UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-K

~~ANNUAL REPORT PURSUANT TO SECTION 13 OR 15~~(dMark One) ~~OF THE SECURITIES EXCHANGE ACT OF 1934~~

~~For~~x ~~Fiscal~~ANNUAL ~~Year~~REPORT ~~Ended~~PURSUANT ~~December~~TO ~~31,~~SECTION ~~2017~~13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2018

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

For the transition period from to

000-53488

Commission file number

PLEDGE PETROLEUM CORP.

(Exact name of registrant as specified in its charter)

Delaware		26-1856569
(State or other jurisdiction of		(I.R.S. Employer Identification No.)
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
incorporation or organization)

11811 North Freeway, 5th Floor,

576 S. Foothills Plaza Dr. #163	37801
Maryville, Tennessee	(Zip Code)
(Address of principal executive offices)

~~Suite~~(865) ~~513, Houston, TX 77060~~227-4818

(Address of principal executive offices)

(832) 328- 0169

(Registrant’s telephone number, including area code)

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

~~Common~~None ~~Stock~~ None (Title of Class) (Name of each exchange on which registered)

Securities registered pursuant to Section 12 (g) of the Act:

Common Stock, $0.001 par value

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 ofor Section 15(d) of the Act. Yes ¨ No No x

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ~~¨ No~~ x No ¨

Indicate by check mark ifwhether ~~disclosure~~the ~~of delinquent~~registrant ~~filers~~has ~~pursuant~~submitted toelectronically ~~Item~~every ~~405~~Interactive ofData ~~Regulation~~File ~~S-K~~required isto ~~not contained herein, and will not~~ be ~~contained,~~submitted pursuant to ~~the~~Rule ~~best~~405 of ~~the Registrant's~~Regulation ~~knowledge,~~S-T in(section ~~definitive~~232.405 ~~proxy~~of orthis ~~information~~chapter) ~~statements~~during ~~incorporated~~the bypreceding ~~reference~~12 inmonths ~~Part~~(or ~~III~~for ofsuch ~~this~~shorter ~~Form~~period ~~10-K or~~that ~~any~~the ~~amendment~~registrant was required to ~~this~~submit ~~Form~~such ~~10-K~~files). Yes x No ¨

Indicate by check mark ~~whether the registrant has submitted electronically and posted on its corporate website,~~ if ~~any,~~disclosure ~~every~~of ~~interactive~~delinquent ~~data~~filers ~~file required to be submitted and posted~~ pursuant to ~~Rule~~Item 405 of Regulation S-TK (section ~~232~~229.405 of this chapter) ~~during~~is not contained herein, and will not be contained, to the ~~preceding~~best 12of ~~months~~registrant’s (knowledge, in definitive proxy or ~~for~~information ~~such~~statements ~~shorter~~incorporated ~~period~~by ~~that~~reference ~~the~~in ~~registrant~~Part ~~was~~III ~~required~~of tothis ~~submit~~Form ~~and~~10-K ~~post~~or ~~such~~any ~~files)~~amendment to this Form 10-K. ~~Yes~~ ¨ ~~No x~~

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

Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer ¨x Smaller reporting company x ~~(Do not check if smaller reporting company)~~ Emerging growth company ¨

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

Indicate by check mark whether the ~~Registrant~~ registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes x ¨ No ¨x

The aggregate market value of the ~~Registrant~~registrant’s common stock held by non-affiliates of the ~~Registrant~~registrant as of June 3029, ~~2017~~2018, the last business day of the registrant’s recently completed second quarter, was approximately $31,~~821~~720,~~929~~000 based on the closing price at which the common stock was last sold on that date.

~~The~~As ~~Registrant~~of ~~has~~April ~~234~~10, 2019, the registrant had 484,256,464 shares of common stock outstanding ~~as of May 23,2018~~.

Documents incorporated by reference: None

PLEDGE PETROLEUM CORP.

FORM 10-K

FOR THE ~~FISCAL~~PERIOD ~~YEAR~~FROM ~~ENDED~~AUGUST 22, 2018 (date of inception)

THROUGH DECEMBER 31, ~~2017~~2018

TABLE OF CONTENTS

		Page
PART I.		3
Item 1.	Business	3
Item 1A.	Risk Factors	615
Item 1B.	Unresolved Staff Comments	615
Item 2.	Properties	615
Item 3.	Legal Proceedings	616
Item 4.	Mine Safety Disclosures	616
PART II.		16
Item 5.	Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	716
Item 6.	Selected Financial Data	817
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	917
Item 7A	Quantitative and Qualitative Disclosures About Market Risk
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk
Item 8.	Financial Statements and Supplementary Data	~~F-1 - F-30~~20
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	1521
Item 9A.	Controls and Procedures	1521
Item 9B.	Other Information	1622
PART III.		23
Item 10.	Directors, Executive Officers and Corporate Governance	1723
Item 11.	Executive Compensation	2125
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	2327
Item 13.	Certain Relationships and Related Transactions and Director Independence	2428
Item 14.	Principal Accounting Fees and Services	2428
PART IV.		29
Item 15.	Exhibits, Financial Statement Schedules	2529
Item 16	Form 10-K Summary	2831
Signatures		2932

PART I

CAUTIONARY STATEMENT RELATING TO THE SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This Annual Report on Form 10-K includes “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We intend those forward looking-statements to be covered by the safe harbor provisions for forward- looking statements. All statements regarding our expected financial position and operating results, our business strategy, our financing plans and the outcome of any contingencies are forward-looking statements. Any such forward-looking statements are based on current expectations, estimates, and projections about our industry and our business and are subject to a number of risks and uncertainties, many of which are difficult to predict and generally beyond our control, that could cause actual results to differ materially from those expressed, projected or implied in by the forward-looking statements. Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” or variations of those words and similar expressions are intended to identify such forward-looking statements. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those stated in or implied by any forward-looking statements.

Such risks and uncertainties include the risks noted under Part 1. “Business,” ~~Part 1A “Risk Factors”~~ and Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” but are also contained elsewhere. You should refer to Item 1A. “Risk Factors.” section of this Annual Report on Form 10-K for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward- looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this Annual Report will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. We do not undertake any obligation to update any forward-looking statements.

Unless the context requires otherwise, references to “we,” “us,” “our,” and “~~Propell~~Pledge,” refer to Pledge Petroleum Corp ~~(formerly Propell Technologies Group~~, ~~Inc.,~~ and its subsidiaries).

Item 1. Business

Overview

Our ~~Company~~goal is to be a next-generation renewable fuels company. We intend to conduct business in the sourcing and implementation of renewable energy technology.

~~During~~Our ~~the~~mission ~~past~~is ~~year,~~to ~~our~~produce ~~management,~~renewable atdiesel ~~the~~fuel ~~direction of the Board of Directors, has evaluated, considered,~~ and ~~brought~~biochar ~~forward~~in ~~various~~a ~~opportunities~~profitable toyet ~~acquire~~sustainable ~~producing oil~~manner. ~~fields;~~We ~~however,~~strive to ~~date,~~achieve annet ~~oil~~environmental ~~field~~and ~~meeting~~social ~~the~~benefits ~~criteria~~and ~~acceptable~~ intend to ~~the~~achieve ~~Board~~a ofnegative ~~Directors~~carbon ~~(which~~footprint, ~~criteria~~by ~~include~~responsibly ~~among other~~managing ~~things,~~our ~~low~~land ~~general~~use and ~~administrative~~water ~~costs~~resources, ~~ability to generate cash flow~~ and ~~ability~~preserving toour ~~fully~~forests ~~utilize the Plasma Pulse~~and ~~Technology~~food ~~(“PPT”))~~sources, ~~had~~while ~~not~~promoting ~~been~~energy ~~found.~~independence, Asjob acreation ~~result,~~ and incommunity ~~lieu~~investment. ofOur astrategy ~~potential~~is ~~dissolution,~~generally predicated on ~~March~~biomass ~~23,~~feedstock ~~2018,~~sources ~~we sold~~consisting ~~substantially all~~ of ~~our~~residues ~~assets,~~from ~~including~~timber ~~all~~harvest ~~pertinent~~and ~~intellectual~~forest ~~property~~thinnings ~~rights comprising our business of implementing plasma pulse technology~~ (~~the~~sometimes ~~“Asset~~called ~~Sale”), to Norma Investments Limited (~~“~~Norma~~slash”)~~, the parent company~~ ofcomprised ~~Ervington Investments Limited (“Ervington”), the current holder~~ of ~~a majority of our outstanding voting securities~~branches, ~~for~~ ~~$650,000~~broken ~~pursuant~~or todefective antree ~~Asset Purchase Agreement (the “Asset Purchase Agreement”) with Norma~~parts, ~~dated February 12~~tops, ~~2018~~ ~~(the~~and ~~“Asset~~trees ~~Purchase~~not ~~Agreement”).~~meeting Ingrade ~~connection~~specifications ~~with~~that ~~the~~can ~~Asset~~be ~~Sale,~~harvested ~~we also repurchased all of our outstanding~~on ~~securities held by Ervington for $8,500,000 (the “Share Repurchase”) pursuant to~~ a ~~Share~~sustainable ~~Purchase Agreement with Ervington, dated February 12, 2018 (the “Share Purchase Agreement”)~~basis.

AtOur ~~this~~technology ~~point,~~platform ~~the Board~~ is ~~reevaluating~~designed ~~its~~to enable ~~business~~us ~~plan~~to ~~and~~convert ~~strategy~~low-cost, abundant and ~~has~~sustainable ~~reduced~~biomass ~~operating~~feedstock ~~expenses~~(i.e., ~~including~~slash) ~~staffing,~~into indiesel. ~~order~~Our ~~to preserve~~renewable ~~capital~~diesel, ~~while~~is ~~the~~expected to ~~Board~~burn ~~evaluates~~much ~~its~~cleaner ~~options~~than ~~including~~traditional ~~the~~petroleum ~~possible~~diesel, ~~acquisition~~and ofto abe ~~technology~~chemically ~~and~~indistinguishable ~~oilfield~~from conventional ASTM D975 diesel. ~~services~~In ~~business~~addition, ofthe ~~which~~renewable ~~two~~diesel ofwe ~~our~~intend ~~current~~to ~~directors~~produce ~~own~~will be a ~~minority~~“drop-in” ~~equity~~diesel ~~interest~~meaning it is a 100% petroleum diesel replacement.

In ~~July~~addition ~~2015,~~to ~~when~~renewable diesel, we ~~closed the final~~intend ~~tranche~~to ofsell ~~our~~Natura ~~private placement of the sale of our Series C Preferred Stock and raised an additional $9~~TM,~~750,000,~~ wewhich ~~shifted~~is ~~our operational focus from being~~ a ~~direct~~high-quality ~~provider~~biochar. ofBiochar ~~well~~is ~~services~~charcoal ~~based~~used ~~upon~~as ~~PPT~~a tosoil ~~actively~~amendment. ~~seeking~~Biochar tois ~~acquire~~a ~~producing oil fields~~stable ~~to generate revenues~~ and ~~the development of untapped hydrocarbon reserves. As a result~~solid, rich in ~~August 2015~~carbon, ~~our board of directors~~ and ~~shareholders~~can ~~approved~~endure ~~through~~in ~~the~~soil ~~formation~~for ofthousands ~~a joint venture, the exclusive sublicense to our majority owned subsidiary Novas Energy North America, LLC (“NENA”)~~ of ~~our~~years. ~~rights~~Biochar tois ~~use~~made ~~certain~~by ~~plasma~~carbonizing ~~pulse~~renewable ~~technology~~organics ~~that we had licensed from Novas~~like ~~Energy~~wood ~~Group~~and ~~Limited~~grass. ~~(the~~Natura ~~“Licensor”)~~TM ~~pursuant~~is toa ~~the~~safe ~~terms~~and ofnatural anproduct ~~exclusive~~made ~~license agreement (the “License Agreement”), for treatment of vertical wells~~ in the United States ~~(hereafter, the “Licensed Plasma Pulse Technology”)~~. WeIt ~~retained the~~is ~~right~~a tobyproduct ~~use the Licensed Plasma Pulse Technology for treatment~~ of our ~~own assets located in the United States as well as treatment~~renewable ofdiesel ~~assets outside of the United States. The Licensed Plasma Pulse Technology refers to the~~ process and ~~apparatus~~provides oflong-term ~~Licensor~~gains ~~for its plasma pulse technology as covered by Licensor’s patent rights. Although we were indirectly engaged~~ in ~~the~~soil ~~oil~~fertility ~~recovery business through NENA~~ and ~~directly~~plant ~~through our treatment of oil wells in Mexico~~performance, itas ~~was~~well ~~not~~as ~~our~~livestock ~~foundational business strategy~~enhancement. In October 2016, we terminated the joint venture due to its failure to meet certain milestones, including its generation of minimal revenue. On March —, 2018, we terminated our agreement with our Mexican partner.

We have financed our operations primarily from sales of our securities, both debt and equity, and to a lesser extent revenue from operations and we expect to continue to obtain required capital in a similar manner. We have incurred an accumulated deficit of $18,088,617 through December 31, 2017 and there can be no assurance that we will be able to achieve profitability.

~~Recent~~We ~~Events~~are fundamentally different from traditional oil and biofuels companies. Unlike traditional oil companies, we intend to generate diesel from completely renewable and sustainable sources rather than depleting fossil fuel reserves. At the same time, we differ from most traditional biofuels companies because our end products are diesel and biochar rather than alcohols or fatty acid methyl esters (“FAME”), such as ethanol or biodiesel. As compared to ethanol, the energy density of one gallon of our renewable diesel equates to 1.7 gallons of ethanol equivalent. While we are a development stage company that has not generated any revenue and has experienced net losses since inception, through our technology platform, we expect to provide a new domestic source of liquid transportation fuel — sustainably — using renewable natural resources to help further energy independence and reduce greenhouse gas emissions.

OnWe ~~March~~believe ~~23,~~that ~~2018, upon~~ the ~~closing~~solution ~~of the~~to ~~Asset Purchase Agreement and~~ the ~~Share Repurchase Agreement, Ivan Persiyanov resigned as director and Chief Executive Officer of the Company and Mr. John Zotos was appointed as the Company~~world’s growing ~~interim~~transportation ~~Chief~~fuel ~~Executive~~demands ~~Officer.~~must be:

On· ~~May~~Real. 2Our technology platform should enable us to produce high-quality renewable diesel that is “drop in” to the existing transportation fuels infrastructure for use in vehicles on the road today. Our fuels will not be ethanol or FAME diesel. Unlike ethanol, ~~2018~~which is generally subject to a 10% to 15% blend wall, ~~Christopher~~our ~~Headrick~~diesel ~~was appointed~~should be useable as components in formulating a ~~director~~variety of fuel products meeting specifications of ASTM International for finished diesel derived from petroleum-based blend stocks.

Rural. We plan to locate our commercial production facilities in rural areas near sources of low-cost, abundant and sustainable biomass feedstock. We also consider the proximity of a potential site to our prospective customers, the adequacy of infrastructure, the availability of labor to operate our facilities and the award of any state or local incentives. We believe that our rural focus not only will help us reduce our operating costs, but also will revitalize rural economies impacted by closed paper mills. We expect that our initial production facility will be located in Bay Minette, Alabama

Renewable. Our technology platform is designed to allow us to convert low-cost, abundant and sustainable non-food biomass feedstock, including woody biomass, such as whole tree chips, logging residues, branches and bark into renewable diesel. In this regard, we believe that the transportation fuel produced from our process will help to satisfy mandates under the Renewable Fuel Standard program (the “RFS2”). We have selected Cooper Marine & Timberlands Corp. (a Cooper company) as our primary provider of feedstock because of their abundant, sustainable supply and generally low-cost and stable pricing history compared to feedstocks used by traditional biofuels companies.

Repeatable. We intend to utilize a modular design for our standard commercial production facilities that can be replicated at any locations with abundant and sustainable non-food feedstock in the southeastern United States and beyond. We believe that this “copy exact” design will help us to reduce our capital costs, implement learned best practices and facilitate rapid deployment of new production facilities. We believe that our repeatable renewable diesel production process will effectively eliminate the exploration risk experienced by traditional E&P companies.

We expect that our renewable diesel will offer several environmental benefits compared to traditional petroleum-based fuels. We believe that the renewable diesel that we will produce will reduce direct lifecycle greenhouse gas emissions by over 80% compared to the fuels they displace.

The Share Exchange Agreement

On December 19, 2018, we entered into a Share Exchange Agreement (the “Share Exchange Agreement”) with Renewable Technology Solutions, Inc. (“RTS”), and Christopher Headrick, a member of the Company’s board of directors and at that time the sole stockholder of RTS. Pursuant to the Share Exchange Agreement and subject to certain unwind provisions of the Share Exchange Agreement, on December 19, 2018, RTS became our wholly owned subsidiary. Pursuant to the Share Exchange Agreement, (i) upon the execution of such agreement, Mr. Headrick delivered to us share certificates evidencing 1,000 shares of RTS common stock, no par value, which represents 100% of the issued and outstanding shares of RTS common stock (the “RTS Shares”) and we delivered to Mr. Headrick 250,000,000 shares of our common stock, par value $0.001 per share (the “Pledge Common Shares”), and (ii) after the expiration of the Unwind Period defined below and the filing of an amendment to our Certificate of Incorporation with the Secretary of State of the State of Delaware, we have agreed to issue to Mr. Headrick 150,000 shares of Series D Preferred Stock, par value $0.001 (the “Series D Preferred Shares”) that will have the right to an aggregate of 1,500,000,000 votes on all items presented to our stockholders for a vote. Upon the issuance of the 250,000,000 shares of common stock to Mr. Headrick, Mr. Headrick became the owner of 52% of our outstanding voting securities. After the issuance of the 150,000 shares of our Series D Preferred Stock to Mr. Headrick, he will own securities providing him the right to vote approximately eighty eight percent (88%) of our voting securities and our other stockholders will own securities providing them with the right to vote approximately twelve percent (12%) of our voting securities. If prior to the twelve-month anniversary of the execution of the Share Exchange Agreement, RTS has not delivered evidence, in form and substance reasonably satisfactory to us of a copy of a financial commitment from a reputable source for $3,000,000 to fund in part the construction of a renewable fuel manufacturing facility to be located in Bay Minette, Alabama, the purchase of the equipment to be contained therein and the applicable technology (the “Unwind Condition”), the Share Exchange will be unwound and RTS Shares will be returned to Mr. Headrick and the Pledge Common Shares will be returned to the Pledge and the Series D Preferred Stock will not be issued.

Pursuant to the terms of the Share Exchange Agreement and Escrow Agreement, until the Unwind Condition is satisfied, (i) Mr. Headrick shall not assign, pledge or transfer any of the Pledge Common Shares and the Company shall not assign, pledge or transfer any of the RTS Shares (ii) any distributions with respect to the Pledge Common Shares shall be made to Mr. Headrick and with respect to the RTS Shares shall be made to us and (iii) Mr. Headrick shall have the full power to vote and exercise all voting, consent and related rights (including, without limitation, all rights to provide instructions or directions as to the exercise of voting or consent rights) with respect to the Pledge Common Shares, subject to the following limitations and we shall have the full power to vote and exercise all voting, consent and related rights (including, without limitation, all rights to provide instructions or directions as to the exercise of voting or consent rights) with respect to the RTS Shares, subject to the following limitations: (a) no amendments may be made to any of the charter documents of either entity without approval of all of the members of the Board of Directors of such entity; (b) and no changes to the Board of Directors of either entity (including increases or removals other than for cause) may be made by an entity without approval of all of the members of the Board of Directors of such entity (c) effect or approve a merger, consolidation or acquisition of all or substantially all of the assets of such entity without approval of all of the members of the Board of Directors of such entity.

Christopher Headrick, John Zotos and John Huemoeller each have indicated that they will vote in favor of an amendment to our Certificate of Incorporation to increase the number of authorized shares of preferred stock that will provide us with the ability to designate the Series D Preferred Stock.

History

~~Pledge~~RTS ~~Petroleum~~was ~~Corp~~incorporated ~~(“Pledge”).~~on August 22, 2018 ~~(f/k/a~~under ~~Propell~~the ~~Technologies~~laws ~~Group~~of the State of Tennessee under the name Renewable Technology Solutions, Inc.) isChristopher aHeadrick, ~~Delaware~~the ~~corporation~~Chief ~~originally~~Executive Officer ~~formed~~and onfounder ~~January~~of 29RTS, ~~2008~~has asspent CAthe ~~Photo~~last ~~Acquisition Corp.~~nine Onyears ~~April~~researching ~~10,~~various ~~2008~~biodiesel ~~Crystal~~technologies ~~Magic,~~as ~~Inc~~well as locations for facilities. Not ~~(“CMI”),~~only has he identified equipment that utilizes a ~~Florida~~technology ~~Corporation,~~that ~~merged~~he ~~with~~intends anto ~~acquisition~~acquire ~~subsidiary~~but ~~of Pledge,~~RTS ~~and~~has wealso ~~issued~~entered into an ~~aggregate~~agreement to ofacquire ~~108,000~~a ~~shares~~property on which to ~~the~~build ~~former~~facilities. ~~shareholders~~A ofcompany ~~CMI~~owned by Mr. OnHeadrick ~~May~~has 6,entered ~~2008,~~into wea ~~acquired~~sales ~~both~~representative ~~Mountain~~agreement ~~Capital,~~with ~~LLC~~the ~~(d/b/a~~owner ~~Arrow~~of ~~Media~~the ~~Solutions)~~equipment ~~(“AMS”)~~that ~~and~~incorporates ~~Auleron~~the ~~2005,~~technology ~~LLC~~that ~~(d/b/a~~we ~~Auleron~~intend ~~Technologies)~~to ~~(“AUL”)~~acquire authorizing it to serve as an authorized ~~and~~sales ~~made~~representative ~~each~~of athe ~~wholly~~third-party ~~owned~~manufacturer ~~subsidiary~~with the right to market and ~~issued~~to asolicit ~~total~~sales of ~~41,987~~the ~~shares~~equipment. Mr. Headrick has also received indications of ~~our~~interest ~~Common~~from ~~Stock~~customers tofor offtake agreements, all pending the ~~members~~acquisition of ~~Mountain~~the ~~Capital,~~site for the ~~LLC~~facility. Mr. Headrick has spent years building relationships with key partners and aformulating ~~total~~the ofbusiness ~~2,721~~plan ~~shares~~for ofRTS ~~our~~in ~~Common~~order to ~~Stock~~enable RTS to ~~the~~successfully ~~members~~begin ofoperations ~~AUL~~once (the ~~shares~~initial ~~referenced~~production ~~above~~facility ~~are~~is inconstructed. ~~pre-split~~For ~~amounts~~example, RTS (or an affiliated ~~that~~entity) ishas ~~prior~~entered tointo ~~our~~the ~~50-~~following letters of intent; (i) Cooper Marine & Timberlands Corp. (a Cooper company) to-1 ~~reverse~~be ~~split~~its primary inprovider ~~August~~of ~~2012~~feedstock; (ii). InForest2Market ~~2010~~to ~~AUL~~provide ~~and~~project ~~AMS~~development ~~were~~and ~~dissolved.~~operational Insupport ~~September~~services ~~2010,~~related ~~CMI’s~~to biomass ~~assets~~feedstock; ~~were~~(iii) ~~foreclosed~~Weaver ~~upon~~and byTidwell, ~~its~~L.L.P. ~~largest~~to ~~creditor~~provide technical support and ~~these~~regulatory ~~assets~~consulting ~~were~~services ~~liquidated~~to RTS in its role as a renewable fuel producer; and ~~effective~~(iv) ~~December~~Targray ~~31,~~Industries ~~2013,~~Inc. weto ~~disposed of~~purchase ~~our~~not ~~interest~~less inthan ~~CMI~~13 ~~for~~million ~~nominal~~gallons ~~consideration~~per year of renewable diesel.

InProduction 2013, we closed a Share Exchange Agreement with the shareholders of Novas, under which we acquired all of the outstanding equity securities of Novas in exchange for 100,000,000 shares of our common stock. Novas had entered into a license for use of the Licensed Plasma Pulse Technology licensed from Licensor for use in the United States and Mexico. Prior to the closing of the second tranche of the Series C Preferred Stock private placement and the sublicense with NENA, our focus had been on the provision of production enhancement services.Facilities

OnRTS ~~February~~has ~~19,~~executed ~~2015~~an agreement, ~~we entered into~~contingent aon ~~Series~~obtaining Cthird-party ~~Preferred~~financing, ~~Stock~~to ~~Purchase~~acquire ~~Agreement~~approximately ~~(the~~28 ~~“Purchase~~acres ~~Agreement”)~~of ~~with~~property ~~Ervington~~in ~~Investment~~Bay ~~Limited~~Minette, anAlabama ~~entity organized~~for ~~under~~$1,250,000, ~~the~~on ~~laws of the Republic of Cyprus~~ which it isintends ~~wholly~~to ~~owned~~build byits ~~Norma~~initial ~~Investments~~renewable ~~Limited,~~fuel ~~which~~manufacturing infacility. ~~turn~~In isconnection ~~wholly owned by Harmony Trust Settlement (“Ervington”)~~therewith, ~~and~~RTS ~~closed~~paid the ~~first~~seller ~~tranche~~ of athe ~~private placement offering under~~property ~~the~~a ~~Purchase Agreement, raising~~ $5,000 down payment,~~000~~ inwhich ~~gross~~it ~~proceeds~~borrowed from ~~the~~John ~~sale~~Huemoeller, ofon ~~1,525,424~~our ~~shares~~board of ~~our~~directors, ~~Series~~pursuant Cto ~~Preferred~~a ~~Stock~~promissory note bearing ~~(“Series~~interest Cat ~~Preferred~~5% ~~Stock”)~~per atyear, adue ~~purchase~~upon ~~price~~the earlier of ~~$3.277777778~~the ~~per~~closing ~~share..~~of Onthe ~~June~~Company’s ~~30,~~next ~~2015,~~financing ~~Ervington~~or ~~closed~~one-year ~~the~~after issuance. ~~second~~We ~~tranche~~estimate ofthat athe ~~private~~cost ~~placement~~to ~~offering~~build ~~under~~ the ~~purchase~~facility ~~agreement~~on ~~raising~~the ansite ~~additional~~will be approximately $9133,~~750~~000,000. inThe ~~gross~~Bay ~~proceeds from~~Minette, ~~the~~Alabama ~~sale~~site ofunder contract ~~2,974,576~~will ~~shares~~be ofable ~~our~~to ~~Series~~accommodate Cup ~~Preferred~~to ~~Stock at~~ a ~~purchase~~total ~~price~~ of $3four production facilities.~~277777778.~~ WeBay ~~agreed~~Minette tois ~~use~~situated in the ~~proceeds~~Southeastern part ~~for~~of the ~~acquisition,~~United ~~enhancement~~States ~~and~~near ~~maintenance~~abundant offeedstock anand ~~oil~~has ~~field~~a ~~and~~rail ~~the~~loading ~~use~~facility, ofinland ~~our~~and ~~Plasma~~gulf ~~Pulse~~waterways ~~Technology~~and ~~thereon~~other transportation channels.

On October 22, 2015, Novas entered into an operating agreement with Technovita Technologies USA, Inc. (“Technovita”) (the “Joint Venture Agreement”) through a newly formed Delaware limited liability company, NENA, whereby Novas agreed to contribute $1,200,000 ($600,000 to be delivered on the effective date (October 22, 2015) of the Joint Venture Agreement, $300,000 on November 1, 2015 and $300,000 on the two month anniversary of the Effective Date) to the capital of NENA for 60% of the membership interests of NENA and Technovita agreed to contribute an aggregate of $800,000 to the capital of NENA for 40% of the membership interests of NENA. In October 2015, Novas entered into a sublicense agreement (the “Novas Sublicense Agreement”) with NENA and the Licensor pursuant to which NENA was granted the right, subject to certain exceptions to be the exclusive provider of the Plasma Pulse Technology for treatment of vertical wells to third parties in the United States. Subject to certain exceptions and pursuant to the terms of Sublicense Agreements (the “Technovita Sublicense Agreement”) that was entered into between Technovita, NENA and Licensor, NENA is the exclusive provider of the Plasma Pulse Technology for treatment of vertical wells to third parties in Canada. Both Novas and Technovita will retain the right to deploy the Plasma Pulse Technology on vertical wells owned by Novas or Technovita in the United States or Canada, respectively. On October 4, 2016, Novas Energy USA, Inc. (“Novas USA”), a wholly owned subsidiary of the Company, delivered a notice to Technovita Technologies USA, Inc. (“Technovita”) electing to dissolve its joint venture with Technovita (the “Joint Venture”), effective November 1, 2016, pursuant to Section 11.1(b) of the Operating Agreement of Novas Energy North America, LLC (“NENA”), dated October 22, 2015 (the “Operating Agreement”), by and among Novas USA and Technovita.

On July 6, 2012, we filed a Certificate of Designations, Rights and Preferences with the Secretary of State of the State of Delaware designating 5,000,000 preferred shares as Series A-1 Preferred Stock. On August 17, 2012, we filed an amendment to our Certificate of Incorporation, which increased the number of shares of our authorized Common Stock to 500,000,000 shares, effectuated a 50:1 reverse split of the number of shares of our outstanding common stock and changed our name to Propell Technologies Group, Inc. On February 4, 2013, we acquired all of the outstanding shares of Novas and Novas became our wholly owned subsidiary. Effective December 31, 2013, we disposed of our e-commerce line of business. On March 14, 2014, we filed a Certificate of Designations, Rights and Preferences with the Secretary of State of the State of Delaware designating 500,000 preferred shares as Series B Preferred Stock. On February 17, 2015, we filed a Certificate of Designations, Rights and Preferences with the Secretary of State of the State of Delaware designating 4,500,000 preferred shares as Series C Preferred Stock.

On February 16, 2017, the board of directors resolved that the Company change its name to Pledge Petroleum Corp and on February 17, 2017, the “Company filed a Certificate of Amendment to the Certificate of Incorporation with the Secretary of State of Delaware to change the name of the Company to Pledge Petroleum Corp.

Available Information

Additional information about Pledge is contained at our website, http://www.pledgepcorp.com . Information contained on our website is not incorporated by reference into, and does not form any part of, this Annual Report on Form 10-K. We have included our website address as a factual reference and do not intend it to be an active link to our website. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are available free of charge through the investor relations page of our internet website as soon as reasonably practicable after those reports we electronically filed such material with, or furnish it to, the SEC. Our principal offices are located at 11811 North Freeway, 5th Floor, Suite 513, Houston, TX 77060. Our telephone number is +1 (832) 328-0169 and our facsimile number is (713) 513-5700. Our fiscal year end is December 31.

The Technology

The basic technology that we intend to acquire rights to utilizes a patented and commercially deployed fast pyrolysis process to turn biomass into renewable diesel. The technology is owned by a third party and is sold to customers incorporated within and as part of a modular piece of equipment. We intend to secure a purchase order for this equipment through the auspices of Christopher Headrick, who through a company he owns is an authorized sales representative for the third party manufacturer. Christopher Headrick has also agreed to forego receipt to any sales commissions paid to him in respect of our purchases of the equipment through his efforts.

Government Programs Favoring Biomass-Based Diesel Production and Use

The biomass-based diesel industry benefits from numerous federal and state government programs, the most important of which is RFS2.

Renewable Fuel Standard

On July 1, 2010, RFS2’s biomass-based diesel requirement became effective, requiring for the first time that a certain percentage of the diesel fuel consumed in the United States be made from renewable sources. The biomass-based diesel requirement can be satisfied by two primary fuels, biodiesel and renewable diesel. Required volumes under the RFS2 program, referred to as the renewable volume obligation (“RVO”), are determined by the United States Environmental Protection Agency (the “EPA”), subject to the approval of the Office of Management and Budget (“OMB”). For 2012 through 2016, the biomass-based diesel RVO was set (in gallons) at one billion, 1.28 billion, 1.63 billion, 1.73 billion, and 1.90 billion for 2012, 2013, 2014, 2015 and 2016, respectively. In November 2016, the EPA issued the final biomass-based diesel RVO volume for 2017 at 2.00 billion gallons. In November 2017, the EPA issued the final biomass-based diesel volume for 2018 at 2.1 billion gallons and set the 2019 RVO volume target at 2.1 billion gallons.

The biomass-based diesel requirement is one of four separate renewable fuel requirements under RFS2. The RFS2 requirements are based on two primary categories and two subcategories. The two primary categories are conventional renewable fuel, which is primarily satisfied by corn ethanol, and advanced biofuel, which is defined as a biofuel that reduces lifecycle greenhouse gas emissions by at least 50% compared to the petroleum-based fuel the biofuel is replacing. The advanced biofuel category has two subcategories, cellulosic biofuel, to be satisfied by newly developed cellulosic biofuels, such as ethanol made from woody biomass, and biomass-based diesel, which is satisfied by biodiesel and renewable diesel. RFS2’s total advanced biofuel requirement is larger than the combined cellulosic fuel and biomass-based diesel requirements, thus requiring the use of additional volumes of advanced biofuels.

The RFS2 requirement for advanced biofuels can be satisfied by any advanced biofuel, including biodiesel, renewable diesel, biogas used in transportation, biobutanol, cellulosic ethanol or sugarcane-based ethanol, so long as it meets the 50% greenhouse gas reduction requirement. The advanced biofuel requirement was 2.88 billion gallons in 2015, 3.61 billion gallons in 2016, 4.28 billion gallons in 2017 and 4.29 billion gallons in 2018.

The advanced biofuel RVO is expressed in terms of ethanol equivalent volumes (“EEV”), which is based on the fuel’s renewable energy content compared to ethanol. Biodiesel has an EEV of 1.5 and renewable diesel has an EEV of 1.5-1.7, compared to 1.0 for sugarcane-based ethanol. Accordingly, it requires less biomass-based diesel than sugarcane-based ethanol to meet the required volumes as each gallon of biomass-based diesel counts as more gallons for purposes of fulfilling the advanced biofuel RVO, providing an incentive for refiners and importers to purchase biomass-based diesel to meet their advanced biofuel RVO.

The RFS2 volume requirements apply to petroleum refiners and petroleum fuel importers in the 48 contiguous states and Hawaii, who are defined as “Obligated Parties” in the RFS2 regulations, and require these Obligated Parties to incorporate into their petroleum-based fuel a certain percentage of renewable fuel or purchase credits in the form of renewable identification numbers (“RINs”) from those who do. An Obligated Party’s RVO is based on the volume of petroleum-based fuel they produce or import. The largest United States petroleum refining companies, such as Valero, Phillips 66, ExxonMobil, British Petroleum, Chevron, Shell, Marathon and Citgo, represent the majority of the total RVO, with the remainder made up of smaller refiners and importers.

Renewable Identification Numbers

The EPA created the RIN system to track renewable fuel production and compliance with the renewable fuel standard. EPA registered producers of renewable fuel may generate RINs for each gallon of renewable fuel they produce. In the case of biomass-based diesel, generally 1.5 to 1.7 biomass-based diesel RINs may be generated for each gallon of biomass-based diesel produced, based upon the fuel’s renewable energy content. Renewable fuel, including biomass-based diesel, can then be sold with associated RINs attached. RINs may also be separated from the gallons of renewable fuel they represent and once separated they may be sold as a separate commodity. RINs are ultimately used by obligated parties to demonstrate compliance with RFS2. Obligated parties must obtain and retire the required number of RINs to satisfy their RVO during a particular compliance period. An Obligated Party can obtain RINs by buying renewable fuels with RINs attached, buying RINs that have been separated, or producing renewable fuels themselves. All RIN activity under RFS2 must be entered into the EPA’s moderated transaction system, which tracks RIN generation, transfer and retirement. RINs are retired when used for compliance with the RFS2 requirements.

The value of RINs is significant to the price of biomass-based diesel. In 2017, RIN prices as a percentage contribution to the daily average B100 spot price, as reported by the Oil Pricing Information System, or OPIS, fluctuated significantly throughout the year and range from a low of $1.19 per gallon, or 38%, in December to a high of $1.76 per gallon, or 56%, in August.

The renewable fuel that we expect to produce will qualify as a D7 renewable fuel. D7 RINs are awarded for Cellulosic Biomass-based Diesel, Cellulosic Biofuel, Advanced Biofuel and Renewable Fuel with GHG emission reductions of at least 60%. D7 RINs are traded at the value of D3 RINs multiplied by 1.7. D3 RINs traded at an average above $2.50 per gallon in 2017 and based upon the 1.7 multiplier, D7 RINs were worth approximately $4.25 per gallon on average in 2017. Additionally, D7 RINs hold more intrinsic value, as D& RINs have the most flexibility for compliance because they can be retired to meet several mandate categories.

Biodiesel Tax Credit

The federal biodiesel mixture excise tax credit (“BTC”), when in effect, provides a $1.00 per gallon excise tax credit to the first blender of biomass-based diesel with at least 0.1% petroleum-based diesel fuel. The BTC can then be credited against such biodiesel federal excise tax liability or the blender can obtain a cash refund from the United States Treasury for the value of the credit. The BTC was first implemented on January 1, 2005, although on several occasions it has been allowed to lapse and then subsequently reinstated, in some cases on a retroactive basis, as detailed in the following table:

The BTC is best thought of as an incentive shared across the entire value chain through routine, daily trading and negotiation. In February 2018, the BTC was retroactively reinstated for 2017, but was not reinstated for 2018. It is uncertain whether the BTC will be reinstated for 2018 or any later years.

California Low Carbon Fuel Standard Credits

The California Low Carbon Fuel Standard (“LCFS”) regulation is a rule designed to reduce greenhouse gas emissions associated with transportation fuels used in California. The regulation quantifies lifecycle greenhouse gas emissions by assigning a “carbon intensity” (“CI”) score to each transportation fuel based on that fuel’s lifecycle assessment. Each fuel provider (generally the fuel’s producer or importer, or “regulated party”) is required to ensure that the overall CI score for its fuel pool meets the annual carbon intensity target for a given year. A regulated party’s fuel pool can include gasoline, diesel, and their blend stocks and substitutes. In other words, excess CI reductions from one type of fuel (e.g., diesel) can be used to offset insufficient reductions in another fuel (e.g., gasoline).

We would obtain CI credits when we sell qualified biomass-based diesel into California, which is our intended market. During 2017, CI credits ranged from $69.5 per metric ton to $113.0 per metric ton, as reported by OPIS.

Anticipated Future Revenues from Fuel Sales and Credits

In addition to selling the diesel fuel itself, RTS anticipates qualifying for three distinct credits. As a factor of our Low Carbon Intensity, RTS renewable diesel should receive $2.00 plus per gallon produced from Low Carbon Fuel Credits (LCFS) awarded by the California Air Resources Board. In addition, the unique feedstock we expect to utilize should allow us to qualify for EPA issued D7 Renewable Identification Numbers (RINs). D7 RINs receive 1.7 times the value of D3 RINs, which translates into $3.50 to $3.85 per gallon produced based upon the most recent pricing. Finally, RTS expects to qualify for the Federal Biodiesel Excise Tax Credit (BTC), which is valued today at $1.00 per gallon produced. At today’s pricing, RTS anticipates receiving over $8.50 per gallon in revenue due to these credits.

Other Government Programs

According to the U.S. Department of Energy, more than 40 states have implemented various programs that encourage the use of biomass-based diesel through blending requirements as well as various tax incentives.

Our Market

The global transportation fuels market represents one of the world’s largest markets at over $2 trillion. According to the U.S. Energy Information Administration (“EIA”) for 2009, there was a 138 billion gallon market for gasoline and a 49 billion gallon market for diesel in the United States alone. We expect our renewable diesel to have “drop in” compatibility with traditional hydrocarbons, unlike conventional biofuels such as FAME diesel, corn ethanol and sugarcane ethanol.

Although we expect our renewable diesel will be marketable not only into the global transportation fuels market, its renewable nature also should allow us to benefit from government programs and incentives. In 2007, the Energy Independence and Security Act (“EISA”) was adopted to move the United States toward greater energy independence and security and to increase the production of clean renewable fuels domestically. EISA updated RFS2 to require the use of cellulosic biofuel, a renewable fuel derived from renewable cellulosic biomass that produces at least 60% lower lifecycle greenhouse gas emissions compared to a 2005 baseline. We believe that the renewable diesel that we produce will reduce direct lifecycle greenhouse gas emissions by over 80% compared to the fuels they displace.

We believe that our renewable diesel will qualify as cellulosic biofuel under RFS2. We expect that our diesel will have an equivalence value of between 1.5 to 1.7. Equivalence value equates to the number of RIN credits per gallon. We expect that this designation, together with the higher energy content of our renewable fuels than ethanol, will make our diesel attractive to fuel producers because diesel can be used to satisfy specific volume requirements for cellulosic biofuel, as well as the volume requirements for both advanced biofuel and renewable fuel under RFS2. This provides cellulosic biofuel producers like our company an opportunity to compete with producers of advanced biofuel and other renewable fuel, but not vice versa. Accordingly, the potential size of the mandated market for cellulosic biofuel in 2022 under RFS2 encompasses the 36.0 billion gallon mandate for all renewable fuels, which includes the 21.0 billion gallon mandate for advanced biofuel, which also includes the 16.0 billion gallon mandate for cellulosic biofuel. Under the EISA mandates, by 2022 renewable fuels are expected not only to make up an increasing percentage of liquid transportation fuels in the United States, but also are expected to contribute to a 15% reduction in net imports of crude oil from 2009 levels. Additional renewable fuels mandates exist in Europe and other countries with varying mandates and volume requirements for premium renewable fuels.

Other Support Agreements

Mr. Headrick has spent years building relationships with key partners and formulating the business plan for our company in order to enable us to successfully begin operations once the initial production facility is brought online. A company owned by Mr. Headrick has entered into a sales representative agreement with the owner of the equipment that incorporates the technology that we intend to acquire authorizing it to serve as an authorized sales representative of the third-party manufacturer with the right to market and to solicit sales of the equipment. In addition, RTS (or an affiliated entity) has entered into the following letters of intent; (i) Cooper Marine & Timberlands Corp. (a Cooper company) to be our primary provider of feedstock, (ii) Forest2Market to provide project development and operational support services related to biomass feedstock, (iii) Weaver and Tidwell, L.L.P. to provide technical support and regulatory consulting services to RTS in its role as a renewable fuel producer and (iv) Targray Industries Inc. to purchase not less than 13 million gallons per year of renewable diesel.

Our Competitive Strengths

We believe that our business benefits from a number of competitive strengths, including the following:

Our renewable fuel product will be hydrocarbons compatible with the existing transportation fuels infrastructure. Unlike other renewable fuels such as ethanol, which is alcohol-based, or biodiesel, which is composed of fatty acids, our diesel will be hydrocarbon compatible that can “drop in” to the existing petroleum-based transportation fuels infrastructure, including pipelines, interchangeably with their petroleum-based counterparts to produce various fuel products, including finished gasoline and diesel. In addition, due to the higher energy content of our diesel, we believe that our transportation fuels will sell at a premium to ethanol. Currently, we expect to compete in the mandated renewable fuels market against corn ethanol, sugarcane ethanol and biodiesel and in the general market for gasoline and diesel fuels.

Existing renewable diesel producers are unable to meet overall demands. The overall demand in the United States for renewable diesel cannot be met by the limited number of renewable diesel producers operating today. As a result, competition is not a primary part of the renewable diesel marketplace dynamics. For example, the renewable diesel consumed in California alone (approximately 278 million gallons in 2016) was provided from just several producers of diesel producers. As a result, we believe that we will be able to sell as much renewable diesel as we can produce.

The technology. We intend to utilize the modular technology platform offered by a third-party supplier to convert biomass into high-quality renewable diesel. By leveraging the technological innovations and modular design and demonstrated scale-up cost, we believe we have significantly reduced our operating risk.

The feedstock we use in our process is completely renewable, low-cost, abundant and sustainable. Our technology platform uses tree slash to produce our renewable diesel. We have selected Cooper Marine & Timberlands Corp. (a Cooper company) as our primary provider of feedstock because of their completely renewable, abundant, sustainable supply and generally low-cost and stable pricing history compared to feedstocks used by traditional biofuels companies. Cooper Marine & Timberlands Corp. provides tree slash as our sole feedstock because of their abundant supply and generally stable pricing history. This completely renewable and sustainable non-food feedstock has a low-cost relative to other traditional renewable biomass and a long lifecycle that we believe significantly decreases price volatility compared to seasonal feedstocks that depend more on weather and other short-term supply and demand dynamics. We believe that our ability to use tree splash, such as logging residues, branches and bark, will enable us to keep our feedstock expenses at a low price.

We have identified strategic locations for our commercial production facilities. The proposed site for our initial-scale commercial production facility is Bay Minette, Alabama, situated in the Southeast near abundant Cooper Marine & Timberlands Corp. feedstock and with access to rail, inland and gulf waterways and other transportation channels. We believe that the Southeast of the United States can provide us with an available skilled labor force for our facilities.

We believe that we have a better use for woodchip feedstock. Based on current prices, and if we meet our target production cost metrics, and if competition for feedstock develops in a region, we believe that we may be able to afford higher prices for feedstock than paper mills.

We have an experienced management team. Our executive officers and senior operational managers have extensive experience in research and development, new product development, capital project execution, feedstock procurement, plant operations and technology commercialization across the catalyst, refining, chemicals and forest products industries. We believe that the experience of our management team provides us with valuable relevant experience, which we believe will enhance our ability to commercialize our products, grow our business and improve our technology.

Our Strategy

Our principal strategy is to leverage the technology and equipment we intend to acquire with our operational expertise to produce clean, economical, renewable and sustainable “green” diesel that we can sell at prices that are competitive with petroleum-based transportation fuels. Key elements of our strategy include the following:

We have adopted a build, own and operate strategy. We plan to build, own and operate our commercial production facilities in the United States. We have identified a 28-acre site located in Bay Minette, Alabama where we intend to acquire the real property and construct our initial facility.

We expect to have a diversified revenue stream. We intend to derive our revenue from five major sources: (1) the sale of renewable diesel, (2) the sale of biochar, (3) RIN, (4) BTC and (5) California LCFS. We believe that these diversified revenue streams will enable us to achieve long-term recurring revenues and mitigate risk.

We are pursuing federal, state and other financing to construct our initial commercial production facilities. The acquisition of our initial-scale commercial production facility is dependent on obtaining financing in all or part through a $133 million loan or convertible debenture or equity raise. We are strategically exploring other financing alternatives, including financing commercial production facilities.

We plan to build our production facilities using “copy exact” principles. We plan to employ a modular design that can be replicated for our subsequent standard commercial production facilities. The initial facility that we plan to develop is expected to be designed to produce approximately 13 million gallons of renewable diesel per year and approximately 23,000 tons of biochar per year. Utilizing learning from our initial commercial production facilities, we plan to deploy a “copy exact” strategy of standardized modular designs to reduce our capital costs, implement best practices, reduce operating costs, increase personnel flexibility and facilitate fast deployment of new production facilities. We believe that commercially available feedstock sources exist to support significant expansion opportunities in biomass-rich regions in the United States and globally. At a later date, we may consider larger or smaller standardized facility sizes to optimize the scale for local feedstock availability and transportation costs.

We plan to expand our base of prospective customers. We believe that we will be able to sell our renewable diesel to a variety of potential customers, including integrated oil companies, distributors of finished products, such as terminal or rack owners, and end users of petroleum products, such as transportation companies, fleets or petrochemical operators. We believe that this broad potential customer base will allow us to maximize the value we receive for our products, as well as make us less dependent on any one customer or market.

We believe that we will be able to compete with petroleum-based transportation fuels. Over time, our goal is to achieve commercial viability without reliance on government incentives, mandates or tariffs. Although we will benefit from mandated policies such as RFS2, we expect that our standard commercial production facilities will be able to produce our diesel on a cost-competitive basis with existing petroleum-based counterparts without government subsidies at current pricing. We also expect to be able to compete in non-mandated international transportation fuels markets, as well as mandated international transportation fuels markets, such as the European biodiesel market, that have historically commanded higher prices per gallon.

We plan to drive brand loyalty for RTS.” We believe our products will provide strategically important new domestic sources of liquid transportation fuels, sustainably utilizing local renewable resources to help further energy independence and reduce greenhouse gas emissions. We plan to capitalize on the increasing global trend in green awareness to differentiate our renewable transportation fuels from petroleum-based alternatives. In the long term, we believe that we will have a substantial marketing opportunity with a variety of large, fuel-intensive prospective customers seeking sustainable, renewable transportation fuel options. These potential customers may include distributors of finished products, such as terminal or rack owners, and end users of petroleum products such as transportation companies, fleets or municipalities that would place a premium on environmentally friendly products.

Marketing

We intend to use a variety of marketing channels to promote our products and platform, such as digital, print and social media advertising, email campaigns, industry events and public relations. If the costs of the marketing channels we use increase dramatically, then we may choose to use alternative and less expensive channels, which may not be as effective as the more expensive channels. As we add to or change the mix of our marketing strategies, we may need to expand into more expensive channels than those we are currently in, which could adversely affect our business, results of operations and financial condition.

Intellectual Property

With respect to proprietary know-how that may not be patentable, or that we believe is best protected by means that do not require public disclosure, and processes for which patents are difficult to enforce, we rely on, among other things, trade secret protection and confidentiality and non-circumvent agreements to protect our interests. All of our employees and consultants have entered into non-disclosure and proprietary information and inventions assignment agreements with us. These agreements address intellectual property protection issues and require our employees and consultants to assign to us all of the inventions, designs and technologies they develop during the course of their employment or consulting engagement with us. We also control access to sensitive information by limiting access to only those employees and consultants who need to know the information and who have agreed contractually to maintain the confidentiality of that information. There can be no assurance that these agreements will not be breached, that we will have adequate remedies for any breach, that others will not independently develop equivalent proprietary information or that other third parties will not otherwise gain access to our trade secrets and other intellectual property.

Our precautions may not prevent misappropriation or infringement of our intellectual property. Third parties could infringe or misappropriate our patents, copyrights, trademarks, trade secrets and other proprietary rights. Litigation may be necessary to enforce our intellectual property rights, to protect our trade secrets, to determine the validity and scope of the proprietary rights of others or to defend against claims of infringement, invalidity, misappropriation or other claims. Any such litigation could result in substantial costs and diversion of our resources. Moreover, any settlement of or adverse judgment resulting from such litigation could restrict or prohibit our use of the technology. Our failure or inability to adequately protect our intellectual property or to defend against third-party infringement claims could materially harm our business.

If any of our processes, products or technology is covered by third party patents or other intellectual property rights, we could be subject to various legal actions. We cannot assure you that our technology and products do not infringe patents held by others or that they will not in the future. Litigation is costly and time-consuming, and there can be no assurance that our litigation expenses will not be significant in the future or that we will prevail in any such litigation.

Environmental and Regulatory Matters

Our operations are subject to a variety of federal, state and local environmental laws and regulations that govern the discharge of materials into the environment or otherwise relate to environmental protection. Examples of these laws include:

the Clean Air Act, also known as CAA, and analogous state laws that impose obligations related to air emissions and regulate fuels and fuel additives;

the federal Comprehensive Environmental Response, Compensation, and Liability Act, also known as CERCLA or the Superfund law, and analogous state laws that regulate the cleanup of hazardous substances that may be or have been released at properties currently or previously owned or operated by us or at locations to which our wastes are or have been transported for disposal;

the federal Water Pollution Control Act, also known as the Clean Water Act, and analogous state laws that regulate discharges from our facilities into state and federal waters, including wetlands;

the federal Resource Conservation and Recovery Act, also known as RCRA, and analogous state laws that impose requirements for the storage, treatment and disposal of solid and hazardous waste from our facilities;

the Endangered Species Act; and

the Toxic Substances Control Act and analogous state laws that impose requirements on the use, storage and disposal of various chemicals and chemical substances at our facilities.

These laws and regulations may impose numerous obligations that are applicable to our operations, including the acquisition of permits to conduct regulated activities, the incurrence of capital or operating expenditures to limit or prevent releases of materials from our facilities, and the imposition of substantial liabilities and remedial obligations for pollution resulting from our operations. Numerous governmental authorities, such as the EPA and analogous state agencies, have the power to enforce compliance with these laws and regulations and the permits issued under them, often requiring difficult and costly corrective actions. Most of these statutes include citizen suit provisions, which enable private parties, in lieu of the government, to sue for alleged violations of environmental law. Failure to comply with these laws, regulations or permits may result in the assessment of administrative, civil and criminal penalties, the imposition of remedial obligations and the issuance of injunctions limiting or preventing some or all of our operations. In addition, we may experience a delay in obtaining or be unable to obtain required permits, which may cause us to lose potential and current customers, interrupt our operations and limit our growth and revenue.

We believe that our current operations are in substantial compliance with existing environmental laws, regulations and permits. New laws, new interpretations of existing laws, increased governmental enforcement of environmental laws or other developments could require us to make significant additional expenditures. Continued government and public emphasis on environmental issues can be expected to result in increased future investments for environmental controls at our ongoing and future operations. Present and future environmental laws and regulations and related interpretations applicable to our operations, more vigorous enforcement policies and discovery of currently unknown conditions may require substantial capital and other expenditures.

Clean Air Act Regulation. Our operations and the products we intend to manufacture will be subject to certain specific requirements of the CAA and similar state and local regulations and permitting requirements. These laws, regulations and permitting requirements may restrict our emissions, affect our ability to make changes to our operations, and otherwise impose limitations on or require controls on our operations. We expect that the facility we intend to acquire will be deemed a “minor source” under the CAA. It is possible that additional facilities that we construct in the future may be considered “major sources” or that modifications to planned facilities may cause such facilities to be “major sources,” which would subject these facilities to more stringent permitting requirements, including requirements of Title V of the CAA. In addition to costs that we expect to incur to achieve and maintain compliance with these laws, new or more stringent CAA standards in the future also may limit our operating flexibility or require the installation of new controls at our facilities and future facilities. Because other domestic alternative fuel manufacturers will be subject to similar restrictions and requirements, however, we believe that compliance with more stringent air emission control or other environmental laws and regulations is not likely to materially affect our competitive position.

Hazardous Substances and Wastes. There is a risk of liability for the investigation and cleanup of environmental contamination at each of the properties that we own or operate and at off-site locations where we may arrange for the disposal of hazardous substances. If these substances have been or are disposed of or released at sites that undergo investigation and/or remediation by regulatory agencies, we may be responsible under CERCLA or other environmental laws for all or part of the costs of investigation and/or remediation and for damage to natural resources. We may also be subject to related claims by private parties alleging property damage and personal injury due to the presence of or exposure to hazardous or other materials at or from these properties. Some of these matters may require us to expend significant amounts for investigation and/or cleanup or other costs. We are unaware of any material environmental liabilities relating to contamination at or from our facilities.

We will also generate solid wastes, including hazardous wastes, that are subject to the requirements of RCRA and comparable state statutes. Although RCRA regulates both solid and hazardous wastes, it imposes strict requirements on the generation, storage, treatment, transportation and disposal of hazardous wastes. The EPA and various state agencies have limited the approved methods of disposal for certain hazardous and non-hazardous wastes.

Water Discharges. The Clean Water Act and analogous state laws impose restrictions and strict controls regarding the discharge of pollutants into state waters as well as waters of the United States and to conduct construction activities in waters and wetlands. Certain state regulations and the general permits issued under the Federal National Pollutant Discharge Elimination System, or NPDES, program prohibit any discharge into surface waters, ground waters, injection wells and publicly owned treatment works except in strict conformance with permits, such as pre-treatment permits and NPDES permits, issued by federal, state and local governmental agencies. We anticipate that our process waste water will not be directly discharged into state or U.S. waters, but rather will be sent to a publicly owned treatment works. In addition, the Clean Water Act and analogous state laws require individual permits or coverage under general permits for discharges of storm water runoff from certain types of facilities. These regulations and permits may require us to monitor and sample the storm water runoff from certain of our facilities or our discharges to publicly owned treatment works. Some states also maintain groundwater protection programs that require permits for discharges or operations that may impact groundwater conditions. Federal and state regulatory agencies can impose administrative, civil and criminal penalties for non-compliance with discharge permits or other requirements of the Clean Water Act and analogous state laws and regulations. We believe that compliance with existing permits and compliance with foreseeable new permit requirements will not have a material adverse effect on our financial condition, results of operations or cash flow.

Construction Permits. Our business is also subject to sewer, electrical and construction permitting requirements. As a condition to granting necessary permits, regulators could make demands that increase our costs of construction and operations, in which case we could be forced to obtain additional debt or equity capital. Permit conditions could also restrict or limit the extent of our operations. We cannot assure you that we will be able to obtain and comply with all necessary permits to construct our commercial production facilities. Failure to obtain and comply with all applicable permits and licenses could halt our construction and could subject us to future claims.

Safety. The hazards and risks associated with producing and transporting our cellulosic gasoline and diesel, such as fires, natural disasters, explosions and pipeline ruptures, also may result in personal injury claims or damage to property and third parties. As protection against operating hazards, we maintain insurance coverage against some, but not all, potential losses. Our coverage includes physical damage to assets, employer’s liability, comprehensive general liability, automobile liability and workers’ compensation. We maintain insurance coverage against pollution resulting from environmental accidents that occur on a sudden and accidental basis, some of which may result in toxic tort claims. We believe that our insurance is adequate and customary for our industry, but losses could occur for uninsurable or uninsured risks or in amounts in excess of existing insurance coverage. We are not currently aware of pending material claims for damages or liability to third parties relating to the hazards or risks of our business.

OSHA. We are subject to the requirements of the federal Occupational Safety and Health Act and comparable state statutes, laws and regulations. These laws and the implementing regulations strictly govern the protection of the health and safety of employees. The Occupational Safety and Health Administration’s, or OSHA, hazard communication standard, the EPA’s community right-to-know regulations under Title III of CERCLA and similar state laws require that we organize and/or disclose information about hazardous materials used or produced in our operations.

Our operations are also subject to standards designed to ensure the safety of our processes, including OSHA’s Process Safety Management standard. The Process Safety Management standard imposes requirements on regulated entities relating to the management of hazards associated with highly hazardous chemicals. Such requirements include conducting process hazard analyses for processes involving highly hazardous chemicals, developing detailed written operating procedures, including procedures for managing change, and evaluating the mechanical integrity of critical equipment.

TSCA. We are subject to the requirements of the Toxic Substances Control Act, or TSCA, which regulates the commercial manufacture and use of chemicals. Before an entity can manufacture a chemical, it needs to determine whether that chemical is listed in the TSCA inventory. If a substance is listed, then manufacture can commence immediately after a notice of commencement. If not, then a “Chemical Abstracts Service” number is obtained, and a registration and pre-manufacture notice must be filed with the EPA. We have obtained the Chemical Abstracts Service numbers, filed a pre-manufacturing notice, entered into a consent order with the EPA, and sent notices of commencement to the EPA. The failure to comply with TSCA could have a material adverse effect on our results of operations and financial condition. In addition, the TSCA new chemical submission policies may change and additional government legislation or regulations may be enacted that could prevent or delay regulatory approval of our products.

Climate Change. In the United States, legislative and regulatory initiatives are underway at the federal and state levels to regulate greenhouse gas, or GHG, emissions, including emissions by facilities such as our initial-scale and planned commercial production facilities. Pursuant to the EPA’s 2009 finding that GHGs present an endangerment to human health and the environment, and other rulemakings and interpretations, the EPA concluded that GHG-emitting stationary sources would become subject to federal permitting requirements under the Clean Air Act starting in 2011. In 2010, the EPA issued a final rule, known as the “Tailoring Rule,” that defined regulatory emissions thresholds at which certain new and modified stationary sources would become subject to permitting requirements for GHG emissions under the CAA. Projected GHG emissions from our facility would fall below the currently applicable thresholds for GHG reporting or permitting requirements. However, our future commercial production facilities are expected to exceed such thresholds and, therefore, will be required to comply with such GHG reporting or permitting requirements if they meet or exceed reporting or permitting thresholds. These thresholds may be reduced from their current levels; for example, the EPA has indicated in rulemakings that it may revise the current Tailoring Rule thresholds downward, making additional sources subject to permitting requirements.

Additional direct federal regulation of GHG emissions may be implemented under other CAA programs, including the New Source Performance Standards, or NSPS, program. The EPA has already proposed to regulate GHG emissions from one source category—electric generating units—and may propose GHG NSPS for additional source categories in the future. Many states, either individually or through multi-regional initiatives, already have begun implementing measures to reduce GHGs, primarily through the planned development of emission inventories or regional GHG “cap and trade” programs.

Complying with federal and state greenhouse gas reporting and permitting requirements may result in materially increased compliance costs, increased capital expenditures, decreased earnings, increased operating costs and additional operating restrictions for our business, which could harm our competitive position.

Because regulation of GHG emissions is relatively new, further regulatory, legislative and judicial developments are likely to occur. Such developments may affect how these GHG initiatives will impact the demand for our products and our operating results. Due to the uncertainties surrounding the regulation of and other risks associated with GHG emissions, we cannot predict the financial impact of related developments on us. Because other domestic alternative fuel manufacturers will be subject to similar restrictions and requirements, however, we believe that compliance with GHG reporting or emission requirements is not likely to materially affect our competitive position.

RTS has executed a contract to acquire a 28 acre of property for $1,250,000 on which we intend to construct a renewable diesel facility in Bay Minette, Alabama. We expect to finance the acquisition the of real property and construction of the facility utilizing a mixture of debt and equity, however, we have received no funding commitments to date and no assurance can be given that any such commitments will be secured.

Competition

We will face competition from producers and suppliers of petroleum-based diesel fuel, other biomass-based diesel producers, marketers, traders and distributors. The size of the biomass-based diesel industry is small compared to the size of the petroleum-based diesel fuel industry and large petroleum companies have greater resources than we do. Our principal competitive differentiators are biomass-based diesel quality and RIN quality, supply reliability and price. We also face competition in the biomass-based diesel RIN compliance market from producers of renewable diesel and in the advanced biofuel RIN compliance market from producers of other advanced biofuels. We believe that we will compete with large, multi-product companies that have greater resources than we do. Archer Daniels Midland Company, Cargill Incorporated, Louis Dreyfus Commodities Group and Ag Processing Inc. are major international agribusiness corporations and biodiesel producers with the financial sourcing and marketing resources to be formidable competitors in the biodiesel industry. These agribusiness competitors tend to make biodiesel from higher cost virgin vegetable oils such as soybean or canola oil, which they produce as part of their integrated agribusinesses. We will also be in competition with other producers of renewable diesel. For example, Renewable Energy Group and Neste Oil have greater resources than we do along with approximately 882 million gallons of renewable diesel production capacity in Asia and Europe. Another renewable diesel competitor is Diamond Green Diesel, LLC, the joint venture between Valero Energy Corp. and Darling International, which has approximately 160 million gallons of production capacity and announced plans to grow its capacity to 275 million gallons and beyond. Renewable diesel can also satisfy the RFS2 biomass-based diesel requirement if the renewable diesel meets the greenhouse gas reduction requirements.

Risk Management

The prices for feedstocks and biomass-based diesel can be volatile and are not always closely correlated. Lower-cost feedstocks are particularly difficult to risk manage given that such feedstocks are not traded in any public futures market. To manage feedstock and biomass-based diesel price risks, we intend to utilize forward contracting, hedging and other risk management strategies, including the use of futures, swaps, options and over-the-counter products.

In establishing our risk management strategies, we draw from our own in-house risk management expertise and consult with industry experts. We utilize research conducted by outside firms to provide additional market information and risk management strategies. We believe combining these sources of knowledge, experience and expertise expands our view of the fluctuating commodity markets for raw materials and energy to improve our risk management strategies.

Employees

As of April 10, 2019, we had one individual that performs services for us in Tennessee that qualifies as a full-time employee. We currently also employ two contractors. We believe that our success will depend, in part, on our ability to attract and retain qualified personnel. We have never experienced a work stoppage due to labor difficulties and believe that our relations with our employees are good. None of our employees are represented by labor unions.

Legal Proceedings

We are not a party to any material litigation or proceeding and are not aware of any material litigation or proceeding, pending or threatened against us.

Available Information

Additional information about Pledge is contained at our website, http://www.pledgepcorp.com. Information contained on our website is not incorporated by reference into, and does not form any part of, this Annual Report on Form 10-K. We have included our website address as a factual reference and do not intend it to be an active link to our website. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are available free of charge through the investor relations page of our internet website as soon as reasonably practicable after those reports we electronically filed such material with, or furnish it to, the SEC. Our principal offices are located 576 S. Foothills Plaza Dr. #163, Maryville, TN, 37801. Our telephone number is (865) 227-4818. Our fiscal year end is December 31.

Prior History

During the 2017 year, our management, at the direction of the Board of Directors, evaluated, considered, and brought forward various opportunities to acquire producing oil fields; however, an oil field meeting the criteria acceptable to the Board of Directors (which criteria include among other things, low general and administrative costs, ability to generate cash flow and ability to fully utilize the Plasma Pulse Technology (“PPT”)) had not been found. As a result, and in lieu of a potential dissolution, on March 23, 2018, we sold substantially all of our assets, including all pertinent intellectual property rights comprising our business of implementing plasma pulse technology (the “Asset Sale”), to Norma Investments Limited (“Norma”), the parent company of Ervington Investments Limited (“Ervington”), the then holder of a majority of our outstanding voting securities, for $650,000 pursuant to an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Norma, dated February 12, 2018 (the “Asset Purchase Agreement”). In connection with the Asset Sale, we also repurchased all of our outstanding securities held by Ervington for $8,500,000 (the “Share Repurchase”) pursuant to a Share Purchase Agreement with Ervington, dated February 12, 2018 (the “Share Purchase Agreement”).

Item 1A. Risk factors

AsWe are a smaller reporting company weas defined by Rule 12b-2 of the Securities Exchange Act of 1934 and, as such, are not required to provide ~~Risk~~the ~~Factors~~information under this Item.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

WeRTS ~~entered~~has ~~into~~executed ~~lease~~a ~~agreement~~contract ~~for~~to ~~approximately~~acquire ~~3,733~~28 ~~square~~acres ~~feet~~located ofin ~~office~~Bay ~~and~~Minette, ~~warehouse~~Baldwin ~~space in Houston~~County, ~~the~~Alabama ~~term of the lease is for 39 months commencing~~ on ~~March~~which 1,it ~~2016 and~~intends ~~terminating~~to onbuild ~~May~~our ~~31,~~initial ~~2019~~facility. ~~The~~RTS ~~lease~~believes ~~provided~~that ~~for~~it will ~~the~~be ~~first~~able ~~month~~ to beacquire ~~rent-free,~~ the ~~fourteenth~~acreage ~~month~~and tobuild ~~be rent-free and~~ the ~~twenty-seventh~~facility ~~month~~for to$133 ~~be rent-free~~million. ~~Monthly~~The ~~rentals,~~acquisition ~~including~~of ~~estimated operating costs, for~~ the ~~first~~real 12property ~~months,~~and ~~excluding~~construction of the ~~free~~facility ~~rental~~will ~~month~~require ~~amount~~significant tofinancing. ~~approximately~~To $3date,~~410~~ ~~per~~we ~~month,~~have ~~escalating~~no atcommitted asources ~~rate~~ of ~~1.7%~~financing ~~per annum, after excluding the free rental months. This lease agreement was amended~~ and ~~the~~no ~~lease~~assurance ~~terminated~~can ~~with effect from May 31, 2017 with a final payment of~~be ~~$2,000~~given ~~and~~that ~~the~~any ~~forfeiture~~such ofcommitments ~~the~~will ~~security~~be ~~deposit of $6,968~~forthcoming.

On May 16, 2017, we entered into an Office Service Agreement on May 16, 2017 whereby we leased an office in a business center, together with all telecommunication services and access to conference rooms, kitchens and all utilities, The agreement is for a period of six months commencing on June 1, 2017 and terminated on November 30, 2017. We paid a monthly amount of $530 in terms of the Office Service Agreement .15

WeThe doBay ~~not~~Minette, ~~own~~Alabama ~~any~~site ~~real~~can ~~property~~accommodate up to a total of four production facilities, including the one described above. WeThe ~~believe~~production facility in Bay Minette is situated ~~that~~in wethe ~~have~~Southeastern ~~adequate~~part ~~space~~of ~~for~~the ~~our~~United ~~anticipated~~States ~~needs~~near abundant feedstock and ~~that~~has ~~suitable~~access ~~additional~~to ~~space~~rail, ~~will~~inland beand ~~available~~gulf atwaterways ~~commercially~~and ~~reasonable~~other ~~prices~~transportation ~~as needed~~channels.

Our principal offices are located 576 S. Foothills Plaza Dr. #163, Maryville, TN, 37801.

Item 3. Legal Proceedings.

~~There~~We are nonot ~~material~~a ~~legal~~party ~~proceedings that~~to ~~are~~any ~~pending~~material litigation or ~~have~~proceeding ~~been~~and ~~threatened~~are ~~against~~not usaware of ~~which~~any ~~management~~material islitigation ~~aware~~or proceeding, pending or threatened against us.

Item 4. Mine Safety Disclosures

Not Applicable.

PART II

(a)

Price Range of Common Stock

Since April 2010 our common stock has traded on the OTCQB under the symbol PROP. ~~From~~The ~~April~~last ~~23,~~reported ~~2010~~sale ~~until~~price ~~the date~~ of ~~this report,~~ our common stock ~~traded~~ on the ~~OTC~~OTCQB ~~Bulletin~~on ~~Board.~~April ~~Prior to that date~~10, ~~there~~2019 was ~~no active market for our common stock~~$0. ~~The following table sets forth~~046 ~~the~~per ~~high and low sale prices for our common stock for the periods indicated~~share.

	HIGH		LOW
Fiscal year 2018
First quarter	$	0.01	$	0.00
Second quarter to May 9, 2018	$	0.03	$	0.01
Fiscal Year 2017
First quarter	$	0.04	$	0.02
Second quarter	$	0.03	$	0.01
Third quarter	$	0.05	$	0.01
Fourth quarter	$	0.03	$	0.00
Fiscal Year 2016
First quarter	$	0.11	$	0.07
Second quarter	$	0.08	$	0.04
Third quarter	$	0.08	$	0.02
Fourth quarter	$	0.06	$	0.02

The last reported sale price of our common stock on the OTC Bulletin board on May 9, 2018 was $0.02 per share.

Holders

As of ~~May~~April 810, ~~2018~~2019, there were approximately 122 ~~119~~ holders of record of our common stock.

Dividend Policy

We have not paid any cash dividends on our common stock to date, and we have no intention of paying cash dividends on our common stock in the foreseeable future. Whether we declare and pay dividends is determined by our board of directors at their discretion, subject to certain limitations imposed under Delaware corporate law. The timing, amount and form of dividends, if any, will depend on, among other things, our results of operations, financial condition, cash requirements and other factors deemed relevant by our board of directors. The holders of the Series B Preferred Stock are entitled to receive out of any assets legally available therefor cumulative dividends at the rate of eight percent (8%) per annum of the stated value (which initially is $10.00), accrued daily and payable annually in arrears on December 31 of each year.

(b)

Recent Sales of Unregistered Securities; Uses of Proceeds from Registered Securities

We did not sell any equity securities during the year ended December 31, ~~2017~~2018 in transactions that were not registered under the Securities Act other than as previously ~~disclosed~~ disclosed in our filings with the Securities and Exchange Commission.

All other sales of unregistered securities have been previously disclosed in our filings with the Securities and Exchange Commission.

(c)

Securities Authorized for Issuance under Equity Compensation Plans

Propell Corporation 2008 Stock Option Plan

Our board of directors adopted the Propell Corporation 2008 Stock Option Plan (the “Plan”) in April 2008 to promote our long-term growth and profitability by (i) providing our key directors, officers and employees with incentives to improve stockholder value and contribute to our growth and financial success and (ii) enable us to attract, retain and reward the best available persons for positions of substantial responsibility. A total of 2,100,000 shares of our common stock have been reserved for issuance upon exercise of options granted pursuant to the Plan. The Plan allows us to grant options to our employees, officers and directors and those of our subsidiaries; provided that only our employees and those of our subsidiaries may receive incentive stock options under the Plan. We have granted a total of ~~380~~152,~~950~~754 options as of December 31, ~~2017~~2018 under the Plan. In addition, we granted 10,000,000 shares of restricted stock to our former CEO, John Huemoeller that were not issued pursuant to the Plan, of which all are vested. One of our directors, John Zotos was also granted 3,000,000 shares of restricted stock that were not issued pursuant to the Plan, all of which are vested.

716

Set forth below is detail with respect to issuances under the Plan:

	Number of securities to be issued upon exercise of outstanding options		Weighted average exercise price of outstanding options		Number of securities remaining for future issuance under equity compensation plans
Equity Compensation plans approved by the stockholders
2008 Stock option plan		~~380~~57,~~950~~704	$	03.9002	$	~~1,719,050~~-
		380,950	$	0.90		1,719,050

On January 1, 2016, we issued 3,000,000 five-year common stock options exercisable at a price of $0.09 per share to our CEO, Brian Boutte. These options were not issued pursuant to the Plan and vested as to 1,000,000 on the first anniversary of the grant date, and 1,000,000 vest on the second anniversary of the grant date and a further 1,000,000 vest on the third anniversary of the grant date. On March 31, 2017, Mr Boutte resigned as the CEO of the Company. Upon the resignation of Mr. Boutte, the 3,000,000 options exercisable over common stock have been forfeited and are available for reissue.

On March 1, 2016, we issued 1,000,000 five-year common stock options exercisable at a price of $0.08 per share to our COO, David Ramsey. These options were not issued pursuant to the Plan and were to vest as to 1,000,000 on the first anniversary of the grant date, 1,000,000 on the second anniversary of the grant date and a further 1,000,000 on the third anniversary of the grant date. These stock options were cancelled upon the termination of Mr. Ramsey’s employment on December 15, 2016.

On May 2, 2018, we issued to each of our three directors for their services as directors, 10,000,000 shares of restricted common stock, vesting as to 1/3 immediately, 1/3 on the one year anniversary of the grant and 1/3 on the two year anniversary of the grant.

Issuer Purchases of Equity Securities

~~There were no issuer purchases of equity securities during the fiscal year ended December 31, 2017.~~None

On March 23, 2018, in terms of a Share Purchase Agreement entered into with Ervington, we repurchasedf 64,302,467 shares of common stock, 3,137,500 shares of series A-1 preferred stock and 4,500,000 Series C preferred stock, for gross proceeds of $8,500,000, resulting in a change of control.

Item 6. Selected Financial Data

This item is omitted as not required for smaller reporting companies.

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

The following discussion and analysis is intended as a review of significant factors affecting our financial condition and results of operations for the periods indicated. The discussion should be read in conjunction with our consolidated financial statements and the notes presented herein and the risk factors and the financial statements and the other information set forth in our Annual Report on Form 10-K for the ~~year~~period from ~~ended~~August 22, 2018 (date of inception) through December 31, ~~2017~~2018. In addition to historical information, the following Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties. Our actual results could differ significantly from those anticipated in these forward-looking statements as a result of certain factors discussed herein and any other periodic reports filed and to be filed with the SEC.

Cautionary Note Regarding Forward-Looking Statements

This report and other documents that we file with the SEC contain forward-looking statements that are based on current expectations, estimates, forecasts and projections about our future performance, our business, our beliefs and our management’s assumptions. Statements that are not historical facts are forward-looking statements. Words such as “expect,” “outlook,” “forecast,” “would,” “could,” “should,” “project,” “intend,” “plan,” “continue,” “sustain”, “on track”, “believe,” “seek,” “estimate,” “anticipate,” “may,” “assume,” and variations of such words and similar expressions are often used to identify such forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not guarantees of future performance and involve risks, assumptions and uncertainties, including, but not limited to, those described in this Annual Report on Form 10-K and other reports that we file or furnish with the SEC. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. Accordingly, you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. Except to the extent required by law, we undertake no obligation to update publicly any forward-looking statements after the date they are made, whether as a result of new information, future events, changes in assumptions or otherwise.

Overview and Financial Condition

Our ~~Company~~company

~~During~~Our ~~the~~goal ~~past~~is ~~year, our management, at the direction of the Board of Directors, has evaluated, considered, and brought forward various opportunities~~ to ~~acquire~~be ~~producing oil~~a ~~fields;~~next-generation ~~however, to date, an oil field meeting the criteria acceptable to the Board of Directors (which criteria include among~~renewable ~~other~~fuels ~~things,~~company. ~~low~~We ~~general~~intend ~~and administrative costs, ability~~ to ~~generate~~conduct ~~cash~~business ~~flow~~in ~~and ability to fully utilize~~ the ~~PPT)~~sourcing ~~has not been found. As a result,~~ and inimplementation ~~lieu~~ of arenewable ~~potential~~energy ~~dissolution, on March 23, 2018, we sold substantially all of our assets, including all pertinent intellectual property rights comprising our business of implementing plasma pulse~~ technology~~, to Norma I for $650,000 pursuant to the Asset Purchase Agreement~~. ~~In connection with the Asset Sale, we also repurchased all of our outstanding securities held by Ervington for $8,500,000 pursuant to the Share Purchase Agreement.~~

AtOur ~~this~~mission ~~point,~~is ~~the~~to ~~Board~~produce isrenewable diesel ~~reevaluating~~fuel ~~its~~and ~~business~~biochar ~~plan~~in a profitable yet sustainable manner. We strive to achieve net environmental and ~~strategy~~social benefits and ~~has~~intend to ~~reduced~~achieve ~~operating~~a ~~expenses~~negative incarbon ~~order~~footprint, toby ~~preserve~~responsibly ~~capital~~managing our land use and water resources, ~~while~~and ~~the~~preserving ~~Board~~our forests and ~~evaluates~~food ~~its~~sources, ~~options~~while ~~including~~promoting ~~the~~energy ~~possible~~independence, ~~acquisition~~job creation and community investment. Our strategy is generally predicated on biomass feedstock sources consisting of aresidues ~~technology~~from timber harvest and ~~oilfield~~forest ~~services~~thinnings ~~business,~~(sometimes called “slash”) comprised of ~~which~~branches, ~~two~~broken ofor ~~our current~~defective ~~directors~~tree ~~own~~parts, atops, ~~minority~~and ~~equity~~trees ~~interest~~not meeting grade specifications that can be harvested on a sustainable basis.

917

ToOur ~~date~~technology weplatform ~~have~~is ~~financed~~designed ~~our operations~~to ~~primarily~~enable ~~from~~us ~~sales~~to ofconvert ~~our securities~~low-cost, ~~both~~abundant ~~debt~~ and ~~equity,~~sustainable ~~and~~biomass tofeedstock a(i.e., ~~lesser~~slash) ~~extent~~into ~~revenue~~diesel. ~~from~~Our ~~operations~~renewable ~~and~~diesel, weis ~~expect to continue~~expected to ~~obtain~~burn ~~required~~much ~~capital~~cleaner inthan atraditional ~~similar~~petroleum ~~manner.~~diesel, Weand ~~have~~to ~~incurred~~be anchemically ~~accumulated~~indistinguishable ~~deficit~~from ofconventional ~~$18,078,065~~ASTM ~~through~~D975 ~~December~~diesel. In 31addition, ~~2017 and~~the ~~there~~renewable ~~can~~diesel bewe nointend ~~assurance~~to ~~that~~produce we will be ~~able~~a to“drop-in” ~~achieve~~diesel ~~profitability~~meaning it is a 100% petroleum diesel replacement.

~~Management~~In ~~Discussion~~addition to renewable diesel, we intend to sell Natura TM, which is a high-quality biochar. Biochar is charcoal used as a soil amendment. Biochar is a stable and ~~Analysis~~solid, rich in carbon, and can endure in soil for thousands of years. Biochar is made by carbonizing renewable organics like wood and grass. Natura TM is a safe and natural product made in the United States. It is a byproduct of ~~financial~~our ~~condition~~renewable diesel process and provides long-term gains in soil fertility and plant performance, as well as livestock enhancement.

~~Our~~We ~~discussion~~are ~~and~~fundamentally ~~analysis~~different offrom ~~our financial~~traditional ~~condition~~oil and ~~results~~biofuels ofcompanies. ~~operations~~Unlike ~~are~~traditional ~~based~~oil ~~upon~~companies, ~~our~~we ~~consolidated~~intend ~~financial~~to ~~statement~~generate asdiesel offrom ~~December~~completely ~~31,~~renewable ~~2017~~ and ~~December 31,~~sustainable ~~2016,~~sources ~~which~~rather ~~have~~than ~~been~~depleting ~~prepared~~fossil infuel ~~accordance~~reserves. ~~with~~At ~~accounting~~the ~~principles~~same ~~generally~~time, ~~accepted~~we indiffer ~~the~~from ~~United~~most ~~States.~~traditional ~~The~~biofuels ~~preparation~~companies because ofour ~~financial~~end ~~statements~~products inare ~~conformity~~diesel ~~with~~and ~~accounting~~biochar ~~principles~~rather ~~generally~~than ~~accepted~~alcohols inor ~~the~~fatty ~~United~~acid ~~States~~methyl ~~requires~~esters us(“FAME”), tosuch ~~make~~as ~~estimates~~ethanol ~~and~~or ~~assumptions~~biodiesel. ~~that~~As ~~affect~~compared to ethanol, the ~~reported~~energy ~~amounts~~density of ~~assets~~one ~~and~~gallon ~~liabilities,~~of ~~disclosure~~our ofrenewable ~~any~~diesel ~~contingent~~equates ~~liabilities~~to at1.7 ~~the~~gallons ~~financial~~of ethanol ~~statement~~equivalent. ~~date~~While ~~and~~we ~~reported~~are ~~amounts~~a ofdevelopment ~~revenue~~stage ~~and~~company ~~expenses~~that ~~during~~has ~~the~~not ~~reporting~~generated ~~period.~~any Onrevenue anand ~~on-going~~has ~~basis~~experienced wenet ~~review~~losses ~~our~~since ~~estimates~~inception, ~~and~~through ~~assumptions.~~our ~~Our~~technology ~~estimates~~platform, ~~are~~we ~~based~~expect onto ~~our~~provide ~~historical~~a ~~experience~~new ~~and~~domestic ~~other~~source ~~assumptions~~of ~~that~~liquid wetransportation ~~believe~~fuel to— besustainably ~~reasonable under~~— ~~the~~using ~~circumstances.~~renewable ~~Actual~~natural ~~results~~resources ~~are likely~~ to ~~differ~~help ~~from~~further ~~those~~energy ~~estimates~~independence ~~under~~and ~~different~~reduce ~~assumptions~~greenhouse orgas ~~conditions~~emissions.

~~Results~~Management ofDiscussion ~~Operations for the year ended December 31, 2017~~ and ~~December~~Analysis ~~31,~~of ~~2016~~Financial Condition

~~Net~~The ~~revenues~~discussion and analysis of our financial condition and results of operations are based upon the audited consolidated financial statements as of December 31, 2018 of Pledge, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of any contingent liabilities at the financial statement date and reported amounts of revenue and expenses during the reporting period. On an on-going basis we review our estimates and assumptions. The estimates are based on our historical experience and other assumptions that we believe to be reasonable under the circumstances. Actual results are likely to differ from those estimates under different assumptions or conditions.

~~Net~~Results ~~revenues were $25,000 and $0 for the year ended December 31, 2017 and 2016 respectively. The revenue during the current year is derived from one well treatment in Mexico. Other than the treatment~~ of one well in Mexico, all of our operations were directed through our 60% held joint venture, Novas Energy North America, LLC. (“NENA”). Effective November 1, 2016 we discontinued our NENA joint venture and the NENA operations are reflected in loss from discontinued operations, net of non-controlling interest.Operations

~~Cost~~Since ofinception ~~goods~~on ~~sold~~August 22, 2018, we have not earned any revenue.

~~Cost~~Since ofinception ~~goods~~on ~~sold~~August ~~was~~22, $02018, ~~for~~we incurred ~~the~~total ~~year ended~~operating ~~December~~expenses 31of $33,746. ~~2017~~Our ~~and~~expenses ~~2016~~consisted of $7,315 ~~respectively.~~for ~~All~~professional ~~cost~~fees, $6,290 of ~~goods~~director ~~sold~~fees, $2,097 of related toparty ~~our~~compensation ~~operations~~and ~~are~~$14,550 ~~reflected~~of inother ~~loss~~general ~~from~~and ~~discontinued operations~~administrative expenses. In addition, ~~net~~we recognized $3,494 of non-~~controlling~~cash ~~interest~~stock-based compensation for the amortization of stock issued to our officers.

~~Gross~~Liquidity ~~profit~~and Capital Resources

~~Gross~~For ~~profit~~the ~~was~~period ~~$25~~from inception on August 22,~~000~~ ~~and~~2018, $0we ~~for~~had ~~the year~~cash ~~ended~~provided ~~December~~by ~~31,~~operating ~~2017~~activities ~~and~~of ~~2016~~$16,240 ~~respectively~~as a result of $30,708 ~~due~~that towas ~~the~~acquired ~~revenue~~as ~~earned~~part onof ~~the~~our ~~Mexican~~reverse merger. ~~well~~We ~~treatments~~received $5,000 from financing activities from related party loans.

10At December 31, 2018, we had a cash balance of $21,140, and liabilities of $103,508. We will need to generate additional revenue from operations and/or obtain additional financing to pursue our business strategy or to take advantage of opportunities that may arise. These factors raise substantial doubt about our ability to continue as a going concern. As a result our independent registered public accounting firm included an explanatory paragraph in its report on the Pledge consolidated financial statements as of and for the period from August 22, 2018 through December 31, 2018 with respect to this uncertainty. To meet our financing needs, we are considering multiple alternatives, including, but not limited to, additional equity financings and, debt financings and/or funding from partnerships. There can be no assurance that we will be able to complete any such transactions on acceptable terms or otherwise.

~~Total expenses~~18

Total expenses were $627,732 and $2,913,235 for the years ended December 31, 2017 and 2016, respectively, a decrease of $2,285, 503 or 78.5%. Total expenses consisted primarily of the following:

· Professional fees of $281,963 and $376,642 for the years ended December 31, 2017 and 2016, respectively, decreased by $94,679 or 25.1%. The decrease is primarily due to; i) a reduction in SEC related printing costs of $9,219 due to the delay in filing the 2016 10-K; ii) a reduction in legal fees of $71,534 due to lower corporate activity; and iii) a reduction in corporate secretarial fees of $51,516 due to management's efforts to reduce operating expenses, offset by iv) an increase in accounting and audit fees of $44,568 due to the timing of the 2016 audit which was delayed during the current period and additional fees incurred on completing that audit.

· Consulting fees of $43,276 and $318,380 for the years ended December 31, 2017 and 2016, respectively, a decrease of $275,104 or 86.4%. The decrease is primarily due to; i) a decrease in merger and acquisition related consulting expenses of $190,979; and ii) a decrease in finance management consulting expenses of $105,000 due to lower activity during the current period.

· General and administrative expenses of $291,114 and $1,090,758 for the years ended December 31, 2017 and 2016, respectively, a decrease of $799,644 or 73.3%. The decrease primarily consists of the following; i) a reduction in payroll expenses of $525,626 due to the rationalization of staff during the December 2016 quarter; ii) a reduction in investor relations expenditure of $116,681 due to a rationalization exercise undertaken by the Board of Directors; iii) a reduction in stock based compensation expense of $70,264 due to options forfeited or fully vested during the current period; and iv) a reduction in travel expenses of $23,994 as operations were curtailed and rationalized under the direction of the Board.

· Depreciation, and amortization of $5,391 and $200,933 for the years ended December 31, 2017 and 2016, respectively, a decrease of $195,542 or 97.3%. The plasma pulse tool asset and the intangible license fees were impaired during the fourth quarter of 2016 due to the uncertainty facing the business, the remaining assets consist of minor office related items.

· Impairment charges of $0 and $899,254 for the years ended December 31, 2017 and 2016, respectively, relates to the following; (i) impairment of the plasma pulse tools due to the Board of Directors abandoning the previous business plan with no new plan formulated as yet and no revenues forecast for the foreseeable future; and (ii) impairment of the remaining Mexican license agreement of $157,500 as no revenue has been generated from this market.

Other income (expense)

Other income was $0 and $193,667 for the years ended December 31, 2017 and 2016, respectively, a decrease of $193,667 or 100.0%, primarily due to the forgiveness of the once off license fee for the Mexican market of $200,000, which was due in June 2015.

Net loss from continuing operations

We incurred a net loss from continuing operations of $601,892 and $2,719,242 for the years ended December 31, 2017 and 2016, respectively, a decrease of $2,117,350 or 77.9%, which consists primarily of the reduction in total expenses of $2,285,503, offset by the forgiveness of the license fee income in the prior year as discussed above.

Loss from discontinued operations, net of tax

We incurred a net loss of $0 and $(1,649,064) for the years ended December 31, 2017 and 2016, respectively, a decrease of $1,649,064 or 100%. The loss in the prior year was incurred by the NENA joint venture prior to its termination in November 2016.

Net loss attributable to non-controlling interest of discontinued operations

The net loss attributable to non-controlling interest of discontinued operations in the prior year of $249,339 is due to the losses in the Joint Venture being shared as to 40% by the non-controlling party until the full value of their investment of $600,000 was depleted.

Net loss attributable to controlling interest

The loss attributable to controlling interest of $601,892 and $4,118,967 for the years ended December 31, 2017 and 2016, respectively, a decrease of $3,517,075 or 85.4%. The decrease is primarily due to the discontinuance of the NENA joint venture in the prior year and a concerted effort by management to reduce operating costs while the directors contemplated the business strategy.

Undeclared Series B and Series C preferred stock dividends

A deemed preferred stock dividend of $626,000 and $627,714 has been disclosed for the year ended December 31, 2017 and 2016. This amount represents the dividends that are due, but remain undeclared, to Series B and Series C preferred stock holders.

Net loss available to common stockholders

We incurred a net loss of $1,227,892 and $4,746,681 for the years ended December 31, 2017 and 2016, a decrease of $3,518,789 or 74.1%, respectively and which consists of the various items discussed above.

Liquidity and Capital Resources.

Although we had a cash balance of $8,599,620 as of December 31, 2017, of which $749,620 is not restricted, we have a history of annual losses from operations since inception and we have primarily funded our operations through sales of our unregistered equity securities. We have recently disposed of substantially all of our assets for $650,000 and simultaneously therewith acquired the entire shareholding of Ervington, for gross proceeds of $8,500,000. We are actively looking to acquire businesses in a similar field which may require substantial cash.

To date, our primary sources of cash have been funds raised from the sale of our securities and the issuance of convertible and non-convertible debt. No additional funds were raised during the current financial period.

We have incurred an accumulated deficit of $19,114,333 through December 31, 2017 and incurred negative cash flow from continuing operations of $570,136 for the year ended December 31, 2017.

Off Balance Sheet Arrangements

There are no off -balance sheet arrangements.

Critical Accounting Policies

Management believes that the critical accounting policies and estimates discussed below involve the most complex management judgments due to the sensitivity of the methods and assumptions necessary in determining the related asset, liability, revenue and expense amounts. Specific risks associated with these critical accounting policies are discussed throughout this Management Discussion & Analysis, where such policies have a material effect on reported and expected financial results. For a detailed discussion of the application of these and other accounting policies, refer to the individual Notes to the Pledge consolidated Financial Statements for the ~~year~~period ~~ended~~from August 22, 2018 through December 31, ~~2017~~2018.

Revenue Recognition

The Company records revenue when all of the following have occurred: (1) persuasive evidence of an arrangement exists, (2) the service is completed without further obligation, (3) the sales price to the customer is fixed or determinable, and (4) collectability is reasonably assured.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions, ~~which are evaluated on an ongoing basis,~~ that affect the ~~amounts~~ reported inamounts of ~~the~~assets ~~consolidated~~and ~~financial~~liabilities ~~statements~~ and ~~accompanying~~disclosures ~~notes.~~of ~~Management~~contingent ~~bases~~assets ~~its estimates on historical experience~~ and onliabilities ~~various~~at ~~other assumptions that it believes are reasonable under~~ the ~~circumstances,~~date ~~the results~~ of ~~which form~~ the ~~basis~~financial ~~for~~statements ~~making judgments about the carrying values of assets~~ and ~~liabilities and~~ the reported amounts of revenues and expenses ~~that~~during ~~are~~the ~~not~~reporting ~~readily~~period ~~apparent from other sources.~~ Actual results could differ from those estimates and judgments. In particular, significant estimates and judgments include those related to: the estimated useful lives for plant and equipment, the fair value of warrants and stock options granted for services or compensation, estimates of the probability and potential magnitude of contingent liabilities, the valuation allowance for deferred tax assets due to continuing operating losses, those related to revenue recognition and the allowance for doubtful accounts.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which management considered in formulating its estimate could change in the near-term due to one or more future confirming events. Accordingly, the actual results could differ significantly from our estimates.

Fair Value of Financial Instruments

We adopted the guidance of Accounting Standards Codification (“ASC”) 820 for fair value measurements which clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.

Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.

Level 3-Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.

The carrying amounts reported in the balance sheets for cash, accounts receivable, prepaid expenses, deposits, accounts payable, accrued liabilities, notes payable, and convertible notes payable approximate fair value due to the relatively short period to maturity for these instruments. We did not identify any other assets or liabilities that are required to be presented on the balance sheets at fair value in accordance with the accounting guidance.

ASC 825-10 “Financial Instruments” allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. We did not elect to apply the fair value option to any outstanding instruments.

Contingencies

Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to us, but which will only be resolved when one or more future events occur or fail to occur. Our management assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in our financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material would be disclosed. Loss contingencies considered to be remote by management are generally not disclosed unless they involve guarantees, in which case the guarantee would be disclosed.

Recently Issued Accounting Standards

For a discussion of the adoption and potential impacts of recently issued accounting standards, refer to the “Recent Accounting Pronouncements” section of Note 2, “Accounting policies and estimates,” in the Notes to consolidated Financial Statements.

1319

Item 8. Financial statements and Supplementary data

PLEDGE PETROLEUM ~~GROUP, INC~~CORP.

TABLE OF CONTENTS

	Page
Report of Independent Registered Public Accounting Firm	F-1
Consolidated Balance Sheets	F-2
Consolidated Balance Sheet as of December 31, 2018	F-2
Consolidated Statements of Operations	F-3
Consolidated Statement of Operations for the period from August 22, 2018 (date of inception) through December 31, 2018	F-3
Consolidated Statements of Changes in Stockholders’ Equity	F-4
Consolidated Statement of Stockholders’ Equity for the period from August 22, 2018 (date of inception) through December 31, 2018	F-4
Consolidated Statements of Cash Flows	F-5
Consolidated Statement of Cash Flows for the period from August 22, 2018 (date of inception) through December 31, 2018	F-5
Notes to Consolidated Financial Statements	F-6
Notes to the Consolidated Financial Statements	F-6

1420

~~Report~~REPORT ofOF ~~Independent~~INDEPENDENT ~~Registered~~REGISTERED ~~Public~~PUBLIC ~~Accounting~~ACCOUNTING ~~Firm~~FIRM

~~The~~To ~~Stockholders and~~ the Board of Directors and Stockholders of Pledge Petroleum Corp.

~~Pledge~~Opinion ~~Petroleum~~on ~~Corp.~~the ~~and~~Financial ~~Subsidiaries~~Statements

~~Opinion~~We onhave audited the ~~Financial~~accompanying ~~Statements~~balance sheet of Pledge Petroleum Corp. (the “Company”) as of December 31, 2018, and the related statements of operations, changes in stockholders’ equity and cash flows for the period from inception (August 22, 2018) to December 31, 2018, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018, and the results of its operations and its cash flows for the period from inception (August 22, 2018) to December 31, 2018, in conformity with accounting principles generally accepted in the United States of America.

WeBasis have audited the accompanying consolidated balance sheets of Pledge Petroleum Corp. and Subsidiaries (collectively, the “Company”) as of December 31, 2017 and 2016, and the related consolidated statements of operations, stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2017, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2017, in conformity with U.S. generally accepted accounting principles.Opinion

~~The~~These financial statements are the responsibility of the Company'’s ~~Ability~~management. Our responsibility is to ~~Continue~~express asan opinion on the Company’s financial statements based on our audit. We are a ~~Going~~public ~~Concern~~accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

~~The~~We ~~accompanying~~conducted ~~consolidated~~our ~~financial statements~~audit ~~have~~in ~~been~~accordance ~~prepared~~with the ~~assuming~~standards ~~that~~of the ~~Company~~PCAOB. ~~will~~Those ~~continue~~standards asrequire athat ~~going~~we ~~concern.~~plan Asand ~~discussed~~perform inthe ~~Note~~audit 3 to ~~the~~obtain ~~financial statements,~~reasonable assurance about whether the ~~Company~~financial ~~has~~statements ~~suffered~~are ~~recurring~~free ~~losses~~of ~~from~~material ~~operations~~misstatement, ~~will~~whether ~~require~~due ~~additional~~to ~~capital~~error toor ~~fund~~fraud. ~~its~~The ~~current~~Company ~~operating plan,~~is ~~and~~not ~~has~~required ~~stated~~to ~~that~~have, nor ~~substantial~~were ~~doubt~~we ~~exists~~engaged ~~about~~to ~~the~~perform, ~~Company’s~~an ~~ability~~audit toof ~~continue~~its asinternal acontrol ~~going~~over ~~concern~~financial reporting. ~~Management’s plans~~As ~~regarding~~part ~~these~~of ~~matters~~our audit, we are ~~also~~required to ~~described~~obtain inan ~~Note~~understanding 3.of ~~The~~internal ~~consolidated~~control over financial ~~statements~~reporting, dobut not ~~include~~for ~~any~~the ~~adjustments to~~purpose ~~reflect~~of ~~the~~expressing ~~possible~~an ~~future~~opinion ~~effects~~ on the effectiveness ~~recoverability and classification~~ of ~~assets or~~ the ~~amounts~~Company’s ~~and~~internal ~~classification~~control ~~of liabilities~~over ~~that~~financial ~~may~~reporting. ~~result~~Accordingly, ~~from~~we ~~the~~express ~~outcome~~no ofsuch ~~this uncertainty~~opinion.

~~Basis~~Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for ~~Opinion~~our opinion.

~~These~~Substantial ~~financial~~Doubt ~~statements~~about ~~are~~ the ~~responsibility of the~~ Company~~'s management. Our responsibility is to express an opinion on the Company~~’s ~~financial statements based on our~~ ~~audits.~~Ability ~~We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required~~ to beContinue ~~independent~~as ~~with~~a ~~respect~~Going ~~to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.~~Concern

WeThe ~~conducted~~accompanying ~~our~~financial ~~audits~~statements ~~in accordance with~~have ~~the~~been ~~standards~~prepared ofassuming ~~the PCAOB. Those standards require~~ that ~~we plan and perform~~ the ~~audit~~Company towill ~~obtain~~continue ~~reasonable~~as ~~assurance~~a ~~about~~going ~~whether the~~concern. ~~financial~~As ~~statements~~discussed ~~are~~in ~~free~~Note ~~of material misstatement~~3, ~~whether~~the ~~due~~Company tojust ~~error~~begun orits ~~fraud.~~operations and ~~The~~does ~~Company is~~ not ~~required~~yet to have~~, nor~~ ~~were~~operations weor ~~engaged~~revenue to ~~perform,~~cover ~~an audit of~~ its ~~internal~~operating ~~control over financial reporting~~expenses. AsThese ~~part~~factors ofraise ~~our~~substantial ~~audits~~doubt weabout ~~are~~the ~~required~~Company’s ability to ~~obtain~~continue anas ~~understanding~~a ofgoing ~~internal~~concern. ~~control~~Our ~~over~~opinion ~~financial~~is ~~reporting but~~ not ~~for~~modified ~~the~~with ~~purpose~~respect ofto ~~expressing~~that ~~an opinion on the effectiveness of the Company's internal control over financial reporting~~matter. ~~Accordingly, we express no such opinion.~~

~~Our~~/s/ ~~audits~~Accell ~~included~~Audit ~~performing~~& ~~procedures to assess the risks of material misstatement of the financial statements~~Compliance, ~~whether due to error or fraud, and performing procedures that respond to those risks~~P. ~~Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements~~A. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/We have served as the Company’s/ ~~RBSM~~auditor ~~LLP~~since 2019.

WeTampa, ~~have~~Florida ~~served as the Company’s auditor since 2016.~~

~~New~~April ~~York~~16, NY2019

~~May 31, 2018~~F-1

~~F-1~~PLEDGE PETROLEUM CORP. CONSOLIDATED BALANCE SHEET

PLEDGE PETROLEUM CORP.

	December 31, 2018
ASSETS
Current assets:
Cash	$	21,140
Prepaid expenses		11,270
Prepaid stock compensation – related party		133,333
Total current assets		165,743

Plant and equipment, net		3,885
Deposits		1,750
Total assets	$	171,378

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	81,097
Accrued expenses and other payables		11,521
Due to related parties		5,890
Loan payable – related party		5,000
Total current liabilities		103,508

Commitments and contingencies (Note 10)		-

Stockholders' Equity:
Series A-1 Convertible Preferred stock, $0.01 par value; 5,000,000 shares designated, no shares issued and outstanding at December 31, 2018		-
Series B Convertible, Redeemable Preferred Stock, $0.001 par value; 500,000 shares designated; 40,000 issued and outstanding. (liquidation preference $480,000)		40
Series C Convertible, Preferred Stock, $0.001 par value, 4,500,000 shares designated, no shares outstanding at December 31, 2018		-
Common stock, $0.001 par value; 500,000,000 shares authorized, 484,256,464 shares issued and outstanding at December 31, 2018		484,257
Accumulated deficit		(416,427	)
Total stockholders' equity		67,870
Total Liabilities and Stockholders' Equity	$	171,378

~~CONSOLIDATED~~The ~~BALANCE~~accompanying notes are an integral ~~SHEETS~~part of these consolidated financial statements.

	December 31,			December 31,
	2017			2016
Assets
Current Assets
Cash	$	749,620		$	9,170,286
Restricted cash related to asset disposal and equity repurchase		7,850,000			-
Prepaid expenses		25,816			25,940
Total Current Assets		8,625,436			9,196,226
Non-Current Assets
Plant and equipment, net		8,935			14,326
Deposits		530			6,968
Total Non-Current Assets		9,465			21,294
Total Assets	$	8,634,901		$	9,217,520
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable	$	38,849		$	31,027
Accrued expenses and other payables		27,852			34,467
Net liabilities of discontinued operations		-			1,025,716
Notes payable		3,000			3,000
Total Current Liabilities		69,701			1,094,210
Stockholders' Equity
Series A-1 Convertible Preferred stock, $0.01 par value; 5,000,000 shares designated, 3,137,500 shares issued and outstanding. (liquidation preference $251,000) as of December 31, 2017 and 2016.		3,138			3,138
Series B Convertible, Redeemable Preferred Stock, $0.001 par value; 500,000 shares designated; 40,000 issued and outstanding. (liquidation preference $480,000) as of December 31, 2017 and 2016.		40			40
Series C Convertible, Preferred Stock, $0.001 par value, 4,500,000 shares designated, 4,500,000 issued and outstanding (liquidation preference $14,750,000) as of December 31, 2017 and 2016.		4,500			4,500
Common stock, $0.001 par value; 500,000,000 shares authorized, 268,558,931 shares issued and outstanding as of December 31, 2017 and 2016.		268,559			268,559
Additional paid-in-capital		27,403,296			26,359,514
Accumulated deficit		(19,114,333	)		(18,512,441	)
Total Stockholders' Equity		8,565,200			8,123,310
Total Liabilities and Stockholders' Equity	$	8,634,901		$	9,217,520

F-2

~~See~~PLEDGE ~~notes~~PETROLEUM toCORP. ~~the~~CONSOLIDATED ~~consolidated~~STATEMENT ~~financial statements~~OF OPERATIONS

F-2

	From August 22, 2018 (date of inception) through December 31, 2018
Expenses:
Professional fees	$	7,315
Directors fees		6,290
Compensation – related party		2,097
Stock compensation – related party		3,494
General and administrative		14,550
Total expenses		33,746

Loss from operations		(33,746	)

Loss before Provision for Income Taxes		(33,746	)
Provision for Income Taxes		-

Net Loss	$	(33,746	)

Undeclared Series B and Series C Preferred stock dividends		(1,140	)

Net loss available to common stock holders	$	(34,886	)
Net Loss Per Share - Basic and Diluted	$	(0.00	)
Weighted Average Number of Shares Outstanding - Basic and Diluted		44,359,462

~~PLEDGE~~The ~~PETROLEUM~~accompanying notes are an integral ~~CORP.~~part of these consolidated financial statements.

~~CONSOLIDATED STATEMENTS OF OPERATIONS~~F-3

	Year ended			Year ended
	December 31			December 31
	2017			2016
Net Revenue	$	25,000		$	-
Cost of Goods Sold		-			-
Gross Profit		25,000			-
Sales and Marketing		5,988			5,087
Professional fees		281,963			376,642
Business development		-			22,181
Consulting fees		43,276			318,380
General and administrative		291,114			1,090,758
Depreciation, amortization and impairment charges		5,391			1,100,187
Total Expense		627,732			2,913,235
Loss from Operations		(602,732	)		(2,913,235	)
Other income (expense)		-			193,667
Finance costs		840			326
Loss before Provision for Income Taxes		(601,892	)		(2,719,242	)
Provision for Income Taxes		-			-
Net loss from continuing operations		(601,892	)		(2,719,242	)
Loss for discontinued operations, net of tax		-			(1,649,064	)
Net loss attributable to non-controlling interest of discontinued operation		-			249,339
Loss from discontinued operations, net of non-controlling interest		-			(1,399,725	)
Net loss attributable to Controlling Interest		(601,892	)		(4,118,967	)
Undeclared Series B and Series C Preferred stock dividends		(626,000	)		(627,714	)
Net loss available to common stock holders	$	(1,227,892	)	$	(4,746,681	)
Net Loss Per Share from continuing operations - Basic and Diluted	$	(0.00	)	$	(0.01	)
Net Loss Per Share from discontinued operations - Basic and Diluted	$	0.00		$	(0.01	)
Net Loss Per Share - Basic and Diluted	$	0.00		$	(0.02	)
Weighted Average Number of Shares Outstanding -
Basic and Diluted		268,558,931			268,558,931

PLEDGE PETROLEUM CORP.

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

See notes to the consolidated financial statements

	Series A-1 Preferred Stock				Series B Preferred Stock				Series C Preferred Stock				Common Stock				Accumulated
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Deficit			Total
August 22, 2018 (date of inception)		-	$	-		-	$	-		-	$	-		-	$	-	$	-		$	-
Common stock sold for cash		-		-		-		-		-		-		1,000		100		-			100
Effects of recapitalization from reverse acquisition		-		-		40,000		40		-		-		484,255,464		484,157		(382,681	)		101,516
Net loss from August 22, 2018 (date of inception) through December 31, 2018		-		-		-		-		-		-		-		-		(33,746	)		(33,746	)
Balance, December 31, 2018		-	$	-		40,000	$	40		-	$	-		484,256,464	$	484,257	$	(416,427	)	$	67,870

~~F-3~~The accompanying notes are an integral part of these consolidated financial statements.

~~PLEDGE PETROLEUM CORP.~~ F-4

PLEDGE PETROLEUM CORP. CONSOLIDATED ~~STATEMENTS~~STATEMENT OF ~~CHANGES~~CASH ~~IN STOCKHOLDERS' EQUITY~~FLOWS

FOR THE PERIOD JANUARY 1, 2016 TO DECEMBER 31, 2017

	From August 22, 2018 (date of inception) through December 31, 2018
Cash flow from operating activities:
Net Loss	$	(33,746	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation		421
Stock based compensation		3,494
Cash acquired in merger		30,708
Changes in operating assets and liabilities:
Prepaid expenses		(1,693	)
Accounts payable and accruals		10,844
Due to related parties		6,212
Net cash provided by operating activities		16,240

Cash flows from financing activities:
Loans from a related party		5,000
Net cash provided by financing activities		5,000

Net increase in cash		21,240
Cash at beginning of period		-
Cash at end of period	$	21,140

Supplemental Disclosures:
Cash paid during the period for:
Interest	$	-
Income taxes	$	-

																						Total
																						Stockholders'
																						Equity
	Preferred Stock																Additional								Non-
	Series A-1				Series B				Series C				Common Stock				Paid-in		Accumulated			Controlling			Controlling
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Capital		Deficit			Interest			Interest			Total
Balance as of January 1, 2016		3,137,500	$	3,138		40,000	$	40		4,500,000	$	4,500		268,558,931	$	268,559	$	26,271,184	$	(14,393,474	)	$	12,153,947		$	249,339		$	12,403,286
Stock option based compensation		-		-		-		-		-		-		-		-		88,330		-			88,330			-			88,330
Net loss for the year ended December 31, 2016		-		-		-		-		-		-		-		-		-		(4,118,967	)		(4,118,967	)		(249,339	)		(4,368,306	)
Balance as of January 1, 2017		3,137,500		3,138		40,000		40		4,500,000		4,500		268,558,931		268,559		26,359,514		(18,512,441	)		8,123,310			-			8,123,310
Stock option based compensation		-		-		-		-		-		-		-		-		18,066		-			18,066			-			18,066
Discontinuance of joint venture		-		-		-		-		-		-		-		-		1,025,716		-			1,025,716			-			1,025,716
Net loss for the year ended December 31, 2017		-		-		-		-		-		-		-		-		-		(601,892	)		(601,892	)		-			(601,892	)
Balance as of December 31, 2017		3,137,500	$	3,138		40,000	$	40		4,500,000	$	4,500		268,558,931	$	268,559	$	27,403,296	$	(19,114,333	)	$	8,565,200		$	-		$	8,565,200

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

~~See notes to the consolidated financial statements~~F-5

~~F-4~~PLEDGE PETROLEUM CORP.

~~PLEDGE~~NOTES ~~PETROLEUM~~TO ~~CORP.~~ CONSOLIDATED ~~STATEMENTS~~FINANCIAL ~~OF CASH FLOWS~~STATEMENTS

	Year ended			Year ended
	December 31			December 31
	2017			2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(601,892	)	$	(4,118,967	)
Net loss from discontinued operations		-			1,649,064
Less: loss attributable to non-controlling interest		-			(249,339	)
Net loss from continuing operations		(601,892	)		(2,719,242	)
Adjustment to reconcile net loss to net cash used in operating activities:
Depreciation expense		5,391			130,933
Deposit forfeited		6,968			-
Amortization expense		-			70,000
Impairment charges		-			899,254
Loss on scrapping of fixed assets		-			1,248
Equity based compensation charge		18,066			88,330
Gain on debt forgiven		-			(200,000	)
Increase in provision for bad debts		-			4,292
Changes in Assets and Liabilities
Accounts receivable		-			(3,400	)
Prepaid expenses and other current assets		125			22,650
Accounts payable		7,822			(103,953	)
Accrued liabilities		(6,616	)		(45,296	)
Cash Used in Operating Activities - continuing operations		(570,136	)		(1,855,184	)
Cash used in operating activities - discontinued operations		-			(444,744	)
		(570,136	)		(2,299,928	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		-			(200,899	)
Investment in deposit		(530	)		(4,768	)
Cash used in investing activities - continuing operations		(530	)		(205,667	)
Cash used in investing activities - discontinued operations		-			(4,782	)
		(530	)		(210,449	)
CASH FLOWS FROM FINANCING ACTIVITIES:
NET CASH PROVIDED BY FINANCING ACTIVITIES - DISCONTINUED
OPERATIONS		-			449,527
		-			449,527
NET DECREASE IN CASH		(570,666	)		(2,060,850	)
CASH AT BEGINNING OF YEAR		9,170,286			11,231,136
CASH AT END OF YEAR	$	8,599,620		$	9,170,286
CASH PAID FOR INTEREST AND TAXES:
Cash paid for income taxes	$	-		$	-
Cash paid for interest	$	-		$	-
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Discontinuance of joint venture	$	1,025,716		$	-
Undeclared Series B and Series C dividends	$	626,000		$	627,714

December 31, 2018

~~See~~NOTE ~~notes~~1 to– ~~consolidated~~ORGANIZATION ~~financial~~AND ~~statements~~DESCRIPTION OF BUSINESS

~~F-5~~On December 19, 2018, Pledge Petroleum Corp. (the “Company”) entered into a Share Exchange agreement with Renewable Technology Solutions, Inc. (“RTS”). Pursuant to the terms of the agreement, in exchange for 100% of the RTS shares, the Company will issue a stock certificate registered in the name of the RTS stockholder for 250,000,000 shares of its common stock. The transaction will be accounted for as a “reverse acquisition” and recapitalization, with RTS being the accounting acquirer. A reverse merger transaction with a public company is considered and accounted for as a capital transaction in substance; it is equivalent to the issuance of Pledge’s common stock for the net monetary assets of RTS, accompanied by a recapitalization. Accordingly, the accounting does not contemplate the recognition of unrecorded assets of the accounting acquiree, such as goodwill. Consolidated financial statements presented herein reflect the consolidated financail assets and liabilities of Pledge at their historical costs, giving effect to the recapitalization, as if it had been RTS during the periods presented.

~~PLEDGE~~RTS ~~PETROLEUM~~was ~~CORP~~incorporated in the State of Tennessee on August 22, 2018. The Company was formed in order to conduct business in the sourcing and implementation of renewable energy technology.

~~NOTES~~NOTE TO2 ~~THE~~- ~~CONSOLIDATED~~SUMMARY ~~FINANCIAL~~OF ~~STATEMENTS~~SIGNIFICANT ACCOUNTING POLICIES

1Basis ~~ORGANIZATION~~of ~~AND DESCRIPTION OF BUSINESS~~presentation

a)The ~~Organization~~Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

~~Pledge~~Principles Petroleum Corp. (formerly Propell Technologies Group, Inc. and Propell Corporation) (the “Company”), is a Delaware corporation originally formed on January 29, 2008 as CA Photo Acquisition Corp. On April 10, 2008 Crystal Magic, Inc. (“CMI”), a Florida Corporation, merged with an acquisition subsidiary of Propell’s, and the Company issued an aggregate of 180,000 shares to the former shareholders of CMI. On May 6, 2008, the Company acquired both Mountain Capital, LLC (doing business as Arrow Media Solutions) (“AMS”) and Auleron 2005, LLC (doing business as Auleron Technologies) (“AUL”) and made each a wholly owned subsidiary and issued a total of 41,897 shares of the Company’s common stock to the members of Mountain Capital, LLC and a total of 2,722 shares of the Company’s common stock to the members of AUL. In 2010 AUL and AMS were dissolved and the operations of CMI were discontinued. On February 4, 2013, the Company entered into a Share Exchange Agreement with Novas Energy (USA), Inc. (“Novas”) whereby the Company exchanged 100,000,000 shares of its common stock for 100,000,000 shares of common stock in Novas. After the consummation of the share exchange, Novas became a wholly owned subsidiary of the Company. As a result of the share exchange the shareholders of Novas obtained the majority of the outstanding shares of the Company. As such, the exchange is accounted for as a reverse merger or recapitalization of the Company and Novas was considered the acquirer for accounting purposes.Consolidation

b)The ~~Description~~accompanying consolidated financial statements include the accounts of the ~~business~~Company and its wholly-owned subsidiary RTS. All significant intercompany transactions and balances have been eliminated.

~~During~~Use ~~the past year, the Company’s management, at the direction~~ of the Board of Directors, had evaluated, considered, and brought forward various opportunities to acquire producing oil fields; however, to date, an oil field meeting the criteria acceptable to the Board of Directors (which criteria include among other things, low general and administrative costs, ability to generate cash flow and ability to fully utilize the PPT) had not been found.estimates

OnThe ~~March~~preparation ~~23,~~of ~~2018,~~financial ~~after obtaining~~statements ~~approval~~in ofconformity ~~the~~with ~~majority~~U.S. ~~shareholder~~GAAP ~~and~~requires ~~the~~management ~~majority~~to ofmake ~~the~~estimates ~~minority~~and ofassumptions that affect the ~~shareholders~~reported weamounts ~~sold~~of ~~substantially~~assets ~~all~~and liabilities and disclosure of ~~our~~contingent assets ~~for~~ ~~$650,000~~ and ~~simultaneously~~liabilities ~~therewith~~at the ~~entire~~date ~~shareholding~~ of the ~~majority~~financial ~~shareholder,~~statements ~~Ervington~~and ~~was~~the ~~purchased~~reported ~~by us for~~amounts ~~gross proceeds~~ of ~~$8,500,000.~~revenues Weand ~~are~~expenses ~~currently~~during ~~exploring~~ the ~~acquisition~~reporting ofperiod. ~~assets~~Actual orresults ~~businesses~~could indiffer ~~the~~from ~~oil~~those ~~and water treatment segments~~estimates.

OnConcentrations ~~October 4, 2016, Novas Energy USA, Inc. (“Novas USA”), a wholly owned subsidiary~~ of ~~the~~credit Company, delivered a notice to Technovita Technologies USA, Inc. (“Technovita”) electing to dissolve its joint venture with Technovita (the “Joint Venture”), effective November 1, 2016, pursuant to Section 11.1(b) of the Operating Agreement of Novas Energy North America, LLC (“NENA”), dated October 22, 2015 (the “Operating Agreement”), by and among Novas USA and Technovita.risk

~~Section~~The ~~11.1(b)~~Company ofmaintains ~~the~~its ~~Operating Agreement~~cash ~~provided that the Joint Venture may be dissolved upon the election of Novas USA~~ in ~~the~~bank ~~event the Joint Venture fails~~deposit to satisfy any Year 1 Key Performance Indicator by an amount greater than five percent (5%) of the applicable metric (the “Year 1 Milestone”). The Joint Venture has not achieved the Year 1 Milestone. For the purposes of the Operating Agreementaccounts, the ~~Year~~ 1balances ~~Key Performance Indicators are defined as: during a continuous twelve (12) month period commencing upon September 1, 2015 each~~ of: ~~(1)~~which ~~sales~~at ~~from~~times ~~activities~~may inexceed ~~the~~federally ~~United~~insured ~~States~~limits. ofThe ~~greater~~Company ~~than~~continually ormonitors ~~equal to $2,829,000; (2) sales from activities in Canada~~its ofbanking ~~greater~~relationships ~~than~~and orconsequently ~~equal~~have tonot ~~$2,829,000;~~experienced ~~(3)~~any ~~EBITDA~~losses ~~from activities~~ in ~~the~~its ~~United~~accounts. ~~States~~The ofCompany ~~greater~~believes ~~than~~it oris ~~equal to $524,000; and~~not ~~(4)~~exposed ~~EBITDA from activities in Canada of greater than or equal~~ to ~~$524,000. Upon a dissolution, all intellectual property assets of the Joint Venture, including~~ any ~~improvements~~significant tocredit ~~Technology~~risk ~~(as~~on defined in the Operating Agreement) is to be distributed to Technovita solely for use in Canada, its territories and its possessions and Novas USA solely for use in the United States and its territoriescash.

~~F-6~~Cash equivalents

~~PLEDGE~~The ~~PETROLEUM~~Company ~~CORP~~considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. There were no cash equivalents as of December 31, 2018.

~~NOTES~~Revenue ~~TO THE CONSOLIDATED FINANCIAL STATEMENTS~~recognition

2Revenue ~~ACCOUNTING~~is ~~POLICIES~~recognized ~~AND~~when ~~ESTIMATES~~a customer obtains control of promised goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the Company expects to receive in exchange for those goods. The Company applies the following five-step model in order to determine this amount: (i) identification of the promised goods in the contract; (ii) determination of whether the promised goods are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of FASB Accounting Standards Codification (“ASC”) 606 ~~Basis~~at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which of ~~Presentation~~these performance obligations are distinct. The Company recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. Generally, the Company's performance obligations are transferred to customers at a point in time, typically upon delivery.

~~The accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”).~~F-6

~~All~~Fair ~~amounts~~value ~~referred~~of ~~to in the notes to the~~ financial ~~statements are in United States Dollars ($) unless stated otherwise.~~instruments

bThe Company follows paragraph ASC 825-10-50-10 for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the ASC (“Paragraph 820-10-35-37”) to ~~Principles~~measure the fair value of ~~Consolidation~~its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

The consolidated financial statements include the financial statements of the Company and its subsidiary in which it has a majority voting interest. All significant inter-company accounts and transactions have been eliminated in the consolidated financial statements. The entities included in these consolidated financial statements are as follows:

Level 1:	Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

Level 2:	Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

Level 3:	Pricing inputs that are generally unobservable inputs and not corroborated by market data.

~~Pledge~~The ~~Petroleum~~carrying ~~Corp~~amount ~~(formerly~~of the Company’s ~~Propell~~financial ~~Technologies~~assets ~~Group~~and liabilities, ~~Inc~~such as cash, prepaid expenses and accrued expenses approximate their fair value because of the short maturity of those instruments.) The –Company’s ~~Parent~~notes payable approximates the fair value of such instruments based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangements at December 31, 2018.

~~Novas~~Property ~~Energy~~and ~~USA Inc. (wholly owned)~~equipment

c)Property ~~Use~~and equipment are carried at the lower of ~~Estimates~~cost or net realizable value. All Property and equipment with a cost of $1,000 or greater are capitalized. Major betterments that extend the useful lives of assets are also capitalized. Normal maintenance and repairs are charged to expense as incurred. When assets are sold or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in operations.

~~The~~Depreciation ~~preparation~~is ofcomputed ~~consolidated financial~~using ~~statements in conformity with U.S. GAAP requires management to make estimates and assumptions, which are evaluated on an ongoing basis, that affect~~ the ~~amounts reported in the consolidated financial statements and accompanying notes. Management~~straight-line ~~bases~~method ~~its~~over ~~estimates on historical experience and on various other assumptions that it believes are reasonable under~~ the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the amounts of revenues and expenses that are not readily apparent from other sources. Actual results could differ from those estimates and judgments. In particular, significant estimates and judgments include those related to: the estimated useful lives ~~for plant and equipment, the fair value~~ of ~~warrants~~three and stock options granted for services or compensation, estimates of the probability and potential magnitude of contingent liabilities, derivative liabilities, the valuation allowance for deferred tax assets due to continuing operating losses, those related to revenue recognition and the allowance for doubtful accountsyears.

~~Making~~Income estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which management considered in formulating its estimate could change in the near-term due to one or more future confirming events. Accordingly, the actual results could differ significantly from our estimates.taxes

d)The ~~Contingencies~~Company follows Section 740-10-30 of the FASB ASC, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Operations in the period that includes the enactment date.

~~Certain~~The ~~conditions~~Company ~~may~~adopted ~~exist as~~section 740-10-25 of the ASC (“Section 740-10-25”) with regards to uncertainty income taxes. Section 740-10-25 addresses the ~~date~~determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section ~~are issued~~740-10-25, ~~which~~the Company may ~~result~~recognize inthe atax ~~loss~~benefit tofrom an uncertain tax position only if it is more likely than not that the ~~Company~~tax position will be sustained on examination by the taxing authorities, ~~but~~based ~~which~~on ~~will~~the ~~only~~technical merits of the position. The tax benefits recognized in the financial statements from such a position should be ~~resolved~~measured based on the largest benefit ~~when~~that ~~one~~has ora ~~more~~greater ~~future~~than ~~events~~fifty ~~occur~~percent or(50%) ~~fail~~likelihood toof ~~occur~~being realized upon ultimate settlement. ~~The~~Section ~~Company’s~~740-10-25 ~~management~~also ~~assesses~~provides guidance ~~such~~on ~~contingent~~de-recognition, ~~liabilities~~classification, interest and penalties on income taxes, accounting in interim periods and requires ~~such~~increased ~~assessment~~disclosures. The ~~inherently~~Company ~~involves~~had anno ~~exercise~~material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of ~~judgment~~Section 740-10-25.

IfNet ~~the~~income ~~assessment of a contingency indicates that it is probable that a material~~ (loss) ~~has~~per ~~been~~common incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material would be disclosed. Loss contingencies considered to be remote by management are generally not disclosed unless they involve guarantees, in which case the guarantee would be disclosed.share

eNet income (loss) ~~Fair~~per ~~Value~~common share is computed pursuant to section 260-10-45 of ~~Financial~~the ~~Instruments~~ASC. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period. The weighted average number of common shares outstanding and potentially outstanding common shares assumes that the Company incorporated as of the beginning of the first period presented. The computation of diluted net loss per share does not assume the issuance of common shares that have an anti-dilutive effect on net loss per share. For the year ended December 31, 2018, all stock options, unvested restricted stock awards, warrants, convertible preferred stock were excluded from the computation of diluted net loss per share. Dilutive shares which could exist pursuant to the exercise of outstanding stock instruments and which were not included in the calculation because their affect would have been anti-dilutive

~~The~~Recently ~~Company~~issued ~~adopted~~accounting the guidance of Accounting Standards Codification (“ASC”) 820 for fair value measurements which clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:pronouncements

~~Level~~ASC ~~1-Inputs~~606, ~~are~~Revenue ~~unadjusted~~from Contracts with ~~quoted~~Customers, ~~prices~~was originally issued by the FASB in ~~active~~May ~~markets~~2014 ~~for~~in ~~identical~~Accounting ~~assets~~Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606). Since then, the FASB has issued several ASUs that have revised or ~~liabilities~~clarified ~~available~~the atguidance in ASC 606. The Company has evaluated the ~~measurement~~impact ~~date~~of this accounting standard update and noted that it has had no material impact.

~~Level 2~~F-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.7

~~Level~~On 3June 20, 2018, the FASB issued ASU 2018-~~Inputs~~07, Compensation—Stock Compensation ~~are~~(Topic ~~unobservable~~718): Improvements to Nonemployee Share-Based Payment Accounting. ASU 2018-07 is intended to reduce cost ~~inputs~~and ~~which~~complexity ~~reflect~~and ~~the~~to improve financial reporting ~~entity’s~~for ~~own~~share-based ~~assumptions~~payments onto ~~what~~nonemployees ~~assumptions~~(for example, service providers, external legal counsel, suppliers, etc.). Under the ~~market~~new ~~participants~~standard, ~~would~~companies ~~use~~will inno ~~pricing~~longer be required to value non-employee awards differently ~~the~~from ~~asset~~employee orawards. ~~liability~~Meaning ~~based~~that oncompanies will value all equity classified awards at their grant-date under ASC 718 and forgo revaluing the ~~best~~award ~~available~~after ~~information~~this date. The guidance is effective for interim and annual periods beginning after December 15, 2018.

~~The~~In ~~carrying~~January ~~amounts~~2017, ~~reported in~~ the ~~balance~~FASB ~~sheets~~issued ~~for~~an ~~cash~~ASU 2017-01, ~~accounts~~Business ~~receivable,~~Combinations ~~prepaid~~(Topic 805) ~~expenses,~~Clarifying ~~deposits,~~the ~~accounts~~Definition ~~payable,~~of ~~accrued~~a ~~liabilities,~~Business. ~~notes~~The ~~payable, and~~amendments ~~convertible~~in ~~notes~~this ~~payable~~update ~~approximate~~clarify the ~~fair~~definition ~~value~~of ~~due~~a tobusiness with the ~~relatively~~objective ~~short~~of ~~period~~adding guidance to ~~maturity~~assist entities with evaluating whether transactions should be accounted for ~~these~~as ~~instruments~~acquisitions or disposals of assets or businesses. The definition of a business affects many areas of accounting ~~Company~~including ~~did~~acquisitions, ~~not~~disposals, ~~identify~~goodwill, ~~any~~and ~~other~~consolidation. ~~assets~~The orguidance ~~liabilities~~is ~~that~~effective ~~are~~for ~~required~~interim toand annual periods beginning after December 15, 2017 and should be ~~presented~~applied prospectively on ~~the~~or ~~balance~~after ~~sheets~~the ateffective ~~fair~~date. ~~value in~~The ~~accordance~~Company ~~with~~has evaluated the impact of this accounting ~~guidance~~standard update and noted that it has had no material impact.

~~ASC~~In ~~825-10~~February ~~“Financial Instruments”~~2016, ~~allows~~the ~~entities~~FASB toissued ~~voluntarily~~ASU ~~choose~~2016-02, Leases to(Topic 842). ~~measure~~ASU ~~certain~~2016-02 ~~financial~~requires ~~assets~~lessees ~~and~~to ~~liabilities~~recognize atlease ~~fair~~assets ~~value (fair~~and ~~value~~lease ~~option).~~liabilities ~~The fair value option may be elected~~ on anthe ~~instrument-by-instrument~~balance ~~basis~~ sheet and isrequires ~~irrevocable,~~expanded ~~unless~~disclosures aabout ~~new election~~leasing ~~date occurs~~arrangements. IfASU ~~the~~2016-02 ~~fair~~is ~~value~~effective ~~option~~for isfiscal ~~elected~~years ~~for~~beginning anafter ~~instrument~~December 15, ~~unrealized~~2018 ~~gains~~ and ~~losses~~interim ~~for~~periods ~~that~~in ~~instrument~~fiscal ~~should be~~years ~~reported~~beginning inafter ~~earnings~~December 15, at2018, ~~each~~with ~~subsequent~~early ~~reporting~~adoption ~~date~~permitted. The Company has ~~did~~evaluated ~~not~~the ~~elect~~impact toof ~~apply~~this ~~the~~accounting ~~fair~~standard ~~value~~update ~~option~~and tonoted ~~any~~that ~~outstanding instruments~~it has had no material impact.

~~F-7~~The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

~~PLEDGE~~NOTE ~~PETROLEUM~~3 ~~CORP.~~– GOING CONCERN

~~NOTES~~The TOCompany’s ~~THE~~consolidated ~~CONSOLIDATED~~financial statements ~~FINANCIAL~~have ~~STATEMENTS~~been prepared on a going concern basis, which assumes that the Company will be able to realize its assets and discharge its liabilities and commitments in the normal course of business for the foreseeable future. The Company has just begun its operations and does not yet have operations or revenue to cover its operating expenses. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon generating profitable operations in the future and/or to obtain the necessary financing to meet the Company’s obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with debt and equity financing. While the Company believes that it will be successful in obtaining the necessary financing and generating revenue to fund its operations, meet regulatory requirements and achieve commercial goals, there are no assurances that such additional funding will be achieved and that it will succeed in its future operations. The financial statements of the Company do not include any adjustments that may result from the outcome of these uncertainties.

2NOTE ~~ACCOUNTING~~4 ~~POLICIES~~– PROPERTY AND ~~ESTIMATES (continued)~~EQUIPMENT

f)Property ~~Risks~~ and ~~Uncertainties~~equipment are summarized as follows:

The Company's operations will be subject to significant risk and uncertainties including financial, operational, regulatory and other risks associated, including the potential risk of business failure. The recent global economic crisis has caused a general tightening in the credit markets, lower levels of liquidity, increases in the rates of default and bankruptcy, and extreme volatility in credit, equity and fixed income markets. These conditions not only limit the Company’s access to capital, but also make it difficult for its customers, vendors and the Company to accurately forecast and plan future business activities.

	December 31, 2018
Furniture and Fixtures	$	3,015
Office Equipment		630
Computer Software		661
Accumulated depreciation		(421	)
Property and equipment, net	$	3,885

~~The~~Depreciation ~~Company’s~~expense ~~operations were~~from ~~carried~~August ~~out in the USA and Mexico. Accordingly~~22, ~~the~~2018 ~~Company’s~~(date ~~business, financial condition and results~~ of ~~operations~~inception) ~~may~~through beDecember ~~influenced by the political~~31, ~~economic~~2018 ~~and~~was ~~legal environment in the USA and Mexico and by the general state of those economies~~$421. The Company’s results could have been adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, and rates and methods of taxation, among other things.

g)NOTE ~~Recent~~5 ~~Accounting~~– ~~Pronouncements~~RELATED PARTY TRANSACTIONS

InOn ~~January~~May ~~2017~~2, 2018, the ~~FASB~~Company issued to each ~~Accounting~~of ~~Standards~~its ~~Update~~three ~~No.~~directors, ~~(“ASU”) 2017-02~~10,000,000 anshares ~~amendment~~of torestricted ~~Topic~~common ~~805~~stock, ~~Business~~vesting ~~Combinations.~~as ~~The~~to ~~amendments~~1/3 inof ~~this~~the ~~Update~~grant ~~clarify~~immediately, ~~the~~1/3 ~~definition~~ of athe ~~business with~~grant on the ~~objective~~one-year anniversary of ~~adding~~the ~~guidance~~grant todate ~~assist~~and ~~entities~~1/3 ~~with~~of ~~evaluating~~the ~~whether~~grant ~~transactions~~on ~~should~~the betwo-year ~~accounted~~anniversary ~~for as acquisitions (or disposals)~~ of ~~assets~~the orgrant ~~businesses~~date. The ~~amendments~~value ~~in this Update affect all reporting entities that must determine whether~~of ~~they~~the ~~have~~stock ~~acquired~~has orbeen ~~sold~~debited ~~a business. The amendments in this Update provide a more robust framework~~ to ~~use~~prepaid instock ~~determining~~compensation ~~when a set of assets~~ and ~~activities~~will ~~is a business. The amendments in this Update apply to annual periods beginning after December 15, 2017. The amendments in this Update should~~ be ~~applied~~amortized ~~prospectively~~over ~~on or after~~ the ~~effective~~vesting ~~date~~period. NoAs ~~disclosures~~of ~~are~~December ~~required~~31, 2018, atthere ~~transition.~~is ~~The~~$133,333 ~~Company~~of ~~does~~prepaid ~~not~~stock ~~expect this guidance to have a material impact on its financial statements~~compensation.

InThe ~~January~~restricted ~~2017,~~stock ~~the~~granted ~~FASB issued ASU 2017-04, an amendment to Topic 350, Intangibles – Goodwill~~ and ~~Other,~~exercisable anat ~~entity~~December no longer will determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. Because these amendments eliminate Step 3 from the goodwill impairment test31, ~~they should reduce the cost and complexity of evaluating goodwill for impairment. An entity should apply the amendments~~ in2018 ~~this Update on a prospective basis. The amendments in this Update are effective for Goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption~~ is ~~permitted~~as ~~for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We are currently evaluating the effect ASU 2017-04 will have on our consolidated financial statements.~~follows:

In February 2017, the FASB issued ASU 2017-05, an amendment to Subtopic 610-20, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets. The amendments in this Update are required for public business entities and other entities that have goodwill reported in their financial statements, under the amendments in this Update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. The amendments in this Update modify the concept of impairment from the condition that exists when the carrying amount of goodwill exceeds its implied fair value to the condition that exists when the carrying amount of a reporting unit exceeds its fair value. An entity no longer will determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. An entity should apply the amendments in this Update on a prospective basis. The amendments in this Update are effective for fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We are currently evaluating the effect ASU 2017-05 will have on our consolidated financial statements.

		Restricted Stock Granted				Restricted Stock Vested
Grant date price		Number granted		Weighted average exercise price		Number vested		Weighted average exercise price

$	0.01		30,000,000	$	0.01		10,000,000	$	0.01

F-8

~~PLEDGE~~The ~~PETROLEUM~~Company ~~CORP~~recorded an expense of $3,494 for the period from August 22, 2018 (date of inception) through December 31, 2018 related to the restricted stock granted to the directors.

~~NOTES~~During TO2018, ~~THE~~Christopher ~~CONSOLIDATED~~Headrick, ~~FINANCIAL~~CEO, purchased ~~STATEMENTS~~1,000 shares of RTS common stock for $100 prior to the reverse merger.

2As ~~ACCOUNTING~~of ~~POLICIES~~December ~~AND~~31, ~~ESTIMATES~~2018, ~~(continued)~~$5,890 is owed to the three directors of the Company for various advances for services provided in the normal course of business. The advance is unsecured, non-interest bearing and due on demand.

g)On ~~Recent~~December ~~Accounting~~31, ~~Pronouncements~~2018, ~~(continued)~~the Company executed a Promissory note with John Huemoeller, Chairman, for $5,000. The promissory note is unsecured, bears interest at 5% and is due on or before December 31, 2019.

InNOTE ~~March~~6 ~~2017,~~– ~~the~~PREFERRED FASB issued ASU 2017-07, Compensation-Retirement Benefits (Topic 715). This Update is being issued primarily to improve the presentation of net periodic pension cost and net periodic postretirement benefit cost. This Update also includes amendments to the Overview and Background Sections of the FASB Accounting Standards Codification. Under generally accepted accounting principles (GAAP), defined benefit pension cost and postretirement benefit cost (net benefit cost) comprise several components that reflect different aspects of an employer’s financial arrangements as well as the cost of benefits provided to employees. Those components are aggregated for reporting in the financial statements. The amendments in this Update apply to all employers, including not-for-profit entities, that offer to their employees defined benefit pension plans, other postretirement benefit plans, or other types of benefits accounted for under Topic 715. The amendments in this Update require that an employer disaggregate the service cost component from the other components of net benefit cost. The amendments also provide explicit guidance on how to present the service cost component and the other components of net benefit cost in the income statement and allow only the service cost component of net benefit cost to be eligible for capitalization. The amendments in this Update are effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those 3 annual periods. For other entities, the amendments in this Update are effective for annual periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019. Early adoption is permitted as of the beginning of an annual period for which financial statements have not been issued or made available for issuance. The amendments in this Update should be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the income statement and prospectively, on and after the effective date, for the capitalization of the service cost component of net periodic pension cost and net periodic postretirement benefit in assets. We are currently evaluating the effect ASU 2017-07 will have on our consolidated financial statements.STOCK

InSeries ~~March 2017, the FASB issued ASU 2017~~A-~~08,~~1 Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20) Premium Amortization of Purchased Callable Debt Securities. The amendments in this Update affect all entities that hold investments in callable debt securities that have an amortized cost basis in excess of the amount that is repayable by the issuer at the earliest call date (that is, at a premium). The amendments in this Update shorten the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. Under current GAAP, premiums and discounts on callable debt securities generally are amortized to the maturity date. The amendments in this Update more closely align the amortization period of premiums and discounts to expectations incorporated in market pricing on the underlying securities. As a result, the amendments more closely align interest income recorded on bonds held at a premium or a discount with the economics of the underlying instrument. For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity should apply the amendments in this Update on a modified retrospective basis through a cumulative effect adjustment directly to retained earnings as of the beginning of the period of adoption. Additionally, in the period of adoption, an entity should provide disclosures about a change in accounting principle. We are currently evaluating the effect ASU 2017-08 will have on our consolidated financial statements.Preferred

FThe Company has designated 5,000,000 preferred shares as Series A-91 Convertible Preferred Stock (“Series A-1 Shares”). Each share of Series A-1 is convertible into ten shares of common stock and has voting rights equal to the number of shares of common stock that holders can convert into. The Series A-1 Shares are non-redeemable by the Company and are entitled to a liquidation preference of $0.08 per share. As of December 31, 2018 there are no Series A preferred shares outstanding.

~~PLEDGE~~Series ~~PETROLEUM~~B ~~CORP.~~Preferred

~~NOTES~~The TOCompany ~~THE~~has ~~CONSOLIDATED~~designated ~~FINANCIAL~~500,000 ~~STATEMENTS~~preferred shares as Series B Convertible Preferred Stock (“Series B Shares”), with 40,000 Series B Shares issued and outstanding as of December 31, 2018, which are convertible into 4,000,000 shares of common stock.

2The ~~ACCOUNTING~~rights, ~~POLICIES~~privileges ~~AND~~and ~~ESTIMATES~~preferences of ~~(continued)~~the Series B Shares are summarized as follows:

~~g) Recent Accounting Pronouncements (continued)~~Conversion

InEach ~~May~~share ~~2017,~~of the ~~FASB~~Series ~~issued Accounting~~B ~~Standards~~Shares ~~Update~~is ~~No.~~convertible at ~~(“ASU’’)~~any ~~2017-09,~~time ~~Compensation~~prior –to ~~Stock~~the ~~Compensation,~~issuance anof ~~amendment~~a toredemption ~~Topic 718.~~notice ~~The~~by ~~amendments~~the inCompany ~~this~~into ~~Update~~such ~~provide~~number ~~guidance~~of ~~about~~shares ~~which~~of ~~changes~~Common toStock by dividing the ~~terms~~Stated orvalue ~~conditions~~($10) of athe ~~share-based~~Series ~~payment~~B ~~award require~~Shares anby ~~entity~~$0.10 and is subject to ~~apply~~adjustment ~~modification~~for ~~accounting~~dividends or distributions made in ~~Topic~~common stock, ~~718.~~the 2.issue Anof ~~entity~~securities ~~should~~convertible ~~account~~into ~~for~~common ~~the~~stock, ~~effects~~stock ofsplits, areverse ~~modification unless~~stock ~~all~~splits, ~~the~~or ~~following~~reclassifications ~~are~~of ~~met:~~common stock.

1.Company The fair value (or calculated value or intrinsic value, if such an alternative measurement method is used) of the modified award is the same as the fair value (or calculated value or intrinsic value, if such an alternative measurement method is used) of the original award immediately before the original award is modified. If the modification does not affect any of the inputs to the valuation technique that the entity uses to value the award, the entity is not required to estimate the value immediately before and after the modification.Redemption

2. The ~~vesting~~Company ~~conditions~~has of the ~~modified~~right, ~~award~~at ~~are~~any time after the ~~same~~date as the ~~vesting~~Series ~~conditions~~B Shares have been issued, to redeem all or a portion of ~~the~~any ~~original~~Holder's ~~award~~Series ~~immediately~~B ~~before~~Shares at a price per Series B Share equal to the ~~original~~issue ~~award~~price isper ~~modified.~~Series B Share multiplied by 120%

3.Voting ~~The classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified.~~Rights

~~The~~Each ~~current~~holder ~~disclosure~~of ~~requirements in~~Series ~~Topic~~B ~~718~~Shares ~~apply~~is ~~regardless~~entitled to ofvote ~~whether~~on anall ~~entity~~matters issubmitted ~~required~~ to ~~apply~~a ~~modification~~vote ~~accounting~~of ~~under~~ the ~~amendments~~stockholders inof ~~this~~the ~~Update. The~~Company ~~amendments~~and inis ~~this~~entitled ~~Update~~to ~~are~~votes ~~effective~~equal ~~for~~to ~~all~~the ~~entities~~number ~~for~~of ~~annual~~shares of ~~periods~~Common ~~beginning~~Stock ~~after~~into ~~December~~which ~~15,~~Series ~~2017.~~B ~~Early~~Shares ~~adoption is~~could ~~permitted and should~~ be ~~applied~~converted, ~~prospectively~~and tothe anholders ~~award~~of ~~modified~~shares onof orSeries ~~after~~B ~~the~~Shares ~~adoption~~and ~~date.~~Common ~~The~~Stock ~~amendments proposed in~~will ~~this~~vote ~~ASU~~together ~~are~~as ~~not~~a ~~expected~~single toclass ~~have~~on aall ~~material~~matters ~~impact~~submitted onto ~~our~~the ~~consolidated~~stockholders ~~financial~~of ~~statements~~the Company.

In May 2017, the FASB issued ASU 2017-10, service concession arrangements, an amendment to Topic 853. Topic 853 provides guidance for operating entities when they enter into a service concession arrangement with a public-sector grantor who both:Dividends

1The holders of the Series B Shares are entitled to receive cumulative dividends at the rate of eight percent per annum of the issue price per share, accrued daily and payable annually in arrears on December 31st of each year. ~~Controls~~Such dividends accrue on any given share from the day of original issuance of such share. Such dividends are cumulative, whether or ~~has~~not declared by the ~~ability~~Board toof ~~modify~~Directors, but are non-compounding. Any dividend payable on a dividend payment date may be paid, at the option of the Company, either (i) in cash or ~~approve~~(ii) in shares of common stock at an issue price of $0.10 per common share. In the ~~services~~event that pursuant to applicable law or contract the ~~operating~~Company ~~entity~~is ~~must~~prohibited or ~~provide~~restricted ~~with~~from paying in cash the ~~infrastructure,~~full dividends to ~~whom~~which itthe ~~must~~holders ~~provide~~of ~~them~~the Series B Shares are entitled, the cash amount available pursuant to applicable law or contract will be distributed among the holders of the Series B Shares ratably in proportion to the full amounts to which they would otherwise be entitled and atany ~~what~~remaining ~~price~~amount due to holders of the Series B Shares will be payable in cash.

2.Liquidation ~~Controls, through ownership, beneficial entitlement, or otherwise, any residual interest in the infrastructure at the end of the term of the arrangement.~~Preference

In athe ~~service~~event ~~concession~~of ~~arrangement~~any liquidation, dissolution ~~within~~or ~~the~~winding ~~scope~~up of ~~Topic~~the ~~853~~Company, ~~the~~either ~~operating~~voluntary ~~entity~~or ~~should~~involuntary, ~~not~~the ~~account~~holders ~~for~~of the ~~infrastructure~~Series asB aShares ~~lease~~are orentitled asto ~~property~~receive, ~~plant,~~prior and ~~equipment.~~in Anpreference ~~operating~~to ~~entity~~any ~~should~~distribution ~~refer~~of any assets of the Company to the holders of any other ~~Topics~~preferred stock of the Company and subordinate to ~~account~~any ~~for~~distribution ~~various~~to ~~aspects~~the Series A-1 Shares, and prior and in preference to any distribution of aany ~~service~~assets ~~concession~~of ~~arrangement.~~the ~~For~~Company ~~example~~to the holders of the Common Stock, anthe ~~operating~~amount ~~entity~~of ~~should~~120% ~~account~~of ~~for~~the ~~revenue~~issue ~~relating~~price toper ~~construction,~~share. ~~upgrade~~In addition, orthe ~~operation~~Series ~~services~~B inholder ~~accordance~~has ~~with~~agreed ~~Topic~~to ~~605,~~vote ~~Revenue~~to ~~Recognition,~~subordinate orthe ~~Topic~~series ~~606,~~B ~~Revenue~~Preferred ~~from~~stock ~~Contracts~~liquidation ~~with~~preferences ~~Customers~~to the Series C Preferred stock preferences.

The amendments in this Update apply to the accounting by operating entities for service concession arrangements within the scope of Topic 853. These updates are effective when the Company adopts the updates to Topic 606. The amendments proposed in this ASU are not expected to have an impact on our consolidated financial statements.F-9

~~F-10~~The Company has undeclared dividends on the Series B Preferred stock amounting to $185,227 as of December 31, 2018. If the dividends are paid in stock, the beneficial conversion feature of these undeclared dividends will be recorded upon the declaration of these dividends. The computation of loss per common share takes into account these undeclared dividends.

~~PLEDGE~~Series ~~PETROLEUM~~C ~~CORP.~~Preferred

~~NOTES~~The TOCompany ~~THE~~has ~~CONSOLIDATED~~designated ~~FINANCIAL~~4,500,000 ~~STATEMENTS~~preferred shares as Series C Convertible Preferred Stock (“Series C Shares”). Each share of Series C is convertible into 120,000,000 shares of common stock and has voting rights equal to the number of shares of common stock that holders can convert into. The Series C Shares are non-redeemable by the Company and are entitled to a liquidation preference. As of December 31, 2018 there are no Series C preferred shares outstanding.

2NOTE ~~ACCOUNTING~~7 ~~POLICIES~~– ~~AND~~STOCK ~~ESTIMATES (continued)~~OPTIONS

g)The ~~Recent~~Company’s ~~Accounting~~Board ~~Pronouncements~~of Directors approved the Company’s 2008 Stock Option Plan (~~continued~~the “Stock Plan”) for the issuance of up to 5,000,000 shares of common stock to be granted through incentive stock options, nonqualified stock options, stock appreciation rights, dividend equivalent rights, restricted stock, restricted stock units and other stock-based awards to officers, other employees, directors and consultants of the Company and its subsidiaries. After the reverse stock split in August 2012, a total of 100,000 shares were available for grant. Subsequent to the reverse split the Board of Directors approved an increase in the number of awards available for grant to 2,100,000 shares. The exercise price of stock options under the Stock Plan is determined by the Board of Directors, and may be equal to or greater than the fair market value of the Company’s common stock on the date the option is granted. Options become exercisable over various periods from the date of grant, and generally expire ten years after the grant date.

InAt ~~July~~December ~~2017~~31, ~~the~~2018 ~~FASB~~there ~~issued Accounting~~were ~~Standards Update No. (“ASU’’) 2017-11~~57,704 ~~Earnings~~plan ~~Per~~options ~~Share (Topic 260)~~outstanding, ~~Distinguishing~~under ~~Liabilities from~~the ~~Equity~~Stock ~~(Topic~~Option ~~480) and Derivatives and Hedging (Topic 815)~~Plan. ~~The amendments in this Update provide guidance about:~~

1.The ~~Accounting~~vesting provisions for ~~certain~~these ~~financial~~stock options ~~instruments~~are ~~with~~determined ~~down~~by ~~round~~the ~~features~~board of directors at the time of grant, there are no unvested options outstanding as of December 31, 2018.

2.In ~~Replacement~~the event of the ~~indefinite~~employees’ ~~deferral~~termination, the ~~for~~Company ~~mandatorily~~will ~~redeemable~~cease ~~financial~~to ~~instruments~~recognize ofcompensation ~~certain non-public entities and certain non-controlling interests~~expense.

~~The~~A ~~amendments~~summary ~~in Part I~~ of ~~this~~ ~~Update~~all ~~change the classification analysis~~ of ~~certain~~our equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) ~~no longer would be accounted for as a derivative liability at~~activity ~~fair~~during ~~value as a result of~~ the ~~existence~~period ofended aDecember ~~down round feature. For freestanding equity classified financial instruments~~31, ~~the amendments~~2108 ~~require entities that present earnings per share (EPS) in accordance with Topic 260 to recognize the effect of the down round feature when it~~ is ~~triggered. That effect is treated~~ as a dividend and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded conversion options that have down round features are now subject to the specialized guidance for contingent beneficial conversion features (in Subtopic 470-20, Debt—Debt with Conversion and Other Options), including related EPS guidance (in Topic 260).follows:

The amendments in Part II of this Update recharacterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect.

	No. of shares		Exercise price per share		Weighted average exercise price

From August 22, 2018		-		$ -	$	-
Granted - non-plan options		-		-		-
Forfeited/cancelled		-		-		-
Exercised		-		-		-
Effects of recapitalization from reverse acquisition		57,704		$0.65 to $13.50		3.02
Outstanding December 31, 2018		57,704		$0.65 to $13.50	$	3.02

The ~~amendments~~options inoutstanding ~~Part I of this Update are effective for fiscal years,~~ and ~~interim~~exercisable ~~periods~~at ~~within those fiscal years, beginning after~~ December 1531, 2018~~. Early~~ ~~adoption~~are ~~is permitted for all entities, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected~~ as ~~of the beginning of the fiscal year that includes that interim period. The amendments in Part 1 of this Update should be applied in either of the following ways~~follows: 1. Retrospectively to outstanding financial instruments with a down round feature by means of a cumulative-effect adjustment to the statement of financial position as of the beginning of the first fiscal year and interim period(s) in which the pending content that links to this paragraph is effective 2. Retrospectively to outstanding financial instruments with a down round feature for each prior reporting period presented in accordance with the guidance on accounting changes in paragraphs 250-10-45-5 through 45-10.

The amendments in Part II of this Update do not require any transition guidance because those amendments do not have an accounting effect.

		Options outstanding						Options exercisable
Exercise price		No. of shares		Weighted average remaining years		Weighted average exercise price		No. of shares		Weighted average exercise price

$	13.50		3,480		0.45				3,480
$	12.50		2,000		1.78				2,000
$	8.50		500		2.50				500
$	5.00		14,800		2.79				14,800
$	0.65		36,924		4.25				36,924

			57,704		3.01		3.02		57,704	$	3.02

~~The Company is currently evaluating the impact this ASU will have on its consolidated financial statements.~~F-10

InNOTE ~~August~~8 ~~2017,~~– ~~the FASB issued ASU 2017-12, Derivatives and Hedging, (Topic 815), Targeted Improvements to accounting for Hedging Activities.~~WARRANTS

The ~~amendments~~warrants inoutstanding ~~this Update better align an entity’s risk management activities~~ and ~~financial~~exercisable ~~reporting~~at ~~for~~December ~~hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. To meet that objective~~31, ~~the amendments expand and refine hedge accounting for both nonfinancial and financial risk components and align~~2018 ~~the~~are ~~recognition~~as ~~and presentation of the effects of the hedging instrument and the hedged item in the financial statements.~~follows:

For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early application is permitted in any interim period after issuance of the Update. Transition Requirements For cash flow and net investment hedges existing at the date of adoption, an entity should apply a cumulative-effect adjustment related to eliminating the separate measurement of ineffectiveness to accumulated other comprehensive income with a corresponding adjustment to the opening balance of retained earnings as of the beginning of the fiscal year that an entity adopts the amendments in this Update. The amended presentation and disclosure guidance is required only prospectively.

		Warrants outstanding					Warrants exercisable
Exercise price			No. of shares	Weighted average remaining years		Weighted average exercise price		No. of shares		Weighted average exercise price
$	0.25		1,751,667	0.49				1,751,667
$	0.15		525,500	0.49				525,500
$	0.25		1,508,333	0.58				1,508,333
$	0.15		577,499	0.60				577,499
$	0.25		968,166	0.60				968,166
$	0.25		633,333	0.65				633,333

			5,964,498	0.53	$	0.22		5,964,498	$	0.22

~~The~~NOTE ~~impact~~9 ~~this~~– ~~ASU~~INCOME ~~will have on the Company’s consolidated financial statements is expected to be immaterial.~~TAXES

~~F-11~~Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The U.S. federal income tax rate is 21%.

~~PLEDGE~~The ~~PETROLEUM~~provision ~~CORP.~~for Federal income tax consists of the following December 31:

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

	2018
Federal income tax benefit attributable to:
Current Operations	$	7,087
Less: valuation allowance		(7,087	)
Net provision for Federal income taxes	$	-

2The ~~ACCOUNTING~~cumulative ~~POLICIES~~tax ~~AND~~effect ~~ESTIMATES~~at ~~(continued)~~the expected rate of 21% of significant items comprising our net deferred tax amount is as follows:

g) Recent Accounting Pronouncements (continued)

	2018
Deferred tax asset attributable to:
Net operating loss carryover	$	7,087
Less: valuation allowance		(7,087	)
Net deferred tax asset	$	-

InAt ~~September~~December ~~2017~~31, 2018, the ~~FASB issued~~Company ~~ASU~~had ~~2017-13,~~net ~~Revenue~~operating ~~Recognition~~loss ~~(Topic~~carry ~~605)~~forwards of approximately $33,746 ~~Revenue~~that may be offset against future taxable income from ~~Contracts~~the year ~~with~~2019 ~~Customers~~to ~~(Topic~~2038. No ~~606)~~tax benefit has been reported in the December 31, ~~Leases~~2018 ~~(Topic~~consolidated ~~840~~financial ~~and~~statements ~~Leases~~since ~~(Topic~~the ~~842).~~potential ~~The~~tax ~~amendments~~benefit inis ~~this~~offset ~~update~~by ~~provide~~a ~~guidance~~valuation ~~about:~~allowance of the same amount.

~~The~~On ~~transition~~December ~~provisions~~22, ~~in ASC~~2017, ~~Topic~~the ~~606~~U.S. ~~require~~government enacted ~~that~~comprehensive atax ~~public~~legislation ~~business~~commonly ~~entity~~referred ~~and~~to ~~certain~~as ~~other~~the ~~specified~~Tax ~~entities~~Cut ~~adopt~~and ~~ASC~~Jobs ~~Topic~~Act ~~606~~(the ~~for~~“Tax ~~annual~~Act”). ~~reporting periods~~The ~~beginning~~Tax ~~after~~Act establishes ~~December~~new ~~15,~~tax ~~2017,~~laws ~~including interim reporting periods within~~ that ~~reporting~~affects ~~period.~~2018 ~~All~~and ~~other~~future ~~entities are~~years, ~~required~~including toa ~~adopt~~reduction ~~ASC~~in ~~Topic~~the ~~606~~U.S. ~~for~~federal ~~annual~~corporate ~~reporting~~income ~~periods~~tax ~~beginning~~rate to ~~after~~21% ~~December~~effective 15January 1, 2018,. ~~and~~For ~~interim~~certain ~~reporting~~deferred ~~periods within~~tax ~~annual~~assets ~~reporting~~and ~~periods~~deferred ~~beginning~~tax ~~after December 15, 2019~~liabilities.

~~The~~Due ~~transition~~to ~~provisions~~the change in ~~ASC~~ ~~Topic~~ownership ~~842~~provisions of ~~require~~the ~~that~~Tax aReform ~~public~~Act ~~business~~of ~~entity~~1986, ~~and~~net ~~certain~~operating ~~other~~loss ~~specified~~carry ~~entities~~forwards ~~adopt ASC Topic 842~~ for ~~fiscal~~Federal ~~years~~income ~~beginning after~~tax ~~December~~reporting ~~15,~~purposes ~~2018, and interim periods within those fiscal years. FN3 All other entities~~ are ~~required~~subject to ~~adopt ASC Topic~~annual ~~842~~limitations. Should ~~for~~a ~~fiscal~~change ~~years~~in ~~beginning~~ownership ~~after~~occur, ~~December~~net ~~15,~~operating ~~2019,~~loss ~~and~~carry ~~interim~~forwards ~~periods~~may ~~within~~be ~~fiscal~~limited ~~years~~as ~~beginning~~to ~~after~~use ~~December~~in ~~15,~~future ~~2020~~years.

~~The impact this ASU will have on the Company’s consolidated financial statements is expected to be immaterial.~~F-11

InASC ~~November~~740 ~~2017,~~provides guidance on the ~~FASB~~accounting for ~~issued~~uncertainty in income taxes recognized in a company’s financial statements. 740 requires a company to determine whether ~~ASU~~it ~~2017-14,~~is ~~Income~~more ~~Statement~~likely –than ~~Reporting~~not ~~Comprehensive~~that ~~Income~~a ~~(Topic220),~~tax ~~Revenue~~position ~~Recognition~~will ~~(Topic~~be ~~605)~~sustained ~~and~~upon ~~Revenue~~examination ~~from~~based upon the technical merits of the position. ~~Contracts~~If ~~with~~the ~~Customers~~more-likely-than-not ~~(Topic~~threshold ~~606)~~is met, a company must measure the tax position to determine the amount to recognize in the financial statements.

~~Certain~~The ~~amendments~~Company ~~made~~includes tointerest ~~SEC~~and penalties ~~materials~~arising ~~and~~from ~~staff~~the ~~guidance~~underpayment ~~relating~~of toincome ~~Operating-Differential~~taxes ~~subsidiaries,~~in ~~and~~the ~~amendments~~statements toof operations in the ~~wording~~provision ~~and~~for ~~disclosure~~income ~~requirements~~ taxes. As of ~~Topic~~December 31, ~~605~~2018, ~~Revenue~~the ~~Recognition~~Company had no accrued interest or penalties related to uncertain tax positions.

~~The~~NOTE ~~impact~~10 of– ~~this~~COMMITMENTS ~~ASU~~AND ~~on the Company’s consolidated financial statements are limited until such time as the Company generates revenue from operations.~~CONTINGENCIES

InDuring ~~January~~the ~~2018~~normal course of business, the Company ~~FASB~~may be exposed to litigation. When the Company becomes aware of potential litigation, it evaluates the merits of the case ~~issued~~in ~~ASU~~accordance ~~2018~~with FASB ASC 450-120-50, ~~Leases~~Contingencies. ~~(Topic~~The ~~842)~~Company evaluates its exposure to the matter, ~~Land~~possible ~~Easement~~legal ~~practical~~or ~~expedient~~settlement strategies ~~for~~and ~~Top~~the ~~842~~likelihood of an unfavorable outcome. ~~The~~If ~~amendments~~the inCompany ~~this~~determines ~~update~~that ~~provide~~an ~~guidance~~unfavorable outcome is probable and ~~about:~~can be reasonably estimated, it establishes the necessary accruals. As of December 31, 2018, the Company is not aware of any contingent liabilities that should be reflected in the financial statements.

~~The~~NOTE ~~amendments~~11 in– ~~this~~SUBSEQUENT Update permit an entity to elect an optional transition practical expedient to not evaluate under Topic 842 land easements that exist or expired before the entity’s adoption of Topic 842 and that were not previously accounted for as leases under Topic 840. An entity that elects this practical expedient should apply the practical expedient consistently to all of its existing or expired land easements that were not previously accounted for as leases under Topic 840. Once an entity adopts Topic 842, it should apply that Topic prospectively to all new (or modified) land easements to determine whether the arrangement should be accounted for as a lease. An entity that does not elect this practical expedient should evaluate all existing or expired land easements in connection with the adoption of the new lease requirements in Topic 842 to assess whether they meet the definition of a lease. The amendment in this Update clarifies that an entity should determine whether land easements are leases in accordance with Topic 842 before applying the guidance.EVENTS

~~The~~Management ~~impact~~has ~~this~~evaluated ~~ASU~~subsequent ~~will have~~events onpursuant to the ~~Company’s~~requirements of ASC Topic 855, from the balance sheet date through the date the consolidated financial statements were isavailable ~~expected~~ to be ~~immaterial~~issued and has determined that there are no material subsequent events that require disclosure in the financial statements other than as disclosed below.

InOn ~~February~~January ~~2018~~22, 2019, the ~~FASB~~Company ~~issued~~executed ~~ASU~~a ~~2018-2~~convertible promissory note with Redstart Holdings Corp. for $103,000. ~~Income~~The ~~Statement-~~note ~~Reporting~~is ~~Comprehensive~~unsecured, ~~Income~~bears ~~(Topic~~interest ~~220)~~at 10% per annum and matures on January 22, ~~Reclassification~~2020. The note is convertible at any time into shares of ~~certain~~common ~~tax~~stock ~~effects~~at ~~from~~the ~~accumulated~~rate of 61% (39% discount) ~~other~~of ~~comprehensive~~the ~~income~~average of the lowest three trading prices in the twenty days preceding the conversion.

The amendments in this Update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. Consequently, the amendments eliminate the stranded tax effects resulting from the Tax Cuts and Jobs Act and will improve the usefulness of information reported to financial statement users. However, because the amendments only relate to the reclassification of the income tax effects of the Tax Cuts and Jobs Act, the underlying guidance that requires that the effect of a change in tax laws or rates be included in income from continuing operations is not affected. The amendments in this Update also require certain disclosures about stranded tax effects.

The amendments in this Update are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of the amendments in this Update is permitted, including adoption in any interim period, (1) for public business entities for reporting periods for which financial statements have not yet been issued and (2) for all other entities for reporting periods for which financial statements have not yet been made available for issuance. The amendments in this Update should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized.

The impact this ASU will have on the Company’s consolidated financial statements will be a reduction in the tax effect of net operating losses carried forward.

F-12

PLEDGE PETROLEUM CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2 ACCOUNTING POLICIES AND ESTIMATES (continued)

g) Recent Accounting Pronouncements (continued)

In February 2018, the FASB issued ASU 2018-3 Technical Corrections and Improvements to Financial Instruments – Overall (Sub topic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities. The amendments in this update provide guidance about:

The amendment clarifies that an entity measuring an equity security using the measurement alternative may change its measurement approach to a fair value method in accordance with Topic 820, Fair Value Measurement, through an irrevocable election that would apply to that security and all identical or similar investments of the same issuer. Once an entity makes this election, the entity should measure all future purchases of identical or similar investments of the same issuer using a fair value method in accordance with Topic 820.

The amendment clarifies that the adjustments made under the measurement alternative are intended to reflect the fair value of the security as of the date that the observable transaction for a similar security took place.

The amendment clarifies that remeasuring the entire value of forward contracts and purchased options is required when observable transactions occur on the underlying equity securities.

The amendment clarifies that when the fair value option is elected for a financial liability, the guidance in paragraph 825-10- 45-5 should be applied, regardless of whether the fair value option was elected under either Subtopic 815-15, Derivatives and Hedging— Embedded Derivatives, or 825- 10, Financial Instruments— Overall.

The amendments clarify that for financial liabilities for which the fair value option is elected, the amount of change in fair value that relates to the instrument specific credit risk should first be measured in the currency of denomination when presented separately from the total change in fair value of the financial liability. Then, both components of the change in the fair value of the liability should be remeasured into the functional currency of the reporting entity using end-of-period spot rates.

The amendment clarifies that the prospective transition approach for equity securities without a readily determinable fair value in the amendments in Update 2016-01 is meant only for instances in which the measurement alternative is applied. An insurance entity subject to the guidance in Topic 944, Financial Services— Insurance, should apply a prospective transition method Area for Correction or Improvement Summary of Amendments when applying the amendments related to equity securities without readily determinable fair values. An insurance entity should apply the selected prospective transition method consistently to the entity’s entire population of equity securities for which the measurement alternative is elected.

The amendments in this Update are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years beginning after June 15, 2018. Public business entities with fiscal years beginning between December 15, 2017, and June 15, 2018, are not required to adopt these amendments until the interim period beginning after June 15, 2018, and public business entities with fiscal years beginning between June 15, 2018, and December 15, 2018, are not required to adopt these amendments before adopting the amendments in Update 2016-01. For all other entities, the effective date is the same as the effective date in Update 2016-01. All entities may early adopt these amendments for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, as long as they have adopted Update 2016-01.

The amendments in this update are not expected to have a material impact on the Company’s consolidated financial statements.

F-13

PLEDGE PETROLEUM CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2 ACCOUNTING POLICIES AND ESTIMATES (continued)

g) Recent Accounting Pronouncements (continued)

In March 2018, the FASB issued ASU 2018-4 Investments – Debt Securities (Topic 320) and Regulated Operations (Topic 980), Amendments to SEC Paragraphs pursuant to SEC Staff Accounting Bulletin no. 117 and SEC Release No. 33-9273. The amendments in this update provide guidance about:

Certain amendments made to SEC materials and staff guidance relating to Investments – Debt Securities (Topic 320) and Regulated Operations (Topic 980).

The amendments in this update are not expected to have a material impact on the Company’s consolidated financial statements.

In March 2018, the FASB issued ASU 2018-5, Income Taxes (Topic 740) Amendments to SEC paragraphs pursuant to SEC Staff Accounting Bulletin No. 118

These amendments affect the wording of SEC paragraphs in the accounting standard codification dealing with Income Taxes (Topic 740).

The amendments in this update are not expected to have a material impact on the Company’s consolidated financial statements.

Any new accounting standards, not disclosed above, that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption.

F-14

PLEDGE PETROLEUM CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2 ACCOUNTING POLICIES AND ESTIMATES (continued)

h) Reporting by Segment

No segmental information is required as the Company currently only has one segment of business, the Plasma Pulse Technology for the petroleum industry.

Revenues to date are insignificant.

i) Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. At December 31, 2017 and December 31, 2016, respectively, the Company had no cash equivalents.

The Company assesses credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits. At December 31, 2017, the Company had cash balances of $8,599,620, which exceeded the federally insured limits by $8,320,495.

j) Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are reported at realizable value, net of allowances for doubtful accounts, which is estimated and recorded in the period the related revenue is recorded. The Company has a standardized approach to estimate and review the collectability of its receivables based on a number of factors, including the period they have been outstanding. Historical collection and payer reimbursement experience is an integral part of the estimation process related to allowances for doubtful accounts. In addition, the Company regularly assesses the state of its billing operations in order to identify issues, which may impact the collectability of these receivables or reserve estimates. Revisions to the allowance for doubtful accounts estimates are recorded as an adjustment to bad debt expense. Receivables deemed uncollectible are charged against the allowance for doubtful accounts at the time such receivables are written-off. Recoveries of receivables previously written-off are recorded as credits to the allowance for doubtful accounts. There were no recoveries during the period ended December 31, 2017.

k) Inventory

The Company had no inventory as of December 31, 2017 or December 31, 2016.

l) Plant and Equipment

Plant and equipment is stated at cost, less accumulated depreciation. Plant and equipment with costs greater than $1,000 are capitalized and depreciated. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The estimated useful lives of the assets are as follows:

Description	Estimated Useful Life
Office equipment and furniture	2 to 5 years
Leasehold improvements and fixtures	Lesser of estimated useful life or life of lease
Plant and equipment	2 to 3 years
Plasma pulse tools	5 years

The cost of repairs and maintenance is expensed as incurred. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition.

Where fixed assets are deemed to be impaired we recognize an impairment loss measured as the difference between the estimated fair value of the fixed asset and its book value.

F-15

PLEDGE PETROLEUM CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2 ACCOUNTING POLICIES AND ESTIMATES (continued)

m) Intangibles

All of the Company’s intangible assets are subject to amortization. The Company evaluates the recoverability of intangible assets periodically by taking into account events or circumstances that may warrant revised estimates of useful lives that indicates the asset may be impaired. Where intangibles are deemed to be impaired we recognize an impairment loss measured as the difference between the estimated fair value of the intangible and its book value.

i) License Agreements

License agreements acquired by the Company are reported at acquisition value less accumulated amortization and impairments.

ii) Amortization

Amortization is reported in the income statement on a straight-line basis over the estimated useful life of the intangible assets, unless the useful life is indefinite. Amortizable intangible assets are amortized from the date that they are available for use. The estimated useful life of the license agreement is five years which is the expected period for which we expect to derive a benefit from the underlying license agreements.

n) Long-Term Assets

Assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.

o) Revenue Recognition

F-16

PLEDGE PETROLEUM CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2 ACCOUNTING POLICIES AND ESTIMATES (continued)

p) Share-Based Payment Arrangements

Generally, all forms of share-based payments, including stock option grants, restricted stock grants and stock appreciation rights are measured at their fair value on the awards’ grant date, based on the estimated number of awards that are ultimately expected to vest. Share-based compensation awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable. The expense resulting from share- based payments is recorded in operating expenses inhe consolidated statement of operations.

q) Income Taxes

Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A full valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. It is the Company’s policy to classify interest and penalties on income taxes as interest expense or penalties expense. As of December 31, 2017, there have been no interest or penalties incurred on income taxes.

r) Net Loss per Share

Basic net loss per share is computed on the basis of the weighted average number of common shares outstanding during the period.

Diluted net loss per share is computed on the basis of the weighted average number of common shares and common share equivalents outstanding. Dilutive securities having an anti-dilutive effect on diluted net loss per share are excluded from the calculation (See Note 14, below).

Dilution is computed by applying the treasury stock method for options and warrants. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common shares at the average market price during the period.

Dilution is computed by applying the if-converted method for convertible preferred shares. Under this method, convertible preferred stock is assumed to be converted at the beginning of the period (or at the time of issuance, if later), and preferred dividends (if any) will be added back to determine income applicable to common stock. The shares issuable upon conversion will be added to weighted average number of common shares outstanding. Conversion will be assumed only if it reduces earnings per share (or increases loss per share).

Any common shares issued as a result of the issue of stock options and warrants would come from newly issued common shares from our remaining authorized shares.

s) Comprehensive income

Comprehensive income is defined as the change in equity of a company during a period from transactions and other events and circumstances excluding transactions resulting from investments from owners and distributions to owners. For the Company, comprehensive income for the periods presented includes net loss.

t) Related parties

Parties are considered to be related to the Company if the parties that, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company, or own in aggregate, on a fully diluted basis 5% or more of the Company’s stock. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions. All transactions are recorded at fair value of the goods or services exchanged. Property purchased from a related party is recorded at the cost to the related party and any payment to or on behalf of the related party in excess of the cost is reflected as a distribution to related party.

u) Reclassification

Certain reclassifications have been made to the prior year financial statement numbers to conform to the current presentation of the financial statements.

F-17

PLEDGE PETROLEUM CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

3 GOING CONCERN

The Company has cash balances of $8,599,620, of which only $749,620 is not restricted as of December 31, 2017. On March 23, 2018, after obtaining approval of the majority shareholder and the majority of the minority of the shareholders the Company sold substantially all of its assets for $650,000 and simultaneously therewith the entire shareholding of the majority shareholder, Ervington was purchased by the Company for gross proceeds of $8,500,000. The Company has $489,236 of cash available on May 8, 2018 and is considering the acquisition of an oil services treatment business in which two of the Company’s directors have an interest. The ability of the Company to conclude an acquisition based on current cash balances and continue as a going concern is uncertain.

4 DISCONTINUED OPERATIONS

On October 4, 2016, Novas Energy USA, Inc. (“Novas USA”), a wholly owned subsidiary of the Company, delivered a notice to Technovita Technologies USA, Inc. (“Technovita”) electing to dissolve its joint venture with Technovita (the “Joint Venture”), effective November 1, 2016, pursuant to Section 11.1(b) of the Operating Agreement of Novas Energy North America, LLC (“NENA”), dated October 22, 2015 (the “Operating Agreement”), by and among Novas USA and Technovita.

Section 11.1(b) of the Operating Agreement provides that the Joint Venture may be dissolved upon the election of Novas USA in the event the Joint Venture fails to satisfy any Year 1 Key Performance Indicator by an amount greater than five percent (5%) of the applicable metric (the “Year 1 Milestone”). The Joint Venture has not achieved the Year 1 Milestone. For the purposes of the Operating Agreement, the Year 1 Key Performance Indicators are defined as: during a continuous twelve (12) month period commencing upon September 1, 2015 each of: (1) sales from activities in the United States of greater than or equal to $2,829,000; (2) sales from activities in Canada of greater than or equal to $2,829,000; (3) EBITDA from activities in the United States of greater than or equal to $524,000; and (4) EBITDA from activities in Canada of greater than or equal to $524,000. Upon a dissolution, all intellectual property assets of the Joint Venture, including any improvements to Technology (as defined in the Operating Agreement) is to be distributed to Technovita solely for use in Canada, its territories and its possessions and Novas USA solely for use in the United States and its territories.

Pursuant to the Operating Agreement, Novas USA had entered into a sublicense agreement (the “Novas Sublicense Agreement”) with NENA and Novas Energy Group Limited for NENA to be the exclusive provider of Plasma Pulse Technology for treatment of vertical wells to third parties in the United States. The Sublicense Agreement was terminated upon termination of the Joint Venture. The Operating Agreement also provided, among other things, that Novas USA would contribute an aggregate of $1,200,000 to the capital of the Joint Venture for its 60% interest in the Joint Venture. Novas USA has contributed $900,000 to the Joint Venture to date and believes that it has valid defenses to any claim that may be made that it contribute additional funds.

The assets and liabilities of discontinued operations as of December 31, 2017 and 2016, respectively is as follows:

	December 31, 2017		December 31, 2016
Current assets
Cash	$	-	$	19,480
Accounts receivable, net		-		61,661
Prepaid expenses and other current assets		-		29,896
Total current assets		-		111,037
Non-current assets
Plant and equipment, net		-		6,480
Total assets	$	-	$	117,517
Current liabilities
Accounts payable	$	-	$	94,784
Related party payables		-		932,478
Accrued liabilities and other payables		-		115,971
Total liabilities	$	-	$	1,143,233
Discontinued operations	$	-	$	1,025,716

Income (Loss) from discontinued operations is as follows:

	Year ended December 31, 2017		Year ended December 31, 2016
Net revenue	$	-	$	196,328
Cost of goods sold		-		148,475
Gross Profit		-		47,853
Sales and marketing expenses		-		11,932
Professional fees		-		62,331
Business development		-		179,980
Consulting fees		-		898,640
General and administrative expenses		-		543,558
Depreciation and amortization		-		1,478
Total expense		-		1,697,919
Loss from operations		-		(1,650,066	)
Gain on discontinuance of subsidiary		-		-
Other income		-		10
Foreign currency gains		-		992
Loss from discontinued operations	$	-	$	(1,649,064	)

F-18

PLEDGE PETROLEUM CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

5 PREPAID EXPENSES

Prepaid expenses consisted of the following:

	December 31, 2017		December 31, 2016
Prepaid insurance	$	22,483	$	22,607
Prepaid professional fees		3,333		3,333
	$	25,816	$	25,940

6 PLANT AND EQUIPMENT

Plant and Equipment consisted of the following:

	December 31, 2017							December 31, 2016
	Cost		Amortization and Impairment			Net book value		Net book value
Plasma pulse tool		945,423		(945,423	)		-		-
Furniture and equipment		6,700		(2,457	)		4,243		5,583
Field equipment		19,627		(19,627	)		-		341
Computer equipment		11,130		(6,438	)		4,692		8,402
	$	982,880		(973,945	)	$	8,935	$	14,326

Depreciation expense was $5,391 and $130,933 for the years ended December 31, 2017 and 2016, respectively. An impairment charge of $741,754 was made in 2016 against the Plasma Pulse tool.

7 INTANGIBLES

Licenses

F-19

PLEDGE PETROLEUM CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

7 INTANGIBLES (continued)

Intangibles consisted of the following:

	December 31, 2017							December 31, 2016
	Cost		Amortization and Impairment			Net book value		Net book value
License agreements	$	350,000	$	(350,000	)	$	-	$	-
Website development		8,000		(8,000	)		-		-
	$	358,000	$	(358,000	)	$	-	$	-

Amortization expense was $0 and $70,000 for the years ended December 31, 2017 and 2016, respectively. Due to the lack of revenue generated under this license agreement, the remaining unamortized balance at December 31, 2016 of $157,500 was impaired.

F-20

PLEDGE PETROLEUM CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

8 ACCRUED LIABILITIES AND OTHER PAYABLES

Accrued liabilities consisted of the following:

	December 31, 2017		December 31, 2016
Royalties payable		14,653		14,653
Other		13,199		-
Severance accrual		-		19,814
	$	27,852	$	34,467

The severance accrual relates to accrued severance costs due to the COO, whose employment with the Company was terminated on December 15, 2016 as part of a cost reduction exercise.

9 NOTES PAYABLE

The note payable advanced by Owl Holdings to the Company has no interest rate and is repayable on demand.

10 STOCKHOLDERS’ EQUITY

a) Common Stock

The Company has authorized 500,000,000 common shares with a par value of $0.001 each, and issued and has outstanding 268,558,931 shares of common stock as of December 31, 2017.

No shares were issued during the current year.

b) Preferred Stock

The Company has 10,000,000 authorized preferred shares with a par value of $0.001 each with 5,000,000 preferred shares designated as Series A-1 Convertible Preferred Stock (“Series A-1 Shares”), 500,000 preferred shares designated as Series B Preferred Stock and 4,500,000 preferred shares designated as Series C Preferred Stock.

i) Series A-1 Convertible Preferred Stock

The Company has designated 5,000,000 preferred shares as Series A-1 Convertible Preferred Stock (“Series A-1 Shares”), with 3,137,500 Series A-1 Shares issued and outstanding which are convertible into 31,375,000 shares of common stock.

The rights, privileges and preferences of the Series A-1 Shares are summarized as follows;

Conversion

Each Series A-1 Share has the following conversion rights:

(a) Each share of the Series A-1Shares is convertible into ten shares of Common Stock.

(b) There shall be no adjustment made to the conversion ratio of the Series A-1 Shares for any stock split, stock dividend, combination, reclassification or other similar event.

Company Redemption

The Series A-1 Shares are non-redeemable by the Company.

Voting Rights

Each holder of Series A-1 Shares is entitled to vote on all matters submitted to a vote of the stockholders of the Company and be entitled to that number of votes equal to the number of shares of Common Stock into which such holder’s shares of Series A-1 Shares could then be converted.

Dividends

Until such time that any dividend is paid to the holders of Common Stock, the holders of Series A-1 Shares will be entitled to a dividend in an amount per share equal to that which such holders would have been entitled to receive had they converted all of the shares of Series A-1 Shares into Common Stock immediately prior to the payment of such dividend

Liquidation Preference

Each share of Series A-1 Shares is entitled to a liquidation preference of $0.08 per share

F-21

PLEDGE PETROLEUM CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

10 STOCKHOLDERS’ EQUITY (continued)

b) Preferred Stock (continued)

i) Series A-1 Convertible Preferred Stock (continued)

No Circumvention

The approval of the holders of at least 2/3 (66.6%) of the outstanding shares of the Series A-1 Shares, voting together separately as a class, is required for:

(a) the merger, sale of all, or substantially all of the assets or intellectual property, recapitalization, or reorganization of the Company;

(b) the authorization or issuance of any equity security having any right, preference or priority superior to or on a parity with the Series A-1 Shares;

(c) the redemption, repurchase or acquisition of any of the Company’s equity securities or the payment of any dividends or distributions thereon;

(d) any amendment or repeal of the Company’s Articles of Incorporation or Bylaws that would have an adverse effect on the rights, preferences or privileges of the Series A-1 Shares; and

(e) the making of any loan or advance to any person except in the ordinary course of business.

ii) Series B Convertible Preferred Stock

The Company has designated 500,000 preferred shares as Series B Convertible Preferred Stock (“Series B Shares”), with 40,000 Series B Shares issued and outstanding which are convertible into 4,000,000 shares of common stock.

The rights, privileges and preferences of the Series B Shares are summarized as follows:

Conversion

The holders of the Series B Preferred Shares shall have conversion rights as follows:

(a) Each share of the Series B Shares is convertible at any time prior to the issuance of a redemption notice by the Company into such number of shares of Common Stock by dividing the Stated value ($10) of the Series B Shares by $0.10 and is subject to adjustment for dividends or distributions made in common stock, the issue of securities convertible into common stock, stock splits, reverse stock splits, or reclassifications of common stock. No adjustments will be made to the conversion rights or conversion price for any reorganization other than to be entitled to receive the same benefits as if the shares were converted immediately prior to such reorganization. No conversion will take place if the holder of the Series B Shares will beneficially own in excess of 4.99% of the shares of Common Stock outstanding immediately after conversion. As of the date hereof, each Series B Share converts into 100 shares of common stock.

(b) The conversion right of the holders of Series B Shares are exercised by the surrender of the certificates representing shares to be converted to the Company, accompanied by written notice electing conversion.

(c) No fractional shares of Common Stock or script will be issued upon conversion of Series B Shares. The Company will pay a cash adjustment in respect to such fractional interest based upon the fair value of a share of Common Stock, as determined in good faith by the Company’s Board of Directors.

(d) All shares of Common Stock issued upon conversion of Series B Shares will upon issuance be validly issued, fully paid and non-assessable. All certificates representing Series B Shares surrendered for conversion shall be appropriately canceled on the books of the Company and the shares so converted represented by such certificates shall be restored to the status of authorized but unissued shares of preferred stock of the Company.

Company Redemption

The Company has the right, at any time after the date the Series B Shares have been issued, to redeem all or a portion of any Holder's Series B Shares at a price per Series B Share equal to the issue price per Series B Share multiplied by 120%

Voting Rights

Each holder of Series B Shares is entitled to vote on all matters submitted to a vote of the stockholders of the Company and is entitled to votes equal to the number of shares of Common Stock into which Series B Shares could be converted, and the holders of shares of Series B Shares and Common Stock shall vote together as a single class on all matters submitted to the stockholders of the Company.

F-22

PLEDGE PETROLEUM CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

10 STOCKHOLDERS’ EQUITY (continued)

b) Preferred Stock (continued)

ii) Series B Convertible Preferred Stock (continued)

Dividends

(a) The holders of the Series B Shares are entitled to receive cumulative dividends at the rate of eight percent per annum of the issue price per share, accrued daily and payable annually in arrears on December 31st of each year (“Dividend Date”). Such dividends accrue on any given share from the day of original issuance of such share. Such dividends are cumulative, whether or not declared by the Board of Directors, but are non-compounding.

(b) Any dividend payable on a dividend payment date may be paid, at the option of the Company, either (i) in cash or (ii) in shares of common stock at an issue price of $0.10 per common share.

(c) Nothing contained herein is deemed to establish or require any payment or other charges in excess of the maximum permitted by applicable law.

(d) In the event that pursuant to applicable law or contract the Company is prohibited or restricted from paying in cash the full dividends to which the holders of the Series B Shares are entitled, the cash amount available pursuant to applicable law or contract will be distributed among the holders of the Series B Shares ratably in proportion to the full amounts to which they would otherwise be entitled and any remaining amount due to holders of the Series B Shares will be payable in cash.

Liquidation Preference

In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, the holders of the Series B Shares are entitled to receive, prior and in preference to any distribution of any assets of the Company to the holders of any other preferred stock of the Company and subordinate to any distribution to the Series A-1 Shares, and prior and in preference to any distribution of any assets of the Company to the holders of the Common Stock, the amount of 120% of the issue price per share. In addition, the Series B holder has agreed to vote to subordinate the series B Preferred stock liquidation preferences to the Series C Preferred stock preferences.

No Circumvention

The Company may not amend its certificate of incorporation, or participate in any reorganization, sale or transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action for the purpose of avoiding or seeking to avoid the observance or performance of any of the terms to be observed or performed by the Company.

The Company has undeclared dividends on the Series B Preferred stock amounting to $626,000 as of December 31, 2017. If the dividends are paid in stock, the beneficial conversion feature of these undeclared dividends will be recorded upon the declaration of these dividends. The computation of loss per common share for the year ended December 31, 2017 takes into account these undeclared dividends.

iii) Series C Convertible Preferred Stock

The Company has designated 4,500,000 preferred shares as Series C Convertible Preferred Stock (“Series C Shares”), with 4,500,000 Series C Shares issued and outstanding which are convertible into 120,000,000 shares of common stock (a conversion price of $0.12291665 per share).

The terms attached to the Series C Preferred Stock (“Series C Share”) are summarized below:

Conversion

Subject to adjustment for stock splits, stock dividends, reorganizations and recapitalizations and similar transactions, each Series C Share is currently convertible at the option of the holder into 26.67 shares of common stock.

Company Redemption

The Series C Shares are not subject to redemption by the Company.

Voting Rights

Generally, holders of Series C Shares will, on an as-converted basis, vote together with the common stock as a single class.

Upon the issuance of at least 1,500,000 shares of Series C Preferred Stock the holders of the Series C Preferred Stock, as a class, are entitled to elect either two directors holding one vote or one director holding two votes. Upon the issuance of an aggregate of 4,500,000 shares of Series C Preferred Stock, the holders of the Series C Preferred Stock are entitled to elect either three directors holding one vote each, one director holding three votes or two directors with one director holding two votes and another director holding one vote.

F-23

PLEDGE PETROLEUM CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

10 STOCKHOLDERS’ EQUITY (continued)

b) Preferred Stock (continued)

iii) Series C Convertible Preferred Stock (continued)

Dividends

The Series C Shares accrue dividends at the rate per annum equal to 4% of the stated price (which initially is $3.277777778) payable annually in arrears on December 31 of each year in preference and priority to any payment of any dividend on our common stock, or any other class of preferred stock.

Liquidation Preference

In the event of our liquidation, dissolution or winding up and other liquidation events (as defined in the Series C Certificate of Designations), holders of Series C Shares are entitled to receive from proceeds remaining after distribution to our creditors and prior to the distribution to holders of common stock or any other class of preferred stock the (x) stated value (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) held by such holder and (y) all accrued but unpaid dividends on such shares.

Anti-Dilution

The Series C Shares are entitled to certain weighted average anti-dilution protection as specified in the Series C Certificate of Designations.

No Circumvention

The approval by holders of a majority of the Series C Shares, voting separately as a class, will be required for the following:

(i) merger, sale of substantially all of our assets or our recapitalization, reorganization, liquidation, dissolution or winding up;

(ii) redemption or acquisition of shares of our common stock other than in limited circumstances;

(iii) declaration or payment of a dividend or distribution with respect to our capital stock;

(iv) making any loan or advance;

(v) amending the Company’s Certificate of Incorporation or Bylaws;

(vi) authorizing or creating any new class or series of equity security;

(vii) increasing the number of authorized shares for issuance under any existing stock or option plan;

(viii) materially changing the nature of the business

(ix) incurring any indebtedness;

(x) engaging in or making investments not authorized by our board of directors;

(xi) acquiring or divesting a material amount of assets;

(xii) selling, assigning, licensing, pledging or encumbering our material technology or intellectual property;

(xiii) entering into any corporate strategic relationship involving payment, contribution or assignment by the Company or to the Company of any assets.

The Company has undeclared dividends on the Series C Preferred stock amounting to $1,550,822 as of December 31, 2017. The computation of loss per common share for the year ended December 31, 2017 takes into account these undeclared dividends.

c) Stock Options

a. Plan options

The Company’s Board of Directors approved the Company’s 2008 Stock Option Plan (the “Stock Plan”) for the issuance of up to 5,000,000 shares of common stock to be granted through incentive stock options, nonqualified stock options, stock appreciation rights, dividend equivalent rights, restricted stock, restricted stock units and other stock-based awards to officers, other employees, directors and consultants of the Company and its subsidiaries. After the reverse stock split in August 2012, a total of 100,000 shares were available for grant. Subsequent to the reverse split the Board of Directors approved an increase in the number of awards available for grant to 2,100,000 shares. The exercise price of stock options under the Stock Plan is determined by the Board of Directors, and may be equal to or greater than the fair market value of the Company’s common stock on the date the option is granted. Options become exercisable over various periods from the date of grant, and generally expire ten years after the grant date.

At December 31, 2017 and 2016, there were 380,950 Plan options issued and outstanding, respectively, under the Stock Option Plan.

The vesting provisions for these stock options are determined by the board of directors at the time of grant, there are no unvested options outstanding as of December 31, 2017.

No options were issued during the year ended December 31, 2017.

In the event of the employees’ termination, the Company will cease to recognize compensation expense.

F-24

PLEDGE PETROLEUM CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

10 STOCKHOLDERS’ EQUITY (continued)

c) Stock Options (continued)

b. Non-Plan Stock Options

On January 1, 2016, the Company granted, to its then Chief Executive Officer, non - plan options for 3,000,000 shares of common stock (that are not covered by the Company’s Stock Option Plan), with an exercise price of $0.08 per share and which options will expire thirty days after resignation. These options vested as to 1,000,000 on January 1, 2017, the first anniversary of the grant date; 1,000,000 was due to vest on the second anniversary of the grant date and a further 1,000,000 was due to vest on the third anniversary of the grant date.

On March 31, 2017, the Chief Executive Officer, Mr. Brian Boutte tendered his resignation and the remaining unvested options for 2,000,000 shares of common stock were cancelled. The 1,000,000 options which vested on January 1, 2017, were not exercised within 30 days of resignation by Mr. Boutte and have been forfeited.

In the event of the employees’ termination, the Company will cease to recognize compensation expense.

The Company has applied fair value accounting for all share based payment awards since inception. The fair value of each option granted is estimated on the date of grant using the Black-Scholes option-pricing model. There is no deferred compensation recorded upon initial grant date, instead, for employees, the fair value of the share-based payment is recognized ratably over the stated vesting period. For consultants, the fair value is recognized as expense immediately.

A summary of all of our option activity during the period January 1, 2016 to December 31, 2017 is as follows:

	No. of shares			Exercise price per share		Weighted average exercise price
Outstanding January 1, 2016		380,950			$0.51 to $13.50	$	0.90
Granted – non plan options		4,000,000			$0.08 to $0.09		0.90
Forfeited/cancelled		(1,000,000	)	$	0.08		0.08
Exercised		-			-		-
Outstanding December 31, 2016		3,380,950			$0.08 to $13.50		0.18
Granted - non plan options		-			-		-
Forfeited/cancelled		(3,000,000	)	$	0.08		0.08
Exercised		-			-		-
Outstanding December 31, 2017		380,950			$0.08 to $13.50	$	0.90

Stock options outstanding as of December 31, 2017 and 2016 as disclosed in the above table, have an intrinsic value of $0 and $0, respectively.

F-25

PLEDGE PETROLEUM CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

10 STOCKHOLDERS’ EQUITY (continued)

c) Stock Options (continued)

The options outstanding and exercisable at December 31, 2017 are as follows:

		Options outstanding						Options exercisable
Exercise price		No. of shares		Weighted average remaining years		Weighted average exercise price		No. of shares		Weighted average exercise price
$	13.50		3,480		1.45				3,480
$	12.50		2,000		2.78				2,000
$	8.50		500		3.50				500
$	5.00		14,800		3.79				14,800
$	0.65		36,924		5.25				36,924
$	0.63		38,096		0.50				38,096
$	0.51		285,150		2.28				285,150
$
			380,950		2.45		0.90		380,950		0.90

The Company has recorded an expense of $18,066 and $88,330 for the year ended December 31, 2017 and 2016 relating to options issued.

(d) Warrants

A summary of all of our warrant activity during the period January 1, 2016 to December 31, 2017 is as follows:

	No. of shares		Exercise price per share		Weighted average exercise price
Outstanding January 1, 2016		6,339,498		$0.15 to $0.30	$	0.24
Granted		-		-		-
Forfeited/cancelled		-		-		-
Exercised		-		-		-
Outstanding December 31, 2016		6,339,498		$0.15 to $0.30		0.24
Granted		-		-		-
Forfeited/cancelled		-		-		-
Exercised		-		-		-
Outstanding December 31, 2017		6,339,498		$0.15 to $0.30	$	0.24

The warrants outstanding and exercisable at December 31, 2017 are as follows:

		Warrants outstanding						Warrants exercisable
Exercise price		No. of shares		Weighted average remaining years		Weighted average exercise price		No. of shares		Weighted average exercise price
$	0.30		375,000		0.83				375,000
$	0.25		1,751,667		1.49				1,751,667
$	0.15		525,500		1.49				525,500
$	0.25		1,508,333		1.58				1,508,333
$	0.15		577,499		1.60				577,499
$	0.25		968,166		1.60				968,166
$	0.25		633,333		1.65				633,333
			6,339,498		1.52		0.24		6,339,498		0.24

The warrants outstanding have an intrinsic value of $0 and $0 as of December 31, 2017 and 2016, respectively.

F-26

PLEDGE PETROLEUM CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

11 EQUITY BASED COMPENSATION

Equity based compensation is made up as follows:

	Year ended December 31, 2017		Year ended December 31, 2016
Stock option compensation charge	$	18,066	$	88,330
	$	18,066	$	88,330

12 OTHER INCOME (EXPENSE)

	Year ended December 31, 2017		Year ended December 31, 2016
License fee forgiven	$	-	$	200,000
Other		-		(6,333)
	$	-	$	193,667

Other income in the prior period includes the forgiveness of the $200,000 license fee due to Novas BVI during the prior period.

13 INCOME TAXES

A reconciliation of the U.S. Federal statutory income tax rate to the effective income tax rate is as follows:

	Year ended December 31, 2017			Year ended December 31, 2016
	%			%
Tax expense at the federal statutory rate		(34	)		(34	)
State tax expense, net of the federal effect		(5	)		(5	)
Permanent timing differences		1			5
Deferred taxation rate change		243			-
Deferred income tax valuation allowance		(205	)		34
		-			-

Significant components of the Company’s deferred income tax assets are as follows:

	December 31, 2017			December 31, 2016
Deferred tax assets
Net operating losses	$	2,867,000		$	4,703,000
Valuation allowance		(2,867,000	)		(4,703,000	)
	$	-		$	-

The valuation allowance for deferred income tax assets as of December 31, 2017 and December 31, 2016 was $2,867,000 and $4,703,000, respectively. The net change in the deferred income tax assets valuation allowance was $1,836,000 for the year ended December 31, 2017, including a decrease in the valuation allowance of $1,464,000 due to the federal tax rate change from 35% to 21% in terms of the Tax Cuts and Jobs Act, discussed below. In the prior year the valuation allowance increased by $1,507,000. The increase includes a true up of the previous year’s estimate of net operating losses.

As of December 31, 2017, the prior three years remain open for examination by the federal or state regulatory agencies for purposes of an audit for tax purposes.

Our net operating loss carry-forwards of $11,026,000 begin to expire in 2032 and continue to expire through 2037. In assessing the realizability of deferred income tax assets, management considers whether or not it is more likely than not that some portion or all deferred income tax assets will be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the projected future taxable income and tax planning strategies in making this assessment.

The Tax Cuts and Jobs Act (the “Act”) was signed into law on December 22, 2017 and significantly changes tax law in the United States by, among other items, reducing the federal corporate income tax rate from a maximum of 35% to 21% (effective January 1, 2018). The Act embraces a territorial system for the taxation of future foreign earnings and modifies certain business deductions by, among other changes, repealing the domestic production activities deduction, further limiting the deductibility of certain executive compensation and increasing the limitation on the deductibility of certain meals and entertainment expenses. On the other hand, the Act permits 100% bonus depreciation on assets placed in service through 2022 (with a phase-out period through 2026). The full effects of these changes will be reflected for the first time in the determination of income tax expense for the year ending December 31, 2018. The Company determined that it had no liability as of December 31, 2018 for the one-time transition tax on deemed repatriated earnings of foreign subsidiaries imposed by the Act.

The Company will evaluate the impact of the Global Intangible Low-Taxed Income (“GILTI”) provision of the Act, beginning with the year ending December 31, 2018, the year for which it will first apply. The FASB has issued guidance stating that a company may elect to treat the additional taxes due in the United States as a result of GILTI inclusions as current period expenses when incurred or to include such amounts in the company’s determination of deferred taxes. The Company has not yet elected a method and will do so once the impact of GILTI has been evaluated.

F-27

PLEDGE PETROLEUM CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

14 NET LOSS PER SHARE

Basic loss per share is based on the weighted-average number of common shares outstanding during each period. Diluted loss per share is based on basic shares as determined above plus common stock equivalents, including convertible preferred shares and convertible notes as well as the incremental shares that would be issued upon the assumed exercise of in-the-money stock options using the treasury stock method. The computation of diluted net loss per share does not assume the issuance of common shares that have an anti-dilutive effect on net loss per share. For the year ended December 31, 2017 and 2016, all stock options, unvested restricted stock awards, warrants, convertible preferred stock and convertible notes were excluded from the computation of diluted net loss per share. Dilutive shares which could exist pursuant to the exercise of outstanding stock instruments and which were not included in the calculation because their affect would have been anti-dilutive are as follows:

	Year ended December 31, 2017		Year ended December 31, 2016
Stock options		380,950		3,380,950
Warrants to purchase shares of common stock		6,339,498		6,339,498
Series A-1 convertible preferred shares		31,375,000		31,375,000
Series B convertible preferred shares		4,000,000		4,000,000
Series C convertible preferred shares		120,000,000		120,000,000
		162,095,448		165,095,448

15 RELATED PARTY TRANSACTIONS

On January 1, 2016, the “Company entered into a three-year Employment Agreement with C. Brian Boutte (the “Boutte Employment Agreement”) to serve as the Company’s Chief Executive Officer. Mr. Boutte was to also serve as the Company’s interim Chief Financial Officer. Under the Boutte Employment Agreement, for his service as the Chief Executive Officer of the Company, Mr. Boutte was to receive an annual base salary of $265,000, a sign on bonus of $60,000 and an annual performance bonus of up to 55% of his base salary, such bonus payable in cash or equity upon attainment of certain performance indicators established by the Company’s Board of Directors and Mr. Boutte. In connection with the entry into the Boutte Employment Agreement, Mr. Boutte was granted an option award exercisable for 3,000,000 shares of the Company’s common stock, which will vest as to 1,000,000 shares on each of the one, two and three-year anniversary of the commencement of his employment with the Company. The Boutte Employment Agreement was amended on December 31, 2016 to provide for a term of six months ending June 30, 2017, a reduced annual base salary of $165,000 and a provision for immediate vesting of the options upon a Change of Control (as defined in the amendment).

Mr. Boutte tendered his resignation to the Board of Directors on March 31, 2017.

F-28

PLEDGE PETROLEUM CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

16 COMMITMENTS AND CONTINGENCIES

The Company disposed of its Crystal Magic, Inc. subsidiary effective December 31, 2013. In terms of the sale agreement entered into by the Company, the purchaser has been indemnified against all liabilities whether contingent or otherwise, claimed by third parties, this includes claims by creditors of the Company amounting to $372,090 and claims against long-term liabilities of $848,916. Management does not consider it likely that these claims will materialize and accordingly no provision has been made for these contingent liabilities.

The Company entered into a lease agreement for approximately 3,733 square feet of office and warehouse space in Houston, the term of the lease was for 39 months commencing on March 1, 2016 and terminating on May 31, 2019. The lease provided for the first month to be rent free, the fourteenth month to be rent free and the twenty-seventh month to be rent free. Monthly rentals, including estimated operating costs, for the first 12 months, excluding the free rental month amounted to approximately $3,410 per month, escalating at a rate of 1.7% per annum, after excluding the free rental months. This lease agreement was amended, and the lease terminated with effect from May 31, 2017 with a final payment of $2,000 and the forfeiture of the security deposit of $6,968.

The Company entered into an Office Service Agreement on May 16, 2017 whereby it has a lease to use an office in a business center, together with all telecommunication services and access to conference rooms, kitchens and all utilities, the agreement is for a period of six months commencing on June 1, 2017 and terminated on November 30, 2017. The Company paid a monthly amount of $530 in terms of the Office Service Agreement.

F-29

PLEDGE PETROLEUM CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

17 JOINT VENTURE

18 SUBSEQUENT EVENTS

The Company entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with an affiliate (the “Purchaser”) of Ervington Investment Limited (“Ervington”), the current holder of a majority of the Company’s outstanding voting securities, pursuant to which the Company has agreed to sell to the Purchaser substantially all of its assets, including all pertinent intellectual property rights, comprising its business of implementing its plasma pulse technology, for $650,000 (the “Asset Sale”). The Asset Purchase Agreement provided, among other things, that the Asset Sale is conditioned on its approval by holders of a majority of the Company’s voting securities, exclusive of the securities held by Ervington (a “majority of the minority”).

The Company had also entered into an agreement with Ervington (the “Share Repurchase Agreement”) to repurchase all of its outstanding securities held by Ervington for $8,500,000 (the “Share Repurchase”), which repurchase will occur at the same time as the Asset Sale. The repurchase will constitute a change of control and upon consummation of the repurchase, Ivan Persiyanov, will resign from all positions he holds as an officer and director of the Company and its subsidiaries. After the completion of the Asset Sale, the Company expects to cease all activities related to its existing business while evaluating other business opportunities, which include potentially acquiring a technology and oilfield services business, of which two of the Company’s current directors (Messrs. Huemoeller and Zotos) own a minority equity interest. The Company has not entered into an agreement with any potential acquisition candidate and has only been in the early stages of discussion.

On March 23, 2018, after receipt of the approval of the majority shareholder, the majority of the minority shareholders, the Company sold substantially all of the Company’s assets for $650,000 and repurchased the outstanding securities held by Ervington for $8,500,000. On March 23, 2018, Mr. Persiyanov resigned as an officer and director and Mr. Zotos was appointed the interim Chief Executive Officer. On May 31, 2018, Mr. Zotos was also appointed as the Interim Chief Financial Officer.

On May 2, 2018, Christopher Headrick was appointed as a director.

On May 2, 2018, we issued to each of our three directors, 10,000,000 shares of restricted common stock, vesting as to 1/3 of the grant immediately, 1/3 of the grant on the one year anniversary of the grant date and 1/3 of the grant on the two year anniversary of the grant date.

Other than disclosed above, in accordance with ASC 855-10, the Company has analyzed its operations subsequent to December 31, 2017 to the date these financial statements were issued, and has determined that it does not have any material subsequent events to disclose in these financial statements.

F-30

Item 9. Changes and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Disclosure Controls and Procedures

~~Pursuant~~We tohave ~~Rule~~adopted ~~13a-15(b)~~and ~~under~~maintain ~~the Securities~~disclosure ~~Exchange~~controls ~~Act~~and ofprocedures ~~1934~~that ~~(“Exchange~~are ~~Act”),~~designed ~~the~~to ~~Company~~provide ~~carried~~reasonable ~~out~~assurance anthat ~~evaluation,~~information ~~with~~required ~~the~~to ~~participation~~be ofdisclosed in the ~~Company’s~~reports ~~management,~~filed ~~including~~under the ~~Company’s~~Exchange ~~Chief~~Act, ~~Executive~~such ~~Officer~~as ~~(“CEO”)~~this Annual Report on Form 10-K, ~~who~~is ~~also~~collected, ~~serves~~recorded, asprocessed, ~~our~~summarized ~~principal~~and ~~financial~~reported ~~and~~within ~~accounting~~the ~~officer,~~time ofperiods specified in the ~~effectiveness~~rules of the ~~Company’s~~SEC. Our disclosure controls and procedures ~~(as~~are ~~defined~~also ~~under~~designed ~~Rule~~to ~~13a-15(e)~~ensure that ~~under~~such ~~the~~information ~~Exchange~~is ~~Act)~~accumulated asand ofcommunicated ~~the~~to ~~end~~management ofto ~~the~~allow ~~period~~timely ~~covered~~decisions byregarding ~~this~~required ~~report~~disclosure. ~~Based~~As ~~upon~~required under ~~that~~Exchange ~~evaluation~~Act Rule 13a-15, our management, including the ~~Company’s~~Chief ~~CEO~~Executive Officer and our interim Chief Financial Officer, ~~who~~after ~~also~~evaluating ~~serves~~the aseffectiveness ~~our~~of ~~principal~~disclosure ~~financial~~controls and ~~accounting~~procedures ~~officer~~(as ~~concluded~~defined ~~that~~in ~~due~~Exchange toAct aRules ~~lack~~13a-15(e) ofand ~~segregation~~15d-15(e)) as of ~~duties~~the ~~and~~end ~~insufficient controls~~of ~~over~~the ~~review~~period ~~and~~covered ~~accounting~~by ~~for~~this ~~certain~~Annual ~~complex~~Report ~~transactions~~on Form 10-K, have concluded that ~~the~~based ~~Company’s~~on ~~disclosure~~such evaluation, our disclosure controls and procedures as ~~of December 31, 2017~~ were not effective to ensure that information required to be disclosed by ~~the~~us ~~Company~~ in the reports that ~~the~~ ~~Company~~we ~~files~~ file or ~~submits~~submit under the Exchange Act, ~~was~~is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to ~~the~~our ~~Company’s~~ management, including ~~the~~our ~~Company’s~~Chief ~~CEO,~~Executive Officer, as appropriate, to allow timely decisions regarding required disclosure. ~~Once~~Our ~~we acquire~~Chief aExecutive ~~new~~Officer ~~business,~~and weour ~~intend~~interim toChief ~~retain~~Financial Officer ~~additional~~have ~~individuals~~concluded, tothat ~~remedy~~as of the ~~ineffective~~date ~~controls.~~of ~~However,~~the wefiling ~~cannot~~of ~~assure you~~this ~~that~~Annual Report, our ~~internal~~disclosure ~~control~~controls ~~over~~and ~~financial~~procedures ~~reporting,~~are asnot effective ~~modified,~~and ~~will~~that ~~enable~~all usmaterial toweaknesses ~~identify~~and orsignificant ~~avoid~~deficiencies ~~material~~have ~~weaknesses~~not ~~in the~~been ~~future~~completely remediated.

Changes in Internal Control

There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during our ~~year~~quarter ended December 31, ~~2017~~2018 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Internal Controls

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13(a)-15. Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act as a process designed by, or under the supervision of, our Chief Executive Officer ~~who~~and ~~is also~~ our interim Chief Financial Officer, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, and includes those policies and procedures that:

·	Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorization of our management and directors; and

·	Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisitions, use or disposition of our assets that could have a material effect on the financial statements.

Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations. It is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. It also can be circumvented by collusion or improper management override.

Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process certain safeguards to reduce, though not eliminate, this risk.

Management has used the framework set forth in the report entitled Internal Control – Integrated Framework (2013) published by the Committee of Sponsoring Organizations of the Treadway Commission, known as COSO, to evaluate the effectiveness of our internal control over financial reporting. Based upon this assessment, management has concluded that our internal control over financial reporting was not effective as of and for the year ended December 31, ~~2017~~2018.

This Annual Report on Form 10-K does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the Securities Exchange Commission that permit us to provide only management’s report in this Annual Report on Form 10-K.

Item 9B. Other Information

OnNot ~~May 31, 2018, John Zotos, was appointed as our Interim Chief Financial Officer~~applicable.

1622

PART III

Item 10. Directors, Executive Officers and Corporate Governance

Directors and Executive Officers

The ~~directors,~~table below sets certain information concerning our executive officers and ~~key~~directors ~~employees~~as of the ~~Company~~date hereof, including their names, ages, anticipated positions with us. Our executive officers are chosen by our Board and hold their respective offices until their resignation or earlier removal asby ~~follows:~~the Board.

Name	Age	Position
John W. Huemoeller II (1)	62	Director (Former Chief Executive Officer/President/Chairman)
John Zotos (2)	57	Interim Chief Executive Officer, Interim Chief Financial Officer, Secretary and Director
Christopher Headrick (3)	54	Director

In accordance with our certificate of incorporation, incumbent directors are elected to serve until our next annual meeting and until each director’s successor is duly elected and qualified.

(1) On March 23, 2018, Mr. Huemoeller was appointed as Chairman of the Board. On January 1, 2016, Mr. Huemoeller resigned as our Chief Executive Officer and President.

Name	Age	Position

John W. Huemoeller II (1)	63	Director (Chairman)

John Zotos (2)	58	Interim Chief Financial Officer, Secretary and Director (Former Chief Executive Officer)

Christopher Headrick (3)	55	Director, Chief Executive Officer

(21) On March 23, 2018, ~~upon the resignation of~~ Mr. ~~Persiyanov,~~Huemoeller ~~Mr. Zotos~~ was appointed as ~~the~~Chairman ~~interim~~of ~~Chief~~the ~~Executive Officer and on May 31, 2018 he was appointed interim Chief Financial Officer~~Board. On ~~March~~January 61, ~~2013~~2016, Mr. ~~Zotos~~Huemoeller ~~was~~resigned ~~appointed~~ as ~~our~~the ~~Secretary~~Company’s ~~and~~Chief aExecutive ~~director~~Officer and President.

(32) ) On March 23, 2018, upon the resignation of Mr. Persiyanov, Mr. Zotos was appointed as the interim Chief Executive Officer and on May 231, 2018 he was appointed interim Chief Financial Officer. On March 6, 2013, Mr. ~~Headrick~~Zotos was appointed as our Secretary and a director. Upon the execution of the Share Exchange, Mr. Zotos resigned as our interim Chief Executive Officer.

(3)	On May 2, 2018, Mr. Headrick was appointed a director and on December 20, 2018. Mr. Headrick was appointed as our Chief Executive Officer.

John W. Huemoeller II

Mr. Huemoeller has served as a director since March 6, 2013, and also served as our Chief Executive Officer and President, as well as Chief Financial Officer and the Chief Executive Officer of Novas from March 6, 2013 until January 1, 2016. Mr. Huemoeller serves on the Board of Directors of AXIM Biotechnologies, Inc., where he chairs the Audit Committee. Mr. Huemoeller has over 30 years’ experience in investment banking, finance, sales and marketing. Mr. Huemoeller began his career as an investment advisor in 1982 with M.L. Stern & Company a municipal bond firm in California and became a registered principal in 1985 managing retail brokers. He has previously been registered with various state insurance boards, as well as with the Chicago Board of Trade as a commodities broker. Mr. Huemoeller has held positions at Smith Barney, Drexel Burnham, Prudential Securities, and Paine Webber and has extensive experience in stocks, bonds, commodities, mergers and acquisitions, leveraged buyouts and private placement transactions.

From April 2012 until March 2013, Mr. Huemoeller had been the President of Joshua Tree Capital Inc., an independent corporate finance advisory firm specializing in providing strategic capital formation guidance to public and private small cap oil and gas companies. From March 2009 to April 2012, Mr. Huemoeller was a FINRA-registered investment banker focused on all aspects of taking company’s public, deal structure and Institutional placement of both debt and equity transactions with Buckman, Buckman and Reid. From August 2008 to March 2009, Mr. Huemoeller worked with Greenstone Holdings Group, LLC; an advisory firm with an emphasis on helping Chinese companies go public in the United States from January 2008 to July 2008, Mr. Huemoeller worked at Aspenwood Capital, a division of Green Drake Securities as an Investment Banker. Mr. Huemoeller previously served as Chairman and CEO of HumWare Media Corp, a publicly traded software development, media and technology company which he started in 1998 and was responsible for acquisition strategies and the day-to-day corporate operations. Mr. Huemoeller is co-author of U.S. Patent #5,855,005. Mr. Huemoeller completed various studies in the Bachelor of Business Administration Program at the University of Minnesota and has previously held Series 3, 7, 24, 63 and 79 Securities Licenses.

Mr. Huemoeller’s financial experience, specifically with ~~oil~~energy ~~and gas~~ companies, provides him with the attributes that make him a valuable member of ~~the~~our ~~Company’s~~ Board of Directors. His service on other public company boards brings to us important knowledge regarding corporate governance.

John Zotos

Mr. Zotos was appointed as a director on March 6, 2013. He also serves as a director of Novas. Since July 2007, he has served as a principal and a managing partner of JC Holdings, LLC, a company engaged in the business of buying, selling and managing heavy equipment and commercial real estate. On March 23, 2018, upon the resignation of Mr. Persiyanov, Mr. Zotos was appointed as the interim Chief Executive Officer and on May 31, 2018 he was appointed interim Chief Financial Officer. On March 6, 2013, Mr. Zotos was appointed as our Secretary and a director. Upon the execution of the Share Exchange, Mr. Zotos resigned as our interim Chief Executive Officer.

Mr. Zotos brings to the Board significant business experience. Mr. Zotos’ prior business experience, especially his experience in the on-line industry, gives him a broad and extensive understanding of our operations and our industry. Due to his business background, he has a broad understanding of the operational, financial and strategic issues facing public companies.

Christopher Headrick

Mr. Headrick was appointed to the Board of Directors on May 2, 2018. Upon the execution of the Share Exchange, Mr. Headrick was appointed as our Chief Executive Officer. Mr. Headrick has been serving as the Chief Executive Officer of Wyoming Energy Corp., a company engaged in the oil and gas business, since May 2012. Mr. Headrick is also the principal of Christopher L. Headrick LLC, an energy consulting firm he founded in June 2015. He also has served since February 2017 as the Chief Executive Officer of H2 Energy Group, a company engaged in the hydrogen energy production business.

Mr. Headrick was selected as a director due to his vast experience in the oil and gas industry.

Term of Office

Our directors hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. Our officers are appointed by our Board of Directors and hold office until removed by the board.

Employment Agreements and Arrangements

On ~~March~~December 2320, ~~2017~~2018, Mr. ~~Zotos~~Headrick ~~was appointed~~became as our ~~Interim~~ Chief Executive Officer in the place of Mr. ~~Persiyanov~~Zotos who resigned as our ~~Chief Executive Officer and~~ Interim Chief ~~Financial~~Executive Officer. ~~On May 31, 2018,~~ Mr. ~~Zotos~~Headrick ~~was~~had ~~appointed as our Interim Chief Financial Officer. We have not entered into a written agreement with Mr. Zotos; however, Mr. Zotos has~~ agreed to serve as the ~~Interim~~ Chief Executive Officer ~~and Interim Chief Financial Officer~~ for compensation of $1020,000 per month.

On March 23, 2017, Mr. Zotos was appointed as our interim Chief Executive Officer, a position from which he resigned in December 20, 2018, in the place of Mr. Persiyanov who resigned as our Chief Executive Officer and Interim Chief Financial Officer. On May 31, 2018, Mr. Zotos was appointed as our Interim Chief Financial Officer. We did not entered into a written agreement with Mr. Zotos; however, Mr. Zotos had agreed to serve as the Interim Chief Executive Officer and Interim Chief Financial Officer for compensation of $10,000 per month.

On April 17, 2015, Mr. Persiyanov was appointed to serve as our Chief Executive Officer. We did not enter into a written agreement with Mr. Persiyanov; however, Mr. Persiyanov had ~~has~~ agreed to serve as the new President and Chief Executive Officer for compensation of $1 per year for the ~~next~~period ~~twelve~~of ~~months~~time he served in such position.

On January 1, 2016, we entered into a three-year Employment Agreement with C. Brian Boutte (the “Original Boutte Employment Agreement”) to serve as our Chief Executive Officer. ~~Under~~which ~~the~~was ~~Original~~replaced Boutte Employment Agreement, for his service as our Chief Executive Officer, Mr. Boutte received an annual base salary of $265,000, and an annual performance bonus of up to 55% of his base salary, such bonus payable in cash or equity upon attainment of certain performance indicators established by ~~our Board of Directors and Mr. Boutte. Upon commencement of employment, Mr. Boutte received~~ a ~~sign~~new onagreement ~~bonus~~that ofwas ~~$60,000.~~entered ~~In connection with the entry~~ into ~~the Boutte Employment Agreement, Mr. Boutte was granted an option award exercisable for 3,000,000 shares of our common stock, which vest as to 1,000,000 shares~~ on ~~each of the one, two and three-year anniversary of the commencement of his employment. On~~ December 31, 2016 ~~we entered into a new employment agreement (the “Second Boutte Employment Agreement”) with Mr~~. ~~Boutte that replaced the Original Boutte Employment Agreement. The Second Boutte Employment Agreement had a term of six months ending on June 30, 2016 and an annual base salary of $165,000.~~

On March 31, 2017, Mr. Boutte resigned as our Chief Executive Officer.

19Family Relationships

~~Employees~~There are no family relationships among the members of our Board or its executive officers.

AtComposition ~~December~~of ~~31,~~the ~~2016 we had one part-time employee.~~Board

In accordance with our certificate of incorporation, our Board is elected annually as a single class.

Communications with our Board of Directors

Stockholders may send correspondence to our board of directors c/o the Corporate Secretary at Pledge Petroleum Corp, 1701 Commerce Street, 2^nd Floor, Houston, Texas 77002. The Company’s corporate secretary will forward stockholder communications to the board of directors prior to the board’s next regularly scheduled meeting following the receipt of the communication.

Director Independence

Although our common stock is not listed on any national securities exchange, for purposes of independence we use the definition of independence applied by the NASDAQ Stock Market. The Board has determined that Mr. ~~Headrick~~Huemoeller is an independent ~~director.~~in ~~Mr.~~accordance ~~Huemoeller~~with isthe ~~not~~definition ~~independent~~of ~~due~~independence toapplied ~~his prior~~by ~~positions~~the ~~with~~NASDAQ ~~our~~Stock ~~company~~Market ~~and~~but ~~Novas~~that Mr. Zotos and Mr. ~~Zotos~~Headrick isare not independent due to ~~his~~their current positions with our company.

Audit Committee and Audit Committee Financial Expert

Our board of directors acts as our audit committee. Messrs. Huemoeller and. Zotos are ~~aach~~each “audit committee financial experts,” as that term is defined in Item 407(d) of Regulation S-K promulgated under the Securities Act.

Upon evaluating our internal controls, our board of directors determined that our internal controls are not adequate to ensure that financial information is recorded, processed, summarized and reported in a timely and accurate manner in accordance with applicable rules and regulations of the SEC.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires our directors and executive officers, and persons who own more than 10% of a registered class of our equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of our common stock and other equity securities of Pledge. Officers, directors and greater than 10% shareholders are required by the SEC regulations to furnish us with copies of all Section 16(a) forms they file. These filings are publicly available on the SEC’s website at www.sec.gov. Based solely on our review of the copies of such forms received by us and our review of the SEC’s website, we believe that during fiscal year ended December 31, ~~2017~~2018, all filing requirements applicable to our officers, directors and greater than 10% percent beneficial owners were complied with except one late Form 4 filing for Christopher Headrick with respect to the Share Exchange Agreement.

Code of Ethics

We have established and maintain a Code of Ethics which is applicable to all employees, officers, and directors. Our policy is designed to deter wrongdoing and to promote honest and ethical conduct and compliance with all applicable laws and regulations. It also communicates our expectations of our employees and helps enable us to provide accurate and timely disclosure in our filings with the SEC and other public communications. In addition, the policy incorporates guidelines pertaining to topics such as environmental compliance, health and safety compliance; diversity and non-discrimination; vendor relations, employee privacy; and business continuity.

We will provide any person without charge, upon written or oral request to our corporate headquarters, a copy of our Code of Ethics.

Item 11. Executive Compensation

The following table discloses the compensation that was paid to our executive officers in the years ended December 31, ~~2017~~2018 and ~~2016~~2017.

Name and Principal Position	Year		Salary ($)		~~Salary ($)~~		Bonus ($)		~~Bonus ($)~~		Option Awards ($)		~~Option Awards ($)~~		Non-Equity Plan Compensation ($)		~~Non-Equity Plan Compensation ($)~~		Non Qualified Deferred Compensation Earnings ($)		~~Non Qualified Deferred Compensation Earnings ($)~~		All Other Compensation ($)		~~All Other Compensation ($)~~		Total ($)		~~Total ($)~~
Ivan Persiyanov, Former President ,CEO and interim CFO(1)		2017				-				-				-				-				-				-				-
Christopher Headrick, CEO	2018			-				-				-				-				-				-				-
Brian Boutte, President ,		2017				48,416				-				-				-				-				13,412				61,828
	2017			-				-				-				-				-				-				-
CEO and interim CFO(1)32)43)		2016				265,000				60,000				216,789				-				-				43,230				585,019
John Zotos, Former CEO	2018			45,000				-				-				-				-				-				45,000
	2017			-				-				-				-				-				-				-
Ivan Persiyanov, Former President, CEO and interim CFO (1)	2018			-				-				-				-				-				-				-
	2017			-				-				-				-				-				-				-

(1)	Mr. Persiyanov was appointed our Chief Executive Officer, President and Interim Chief Financial Officer on March 31, 2017 when Mr. Boutte resigned.

~~(2) The amounts disclosed as bonus for Mr. Boutte represents a once-off signing bonus.~~25

(3) Mr. Boutte was awarded 3,000,000 options on January 1, 2016. These options were valued at $216,789 using a Black Scholes option pricing model. These options vested as to 1,000,000 shares on January 1, 2017. Mr. Boutte resigned as our Chief Executive Officer on March 31, 2017.

(4) All other compensation for Mr. Boutte includes $16,985 for company contributed healthcare; $20,489 for company contributions to Mr. Boutte’s 401K plan and $5,756 for lease payments on a vehicle utilized by Mr. Boutte.

Outstanding Equity Awards at Fiscal Year-End

None of the executive officers were issued any equity awards in their capacity as executive officers during the year ended. The following table sets forth information relating to equity awards outstanding at the end of December 31, ~~2017~~ 2018 for each ~~Named~~named ~~Executive~~executive ~~Officer~~officer.

	OPTION AWARDS										STOCK AWARDS
Name	Number of securities underlying unexercised options Exercisable (#)		Number of securities underlying unexercised options Unexercisable (#)		Equity incentive plan awards: Number of securities underlying unearned options (#)		Option exercise price ($)		Option expiry date		Number of shares or units of stock that have not vested (#)		Market value of shares or units of stock that have not vested ($)		Equity incentive plan awards: Number of unearned shares, units or other rights that have not vested (#)		Equity incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested ($)
Brian Boutte (1)		-		3,000,000		-		0.09		1/1/2021		-		-		-		-
Ivane Persiyanov (2)		-		-		-		-		-		-		-		-		-

(1) Mr. Boutte was awarded five year options exercisable over 3,000,000 shares of common stock in terms of an employment agreement entered into with him. These options vest as to 1,000,000 on January 1, 2017, 1,000,000 on January 1, 2018 and 1,000,000 on January 1, 2019. Mr. Boutte resigned as our Chief Executive Officer on March 31, 2017 and the reaming unvested options were cancelled.

Option Exercises

No options were exercised during the year ended December 31, 2017.

Name	Grant Date	Number of securities underlying restricted stock awards		Number of securities underlying restricted stock awards Vested		Number of securities underlying restricted stock awards Not Vested		Grant date fair value of restricted stock awards ($ per share)
John Huemoeller	December 5, 2014		10,000,000		10,000,000		-		0.18
John Zotos	December 5, 2014		3,000,000		3,000,000		-		0.18

Directors Compensation

The following table sets forth certain information concerning the compensation paid or earned by the Directors ~~who were not Named Executive Officers~~ for their services rendered in ~~all~~as ~~capacities~~directors during the year ended December 31, ~~2017~~2018.

Name	Fees earned or paid in cash ($)		Stock awards ($)		Option awards ($)		Non-Equity Plan Compensation ($)		Non Qualified Deferred Compensation Earnings ($)		All Other Compensation ($)		Total ($)
Ivan Persiyanov		-		-		-		-		-		-		-
John Huemoeller(1)		25,000		-		-		-		-		-		25,000
John Zotos(1)(2)		25,000		-		-		-		-		18,125		43,125

2018 Director Compensation Table

~~(1)~~The ~~Mr.~~following ~~Huemoeller~~table ~~and~~sets forth information regarding the compensation earned for service on our board of directors by our directors during the year ended December 31, 2018. Mr. Zotos ~~were~~also ~~paid~~served ~~directors~~on ~~fees~~our ~~from~~board ~~August~~of ~~2017~~directors, atand ~~$5,000~~received ~~per~~compensation ~~month~~as a result.

(2) Mr. Zotos provided consulting services to us in the form of secretarial duties through his company ZotoZulu that amounted to $18,125, disclosed under “all other compensation”.

(a) Name	(b) Fees Earned or Paid in Cash ($)⁽¹⁾		(c) Stock Awards ($)⁽²⁾⁽⁴⁾		(d) Option Awards⁽¹⁾ ($)		(e) Non-Equity Incentive Plan Compensation ($)		(f) Nonqualified Deferred Compensation Earnings ($)		(g) All Other Compensation ($)⁽³⁾		(h) Total ($)

Ivan Persiyanov	$	-	$	-	$	-	$	-	$	-	$	-	$	-

John Huemoeller ⁽¹⁾	$	60,000	$	33,333	$	-	$	-	$	-	$	-	$	93,333

John Zotos ⁽¹⁾⁽²⁾	$	60,000	$	33,333	$	-	$	-	$	-	$	18,125	$	114,458

Christopher Headrick	$	35,000	$	33,333	$	-	$	-	$	-	$	-	$	68,333

None of our directors, who are not named executive officers have any options outstanding at December 31, 2017.

(1)	Mr. Huemoeller and Mr. Zotos were paid directors fees from August 2017 through December 31, 2018 at $5,000 per month.
(2)	On May 2, 2018, 10,000,000 shares of restricted stock to were issued to each director vesting as to 1/3rd upon the grant date, 1/3rd on the one year anniversary of the grant date and 1/3rd on the two year anniversary of the grant date.
(3)	Mr. Zotos provided consulting services to us in the form of secretarial duties through his company ZotoZulu that amounted to $18,125, disclosed under “all other compensation”.
(4)	The table below shows the aggregate number of unvested restricted stock awards outstanding at fiscal year end for each of our directors

We also reimburse directors for travel and other out-of-pocket expenses incurred in attending Board of Director and committee meetings and any other company related business.

Name	Number of securities underlying restricted stock awards that have not vested
Christopher Headrick	6,666,667
John Huemoeller		6,666,667
John Zotos		6,666,667

~~The following table sets forth information relating to Restricted Stock awards outstanding for our directors who were not Named Executive Officers as at December 31, 2017.~~26

Name	Grant Date	Number of securities underlying restricted stock awards		Number of securities underlying restricted stock awards Vested		Number of securities underlying restricted stock awards Not Vested		Grant date fair value of restricted stock awards ($ per share)
John Huemoeller	December 5, 2014		10,000,000		10,000,000		-		0.18
John Zotos	December 5, 2014		3,000,000		3,000,000		-		0.18

On May 2, 2018, we issued to each of our three directors, 10,000,000 shares of restricted common stock, vesting as to 1/3 of the grant immediately, 1/3 of the grant on the one-year anniversary of the grant date and 1/3 of the grant on the two year anniversary of the grant date.

OnExcept ~~May~~as 2,described ~~2018,~~under weExecutive ~~issued~~Compensation and toexcept ~~each~~for the Share Exchange, none of our ~~three~~ directors and executive officers nor any person who beneficially owns, 10directly or indirectly,~~000,000~~ shares equaling more than 5% of ~~restricted~~our common stock, ~~vesting~~nor asany tomembers ~~1/3~~ of the ~~grant~~immediate ~~immediately,~~family ~~1/3~~(including ofspouse, ~~the~~parents, children, ~~grant~~siblings, ~~on the~~and ~~one~~in- ~~year~~laws) ~~anniversary~~of any of the ~~grant~~foregoing ~~date~~persons, ~~and~~has ~~1/3~~any ofmaterial ~~the~~interest, ~~grant~~direct onor indirect, in any transaction that the ~~two~~Company ~~year~~entered ~~anniversary~~into ofsince ~~the~~January ~~grant~~1, ~~date~~2017.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table indicates beneficial ownership of our common stock, ownership of our series B Preferred Stock, and the total voting power of our shareholders as of ~~May~~April 810, ~~2018~~2019, by: (1) each person known by us to be the owner of more than 5% of our outstanding shares of Common Stock; (2) ~~each~~ each person known to us to be the owner of more than 5% of our outstanding shares of Series B Preferred Stock ; (3) each of our directors; (4) each of our executive officers; and (5) all of our directors and executive officers as a group. In general, “beneficial ownership” includes those shares a person has sole or shared power to vote or transfer (whether or not owned directly) and rights to acquire common stock through the exercise of stock options or warrants that are exercisable currently or become exercisable within 60 days of ~~May~~April 810, ~~2018~~2019. Except as indicated otherwise, the person’s name in the table below have sole voting and ~~investment~~ investment power with respect to all shares shown as beneficially owned by them.

The information below does not reflect the issuance of shares of Series D Preferred stock to Christopher Headrick that we have agreed to issue. Unless otherwise specified, the address of each of the individuals listed below is c/o Pledge Petroleum Corp., ~~11811~~576 ~~North~~S. ~~Freeway,~~Foothills ~~5th~~Plaza ~~Floor~~Drive, ~~Suite~~Unit ~~513~~#163, ~~Houston~~Maryville, Tennessee ~~TX 77060~~37801.

Name of beneficial owner	Amount and nature of beneficial ownership, including common stock			Percentage of common stock beneficially owned (1)(2)			~~Percentage of total voting power (2)~~
John Huemoeller		20,000,000	(3)		84.51	%		~~8.5~~	%
John Zotos		13,160,000	(4)		52.67	%		~~5.5~~	%
Christopher Headrick		10260,000,000	(5)		453.27	%		~~4.2~~	%
Ivan Persiyanov		-	(6)			*			*
Ivan Persiyanov(6)		—			*
Brain Boutte		-	(7)			*			*
All officers and directors as a group (4 persons)		293,160,000			60.5	%
5% Shareholders
Demesne Holdings Limited		12,500,000	(8)		5.3	%		5.2	%
Charles Hoogland		4,000,000	**(7)		*
Viktoria Akhmetova		12,500,000	(9)		5.3	%		5.2	%
Charles Hoogland		4,000,000	**(10)		1.7	%		1.7	%
All officers and directors as a group (5 persons)		43,160,000			6.4	%		6.3	%

	*	Less than 1%
	**	Includes all of the outstanding shares of Series B Preferred Stock on an “as converted basis”
	(1)	Based on 484,256,464 shares of common stock issued and outstanding as of April 10, 2019 and assumes that none of the 150,000 shares of Series D Preferred Stock have been issued within sixty (60) days of the date hereof
	(2)	Based on the voting rights attached to each class of shares, which vote as a single class together with common stockholders. Each share of common stock exercises one vote per share, each Series B Preferred Stock exercises one hundred votes per share (for an aggregate of 4,000,000 votes based on 40,000 outstanding Series B Preferred Stock) on an “as converted basis” The outstanding and vested shares of common stock and preferred stock, as of April 10, 2019 are entitled to an aggregate of 488,256,464 votes.
	(3)	Includes 20,000,000 shares of common stock. Mr. Huemoeller was granted 10,000,000 shares of our restricted stock. Mr. Huemoeller was granted 10,000,000 shares of our restricted stock in May 2018 that vested as to 1/3 of the grant immediately, 1/3 of the grant on the one-year anniversary of the grant date and 1/3 of the grant on the two-year anniversary of the grant date.
	(4)	Includes 3,000,000 shares of common stock. Mr. Zotos was granted 3,000,000 shares of restricted stock, 160,000 shares of common stock owned by the wife of Mr. Zotos and 10,000,000 shares of our restricted stock issued in May 2018 that vested as to 1/3 of the grant immediately, 1/3 of the grant on the one-year anniversary of the grant date and 1/3 of the grant on the two-year anniversary of the grant date.
	(5)	Includes 250,000,000 shares of common stock issued upon execution of the Share Exchange Agreement and 10,000,000 shares of our restricted stock issued in May 2018 that vested as to 1/3 of the grant immediately, 1/3 of the grant on the one-year anniversary of the grant date and 1/3 of the grant on the two-year anniversary of the grant date. Does not include 150,000 shares of Series D Preferred Stock to be issued to Mr. Headrick upon the closing of the Share Exchange Agreement that will have the right to an aggregate of 1,500,000,000 votes. Upon issuance of the Series D Preferred Stock, mr. Headrick will have the right to vote 88% of our outstanding voting stock.

* Less than 1%27

** Includes all of the outstanding shares of Series B Preferred Stock on an “as converted basis”

	(6)	Mr. Persiyanov resigned as an officer and director on March 23, 2018.
	(7)	Includes 40,000 shares of our Series B Preferred Stock convertible into 4,000,000 shares of our common stock. The 40,000 shares of Series B Preferred Stock represents 100% of the outstanding shares of Series B Preferred Stock. The address of the beneficial owner is Charles Hoogland, 2440 S. Willemoore, Springfield, Illinois 62704.

(1) Based on 234,256,464 shares of common stock issued and outstanding as of May 8, 2018.

(2) Based on the voting rights attached to each class of shares, which vote as a single class together with common stockholders. Each share of common stock exercises one vote per share, each Series B Preferred Stock exercises one hundred votes per share (for an aggregate of 4,000,000 votes based on 40,000 outstanding Series B Preferred Stock) on an “as converted basis” The outstanding and vested shares of common stock and preferred stock, as of May 8, 2018 are entitled to an aggregate of 238,256,464 votes.

(3) Includes 20,000,000 shares of common stock. Mr. Huemoeller was granted 10,000,000 shares of our restricted stock. Mr. Huemoeller was granted 10,000,000 shares of our restricted stock in _May 2018 that vested as to 1/3 of the grant immediately, 1/3 of the grant on the one year anniversary of the grant date and 1/3 of the grant on the two year anniversary of the grant date.___.

(4) Includes 3,000,000 shares of common stock. Mr. Zotos was granted 3,000,000 shares of restricted stock, 160,000 shares of common stock owned by the wife of Mr. Zotos and 10,000,000 shares of our restricted stock issued in May 2018 that vested as to 1/3 of the grant immediately, 1/3 of the grant on the one year anniversary of the grant date and 1/3 of the grant on the two year anniversary of the grant date.

	(5)	Includes 10,000,000 shares of our restricted stock issued in May 2018 that vested as to 1/3 of the grant immediately, 1/3 of the grant on the one year anniversary of the grant date and 1/3 of the grant on the two year anniversary of the grant date
	(6)	Mr. Boutte resigned as our Chief Executive Officer on March 31, 2017
	(7)	Mr. Persiyanov resigned as an officer and director on March 23, 2018
	(8)	Includes 12,500,000 shares of common stock held by Demesne Holdings Limited. The registered address is Heritage Plaza, Main Street, Charlestown, Nevis.
	(9)	Includes 12,500,000 shares of common stock held by Viktoria Akhmetova, 100 9 Gzhatskaya Street, St Petersburg, 195220, Russia
	(10)	Includes 40,000 shares of our Series B Preferred Stock convertible into 4,000,000 shares of our common stock. The 40,000 shares of Series B Preferred Stock represents 100% of the outstanding shares of Series B Preferred Stock. The address of the beneficial owner is Charles Hoogland, 2440 S. Willemoore, Springfield, Illinois 62704.

Except as described under Executive Compensation and except for the Share Exchange Agreement and transactions effected pursuant thereto and the Asset Sale and Share Repurchase, none of our directors and executive officers nor any person who beneficially owns, directly or indirectly, shares equaling more than 5% of our common stock, nor any members of the immediate family (including spouse, parents, children, siblings, and in- laws) of any of the foregoing persons, has any material interest, direct or indirect, in any transaction that we have entered into since January 1, ~~2016~~2017.

Item 14. Principal Accountant Fees and Services

On March ~~February 3~~14, ~~2016~~2019, the Board of Directors of Pledge Petroleum Corp. (the “Company”) ~~engaged~~retained Accell as its independent registered public accounting firm responsible for auditing its financial statements, to replace RBSM LLP, aswho ~~our~~was dismissed as its independent registered public accounting firm.

Service	Fiscal ~~2017~~2018		Fiscal ~~2016~~2017
Audit Fees	$	5552,~~500~~900	$	5455,~~000~~500
Audit-related Fees		-		-
Tax Fees		85,000		48,000
All Other Fees		-		-
	$	6357,~~500~~900	$	5863,~~000~~500

24Pre-Approval Policy

The Board of Director’s (in the absence of an Audit Committee) policy is to pre-approve all audit and permissible non-audit services provided by the Company’s independent registered public accounting firm. These services may include audit services, audit-related services, tax services and other services. Pre-approval is generally provided for up to one year and any pre-approval is detailed as to the particular service or category of services. The independent registered public accounting firm and management are required to periodically report to Board regarding the extent of services provided by the independent registered public accounting firm in accordance with such pre-approval. The Board approved all of the Company’s Audit Related Fees, Tax Fees and All Other Fees incurred by the Company in 2018 and 2017.

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a)

The financial statements listed in the Index to Consolidated Financial Statements are filed as part of this Annual Report. All financial statement schedules have been included in the Consolidated Financial Statements or Notes thereto.

No.		Description
2.1		Agreement and Plan of Reorganization between the Registrant, Crystal Magic, Inc. and Crystal Acquisition Corporation (Incorporated herein by reference to Exhibit 2.1 to the Company’s Registration Statement on Form S-1, as amended filed with the Securities and Exchange Commission on May 13, 2008, File No. 333-150862).
2.2		Agreement and Plan of Reorganization between the Registrant, Mountain Capital, LLC, Auleron 2005, LLC, Arrow Acquisition Corporation and Auleron 2005 Acquisition Corporation. (Incorporated herein by reference to Exhibit 2.2 to the Company’s Registration Statement on Form S-1, as amended filed with the Securities and Exchange Commission on May 13, 2008, File No. 333-150862).
2.3		~~Exhibit~~Share ~~and~~Exchange ~~Plan~~Agreement, ofdated ~~Reorganization~~as ~~dated~~of ~~June~~December 1419, ~~2010~~2018, ~~between~~by ~~the~~and ~~Registrant,~~among ~~Designbyhumans~~Pledge Petroleum Corp.~~com~~, ~~(“DBH”)~~Renewable ~~the~~Technology ~~DBH~~Solutions, ~~shareholders~~Inc., and ~~DBH~~Christopher ~~Acquisition~~Headrick ~~Corporation~~ (Incorporated herein by reference to ~~Exhibit 2.3 to~~ the Company’s ~~Current~~current ~~Report~~report on Form 8-K filed with the Securities and Exchange Commission on ~~June~~December 21, ~~2010~~2018, File No. 000-53488).
3.1		Certificate of Incorporation (Incorporated herein by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1, as amended filed with the Securities and Exchange Commission on May 13, 2008, File No. 333-150862).
3.2		Certificate of Amendment to Certificate of Incorporation (Incorporated herein by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-1, as amended filed with the Securities and Exchange Commission on May 13, 2008, File No. 333-150862).
3.3		By-Laws (Incorporated herein by reference to Exhibit 3.3 to the Company’s Registration Statement on Form S-1, as amended filed with the Securities and Exchange Commission on May 13, 2008, File No. 333-150862).
3.4		Certificate of Designations Series B Convertible Preferred Stock (Incorporated herein by reference to Exhibit 3.4 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 filed with the Securities and Exchange Commission on April 7, 2014, File No. 000-53488).
3.5		Certificate of Designations Series C Convertible Preferred Stock (Incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 19, 2015, File No. 000-53488).
3.6		Amended and Restated Bylaws (Incorporated herein by reference to Exhibit 3.2 to the Company’s current report on Form 8-K filed with the Securities and Exchange Commission on February 19, 2015, File No. 000-53488).
3.7		Certificate of Amendment to the Certificate of Incorporation (Incorporated herein by reference to Exhibit 3.1 to the Company’s current report on Form 8-K filed with the Securities and Exchange Commission on February 21, 2017, File No. 000-53488).
4.1		2008 Stock Option Plan (Incorporated herein by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-1, as amended filed with the Securities and Exchange Commission on May 13, 2008, File No. 333-150862).*
4.3		~~Option~~Form ~~Agreement~~of ~~between~~Registration ~~Steven~~Rights M.Agreement ~~Rhodes,~~between ~~Crystal~~Propell ~~Magic, Inc. and the Registrant~~ (Incorporated herein by reference to Exhibit 4.31 to the Company’s ~~registration~~Current ~~statement~~Report on Form S8-1,K ~~as amended~~ filed ~~with~~July ~~the Securities and Exchange Commission on May 13~~3, ~~2008,~~2014 File No. ~~333~~000-~~150862~~53488).
4.4		Form of Warrant (Incorporated herein by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed July 3, 2014, File No. 000-53488).
4.5		Form of Purchase Warrant to Paulson Investments, LLC (Incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on October 14, 2015, File No. 333-199292).

2529

4.4		Form of Registration Rights Agreement between Propell (Incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed July 3, 2014 File No. 000-53488).
4.6		Investors Rights Agreement (Incorporated herein by reference to Exhibit 4.1 to the Company’s current report on Form 8-K filed with the Securities and Exchange Commission on February 19, 2015, File No. 000-53488).
4.5		Form of Warrant (Incorporated herein by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed July 3, 2014, File No. 000-53488).
4.7		Incentive Stock Option Agreement (Incorporated herein by reference to Exhibit 4.24 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, filed with the Securities and Exchange Commission on March 30, 2015, File No. 000-53488).*
4.6		Form of Purchase Warrant to Paulson Investments, LLC (Incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on October 14, 2015, File No. 333-199292).
4.8		Restricted Stock Grant Agreement (Incorporated herein by reference to Exhibit 4.25 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, filed with the Securities and Exchange Commission on March 30, 2015, File No. 000-53488).*
4.7		Investors Rights Agreement (Incorporated herein by reference to Exhibit 4.1 to the Company’s current report on Form 8-K filed with the Securities and Exchange Commission on February 19, 2015, File No. 000-53488).
4.9		Form of Restricted Stock Grant Agreement (Incorporated by reference to Exhibit 4.10 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 filed with the Securities and Exchange Commission on June 1, 2018, File No. 000-53488).*
4.8		Incentive Stock Option Agreement (Incorporated herein by reference to Exhibit 4.24 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, filed with the Securities and Exchange Commission on March 31, 2015, File No. 000-53488).
10.1		License Agreement between Novas Energy (USA), Inc. and Novas Energy Group Limited (Incorporated herein by reference to Exhibit 10.28 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012, as filed with the Securities and Exchange Commission on April 15, 2013, File No. 000-53488).
4.9		Restricted Stock Grant (Incorporated herein by reference to Exhibit 4.25 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, filed with the Securities and Exchange Commission on March 31, 2015, File No. 000-53488).
10.2		Addendum to License Agreement between Novas Energy (USA), Inc. and Novas Energy Group Limited (Incorporated herein by reference to Exhibit 10.32 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 filed with the Securities and Exchange Commission on April 7, 2014, File No. 000-53488).
4.10		Form of Restricted Stock Grant Agreement (1)*
10.3		Securities Purchase Agreement for purchase of $750,000 of Series B Stock dated March 28, 2014 (Incorporated herein by reference to Exhibit 10.33 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 filed with the Securities and Exchange Commission on April 7, 2014, File No. 000-53488).
10.1		Crystal Magic, Inc. SBA Disaster Loan Control No. 9TFL-00512 dated December 19, 2001 (Incorporated herein by reference to Exhibit to the Company’s Registration Statement on Form S-1, as amended filed with the Securities and Exchange Commission on May 13, 2008, File No. 333-150862).
10.4		Form of Securities Purchase Agreement (Incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed July 3, 2014, File No. 000-53488).
10.2		Crystal Magic, Inc. SBA Loan No. PLP 399-356-4007 dated October 5, 2000 (Incorporated herein by reference to Exhibit 10.2 to the Company’s Registration Statement on Form S-1, as amended filed with the Securities and Exchange Commission on May 13, 2008, File No. 333-150862).
10.5		Employment Agreement, dated January 1, 2016 by and between C. Brian Boutte and the Company (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 5, 2016, File Number 000-53488)*
10.3		Crystal Magic, Inc. SBA Loan No. PLP 399-236-4004 dated October 4, 2000 (Incorporated herein by reference to Exhibit 10.3 to the Company’s Registration Statement on Form S-1, as amended filed with the Securities and Exchange Commission on May 13, 2008, File No. 333-150862).
10.4		Crystal Magic, Inc. SBA Loan No. PLP 309-109-4009 dated July 29, 1999 (Incorporated herein by reference to Exhibit 10.4 to the Company’s Registration Statement on Form S-1, as amended filed with the Securities and Exchange Commission on May 13, 2008, File No. 333-150862).
10.5		Indemnification Agreement between the Registrant and Steven M. Rhodes and Vicki L. Rhodes (Incorporated herein by reference to Exhibit 10.9 to the Company’s registration statement on Form S-1, as amended filed with the Securities and Exchange Commission on May 13, 2008, File No. 333-150862).
10.6		Release, Termination and Restructuring Agreement between Registrant and Steven M. Rhodes dated April 8, 2009 (Incorporated herein by reference to Exhibit 10.11 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, as amended filed with the Securities and Exchange Commission on March 31, 2009, File No. 000-53488).
10.7		License Agreement between Novas Energy (USA), Inc. and Novas Energy Group Limited (Incorporated herein by reference to Exhibit 10.28 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012, as filed with the Securities and Exchange Commission on April 15, 2013, File No. 000-53488).

2630

10.8		Addendum to License Agreement between Novas Energy (USA), Inc. and Novas Energy Group Limited (Incorporated herein by reference to Exhibit 10.32 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 filed with the Securities and Exchange Commission on April 7, 2014, File No. 000-53488).
10.6		Amended Employment Agreement, effective as of December 31, 2016 by and between C. Brian Boutte and the Company (Incorporated herein by reference to Exhibit 10.1 to the Company’s current report on Form 8-K filed with the Securities and Exchange Commission on January 17, 2017, File No. 000-53488)*
10.9		Securities Purchase Agreement for purchase of $750,000 of Series B Stock dated March 28, 2014 (Incorporated herein by reference to Exhibit 10.33 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 filed with the Securities and Exchange Commission on April 7, 2014, File No. 000-53488).
10.7		Contract for Sale and Purchase of Real Estate, dated December 12, 2018, by and between Stevens Automotive LLC, as Seller, and Renewable Technology Solutions, Inc., as Buyer (Incorporated herein by reference to the Company’s current report on Form 8-K filed with the Securities and Exchange Commission on December 21, 2018, File No. 000-53488)
10.10		Form of Securities Purchase Agreement (Incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed July 3, 2014, File No. 000-53488).
10.8		Promissory Note, in the principal amount of $5,000.00, issued by and Renewable Technology Solutions, Inc. to John Huemoeller (Incorporated herein by reference to the Company’s current report on Form 8-K filed with the Securities and Exchange Commission on December 21, 2018, File No. 000-53488)
10.11		Series C Preferred Stock Purchase Agreement (Incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 19, 2015, File No. 000-53488).
10.12		Stockholders Agreement (Incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 19, 2015 File No. 000-53488).
10.13		Indemnification Agreement (Incorporated herein by reference to Exhibit 10.3 to the Company’s current report on Form 8-K filed with the Securities and Exchange Commission on February 19, 2015 File No. 000-53488).
10.14		Amendment to the Series C Preferred Stock Purchase Agreement, dated June 5, 2015 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on June 9, 2015, File Number 000-53488)
10.15		Operating Agreement of Novas Energy North America, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 29, 2015, File Number 000-53488)
10.16		Sublicense Agreement by and among Novas Energy USA, Inc., Novas Energy North America, LLC and Novas Energy Group Inc. (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 29, 2015, File Number 000-53488)
10.17		Allocation Side Agreement between Novas Energy USA, Inc. Technovita Technologies Corporation and Novas Energy North America, LLC dated November 18, 2015 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 19, 2015, File Number 000-53488)
10.18		Employment Agreement, dated January 1, 2016 by and between C. Brian Boutte and the Company (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 5, 2016, File Number 000-53488)*
10.19		Employment Agreement, dated March 1, 2016 by and between David S. Ramsey and the Company (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 1, 2016, File Number 000-53488)*
10.20		Amended Employment Agreement, effective as of December 31, 2016 by and between C. Brian Boutte and the Company (Incorporated herein by reference to Exhibit 10.1 to the Company’s current report on Form 8-K filed with the Securities and Exchange Commission on January 17, 2017, File No. 000-53488)
14.1		Code of Ethics (Incorporated herein by reference to Exhibit 14.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, as amended filed with the Securities and Exchange Commission on March 31, 2009, File No. 000-53488).
21		List of Subsidiaries of the Registrant(1)
31.1		Certification of our Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.(1)
31.2		Certification of our Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.(1)
32.1		Certification of our Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.(1)
32.2		Certification of our Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.(1)
99.1		Secondary Stock Purchase Agreement (Incorporated herein by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 19, 2015, File No. 000-53488).

	101.INS		XBRL Instance Document ⁽¹⁾
	101.SCH		XBRL Taxonomy Extension Schema Document ⁽¹⁾
	101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document ⁽¹⁾
	101.DEF		XBRL Taxonomy Extension Definition Linkbase Document ⁽¹⁾
	101.LAB		XBRL Taxonomy Extension Label Linkbase Document ⁽¹⁾
	101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document ⁽¹⁾

32.1		Certification of our Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.(1)
32.2		Certification of our Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.(1)
99.1		Secondary Stock Purchase Agreement (Incorporated herein by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 19, 2015, File No. 000-53488).

	101.INS		XBRL Instance Document(1)
	101.SCH		XBRL Taxonomy Extension Schema Document(1)
	101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document(1)
	101.DEF		XBRL Taxonomy Extension Definition Linkbase Document(1)
	101.LAB		XBRL Taxonomy Extension Label Linkbase Document(1)
	101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document(1)

⁽¹⁾	Filed herewith
*	Management contract or compensatory plan or arrangement required to be identified pursuant to Item 15(a)(3) of this report.

Item 16. 10-K Summary

~~None~~Not applicable.

2831

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this ~~report~~Annual Report on Form 10-K for the fiscal year ended December 31, 2018 to be signed on its behalf by the undersigned, thereunto duly authorized, on the 16th day of April, 2019.

PLEDGE PETROLEUM CORP. By: /s/ Christopher Headrick Name: Christopher Headrick Title: Chief Executive Officer and Director

~~By:~~Pursuant ~~/s/~~to ~~John~~the ~~Zotos~~requirements ~~John~~of ~~Zotos~~the ~~Interim~~Securities Exchange ~~Chief~~Act ~~Executive~~of ~~Officer~~1934, ~~and~~as ~~Interim~~amended, ~~Chief~~this ~~Financial~~Annual ~~Officer~~Report ~~(Principal~~on ~~Executive~~Form ~~Officer~~10-K for the fiscal year ended December 31, ~~Principal~~2018 ~~Financial~~has ~~Officer~~been signed below by the following persons on behalf of the registrant, Pledge Petroleum Corp., in the capacities and ~~Principal~~on ~~Accounting~~the ~~Officer)~~date or dates indicated.

Date: May 31, 2018

Signature	Title	Date

/s/ Christopher Headrick	Chief Executive Officer and Director (Principal Executive Officer)	April 16, 2019
Christopher Headrick

/s/ John Zotos	Interim Chief Financial Officer and Director (Principal Financial Officer and Principal Accounting Officer)	April 16, 2019
John Zotos

/s/ John Huemoeller	Director	April 16, 2019
John Huemoeller

~~Pursuant to the requirements of the Securities Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.~~32

Date: May 31, 2018	By:	/s/ John Zotos
	John Zotos, Secretary and Director
Date: May 31, 2018	By:	/s/ John Huemoeller
	John Huemoeller, Director
Date: May 31, 2018	By:	/s/ Christopher Headrick
	Christopher Headrick

Filing Compare · PLEDGE PETROLEUM CORP