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xbrli:shares

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q

Quarterly report pursuant Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended ~~September~~June 30, ~~2016~~2017

Transition report pursuant Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _______ to _______.

Commission file number 000-53246

EOS PETRO, INC.

(Exact name of registrant as specified in its charter)

Nevada (State or other jurisdiction of incorporation or organization)	98-0550353 (I.R.S. Employer Identification No.)
Nevada(State or other jurisdiction of incorporation or organization)	980550353(I.R.S. Employer Identification No.)
1999 Avenue of the Stars, Suite 2520 Los Angeles, California (Address of principal executive offices)	90067 (Zip code)
1999 Avenue of the Stars, Suite 2520 Los Angeles, California(Address of principal executive offices)	90067(Zip code)

(310) 552-1555 (Registrant'’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

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 x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes ☒ x No ☐o

Indicate by check mark whether the registrant ~~has~~is ~~submitted~~a ~~electronically~~large ~~and~~accelerated ~~posted~~filer, onan ~~its~~accelerated ~~corporate Web site~~filer, ifa ~~any~~non-accelerated filer, ~~every~~or ~~Interactive~~a ~~Data~~smaller ~~File~~reporting ~~required~~company. See tothe bedefinitions ~~submitted and posted pursuant to Rule 405~~ of ~~Regulation~~“large ~~S-T~~accelerated ~~(§232.405~~filer,” of“accelerated ~~this~~filer” ~~chapter)~~and ~~during~~“smaller ~~the~~reporting ~~preceding~~company” 12in ~~months~~Rule ~~(or~~12b-2 ~~for~~of ~~such shorter period that~~ the ~~registrant~~Exchange ~~was required to submit and post such files)~~Act.

~~Yes ☒ No~~Large accelerated filer ☐o Accelerated filer o

~~Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non~~ Non-accelerated filer, o Smaller ~~or a smaller~~ reporting company. ~~See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.~~x

~~Large~~Emerging ~~accelerated~~Growth ~~filer~~Company ☐ ~~Accelerated filer ☒ Non-accelerated filer ☐ Smaller reporting 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 7(a)(2)(B) of the Securities Act. ☐

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

Yes ☐ o No ☒x

As of ~~November~~March 119, ~~2016~~2018, the registrant had 5255,~~089~~496,528 outstanding shares of common stock.

EOS PETRO, INC. TABLE OF CONTENTS

			Page No.
PART I. FINANCIAL INFORMATION
	Item 1.	Unaudited Financial Statements	3
	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2116
	Item 3	Quantitative and Qualitative Disclosures About Market Risk	2822
	Item 4T.	Controls and Procedures	2822
PART II. OTHER INFORMATION
	Item 1	Legal Proceedings	2923
	Item 1A	Risk Factors	2923
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3023
	Item 3.	Defaults Upon Senior Securities	3024
	Item 4	Mine Safety Disclosures	3024
	Item 5.	Other Information	3024
	Item 6.	Exhibits	3024
		SIGNATURES	3125

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Eos Petro, Inc. and Subsidiaries Condensed Consolidated Balance Sheets
Eos Petro, Inc. and Subsidiaries
		September 30,			December 31,
Condensed Consolidated Balance Sheets
		2016			2015
		June 30,		December 31,
ASSETS		(unaudited)
		2017		2016
Current assets
		(unaudited)
Cash		$	37		$	1,367
ASSETS
Other current assets			-			12,878
Current assets
Total current assets			37			14,245
Cash	$	2	$	24,762
Oil and gas properties, using the full cost method of accounting,
Accounts receivable		8,505		-
net of accumulated depletion of $197,906 and $187,197, respectively			1,051,702			1,062,411
Total current assets		8,507		24,762
Other property plant and equipment, net of accumulated
Long-term deposits		65,089		54,128
depreciation of $29,862 and $27,232, respectively			138			2,768
Total assets	$	73,596	$	78,890
Long-term deposits			202,441			102,441
LIABILITIES AND STOCKHOLDERS' DEFICIT
Total assets		$	1,254,318		$	1,181,865
Current liabilities
LIABILITIES AND STOCKHOLDERS' DEFICIT
Accounts payable	$	1,544,179	$	1,501,514
Current liabilities
Accrued expenses		1,518,479		1,221,456
Accounts payable		$	1,559,171		$	1,084,621
Accrued officers' compensation		614,196		467,501
Accrued expenses			1,109,689			1,189,545
Accrued termination fee		5,500,000		5,500,000
Accrued compensation - officer			317,752			180,000
Accrued structuring fee		4,000,000		4,000,000
Accrued termination fee			5,500,000			5,500,000
LowCal convertible and promissory notes payable, in default		8,250,000		8,250,000
Accrued structuring fee			4,000,000			4,000,000
Notes payable, net of discount of $0 and $45,916		2,360,500		2,022,084
LowCal convertible and promissory notes payable			8,250,000			8,250,000
Derivative liabilities		-		469,267
Notes payable, net of discount of $212,462 and $0			1,770,538			1,383,000
Total current liabilities		23,787,354		23,431,822
Notes payable, related party			-			1,208,160
Asset retirement obligation		106,852		101,764
Derivative liabilities			-			6,381,553
Total liabilities		23,894,206		23,533,586
Total current liabilities			22,507,150			29,176,879
Commitments and contingencies		-		-
Asset retirement obligation			99,451			92,512
Stockholders' deficit
Total liabilities			22,606,601			29,269,391
Series B Preferred stock: $0.0001 par value; 44,000,000 shares authorized, none issued and outstanding		-		-
Commitments and contingencies
Common stock; $0.0001 par value; 300,000,000 shares authorized 55,296,528 and 52,461,528 shares issued and outstanding		5,530		5,246
Stockholders' deficit
Additional paid-in capital		146,599,758		141,543,351
Series B Preferred stock: $0.0001 par value; 44,000,000 shares authorized,
Accumulated deficit		(170,425,898)		(165,003,293)
none issued and outstanding			-			-
Total stockholders' deficit		(23,820,610)		(23,454,696)
Common stock; $0.0001 par value; 300,000,000 shares authorized
Total liabilities and stockholders' deficit	$	73,596	$	78,890
52,089,528 and 47,827,882 shares issued and outstanding			5,209			4,783
The accompanying notes are a part of the condensed consolidated financial statements.
Additional paid-in capital			139,056,207			116,977,726
Stock subscription receivable			(88,200	)		(88,200	)
Accumulated deficit			(160,325,499	)		(144,981,835	)
Total stockholders' deficit			(21,352,283	)		(28,087,526	)
Total liabilities and stockholders' deficit		$	1,254,318		$	1,181,865
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Eos Petro, Inc. and Subsidiaries Condensed Consolidated Statements of Operations
Eos Petro, Inc. and Subsidiaries
		Three Months Ended September 30,							Nine Months Ended September 30,
Condensed Consolidated Statements of Operations
		2016				2015			2016			2015
		Three Months Ended June 30,				Six Months Ended June 30,
		(unaudited)				(unaudited)			(unaudited)			(unaudited)
		2017		2016		2017		2016
Revenues
		(unaudited)		(unaudited)		(unaudited)		(unaudited)
Oil and gas sales		$	-			$	39,863		$	36,519		$	170,822
Revenues
Costs and expenses
Oil and gas sales	$	20,970	$	17,091	$	20,970	$	36,519
Lease operating expense			13,164				39,131			55,493			103,788
Costs and expenses
General and administrative			2,715,084				3,238,923			16,428,317			20,823,143
Lease operating expense		5,905		9,655		5,905		42,329
Structuring fee			-				-			-			4,000,000
General and administrative		3,262,871		3,726,252		4,593,856		13,713,233
Acquisition termination fee			-				-			-			5,500,000
Total costs and expenses		3,268,776		3,735,907		4,599,761		13,755,562
Total costs and expenses			2,728,248				3,278,054			16,483,810			30,426,931
Loss from operations		(3,247,806)		(3,718,816)		(4,578,791)		(13,719,043)
Loss from operations			(2,728,248	)			(3,238,191	)		(16,447,291	)		(30,256,109	)
Other income (expense)
Other income (expense)
Interest and finance costs		(404,365)		(1,515,304)		(844,392)		(3,439,235)
Interest and finance costs			(449,063	)			(2,667,186	)		(3,888,298	)		(3,058,976	)
Change in fair value of derivative liabilities		-		4,500,103		578		5,105,765
Change in fair value of derivative liabilities			(113,840	)			(1,695,203	)		4,991,925			4,241,697
Total other income (expense)		(404,365)		2,984,799		(843,814)		1,666,530
Total other income (expense)			(562,903	)			(4,362,389	)		1,103,627			1,182,721
Net loss	$	(3,652,171)	$	(734,017)	$	(5,422,605)	$	(12,052,513)
Net loss		$	(3,291,151	)		$	(7,600,580	)	$	(15,343,664	)	$	(29,073,388	)
Net loss per share: basic and diluted	$	(0.07)	$	(0.02)	$	(0.10)	$	(0.25)
Net loss per share attributed to common
Weighted average common shares outstanding: basic and diluted		54,253,231		48,631,069		53,466,473		48,375,025
stockholders - basic and diluted		$	(0.06	)		$	(0.16	)	$	(0.31	)	$	(0.61	)
The accompanying notes are a part of the condensed consolidated financial statements.
Weighted average common shares outstanding
basic and diluted			51,922,210				47,790,697			49,566,050			47,759,985
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Eos Petro, Inc. and Subsidiaries Consolidated Statement of Stockholders' Deficit For the Nine Months Ended September 30, 2016 (unaudited)
Eos Petro, Inc. and Subsidiaries
							Additional			Stock						Total
Condensed Consolidated Statement of Stockholders' Deficit
	Common Stock						Paid-in			Subscription			Accumulated			Stockholders'
For the Six Months Ended June 30, 2017 (unaudited)
	Shares			Amount			Capital			Receivable			Deficit			Deficit
						Additional			Total
Balance, December 31, 2015		47,827,882		$	4,783		$	116,977,726		$	(88,200	)	$	(144,981,835	)	$	(28,087,526	)
			Common Stock			Paid-in	Accumulated		Stockholders'
Issuance of common stock for debt extension		315,000			32			1,249,968			-			-			1,250,000
			Shares	Amount		Capital	Deficit		Deficit
Issuance of common stock in connection with amendment of note agreement		75,000			7			299,993			-			-			300,000
Balance, January 1, 2017			52,461,528	$ 5,246		$ 141,543,351	$ (165,003,293)		$ (23,454,696)
Issuance of common stock for services		200,000			20			264,980			-			-			265,000
Fair value of stock for debt modification			385,000	39		458,461	-		458,500
Issuance of common stock in connection with notes payable								1,304,880			-			-			1,305,000
Fair value of stock for services			2,350,000	235		2,398,765	-		2,399,000
Issuance of common stock in connection debt conversions								2,471,399			-			-			2,471,646
Issuance of common stock for cash			100,000	10		99,990	-		100,000
Transfer of common shares owned by majority stockholder in connection with notes payable		-			-			290,000			-			-			290,000
Fair value of vested options			-	-		1,630,502	-		1,630,502
Extension of warrant expiration date in connection with amendment of note agreement		-			-			188,378			-			-			188,378
Extinguishment of derivative liability			-	-		468,689	-		468,689
Fair value of warrants issued for consulting services		-			-			1,164,738			-			-			1,164,738
Net loss			-	-		-	(5,422,605)		(5,422,605)
Fair value of vested options		-			-			12,243,453			-			-			12,243,453
Balance, June 30, 2017 (unaudited)			55,296,528	$ 5,530		$ 146,599,758	$ (170,425,898)		$ (23,820,610)
Fair value related to change in stock option terms		-			-			93,714			-			-			93,714
The accompanying notes are a part of the condensed consolidated financial statements.
Value of warrants issued with note payable		-			-			186,290			-			-			186,290
Sale of common shares owned by majority stockholder to affiliates at discount		-			-			931,060			-			-			931,060
Reclassification of derviative liability to equity		-			-			1,389,628			-			-			1,389,628
Net loss		-			-			-			-			(15,343,664	)		(15,343,664	)
Balance, September 30, 2016		52,089,528		$	5,209		$	139,056,207		$	(88,200	)	$	(160,325,499	)	$	(21,352,283	)
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Eos Petro, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows
Eos Petro, Inc. and Subsidiaries
		Nine Months Ended September 30,
Condensed Consolidated Statements of Cash Flows
		2016			2015
		Six Months Ended June 30,
		(unaudited)			(unaudited)
		2017		2016
Cash flows from operating activities
		(unaudited)		(unaudited)
Net loss		$	(15,343,664	)	$	(29,073,388	)
Cash flows from operating activities
Adjustments to reconcile net loss to net cash
Net loss	$	(5,422,605)	$	(12,052,513)
used in operating activities:
Adjustments to reconcile net loss to net cash used in operating activities:
Depletion		-	~~10,709~~	10,709		~~29,970~~
Depreciation		-	~~2,630~~	2,214		~~7,583~~
Accretion of asset retirement obligation		5,088	~~6,939~~	4,626		~~6,308~~
Amortization of debt discounts		45,916	~~290,841~~	70,387		-
Financing costs related to stock and warrants issued with notes payable		-	~~1,277,987~~	1,277,987		-
Fair value of stock issued for services		2,399,000	~~265,000~~	175,000		~~62,659~~
Fair value of stock issued for debt extension			1,250,000			311,250
Fair value of stock issued for debt modification		458,500		1,250,000
Fair value of stock issued for amendment of note agreement		-	~~300,000~~	300,000		-
Fair value of warrants issued for consulting services		-	~~1,164,738~~	1,164,738		~~8,157,284~~
Fair value of warrants issued for amendment of note agreement		-	~~188,378~~	188,378		~~2,212,149~~
Fair value of vested options		1,630,502	~~12,243,453~~	10,040,072		~~4,673,412~~
Fair value related to change in stock option terms		-	~~93,714~~	93,714		-
Sale of common shares owned by majority stockholder to affiliates at discount		-	~~931,060~~	931,060		~~6,293,200~~
Termination fee			-			5,500,000
Change in fair value of derivative liabilities		(578)		(5,105,765)
Structuring fee			-			4,000,000
Change in operating assets and liabilities:
Change in fair value of derivative liabilities			(4,991,925	)		(4,241,697	)
Accounts receivable		(8,505)		12,878
Change in operating assets and liabilities:
Long-term deposit		(10,961)		-
Other current assets			12,878			42,959
Accounts payable		98,665		751,183
Accounts payable			762,740			1,047,214
Accrued expenses		377,023		387,817
Accrued expenses			653,904			(68,824	)
Accrued officers' compensation		146,695		180,000
Accrued compensation - officer			137,752			90,000
Net cash used in operating activities		(281,260)		(317,515)
Net cash used in operating activities			(742,866	)		(949,921	)
Cash flows from financing activities:
Cash flows from investing activities:
Proceeds from issuance of notes payable		156,500		456,810
Deposit for acquistion			(100,000	)		-
Proceeds from the sale of common stock		100,000		-
Net cash used in investing activities			(100,000	)		-
Repayment of notes payable				(120,000)
Cash flows from financing activities:
Proceeds from issuance of notes payable, related party		-		125,000
Proceeds from issuance of notes payable			956,810			150,000
Repayment of notes payable, related party		-		(76,625)
Repayment of notes payable			(195,000	)		-
Net cash provided by financing activities		256,500		385,185
Proceeds from issuance of notes payable, related party			125,000			870,000
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(24,760)		67,670
Repayment of notes payable, related party			(45,274	)		(201,540	)
CASH AND CASH EQUIVALENTS, beginning of period		24,762		1,367
Net cash provided by financing activities			841,536			818,460
CASH AND CASH EQUIVALENTS, end of period	$	2	$	69,037
NET DECREASE IN CASH AND CASH EQUIVALENTS			(1,330	)		(131,461	)
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
CASH AND CASH EQUIVALENTS, beginning of period			1,367			133,210
Cash paid for interest	$	-	$	-
CASH AND CASH EQUIVALENTS, end of period		$	37		$	1,749
Cash paid for income taxes	$	-	$	-
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES:
Cash paid for interest		$	-		$	-
Notes payable issued for accounts payable	$	56,000	$	288,190
Cash paid for income taxes		$	-		$	-
Accrued interest and loan fee converted to note payable	$	80,000	$	-
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES:
Discount on notes payable	$	-	$	275,000
Notes payable issued for accounts payable		$	288,190		$	-
Extinguishment of derivative liability	$	468,689	$	-
Discount on notes payable		$	503,303		$	-
The accompanying notes are a part of the condensed consolidated financial statements.
Common stock issued for conversion of debt		$	2,471,646		$	-
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Eos Petro, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

For the ~~Three~~Six ~~and Nine~~ months Ended ~~September~~June 30, ~~2016~~2017 and ~~2015~~2016

(Unaudited)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Business

~~The~~Eos Petro, Inc. (the “Company”) was organized under the laws of the state of Nevada in 2007. On October 12, 2012, ~~pursuant to~~ the ~~Merger~~Company ~~Agreement~~(then ~~entered~~named ~~into~~"Cellteck, byInc.") and ~~between the Company,~~ Eos Global Petro, Inc. ("Eos"),. As ~~and~~a ~~Eos~~result ~~Merger~~of ~~Sub,~~the ~~Inc.~~merger, aEos ~~Delaware~~became ~~corporation~~a ~~and~~ wholly-owned subsidiary of the Company. Effective ~~("Company~~May ~~Merger Sub")~~20, ~~dated July 16~~2013, ~~2012,~~the Company ~~Merger~~changed ~~Sub~~its ~~merged~~name ~~into~~to Eos, ~~with Eos being the surviving entity and the Company the legal acquirer (the "Merger"). As a result of the Merger~~Petro, ~~Eos became a wholly-owned subsidiary of the Company~~Inc.

Effective as of May 20, 2013, the Company changed its name to Eos Petro, Inc. (it previously had been named "Cellteck, Inc.").

The Company has two wholly-owned subsidiaries, Eos and Eos Merger Sub, Inc., a Delaware corporation ("Eos Delaware"), which was formed as an acquisition vehicle for potential transactions. Eos itself also has two subsidiaries: Plethora Energy, Inc., a Delaware corporation and a wholly-owned subsidiary of Eos ("Plethora Energy"), and EOS Atlantic Oil & Gas Ltd., a Ghanaian corporation ("EAOG"), which is also 10% owned by one of the Company's Ghanaian-based third party consultants. Plethora Energy also owns 90% of Plethora Bay Oil & Gas Ltd., a Ghanaian corporation ("PBOG"), which is also 10% owned by the same Ghanaian-based consultant. Eos, Eos Delaware, PBOG, Plethora Energy and EAOG are collectively referred to as the Company's "Subsidiaries."

Business

The Company is in the business of acquiring, exploring and developing oil and gas-related assets.

Basis of Presentation

The unaudited condensed consolidated financial statements have been prepared by Eos Petro, Inc. (the "Company"), pursuant to the rules and regulations of the Securities and Exchange Commission. The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments) which are, in the opinion of management, necessary to fairly present the financial condition of the Company and its operating results for the respective periods. The condensed consolidated balance sheet at December 31, 2015 has been derived from the Company's audited consolidated financial statements. Certain information and footnote disclosures normally present in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015, filed with the Securities and Exchange Commission. The results for the nine months ended September 30, 2016 are not necessarily indicative of the results to be expected for the full year ending December 31, 2016.

Going Concern

The accompanying consolidated financial statements have been prepared ~~under~~on ~~the assumption that the Company will continue as~~ a going concern. ~~Such~~basis, ~~assumption~~which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. As of ~~September~~June 30, ~~2016 and December 31~~2017, ~~2015,~~ the Company had a stockholders'’ deficit of $2123,~~352~~820,~~283~~610, and ~~$28~~,~~087,526,~~ ~~respectively;~~ for the ~~nine~~six months ended ~~September~~June 30, ~~2016 and for the year ended December 31~~2017, ~~2015,~~ reported a net loss of $155,~~343~~422,~~664~~605 and ~~$35,453,024, respectively; and~~ had negative cash flows from operating activities of $~~742~~281,~~866 and $1,420,003, respectively~~260. In The ~~addition, the~~ Company ~~may~~is ~~have~~also ~~become obligated to pay a $5.5 million termination fee under the "Dune Merger Agreement," as defined~~ in ~~Note~~default 9 below (the "Parent Termination Fee," as more fully defined in the Dune Merger Agreement) (see Note 9) and $4 million that may be due under a structuring fee with GEM Global Yield Fund ("GEM"). Furthermore, $8,250,000 of LowCal Convertible and Promissory Notes became due on May 1, 2016 and are therefore now due and payable. Management estimates the Company's capital requirements for the next twelve months, including drilling and completing wells for the Company's oil and gas "Works Property" located in Illinois and possible acquisitions, will total approximately $29,~~500~~082,~~000,~~500 excluding any amounts that may be due to Dune Energy, Inc. under the Dune Merger Agreement or a $4 million structuring fee that may be due to GEM. Errors may be made in predicting and reacting to relevant business trends and the Company will be subject to the risks, uncertainties and difficulties frequently encountered by early-stage companies. The Company may not be able to successfully address any or all of these risks and uncertainties. Failure to adequately do so could cause the Company's business, results of operations, and financial condition to suffer. As a result, management has concluded that there is substantial doubt about the Company's ability to continue as a going concern. In addition, the Company's independent registered public accounting firm, in its ~~report~~convertible on the Company's December 31, 2015 consolidated financial statements, has raised substantial doubt about the Company's ability to continue as a going concern. The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern and dopromissory ~~not include any adjustments that may result from the outcome of this uncertainty~~notes.

7In addition, the Company may have become obligated to pay a $5.5 million termination fee under the "Dune Merger Agreement," as defined in Note 8 below (the "Parent Termination Fee," as more fully defined in the Dune Merger Agreement) (see Note 8) and $4 million that may be due under a structuring fee with GEM Global Yield Fund ("GEM"). Furthermore, $8,250,000 of LowCal Convertible and Promissory Notes became due on May 1, 2016 and are therefore now due and payable. Management estimates the Company's capital requirements for the next twelve months, including drilling and completing wells for the Company's oil and gas "Works Property" located in Illinois and possible acquisitions, will total approximately $2,500,000, excluding any amounts that may be due to Dune Energy, Inc. under the Dune Merger Agreement or a $4 million structuring fee that may be due to GEM. Errors may be made in predicting and reacting to relevant business trends and the Company will be subject to the risks, uncertainties and difficulties frequently encountered by early-stage companies. The Company may not be able to successfully address any or all of these risks and uncertainties. Failure to adequately do so could cause the Company's business, results of operations, and financial condition to suffer. As a result, management has concluded that there is substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern and do not include any adjustments that may result from the outcome of this uncertainty.

The Company's ability to continue as a going concern is an issue due to its net losses and negative cash flows from operations, and its need for additional financing to fund future operations. The Company's ability to continue as a going concern is subject to its ability to obtain necessary funding from outside sources, including the sale of its securities or obtaining loans from investors or financial institutions. There can be no assurance that such funds, if available, can be obtained on terms reasonable to the Company. Any debt financing or other financing of securities senior to common stock that the Company is able to obtain will likely include financial and other covenants that will restrict the Company's flexibility. At a minimum, the Company expects these covenants to include restrictions on its ability to pay dividends on its common stock in the case of debt financing, or cause substantial dilution for stockholders in the case of convertible debt and equity financing. Any failure to comply with these covenants would have a material adverse effect on the Company's business, prospects, financial condition, results of operations and cash flows.

~~NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES~~Estimates

~~Principles of Consolidation~~7

The ~~condensed~~preparation ~~consolidated~~of financial statements ~~include~~in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the ~~accounts~~reported amounts of ~~our~~assets ~~wholly~~and ~~owned~~liabilities and ~~majority~~disclosure ~~owned~~of ~~subsidiaries.~~contingent ~~Intercompany~~assets ~~transactions~~and liabilities at the date of the financial statements and ~~balances~~the ~~have~~reported ~~been~~amounts ~~eliminated~~of revenues and expenses during the reporting period. Significant ~~Management~~estimates ~~evaluates~~reflected ~~its~~in ~~investments~~the oncondensed anconsolidated ~~individual~~financial ~~basis~~statements ~~for~~include, ~~purposes~~but are not limited to, amortization and depletion allowances, the recoverability of ~~determining~~the ~~whether~~carrying oramount ~~not~~and ~~consolidation~~estimated isuseful ~~appropriate~~lives of long-lived assets, asset retirement obligations, the valuation of equity instruments issued in connection with financing transactions and share-based compensation, and assumptions used in valuing derivative liabilities and net operating loss carryforwards. Actual results could differ from those estimates.

Basic and Diluted Earnings (Loss) Per Share

Earnings per share is calculated in accordance with the ASC 260-10, “Earnings Per Share.” Basic earnings-per-share is based upon the weighted average number of common shares outstanding. Diluted earnings-per-share is based on the assumption that all dilutive convertible ~~notes~~preferred shares, stock options and warrants were converted or exercised. Dilution is computed by applying the treasury stock method. 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 stock at the average market price during the period. ~~The following potentially dilutive shares were excluded from the shares used to calculate diluted earnings per share as their inclusion would be anti-dilutive.~~

	September 30,
	2016		2015
Options		5,750,000		1,325,000
Warrants		9,430,734		16,702,992
Convertible notes		2,000,000		2,000,000
Total		17,180,734		20,027,992

The following potentially dilutive shares were excluded from the shares used to calculate diluted earnings per share as their inclusion would be anti-dilutive.

	June 30,	June 30,
	2017	2016
Options	5,750,000	5,825,000
Warrants	8,607,734	9,279,992
Convertible notes	2,000,000	2,000,000
Total	16,357,734	17,104,992

Concentrations

One customer accounted for 100% of oil sales for the six months ended June 30, 2017 and 2016.

Recently Issued Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. ASU 2014-09 is a comprehensive revenue recognition standard that will supersede nearly all existing revenue recognition guidance under current U.S. GAAP and replace it with a principle based approach for determining revenue recognition. Under ASU 2014-09, revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration which the entity expects to receive in exchange for those 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 FASB has recently issued ASU 2016-08, ASU 2016-10, ASU 2016-11, ASU 2016-12, ASU 2016-20, and ASU 2017-05, all of which clarify certain implementation guidance within ASU 2014-09. ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted only in annual reporting periods beginning after December 15, 2016, including interim periods therein. The standard can be adopted either retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the cumulative catch-up transition method). The Company is currently in the process of analyzing the information necessary to determine the impact of adopting this new guidance on its financial position, results of operations, and cash flows. The Company will adopt the provisions of this statement in the first quarter of fiscal 2018.

In February 2016, the FASB issued ASU No. 2016-02, Leases. This update will require the recognition of a right-of-use asset and a corresponding lease liability, initially measured at the present value of the lease payments, for all

~~Management~~leases ~~Estimates~~with terms longer than 12 months. For operating leases, the asset and liability will be expensed over the lease term on a straight-line basis, with all cash flows included in the operating section of the statement of cash flows. For finance leases, interest on the lease liability will be recognized separately from the amortization of the right-of-use asset in the statement of comprehensive income and the repayment of the principal portion of the lease liability will be classified as a financing activity while the interest component will be included in the operating section of the statement of cash flows. ASU 2016-02 is effective for annual and interim reporting periods beginning after December 15, 2018. Early adoption is permitted. Upon adoption, leases will be recognized and measured at the beginning of the earliest period presented using a modified retrospective approach. The Company is currently evaluating the impact of the adoption of ASU 2016-02 on its financial statements and related disclosures.

~~The~~Other ~~preparation~~recent ~~of financial statements in conformity with generally accepted~~ accounting ~~principles~~pronouncements ~~requires~~issued ~~management~~by ~~to make estimates and assumptions that affect~~ the ~~reported~~FASB, ~~amounts~~including ofits ~~assets~~Emerging ~~and~~Issues ~~liabilities~~Task ~~and~~Force, ~~disclosure of contingent assets and liabilities at~~ the ~~date~~American Institute of ~~the~~Certified ~~financial~~Public ~~statements~~Accountants, and the ~~reported~~Securities ~~amounts of revenues~~ and ~~expenses~~Exchange ~~during~~Commission ~~the~~did ~~reporting~~not ~~period.~~or ~~Significant estimates reflected in the consolidated financial statements include, but~~ are not ~~limited~~believed ~~to,~~by ~~amortization~~management ~~and~~to ~~depletion~~have ~~allowances,~~a ~~the~~material ~~recoverability~~impact ofon the ~~carrying~~Company's ~~amount~~present ~~and~~or ~~estimated~~future ~~useful~~consolidated ~~lives~~financial of long-lived assets, asset retirement obligations, the valuation of equity instruments issued in connection with financing transactions and share-based compensation, and assumptions used in valuing derivative liabilitiesstatements. ~~Changes in facts and circumstances may result in revised estimates. Actual results could differ from those estimates.~~

~~Full~~NOTE ~~Cost~~2 ~~Method~~- ofLOWCAL ~~Accounting~~CONVERTIBLE ~~for~~AND ~~Oil~~PROMISSORY ~~and~~NOTES ~~Gas~~PAYABLE ~~Properties~~

~~The~~LowCal ~~Company~~convertible ~~has elected to utilize the full cost method of accounting for its oil~~ and ~~gas~~promissory ~~activities.~~notes Inpayable ~~accordance~~at ~~with~~June ~~the full cost method of accounting~~30, ~~the~~2017 ~~Company capitalizes all costs associated with acquisition, exploration~~ and ~~development~~December ~~of oil and natural gas reserves~~31, ~~including~~2016 leasehold acquisition costs, geological and geophysical expenditures, lease rentals on undeveloped properties and costs of drilling of productive and non-productive wells into the full cost pool on a country by country basis. Capitalized costs of oil and gas properties, including the estimated future costs to develop proved reserves, are ~~amortized~~as ~~on the unit-of-production method using estimates of proved reserves once proved reserves are determined to exist.~~follows:

Capitalized oil and gas property costs within a cost center are amortized on an equivalent unit-of-production method. The equivalent unit-of-production rate is computed on a quarterly basis by dividing production by proved oil and gas reserves at the beginning of the quarter then applying such amount to capitalized oil and gas property costs, which includes estimated asset retirement costs, less accumulated amortization, plus the estimated future expenditures (based on current costs) to be incurred in developing proved reserves, net of estimated salvage values.

		June 30,		December 31,
		2017		2016
LowCal Convertible Note	$	5,000,000	$	5,000,000
LowCal Promissory Note		3,250,000		3,250,000
Total	$	8,250,000	$	8,250,000

~~Full~~The ~~Cost~~LowCal ~~Ceiling~~Loan ~~Test~~is secured by: (i) a mortgage, lien on, assignment of and security interest in and to oil and gas properties; (ii) a guaranty by the Company as a primary obligor for payment of Eos' obligations when due; and (iii) a first priority position equal to the outstanding principal balance of and accrued interest on the LowCal Loan on the first draw down by either Eos or the Company from a commitment letter entered into with a prospective investor, should the Company or Eos be in a position to draw on this facility.

~~Oil~~As ~~and~~amended, ~~gas properties without estimated proved reserves are not amortized until proved reserves associated with~~ the ~~properties~~maturity ~~can~~dates ~~be determined or until impairment occurs. At the end~~ of ~~each~~both ~~reporting period,~~ the ~~unamortized~~LowCal ~~costs~~Loan ~~of oil~~ and ~~gas properties are subject to a "ceiling test" which limits capitalized costs to~~ the ~~sum~~Second ofLowCal ~~the~~Note ~~estimated~~are ~~future~~May ~~net revenues from proved reserves~~1, ~~discounted at 10% per annum to present value~~2016, ~~based on current economic~~ and ~~operating~~are ~~conditions,~~currently ~~adjusted for related income tax effects. If the net capitalized costs exceed the cost center ceiling, the excess is recognized as an impairment of oil and gas properties. An impairment recognized~~ in ~~one period may not be reversed in a subsequent period even if higher oil and gas prices increase the cost center ceiling applicable to the subsequent period~~default.

The ~~estimated~~Second ~~future~~LowCal ~~net~~Note ~~revenues~~must ~~used~~also inbe ~~the~~repaid ~~ceiling~~upon ~~test are calculated using average quoted market prices for sales of oil and gas on~~ the ~~first~~earlier ~~calendar~~to ~~day~~occur of: ~~each~~(i) ~~month during~~ the ~~preceding~~Company ~~12-month~~closing ~~period~~certain ~~prior~~potential toacquisition ~~the~~transactions, ~~end~~or of(ii) the ~~current~~Company ~~reporting~~closing ~~period.~~a ~~Prices~~financing ~~are held constant indefinitely and are not changed except where different prices are fixed and determinable from applicable contracts~~ for ~~the~~a ~~remaining~~minimum ~~term~~ of ~~those contracts~~$20,000,000. ~~Prices~~The ~~used~~parties inhave ~~the~~agreed ~~ceiling~~that, ~~test~~upon ~~computation~~repayment doin ~~not~~full ~~include~~of the ~~impact~~Second ofLowCal ~~derivative~~Note, ~~instruments~~LowCal ~~because~~will ~~the~~forever ~~Company~~release, ~~elected~~cancel ~~not~~and toterminate ~~meet~~all ~~the~~of ~~criteria~~its tomortgages ~~qualify~~and ~~its~~any ~~derivative~~other ~~instruments~~liens ~~for~~against ~~hedge~~the ~~accounting treatment~~Company.

The Company assesses oil and gas properties at least quarterly to ascertain whether impairment has occurred. In assessing impairment, the Company considers factors such as historical experience and other data such as primary lease terms of the property, average holding periods of unproved property, and geographic and geologic data. Through September 30, 2016, the Company has not experienced any impairment of its capitalized oil and gas properties.

~~The~~NOTE ~~Company~~3 ~~recorded~~– NOTES ~~depletion expense of $10,709 and $29,970 for the nine months ended September 30, 2016 and 2015, respectively.~~PAYABLE

~~Proceeds~~Notes ~~from~~payable ~~the~~at ~~sale~~June ~~of oil and gas properties are recognized as a reduction of capitalized oil and gas property costs with no gain or loss recognized~~30, ~~unless~~2017 ~~the sale significantly alters the relationship between capitalized costs~~ and ~~proved~~December ~~reserves of oil and gas attributable to a cost center. Through September 30~~31, 2016, ~~the~~are ~~Company~~as ~~has not had any sales of oil and gas properties that significantly alter that relationship.~~follows:

Asset Retirement Obligation

		June 30,		December 31,
		2017		2016

Secured note payable, at 18% (1) – in default	$	300,000	$	300,000
Note payable at 10%, (2)		748,000		728,000
Note payable, at 2%, (3) – in default		100,000		100,000
Notes payable at 5% to 10% (4)		200,000		200,000
Note payable at 10%, (5) – in default		200,000		200,000
Note payable at 5%, (6)		580,000		500,000
Note payable at 2%, (7) – in default		40,000		40,000
Note payable at 3%, (8) – in default		192,500		-
Total notes payable		2,360,500		2,068,000
Debt discount		-		(45,916)
	$	2,360,500	$	2,022,084

~~The~~ ~~Company accounts for its future asset retirement obligations~~ (~~"ARO"~~1) byNote ~~recording~~payable ~~the~~issued ~~fair value of the liability during the period~~ in ~~which~~2012 itto ~~was~~Vatsala ~~incurred.~~Sharma ~~The~~with ~~associated~~interest ~~asset~~at ~~retirement~~18% ~~costs~~per ~~are~~annum, ~~capitalized~~secured asby ~~part~~all of ~~the~~Eos’ ~~carrying~~assets, ~~amount of the long-lived asset. The increase in carrying value of~~ a ~~property~~mortgage ~~associated~~on ~~with~~ the ~~capitalization~~Works ~~of an ARO is included in proven~~ oil and gas ~~properties~~property, ina ~~the~~50% ~~balance~~security ~~sheets.~~interest ~~The~~in ~~ARO~~Nikolas ~~consists~~Konstant’s ofpersonal ~~costs related to the plugging of wells~~residence, ~~removal of facilities~~ and ~~equipment,~~his ~~and~~personally ~~site~~held ~~restoration~~shares onin ~~its~~a ~~oil~~non-affiliated ~~and~~public ~~gas properties~~corporation. As ~~The~~amended, ~~asset retirement liability is accreted to operating expense over~~ the ~~useful~~maturity ~~life~~date of the ~~related~~Sharma ~~asset.~~loan Asis ofJanuary ~~September 30~~15, ~~2016~~2017. This ~~and~~note ~~December~~is ~~31,~~currently ~~2015,~~in ~~the Company had an ARO of $99,451 and $92,512, respectively~~default.

~~Oil~~(2) Notes payable issued in 2014 ($130,000), 2015 ($453,000), 2016 ($275,000) and ~~Gas~~2017 ~~Revenue~~($20,000) to Bacchus Investors, LLC, with interest at 4-10% per annum, unsecured, and due upon demand.

~~Revenues~~(3) Note ~~are~~payable ~~recognized~~issued ~~when~~in ~~hydrocarbons~~2014 ~~have~~to ~~been~~Ridelinks, ~~delivered~~Inc., ~~the~~interest ~~customer~~at ~~has~~2% ~~taken~~per ~~title~~annum, and ~~collection~~unsecured. The note was initially due March 26, 2016. On April 14, 2017, this note was amended to extend the maturity date to July 31, 2017. As consideration for the extension the Company agreed to issue the lender 35,000 shares of the Company’s common stock valued at $35,000 based on the market price of the Company’s stock on the date of the amendment. The amendment to the note will be recorded as a debt extinguishment. This note is ~~reasonably~~currently ~~assured~~in default.

~~Share-Based~~ ~~Compensation~~(4) Unsecured promissory notes, interest at 5% to 10% per annum, and due upon demand.

~~The~~(5) ~~Company~~Note ~~periodically~~payable ~~issues~~issued ~~stock options and warrants to employees and non-employees~~ in ~~capital raising transactions~~2016, ~~for~~interest ~~services~~at ~~and for financing costs. The Company accounts for share-based payments under the guidance as set forth in the Share-Based Payment Topic of the FASB Accounting Standards Codification~~10%, ~~which requires the measurement~~ and ~~recognition~~secured ofby ~~compensation~~certain ~~expense~~assets. The ~~for~~note ~~all~~was ~~share-based~~initially ~~payment~~due ~~awards~~December ~~made to employees~~15, ~~officers,~~2016. On ~~directors,~~April ~~and consultants~~11, ~~including employee stock options~~2017, ~~based~~this onnote ~~estimated~~was ~~fair~~amended ~~values.~~to ~~The~~extend ~~Company estimates~~ the ~~fair~~maturity ~~value~~date ~~of share-based payment awards~~ to ~~employees~~July ~~and directors on the date of grant using an option-pricing model~~30, ~~and~~2017. As ~~the~~consideration ~~value~~for of the ~~portion~~extension of the ~~award~~Company ~~that~~agreed ~~is ultimately expected~~ to ~~vest~~issue ~~is recognized as expense over~~ the ~~required~~lender ~~service~~200,000 ~~period~~shares inof the Company'’s ~~Statements~~common ~~of Operations. The Company accounts for~~ stock ~~option~~valued ~~and~~at ~~warrant~~$200,000 ~~grants~~based ~~issued~~on ~~and vesting to non-employees in accordance with~~ the ~~authoritative~~market ~~guidance~~price ~~where the value~~ of the Company’s stock ~~compensation~~on ~~is based upon~~ the ~~measurement~~ date asof ~~determined at either a)~~ the ~~date~~amendment atand ~~which~~to pay a ~~performance commitment is reached~~$25,000 orloan b)extension ~~the~~fee. The ~~date~~amendment atwill ~~which~~be ~~the~~recorded ~~necessary~~as ~~performance~~a todebt ~~earn the equity instruments is complete~~extinguishment. This ~~Stock-based~~note ~~compensation~~ is ~~based~~currently ~~on awards ultimately expected to vest and is reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, as necessary,~~ in ~~subsequent periods if actual forfeitures differ from those estimates~~default.

~~Fair~~(6) ~~Value~~Note ~~Measurements~~payable issued in 2016, interest at 5%, secured by certain assets of the Company, in the original principal amount of $500,000, due on June 5, 2017. On February 6, 2017, the note was amended and a loan fee of $75,000 and accrued interest of $5,000 were added to principal. In addition, the Company agreed to issue 150,000 shares to the note holder valued at $223,500 based on the market price of the Company’s stock on the date of the amendment. On September 7, 2017, the note was amended again to extend the maturity date to October 31, 2017 (see Note 9).

~~The~~ ~~Company~~(7) ~~applies~~Note ~~the~~payable ~~provisions~~issued ofin ~~ASC 820-10~~2016, ~~Fair~~with ~~Value~~an ~~Measurements~~original ~~and~~issue ~~Disclosures.~~discount ~~ASC~~of ~~820-~~$10,000, ~~defines fair value~~unsecured, and ~~establishes~~due aNovember ~~three-level~~30, ~~valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures~~2016. The ~~three~~note ~~levels~~is ofcurrently ~~valuation~~in ~~hierarchy are defined as follows:~~default.

· Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.

· Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

· Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

~~The~~(8) ~~carrying~~Note ~~amounts~~payable ~~reported~~issued in ~~the~~2017, ~~consolidated~~unsecured, ~~balance~~interest ~~sheets~~at ~~for~~3% ~~cash~~ and ~~cash~~due ~~equivalents~~on ~~and~~April ~~current liabilities~~21, ~~including~~2017. This ~~notes~~note ~~payable~~contained ~~and convertible notes, each qualify as financial instruments and are~~ a ~~reasonable~~loan ~~estimate~~origination offee ~~their fair values because~~ of ~~the~~$20,000. This ~~short~~note ~~period~~is ofcurrently ~~time~~in ~~between the origination of such instruments and their expected realization and their current market rate of interest~~default.

~~The~~During ~~Company~~six ~~uses~~months ~~Level~~ended 2June ~~inputs~~30, ~~for~~2017, ~~its valuation methodology for~~ the ~~warrant~~Company ~~derivative~~recognized ~~liabilities~~amortization asof ~~their~~debt ~~fair~~discounts ~~values~~of ~~were~~notes ~~determined~~issued byin ~~using~~2016 aof ~~probability weighted average Black-Scholes-Merton pricing model based on various assumptions~~$45,916. As ~~The~~of ~~Company's~~June ~~derivative~~30, ~~liabilities are adjusted to reflect fair value at each period end~~2017, ~~with any increase or decrease in~~ the ~~fair~~unamortized ~~value~~valuation ~~being~~discount ~~recorded~~was ~~in results of operations as adjustments to fair value of derivatives~~$0.

~~Concentrations~~NOTE 4 – DERIVATIVE LIABILITIES

~~The~~Under ~~Company~~authoritative ~~maintains~~guidance ~~cash~~used ~~balances~~by atthe FASB on determining whether an instrument (or embedded feature) is indexed to an entity’s own stock, instruments which do not have fixed settlement provisions are deemed to be derivative instruments. On November 1, 2016, the Company issued a ~~bank~~warrant to purchase an aggregate of 500,000 shares of the Company’s common stock to an investor in ~~California~~connection with a note payable. The ~~account~~exercise price of the warrant is ~~insured~~equal to 85% of the price per shares of common stock sold by the ~~Federal~~Company ~~Deposit~~in ~~Insurance~~a ~~Corporation~~future upoffering toof at least $~~250~~1,000,000. If no such offering occurs within six months then the exercise price will be $0.10 per ~~institution~~shares. AtSince ~~September~~the 30exercise price of the warrant is a percentage of a future offering price, ~~2016~~the Company determined that the warrant met the definition of a derivative and ~~December~~is 31to be re-measured at the end of each reporting period with the change in fair value reported in the statement of operations. On April 1, ~~2015~~2017, the ~~Company~~exercise ~~did~~price ~~not~~of ~~have~~the ~~amounts~~warrant onbecame ~~deposit~~a ~~that~~fixed ~~exceeded~~amount at $0.10 per shares. As a result of the ~~FDIC~~exercise price no longer being variable, these warrants are no longer considered derivative liabilities, and the fair value of the warrants of $468,689 was reclassified to additional paid-~~insured~~in ~~limits~~capital.

~~The~~As ~~future results~~ of ~~the~~April Company's oil and natural gas operations will be affected by the market prices of oil and natural gas. The availability of a ready market for oil and natural gas products in the future will depend on numerous factors beyond the control of the Company1, ~~including~~2017 ~~weather, imports, marketing of competitive fuels, proximity~~ and ~~capacity~~December ~~of oil and natural gas pipelines and other transportation facilities~~31, ~~any oversupply or undersupply of oil~~2016, ~~natural gas and liquid products,~~ the ~~regulatory~~derivative ~~environment,~~liabilities ~~the~~were ~~economic~~valued ~~environment,~~using ~~and~~a ~~other~~probability ~~regional~~weighted ~~and~~average ~~political~~Black-Scholes-Merton ~~events,~~pricing ~~none~~model ofwith ~~which~~the ~~can~~following ~~be predicted with certainty.~~assumptions:

One customer accounts for 100% of oil sales for the nine months ended September 30, 2016 and 2015. The Company's oil and gas properties are located in Illinois.

		April 1,		December 31,
		2017		2016
Exercise Price	$	0.10	$	0.10
Stock Price	$	1.00	$	1.00
Expected life of the options (Years)		2.59		2.84
Expected volatility		136%		133%
Risk-free interest rate		1.50%		0.80%
Expected dividend yield		0%		0%

Fair Value	$	468,689	$	469,267

Derivative Financial Instruments

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The Company uses a probability weighted average Black-Scholes-Merton model to value the derivative instruments. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date.

Recently Issued Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. ASU 2014-09 is a comprehensive revenue recognition standard that will supersede nearly all existing revenue recognition guidance under current U.S. GAAP and replace it with a principle based approach for determining revenue recognition. ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted only in annual reporting periods beginning after December 15, 2016, including interim periods therein. Entities will be able to transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. The Company is in the process of evaluating the impact of ASU 2014-09 on the Company's financial statements and disclosures.

In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases. ASU 2016-02 requires a lessee to record a right of use asset and a corresponding lease liability on the balance sheet for all leases with terms longer than 12 months. ASU 2016-02 is effective for all interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is in the process of evaluating the impact of ASU 2016-02 on the Company's financial statements and disclosures.

In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share Based Payment Accounting, to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The guidance will be effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the impact of the adoption of this newly issued guidance to its consolidated financial statements.

In August 2014, the FASB issued Accounting Standards Update No. 2014-15, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern, which provides guidance on determining when and how to disclose going-concern uncertainties in the financial statements. ASU 2014-15 requires management to perform interim and annual assessments of an entity's ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entity's ability to continue as a going concern. ASU 2014-15 is effective for annual periods ending after December 15, 2016, and interim periods thereafter. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of ASU 2014-15 on the Company's financial statements and disclosures.

Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future financial statements.

NOTE 3 - LOWCAL CONVERTIBLE AND PROMISSORY NOTES PAYABLE

LowCal convertible and promissory notes payable at September 30, 2016 and December 31, 2015 are as follows:

	September 30,		December 31,
	2016		2015
LowCal Convertible Note	$	5,000,000	$	5,000,000
LowCal Promissory Note		3,250,000		3,250,000
Total	$	8,250,000	$	8,250,000

On February 8, 2013, and as subsequently amended through August 14, 2015, the Company and Eos entered into: (i) a Loan Agreement and Secured Promissory Note; (ii) a Lock-Up/Leak-Out Agreement; (iii) a Guaranty; (iv) a Series B Convertible Preferred Stock Purchase Agreement; and (v) a Leasehold Mortgage, Assignment, Security Agreement and Fixture Filing (collectively referred to as the "Loan Agreements"), with LowCal Industries, LLC and LowCal [EOS/Petro], LLC (collectively referred to as " LowCal "). Pursuant to the Loan Agreements, LowCal agreed to purchase from Eos, for $4,980,000, promissory notes in the aggregate principal amount of $5,000,000 (of which $1,500,000 was advanced in 2014 and $3,500,000 in prior years), with interest at 10% per annum (the "LowCal Loan"). At LowCal's option, LowCal can elect to convert any part of the principal of the LowCal Loan into shares of the Company's common stock at a conversion price of $2.50 per share. On January 13, 2015, the Company and LowCal amended the Loan Agreements, including the LowCal Loan, and entered into a new unsecured promissory note in the principal amount of $3,250,000, with interest at 10% per annum (the "Second LowCal Note"), $750,000 of which was advanced to the Company in 2014 and was recognized as included in the principal amount of the Second LowCal Note. As part of the amendment, LowCal forgave approximately $667,000 of accrued interest on the LowCal Loan and eliminated all interest on the LowCal Loan going forward. As amended, there was no remaining accrued and outstanding interest on the LowCal Loan.

The LowCal Loan is secured by: (i) a mortgage, lien on, assignment of and security interest in and to oil and gas properties; (ii) a guaranty by the Company as a primary obligor for payment of Eos' obligations when due; and (iii) a first priority position or call right for an amount equal to the then outstanding principal balance of and accrued interest on the LowCal Loan on the first draw down by either Eos or the Company from a commitment letter entered into with a prospective investor, should the Company or Eos be in a position to draw on this facility.

As amended, the maturity dates of both the LowCal Loan and the Second LowCal Note are May 1, 2016. The LowCal Loan and the Second LowCal Note are currently in default. The Second LowCal Note must also be repaid upon the earlier to occur of: (i) the Company closing certain potential acquisition transactions, or (ii) the Company closing a financing for a minimum of $20,000,000. The parties have agreed that, upon repayment in full of the Second LowCal Note, LowCal will forever release, cancel and terminate all of its mortgages and any other liens against the Company.

On March 11, 2016, the Company and LowCal amended the LowCal Agreements (the "Seventh Amendment to the LowCal Agreements"). Under the Seventh Amendment to the LowCal Agreements: (i) the maturity dates of the LowCal Loan and Second LowCal Note was extended to May 1, 2016; (ii) the expiration date of LowCal's warrants was extended to May 1, 2020; (iii) the Company will issue to LowCal [EOS/PETRO], LLC ("LowCal") an additional 75,000 restricted shares of the Company's common stock; and (iv) the parties agreed that if: (1) the Company pays off the $3,250,000 principal balance of the Second LowCal Note in full, plus any accrued and unpaid interest, and (2) either: (A) the Company closes a transaction where it acquires at least $10,000,000 in additional assets, through an asset purchase, stock purchase, merger, or other similar transaction, which shall be determined by generally accepted accounting principles, or (B) the Company successfully uplists its common stock to a national exchange market (NASDAQ or the New York Stock Exchange), then the following will automatically occur: (1) the conversion price of the LowCal Loan will be reduced from $2.50 per share to $2.00 per share, and (2) any outstanding principal and interest due on the LowCal Loan will be converted at a price of $2.00 per share into restricted shares of the Company's common stock, which shall be issued to LowCal.

The value of the 75,000 shares issued with the Seventh Amendment to the LowCal Agreements was $300,000 which was the fair value of the shares on March 11, 2016. The $300,000 was charged to financing cost during the nine months ended September 30, 2016. In addition, the Company took a charge to earnings of $188,378 during the nine months ended September 30, 2016 related to the extension of the expiration date of 1,000,000 warrants previously issued to LowCal. The charge is the difference in fair value of the warrants using the old expiration date and the new expiration date using the Black-Scholes option- pricing model for options with the following assumptions:

· Expected life of 2.81 to 4.14 years; · Volatility of 174%; · Dividend yield of 0%; and · Risk free interest rate of 1.16%.

NOTE 4 – NOTES PAYABLE

Notes payable at September 30, 2016 and December 31, 2015 are as follows:

	September 30,			December 31,
	2016			2015
Secured note payable, at 18% (1)	$	300,000		$	600,000
Note payable at 10%, (2)		653,000			453,000
Note payable, at 2%, (3)		100,000			100,000
Note payable at 10%, (4)		-			150,000
Note payable at 10%, (5)		130,000			30,000
Note payable at 10%, (6)		-			50,000
Note payable at 10%, (7)		100,000			-
Note payable at 10%, (8)		200,000			-
Note payable at 2%, (9)		500,000			-
Total notes payable		1,983,000			1,383,000
Debt discount		(212,462	)		-
	$	1,770,538		$	1,383,000

(1) On February 16, 2012, and as amended through January 1, 2016, Eos entered into a Secured Promissory Note with Vatsala Sharma ("Sharma") for a secured loan for $600,000 at an interest rate of 18% per annum (as amended, the "Sharma Loan"). The Sharma Loan is secured by a blanket security interest in all of Eos' assets, and newly acquired assets, a mortgage on the Works Property, a 50% security interest in Nikolas Konstant's personal residence, and his personally held shares in a non-affiliated public corporation. As amended, the maturity date of the Sharma Loan is January 15, 2017. As additional consideration for entering into the Sharma Loan, the Company issued 400,000 shares of common stock. Under the terms of the Sharma Loan, Sharma will receive an additional 275,000 shares of the Company's common stock as of January 1, 2016. The value of the 275,000 shares issued to Sharma was $1,100,000, which was the fair value of the shares on January 1, 2016. Such amount was charged to financing cost during the nine months ended September 30, 2016. During the nine months ended September 30, 2016, $300,000 of this note plus $456,460 of accrued interest was converted into 756,460 shares of the Company's common stock.

(2) On September 30, 2014, the Company issued an unsecured promissory note to Bacchus Investors, LLC ("Bacchus") for $323,000, with interest at 4%. During 2015, the Company issued $130,000 of additional unsecured promissory notes to Bacchus with interest at 10%. In addition, in 2016, the Company issued additional unsecured promissory notes of $200,000 to Bacchus with interest at 10% for a total outstanding of $653,000 at September 30, 2016. The unsecured promissory notes are due upon demand.

(3) On October 9, 2014, the Company issued an unsecured promissory note to Ridelinks, Inc. for $200,000, with interest at 2% and a maturity date of March 15, 2015 that was extended to June 15, 2015 and includes an exit fee of $30,000. The maturity date has subsequently been extended to April 30, 2016. In consideration for extending the due date of this note per an agreement dated March 25, 2016, the Company issued to Ridelinks 40,000 shares of the Company's common stock. The value of the 40,000 shares issued to Ridelinks was $150,000 which was the fair value of the shares on March 26, 2016. The $150,000 was charged to financing cost during the nine months ended September 30, 2016. This note is currently in default.

(4) On April 15, 2015, the Company issued an unsecured promissory note to Clearview Partners II, LLC ("Clearview") for $150,000, with interest at 10%. The Company and Clearview executed letter agreements extending the maturity date of the unsecured promissory note to July 1, 2016. During the nine months ended September 30, 2016, this note plus $18,205 of accrued interest was converted into 168,205 shares of the Company's common stock.

(5) Unsecured promissory notes, with interest ranging from 4% to 5% per annum, maturing through January 1, 2017.

(6) On December 14, 2015, the Company issued an unsecured promissory note to an individual for $50,000, with interest at 10% and a maturity date of July 1, 2016. On January 20, 2016, the Company issued an additional unsecured promissory note to this individual for $50,000, with interest at 10% and a maturity date of July 1, 2016. As of September 30, 2016, the total of $100,000 has fully been repaid.

(7) On February 18, 2016, the Company issued an unsecured promissory note in settlement of accounts payable of $120,000, with interest at 10%. $20,000 had been repaid on the note with the remaining principal due on January 15, 2017.

(8) On June 27, 2016, the Company issued a secured promissory note to an investor for $200,000, with interest at 10% and a maturity date of October 31, 2016, which was extended to December 15, 2016. This note is secured by 1,000,000 shares of common stock owned by the Company's majority stockholder, Plethora Enterprises, LLC ("Plethora"), In connection with this promissory note, the Company also issued to the investor 200,000 warrants to purchase shares of the Company's common stock with an exercise price of $1.00 per share with a fair value of $173,787 and 300,000 shares of the Company's common stock valued at $300,000.

The fair values of the warrants were determined using the Black-Scholes option pricing model with the following assumptions:

· Expected life of 3.0 years

· Volatility of 174%;

· Dividend yield of 0%;

· Risk free interest rate of 0.71%

The aggregate relative fair value of the warrants were valued at $92,987 and was recorded as a discount on the promissory note and as additional paid in capital. The value of the common stock of $300,000 first recorded as a discount of $107,013, with the balance of $192,987 was charged to financing costs. The combined total discount is $200,000, and will be amortized over the term of the note.

(9) On August 10, 2016, the Company issued a secured promissory note to an investor for $500,000, with interest at 2% and a maturity date of February 5, 2017. This note is secured by 2,000,000 shares of common stock owned by the Company's majority stockholder, Plethora, and real property owned by an unrelated party. The note also provides for a loan fee of $75,000 to be paid upon maturity. In connection with this promissory note, the Company also issued to the investor 150,000 warrants to purchase shares of the Company's common stock with an exercise price of $1.00 per share with a fair value of $114,708 and 150,000 shares of the Company's common stock valued at $135,000.

The fair values of the warrants were determined using the Black-Scholes option pricing model with the following assumptions:

· Expected life of 3.0 years

· Volatility of 169%;

· Dividend yield of 0%;

· Risk free interest rate of 0.80%

The aggregate relative fair value of the warrants were valued at $93,303 and was recorded as a discount on the promissory note and as additional paid in capital. The value of the common stock of $135,000 was also recorded as a discount on the promissory note. The combined total discount is $228,303 and will be amortized over the term of the note.

On May 19, 2016, the Company issued two secured promissory notes for $37,500 each, with interest at 1% and a maturity date of July 6, 2016. In connection with these promissory notes, the Company also issued to the noteholders 750,000 shares of the Company's common stock valued at $870,000. In addition, for one note, Plethora, the Company's majority stockholder, issued the noteholder 250,000 shares of the Company's common stock valued at $290,000. The value of the common stock was based on the closing stock price on the date of the agreements and was recorded as a discount of $75,000 and the reminder of $1,085,000 was charged to financing costs. The discount of $75,000 was amortized over the term of the notes. During the quarter ended September 30, 2016, these notes were fully repaid.

During nine months ended September 30, 2016, the Company recorded valuation discount of $503,303 and recognized amortization of debt discounts of $290,841 which is included in interest expense in the accompanying consolidated statement of operations. As of September 30, 2016, the unamortized valuation discount was $212,462.

The weighted average interest rate at September 30, 2016 for the outstanding notes payable is 8.4%

NOTE 5 – NOTES PAYABLE, RELATED PARTY

The Company has been receiving advances from Plethora, a company wholly owned by Nickolas Konstant, the Company's majority shareholder and CEO. All of the loans extended by Plethora to the Company accrue interest at an annual rate of 10%, and are due on July 1, 2016. At December 31, 2015, the aggregate principal balance due under these notes was $1,208,160.

During the nine months ended September 30, 2016 and 2015, Plethora sold an aggregate of 351,515 and 2,520,000 of its shares of the Company's restricted common stock in private sales. Following the private sales transactions, Plethora loaned all of the aggregate proceeds from the private sale of stock of to the Company, and concurrently, the Company issued Plethora separate unsecured promissory notes for the aggregate principal amount received. The proceeds from these sales of $125,000 and $870,000 were loaned to the Company.

During the nine months ended September 30, 2016 and 2015, of the shares of common stock sold by Plethora as discussed above, 251,515 and 2,160,000 shares were sold to either affiliates of the Company, vendors, or individuals with whom the Company had a past business relationship. The Company considered the provisions of Staff Accounting Bulletin ("SAB") Topic 5T, Accounting for Expenses or Liabilities Paid by Principal Stockholders, and determined that the difference between the quoted market price of the shares and the sales price to the buyers as additional compensation cost and a contribution to capital by a major related party stockholder (Plethora). As such, the Company recorded charges of $931,060 and $6,293,200 during the nine months ended September 30, 2016 and 2015 relating to the difference between the sales price and the fair market price of the shares on the date of the transaction.

During the quarter ended September 30, 2016, the entire balance due on this note payable of $1,287,886 and accrued interest of $110,095 were converted into 1,397,981 shares of the Company's common stock. The balance of the notes payable, related party at September 30, 2016 was $0.

NOTE 6 – DERIVATIVE LIABILITIES

Under authoritative guidance used by the FASB on determining whether an instrument (or embedded feature) is indexed to an entity's own stock, instruments which do not have fixed settlement provisions are deemed to be derivative instruments. In August 2014, the Company issued warrants to purchase an aggregate of 1,775,000 shares of the Company's common stock, to a former note holder and certain other related parties. The warrant agreements included an anti-dilution provision that would reduce the exercise price if the Company were to issue additional equities at a price below the exercise price which is in effect at the time of the issuance of the additional equities. The Company determined that these warrants met the definition of a derivative and are to be re-measured at the end of each reporting period with the change in fair value reported in the statement of operations. On July 2, 2016, the Company and the warrant holders entered into an agreement whereby the Company agreed to reduce the exercise price of the warrants to $1.00 in exchange for the warrant holder removing the anti-dilution provision contained in the warrant agreements. As a result of the removal of this anti-dilution provision, these warrants are no longer considered derivative liabilities. On July 2, 2016, the fair value of the warrants of $1,389,628 was reclassified to additional paid-in capital.

As of July 2, 2016 and December 31, 2015, the derivative liabilities were valued using a probability weighted average Black-Scholes-Merton pricing model with the following assumptions:

	July 2,			December 31,
	2016			2015
Exercise Price	$	1.00		$	2.00
Stock Price	$	1.00		$	4.00
Risk-free interest rate		0.59	%		1.06	%
Expected life of the options (Years)		2.14			2.64
Expected volatility		169	%		180	%
Expected dividend yield		0	%		0	%
Expected forfeitures		0	%		0	%
Fair Value	$	1,389,628		$	6,381,553

The risk-free interest rate was based on rates established by the Federal Reserve Bank. The Company uses the historical volatility of its common stock to estimate the future volatility for its common stock. The expected life of the warrants was determined by the expiration dates of the warrants. The expected dividend yield was based on the fact that the Company has not paid dividends to its common stockholders in the past and does not expect to pay dividends to its common stockholders in the future.

The Company recorded an adjustment to the fair value of derivative liabilities of $~~4,991,925~~578 and $45,~~241~~105,~~697~~765 for ~~nine~~six months ended ~~September~~June 30, ~~2016~~2017 and ~~2015~~2016, respectively, and were valued using Level 2 inputs.

NOTE 75 - RELATED PARTY TRANSACTIONS

Plethora Enterprises, LLC

The Company has a consulting agreement with Plethora, which is solely owned by Nikolas Konstant, the Company's Chairman of the Board and Chief Financial Officer. Under the consulting agreement, for the nine months ended September 30, 2016 and 2015, the Company recorded compensation expense of $270,000 and $270,000, respectively. At September 30, 2016 and December 31, 2015, there was $317,752 and $180,000, respectively, due to Mr. Konstant under the Plethora consulting agreement.11

InThe ~~addition,~~Company has a consulting agreement with Plethora, ~~has~~which ~~made~~is ~~advances~~solely toowned by Nikolas Konstant, the Company’s asChairman ~~described~~of the Board and Chief Financial Officer. Under the consulting agreement, for the six months ended June 30, 2017 and 2016, the Company recorded compensation expense of $180,000 and $180,000, respectively. At June 30, 2017 and December 31, 2016, there was $436,297 and $363,601, respectively, due to Mr. Konstant, and included in ~~Note~~the 5balance of accrued officers’ compensation in the accompanying consolidated balance sheet.

~~NOTE~~During 8-the ~~STOCKHOLDERS'~~six ~~DEFICIT~~months ended June 30, 2017, the Company issued 1,500,000 shares of common stock to Plethora for services rendered. The value of the shares was $1,500,000 based on the market price of the Company’s common stock at the date of issuance.

During the ~~nine~~six months ended June 30, 2016, Plethora sold an aggregate of 351,515 of its shares of the Company's ~~issued:~~restricted common stock in private sales. The proceeds from these sales of $125,000 were loaned to the Company. Of the 351,515 shares of common stock sold by Plethora, 251,515 shares were sold to either affiliates of the Company, vendors, or individuals with whom the Company had a past business relationship. The Company considered the provisions of Staff Accounting Bulletin ("SAB") Topic 5T, Accounting for Expenses or Liabilities Paid by Principal Stockholders, and determined that the difference between the quoted market price of the shares and the sales price to the buyers as additional compensation cost and a contribution to capital by a major related party stockholder (Plethora). As such, the Company recorded a charge of $931,060 during the six months ended June 30, 2016 relating to the difference between the sales price and the fair market price of the shares on the date of the transaction.

·NOTE ~~200,000~~6- ~~shares~~STOCKHOLDERS’ ~~of its common stock to a consultant. The shares were valued at $265,000 based on the market price of the Company's common stock at the date of issuance;~~DEFICIT

·During ~~315,000~~the ~~shares~~six ofmonths ~~its~~ended ~~common~~June ~~stock in connection with debt extensions. The shares were valued at $1~~30,~~250,000~~ ~~based~~2017 on the ~~market price of the~~ Company's ~~common stock at the date of issuance;~~issued:

~~· 75~~1,~~000~~500,000shares ~~shares~~ of its common stock into ~~connection with an amendment of~~ a ~~note~~related ~~agreement.~~party ~~The~~(See ~~shares~~Note ~~were~~5) valued at $~~300~~1,500,000 based on the market price of the Company'’s common stock at the date of issuance;

~~· 1~~850,~~200,~~000 shares of its common stock into ~~connection~~two ~~with~~consultants ~~notes payable. The shares were~~ valued at $1899,~~305,~~000 based on the market price of the Company'’s common stock at the date of issuance; ~~and~~

~~· 2~~385,~~471,646~~000 shares of its common stock in connection with ~~the~~an ~~conversion~~extension of ~~notes~~the ~~payable~~maturity date of ~~$450,000;~~a ~~notes~~note payable to(See ~~related~~Note ~~party~~3) ofvalued at $1458,~~287,886;~~500 ~~accrued~~based ~~interest~~on the market price of ~~$584,760~~the ~~and~~Company’s ~~accrued~~common ~~expenses~~stock at the date of ~~$149,000.~~issuance; and

17100,000 shares of its common stock for cash proceeds of $100,000.

~~NOTE 9 - STOCK OPTIONS AND WARRANTS~~12

NOTE 7 - STOCK OPTIONS AND WARRANTS

Option Activity

A summary of the option activity is presented below:

				Weighted			~~Weighted~~
			Weighted	~~Weighted~~Average			~~Average~~
			Average	~~Average~~Remaining		Aggregate	~~Remaining~~		~~Aggregate~~
	Number of		Exercise	~~Exercise~~Contractual		Intrinsic	~~Contractual~~		~~Intrinsic~~
	Options		Price ($)	~~Price~~Life ($in years)		Value ($)	~~Life (in years)~~		~~Value ($)~~
Outstanding, December 31, 2015		1,325,000			2.50			3.08		2,186,250
Outstanding, December 31, 2016	5,750,000		1.33	3.63		-
Granted	-	~~4,500,000~~	-		~~1.00~~
Exercised	-	-
Forfeited/Canceled	-	~~(75,000~~	)		~~2.50~~
Outstanding, September 30, 2016		5,750,000			1.33			3.88		-
Outstanding, June 30, 2017	5,750,000		1.33	3.13		-
Exercisable, September 30, 2016		2,750,000			1.68			3.44		-
Exercisable, June 30, 2017	4,250,000		1.44	2.99		-

At ~~September~~June 30, ~~2016~~2017, ~~the~~there was no intrinsic value ofto the outstanding and exercisable stock options ~~was zero~~.

The following table summarizes information about options outstanding at ~~September~~June 30, ~~2016~~2017:

~~Weighted~~

~~Average~~

~~Number of~~Remaining

Exercise

~~Remaining~~

~~Exercise~~

Price ($)

~~Shares~~Life (Years)

Price ($)

~~Life (Years)~~

~~Price ($)~~

~~1.00~~

~~4,500,000~~

~~4.28~~

~~1.00~~

~~2.50~~

~~1,250,000~~

~~2.42~~

~~2.50~~

The following table summarizes information about options exercisable at September 30, 2016:


Options Exercisable
		Weighted	Weighted
		Average	Average
Exercise	Number of	Remaining	Exercise
Price ($)	Shares	Life (Years)	Price ($)
1.00	3,000,000	3.54	1.00
2.50	1,250,000	1.67	2.50

During the six months ended June 30, 2017 and 2016, the Company recorded $1,630,502 and $10,040,072, respectively, of share based compensation relating to the vesting of options granted in 2016. As of June 30, 2017, the unamortized balance related to future stock based compensation for options previously granted but not vested is $1,549,711.

In connection with Mr. Alan Gaines' employment as the Company's President, the Company and Mr. Gaines entered into a Stock Option Agreement, signed on December 16, 2015 and effective January 11, 2016 ("Effective Date"), whereby the Company granted Mr. Gaines options to purchase up 4,500,000 shares of the Company's restricted common stock, all of which have an exercise price of $1.00 per share and expire in five years. The Company determined the total fair value at grant date was $17,627,047, calculated using the Black-Scholes option pricing model. The options vest as follows: 1,500,000 of the shares vested on the Effective Date; 1,500,000 of the shares shall vest on the first anniversary of the Effective Date; and 1,500,000 of the shares shall vest on the second anniversary of the Effective Date.13

The assumptions used in calculating the fair value of options granted using the Black-Scholes option pricing model for options are as follows:

· Expected life of 5.0 years;

· Volatility of 179%;

· Dividend yield of 0%; and

· Risk free interest rate of 1.58%.

During the nine months ended September 30, 2016 and 2015, the Company recorded $12,243,453 and $4,673,412, respectively, of share based compensation relating to the vesting of options granted in 2016 and other previously granted options. As of September 30, 2016, the unamortized balance related to future stock based compensation for options previously granted but not vested is $5,383,594.

During the nine months ended September 30, 2016, the Company extended the terms of 50,000 option by five years. The change in fair value between the fair value of the options using the old expiration date and the new expiration date was $93,714. This amount was recorded as an expense during the period as the options have fully vested.

Warrant Activity

A summary of warrant activity is presented below:

				Weighted			~~Weighted~~
			Weighted	~~Weighted~~Average			~~Average~~
			Average	~~Average~~Remaining		Aggregate	~~Remaining~~		~~Aggregate~~
	Number of		Exercise	~~Exercise~~Contractual		Intrinsic	~~Contractual~~		~~Intrinsic~~
	Warrants		Price ($)	~~Price~~Life ($in years)		Value ($)	~~Life (in years)~~		~~Value ($)~~
Outstanding, December 31, 2015		8,612,992			3.25			2.66		11,237,988
Outstanding, December 31, 2016	8,627,734		2.75	2.26		450,000
Granted	-	~~817,742~~	-		~~1.70~~
Exercised	-	-
Forfeited/Canceled	(20,000)	-
Outstanding, September 30, 2016		9,430,734			2.93			2.15		-
Outstanding, June 30, 2017	8,607,734		2.74	1.77		350,000
Exercisable, September 30, 2016		9,430,734			2.93			2.15		-
Exercisable, June 30, 2017	8,627,734		2.74	1.77		350,000

AtThe ~~September~~following ~~30,~~tables ~~2016,~~summarize ~~the~~information ~~intrinsic~~about ~~value~~warrants of outstanding and exercisable ~~stock~~at ~~warrants~~June ~~was~~30, ~~zero.~~2017:

The following tables summarize information about warrants outstanding and exercisable at September 30, 2016:

Warrants Outstanding and Exercisable
		Weighted	Weighted
		Average	Average
Exercise	Number of	Remaining	Exercise
Price ($)	Shares	Life (Years)	Price ($)
0.10	500,000	2.34	1.00
1.00	2,175,000	1.34	1.00
2.00	1,100,000	2.31	2.00
2.50	3,207,734	2.13	2.50
3.00	50,000	2.63	3.00
4.00	75,000	1.09	4.00
7.15	1,500,000	1.03	7.15
	8,607,734

Warrants Outstanding and Exercisable
				Weighted		Weighted
				Average		Average
Exercise		Number of		Remaining		Exercise
Price ($)		Shares		Life (Years)		Price ($)
	1.00		2,175,000		2.09		1.00
	2.00		1,100,000		3.05		2.00
	2.50		3,207,734		2.86		2.50
	3.00		1,353,000		0.24		3.00
	4.00		75,000		1.84		4.00
	6.00		20,000		0.58		6.00
	7.15		1,500,000		1.78		7.15
			9,430,734

NOTE 8 - COMMITMENTS AND CONTINGENCIES

Warrants issued to consultants

During the nine months ended September 30, 2016, the Company issued a total of 467,742 warrants to two consultants and the CEO with an aggregate fair value of $1,164,738 which was recorded as expense during the nine months ended September 30, 2016. The fair values of the warrants were determined using the Black-Scholes option pricing model with the following assumptions:

· Expected life of 5.0 years

· Volatility of 171%-176%;

· Dividend yield of 0%;

· Risk free interest rate of 1.21% - 1.39%

NOTE 10 - COMMITMENTS AND CONTINGENCIES

Dune Merger Agreement

On September 17, 2014 the Company entered into an Agreement and Plan of Merger with Dune Energy Inc. ("Dune") and Eos Delaware, dated as of September 16, 2014, as subsequently amended (the "Dune Merger Agreement"), and on the terms and subject to the conditions described therein, Eos Delaware agreed to conduct a cash tender offer to purchase all of Dune's issued and outstanding shares of common stock at a price of $0.30 per share in cash, without interest, upon the terms and conditions set forth in the Dune Merger Agreement.

Due to the severe decline in oil prices, the Company's sources of capital for the merger and tender offer were withdrawn, and the Company was unable to complete the merger and tender described in the Dune Merger Agreement on the terms originally negotiated. After a series of amendments to the Dune Merger Agreement while the parties continued to try to negotiate financing terms, the tender offer ultimately expired on February 27, 2015.

Subsequently, on March 4, 2015, Dune provided the Company with notice of its decision to terminate the Dune Merger Agreement in accordance with the terms thereof, and demanded the Parent Termination Fee (as defined in the Dune Merger Agreement) of $5,500,000 in cash, and reimbursement for certain unidentified expenses incurred by Dune. Dune has threatened to bring litigation to collect these amounts in connection with its contention that the Company breached the Dune Merger Agreement and is entitled to the Parent Termination Fee. The Company has accordingly recorded a liability for $5,500,000 related to the Parent Termination Fee. No lawsuit has been filed to date against the Company for the Parent Termination Fee, and the Company would vigorously defend itself, should any action ever be brought. The Company believes that it has equitable and legal defenses against payment of all or a portion of the Parent Termination Fee.

accordingly recorded a liability for $5,500,000 related to the Parent Termination Fee. No lawsuit has been filed to date against the Company for the Parent Termination Fee, and the Company would vigorously defend itself, should any action ever be brought.

GEM Global Yield Fund

Pursuant to the financing commitment, dated August 31, 2011, and the Common Stock Purchase Agreement and Registration Rights Agreement, both dated as of July 11, 2013, entered into between the Company and GEM (collectively referred to as the "Commitment Agreements"), the Company was required to use commercially reasonable efforts to uplist to the NYSE, NASDAQ or AMEX stock exchange within 270 days of July 11, 2013, and then to file a registration statement covering the shares and warrants referenced in the Commitment Agreements within 30 days of uplisting. The Company further agreed to pay to GEM a structuring fee equal to $4 million, which was to be paid on the 18 -month anniversary of July 11, 2013 regardless of whether the Company had drawn down from the Commitment at that time. At the Company's election, the Company may elect to pay the structuring fee in registered shares of its common stock of the Company at a per share price equal to 90% of the average closing trading price of the Company's common stock for the thirty-day period immediately prior to the 18-month anniversary of July 11, 2013. As of January 11, 2015, the 18-month anniversary date of the agreement, the Company had not met this requirement and may now become liable for payment of this structuring fee to GEM. As of December 31, 2015, the Company has recorded an accrued structuring fee of $4 million.

NOTE 119– SUBSEQUENT EVENTS

~~Subsequent~~These tounaudited consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Form 10-Q for the period ended September 30, ~~2016~~2017, filed on April 27, 2018, with the ~~Company~~Securities ~~made~~and anExchange Commission, which contains additional ~~deposit~~information of ~~$50,000~~events ~~for~~subsequent ato ~~potential~~June ~~acquisition~~30, 2017.

2015

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

~~Forward~~The ~~Looking~~following ~~Statements~~discussion should be read in conjunction with our consolidated financial statements and the notes thereto which appear elsewhere in this Report. The results shown herein are not necessarily indicative of the results to be expected in any future periods. This discussion contains forward-looking statements based on current expectations, which involve uncertainties. Actual results and the timing of events could differ materially from the forward-looking statements as a result of a number of factors.

This Report contains projections, expectations, beliefs, plans, objectives, assumptions, descriptions of future events or performances and other similar statements that constitute "forward looking statements" that involve risks and uncertainties, many of which are beyond our control. These statements are often, but not always, made through the use of words or phrases such as "may," "should," "could," "predict," "potential," "believe," "will likely result," "expect," "will continue," "anticipate," "seek," "estimate," "intend," "plan," "projection," "would" and "outlook," and similar expressions. All statements, other than statements of historical facts, included in this Report regarding our expectations, objectives, assumptions, strategy, future operations, financial position, estimated revenue or losses, projected costs, prospects and plans and objectives of management are forward-looking statements. All forward-looking statements speak only as of ~~September~~June 30, ~~2016~~2017. Our actual results could differ materially and adversely from those anticipated in such forward-looking statements as a result of certain factors, including, but not limited to, those set forth in this Report. Important factors that may cause actual results to differ from projections include, but are not limited to, for example: adverse economic conditions, inability to raise sufficient additional capital to operate our business, delays, cancellations or cost overruns involving the development or construction of oil wells, the vulnerability of our oil-producing assets to adverse meteorological and atmospheric conditions, unexpected costs, lower than expected sales and revenues, and operating defects, adverse results of any legal proceedings, the volatility of our operating results and financial condition, inability to attract or retain qualified senior management personnel, expiration of certain governmental tax and economic incentives, and other specific risks that may be referred to in this Report. It is not possible for management to predict all of such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained or implied in any forward-looking statement. We undertake no obligation to update any forward-looking statements or other information contained herein. Stockholders and potential investors should not place undue reliance on these forward-looking statements. Although we believe that our plans, intentions and expectations reflected in or suggested by the forward-looking statements in this Report are reasonable, we cannot assure stockholders and potential investors that these plans, intentions or expectations will be achieved. These cautionary statements qualify all forward-looking statements attributable to us or persons acting on our behalf.

Except as required by law, we assume no obligation to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available in the future.

You should read the following discussion of our financial condition and results of operations together with the ~~unaudited~~audited financial statements and the notes to the ~~unaudited~~audited financial statements included in this Report. This discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results may differ materially from those anticipated in these forward-looking statements.

Overview

OnWe ~~October~~are ~~12,~~focused ~~2012,~~on ~~pursuant to~~ the ~~Merger Agreement~~acquisition, ~~entered into by and between the Company~~exploration, ~~Eos and Company Merger Sub~~development, ~~dated July 16~~mining, ~~2012,~~operation ~~Company~~and ~~Merger~~management ~~Sub~~of ~~merged~~medium-scale ~~into~~oil ~~Eos,~~and ~~with~~gas ~~Eos being the surviving entity in the Merger~~assets. AsOur aprimary ~~result~~activities as of ~~the~~September ~~Merger~~30, ~~Eos became a wholly owned subsidiary of the Company. Upon the closing of the Merger~~2016, ~~each~~have ~~issued~~centered ~~and~~on ~~outstanding~~organizing ~~share~~activities ofbut ~~common~~have ~~stock~~also ofincluded ~~Eos was automatically converted into~~ the ~~right~~acquisition ~~to receive one share~~ of ~~our~~existing ~~Series B preferred stock. At the closing~~assets, weevaluation ~~issued 37,850,044 shares~~ of ~~Series~~new Bassets ~~preferred stock~~ to ~~the~~be ~~former Eos stockholders~~acquired, ~~subject to the rights of the stockholders of Eos to exercise~~ and ~~perfect~~pre-development ~~their~~activities ~~appraisal~~for ~~rights~~existing ~~under applicable provisions of Delaware law to accept cash in lieu of shares of the equity securities of the Company~~assets.

~~Effective~~Our ascontinuing development of ~~May~~oil 20and gas projects will require the acquisition of land rights, ~~2013~~mining equipment and associated consulting activities required to convert the fields into revenue generating assets. Generally, financing is available for these initial project costs where such financing is secured by the ~~Company~~assets ~~changed~~themselves. ~~its~~From ~~name~~time to ~~Eos~~time. ~~Petro~~However, ~~Inc.~~our ~~(it~~activities ~~previously~~may ~~had~~require ~~been~~senior ~~named~~credit ~~"Cellteck~~facilities, ~~Inc.~~convertible ")securities and the sale of common and preferred equity at the corporate level.

2116

WeIn ~~are~~connection ~~presently~~with ~~focused~~our ~~on the acquisition~~business, ~~exploration,~~we ~~development,~~will ~~mining,~~likely ~~operation~~engage ~~and~~consultants ~~management~~with ofexpertise ~~medium-scale~~in the oil and gas ~~assets. Our primary activities as of September 30~~industries, ~~2016,~~project ~~have~~financing ~~centered~~and onoil ~~organizing activities but have also included the acquisition of existing assets, evaluation of new assets to be acquired,~~ and ~~pre-development~~gas ~~activities for existing assets~~operations.

~~Our~~The ~~continuing~~financial ~~development~~statements ofincluded ~~oil~~as ~~and~~part ~~gas projects will require the acquisition~~ of ~~land~~this ~~rights,~~Report ~~mining equipment~~ and ~~associated~~the ~~consulting~~financial ~~activities~~discussion ~~required~~reflect ~~to convert~~ the ~~fields~~performance ~~into~~of ~~revenue~~Eos ~~generating~~and ~~assets.~~the ~~Generally~~Company, ~~financing~~which isprimarily ~~available~~relates ~~for these initial project costs where such financing is secured by the assets themselves. From time~~ to ~~time.~~Eos' ~~However,~~Works ~~our~~Property ~~activities~~oil ~~may require senior credit facilities, convertible securities~~ and ~~the~~gas ~~sale~~assets oflocated ~~common~~in ~~and preferred equity at the corporate level~~Illinois.

InComparison ~~connection~~of ~~with~~the ~~our~~three ~~business,~~months weended ~~will~~June ~~likely~~30, ~~engage~~2017 ~~consultants~~to ~~with~~June ~~expertise in the oil and gas industries~~30, ~~project financing and oil and gas operations.~~2016

The financial statements included as part of this Report and the financial discussion reflect the performance of Eos and the Company, which primarily relates to Eos' Works Property oil and gas assets located in Illinois.

		Three Months Ended June 30,
		2017		2016
					Dollar	Percentage
		Amount		Amount	change	Change
Revenue	$	20,970	$	17,091	3,879	22.7%
Lease operating expense		5,905		9,655	(3,750)	-38.8%
General and administrative expenses		3,262,871		3,726,252	(463,381)	-12.4%
Other income (expense), net		(404,365)		2,984,799	(3,389,164)	-113.5%
Net loss	$	(3,652,171)	$	(734,017)	(2,918,154)	397.6%

On September 17, 2014, we entered into the Dune Merger Agreement with Dune, and Eos Delaware agreed to conduct a cash tender offer to purchase all of Dune's issued and outstanding shares of common stock at $0.30 per share. In addition, we agreed to provide Dune with sufficient funds to pay in full and discharge all of Dune's outstanding indebtedness and agreed to assume liability for all of Dune's trade debt, as well as fees and expenses related to the Dune Merger Agreement and transactions contemplated therein. At the commencement of the merger and tender offer, we estimated that the total amount of cash required to complete the contemplated transactions was approximately $140 million dollars. The tender offer was not subject to a financing contingency. Following successful completion of the offer, Eos Delaware would have been merged into Dune, with Dune surviving as a direct wholly-owned subsidiary of the Company.Revenue

~~Due~~We primarily generate revenue from the operation of oil and gas properties that we own or lease and the sale of hydrocarbons delivered to a customer when that customer has taken title. For the ~~severe~~three ~~decline~~months inended ~~oil~~June ~~prices~~30, 2017 and 2016, our ~~sources~~primary ofrevenue ~~capital~~came from one source, the Works Property, located in Southern Illinois. Revenue for the ~~merger~~three ~~and~~months ~~tender~~ended ~~offer~~June ~~were~~30, ~~withdrawn~~2017 and 2016 was $20,970 and we$17,091, ~~were~~respectively. The ~~unable~~increase toin ~~complete~~revenues for the ~~merger~~three ~~and~~months ~~tender~~ended ~~described~~June 30, 2017 is due to an increase in the ~~Dune~~number ~~Merger~~of ~~Agreement~~barrels onsold and an increase in the ~~terms~~price ~~originally~~per ~~negotiated~~barrels sold. For ~~After~~the athree ~~series~~months ofended ~~amendments~~June to30, ~~the~~2017, ~~Dune~~we ~~Merger~~sold ~~Agreement~~522 ~~while~~barrels ~~the~~at ~~parties~~an ~~continued~~average toprice ~~try~~of to$40 ~~negotiate~~per ~~financing~~barrel ~~terms,~~and for the ~~tender~~three ~~offer~~months ~~ultimately~~ended ~~expired~~June on30, ~~February 27~~2016, ~~2015.~~we ~~After~~sold ~~the~~501 ~~expiration~~barrels at an average price of ~~the~~$34 ~~tender~~per ~~offer~~barrel. As disclosed below, ~~Dune~~our ~~was~~current ~~notified~~financial byresources are not sufficient to allow us ~~that~~to ~~shares~~meet the anticipated costs of ~~Dune's~~our ~~common~~business ~~stock~~plan ~~would~~for bethe ~~returned~~next 12 months and we will require additional financing in order to ~~the~~fund ~~tendering~~our ~~stockholders~~business activities.

~~Subsequently,~~Lease onoperating March 4, 2015, Dune provided us with notice of its decision to terminate the Dune Merger Agreement in accordance with the terms thereof, and demanded the Parent Termination Fee (as defined in the Dune Merger Agreement) of $5,500,000 in cash, and reimbursement for certain unidentified expenses incurred by Dune. Dune has threatened to bring litigation to collect these amounts in connection with its contention that the Company breached the Dune Merger Agreement and is entitled to the Parent Termination Fee. The Company has accordingly recorded a liability for $5,500,000 related to the Parent Termination Fee. No lawsuit has been filed to date against the Company for the Parent Termination Fee, and the Company would vigorously defend itself, should any action ever be brought. The Company believes that it has equitable and legal defenses against payment of all or a portion of the Parent Termination Fee.

~~Comparison~~Lease operating expenses for oil and gas assets were primarily made up of the Works Property. Lease operating expenses for the three months ended ~~September~~June 30, 2017 and 2016 towas ~~September~~$5,905 30and $9,655, ~~2015~~respectively. The decrease in operating expenses was due to the wells being shut down during the second quarter of 2017 during which time we did not incur any operating costs.

	For the Three Months Ended September 30,
	2016					2015
				% of					% of			Dollar			Percentage
	Amount			Revenue		Amount			Revenue			change			Change
Revenue	$	-			N/A	$	39,863			100.0	%		(39,863	)		-100.0	%
Lease operating expense		13,164			N/A		39,131			98.2	%		(25,967	)		-66.4	%
General and administrative expenses		2,715,084			N/A		3,238,923			8125.1	%		(523,839	)		-16.2	%
Other income (expense), net		(562,903	)		N/A		(4,362,389	)		-10943.5	%		3,799,486			-87.1	%
Net loss	$	(3,291,151	)		N/A	$	(7,600,580	)		-5803.8	%		4,309,429			-56.7	%

General and administrative expenses

22General and administrative expenses for the three months ended June 30, 2017 and 2016 were $3,262,871 and $3,726,252, respectively. Our general and administrative expenses have primarily been made up of professional fees (legal and accounting services) required for our organizing activities, acquisition agreements and development agreements. We recognized approximately $57,000, $750,000, and $2,375,000 in professional fees, consulting fees and compensation, respectively, for the three months ended June 30, 2017. We recognized approximately $515,000 $670,000, and $2,452,000 in professional fees, consulting fees and compensation, respectively, for the three months ended June 30, 2016. The decrease in professional fees was primarily due to lower legal and accounting fees for services rendered in 2017 as compared to 2016. The decrease in compensation was due to stock option expense of $2,203,381 for the three months ended June 30, 2016 compared to $734,460 for the three months ended June 30, 2017 related to options that were granted to an officer in January 2016 and vesting through January 2018 offset by common stock valued at $1,500,000 issued to an officer for services rendered during the three months ended June 30, 2017. There was no such issuance during the three months ended June 30, 2016. The decrease in consulting

~~Revenue~~17

Wefees ~~primarily~~is ~~generate~~a ~~revenue~~result ~~from the operation~~ of ~~oil~~us ~~and~~recognizing ~~gas~~costs ~~properties that we own or lease and the sale~~ of ~~hydrocarbons~~$931,060 ~~delivered~~due to ~~a customer when that customer has taken title. For the three months ended September 30, 2016 and 2015,~~ our ~~primary~~majority ~~revenue~~stockholder ~~has~~selling ~~come~~shares ~~from~~of ~~one~~common ~~source,~~stock ~~the~~to ~~Works~~entities ~~Property,~~with ~~located~~which inwe ~~Southern~~have ~~Illinois.~~current ~~Revenue~~business ~~for~~relationships ~~the~~at ~~three~~a ~~months~~significant ~~ended~~discount ~~September 30, 2016 and 2015 was $0 and $39,863, respectively. The decrease in revenues for the three months ended September 30, 2016 is due~~ to ~~the~~market ~~wells being shut down for maintenance~~ during the ~~third quarter of 2016. For the~~ three months ended ~~September~~June 30, 2016, weoffset ~~sold~~by 0common ~~barrels~~stock ~~compared~~valued ~~to 996 barrels~~ at an$750,000 ~~average~~issued ~~price~~to ofa ~~$42~~consultant ~~per~~rendered ~~barrel~~during ~~for~~ the three months ended ~~September~~June 30, ~~2015~~2017. ~~The~~ decrease in the barrels produced in 2016 compared to 2015 is due to the wells being shut down in during the third quarter of 2016 for maintenance. As disclosed below, our current financial resources are not sufficient to allow us to meet the anticipated costs of our business plan for the next 12 months and we will require additional financing in order to fund our business activities.

~~Lease~~Other ~~operating~~income (expenses)

~~Lease~~For ~~operating~~the ~~expenses~~three ~~for~~months ~~oil~~ended June 30, 2017, net other expense was $404,365, consisting of interest and ~~gas~~finance ~~assets~~costs ~~were~~of ~~primarily~~$404,365. Interest ~~made~~and upfinancing costs for the three months ended June 30, 2017 includes a charge of $235,000 for the ~~Works~~issuance ~~Property.~~of ~~Lease~~235,000 ~~operating~~shares ~~expenses~~of common stock for debt extensions and a $25,000 loan modification fee related to the same debt extensions. For the three months ended ~~September~~June 30, 2016, ~~and~~net ~~2015~~other income was $132,~~164~~984,799, consisting of interest and finance costs of $391,~~131~~515,304 ~~respectively. The~~and ~~decrease~~a gain on change in ~~operating~~fair ~~expenses~~value ~~was~~of ~~due~~derivative liability of $4,500,103. Interest and financing costs for the three months ended June 30, 2016 includes a charge to ~~lower~~earnings ~~cost~~of ~~due~~$1,277,987 related to ~~the~~common ~~wells~~stock and warrants being ~~shut~~issued ~~down~~with innotes ~~2016~~payable financing agreements.

~~General~~Comparison ~~and~~of ~~administrative~~the ~~expenses~~six months ended June 30, 2017 to June 30, 2016

General and administrative expenses for the three months ended September 30, 2016 and 2015 were $2,715,084 and $3,238,923, respectively. Our general and administrative expenses have primarily been made up of professional fees (legal and accounting services) required for our organizing activities, acquisition agreements and development agreements. We recognized approximately $211,000, $23,000, and $2,359,000 in professional fees, consulting fees and compensation, respectively, for the three months ended September 30, 2016. We recognized approximately $143,000, $2,847,000, and $118,000 in professional fees, consulting fees and compensation, respectively for the three months ended September 30, 2015. Other expenses included are temporary professional staffing, rent, utilities, and other overhead expenses. During the three months ended September 30, 2016, we recorded compensation expense of $2,203,000 related to options that were granted to our new CEO in January 2016 and vesting through January 2018. During the three months ended September 30, 2015, we recognized costs of $2,618,200 due to our majority stockholder selling shares of common stock to entities with which we have current business relationships at a significant discount to market.


		Six Months Ended June 30,
		2017		2016
					Dollar	Percentage
		Amount		Amount	change	Change
Revenue	$	20,970	$	36,519	(15,549)	-42.6%
Lease operating expense		5,905		42,329	(36,424)	-86.0%
General and administrative expenses		4,593,856		13,713,233	(9,119,377)	-66.5%
Other income (expense), net		(843,814)		1,666,530	(2,510,344)	-150.6%
Net loss	$	(5,422,605)	$	(12,052,513)	6,629,908	-55.0%

~~Other income (expenses)~~Revenue

We primarily generate revenue from the operation of oil and gas properties that we own or lease and the sale of hydrocarbons delivered to a customer when that customer has taken title. For the ~~three~~six months ended ~~September~~June 30, 2017 and 2016, ~~net~~our ~~other~~primary ~~expense~~revenue ~~was~~came ~~$562~~from one source,~~903,~~ ~~consisting~~the ofWorks ~~interest~~Property, ~~and~~located ~~finance~~in ~~costs~~Southern ofIllinois. ~~$449,063~~Revenue ~~and~~for athe ~~loss~~six onmonths ~~change~~ended inJune ~~fair~~30, ~~value~~2017 ofand ~~derivative~~2016 ~~liability~~was of$20,970 and $~~113~~36,~~840~~519, respectively. ~~For~~ The decrease in revenues for the ~~three~~six months ended ~~September~~June 30, ~~2015,~~2017 ~~net~~is ~~other~~due ~~expense~~to ~~was~~a ~~$4,362,389~~decrease ~~consisting~~in the number of ~~interest~~barrels ~~and~~sold ~~finance~~offset ~~costs~~by ofan ~~$2,667,186~~increase ~~and~~in athe ~~charge~~price ~~due~~per tobarrels sold. For the ~~change~~six inmonths ~~fair~~ended ~~value~~June of30, ~~derivative~~2017, ~~liability~~we sold 522 barrels at an average price of $~~1,695,203. Interest~~40 ~~and~~per ~~financing~~barrel ~~costs~~and for the ~~three~~six months ended ~~September~~June 30, ~~2015~~2016, ~~includes~~we asold ~~charge~~1,211 barrels at an average price of $~~2,523,398~~30 ~~related~~per barrel. The decrease in barrels produced was due to the ~~August~~Works ~~14,~~Property ~~2015~~being ~~amendment~~shut ofdown during the ~~LowCal~~first ~~Agreements~~quarter ~~related~~and topart of the ~~issuance~~second quarter of ~~75,000~~2017. The ~~shares~~Works ofProperty ~~common~~restarted ~~stock,~~production in the ~~issuance~~second quarter of ~~500~~2017. As disclosed below,~~000~~ ~~warrants~~our ~~and~~current financial resources are not sufficient to allow us to meet the ~~modification~~anticipated costs of our business plan for the ~~terms~~next of12 ~~previously~~months ~~issued~~and ~~warrants~~we will require additional financing in order to fund our business activities.

23Lease operating expenses

~~Comparison~~Lease operating expenses for oil and gas assets were primarily made up of the ~~nine~~Works Property. Lease operating expenses for the six months ended ~~September~~June 30, 2017 and 2016 towas ~~September~~$5,905 30and $42,329, ~~2015~~respectively. The decrease in operating expenses was due to the wells being shut down during the first quarter and part of the second quarter of 2017 during which time we did not incur any operating costs.

	For the Nine Months Ended September 30,
	2016						2015
				% of						% of			Dollar			Percentage
	Amount			Revenue			Amount			Revenue			change			Change
Revenue	$	36,519			100.0	%	$	170,822			100.0	%		(134,303	)		-78.6	%
Lease operating expense		55,493			152.0	%		103,788			60.8	%		(48,295	)		-46.5	%
General and administrative expenses		16,428,317			44985.7	%		20,823,143			12190.0	%		(4,394,826	)		-21.1	%
Structuring fee		-			0.0	%		4,000,000			2341.6	%		(4,000,000	)		N/A
Termination fee		-			0.0	%		5,500,000			3219.7	%		(5,500,000	)		N/A
Other income (expense), net		1,103,627			3022.1	%		1,182,721			692.4	%		(79,094	)		-6.7	%
Net loss	$	(15,343,664	)		-42015.6	%	$	(29,073,388	)		-17019.7	%		13,729,724			-47.2	%

General and administrative expenses

~~Revenue~~18

WeGeneral ~~primarily~~and ~~generate~~administrative ~~revenue~~expenses ~~from~~for the ~~operation~~six ofmonths ~~oil~~ended ~~and~~June ~~gas~~30, ~~properties~~2017 ~~that~~and we2016 ~~own~~were or$4,593,856 ~~lease~~ and ~~the~~$13,713,233, ~~sale~~respectively. ofOur ~~hydrocarbons~~general ~~delivered~~and toadministrative aexpenses ~~customer~~have ~~when~~primarily ~~that~~been ~~customer~~made ~~has~~up ~~taken~~of ~~title.~~professional ~~For~~fees ~~the~~(legal ~~nine~~and ~~months~~accounting ~~ended~~services) ~~September~~required 30for our organizing activities, ~~2016~~acquisition agreements and ~~2015,~~development ~~our~~agreements. ~~primary~~We ~~revenue~~recognized ~~has~~approximately ~~come~~$270,000, ~~from~~$763,000, ~~one~~and ~~source~~$3,412,000 ~~the~~in ~~Works~~professional ~~Property~~fees, ~~located~~consulting infees ~~Southern~~and ~~Illinois.~~compensation, ~~Revenue~~respectively, for the ~~nine~~six months ended ~~September~~June 30, ~~2016~~2017. We ~~and~~recognized ~~2015~~approximately ~~was~~$1,182,000 $361,~~519~~727,000, and $~~170~~10,~~822~~617,000 ~~respectively. The~~in ~~decrease~~professional infees, ~~revenues~~consulting fees and compensation, respectively, for the ~~nine~~six months ended ~~September~~June 30, 2016. The isdecrease in professional fees was primarily due to alower ~~decrease~~legal inand ~~the~~accounting ~~price~~fees ~~per~~for ~~barrels~~services ~~sold~~rendered ~~and~~in a2017 as compared to 2016. The decrease in ~~the~~compensation ~~number~~was due to stock option expense of ~~barrels~~$10,040,072 ~~sold. For~~for the ~~nine~~six months ended ~~September~~June 30, 2016, wecompared ~~sold~~to $1,~~211~~630,502 ~~barrels~~for atthe ansix ~~average~~months ~~price~~ended ofJune $30 ~~per barrel~~, ~~compared~~2017 related to ~~3,784~~options ~~barrels~~that atwere angranted ~~average~~to ~~price~~an ofofficer ~~$45~~in ~~per~~January ~~barrel~~2016 ~~for~~and ~~the~~vesting ~~nine~~through ~~months~~January ~~ended~~2018 ~~September~~offset ~~30,~~by ~~2015. The~~common ~~decrease~~stock invalued ~~the~~at ~~barrels~~$1,500,000 ~~produced~~issued ~~in 2016 compared~~ to ~~2015~~an isofficer ~~due~~for toservices ~~shutting~~rendered ~~down~~during the ~~production~~six ofmonths ~~the~~ended ~~wells~~June ~~for~~30, a2017. There ~~longer~~was ~~period~~no ofsuch ~~time~~issuance induring ~~early~~the ~~2016~~six ~~due~~months toended ~~cold~~June ~~weather~~30, ~~related~~2016. The ~~issues~~decrease ~~and~~in ~~the~~consulting ~~wells~~fees ~~being~~is ~~shut~~a ~~down~~result ~~during~~of ~~the~~us ~~third~~recognizing ~~quarter~~costs of ~~2016~~$931,060 ~~for~~due ~~maintenance.~~to Asour ~~disclosed~~majority ~~below,~~stockholder ~~our~~selling ~~current~~shares ~~financial~~of ~~resources~~common ~~are~~stock ~~not~~to ~~sufficient~~entities towith ~~allow~~which uswe tohave ~~meet~~current ~~the~~business ~~anticipated~~relationships ~~costs~~at ofa ~~our~~significant ~~business~~discount ~~plan~~to ~~for~~market during the ~~next~~six 12 months ~~and~~ended weJune ~~will~~30, ~~require~~2016. There ~~additional~~was ~~financing~~no insuch ~~order~~charge toduring ~~fund~~the ~~our~~six ~~business~~months ~~activities~~ended June 30, 2017.

~~Lease~~Other ~~operating~~income (expenses)

~~Lease~~For ~~operating~~the ~~expenses~~six ~~for~~months ~~oil~~ended June 30, 2017, net other expense was $843,814, consisting of interest and ~~gas~~finance ~~assets~~costs ~~were~~of ~~primarily~~$844,392 ~~made~~and upa gain on change in fair value of ~~the~~derivative ~~Works~~liability ~~Property~~of $578. Interest ~~Lease~~and ~~operating~~financing ~~expenses~~costs for the ~~nine~~six months ended ~~September~~June 30, ~~2016~~2017 includes a charge of $458,500 for the issuance of 385,000 shares of common stock for debt extensions and ~~2015~~a $75,000 loan modification fee related to the same debt extensions. For the six months ended June 30, 2016, net other income was $551,~~493~~666,530, consisting of interest and finance costs of $~~103~~3,~~788~~439,235 ~~respectively. The~~and ~~decrease~~a gain on change in ~~operating~~fair ~~expenses~~value ~~was~~of ~~due~~derivative liability of $5,105,765. Interest and financing costs for the six months ended June 30, 2016 includes i) a charge of $488,378 related to ~~lower~~the ~~cost~~Seventh ~~due~~Amendment to the ~~wells~~LowCal ~~being~~Agreements ~~shut~~for ~~down~~the issuance of 75,000 shares of common stock, and the extension of the warrant expiration date; ii) a charge of $1,250,000 for ~~longer~~the ~~periods~~value of ~~time~~an inaggregate ~~2016~~of 315,000 shares of common stock issued for debt extensions; and iii) a charge to earnings of $1,277,987 related to common stock and warrants being issued with notes payable financing agreements.

~~General~~Liquidity and ~~administrative~~Capital ~~expenses~~Resources

~~General~~Since ~~and~~our ~~administrative expenses for the nine months ended September 30~~inception, ~~2016~~we ~~and~~have ~~2015~~financed ~~were~~operations ~~$16,428,317~~through ~~and~~consulting ~~$20,823,143, respectively. Our general~~ and ~~administrative~~service ~~expenses~~agreements ~~have~~with ~~primarily~~limited ~~been~~cash requirements, made up of ~~professional~~stock ~~fees~~compensation ~~(legal~~ and ~~accounting~~various ~~services)~~debt ~~required~~instruments ~~for~~as ~~our~~more ~~organizing~~fully ~~activities,~~described ~~acquisition~~in ~~agreements~~Stock ~~and~~Based ~~development agreements. We recognized approximately $1~~Compensation,~~394,000,~~ ~~$1,749,000,~~Commitments and ~~$12~~Contingencies,~~976,000~~ inMaterial ~~professional~~Agreements ~~fees, consulting fees~~ and ~~compensation,~~Related ~~respectively,~~Party ~~for~~Transactions. ~~the~~Our ~~nine~~business ~~months~~calls ~~ended~~for ~~September~~significant ~~30,~~expenses ~~2016. We~~in ~~recognized~~connection ~~approximately~~with ~~$670,000,~~the ~~$14,647,000,~~operation and ~~$5,028,000~~acquisition inof ~~professional~~oil ~~fees, consulting fees~~ and ~~compensation,~~gas ~~respectively~~related ~~for~~projects. ~~the~~In ~~nine~~order ~~months~~to ~~ended~~maintain ~~September~~our ~~30,~~corporate ~~2015. The~~operations ~~increase~~and into ~~professional~~significantly ~~fees~~expand ~~was~~our ~~due~~operations ~~primarily~~and tocorresponding ~~costs~~revenue ~~associated~~from ~~with~~our ~~due~~Works ~~diligence~~Property, ~~for~~we ~~potential~~must ~~acquisitions~~raise ~~and~~a ~~financings. The~~significant ~~decrease~~amount inof ~~consulting~~working ~~fees~~capital ~~was~~and ~~due~~capital ~~primarily~~ to ~~the~~fund ~~fact~~improvements ~~that~~to ~~during~~ the ~~nine~~Works ~~months~~Property. ~~ended~~As ~~September~~of June 30, ~~2015~~2017, we ~~recorded~~had ~~consulting~~cash ~~fees of approximately $8,036,000 associated with warrants to be issued. The increase~~ in ~~compensation was due primarily to~~ the ~~fact~~amount ~~that~~of ~~during~~$2. ~~the~~At ~~nine~~June ~~months ended September~~ 30, ~~2016~~2017, we ~~recorded~~had ~~compensation~~total ~~expense~~liabilities of $1223,~~243~~894,~~000~~206. ~~related~~Our tocurrent ~~options~~financial ~~that~~resources ~~were~~are ~~granted~~not sufficient to ~~our~~allow ~~new~~us ~~CEO~~to inmeet ~~January 2016 and vesting through January 2018. In addition, during~~ the ~~nine~~anticipated ~~months ended September 30, 2016, we recognized~~ costs of ~~$931,060 due to~~ our ~~majority~~business ~~stockholder~~plan ~~selling~~for ~~shares~~the ofnext ~~common~~12 ~~stock~~months toand ~~entities with which~~ we ~~have~~will ~~current~~require ~~business~~additional ~~relationships~~financing atin aorder ~~significant~~to ~~discount~~fund tothese ~~market~~activities. ~~During~~ ~~the~~In ~~nine months ended September 30~~addition, ~~2015,~~our weindependent ~~recorded~~registered ~~compensation~~public ~~expense~~accounting ~~of $4~~firm,~~476,000~~ ~~related~~in toits ~~options~~report ~~that~~on ~~were issued to~~ our ~~CEO~~December in31, ~~August~~2016 ~~2014~~financial ~~and~~statements, ~~vesting~~has ~~though~~raised ~~June~~substantial ~~2015. Other~~doubt ~~expenses~~about ~~included~~our ~~are~~ability ~~temporary~~to ~~professional~~continue ~~staffing,~~as ~~rent,~~a ~~utilities,~~going ~~and other overhead expenses~~concern.

~~Structuring~~Management estimates the Company's capital requirements for the next twelve months, including drilling and completing wells for the Works Property, will total approximately $2,500,000, excluding any amounts that may be due to Dune under the Parent Termination Fee or a $4 million structuring fee that may be due to GEM. No assurance can be given that any future financing will be available, or if available, that it will be on terms satisfactory to the Company. Any debt financing or other financing of securities senior to common stock that the Company is able to obtain will likely include financial and other covenants that will restrict the Company's flexibility. At a minimum, the Company expects these covenants to include restrictions on its ability to pay dividends on its common stock in the case of debt financing, or cause substantial dilution for stockholders in the case of convertible debt and equity financing. Any failure to comply with these covenants would have a material adverse effect on the Company's business, prospects, financial condition, results of operations and cash flows.

~~During~~To ~~the~~finance ~~nine~~our ~~months ended September 30~~operations, ~~2015,~~ we ~~recorded~~have aissued ~~charge~~notes ~~to earnings related to a structuring fee of $4 million due to GEM~~payable. ~~There~~ ~~was~~At noJune ~~such~~30, ~~charge~~2017, ~~during~~we had the ~~nine~~following ~~months~~outstanding ~~ended September 30, 2016.~~debt:

2419

Acquisition termination fee

•		$8,250,000 in convertible and promissory notes payable to LowCal. These loans were due on May 1, 2016 and are currently past due and in default;

•		$2,360,500 in notes payable due to ten note holders. These notes bear interest ranging from 2% to 18% and have maturity dates through October 31, 2017.

~~During~~We ~~the~~do ~~nine~~not ~~months~~currently ~~ended~~have ~~September~~sufficient ~~30,~~financing ~~2015,~~arrangements wein ~~recorded~~place ato ~~charge~~fund toour ~~earnings~~operations, ofand ~~$5.5~~there ~~million~~are ~~related~~no toassurances ~~the~~that ~~Parent~~we ~~Termination~~will ~~Fee~~be ~~associated~~able ~~with~~to ~~our~~obtain ~~proposed~~additional ~~acquisition~~financing ofin ~~Dune. There~~an ~~was~~amount nosufficient ~~such~~to ~~charge~~meet ~~during~~our ~~the~~needs ~~nine~~or ~~months~~on ~~ended~~terms ~~September~~that ~~30,~~are ~~2016~~acceptable to us.

~~Other~~In ~~income~~addition to funding our operations, we may become liable to pay certain other contractual obligations, such as a structuring fee to GEM of $4,000,000 under the financing commitment, dated August 31, 2011, and the Common Stock Purchase Agreement and Registration Rights Agreement, both dated as of July 11, 2013, entered into between the Company and GEM (~~expenses~~collectively referred to as the "Commitment Agreements"), whereby GEM would provide and fund the Company with up to $400 million dollars for the Company's African acquisition activities.

~~For~~Pursuant to the ~~nine~~GEM ~~months~~Commitment ~~ended September 30~~Agreements, ~~2016,~~the ~~net~~Company ~~other~~was ~~income~~required ~~was~~to ~~$1,103,627,~~use ~~consisting~~commercially ofreasonable ~~interest~~efforts ~~and~~to ~~finance~~uplist ~~costs~~to ofthe $3NYSE,~~888,298~~ ~~and~~NASDAQ aor ~~gain~~AMEX onstock ~~change~~exchange inwithin ~~fair~~270 ~~value~~days of ~~derivative~~July ~~liability~~11, ~~of $4~~2013,~~991,925. Interest~~ and ~~financing~~then ~~costs~~file ~~for~~a registration statement covering the ~~nine~~shares ~~months~~and ~~ended~~warrants ~~September~~referenced ~~30,~~in ~~2016~~the ~~includes~~Commitment i)Agreements awithin ~~charge~~30 days of ~~$488,378~~uplisting. ~~related~~The toCompany ~~the~~further ~~Seventh~~agreed ~~Amendment~~ to ~~the~~pay ~~LowCal~~to ~~Agreements~~GEM ~~for~~a ~~the~~structuring ~~issuance~~fee of 75$4,000,000, ~~shares~~which ofwas ~~common~~to ~~stock,~~be ~~and~~paid ~~the~~on ~~extension of~~ the ~~warrant~~18-month ~~expiration~~anniversary ~~date;~~of ~~ii)~~July a11, ~~charge~~2013, regardless of ~~$1,250,000~~whether ~~for~~ the ~~value~~Company ofhad andrawn ~~aggregate~~down offrom ~~315,000~~the ~~shares~~Commitment ofat ~~common~~that ~~stock~~time. ~~issued~~At ~~for~~the ~~debt~~Company's ~~extensions;~~election, ~~and~~the ~~iii)~~Company amay ~~charge~~elect to ~~earnings~~pay ofthe ~~$1,277,987~~structuring ~~related~~fee toin common stock ~~and~~of ~~warrants~~the ~~being~~Company ~~issued~~at ~~with~~a ~~notes~~per ~~payable~~share ~~financing~~price ~~agreements. For~~equal ~~the~~to ~~nine~~90% ~~months~~of ~~ended~~the ~~September~~average ~~30,~~closing ~~2015,~~trading ~~net~~price ~~other~~of ~~income~~the ~~was~~Company's ~~$1,182,721~~common ~~consisting~~stock offor ~~interest~~the ~~and~~thirty-day ~~finance~~period ~~costs~~immediately ofprior ~~$3,058,976~~to ~~and~~the a18-month ~~gain~~anniversary onof ~~change~~July in11, ~~fair~~2013. ~~value~~As of ~~derivative~~January ~~liability~~11, ~~of $4~~2015,~~241,697. Interest~~ ~~and~~the ~~financing~~18-month ~~costs~~anniversary ~~for~~date of the ~~nine~~agreement, ~~months~~the ~~ended~~Company ~~September~~had ~~30,~~not ~~2015~~met ~~includes~~this arequirement ~~charge~~and ofmay ~~$2,523,398~~now ~~related~~become toliable ~~the~~for ~~Sixth~~payment ~~Amendment~~ of ~~the~~this ~~LowCal~~structuring ~~agreement~~fee ~~related~~ to ~~the~~GEM. ~~issuance~~The ofCompany ~~75,000~~believes ~~shares~~that ofit ~~common~~has ~~stock,~~equitable ~~the issuance of 500,000 warrants~~ and ~~the~~legal ~~modification~~defenses ofagainst ~~the~~payment ~~terms~~ of ~~previously~~this ~~issued~~structuring ~~warrants~~fee.

~~Liquidity~~In connection with the asserted claim by Dune of the alleged breach of contract by the Company of the Dune Merger Agreement, upon a termination of such agreement, a demand letter was received from Dune on March 4, 2015 demanding payment of $5.5 million in the form of the Parent Termination Fee, plus additional costs and ~~Capital~~expenses ~~Resources~~which were undefined. The Company has recorded this liability of $5.5 million as of December 31, 2015. No lawsuit has been filed to date against the Company for the Parent Termination Fee, and the Company would vigorously defend itself, should any action ever be brought. The Company believes that it has equitable and legal defenses against payment of all of the Parent Termination Fee.

~~Since~~Obtaining ~~our~~additional ~~inception,~~financing weis ~~have~~subject ~~financed~~to ~~operations~~a ~~through~~number ~~consulting and service agreements with limited cash requirements, made up~~ of ~~stock~~other ~~compensation and various debt instruments as more fully described in Stock Based Compensation~~factors, ~~Commitments~~including ~~and~~the ~~Contingencies,~~market ~~Material~~prices ~~Agreements and Related Party Transactions. Our business calls~~ for ~~significant expenses in connection with~~ the ~~operation and acquisition of~~ oil and gas ~~related projects~~. InThese ~~order~~factors tomay ~~maintain~~make ~~our~~the ~~corporate~~timing, ~~operations and to significantly expand our operations and corresponding revenue from our Works Property~~amount, weterms ~~must~~or ~~raise~~conditions ~~a significant amount~~ of ~~working~~additional ~~capital~~financing ~~and~~unavailable ~~capital~~ to ~~fund improvements to the Works Property~~us. AsIf ofadequate ~~September~~funds ~~30,~~are ~~2016,~~not weavailable ~~had~~or ~~cash~~if inthey ~~the~~are ~~amount~~not ofavailable ~~$37.~~on Atacceptable ~~September 30~~terms, ~~2016,~~our weability ~~had~~to ~~total~~fund ~~liabilities~~our ofbusiness ~~$22,606,601.~~plan ~~Our~~could ~~current~~be ~~financial~~significantly ~~resources~~limited ~~are~~and ~~not~~we ~~sufficient~~may tobe ~~allow~~required us to ~~meet~~suspend ~~the anticipated costs of~~ our business ~~plan~~operations. ~~for~~We ~~the~~cannot ~~next~~assure 12you ~~months~~that ~~and~~additional wefinancing will ~~require~~be ~~additional~~available ~~financing~~on interms ~~order~~favorable to ~~fund~~us, ~~these~~or ~~activities~~at all. InThe ~~addition,~~failure ~~our~~to ~~Auditors~~obtain insuch ~~their~~a ~~audit~~financing ~~report~~would ~~for~~have ~~the~~a ~~year ending December 31~~material, ~~2015~~adverse ~~included~~effect aon ~~statement~~our inbusiness, ~~their~~results ~~report~~of tooperations ~~express~~and afinancial ~~going concern uncertainty~~condition.

~~Management~~As ~~estimates~~a ~~the~~result, ~~Company's~~one ~~capital~~of ~~requirements~~our ~~for~~key ~~the~~activities ~~next~~is ~~twelve~~focused ~~months,~~on ~~including~~raising ~~drilling~~significant ~~and~~working ~~completing~~capital ~~wells~~in ~~for~~ the ~~Works~~form ~~Property,~~of ~~will~~the ~~total~~sale ~~approximately~~of $2stock,~~500,000,~~ ~~excluding~~convertible ~~any~~debt ~~amounts~~instrument(s) ~~that may be due to Dune under the Parent Termination Fee~~ or a $4senior ~~million~~debt ~~structuring~~instrument ~~fee~~to ~~that~~retire ~~may~~outstanding beobligations ~~due~~and to ~~GEM. No~~fund ~~assurance~~ongoing ~~can~~operations. beIt ~~given~~is ~~that~~expected ~~any future financing will be available, or if available,~~ that itstockholders ~~will~~may beface onsignificant ~~terms~~dilution ~~satisfactory~~due to ~~the~~any ~~Company. Any~~such ~~debt~~raise ~~financing~~in orany ~~other financing~~ of ~~securities senior to common stock that~~ the ~~Company~~forms islisted ~~able~~herein. toNew ~~obtain~~securities ~~will~~may ~~likely~~have ~~include~~rights ~~financial~~ and ~~other~~preferences ~~covenants~~superior to that ~~will~~of ~~restrict~~current ~~the Company's flexibility~~stockholders. AtIf awe ~~minimum,~~raise ~~the~~capital ~~Company~~through ~~expects these covenants to include restrictions on its ability to pay dividends on its common stock in the case of~~ debt financing, orwe ~~cause~~may ~~substantial~~be ~~dilution~~forced ~~for stockholders in the case of convertible debt and equity financing. Any failure~~ to ~~comply~~accept ~~with~~restrictions ~~these~~affecting ~~covenants~~our ~~would~~liquidity, ~~have~~including arestrictions ~~material adverse effect~~ on ~~the~~our ~~Company's~~ability ~~business,~~to ~~prospects,~~incur ~~financial~~additional ~~condition,~~indebtedness ~~results~~or ofpay ~~operations and cash flows~~dividends.

ToFor ~~finance~~these reasons, the report of our ~~operations,~~auditor weaccompanying ~~have~~our ~~issued~~audited ~~notes~~financial ~~payable. At~~statements ~~September~~for 30the year ended December 31, 2016, weincluded ~~had~~a statement that these factors raise substantial doubt about our ability to continue as a going concern within one year after the ~~following~~date ~~outstanding~~that ~~debt:~~the financial statements are issued. Our ability to continue as a going concern will be dependent on our raising of additional capital and the success of our business plan.

~~· $8,250,000 in convertible and promissory notes payable to LowCal. These loans were due on May 1, 2016 and are currently past due and in default;~~20

·We ~~$1,983,000~~have inretained ~~notes~~consultants ~~payable~~to ~~due~~assist tous ~~eight~~in ~~note~~our ~~holders.~~efforts ~~These~~to ~~notes~~raise ~~bear~~capital. ~~interest~~The ~~ranging~~consulting ~~from~~agreements 2%provide tofor ~~18%~~compensation ~~and~~in ~~have~~the ~~maturity~~form ~~dates~~of ~~ranging~~cash ~~from~~and ~~April~~stock ~~30,~~and ~~2016~~result toin ~~February~~additional 5,dilution ~~2017;~~to ~~and~~shareholders.

25Cash Flows

~~During~~Operating the nine months ended September 30, 2016, we received additional proceeds of $1,125,000 ($168,190 of which the proceeds were paid directly to our vendors) from issuing notes payable as described below.Activities

OnNet ~~January~~cash ~~27,~~used ~~2016,~~in ~~February~~operating 9,activities ~~2016~~was $281,260 and ~~February 26~~$317,515 ~~2016,~~for wethe ~~issued~~six ~~three~~months ~~unsecured~~ended ~~promissory~~June ~~notes~~30, to2017 ~~Bacchus~~and ~~Investors~~2016, ~~LLC,~~respectively. ~~for~~The ~~$50,000,~~net ~~$50,000~~cash ~~and~~used ~~$100,000,~~in ~~respectively,~~operating ~~each~~activities ~~with~~was anprimarily ~~interest~~due ~~rate~~to ofthe ~~10%~~costs ~~per~~incurred ~~annum~~with ~~and~~the ~~due~~organizing onactivities ~~demand~~more fully described above.

WeFinancing issued a series of unsecured promissory notes to Plethora Enterprises for an aggregate amount of $125,000, with an interest rate of 10% per annum and due on July 1, 2016. Nikolas Konstant, our CFO and Chairman of the Board, is the sole member and manager of Plethora Enterprises. Activities

OnNet ~~April~~cash 6provided by financing activities was $256,500 and $385,185 for the six months ended June 30, 2017 and 2016, werespectively. ~~issued~~Cash angenerated ~~unsecured~~from ~~promissory~~financing ~~note~~activities tofor anthe ~~investor~~six months ended June 30, 2017 was from selling shares of our common stock for $100,000 ~~with~~and anproceeds ~~interest~~from ~~rate~~the issuance of ~~10%~~promissory ~~per~~notes ~~annum~~of $156,500. Cash generated from financing activities for the six months ended June 30, 2016 was primarily from issuing promissory notes to related and ~~due~~unrelated onparties ~~January~~totaling 1of $581,810 ~~2017~~offset by repayment of related party promissory notes and notes payable of $196,625.

OnCritical ~~May~~Accounting 19, 2016, we issued two secured promissory notes to two investors for $37,500 each with an interest rate of 1% per annum and due on July 6, 2016. In addition, to we also issued 750,000 shares of common stock and Plethora issued 250,000 shares of common stock to the two investors in connection with these two notes.Policies

OnOur ~~June~~discussion ~~27,~~and ~~2016,~~analysis of our financial condition and results of operations is based upon consolidated financial statements and condensed consolidated financial statements that we ~~issued~~have aprepared ~~secured~~in ~~promissory~~accordance ~~note~~with toU.S. angenerally ~~investor~~accepted ~~for~~accounting ~~$200~~principles,~~000~~ ~~with~~or anU.S. ~~interest~~GAAP. The ~~rate~~preparation of ~~10%~~these ~~per~~financial ~~annum~~statements requires us to make a number of estimates and ~~due~~assumptions onthat ~~October~~affect 31the reported amounts of assets, ~~2016~~liabilities, revenues and expenses in the consolidated financial statements and accompanying notes included in this report. In ~~addition~~We base our estimates on historical information, when available, and assumptions believed to webe ~~also~~reasonable ~~issued~~under ~~300~~the circumstances,~~000~~ ~~shares~~the results of ~~common~~which ~~stock~~form ~~and~~the abasis ~~warrant~~for tomaking ~~purchase~~judgments ~~200,000~~about ~~shares~~the carrying values of ~~common~~assets ~~stock~~and ~~with~~liabilities annot ~~exercise~~readily ~~price~~apparent offrom $1other sources.00 ~~per~~Actual ~~share~~results tomay ~~the~~differ ~~investors~~from inthese ~~connection~~estimates ~~with~~under ~~this~~different ~~note~~assumptions or conditions.

OnWe ~~August~~believe ~~10,~~the ~~2016,~~following weaccounting ~~issued~~policies ~~a secured promissory note~~ to an investor for $500,000, with interest at 2% and a maturity date of February 5, 2017. This note is secured by 2,000,000 shares of common stock owned by our majority stockholder, Plethora Enterprises, LLC ("Plethora"), and real property owned by an unrelated party. The note also provides for a loan fee of $75,000 to be ~~paid~~critical ~~upon maturity. In connection with this promissory note, we also issued~~ to the ~~investor~~estimates ~~150,000~~used ~~warrants~~in tothe ~~purchase~~preparation ~~shares~~ of our ~~common~~financial ~~stock with an exercise price of $1~~statements.~~00 and 150,000 shares of our common stock.~~

WeUse doof not currently have sufficient financing arrangements in place to fund our operations, and there are no assurances that we will be able to obtain additional financing in an amount sufficient to meet our needs or on terms that are acceptable to us.Estimates

InThese ~~addition~~consolidated tofinancial ~~funding~~statements ~~our~~have ~~operations,~~been weprepared ~~may~~in ~~become~~accordance ~~liable~~with toaccounting ~~pay~~principles ~~certain~~generally ~~other~~accepted ~~contractual~~in ~~obligations,~~the ~~such~~United asStates aand, ~~structuring~~accordingly, ~~fee~~require management to ~~GEM~~make ofestimates ~~$4,000,000~~and ~~under~~assumptions that affect the ~~financing~~reported ~~commitment,~~amounts ~~dated~~of ~~August~~assets ~~31,~~and ~~2011,~~liabilities at the date of the financial statements and the ~~Common~~reported ~~Stock~~amounts ~~Purchase~~of ~~Agreement~~revenues and ~~Registration~~expenses ~~Rights~~during ~~Agreement,~~the ~~both~~reporting ~~dated~~period. asSignificant ofestimates ~~July~~reflected 11in the condensed consolidated financial statements include, ~~2013~~but are not limited to, ~~entered~~amortization ~~into~~and ~~between~~depletion allowances, the ~~Company~~recoverability of the carrying amount and ~~GEM~~estimated ~~(collectively~~useful ~~referred~~lives toof aslong-lived ~~the~~assets, ~~"Commitment~~asset ~~Agreements")~~retirement obligations, ~~whereby~~the ~~GEM~~valuation ~~would~~of ~~provide~~equity ~~and~~instruments ~~fund~~issued ~~the~~in ~~Company~~connection with upfinancing totransactions ~~$400~~and ~~million~~share-based ~~dollars~~compensation, ~~for~~and ~~the~~assumptions ~~Company's~~used ~~African~~in ~~acquisition~~valuing ~~activities~~derivative liabilities and net operating loss carryforwards. Actual results could differ from those estimates

Pursuant to the GEM Commitment Agreements, the Company was required to use commercially reasonable efforts to uplist to the NYSE, NASDAQ or AMEX stock exchange within 270 days of July 11, 2013, and then file a registration statement covering the shares and warrants referenced in the Commitment Agreements within 30 days of uplisting. The Company further agreed to pay to GEM a structuring fee of $4,000,000, which was to be paid on the 18Share-~~month~~Based anniversary of July 11, 2013, regardless of whether the Company had drawn down from the Commitment at that time. At the Company's election, the Company may elect to pay the structuring fee in common stock of the Company at a per share price equal to 90% of the average closing trading price of the Company's common stock for the thirty-day period immediately prior to the 18-month anniversary of July 11, 2013. As of January 11, 2015, the 18-month anniversary date of the agreement, the Company had not met this requirement and may now become liable for payment of this structuring fee to GEM.Compensation

26We periodically issue stock options and warrants to employees and non-employees and in connection with capital raising transactions, for services and for financing costs. We account for share-based payments under the guidance as set forth in the Share-Based Payment Topic of the FASB Accounting Standards Codification, which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees, officers, directors, and consultants, including employee stock options, based on estimated fair values. We estimate the fair value of share-based payment awards to employees and directors on the date of grant using an option-pricing

In connection with the asserted claim by Dune of the alleged breach of contract by the Company of the Dune Merger Agreement, upon a termination of such agreement, a demand letter was received from Dune on March 4, 2015 demanding payment of $5.5 million in the form of the Parent Termination Fee, plus additional costs and expenses which were undefined. The Company has recorded this liability of $5.5 million as of December 31, 2015. No lawsuit has been filed to date against the Company for the Parent Termination Fee, and the Company would vigorously defend itself, should any action ever be brought. The Company believes that it has equitable and legal defenses against payment of all or a portion of the Parent Termination Fee.21

~~Obtaining~~model, ~~additional~~and ~~financing~~the value of the portion of the award that is ~~subject~~ultimately expected to avest ~~number~~is ofrecognized ~~other~~as ~~factors,~~expense ~~including~~over the ~~market~~required ~~prices~~service ~~for~~period in the ~~oil~~our ~~and~~Statements ~~gas~~of Operations. ~~These~~We ~~factors~~account ~~may~~for ~~make~~stock ~~the~~option ~~timing,~~and ~~amount,~~warrant ~~terms~~grants orissued ~~conditions~~and ofvesting ~~additional~~to ~~financing~~non-employees ~~unavailable~~in toaccordance ~~us.~~with Ifthe ~~adequate~~authoritative ~~funds~~guidance ~~are~~whereas ~~not~~the ~~available~~value orof ifthe ~~they~~stock ~~are~~compensation ~~not~~is ~~available~~based onupon ~~acceptable~~the ~~terms,~~measurement ~~our~~date ~~ability~~as todetermined ~~fund~~at ~~our~~either ~~business~~a) ~~plan~~the ~~could~~date beat ~~significantly~~which ~~limited~~a ~~and~~performance wecommitment ~~may~~is bereached, ~~required~~or tob) ~~suspend~~the ~~our~~date ~~business~~at ~~operations.~~which Wethe ~~cannot~~necessary ~~assure~~performance ~~you~~to ~~that~~earn ~~additional~~the ~~financing~~equity ~~will~~instruments beis ~~available~~complete. Stock-based compensation is based on ~~terms~~awards ~~favorable~~ultimately expected to ~~us,~~vest orand atis ~~all.~~reduced ~~The~~for ~~failure~~estimated toforfeitures. ~~obtain~~Forfeitures ~~such~~are aestimated ~~financing~~at ~~would~~the ~~have~~time aof ~~material~~grant and revised, ~~adverse~~as ~~effect~~necessary, onin ~~our~~subsequent ~~business,~~periods ~~results~~if ofactual ~~operations~~forfeitures ~~and~~differ ~~financial~~from ~~condition~~those estimates.

AsRecently aIssued ~~result,~~Accounting one of our key activities is focused on raising significant working capital in the form of the sale of stock, convertible debt instrument(s) or a senior debt instrument to retire outstanding obligations and to fund ongoing operations. It is expected that stockholders may face significant dilution due to any such raise in any of the forms listed herein. New securities may have rights and preferences superior to that of current stockholders. If we raise capital through debt financing, we may be forced to accept restrictions affecting our liquidity, including restrictions on our ability to incur additional indebtedness or pay dividends.Pronouncements

~~For~~See ~~these~~Note ~~reasons,~~1 to the ~~report~~consolidated ~~of our auditor accompanying our audited~~ financial statements ~~for the year ended December 31, 2015~~ included aelsewhere ~~statement~~in ~~that~~this ~~these~~Form ~~factors raise substantial doubt about our ability to continue as a going concern~~10Q. ~~Our ability to continue as a going concern will be dependent on our raising of additional capital and the success of our business plan.~~

WeOff-Balance ~~have~~Sheet ~~retained consultants to assist us in our efforts to raise capital. The consulting agreements provide for compensation in the form of cash and stock and result in additional dilution to shareholders.~~Arrangements

~~Cash~~We ~~Flows~~do not maintain any off-balance sheet arrangements, transactions, obligations or other relationships with unconsolidated entities that would be expected to have a material current or future effect upon our financial condition or results of operations.

~~Operating~~Item ~~Activities~~3. Quantitative and Qualitative Disclosures About Market Risk

~~Net~~Not cash used in operating activities was $742,866 and $949,921 for the nine months ended September 30, 2016 and 2015, respectively. The net cash used in operating activities was primarily due to the costs incurred with the organizing activities more fully described above.Applicable

~~Investing~~Item ~~Activities~~4. Controls and Procedures

~~Net~~Disclosure ~~cash~~Controls ~~used in investing activities was $100,000~~ and ~~$0 for the nine months ended September 30, 2016 and 2015, respectively. In 2016, we made a deposit for a potential acquisition.~~Procedures

~~Financing~~The ~~Activities~~Company’s Chief Executive Officer and Chief Financial Officer has evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of June 30, 2017. Based upon such evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of June 30, 2017, the Company’s disclosure controls and procedures were ineffective.

~~Net~~Under ~~cash~~the ~~provided~~supervision byand ~~financing~~with ~~activities~~the ~~was~~participation ~~$841~~of our management,~~536~~ including our Chief Executive Officer and ~~$818~~Chief Financial Officer,~~460~~ ~~for~~we conducted an evaluation of the ~~nine~~effectiveness ~~months~~of ~~ended~~our ~~September~~internal control over financial reporting as of June 30, ~~2016~~2017, ~~and~~based ~~2015,~~on ~~respectively.~~the ~~Cash~~framework ~~generated~~stated ~~from~~by ~~financing~~the ~~activities~~Committee ~~for~~of Sponsoring Organizations of the ~~nine~~Treadway ~~months~~Commission. ~~ended~~Furthermore, ~~September~~due 30to our financial situation, ~~2016~~we ~~was~~will ~~primarily~~be ~~from~~implementing ~~issuing~~further ~~promissory~~internal ~~notes~~controls toas ~~related~~we ~~and~~become ~~unrelated~~operative ~~parties~~so ~~totaling~~as ofto ~~$1,081,810~~fully ~~offset~~comply bywith ~~repayment~~the ofstandards ~~related~~set ~~party~~by ~~promissory~~the ~~notes~~Committee ~~and~~of ~~notes~~Sponsoring ~~payable~~Organizations of ~~$240,274~~the Treadway Commission.

27Our Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our internal control system was designed 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. Because of inherent limitations, a system of internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate due to change in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

~~Critical~~Based ~~Accounting~~on ~~Policies~~its evaluation as of June 30, 2017, our management concluded that our internal controls over financial reporting were ineffective as of June 30, 2017. A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

Our discussion and analysis of our financial condition and results of operations is based upon consolidated financial statements and condensed consolidated financial statements that we have prepared in accordance with U.S. generally accepted accounting principles, or U.S. GAAP. The ~~preparation~~material ofweaknesses ~~these~~relate ~~financial statements requires us~~ to ~~make a number of estimates and assumptions that affect~~ the ~~reported~~following: amounts of assets, liabilities, revenues and expenses in the consolidated financial statements and accompanying notes included in this report. We base our estimates on historical information, when available, and assumptions believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

On an ongoing basis, we evaluate the continued appropriateness of our accounting policies and resulting estimates to make adjustments we consider appropriate under the facts and circumstances. There have been no significant changes to our critical accounting policies as disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015.22

~~Recent~~Lack ~~Accounting~~of ~~Pronouncements~~an independent audit committee;

~~See~~Lack ~~Note~~of 2formal toapproval ~~the~~policies ~~financial~~by ~~statements~~the ~~included~~Board ~~elsewhere in this Form 10-Q for a discussion~~ of ~~recent accounting pronouncements.~~Directors;

~~Off-Balance~~Lack ~~Sheet~~of ~~Arrangements~~adequate oversight over individuals responsible for certain key control activities;

WeInsufficient donumber ~~not~~of ~~maintain~~personnel ~~any~~appropriately ~~off-balance~~qualified ~~sheet arrangements, transactions, obligations or other relationships with unconsolidated entities that would be expected~~ to ~~have~~perform acontrol ~~material~~monitoring ~~current~~activities, orincluding ~~future~~the ~~effect~~recognition ~~upon~~of ~~our~~risks ~~financial~~and ~~condition~~complexities orof ~~results~~its ofbusiness operations.;

~~Item~~An ~~3. Quantitative~~insufficient number of personnel with an appropriate level of GAAP knowledge and ~~Qualitative~~experience ~~Disclosures~~or ~~About~~training ~~Market~~in ~~Risk~~the application of GAAP commensurate with the Company’s financial reporting requirements.

~~Not~~The ~~Applicable~~Company intends to remedy these material weaknesses by hiring additional employees, officers, and perhaps directors, and reallocating duties, including responsibilities for financial reporting, among our officers, directors and employees as soon as there are sufficient resources available. However, until such time, these material weaknesses will continue to exist.

~~Item~~Further, 4in order to mitigate these material weaknesses to the fullest extent possible, all financial reports are reviewed by an outside accounting firm that is not our audit firm. ~~Controls~~ ~~and~~All ~~Procedures~~unexpected results are investigated. At any time, if it appears that any control can be implemented to continue to mitigate such weaknesses, it will be immediately implemented.

~~Disclosure~~Changes ~~Controls~~in ~~and~~Internal ~~Procedures~~Control over Financial Reporting

~~The~~There ~~Company's~~have ~~Chief~~been ~~Executive~~no ~~Officer~~changes ~~and~~in ~~Chief~~our ~~Financial~~internal ~~Officer~~controls ~~has~~over ~~evaluated~~financial ~~the~~reporting ~~effectiveness~~(as ofsuch ~~the~~term ~~Company's~~is ~~disclosure controls and procedures (as~~ defined in ~~Rules~~ Rule 13a-15(ef) and 15d-15(ef) under the Exchange Act) asduring ofthe ~~September~~quarter ~~30,~~ended ~~2016.~~June ~~Based upon such evaluation~~30, ~~the~~2017 ~~Chief~~that ~~Executive Officer and Chief Financial Officer~~ have ~~concluded~~materially ~~that~~affected, asor ofare ~~September~~reasonably ~~30,~~likely ~~2016,~~to ~~the~~materially ~~Company's~~affect, ~~disclosure~~our ~~controls~~internal ~~and~~control ~~procedures~~over ~~were~~financial ~~ineffective~~reporting.

~~Under~~PART ~~the~~II ~~supervision~~- ~~and~~OTHER with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of September 30, 2016, based on the framework stated by the Committee of Sponsoring Organizations of the Treadway Commission. Furthermore, due to our financial situation, we will be implementing further internal controls as we become operative so as to fully comply with the standards set by the Committee of Sponsoring Organizations of the Treadway Commission.INFORMATION

~~Our~~Item ~~Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act~~1. ~~Our~~Legal internal control system was designed 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. Because of inherent limitations, a system of internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate due to change in conditions, or that the degree of compliance with the policies or procedures may deteriorate.Proceedings

28Dune Termination Fee

~~Based~~On onMarch 4, 2015, Dune provided us with notice of its ~~evaluation~~decision asto terminate the Dune Merger Agreement in accordance with Section 8.1(c)(i) of ~~September~~the ~~30,~~Dune ~~2016,~~Merger ~~our~~Agreement. ~~management~~Dune’s ~~concluded~~letter ~~that~~terminating ~~our~~the ~~internal~~Dune ~~controls~~Merger ~~over~~Agreement ~~financial~~demanded ~~reporting~~the ~~were~~Parent ~~ineffective~~Termination Fee (as defined in the Dune Merger Agreement) of ~~September~~$5,500,000 30in cash, ~~2016.~~and Areimbursement ~~material~~for ~~weakness~~certain isunidentified aexpenses ~~deficiency,~~incurred orby aDune. Dune ~~combination~~has ofthreatened ~~control~~to ~~deficiencies,~~bring inlitigation ~~internal~~to ~~control~~collect ~~over~~these ~~financial~~amounts ~~reporting~~in ~~such~~connection with its contention that ~~there~~the Company breached the Dune Merger Agreement and is aentitled ~~reasonable~~to ~~possibility~~the ~~that~~Parent Termination Fee. The Company has accordingly recorded a ~~material~~liability ~~misstatement~~for of$5,500,000 related to the Parent termination Fee. No lawsuit has been filed to date against the Company's ~~annual~~for orthe ~~interim~~Parent ~~financial~~Termination ~~statements~~Fee, ~~will~~and ~~not~~the Company would vigorously defend itself, should any action ever be ~~prevented~~brought. orThe ~~detected~~Company onbelieves that it has equitable and legal defenses against payment of all or a ~~timely~~portion of ~~basis~~the Parent Termination Fee.

~~The~~Item ~~material~~1A. ~~weaknesses~~Risk ~~relate to the following:~~Factors

·In ~~Lack~~addition ofto anthe ~~independent~~other ~~audit~~information ~~committee;~~set forth in this Report, you should carefully consider the factors discussed in the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2016, which to our knowledge have not materially changed. Those risks, which could materially affect our business, financial condition or future results, 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 condition and/or operating results.

·Item ~~Lack~~2. ofUnregistered ~~formal~~Sales ~~approval~~of ~~policies~~Equity bySecurities ~~the~~and ~~Board~~Use of ~~Directors;~~Proceeds

~~· Lack of adequate oversight over individuals responsible for certain key control activities;~~23

·In ~~Insufficient~~May ~~number~~2017, ofthe ~~personnel~~Company ~~appropriately~~issued ~~qualified~~1,500,000 toshares ~~perform~~of ~~control~~common ~~monitoring~~stock ~~activities,~~to ~~including~~a ~~the~~company ~~recognition~~owned by our Chairman of ~~risks~~the Board and ~~complexities~~Chief ofFinancial ~~its~~Officer ~~business~~for ~~operations;~~services rendered.

·In AnMay ~~insufficient~~2017, ~~number~~the ofCompany ~~personnel~~issued ~~with~~750,000 anshares ~~appropriate level~~ of ~~GAAP~~common ~~knowledge~~stock ~~and~~to ~~experience~~a orconsultant ~~training~~for inservices ~~the application of GAAP commensurate with the Company's financial reporting requirements~~rendered.

~~The~~In ~~Company~~April ~~intends to remedy these material weaknesses by hiring additional employees~~2017, ~~officers,~~the ~~and~~Company ~~perhaps~~issued ~~directors~~235,000 ~~and~~shares ~~reallocating~~of ~~duties,~~common ~~including~~stock ~~responsibilities~~to ~~for~~investors ~~financial~~in ~~reporting,~~connection ~~among~~with ~~our~~the ~~officers,~~extensions ~~directors~~of ~~and~~the ~~employees~~maturity asdate ~~soon~~of asnotes ~~there are sufficient resources available~~payable. ~~However, until such time, these material weaknesses will continue to exist.~~

~~Further,~~The inabove ~~order~~shares towere ~~mitigate~~issued ~~these~~in ~~material~~reliance ~~weaknesses~~upon to the ~~fullest~~exemption ~~extent~~from ~~possible,~~registration ~~all~~provided ~~financial reports are reviewed~~ by anSection ~~outside~~4(a)(2) ~~accounting~~of ~~firm~~the ~~that~~Securities isAct ~~not~~of ~~our~~1933, ~~audit~~as ~~firm. All unexpected results are investigated. At any time~~amended, iffor ittransactions ~~appears~~not ~~that~~involving ~~any~~a ~~control~~public ~~can be implemented to continue to mitigate such weaknesses, it will be immediately implemented~~offering.

~~Changes~~Item in3. ~~Internal~~Defaults ~~Control~~Upon ~~over~~Senior ~~Financial Reporting~~Securities

~~There~~The ~~have~~Company ~~been no changes in our internal controls over financial reporting (as such term~~ is ~~defined~~currently in ~~Rule 13a-15(f) and~~default ~~15d-15(f) under~~of the ~~Exchange~~LowCal ~~Act)~~notes ~~during~~totaling ~~the quarter ended September 30~~$8, ~~2016 that have materially affected~~250,000 orand ~~are reasonably likely to materially affect~~$832,500 ~~our~~of ~~internal~~notes ~~control over financial reporting~~payable.

~~PART~~Item II4. -Mine ~~OTHER~~Safety ~~INFORMATION~~Disclosures

~~Item~~Not 1Applicable. ~~Legal Proceedings~~

~~Dune~~Item ~~Termination~~5. ~~Fee~~Other Information

~~On March 4, 2015, Dune provided us with notice of its decision to terminate the Dune Merger Agreement in accordance with Section 8~~None.1(c)(i) of the Dune Merger Agreement. Dune's letter terminating the Dune Merger Agreement demanded the Parent Termination Fee (as defined in the Dune Merger Agreement) of $5,500,000 in cash, and reimbursement for certain unidentified expenses incurred by Dune. Dune has threatened to bring litigation to collect these amounts in connection with its contention that the Company breached the Dune Merger Agreement and is entitled to the Parent Termination Fee. The Company has accordingly recorded a liability for $5,500,000 related to the Parent termination Fee. No lawsuit has been filed to date against the Company for the Parent Termination Fee, and the Company would vigorously defend itself, should any action ever be brought. The Company believes that it has equitable and legal defenses against payment of all or a portion of the Parent Termination Fee.

Item 1A6. ~~Risk~~ ~~Factors~~Exhibits

In addition to the other information set forth in this Report, you should carefully consider the factors discussed in the section entitled "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2015, which to our knowledge have not materially changed. Those risks, which could materially affect our business, financial condition or future results, 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 condition and/or operating results.

EXHIBIT TABLE The following is a complete list of exhibits filed as part of the Quarterly Report on Form 10-Q, some of which are incorporated herein by reference from the reports, registration statements and other filings of the issuer with the Securities and Exchange Commission, as referenced below:

Reference Number	Item
31.1	Section 302 Certification of Principal Executive Officer.*
31.2	Section 302 Certification of Principal Financial Officer.*
32.1	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350.*
32.2	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350.*
101.INS	SBRL Instance Document.*
101.SCH	XBRL Taxonomy Extension Schema Document*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document*
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document*
101.LAB	XBRL Taxonomy Extension Label Linkbase Document*
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document*

29* Furnished herewith.

~~Item 2. Unregistered Sales of Equity Securities and Use of Proceeds~~24

~~On July 2, 2016, the Company issued 1,397,981 shares of common stock to Plethora Enterprises, LLC for the conversion of notes payable and accrued interest.~~SIGNATURES

OnPursuant ~~July~~to 2,the ~~2016,~~requirements of the ~~Company~~Securities ~~issued~~Exchange ~~973~~Act of 1934,~~665~~ ~~shares~~the ofregistrant ~~common~~has ~~stock~~duly ~~for~~caused ~~the~~this ~~conversion~~report ofto ~~notes~~be ~~payable,~~signed ~~accrued~~on ~~interest~~its ~~and~~behalf ~~accrued~~by ~~expenses~~the undersigned thereunto duly authorized.

On August 10, 2016, the Company issued 150,000 shares of common stock to two investors in connection with the issuance of a note payable.

	EOS PETRO, INC. a Nevada corporation

Date: April 27, 2018	By:	/s/ MARTIN B. ORING
		Martin B. Oring
		Chief Executive Officer

Date: April 27, 2018	By:	/s/ NIKOLAS KONSTANT
		Nikolas Konstant
		Chairman of the Board and Chief Financial Officer

~~The above shares were issued in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, for transactions not involving a public offering.~~25

Item 3. Defaults Upon Senior Securities

The Company is currently in default of the LowCal notes totaling $8,250,000.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

None.

Item 6. Exhibits

EXHIBIT TABLE The following is a complete list of exhibits filed as part of the Quarterly Report on Form 10-Q, some of which are incorporated herein by reference from the reports, registration statements and other filings of the issuer with the Securities and Exchange Commission, as referenced below:
Reference Number	Item
31.1	Section 302 Certification of Principal Executive Officer.*
31.2	Section 302 Certification of Principal Financial Officer.*
32.1	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350.*
32.2	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350.*
101.INS	XBRL Instance Document.*
101.SCH	XBRL Taxonomy Extension Schema Document*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document*
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document*
101.LAB	XBRL Taxonomy Extension Label Linkbase Document*
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document*

* Furnished herewith.

SIGNATURES

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

	EOS PETRO, INC. a Nevada corporation
Date: November 14, 2016	By:	/s/ MARTIN B. ORING
		Martin B. Oring
		Chief Executive Officer
Date: November 14, 2016	By:	/s/ NIKOLAS KONSTANT
		Nikolas Konstant
		Chairman of the Board and Chief Financial Officer

Filing Compare · Eos Petro, Inc.