U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒	Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the quarterly period ended September 30, 2023.
	For the quarterly period ended March 31, 2024.
☐	Transition Report under Section 13 or 15(d) of the Exchange Act
	For the Transition Period from to

Commission File Number: 000-55586

Truleum, Inc.

(Exact Name of Registrant as Specified in its Charter)

Colorado

90-1020566

(State of other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification Number)

14143 Denver West Parkway, Suite 100,

Golden, CO 80401

(Address of principal executive offices) (Zip Code)

Registrant's Phone: 800-819-0604

Alpha Energy, Inc.

Former name or former address, if changed since last report

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large, accelerated filer, an accelerated filer, a non-accelerated filer, 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.

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

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

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None

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

The number of shares outstanding of the registrant’s common stock, par value $0.001 per share, as of ~~November~~May 15, ~~2023~~2024, was 21,~~742~~794,178.

Explanatory Note

This Report on Form 10-Q is filed without the Financial Statements having been reviewed by a registered independent accounting firm as required by Article 10 of Regulation S-X. An amendment will be filed after completion of the review. The Company is actively trying to engage a registered independent accounting firm as required by Article 10 of Regulation S-X after the BF Borgers SEC’s staff statement https://www.sec.gov/news/statement/staff-statement-borgers-05032024 to maintain compliance with the SEC and the Company’s dismissal as filed on form 8-K.

	TABLE OF CONTENTS	Page
	PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operation	1314
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	1415
Item 4.	Controls and Procedures	1415
	PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	1416
Item 1A.	Risk Factors	1516
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	1516
Item 3.	Defaults Upon Senior Securities	1516
Item 4.	Mine Safety Disclosures	1516
Item 5.	Other Information	1516
Item 6.	Exhibits	1617

ITEM 1. FINANCIAL STATEMENTS

	Page(s)
Consolidated Balance Sheets (unaudited)	4

Consolidated Statements of Operations (unaudited)	5

Consolidated Statements of Stockholders' Deficit (unaudited)	6

Consolidated Statements of Cash Flows (unaudited)	7

Notes to the Consolidated Financial Statements (unaudited)	8

Truleum, Inc.

(Formerly Alpha Energy, Inc.)

Consolidated Balance Sheets

(Unaudited)

	September 30, 2023			December 31, 2022
	March 31, 2024			December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	105,~~263~~530		$	955,~~362~~218
Joint interest billing receivable		~~7,940~~-			3121,~~492~~284
Prepaid assets and other current assets		9381,~~198~~256			8189,~~690~~320
Total current assets		~~111~~86,~~401~~786			~~208~~115,~~544~~822
Noncurrent assets:
Property and equipment, net		7840,~~094~~555			8843,~~020~~513
Oil and gas property, unproved, full cost		1,798,433			1,460,674
Oil and gas property, proved and unproved, full cost		1,823,294			1,814,363
Total noncurrent assets		1,~~876~~863,~~527~~849			1,~~548~~857,~~694~~876
Total assets	$	1,~~987~~950,~~928~~635		$	1,~~757~~973,~~238~~698
Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable and accrued expenses	$	1,~~013~~030,~~424~~155		$	~~334~~1,~~657~~062,239
Accounts payable and accrued expenses - related parties		60,000			328,375
Accounts payable and accrued expenses-related party		24,462			-
Advances - related party		130,381			-
Interest payable - related parties		183,660			136,100
Interest payable - related parties		86,865			22,183
Subscription liability		-			6,000
Convertible credit line payable - related party		490,330			-
Subscription liability - related party		-			40,000
Convertible credit line payable - related party		1,199,330			957,458
Convertible note payable		1,210,000			1,210,000
Total current liabilities		23,~~991~~647,~~000~~607			13,~~895~~411,~~215~~797
Senior secured convertible notes payable, related party, net of discount of $42,266 and $120,231, respectively		1,277,693			1,199,729
Senior secured convertible notes payable, related party, net of discount of $0 and $15,993, respectively		1,319,959			1,303,967
Asset retirement obligation		36,~~672~~856			~~918~~5,938
Total liabilities		4,~~272~~974,~~365~~422			34,~~095~~721,~~862~~702
Commitments and contingencies
Stockholders' deficit:
Preferred stock, 10,000,000 shares authorized:
10,000,000
Series A convertible preferred stock, $0.001 par value, 2,000,000 shares authorized and 0 shares issued and outstanding		-			-
Series A convertible preferred stock, $0.001 par value, 2,000,000 shares authorized, and 0 shares issued and outstanding		-			-
Common stock, $0.001 par value, 65,000,000 shares authorized and 21,742,178 and 21,653,326 shares issued and outstanding, respectively		21,742			21,653
Common stock, $0.001 par value, 65,000,000 shares authorized, and 21,794,178 and 21,788,178 shares issued and outstanding, respectively		21,794			21,742
Additional paid-in capital		6,~~346~~810,~~001~~456			56,~~731~~571,~~830~~011
Accumulated deficit		(89,~~652~~856,~~180~~037	)		(79,~~092~~340,~~107~~757	)
Total stockholders' deficit		(23,~~284~~023,~~437~~787	)		(12,~~338~~748,~~624~~004	)
Total liabilities and stockholders' deficit	$	1,~~987~~950,~~928~~635		$	1,~~757~~973,~~238~~698

See accompanying notes to the ~~unaudited~~ consolidated financial statements.

Truleum, Inc.

(Formerly Alpha Energy, Inc.)

Consolidated Statements of Operations

For the three ~~and nine~~ months ended ~~September~~March 3031, ~~2023~~2024 and ~~2022~~2023

(Unaudited)

	Three months ended						Nine months ended
	March 31, 2024			March 31, 2023
	September 30, 2023			September 30, 2022			September 30, 2023			September 30, 2022
Oil and gas sales	$	8,458		$	71,716
Oil and gas sales	$	22,217		$	138,900		$	129,473		$	144,139
Lease operating expenses		36,361			179,441
Lease operating expenses		84,219			229,099			333,178			278,533
Gross loss		(27,903	)		(107,725	)
Gross loss		(62,002	)		(90,199	)		(203,705	)		(134,394	)
Operating expenses:
Operating expenses:
Professional services		113,880			110,483
Professional services		130,700			100,775			422,710			310,468
Board of director fees		196,497			36,000
Board of director fees		150,000			36,000			222,000			120,000
General and administrative		111,803			151,530
General and administrative		141,983			215,859			550,589			580,453
Total operating expenses		422,180			298,013
Total operating expenses		422,683			352,634			1,195,299			1,010,921
Loss from operations		(450,083	)		(405,738	)
Loss from operations		(484,685	)		(442,833	)		(1,399,004	)		(1,145,315	)
Other income (expense):
Other income (expense):
Other income		-			1,139
Other income		-			-			1,655			-
Interest expense		(65,197	)		(55,223	)
Interest expense		(60,369	)		(56,871	)		(162,724	)		(137,273	)
Total other income (expense)		(65,197	)		(54,084	)
Gain on change in fair value of derivative liabilities		-			66,186			-			78,397
Net loss	$	(515,280	)	$	(459,822	)
Total other income (expense)		(60,369	)		9,315			(161,069	)		(58,876	)
Loss per share:
Net loss	$	(545,054	)	$	(433,518	)	$	(1,560,073	)	$	(1,204,191	)
Basic	$	(0.02	)	$	(0.02	)
Loss per share:
Diluted	$	(0.02	)	$	(0.02	)
Basic	$	(0.03	)	$	(0.02	)	$	(0.07	)	$	(0.06	)
Weighted average shares outstanding:
Diluted	$	(0.03	)	$	(0.02	)	$	(0.07	)	$	(0.06	)
Basic		21,765,689			21,653,326
Weighted average shares outstanding:
Diluted		21,765,689			21,653,326
Basic		21,736,178			19,900,856			21,705,800			19,184,342
Diluted		21,736,178			20,303,176			21,705,800			19,586,662

See accompanying notes to the ~~unaudited~~ consolidated financial statements.

Truleum, Inc.

(Formerly Alpha Energy, Inc.)

Consolidated Statements of Stockholders' Deficit

For the ~~nine~~ three months ended ~~September~~March 3031, ~~2023~~2024 and ~~2022~~2023

(Unaudited)

	Common Stock				Additional		Accumulated			Total Stockholders'
	Shares		Amount		Paid-in Capital		Deficit			Deficit
Balance, December 31, 2022		21,653,326	$	21,653	$	5,731,830	$	(7,092,107	)	$	(1,338,624	)
Balance, December 31, 2023		21,742,178	$	21,742	$	6,571,011	$	(9,340,757	)	$	(2,748,004	)
Shares issued for subscription liability		6,000		6		45,994		-			46,000
Stock-based compensation		46,000		46		193,451		-			193,497
Net loss		-		-		-		(515,280	)		(515,280	)
Balance, March 31, 2024		21,794,178		21,794		6,810,456		(9,856,037	)		(3,023,787	)
Balance, December 31, 2022 - As revised		21,653,326	$	21,653	$	5,731,830	$	(7,092,107	)	$	(1,338,624	)
Stock-based compensation		-		-		62,000		-			62,000
Net loss		-		-		-		(459,822	)		(459,822	)
Balance, March 31, 2023		21,653,326		21,653		5,793,830		(7,551,929	)		(1,736,446	)
Shares issued for the settlement of accounts payable, related party		70,852		71		354,189		-			354,260
Stock-based compensation		12,000		12		41,988		-			42,000
Net loss		-		-		-		(555,197	)		(555,197	)
Balance, June 30, 2023		21,736,178		21,736		6,190,007		(8,107,126	)		(1,895,383	)
Stock-based compensation		6,000		6		155,994		-			156,000
Net loss		-		-		-		(545,054	)		(545,054	)
Balance, September 30, 2023		21,742,178	$	21,742	$	6,346,001	$	(8,652,180	)	$	(2,284,437	)
Balance, December 31, 2021		18,824,106	$	18,824	$	2,739,634	$	(5,371,918	)	$	(2,613,460	)
Stock-based compensation		-		-		63,000		-			63,000
Net loss		-		-		-		(376,138	)		(376,138	)
Balance, March 31, 2022		18,824,106		18,824		2,802,634		(5,748,056	)		(2,926,598	)
Stock-based compensation		-		-		51,000		-			51,000
Net loss		-		-		-		(394,535	)		(394,535	)
Balance, June 30, 2022		18,824,106		18,824		2,853,634		(6,142,591	)		(3,270,133	)
Stock issued for cash		2,504,500		2,504		2,501,996		-			2,504,500
Stock-based compensation		283,720		284		123,436		-			123,720
Net loss		-		-		-		(433,518	)		(433,518	)
Balance, September 30, 2022		21,612,326	$	21,612	$	5,479,066	$	(6,576,109	)	$	(1,075,431	)

See accompanying notes to the ~~unaudited~~ consolidated financial statements.

Truleum, Inc.

(Formerly Alpha Energy, Inc.)

Consolidated Statements of Cash Flows

For the ~~nine~~three months ended ~~September~~March 3031, ~~2023~~2024 and ~~2022~~2023

(Unaudited)

	September 30, 2023			September 30, 2022
	March 31, 2024			March 31, 2023
Cash flows from operating activities:
Net loss	$	(1515,~~560,073~~280	)	$	(1459,~~204,191~~822	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation		~~260~~193,~~000~~497			~~237~~62,~~720~~000
Depreciation expense		20(5,~~000~~973	)		~~922~~6,107
Amortization of debt discount		7715,~~964~~992			6725,~~368~~703
Asset retirement obligation expense		~~2,754~~918			-
Gain on change in fair value of derivative liabilities		-			(78,397	)
Changes in operating assets and liabilities:
Accounts receivable		-			(7,940	)
Joint interest billing receivable		21,284			750
Joint interest billing receivable		23,552			-
Prepaid expenses and other current assets		8,064			(12,531	)
Prepaid expenses and other current assets		(11,508	)		(51,250	)
Accounts payable		(7,622	)		331,559
Accounts payable		678,767			(95,928	)
Accounts payable-related party		-			25,885
Accounts payable-related party		85,885			(13,085	)
Subscription liability		-			-
Interest payable		64,682			22,427
Subscription liability - related party		-			-
Net cash used in operating activities		(357,977	)		(1,122,354	)
Interest payable		47,560			23,596
Net cash used in operating activities		(241,560	)		3,247
Cash flows from investing activities:
Cash paid for purchase of property and equipment		~~(10,074~~-	)		~~(55,300~~-	)
Acquisition of oil and gas property		~~(337,759~~-	)		(182,~~165,212~~140	)
Net cash used in investing activities		~~(347,833~~-	)		(182,~~220,512~~140	)
Cash flows from financing activities:
Proceeds from convertible credit line, related party		~~490~~241,~~330~~872			-
Proceeds from advances, related parties		130,381			120,236
Net cash provided by financing activities		241,872			-
Repayment of advances, related parties		-			(10,000	)
Net change in cash and cash equivalents		312			(78,893	)
Repayment of convertible credit line payable - related party		-			(30,000	)
Cash and cash equivalents, at beginning of period		5,218			95,362
Proceeds from senior secured convertible notes payable, related party		-			500,000
Cash and cash equivalents, at end of period	$	5,530		$	16,469
Proceeds from unexecuted subscription agreements		-			2,504,500
Net cash provided by financing activities		620,711			3,084,736
Net change in cash and cash equivalents		(85,099	)		741,870
Cash and cash equivalents, at beginning of period		95,362			217
Cash and cash equivalents, at end of period	$	10,263		$	742,087
Supplemental disclosures of cash flow information:
Cash paid for interest	$	1632,~~210~~419		$	~~23,596~~-
Cash paid for income taxes	$	-		$	-
Supplemental disclosure of non-cash investing and financing activities:
Debt discount on senior secured convertible notes payable - related party	$	-		$	~~208,476~~-
Advances and other liabilities converted to senior secured convertible notes payable, related party	$	-		$	~~819,963~~-
Shares issued for the settlement of accounts payable, related party	$	354,260		$	-
Extinguishment of derivative liability	$	-		$	-

See accompanying notes to the unaudited consolidated financial statements.

Truleum, Inc.

(Formerly Alpha Energy, Inc.)

Notes to the Consolidated Financial Statements

NOTE 1 – BASIS OF PRESENTATION

The interim unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and should be read in conjunction with the audited consolidated financial statements and notes thereto for the years ended December 31, ~~2022~~2023 and ~~2021~~2022 which are included on the Form 10-K filed on April 175, ~~2023~~2024. In the opinion of management, all adjustments which include normal recurring adjustments, necessary to present fairly the financial position, results of operations, and cash flows for the periods shown have been reflected herein. The results of operations for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2023~~2024 are not necessarily indicative of the operating results for the full year. Certain information and footnote disclosures which would substantially duplicate the disclosures contained in the audited consolidated financial statements for the years ended December 31, ~~2022~~2023, and ~~2021~~2022 have been omitted.

On April 27, 2023, the Company amended its articles of incorporation to change their name from Alpha Energy, Inc. to Truleum, Inc.

Principles of Consolidation

Our consolidated financial statements include our accounts and the accounts of our 100% owned subsidiary, Alpha Energy Texas Operating, LLC. All intercompany transactions and balances have been eliminated.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. Actual results could differ from those estimates. Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company’s system of internal accounting control is designed to assure, among other items, that (1) recorded transactions are valid; (2) all valid transactions are recorded and (3) transactions are recorded in the period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the company for the respective periods being presented.

Basic and Diluted Loss per share

Net loss per share is provided in accordance with FASB ASC 260-10, “Earnings (Loss) per Share”. Basic loss per share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive. For the ~~nine~~three months ended ~~September~~March 3031, ~~2023~~2024 and ~~2022~~2023, there were 263,992 shares issuable from the senior secured convertible notes payable and ~~326~~655,~~887~~870 and ~~168,328~~0 shares issuable from the convertible credit line payable which were considered for their dilutive effects but were determined to be anti-dilutive due to the Company’s net loss, respectively.

Fair Value of Financial Instruments

The Company applies fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements. The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability.

The carrying amount of the Company’s financial instruments consisting of cash and cash equivalents, accounts payable, notes payable and convertible notes approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.

Reclassification

Certain reclassifications may have been made to our prior year’s financial statements to conform to our current year presentation. These reclassifications had no effect on our previously reported results of operations or accumulated deficit.

Recently Issued Accounting Standards Not Yet Adopted

The Company has reviewed all recently issued, but not yet adopted, accounting standards, in order to determine their effects, if any, on its results of operations, financial position or cash flows. Based on that review, the Company believes that there are no recently issued accounting pronouncements that will have a significant effect on its financial statements.

~~NOTE~~Note 2 – GOING CONCERN

The Company’s interim unaudited consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has minimal cash or other current assets and does not have an established ongoing source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 3 – OIL AND GAS PROPERTIES

~~On September 6, 2023, the Company entered into a Purchase and Sale Agreement (“PSA”) with NJW Oklahoma Acquisitions Company, Inc. a wholly-owned subsidiary of Nash~~ Oil, ~~Gas,~~ and ~~Power, Inc. (“NJW”). Under the terms of the PSA, the Company will acquire leases and related assets to certain oil and~~ gas ~~wells~~properties ~~located~~at inMarch ~~Noble~~31, ~~Kay,~~2024 ~~Payne~~ and ~~Pawnee,~~December ~~Oklahoma as more fully described in the PSA (the “Ambassador Project”) in addition to the working interests therein. Under the PSA the Company is obligated to make a cash payment of $6~~31,~~500,000~~ ~~and~~2023 ~~payment~~consisted of ~~approximately $100,000 for bonds required by~~ the ~~Bureau of Indian Affairs and Bureau of Land Management.~~following:

	Balance					Balance
Account	12/31/2023			Additions		03/31/2024
Leasehold Improvements - Chicorica	$	40,000		$	-	$	40,000
Leasehold Improvements - Undeveloped		63,973			-		63,973
Lease Acquisition and Development Costs - Logan County		1,739,404			-		1,741,669
Asset retirement obligation – true-up		1,348			-		1,348
(Accumulated depletion)		(30,362	)		-		(30,362	)
Total oil and gas related assets	$	1,814,363		$	-	$	1,814,363

Oil and gas properties, unproved at September 30, 2023 and December 31, 2022 consisted of the following:

	Balance		Balance
Account	12/31/2022		9/30/2023
Leasehold Improvements - Chico Rica, LLC	$	40,000	$	40,000
Leasehold Improvements - Undeveloped		62,596		62,596
Lease Acquisition and Development Costs - Logan County		1,358,078		1,695,837
Total oil and gas properties, unproved	$	1,460,674	$	1,798,433

NOTE 4 – RELATED PARTY TRANSACTIONS

Advances from Related Party

The Company received advances from AEI Management, Inc., a Company owned by a significant shareholder, totaling $0 and $88,956 during the nine months ended September 30, 2023 and 2022, respectively. The advances are unsecured, non-interest bearing and are payable on demand. During the nine months ended September 30, 2022, the Company repaid $10,000 of the advances and converted $413,206 of advances to a senior secured convertible note due February 24, 2024.

The Company received advances from Jay Leaver, President of the Company, totaling $130,381 and $31,280 during the nine months ended September 30, 2023 and 2022, respectively. The advances are unsecured, non-interest bearing and is payable on demand. During the nine months ended September 30, 2022, the Company converted $325,580 of advances to a senior secured convertible note due February 24, 2024.

Accounts Payable and Accrued Expenses - Related Parties

As of ~~September~~March 3031, ~~2023~~2024 and December 31, ~~2022~~2023, there ~~was~~were ~~$60,000~~no ~~and~~advances ~~$328,375~~due ofto ~~accounts payable~~ related parties for either period and $24,462 due to Leaverite Exploration, Inc. d/b/a Leaverite Consulting (“Leaverite Exploration”), a corporation wholly-owned by our President, Jay Leaver pursuant to a consulting agreement. On April 10, 2023, the Company issued 70,852 shares of common stock valued at $5.00 per share to settle outstanding consulting invoices in the amount of $354,260 owed to ~~Jay~~Mr. Leaver~~, President~~.

Subscription Liability – Related Party

On January 12, 2024, the Company issued 40,000 shares of its common stock to Company director Mark Timm as a bonus effective December 31, 2023; this amount of $40,000 was recorded as a subscription liability – related party on the balance sheet as of year-end.

Senior Secured Convertible Notes Payable – Related Party

OnAEI ~~February 25~~Management, ~~2022, the Company entered into a secured senior secured convertible note for the purchase and sale of convertible promissory notes (“Convertible Note”) in the principal amount of $5,000,000~~Inc. The Senior Convertible Note is convertible at any time after the date of issuance into shares of the Company’s common stock at a fixed conversion price of $5.00 per share. Upon conversion of the convertible note into the Company’s common stock, the noteholder would be issued 1,000,000 shares of the Company’s common stock. Interest on the Convertible Note shall be paid to the investors at a rate of 7.25% per annum, paid on a quarterly basis, and the maturity date of the Convertible Note is two years after the issuance date. The Convertible Note purports to be secured by certain oil and gas leases, lands, minerals and other properties of the Company, subject to prior liens and security interests. See Note 5 – Related Party Transactions. During the year ended December 31, 2022, $413,206 from a related party were exchanged for a Convertible Note. Due to the variable conversion price in the convertible credit line, this fixed senior secured convertible note is treated as derivatives due to the possibility of insufficient shares available at conversion to settle the notes. The day one derivative liability was $65,262, which was recorded as a discount on the senior secured convertible notes payable. During the nine months ended September 30, 2023, the Company amortized $24,406 of the discount as interest expense. As of September 30, 2023, the unamortized discount was $13,231. The outstanding principal balance on the senior secured convertible notes payable as of September 30, 2023 and December 31, 2022 amounted to $413,206.

On February 25, 2022, ~~Mr.~~the ~~Leaver~~Company ~~assigned~~entered into a ~~$406,750~~secured ~~promissory~~senior secured convertible note with AEI for the purchase and ~~advances~~sale of convertible promissory notes (“Convertible Note”) in the principal amount of $~~500~~5,000,000. toThe 20Convertible ~~Shekels,~~Note anis ~~affiliated~~convertible ~~Company.~~at Onany time after the ~~same~~date ~~day,~~of issuance into shares of the ~~assigned~~Company’s ~~promissory~~common ~~note~~stock ~~and~~at ~~advance~~a ~~totaling~~fixed conversion price of $~~906~~5.00 per share; upon conversion,~~750~~ ~~were~~the ~~transferred~~Company ~~into~~would aissue ~~secured~~the ~~senior~~noteholder ~~secured~~1,000,000 ~~convertible~~shares ~~note~~of common stock. The ~~convertible~~Convertible ~~note~~Note bears interest at a rate of 7.25% ~~and~~per ~~matures~~annum, is paid on ~~February~~a 25quarterly basis, and has a maturity date of December 31, 2024. The ~~note~~Convertible Note is ~~convertible~~secured ~~into~~by ~~shares~~certain oil and gas leases, lands, minerals and other properties of the Company, atsubject ~~$5.00~~to ~~per~~prior ~~share~~liens and security interests. ~~Due~~During the year ended December 31, 2022, $413,206 from a related party was exchanged for a convertible note; due to the variable conversion price in the convertible credit line, this fixed senior secured convertible note is treated as ~~derivatives~~a derivative due to the possibility of insufficient shares available at conversion to settle the ~~notes~~note. The day one derivative liability was $~~143~~65,~~214~~262, which was recorded as a discount; onfor the ~~senior~~years ~~secured convertible notes payable. During the nine months~~ ended ~~September~~December 3031, 2023 and 2022, the Company amortized $5532,~~558~~631 and $27,624, respectively, of the discount as interest expense. As of ~~September~~March 3031, 2024 and December 31, 2023, the unamortized discount was $290 and $5,~~035~~006, respectively. The outstanding principal balance on the senior secured convertible notes payable as of ~~September~~March 3031, ~~2023~~2024 and December 31, ~~2022~~2023 ~~amounted~~was to $~~906~~413,~~754~~206 as of both dates.

As20 ~~of September 30~~Shekels, ~~2023 and December 31, 2022, the senior secured convertible notes payable balance, net of discount was $1,277,693 and $1,199,729 with accrued interest of $55,104 and $0, respectively~~Inc.

~~Convertible~~On ~~Credit~~February ~~Line~~25, –2022, ~~Related~~Mr. ~~Party~~Leaver assigned a $406,750 promissory note and advances of $500,000 to 20 Shekels. On the same day, the assigned promissory note and advance totaling $906,750 were transferred into a secured senior secured convertible note. The convertible note bears interest at 7.25% and matures on December 31, 2024. The note is convertible into shares of the Company at $5.00 per share. Due to the variable convertible credit line, this fixed senior secured convertible note is treated as derivatives due to the possibility of insufficient shares available at conversion to settle the notes. The day one derivative liability was $143,214, which was recorded as a discount; for the years ended December 31, 2023 and 2022, the Company amortized $71,607 and $60,621, respectively, of the discount as interest expense. As of March 31, 2024 and December 31, 2023 , the unamortized discount was $ 0 and $ 10,986, respectively. The outstanding principal balance on the senior secured convertible notes payable as of March 31, 2024 and December 31, 2023 was $906,754 as of both dates.

On June 1, 2021, the Company entered into a new convertible credit line agreement to borrow up to $1,500,000 and matures on June 1, 2023. The outstanding balance accrues interest at a rate of 7% per annum and the outstanding balance is convertible to common stock of the Company at the lesser of the close price of the common stock as quoted on the OTCBB on the day interest is due and payable immediately preceding the conversion or $1.50. On February 11, 2023, the Company and AEI Acquisition Company, LLC. (“AEI”), the Company’s majority shareholder, entered into a First Amendment to Revolving Credit Note (the “Amendment”) which amended the convertible Revolving Credit Note dated June 1, 2021 and matures on December 31, 2023 in the maximum amount of $1,500,000 by and between the Company and AEI (the “Revolving Credit Line”). The Amendment amends the Revolving Credit Line to provide that any outstanding amount of principal and/or interest under the Revolving Credit Line may be converted into fully paid and non-assessable shares of common stock, $0.001 per share par value, at a fixed conversion price of $1.50 per share subject to adjustment for stock dividends, stock splits, recapitalizations, or other similar transactions that affect the rights of common stockholders generally. As of September 30, 2023, the Company has drawn $490,330 on the convertible note, with accrued interest of $9,578.

As of March 31, 2024 and December 31, 2023, the senior secured convertible notes payable balance, net of discount was $1,215,722 with accrued interest of $23,596 and $79,225 , respectively.

Convertible Credit Line – Related Party

AEI Acquisition Company, LLC

On June 1, 2021, the Company entered into a new convertible credit line agreement with AEI Acquisition Company, LLC. (“AEI”), the Company’s majority shareholder, to borrow up to $1,500,000; the agreement has a maturity date of June 1, 2023. The outstanding balance accrues interest at a rate of 7% per annum and the outstanding balance is convertible to common stock of the Company at the lesser of the close price of the common stock as quoted on the OTCBB on the day interest is due and payable immediately preceding the conversion or $4.00. The Company analyzed the conversion option in the convertible line of credit for derivative accounting consideration under ASC 815, Derivative and Hedging, and determined that the transaction does qualify for derivative treatment. The Company evaluated the new convertible credit line for debt modification in accordance with ASC 470-50 and concluded that the debt qualified for debt modification as the borrowing capacity under the new credit line is greater than the borrowing capacity under the original credit line. There were no fees paid to the creditor and no unamortized deferred costs on the original credit line. Accordingly, no expense was recognized in connection with the transaction.

During the year ended December 31, 2022, the Company amortized $11,100 of the discount as interest expense, and as of December 31, 2022, the unamortized discount was $0. During the year ended December 31, 2022, the Company repaid $168,328 of principal on the convertible credit line and $53,275 of accrued interest and as of December 31, 2022, the outstanding principal balance on the convertible credit line was $0. See discussion of derivative liability in Note 8 – Derivative Liability.

On February 11, 2023, the Company and AEI entered into an amendment to the convertible revolving credit line (the “First Amendment”), which provided that any outstanding amount of principal and/or interest under the revolving credit line may be converted into fully paid and non-assessable shares of common stock, $0.001 per share par value, at a fixed conversion price of $1.50 per share subject to adjustment for stock dividends, stock splits, recapitalizations, or other similar transactions that affect the rights of common stockholders generally. On May 30, 2023 and January 8, 2024, the Company and AEI entered into second and third amendments to the convertible revolving credit line, which extended the maturity dates of the lines to December 31, 2023 and January 1, 2025, respectively. As of March 31, 2024, the Company has drawn $878,430 on the convertible note, with accrued interest of $35,235.

20 Shekels, Inc.

On October 23, 2023, the Company entered into a new revolving credit facility with 20 Shekels, Inc. (“20 Shekels”), an affiliated company, to borrow up to $500,000; the agreement has a maturity date of October 1, 2024, will accrue interest at a rate of 12% per annum and the outstanding balance is convertible to common stock of the Company at the lesser of $5.00 per share or a 10% discount to a 3-day volume weighted price average subject to adjustment as provided in the note agreement. Since May 16, 2023, 20 Shekels has made loans in favor of the Company in the amounts of principal and accrued interest totaling $142,235 as of October 3, 2023 (the date these amounts were evaluated for incorporation into the credit facility); such amounts will be consolidated and incorporated into the indebtedness covered by this facility. As of March 31, 2024, the Company has a balance of $320,901, with accrued interest of $23,461.

NOTE 5 – COMMON STOCK

The Company is authorized to issue 75,000,000 shares of its capital stock, consisting of 10,000,000 shares of preferred stock, par value $0.001 per share, and 65,000,000 shares of common stock, par value $0.001 per share.

~~The~~During ~~Company~~2022 ~~compensates~~and ~~each~~through ofJune ~~its~~30, ~~directors~~2023, the Company compensated each director with 4,000 shares of common stock ~~each~~per month (see discussion below of revised Board of Director compensation plan). ~~During~~For the ~~nine~~years ~~months~~ ended ~~September~~December 3031, 2023 and 2022, the Company ~~recorded~~issued 72,000 and 156,000 shares of common stock ~~compensation~~for a total of $72,000 ~~for~~and ~~the~~$156,000, ~~directors~~respectively, ~~which~~as ~~was~~board ~~recorded~~of indirector ~~additional~~compensation ~~paid~~related into ~~capital~~this plan.

On September 2, 2022, the Company entered into a six-month agreement with a consultant that ~~includes~~included the issuance of 60,000 common shares.; ~~During~~such ~~the~~shares ~~year~~were ~~ended December 31, 2022, the Company~~ issued ~~60,000~~as ~~common~~of ~~shares~~December ~~and recorded $40~~31,~~000~~ ~~of expense related to this agreement~~2022. During the ~~nine~~years ~~months~~ ended ~~September~~December 3031, 2023 and 2022, the Company ~~recorded~~recognized ~~stock compensation of~~ $20,000 ~~for~~and ~~this~~$40,000, ~~agreement~~respectively, ~~which~~of ~~was~~expense ~~recorded~~related into ~~additional~~this ~~paid in capital~~agreement.

On October 15, 2022, the Company entered into a one-year agreement with a consultant. Per the agreement, the Company will compensate the consultant $10,000 and issue 2,000 common shares per month. During the nine months ended September 30, 2023, the Company recorded issued 18,000 shares of common stock related to this agreement.

On April 10, 2023, the Company issued 70,852 shares of common stock valued at $5.00 per share to settle outstanding consulting invoices owed to Jay Leaver, President.

On July 1, 2023, the Company has adopted a revised Board of Directors compensation plan providing for awards to be made under the Plan and intended to replace the current director compensation plan which had provided for monthly grants to non-employee directors of 4,000 shares of restricted Common Stock per month. Under the new plan, each director shall receive compensation for their service on the Board and receive reimbursements for certain expenses in accordance with the Company’s reimbursement policy. Until the Company’s Common Stock is listed on a national securities exchange, each non-employee director shall receive options to purchase shares of Common Stock valued at $150,000 by the Black-Scholes pricing model on an annual basis, payable quarterly, with an exercise price equal to the closing price of the Company’s common stock on the last business day of the quarter.

Stock Options

The following table summarizes the stock option activity for the nine months ended September 30, 2023:

	Number of Options		Weighted Average Exercise Price Per Share
Outstanding at December 31, 2022		–	$	–
Granted		76,848		2.01
Exercised		–		–
Forfeited and expired		–		–
Outstanding at September 30, 2023		76,848	$	2.01

On September 30, 2023, the Company granted 76,848 options to the Company’s board of directors. The options have a ten-year term and have an exercise price of $2.01 per share. The fair value of the options at issuance was $150,000. The Company valued the options using the Black-Scholes model with the following key assumptions ranging from: fair value stock price, $2.01, Exercise price, $2.01, Term 10 years, Volatility 182%, and Discount rate 4.61% and a dividend yield of 0%.

As of September 30, 2023, the outstanding stock options have a weighted average remaining term of 10 years and have no aggregate intrinsic value.

On October 15, 2022, the Company entered into a one-year agreement with a consultant. Per the agreement, the Company will compensate the consultant $10,000 and issue 2,000 common shares per month. During the year ended December 31, 2023, the Company issued 18,000 common shares, recorded a subscription liability for $6,000 and expense of $24,000 related to this agreement. During the year ended December 31, 2022, the Company issued $5,000 shares and recorded $5,000 of expense related to this agreement.

On April 10, 2023, the Company issued 70,852 shares of common stock valued at $5.00 per share to settle outstanding consulting invoices owed to Jay Leaver, President for an aggregate amount of $354,260.

On July 1, 2023, the Company adopted a revised Board of Directors compensation plan, replacing the previous director compensation plan, which provided monthly grants to non-employee directors (see discussion above). Under the new plan, each director receives compensation for their service on the Board and reimbursements for certain expenses in accordance with the Company’s reimbursement policy. Until the Company’s common stock is listed on a national securities exchange, each non-employee director shall receive options to purchase shares of common stock valued at $150,000 by the Black-Scholes pricing model on an annual basis, payable quarterly, with an exercise price equal to the closing price of the Company’s common stock on the last business day of the quarter. See details of stock options below.

Stock Options

The following table summarizes the stock option activity for the nine months ended March 31, 2024:

	Number of Options		Weighted Average Exercise Price Per Share

Outstanding at December 31, 2023		134,145	$	2.86
Granted		37,875		3.33
Exercised		–		–
Forfeited and expired		–		–
Outstanding at March 31, 2024		172,020	$	3.10

On September 30, 2023, the Company granted a total of 96,060 options to the Company’s board of directors, or 19,212 options each to Robert J. Flynn, Jr., Lacie Kellogg, Mark Timm, Isaac Dietrich and Richard Nummi. The options have a ten-year term and have an exercise price of $2.01 per share. The fair value of the 96,060 options at issuance was $187,501. The Company valued the options using the Black-Scholes model with the following key assumptions: a fair value stock price of $2.01, an exercise price of $2.01, a term of ten years, volatility of 182%, a discount rate of 4.61% and a dividend yield of 0%.

On December 29, 2023, the Company granted a total of 38,085 options to the Company’s board of directors, or 7,617 options each to Robert J. Flynn, Jr., Lacie Kellogg, Mark Timm, Isaac Dietrich and Richard Nummi. The options have a ten-year term and have an exercise price of $5.00 per share. The fair value of the 38,085 options at issuance was $187,510. The Company valued the options using the Black-Scholes model with the following key assumptions: a fair value stock price of $5.00, an exercise price of $5.00, a term of ten years, volatility of 204%, a discount rate of 3.84% and a dividend yield of 0%.

On March 31, 2024, the Company granted a total of 37,875 options to the Company’s board of directors, or 7,575 options each to Robert J. Flynn, Jr., Lacie Kellogg, Mark Timm, Isaac Dietrich and Richard Nummi. The options have a ten-year term and have an exercise price of $5.00 per share. The fair value of the 37,875 options at issuance was $187,497. The Company valued the options using the Black-Scholes model with the following key assumptions: a fair value stock price of $5.00, an exercise price of $5.00, a term of ten years, volatility of 216%, a discount rate of 4.21% and a dividend yield of 0%.

As of March 31, 2024, the outstanding stock options have a weighted average remaining term of 9.3 years and have no aggregate intrinsic value.

NOTE 6 –CONVERTIBLE NOTES PAYABLE

On March 30, 2019, the Company executed a promissory note for $50,000 to ZQH (75%) and Pure (25%). The due date of the note is April 30, 2019 and has an interest rate of $50 per day. The note is for an escrow payment made directly to Premier Gas Company, LLC to hold the Purchase and Sale Agreement dated January 29, 2019. The note is secured by 50,000 shares of the Company’s common stock at $1 per share. On June 25, 2020, the Company entered into a Purchase and Sale Agreement (“"PSA”) with Pure Oil & Gas, Inc. ("Pure”) and ZQH Holding, LLC ("ZQH”) to acquire oil and gas assets in Rogers County Oklahoma (the ~~“Rogers~~ "Project”) in consideration of a purchase price of $1,000,000. InThe ~~connection~~operator ~~with~~of the ~~purchase,~~Project ~~the $50,000 note~~ and ~~accrued~~owner ~~interest~~ of ~~$10,000 was added to~~ the ~~purchase~~residual ~~price~~working ~~resulting in a total note payable balance of $1,060,000. During the year ended December 31, 2020, $10,750 of accrued~~ interest ~~which~~is ~~was~~Premier ~~previously~~Gas ~~outstanding was discharged and recorded as a gain on extinguishment of debt. The note payable of $1~~Company,~~060,000~~ ~~was~~LLC ~~due to be paid on or before July 31, 2020 but remains outstanding to date~~("Premier”). ~~The balance of the note will increase by $50,000 per month thereafter up to a maximum amount of $200,000 through December 1, 2020.~~ As of December 31, 2020, the Company ~~recognized~~fully ~~$200,000~~impaired ofthe ~~default~~Project ~~interest~~due ~~that was added~~ to the ~~principal~~lack ~~and made payments~~ of ~~$100,000~~funds for ~~a total payable of $1,160,000~~development. IfOn July ~~the purchase price is not fully paid on or before December 1~~6, 2020, Premier ~~ZQH~~filed ~~and~~a ~~Pure have the option to convert the balance outstanding into the Company~~mechanic’s ~~common~~lien ~~stock~~in atRogers aCounty ~~conversion~~alleging ~~price~~past ofunpaid $1invoices.00 ~~per~~During ~~share~~2021 ~~and~~ the ~~note will also be subject to a monthly interest of 1%. The~~ Company, ~~Pure,~~notified ~~and~~ ZQH ~~have~~that ~~entered~~title ~~into~~research ~~various~~revealed ~~Extension~~that ~~Agreements,~~ the ~~current~~assets ~~one~~covered ofby ~~which is dated March 28, 2021 (~~the ~~“Extension~~PSA ~~Agreement”).~~are ~~The~~not ~~Extension~~valid ~~Agreement~~or ~~prevents~~in ~~Pure~~effect and ~~ZQH~~were ~~from~~not ~~taking~~valid ~~stock~~or ~~rather than cash through June 1, 2021,~~ in ~~return~~effect ~~for~~at ~~which~~the ~~Company~~time ~~makes~~the aPSA ~~monthly~~was ~~interest~~executed ~~payment to ZQH~~ and ~~Pure~~denied effectiveness of ~~$10,083, which represents 1% annual interest on~~ the ~~Purchase~~PSA ~~Price,~~and ~~compounded~~further ~~monthly.~~notified ~~The~~ZQH ~~Extension~~that ~~Agreement allows~~ the Company tohad ~~extend~~no ~~that~~continuing ~~period~~obligations ~~beyond~~and ~~June~~no 1,further ~~2021~~obligation under ~~similar terms. No further Extension Agreement has been entered into to date. Per~~ the ~~extension agreement~~$1,210,000 ~~ZQH~~principal ~~and~~amount ~~Pure~~promissory ~~have~~note ~~the~~therefore ~~option~~issued toin ~~convert~~connection ~~all~~with ~~or part of~~ the ~~purchase~~PSA ~~price~~as toa ~~the Company’s common stock at $1~~result.00 ~~per~~There ~~share~~can ~~after~~be ~~June~~no 1,assurance ~~2021.~~that ~~The~~Pure ~~Company evaluated the conversion option~~ and ~~concluded~~ZQH ado ~~beneficial conversion feature and embedded derivative were~~ not ~~present~~dispute atour ~~the~~conclusions ~~date~~and ofassert ~~conversion.~~claims Asagainst aus ~~result~~including ofpotential ~~the conversion option on June 1, 2021, the Company reclassified the note payable to convertible note payable~~litigation.

AsSince June 1, 2021, no further extension agreements have been entered into and as of ~~September~~March 3031, ~~2023~~2024 and December 31, ~~2022~~2023, the convertible note payable balance was $1,210,000 with accrued interest of $22,~~183~~882 for both dates. The Company is in legal discussions with ZQH to relieve the loan as the properties in the purchase agreement were not held by title.

Note 7 – LITIGATION

On May 23, 2023 a complaint was filed against the Company in the Probate Court of Harris County, Texas by Ernest Berger, as Independent Executor of the Estate of John Lepin. The Complaint was filed pursuant to the Texas Estates Code Section 351.054 and alleges breach of an employment agreement with John Lepin who resigned from the Company in 2022, among other claims for unpaid compensation. The Complaint seeks payment of $39,247, issuance of 22, 250 shares of common stock, an indeterminate amount of royalty payments, and attorneys fees, costs and expenses, as well as interest and such other relief as the court may award. The answer was filed August 8, 2023. The company is disputing the litigation and believes at this point the result is undeterminable. As a result, no accrual has been made.

12NOTE 8 – SUBSEQUENT EVENTS

None.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

The discussion and analysis below includes certain forward-looking statements that are subject to risks, uncertainties and other factors, as described in “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022, that could cause our actual growth, results of operations, performance, financial position and business prospects and opportunities for this fiscal year and periods that follow to differ materially from those expressed in or implied by those forward-looking statements. Readers are cautioned that forward-looking statements contained in this Quarterly Report on Form 10-Q should be read in conjunction with our disclosure under the heading “Disclosure Regarding Forward-Looking Statements” below.

General Business Development

The Company was formed on September 26, 2013 in the State of Colorado.

Business Strategy

Our strategy is to acquire and develop additional properties we can restart, rework, and/or recomplete through cash and/or equity transactions. Our strategy is to acquire and develop additional producing properties in the vicinity of the Cherokee Uplift similar to our existing Logan Project that we can restart, rework, recomplete, and which have proven un-drilled potential to produce oil and natural gas. In this manner, our strategy involves acquiring existing infrastructure from historic operations. Deployment of current modern technology to enhance recompletions and drilling in previously undeveloped or underdeveloped areas is part of our strategy to enhance the value of acquired properties.

Liquidity and Capital Resources

As of ~~September~~March 3031, ~~2023~~2024, we had total current assets of $~~111~~86,~~401~~876 and total current liabilities of $23,~~991~~647,~~000~~607.

The Company had $~~357~~(241,~~977~~560) of cash ~~used in operating activities~~ during the ~~nine~~three months ended ~~September~~March 3031, ~~2023~~2024, compared to $13,~~122,354~~247 ~~used in operations~~ during the same period in ~~2022~~2023. Net cash used in operating activities during the ~~nine~~three months ended ~~September~~March 3031, ~~2023~~2024 was mainly comprised of our $1515,~~560,073~~280 net loss during the period, adjusted by non-cash charges of $~~260~~193,~~000~~497 for stock-based compensation, amortization of debt discounts ofin ~~$77,964,~~the ~~depreciation~~amount ~~expense~~ of $2015,~~000~~992, and ~~changes~~depreciation ~~in operating assets~~ and ~~liabilities~~depletion ~~of $841,378. Net cash used in operating activities during the nine months ended September 30, 2022 was mainly comprised of our $1,204,191~~ net ~~loss during the period, adjusted by non-cash charges of $78,397 for gain on~~ change ~~in fair value~~ of ~~derivative liabilities, stock-based compensation of~~ $~~237~~(5,~~720, amortization of debt discounts of $67,368 and changes in operating assets and liabilities of $145,776~~973).

The Company ~~used~~generated cash of $~~347~~241,~~833~~872 ~~for~~from ~~investing~~financing activities during the ~~nine~~three ~~months~~Months ended ~~September~~March 3031, ~~2023~~2024 which ~~primarily~~ consisted of ~~the~~proceeds ~~acquisition~~from ofadvances ~~oil~~from ~~and~~related ~~gas property~~parties. The Company ~~used~~had no cash offlows ~~$1,220,512~~from ~~for~~financing ~~investing~~ activities during the ~~nine~~three months ended ~~September~~March 3031, ~~2022 which consisted of $1,165,212 for the acquisition of oil and gas property and cash paid for purchase of equipment of $55,300~~2023.

The Company ~~had~~used cash ~~flows provided by financing activities~~ of $~~620~~82,~~711~~140 ~~during~~for ~~the~~investing nine months ended September 30, 2023, which consisted of $490,330 proceeds from convertible credit line from related and $130,381of advances from related party. The Company generated cash of $3,084,736 from financing activities during the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023 which consisted of ~~$120,236 in proceeds from advances, related party, $500,000 from senior secured convertible notes payable from related party and $2,504,500 in proceeds from~~ the ~~sale~~acquisition of ~~common~~oil ~~stock, which were offset by repayments on the convertible credit line of $30,000~~ and ~~$10,000~~gas ~~repayments of advances, related party~~property.

Going Concern

The future of our company is dependent upon its ability to obtain financing and upon future profitable operations. Management has plans to seek additional capital through a private placement and public offering of its common stock, if necessary. See Note 2 to the unaudited consolidated financial statements for additional information.

1314

Results of Operations

We generated ~~revenues~~revenue of $228,~~217~~458 and $~~138~~71,~~900~~716 during the three months ended ~~September~~March 3031, ~~2023~~2024 and ~~2022~~2023, respectively. Lease operating expenses were $8436,~~219~~361 and $~~229~~179,~~099~~441 during the three months ended ~~September~~March 3031, ~~2023~~2024 and ~~2022~~2023, respectively. ~~The decrease in revenue was due to the decrease in sales.~~ Total operating expenses were $422,~~683~~180 during the three months ended ~~September~~March 3031, ~~2023~~2024 compared to $~~352~~298,~~634~~013 during the same period in ~~2022~~2023. The increase in operating ~~expenses~~expense was due to aan ~~$29,925~~ increase in ~~professional~~Board ~~services and a $114,000 increase in board~~ of ~~director~~Directors ~~fees~~Fees ~~which were~~ offset by a decrease of $7339,~~876~~727 ~~decrease~~ in general and administrative expenses and an increase of $3,397 Professional Fees.

We generated revenues of $129,473 and $144,139 during the nine months ended September 30, 2023 and 2022, respectively. Lease operating expenses were $333,178 and $278,533 during the nine months ended September 30, 2023 and 2022, respectively. The decrease in revenue was due to the decrease in sales. Total operating expenses were $1,195,299 during the nine months ended September 30, 2023 compared to $1,010,921 during the same period in 2022. The increase in operating expenses was due to a $112,242 increase in professional services and a $102,000 increase in board of director fees which were offset by a $29,864 decrease in general and administrative expenses.

Off-Balance sheet arrangements

As of ~~September~~March 3031, ~~2023~~2024, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Critical Accounting Policies

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenue and expenses during the reported periods. Our accounting policies are described in Note 1 to our audited consolidated financial statements for ~~2022~~2023 appearing in our Annual Report on Form 10-K for the year ended December 31, ~~2022~~2023.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls

The Company and its subsidiaries maintain an effective system of “disclosure controls and procedures” (as defined in Rule 13a-15(e) of the Exchange Act) that complies with the requirements of the Exchange Act. The Company and its subsidiaries have carried out evaluations of the effectiveness of their disclosure controls and procedures as required by Rule 13a-15 of the Exchange Act.

Evaluation of Disclosure Controls and Procedures

Under the direction and with the participation of the Company’s management, including the Company’s Chief Executive and Chief Financial Officer, the Company has conducted an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures as of ~~September~~March 3031, ~~2023~~2024. The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its periodic reports with the Securities and Exchange Commission is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and regulations, and that such information is accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Company’s disclosure controls and procedures are designed to provide a reasonable level of assurance of reaching its desired disclosure control objectives. Based on the evaluation, the Chief Executive and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were not effective as of ~~September~~March 3031, ~~2023~~2024.

Changes in Internal Control over Financial Reporting

There was no change in the Company’s internal control over financial reporting that occurred during the three months ended ~~September~~March 3031, ~~2023~~2024 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On May 23, 2023 a complaint was filed against the Company in the Probate Court of Harris County, Texas by Ernest Berger, as Independent Executor of the Estate of John Lepin. The Complaint was filed pursuant to the Texas Estates Code Section 351.054 and alleges breach of an employment agreement with John Lepin who resigned from the Company in 2022, among other claims for unpaid compensation. The Complaint seeks payment of $39,247, issuance of 22, 250 shares of common stock, an indeterminate amount of royalty payments, and attorneys fees, costs and expenses, as well as interest and such other relief as the court may award. The answer was filed August 8, 2023. The company is disputing the litigation and believes at this point the result is undeterminable. As a result, no accrual has been made.

ITEM 1A. RISK FACTORS

You should carefully consider the factors discussed below in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2022~~2023, which could materially affect our business, financial position, or future results of operations. The risks described ~~below~~ in our Annual Report are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially, adversely affect our business, financial position, or future results of operations. There have been no material changes in the risk factors set forth in the Company’s Form 10K for the period ended December 31, ~~2022~~2023.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable to our operations.

ITEM 5. OTHER INFORMATION

None.

1516

ITEM 6. EXHIBITS

The following documents are included or incorporated by reference as exhibits to this report:

Exhibit Number	Description
3.1	Articles of Amendment
10.1	Revolving Credit Note (incorporated)
10.2	Reserve Report (incorporated)
31.1	Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as a adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as a adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS**	Inline XBRL Instance
101.SCH**	Inline XBRL Taxonomy Extension Schema
101.CAL**	Inline XBRL Taxonomy Extension Calculation
101.DEF**	Inline XBRL Taxonomy Extension Definition
101.LAB**	Inline XBRL Taxonomy Extension Labels
101.PRE**	Inline XBRL Taxonomy Extension Presentation
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
** XBRL	information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

Exhibit

Number

Description


3.1 **	Articles of Amendment to Articles of Incorporation of the Company dated April 27, 2023 (incorporated by reference to Exhibit 3.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, filed with the SEC June 2, 2023).
3.2 **	Amended and Restated Articles of Incorporation of the Company dated April 27, 2023 (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K dated April 25, 2023 filed with the SEC on May 1, 2023).
3.3 **	Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 filed with the SEC on April 4, 2022).
10.1 **	Exchange Agreement, dated December 31, 2022, by and between Truleum, Inc and 20 Shekels, Inc. (incorporated by reference to Exhibit 10.1 to the Registration Statement on Form S-1 filed on February 14, 2023).
10.2 **	Exchange Agreement, dated December 31, 2022, by and between Truleum, Inc. and AEI Management Inc. (incorporated by reference to Exhibit 10.1 to the Registration Statement on Form S-1 filed on February 14, 2023).
10.3 **	Note Purchase Agreement, dated December 31, 2022, by and between Truleum, Inc. and 20 Shekels, Inc. (incorporated by reference to Exhibit 10.3 to the Registration Statement on Form S-1 filed on February 14, 2023).
10.4 **	Note Purchase Agreement, dated December 31, 2022, by and between Truleum, Inc. and AEI Management, Inc. (incorporated by reference to Exhibit 10.4 to the Registration Statement on Form S-1 filed on February 14, 2023).
10.5 **	7.25% Senior Secured Convertible Note due December 31, 2024, dated December 31, 2022, issued by Truleum, Inc. to 20 Shekels Inc., in the amount of $906,754 (incorporated by reference to Exhibit 10.5 to the Registration Statement on Form S-1 filed on February 14, 2023).
10.6 **	7.25% Senior Secured Convertible Note due December 31, 2024, dated December 31, 2022, issued by Truleum, Inc. to AEI Management, Inc., in the amount of $403,216 (incorporated by reference to Exhibit 10.6 to the Registration Statement on Form S-1 filed on February 14, 2023).
10.7 **	Security Agreement, dated December 31, 2022, made by Truleum, Inc. in favor of 20 Shekels, Inc. (incorporated by reference to Exhibit 10.7 to the Registration Statement on Form S-1 filed on February 14, 2023).
10.8 **	Security Agreement, dated December 31, 2022, made by Truleum, Inc. in favor of AEI Management, Inc. (incorporated by reference to Exhibit 10.8 to the Registration Statement on Form S-1 filed on February 14, 2023).
10.9 **	Purchase and Sale Agreement between the Company and Progressive Well Service, LLC, dated February 17, 2022 (incorporated by reference to Exhibit 10.1 to Registrant’s Annual Report on Form 10-K, filed with the SEC on April 4, 2022).
10.10 **	Form of $1.00 per share Subscription Agreement. (incorporated by reference to Exhibit 10.10 to the Registration Statement on Form S-1 filed on February 14, 2023).
10.11 **	Consulting Agreement by and between Fidare Consulting Group, LLC and the Company effective September 2, 2022 (incorporated by reference to Exhibit 10.11 to the Registration Statement on Form S-1 filed on February 14, 2023).
10.12 **	Consultant Engagement Agreement by and between the Company and Jay Leaver, an individual, acting in his capacity as a representative of Leaverite Exploration, Inc., dated June 1, 2020 (incorporated by reference to Exhibit 10.13 to Registrant’s Annual Report on Form 10-K, filed on April 4, 2022).
10.13 **	Consulting Agreement by and between Matador Wellsite Consulting, LLC and the Company dated October 15, 2022. (incorporated by reference to Exhibit 10.13 to the Registration Statement on Form S-1 filed on February 14, 2023).
10.14 **	Gathering and Processing Agreement Between Truleum, Inc. and ETC Texas Pipeline, LTD, dated August 1, 2023 (as amended by Aid In Processing Agreement dated as of November 1, 2022) (incorporated by reference to Exhibit 10.14 to the Registration Statement on February 14, 2023).
10.15 **	Crude Oil Purchasing Agreement between Truleum, Inc. and Energy Transfer Crude Marketing LLC, dated June 7, 2022. (incorporated by reference to Exhibit 10.15 to the Registration Statement on Form S-1 filed on February 14, 2023).
10.16 **	Revolving Credit Note dated June 1, 2021, with AEI Acquisition Company, LLC (incorporated by reference to Exhibit 10.1 to Registrant’s Quarterly Report on Form 10-Q, filed with the SEC on November 1, 2022).
10.17 **	First Amendment to Revolving Credit Note dated February 11, 2023 with AEI Acquisition Company, LLC (incorporated by reference to Exhibit 10.2 to Registrant’s Current Report on Form 8-K filed with the SEC on February 16, 2022).
10.18 **	Second Amendment to Revolving Credit Note dated as of May 30, 2023 with AEI Acquisition Company, LLC. (Incorporated by reference to Exhibit 10.18 to the Company’s Registration Statement on Form S-1 filed on August 3, 2023).

10.19 **	Employment Agreement by and between the Truleum, Inc. and John Lepin, dated October 27, 2018 (incorporated by reference to Exhibit 10.18 to Registrant’s Current Report on Form 8-K, filed with the SEC on October 29, 2018).
10.20 **	Assignment of LLC Membership Interest Truleum Texas Operating, LLC. (incorporated by reference to Exhibit 10.22 to the Registration Statement on Form S-1 filed on February 14, 2022).
10.21 **	2022 Equity Incentive Plan (incorporated by reference to Exhibit A to the Company’s Information Statement on Schedule 14C filed with the SEC on November 21, 2022).
10.22 **	Reserve Report dated October 14, 2023 effective December 31, 2022, of Liquid Gold Technologies Corporation (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on November 6, 2023).
10.23 **	Indemnification Agreement by and between Alpha Energy, Inc. and Isaac Dietrich dated as of February 27, 2023 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on March 2, 2023).
10.24 **	Board of Directors Agreement, by and between Truleum, Inc. and Robert Flynn, dated July 1, 2023. (Incorporated by reference to Exhibit 10.24 to the Company’s Registration Statement on Form S-1 filed on August 3, 2023).
10.25 **	Board of Directors Agreement, by and between Truleum, Inc. and Mark Timm dated July 1, 2023. (Incorporated by reference to Exhibit 10.25 to the Company’s Registration Statement on Form S-1 filed on August 3, 2023).
10.26 **	Board of Directors Agreement, by and between Truleum, Inc. and Lacie Kellogg dated July 1, 2023. (Incorporated by reference to Exhibit 10.26 to the Company’s Registration Statement on Form S-1 filed on August 3, 2023).
10.27 **	Board of Directors Agreement, by and between Truleum, Inc. and Isaac Dietrich dated July 1, 2023. (Incorporated by reference to Exhibit 10.27 to the Company’s Registration Statement on Form S-1 filed on August 3, 2023).
10.28 **	Indemnification Agreement, by and between Truleum, Inc. and Robert Flynn dated May 1, 2023. (Incorporated by reference to Exhibit 10.28 to the Company’s Registration Statement on Form S-1 filed on August 3, 2023).
10.29 **	Indemnification Agreement, by and between Truleum, Inc. and Mark Timm dated May 1, 2023. (Incorporated by reference to Exhibit 10.29 to the Company’s Registration Statement on Form S-1 filed on August 3, 2023).
10.30 **	Indemnification Agreement, by and between Truleum, Inc. and Lacie Kellogg dated May 1, 2023. (Incorporated by reference to Exhibit 10.30 to the Company’s Registration Statement on Form S-1 filed on August 3, 2023).
10.31 **	Indemnification Agreement, by and between Truleum, Inc. and Isaac Dietrich dated May 1, 2023 (Incorporated by reference to Exhibit 10.31 to the Company’s Registration Statement on Form S-1 filed on August 3, 2023).
10.32**	Reserve Report dated March 27, 2024, effective December 31, 2023, of Pinnacle Energy Services, LLC
31.1*	Certificate of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act
31.2*	Certification Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act
32.1*	Certificate of Principal Financial and Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act
32.2*	Certification Principal Financial and Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act
101.INS	Inline XBRL Instance Document
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (embedded within the Inline XBRL and contained in Exhibit 101)

* Filed herewith.

** Previously filed.

SIGNATURES

In accordance with Section 13 or 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: ~~November~~May 2115, ~~2023~~ 2024

	Truleum, Inc.

	By:	/s/ Jay Leaver
		Jay Leaver, Principal Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By:

/s/ Lacie Kellogg

Lacie Kellogg, Chief Financial Officer

(Principal Financial and Accounting Officer)

1719

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