases. Testingthe arrangements described therein. The warrants expire five years after the date of the Properties for noble gas reserves has provided encouraging but not conclusive results and the Company has yet to determine the possibility of commercializing the noble gas reserves on the Properties. The Company plans to assess the existing oil and gas reserves on the Properties while continuing the evaluation of the existence of new oil and gas zones and other mineral reserves and specifically the noble gas reserves that the Properties may hold.USNG Letter Agreement.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet debt, nor did we have any transactions, arrangements, obligations (including contingent obligations) or other relationships with any unconsolidated entities or other persons that may have a material current or future effect on our financial conditions, changes in our financial conditions, or our results of operations, liquidity, capital expenditures, capital resources, or significant components of revenue or expenses.expenses except as follows:

Investment in Unconsolidated Subsidiary – GMDOC - On May 3, 2022, the Company entered into the Operating Agreement pursuant to which the Company acquired 17 (or 60.7143%) of 28 limited liability membership Interests in GMDOC, for an aggregate purchase price of $4,037,500, and was subsequently admitted as a member of GMDOC.

With respect to its cash capital contribution, the Company paid a non-refundable cash deposit for the membership interests in the amount of $50,000 on May 3, 2022. The Company paid the remainder of the cash contribution for the membership interests, or $800,000, on May 16, 2022. The remainder of the Company’s capital contribution, or $3,187,500, was financed by the Bank Loan (as defined below).

GMDOC had previously acquired 70% of the working interests in the GMDOC Leases from Castelli Energy, L.L.C, an Oklahoma limited liability company. The GMDOC Leases cover approximately 10,000 acres located in Southern Kansas near the Oklahoma border. The GMDOC Leases currently produce approximately 100 barrels of oil per day and 1.5 million cubic feet of natural gas per day on a gross basis.

Pursuant to the terms of the Operating Agreement, each member agreed to pay GMDOC, as its capital contribution, $50,000 in cash per Interest, with the remainder to be financed, in part, by a loan to GMDOC from a commercial bank, secured by GMDOC’s property, in the aggregate amount of $6,045,000 (the “Bank Loan”). The principal of the Bank Loan is to be repaid in 84 varying monthly installments, ranging from $170,000 at the beginning to $40,500 at the end of the loan term, with the first installment on July 1, 2022. The Bank Loan bears a variable interest beginning at an initial rate of 6% per annum with one rate adjustment after 36 months subject to a 6% minimum interest rate.

For the Years Ended December 31, 20212022 and 20202021

Results of Operations

Revenue

The Company began generating revenues from the production and sale of crude oil since the acquisition of the Properties on April 1, 2021. Revenues totaled $117,125 and $79,002 for the years ended December 31, 2022 and 2021, respectively. The $38,123 or 48% increase in revenues during the year ended December 31, 2021.2022 as compared to the same period in 2021 reflects the commencement of natural gas and helium sales from the initial Hugoton Gas Field which was connected to the pipeline on August 17, 2022 as well as the timing of the purchase of the Properties. The Company had noexpects its revenues in 2020to continue to improve as the price of WTI crude oil remains strong and the Company increases the volume of natural gas and helium gas sold as it focused on identification of acquisition targets of domestic oilcontinues its drill and gas producing properties.complete wells pursuant to its Hugoton Gas Field participation agreement.

On April 1, 2021, we completedDuring the acquisition ofyear ended December 31, 2022, our revenue was substantially impacted by inflation, the Properties, under the terms of the Asset Purchase Agreement which provided a purchase price of $900,000. The purchase of the Properties included the existing production equipment, infrastructure and ownership of 11 square miles of existing 3-D seismic data on the acreage. The Properties include a horizontal producing well, horizontal saltwater injection well, conventional saltwater disposal well and two conventional vertical producing wells, which currently produce from the Reagan Sand Zone with an approximate depth of 3,600 feet.

Following the acquisition, we have commenced rework of the existing production wells and have performed testing and evaluation of the existence of noble gas reserves on the Properties including helium, argon and other rare earth minerals/gases. Testing of the Properties for noble gas reserves has provided encouraging but not conclusive resultsCOVID-19 pandemic and the CompanyRussian war in Ukraine, which has yet to determinerestricted the possibilityworld supply of commercializing the noble gas reserves on the Properties. The Company plans to assess the existing oil and gas reserves onand thereby increased the Properties while continuing the evaluation of the existence of newaverage WTI crude oil price. We expect this trend to continue during 2023 and gas zones and other mineral reserves and specifically the noble gas reserves that the Properties may hold.perhaps beyond.

Oil and Gas Lease Operating Expenses

The Company began generating revenues from the production and sale of crude oil since the acquisition of the Properties on April 1, 2021. Total oil and gas lease operating expenses totaled $279,067 and $530,118 for the years ended December 31, 2022 and 2021, respectively. The decrease in oil and gas lease operating expenses during the year ended December 31, 2022 as compared to the same period in 2021 is attributable to significant repairs and rework performed in the year ended December 31, 2022 that did not recur during the year ended December 31, 2021.

WeUpon completion of our acquisition of the Properties on April 1, 2021, we commenced rework of the existing production wells on the Properties in order to restore the three producing wells to full operational condition. All such rework costs were expensed as routine maintenance instead of capitalized to oil and gas properties and equipment under the full-cost method. In addition, we have performed certain exploration, including testing and evaluation for the existence of noble gas reserves on the Properties, including helium, argon and other rare earth minerals/gases. Testing of the Properties for noble gas reserves has provided encouraging but not conclusive results and the Company has yet to determine the possibility of commercializing the noble gas reserves on the Properties. The Company plans to assess the existing oil and gas reserves on the Properties while continuing the evaluation of the existence of new oil and gas zones and other mineral reserves and specifically the noble gas reserves that the Properties may hold.

The Company had noDuring the year ended December 31, 2022, our oil and gas lease operating expenses have been substantially impacted by inflation, the COVID-19 pandemic and the Russian war in 2020 as it held noUkraine, which has restricted the supply of production pipe and other materials used in the drilling and rework of oil and gas producing properties.wells. In addition, experienced oil and gas service professionals have been in high demand in the oil and gas service sector and thereby increasing the cost of oil and gas well services. We expect this trend to continue during the 2023 and perhaps beyond.

Depreciation, Depletion and AmortizationImpairment

Depreciation, depletion and amortization expense totaled $1,035,827 and $92,502 during the years ended December 31, 2022 and 2021, respectively. Depreciation and depletion expenses were $130,253 and $92,502 for the years ended December 31, 2022 and 2021, respectively. Impairment charges totaled $905,574 and $— for the years ended December 31, 2022 and 2021, respectively.

The Company began generating revenues from the production and sale of natural gas and helium from the Hugoton Gas Field on August 17, 2022 and crude oil resulting since the acquisition of the Properties on April 1, 2021, which was acquired for $900,000 cash plus the assumption of asset retirement obligations of $13,425. The Company allocated the purchase price of $913,425 to oil and gas properties and equipment, which is subject to depreciation, depletion and amortization as the acquisition qualified as an asset acquisition. TotalThe Company began generating revenues from the production and sale of natural gas and helium from the Hugoton Gas Field on August 17, 2022, which also marked the beginning of the related depreciation, depletion and amortization was $92,502 foramortization.

During the year ended December 31, 2021. There2022, the Company changed its strategy regarding the Central Kansas Uplift considering the reduced net cash flows from the sale of crude oil production. The reduction in net cash flows was no depreciation, depletionattributable to lower spot crude oil prices during 2022 compared to 2021 and amortization forhigher than anticipated operating costs related to the year endedoperation of the horizontal wells on the Properties. The Company has shut down the horizontal production wells as of December 31, 2020 as2022 and is considering the deepening of the conventional wells on the property to explore for helium and other noble gases that may be present in deeper producing zones. Accordingly, the Company held nohas recorded an impairment charge of $712,812 to reduce the capitalized tangible and intangible costs related to its Central Kansas Uplift properties for the year endedto zero as of December 31, 2020.2022.

CapitalizedThe Company performed the ceiling test to assess potential impairment of the capitalized costs relative to its Hugoton Gas Field Project. The ceiling test indicated an impairment charge of $192,762 was required to reduce the total capitalized costs to acquire oil and natural gas properties are depreciated and depleted on a units-of-production basis based on estimated proved reserves. Capitalized costs$88,687 as of exploratory wells and development costs are depreciated and depleted on a units-of-production basis based on estimated proved developed reserves. Under this method, the sum of the full cost pool, excluding the book value of unproved properties, and all estimated future development costs are divided by the total estimated quantities of proved reserves. This rate is applied to our total production for the year ended December 31, 2021,2022. Accordingly, the Company has recorded an impairment charge of $192,762 to reduce the capitalized tangible and the appropriate expense is recorded. Support equipment and other property, plant and equipmentintangible costs related to oil and gas producing activities,its Hugoton Gas Field properties to $88,687 as well as property, plant and equipment unrelated to oil and gas producing activities, are recorded at cost and depreciated on a straight-line basis over the estimated useful lives of the assets.December 31, 2022.

Accretion of Asset Retirement Obligation

Total expense for the accretion of asset retirement obligations was $836$2,222 and $-0-$836 for the yearyears ended December 31, 20212022 and 2020,2021, respectively. The Company determined the amount of the asset retirement obligation assumed to be $13,425 as of April 1, 2021, the date of the acquisition of the Properties. In addition, the Company commenced production from the Hugoton Gas Field well which began the accretion of its related asset retirement obligations. The obligation relates to legal requirements associated with the retirement of long-lived assets that result from the acquisitions, construction, development, or normal use of the asset. The obligation relates primarily to the requirement to plug and abandon oil and natural gas wells and support wells at the conclusion of their useful lives.

Oil and Gas Production Related Taxes

The Company began generating revenues from the production and sale of crude oil since the acquisition of the Properties on April 1, 2021.

Oil and gas production related taxes totaled $1,060$164 and $-0-$1,060 for the yearyears ended December 31, 20212022 and 2020,2021, respectively. Such taxes are deducted from gross oil and gas revenue by the crude oil purchaser upon payment to the Company and include primarily severance taxes imposed by the State of Kansas, and Kansas conservation assessment fees. Revenues totaled $117,125 for the year ended December 31, 2022, which resulted in the deduction of $164 in production related taxes. Revenues totaled $79,002 for the year ended December 31, 2021, which resulted in the deduction of $1,060 in production related taxes. Thetaxes primarily due to severance taxes paid in 2021. During the year ended December 31, 2021, the Company has received a notice of an exemption from the State of Kansas whichthat exempted the Company formfrom paying severance taxes due to the existing wellswells’ production levels. Therefore, production related taxes should declinedeclined as a percentage of revenue during the year ended December 31, 2022 as compared to the same period in 2022 and beyond. The Company had no revenues in 2020 and therefore there was no deduction for production related taxes in Kansas.2021.

Other General and Administrative Expenses

Other general and administrative expenses were $1,036,996$1,500,504 for the year ended December 31, 2021,2022, an increase of $720,697,$463,508, or 228%45%, from other general and administrative expenses of $316,299$1,036,996 for the year ended 2020.December 31, 2021. The increase in other general and administrative expenses is primarily attributable to an increase of $314,643$549,561 in stock-based compensation due to the noncash compensation for its executives and Board members in 2021. The increase in other general and administrative expenses is also attributable to an increase $193,834 for legal fees, $37,705 for geological services and a $34,500 increase in auditor fees as the Company began operating the Properties, which required various capital raises and other filings with the SEC. In addition, the increase in other general and administrative expenses were attributable to the $75,000 charge-off of the option to acquire the Properties which expired, a $30,000 bonus paidawarded to the Company’s Chief Executive Officer attributable to his efforts in the acquisitionexecutives, members of the Properties.Board of Directors, the USNG Letter Agreement, which awarded compensatory warrants to advisory members of the Board of Advisors and other consultants in 2022 and in late 2021. The $314,643 increase in stock-based compensation was relatedoffset by a $75,000 charge-off of one option to acquire a property during the amortizationyear ended December 31, 2021 that did not recur in the comparable period in 2022.

Equity in earnings of unconsolidated subsidiary – GMDOC

The Company reported equity in earnings of unconsolidated subsidiary of $251,461 for the year ended December 31, 2022, compared to $-0- for the year ended December 31, 2021. Such income resulted from the Company acquiring a 60.7143% membership interest in GMDOC in May 2022. The Company uses the equity method of accounting for equity investments if the investment provides the ability to exercise significant influence, but not control, over operating and financial policies of the stock option grantsinvestee, GMDOC. Management’s judgment regarding its level of influence over the operations of GMDOC included considering key factors such as the Company’s ownership interest, legal form of the investee, its’ lack of participation in June 2021,policy-making decisions and its’ lack of control over the warrants issued to USNGday-to-day operations of GMDOC.

GMDOC had previously acquired 70% of the working interests in the GMDOC Leases from Castelli Energy, L.L.C., an Oklahoma limited liability company. The GMDOC Leases cover approximately 10,000 acres located in Southern Kansas near the Oklahoma border. The GMDOC leases currently produce approximately 100 barrels of oil per day and 1.5 million cubic feet of natural gas per day on a gross basis. GMDOC, LLC generated $414,171 of net income on $2,397,406 of oil and gas revenues during the Advisory Board, andyear ended December 31, 2022. The Company owns a 60.7143% membership interest in such net income or $251,461 which it has reported as equity in earnings of unconsolidated subsidiary – GMDOC during the restricted stock grants in August 2020.year ended December 31, 2022.

Interest Expense

Interest expense decreasedincreased to $913,608 for the year ended December 31, 2022, compared to $108,052 for the year ended December 31, 2021, compared to $210,931 for the2021. The increase in the year ended December 31, 2020, a decline of $102,879, or 49%. Interestinterest expense declined during the year ended December 31, 2021 primarily due2022 was attributable to $218,680 of default interest accrued on the convertible notes that were in default at December 31, 2022. Management believes that it will be able to negotiate the waiver of such default interest when it negotiates amendments to the pay-offnotes in default during 2023. In addition the increase was attributable to the issuance of the various convertible notenotes payable issued in August 2019, which had a stated principal balance of $365,1692022 and bore interest at an 8% rate until it was retired on March 26, 2021. The retirement of the two notes payable totaled $85,000 on April 1,in 2021 and the August Note on March 31, 2021 resulted in less interest expense being reportedthat were outstanding during the year ended December 31, 2021 as compared to the year ended December 31, 2020.

On March 31, 2021, the Company issued $28,665 principal balance of 3% Notes in connection with the Debt Settlement Agreements, which bear interest at 3%. Interest expense totaled $643 related to these 3% Notes2022 and not outstanding during the year ended December 31, 2021 and will continue to affect interest expense in future quarters.2021.

On April 1, 2021, the Company and the holder of the $50,000 outstanding convertible note reached a settlement, pursuant to which the Company issued a total of 145,000 shares of Common Stock in exchange for the extinguishment of the outstanding principal, accrued interest and associated common stock purchase warrants, which totaled $72,874 as of April 1, 2021. In addition, on April 1, 2021, the Company and the holder of the $35,000 outstanding convertible note reached a settlement, pursuant to which the Company issued a total of 100,000 shares of Common Stock in exchange for the extinguishment of the outstanding principal, accrued interest and associated common stock purchase warrants, which totaled $50,956 as of April 1, 2021. The 100,000 shares issued to extinguish the debt obligations were valued at $28,000 based on the closing market price on the date of the extinguishment. Accordingly, there was less interest related to these notes in the year ended December 31, 2021 as compared to in the year ended December 31, 2020.

On August 30, 2021 and October 29, 2021, the Company entered into two Securities Purchase Agreements with one and three, respectively, accredited investors agreed for the 8% Notes, with an aggregate principal face amount of approximately $650,000. The 8% Notes are, subject to certain conditions, convertible into an aggregate of 1,300,000 shares of Common Stock, at a price of $0.50 per share. The Company also issued five and one half-year common stock purchase warrants to purchase up to 1,850,000 shares of Common Stock at an exercise price of $0.50 per share, subject to customary adjustments which are immediately exercisable. The investors purchased the 8% Notes and the warrants from the Company for an aggregate purchase price of $650,000 and the proceeds were used for general working capital purposes. The 8% Notes bear interest at 8%, however a discount was recorded for the on the relative estimated fair value of the detachable warrants issued, which will be amortized to interest expense over the term of the 8% Notes using the interest method. Total interest expense was $62,170 during the year ended December 31, 2021 and will continue to affect interest expense in future quarters.

Gain on Extinguishment of Liabilities

The Company reported a gain on exchange and extinguishment of liabilities of $86,602$-0- and $6,150,142$86,602 in the years ended December 31, 20212022 and 2020,2021, respectively.

On April 1, 2021, the Company and the holderholders of the $50,000 outstanding convertible notetwo notes payable aggregating $85,000 that were in default reached a settlement pursuant to whichwhereby the Company issued a total of 145,000245,000 shares of Common stockStock in exchange for the extinguishment of the outstanding principal, accrued interest and associated common stockCommon Stock purchase warrants, which totaled $72,874$123,830, as of April 1, 2021. The 145,000245,000 shares issued to extinguish the debt obligations were valued at $40,600 based on the closing market price on the date of the extinguishment. The extinguishment of the debt obligations resulted in a gain of $32,274, which was recorded in the year ended December 31, 2021.

On April 1, 2021, the Company and the holder of the $35,000 outstanding convertible note reached a settlement, pursuant to which the Company issued a total of 100,000 shares of Common stock in exchange for the extinguishment of the outstanding principal, accrued interest and associated common stock purchase warrants which totaled $50,956 as of April 1, 2021. The 100,000 shares issued to extinguish the debt obligations were valued at $28,000 based on the closing market price on the date of the extinguishment. The extinguishment of the debt obligations resulted in a gain of $22,956,$55,230 which was recorded in the year ended December 31, 2021.

On March 31, 2021, the Company recorded a net gain on extinguishment of liabilities totaling $31,372, which was attributable to six transactions that extinguished outstanding liabilities during the year ended December 31, 2021.as of that date. The Debt Settlement Agreements extinguished accounts payable and accrued liabilities with a total outstanding balance of $2,866,497, for the issuance of $28,665 in principal balance of the 3% Notes. Such 3% Notes were issued with detachable warrants to purchase 5,732,994 shares of Common Stock for $0.50 per share,the 3% Warrants, which waswere valued at $1,605,178, which$1,605,178. The transaction resulted in a total gain of $1,232,654 of which $124,177 was reported as a gain on extinguishment of liabilities and $1,108,477 was reported as a capital contribution.contribution during the year ended December 31, 2021. The $23,000 gain from settlement of litigation extinguished $33,000 of trade payables for a cash payment of $10,000. The loss of $115,805 is related to the early retirement of $365,169 principal balance of the August 2020 Note.

For There were no similar transactions during the year ended December 31, 2020, the gain on extinguishment of liabilities was attributable to two transactions that extinguished outstanding liabilities; (i) the SKM Exchange Agreement, which extinguished a promissory note with an outstanding principal balance of $1,000,000, $542,762 in accrued interest and other obligations previously outstanding and resulting in a total gain of $1,310,006, and (ii) the extinguishment of trade payable obligations totaling $4,840,136 that arose during 2013, which were extinguished in 2020 pursuant to the relevant statute of limitations.2022.

Change in Warrant Derivative Fair Value

The change in warrant derivative liability was an expense of $577,269 during the year ended December 31, 2022, as compared to a gain of $199 during the year ended December 31, 2021. The estimated fair value of the Company’s derivative liabilities, all of which were related to the detachable warrants issued in connection with the issuance of Series A Convertible Preferred Stock, were estimated using a closed-ended option pricing model utilizing assumptions related to the contractual term of the instruments, estimated volatility of the price of the Company’s common stock and current interest rates. The detachable warrants issued in connection with the issuance of certain Series A Convertible Preferred Stock contained a provision allowing the holder to require cash settlement in certain situations were fundamental transaction, as defined in the warrant agreements have occurred. An event occurred on December 31, 2022 that activated the Holder’s ability to utilize such provisions, therefore the derivative liability was recognized on December 31, 2022.

The conversion feature in certain outstanding promissory notes payable and common stockCommon Stock purchase warrants issued in connection with short-term notes outstanding during the yearsyear ended December 31, 2021 and 2020 were treated as derivative instruments because such notes payable and warrants contained ratchet and anti-dilution provisions. The mark-to-market process resulted in a gain of $199 during the year ended December 31, 2021, compared to a gain of $7952021. There were no similar derivatives outstanding during the year ended December 31, 2020.2022. All short-term notes and their related derivative warrants have beenwere terminated as of December 31,on April 1, 2021.

Income Tax

The Company recorded no income tax benefit (expense) in the years ended December 31, 20212022 and 2020.2021. The Company has been in a cumulative tax loss position and has substantial net operating loss carryforwards available for its utilization at December 31, 2021.2022. The Company has continued to carry a 100% reserve on its net deferred tax assets and therefore recorded no income tax expense or benefit on its income (loss) before income taxes during the years ended December 31, 20212022 and 2020.2021.