S-1/A

As filed with the Securities and Exchange Commission on April 25, 2024.

Registration No. 333-276319

 UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

AMENDMENT NO. 1

TO

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

Lafayette Energy Corp

(Exact Name of Registrant as Specified in Its Charter)

Delaware	1311	88-1178200
(State or Other Jurisdiction of Incorporation or Organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

3450 N. Triumph Blvd., Suite 102,

Lehi, Utah 84043

(303) 625 6709

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

Mr. Michael L. Peterson, Chief Executive Officer

3450 N. Triumph Blvd., Suite 102,

Lehi, Utah 84043

(303) 625 6709

(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent For Service)

Copies to:

David M. Loev, Esq.	Ross D. Carmel, Esq.
John S. Gillies, Esq.	Barry P. Biggar, Esq.
The Loev Law Firm, PC	Sichenzia Ross Ference Carmel LLP
6300 West Loop South	1185 Avenue of the Americas, 31st floor
Suite 280	New York, New York 10036
Bellaire, Texas 77401	Telephone: (212) 930-9700
Telephone: (713) 524-4110	rcarmel@srfc.law
dloev@loevlaw.com

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☒

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

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

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

EXPLANATORY NOTE

This Registration Statement contains two prospectuses, as set forth below.

· Public Offering Prospectus. A prospectus to be used for the public offering of 1,200,000 shares of common stock of the registrant (not including shares of common stock issuable upon exercise of the underwriter’s over-allotment option) (the “Public Offering Prospectus”) through the underwriter named on the cover page of the Public Offering Prospectus.

· Resale Prospectus. A prospectus to be used for the resale by the selling stockholders set forth therein of 3,656,475 shares of common stock of the registrant (the “Resale Prospectus”).

The Resale Prospectus is substantially identical to the Public Offering Prospectus, except for the following principal points:

· they contain different front cover pages and back cover pages;

· all references in the Public Offering Prospectus to “this offering” or “this initial public offering” will be changed to “our initial public offering” and/or “the IPO,” defined as the underwritten initial public offering of our common stock, in the Resale Prospectus;

· all references in the Public Offering Prospectus to “underwriter” will be changed to “underwriter of the IPO” in the Resale Prospectus;

· they contain different “The Offering” sections;

· the number of issued and outstanding shares disclosed throughout the Resale Prospectus and the percentage ownership held by certain stockholders disclosed throughout the Resale Prospectus, will be updated to the total the number of issued and outstanding shares of common stock of the Company and applicable percentages of total outstanding shares held, immediately following the completion of the IPO;

· the Resale Prospectus includes a separate “Private Placement Offerings” section;

· the section “Shares Eligible For Future Sale—Selling Stockholder Resale Prospectus” from the Public Offering Prospectus is deleted from the Resale Prospectus;

· the “Underwriting” section from the Public Offering Prospectus is deleted from the Resale Prospectus and a “Plan of Distribution” section is inserted in its place;

· the “Capitalization” and “Dilution” sections are deleted from the Resale Prospectus;

· a “Selling Stockholders” section is included in the Resale Prospectus; and

· the “Legal Matters” section in the Resale Prospectus deletes the reference to counsel for the underwriter.

The registrant has included in this registration statement a set of alternate pages after the outside back cover page of the Public Offering Prospectus, which we refer to as the Alternate Pages, to reflect the foregoing differences in the Resale Prospectus as compared to the Public Offering Prospectus. The Public Offering Prospectus will exclude the Alternate Pages and will be used for the public offering by the registrant. The Resale Prospectus will be substantially identical to the Public Offering Prospectus except for the addition or substitution of the Alternate Pages and will be used for the resale offering by the selling stockholders (it being understood that none of the shares being registered for resale by the selling stockholders in the Resale Prospectus may be sold prior to the closing of our initial public offering under the Public Offering Prospectus, and only then in compliance with applicable laws, rules and regulations).

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The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities nor may we accept offers to buy these securities until the registration statement filed with the Securities and Exchange Commission becomes effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION, DATED APRIL 25, 2024

1,200,000 shares

Lafayette Energy Corp

Common Stock

This is a firm commitment initial public offering of shares of common stock of Lafayette Energy Corp.

Prior to this offering, there has been no public market for our common stock. It is currently estimated that the initial public offering price per share will be between $3.50  and $4.50. We intend to list the common stock for trading on The Nasdaq Capital Market under the symbol “LEC.” If our common stock is not approved for listing on The Nasdaq Capital Market, we will not consummate this offering.

At the same time as the offering set forth in this prospectus (the “Public Offering Prospectus”), we are registering the resale of 3,656,475 shares of common stock, the prospectus of which was filed as part of the same registration statement of which this prospectus forms a part (the “Resale Prospectus”).

We are an “emerging growth company” as defined in Section 2(a) of the Securities Act of 1933, as amended, and, as such, may elect to comply with certain reduced public company reporting requirements for future filings. This prospectus complies with the requirements that apply to an issuer that is an emerging growth company.

	Per Share	Total
Initial public offering price	$	$
Underwriting discounts and commissions(1)	$	$
Proceeds to us, before expenses	$	$

(1) Please refer to the section entitled “Underwriting” for additional information regarding total underwriter compensation. We have agreed to pay the underwriter a non-accountable expense allowance equal to 1% of gross proceeds and reimburse the underwriter for its reasonable out-of-pocket expenses, including legal fees, up to $125,000.

We have granted the underwriter an option for a period of 45 days after the date of this prospectus to purchase up to 15% of the total number of our shares of common stock to be offered by us pursuant to this offering (excluding shares of common stock subject to this option), solely for the purpose of covering over-allotments, at the initial public offering price less the underwriting discounts and commissions.

An investment in our common stock involves a high degree of risk. You should carefully consider the risk factors set forth under “Risk Factors,” beginning on page  23  of this prospectus before you make your decision to invest in our common stock.

Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

The Underwriter expects to deliver the shares of common stock against payment as set forth under “Underwriting,” on or about ___________, 2024.

The date of this prospectus is             , 2024

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TABLE OF CONTENTS

Glossary of Oil and Gas Industry Terms.	2
About This Prospectus.	7
Prospectus Summary.	8
The Offering.	21
Summary Financial Data.	22
Risk Factors.	23
Cautionary Note Regarding Forward-Looking Statements.	64
Use of Proceeds.	66
Dividend Policy.	67
Management’s Discussion and Analysis of Financial Condition and Results of Operations.	70
Business.	76
Management.	99
Executive and Director Compensation.	109
Certain Relationships and Related Transactions.	119
Security Ownership of Certain Beneficial Owners and Management	123
Description of Capital Stock.	124
Shares Eligible for Future Sale.	133
Underwriting.	135
Legal Matters.	140
Experts.	140
Where You Can Find More Information.	140
Index to Financial Statements.	F-1

Through and including ___________, 2024 (the 25th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

No dealer, salesperson or other individual has been authorized to give any information or to make any representation other than those contained in this prospectus in connection with the offer made by this prospectus and, if given or made, such information or representations must not be relied upon as having been authorized by us. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities in any jurisdiction in which such an offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so, or to any person to whom it is unlawful to make such offer or solicitation. Neither the delivery of this prospectus nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in our affairs or that information contained herein is correct as of any time subsequent to the date hereof.

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GLOSSARY OF OIL AND GAS INDUSTRY TERMS

The following are abbreviations, acronyms and definitions of certain terms used in this document, which are commonly used in our industry:

2-D seismic. The method by which a cross-section of the earth’s subsurface is created through the interpretation of reflecting seismic data collected along a single source profile.

3-D seismic. The method by which a three-dimensional image of the earth’s subsurface is created through the interpretation of reflection seismic data collected over a surface grid. 3-D seismic surveys allow for a more detailed understanding of the subsurface than do 2-D seismic surveys and contribute significantly to field appraisal, exploitation, and production.

AFE or Authorization for Expenditures. A document that lays out proposed expenses for a particular project and authorizes an individual or group to spend a certain amount of money for that project.

ARO. Asset retirement obligation, which is a legal obligation associated with the retirement of an oil or gas well, where the owner is responsible for removing equipment, plugging the well and/or cleaning up hazardous materials at some future date.

Bbl. One stock tank barrel, or 42 U.S. gallons liquid volume, used in this Annual Report in reference to crude oil or other liquid hydrocarbons.

Bcf. An abbreviation for billion cubic feet. Unit used to measure large quantities of gas, approximately equal to 1 trillion Btu.

Bitumen. Is an immensely viscous constituent of petroleum. Depending on its exact composition it can be a sticky, black liquid or an apparently solid mass that behaves as a liquid over very large time scales. Bitumen is defined by the U.S. Geological Survey as an extra-heavy oil with an API gravity less than 10° and a viscosity greater than 10,000 centipoise. At the temperatures normally encountered in natural deposits, bitumen will not flow; in order to be moved through a pipe, it must be heated and, in some cases, diluted with a lighter oil.

Boe. Barrels of oil equivalent, determined using the ratio of one Bbl of crude oil, condensate or natural gas liquids, to six Mcf of natural gas.

Boepd. Barrels of oil equivalent per day.

Bopd. Barrels of oil per day.

Btu or British thermal unit. The quantity of heat required to raise the temperature of one pound of water by one degree Fahrenheit.

Completion. The operations required to establish production of oil or natural gas from a wellbore, usually involving perforations, stimulation and/or installation of permanent equipment in the well or, in the case of a dry hole, the reporting of abandonment to the appropriate agency.

Condensate. Liquid hydrocarbons associated with the production of a primarily natural gas reserve.

Conventional resources. Natural gas or oil that is produced by a well drilled into a geologic formation in which the reservoir and fluid characteristics permit the natural gas or oil to readily flow to the wellbore.

Cushing/WTI. Means the price of West Texas Intermediate oil at the hub located in Cushing, Oklahoma.

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Developed acreage. The number of acres that are allocated or assignable to productive wells.

Developed oil and natural gas reserves. Reserves of any category that can be expected to be recovered (i) through existing wells with existing equipment and operating methods or in which the cost of the required equipment is relatively minor compared to the cost of a new well and (ii) through installed extraction equipment and infrastructure operational at the time of the reserves estimate if the extraction is by means not involving a well.

Development well. A well drilled into a proved oil or natural gas reservoir to the depth of a stratigraphic horizon known to be productive.

Electric submersible pump or ESP. Is an artificial-lift method for lifting moderate to high volumes of fluids from wellbores.

Estimated ultimate recovery or EUR. Estimated ultimate recovery is the sum of reserves remaining as of a given date and cumulative production as of that date.

Exploratory well. A well drilled to find and produce oil or natural gas reserves not classified as proved, to find a new reservoir in a field previously found to be productive of oil or natural gas in another reservoir or to extend a known reservoir.

Frac or fracking. A short name for hydraulic fracturing, a method for extracting oil and natural gas.

Farmin, farm-in or farmout. An agreement under which the owner of a working interest in an oil or natural gas lease assigns the working interest or a portion of the working interest to another party who desires to drill on the leased acreage. Generally, the assignee is required to drill one or more wells in order to earn its interest in the acreage. The assignor usually retains a royalty or reversionary interest in the lease. The interest received by an assignee is a “farmin” while the interest transferred by the assignor is a “farmout.”

FERC. Federal Energy Regulatory Commission.

Field. An area consisting of a single reservoir or multiple reservoirs all grouped on or related to the same individual geological structural feature and/or stratigraphic condition.

GHG. Greenhouse gases, which are gases that absorb and emit radiant energy within the thermal infrared range, causing the greenhouse effect.

Gross acres or gross wells. The total acres or wells in which a working interest is owned.

Henry Hub. A natural gas pipeline located in Erath, Louisiana that serves as the official delivery location for futures contracts on the NYMEX. The settlement prices at the Henry Hub are used as benchmarks for the entire North American natural gas market.

Held by production. An oil and natural gas property under lease in which the lease continues to be in force after the primary term of the lease in accordance with its terms as a result of production from the property.

Horizontal drilling or well. A drilling operation in which a portion of the well is drilled horizontally within a productive or potentially productive formation. This operation typically yields a horizontal well that has the ability to produce higher volumes than a vertical well drilled in the same formation. A horizontal well is designed to replace multiple vertical wells, resulting in lower capital expenditures for draining like acreage and limiting surface disruption.

Hydraulic Fracturing. Means the forcing open of fissures in subterranean rocks by introducing liquid at high pressure, especially to extract oil or gas.

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Initial Development Opportunities. Means undertaking initial drilling activities on the Asphalt Ridge Acreage after the first 3 wells have been drilled and completed, assuming the successful closing of the Farm-In Agreement (defined below in the “Overview” section of the Prospectus Summary).

IP30. Means the production of a well for the first full calendar month of production.

Liquids. Liquids, or natural gas liquids, are marketable liquid products including ethane, propane, butane, and pentane resulting from the further processing of liquefiable hydrocarbons separated from raw natural gas by a natural gas processing facility.

LOE or Lease operating expenses. The costs of maintaining and operating property and equipment on a producing oil and gas lease.

MBbl or MBbls. One thousand barrels of crude oil or other liquid hydrocarbons.

MBbl/d. One thousand barrels of crude oil or other liquid hydrocarbons per day.

MBoe. Thousand barrels of oil equivalent.

MBoe/d. Thousand barrels of oil equivalent per day.

Mcf. One thousand cubic feet of natural gas.

Mcfgpd. Thousands of cubic feet of natural gas per day.

MMcf. One million cubic feet of natural gas.

MMBtu. One million British thermal units.

MMBoe. Million barrels of oil equivalent.

Net acres or net wells. The sum of the fractional working interest owned in gross acres or wells.

Net revenue interest. The interest that defines the percentage of revenue that an owner of a well receives from the sale of oil, natural gas and/or natural gas liquids that are produced from the well.

NGL. Natural gas liquids.

NYMEX. New York Mercantile Exchange.

Oil in place. The amount of crude oil which is estimated to be in a reservoir.

Permeability. A reference to the ability of oil and/or natural gas to flow through a reservoir.

Petrophysical analysis. The interpretation of well log measurements, obtained from a string of electronic tools inserted into the borehole, and from core measurements, in which rock samples are retrieved from the subsurface, then combining these measurements with other relevant geological and geophysical information to describe the reservoir rock properties.

Play. A set of known or postulated oil and/or natural gas accumulations sharing similar geologic, geographic, and temporal properties, such as source rock, migration pathways, timing, trapping mechanism and hydrocarbon type.

Plugging and abandonment. Refers to the sealing off of fluids in the strata penetrated by a well so that the fluids from one stratum will not escape into another or to the surface. State regulations require generally plugging of abandoned wells.

Possible reserves. Additional reserves that are less certain to be recognized than probable reserves.

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Present value of future net revenues (“PV-10”). The present value of estimated future revenues to be generated from the production of proved reserves, before income taxes, calculated in accordance with SEC guidelines, net of estimated production and future development costs, using prices and costs as of the date of estimation without future escalation and without giving effect to hedging activities, non-property related expenses such as general and administrative expenses, debt service and depreciation, depletion and amortization. PV-10 is calculated using an annual discount rate of 10%.

Probable reserves. Additional reserves that are less certain to be recognized than proved reserves but which, in sum with proved reserves, are as likely as not to be recovered.

Producing well, production well or productive well. A well that is found to be capable of producing hydrocarbons in sufficient quantities such that proceeds from the sale of the well’s production exceed production-related expenses and taxes.

Production costs. Costs incurred to operate and maintain wells and related equipment and facilities, including depreciation and applicable operating costs of support equipment and facilities and other costs of operating and maintaining those wells and related equipment and facilities that become part of the cost of oil, natural gas and NGL produced.

Properties. Natural gas and oil wells, production and related equipment and facilities and natural gas, oil or other mineral fee, leasehold, and related interests.

Prospect. A specific geographic area which, based on supporting geological, geophysical, or other data and also preliminary economic analysis using reasonably anticipated prices and costs, is considered to have potential for the discovery of commercial hydrocarbons.

Proved developed reserves. Proved reserves that can be expected to be recovered through existing wells and facilities and by existing operating methods.

Proved reserves. Reserves of oil and natural gas that have been proved to a high degree of certainty by analysis of the producing history of a reservoir and/or by volumetric analysis of adequate geological and engineering data.

Proved undeveloped reserves or PUDs. Proved reserves that are expected to be recovered from new wells on undrilled acreage or from existing wells where a relatively major expenditure is required for recompletion.

Repeatability. The potential ability to drill multiple wells within a prospect or trend.

Reserves. Estimated remaining quantities of oil, natural gas and NGL and related substances anticipated to be economically producible by application of development projects to known accumulations. In addition, there must exist, or there must be a reasonable expectation that there will exist, the legal right to produce or a revenue interest in the production, installed means of delivering oil, natural gas and NGL or related substances to market, and all permits and financing required to implement the project. Reserves should not be assigned to adjacent reservoirs isolated by major, potentially sealing, faults until those reservoirs are penetrated and evaluated as economically producible. Reserves should not be assigned to areas that are clearly separated from a known accumulation by a non-productive reservoir (i.e., absence of reservoir, structurally low reservoir, or negative test results). Such areas may contain prospective resources (i.e., potentially recoverable resources from undiscovered accumulations).

Reservoir. A porous and permeable underground formation containing a natural accumulation of producible oil and/or natural gas that is confined by impermeable rock or water barriers and is individual and separate from other reservoirs.

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Royalty interest. An interest in an oil and natural gas lease that gives the owner of the interest the right to receive a portion of the production from the leased acreage (or of the proceeds of the sale thereof), but generally does not require the owner to pay any portion of the costs of drilling or operating the wells on the leased acreage. Royalties may be either landowner’s royalties, which are reserved by the owner of the leased acreage at the time the lease is granted, or overriding royalties, which are usually reserved by an owner of the leasehold in connection with a transfer to a subsequent owner.

Salt Water Disposal Well or SWD. A salt water disposal (SWD) well is a disposal site for water produced as a result of the oil and gas extraction process.

Spud. Spudding is the process of beginning to drill a well in the oil and gas industry.

Standardized measure or standardized measure of discounted future net cash flows. The present value of estimated future cash inflows from proved oil, natural gas and NGL reserves, less future development and production costs and future income tax expenses, discounted at 10% per annum to reflect timing of future cash flows and using the same pricing assumptions as were used to calculate PV-10. Standardized Measure differs from PV-10 because standardized measure includes the effect of future income taxes on future net revenues. 

Step-out well. A well drilled near a proven well, but located in an unproven area, that determines the boundaries of the producing formation.

Transition Zone. The Transition Zone usually produces both oil and water at different ratios depending on the height above the Free Water Level (“FWL”). In normal conditions wells that are drilled in the Transition Zone will produce at some water cut.

Trend. A region of oil and/or natural gas production, the geographic limits of which have not been fully defined, having geological characteristics that have been ascertained through supporting geological, geophysical, or other data to contain the potential for oil and/or natural gas reserves in a particular formation or series of formations.

Unconventional resource play. A set of known or postulated oil and or natural gas resources or reserves warranting further exploration which are extracted from (a) low-permeability sandstone and shale formations and (b) coalbed methane. These plays require the application of advanced technology to extract the oil and natural gas resources.

Undeveloped acreage. Lease acreage on which wells have not been drilled or completed to a point that would permit the production of commercial quantities of oil and natural gas, regardless of whether such acreage contains proved reserves. Undeveloped acreage is usually considered to be all acreage that is not allocated or assignable to productive wells.

Unproved and unevaluated properties. Refers to properties where no drilling or other actions have been undertaken that permit such property to be classified as proved.

Updip well. A well located higher in the structure.

USACE. United States Army Corps of Engineers.

Vertical well. A hole drilled vertically into the earth from which oil, natural gas or water flows is pumped.

Volumetric reserve analysis. A technique used to estimate the amount of recoverable oil and natural gas. It involves calculating the volume of reservoir rock and adjusting that volume for the rock porosity, hydrocarbon saturation, formation volume factor and recovery factor.

Wellbore. The hole made by a well.

WTI or West Texas Intermediate. A grade of crude oil used as a benchmark in oil pricing. This grade is described as light because of its relatively low density, and sweet because of its low sulfur content.

Working interest. The operating interest that gives the owner the right to drill, produce and conduct operating activities on the property and receive a share of production.

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ABOUT THIS PROSPECTUS

No dealer, salesperson or other individual has been authorized to give any information or to make any representation other than those contained in this prospectus in connection with the offer made by this prospectus and, if given or made, such information or representations must not be relied upon as having been authorized by us. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities in any jurisdiction in which such an offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so, or to any person to whom it is unlawful to make such offer or solicitation. Neither the delivery of this prospectus nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in our affairs or that information contained herein is correct as of any time subsequent to the date hereof.

For investors outside the United States: We and the underwriter have not done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves, and observe any restrictions relating to, the offering of the shares of our common stock and the distribution of this prospectus outside the United States.

Our logo and some of our trademarks and tradenames are used in this prospectus. This prospectus also includes trademarks, tradenames and service marks that are the property of others. Solely for convenience, trademarks, tradenames, and service marks referred to in this prospectus may appear without the ®, ™ and SM symbols. References to our trademarks, tradenames and service marks are not intended to indicate in any way that we will not assert to the fullest extent under applicable law our rights or the rights of the applicable licensors if any, nor that respective owners to other intellectual property rights will not assert, to the fullest extent under applicable law, their rights thereto. We do not intend the use or display of other companies’ trademarks and trade names to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

The market data and certain other statistical information used throughout this prospectus are based on independent industry publications, reports by market research firms or other independent sources that we believe to be reliable sources; however, we have not commissioned any of the market or survey data that is presented in this prospectus. Industry publications and third-party research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. We are responsible for all of the disclosures contained in this prospectus, and we believe these industry publications and third-party research, surveys and studies are reliable. While we are not aware of any misstatements regarding any third-party information presented in this prospectus, their estimates, in particular, as they relate to projections, involve numerous assumptions, are subject to risks and uncertainties, and are subject to change based on various factors, including those discussed under the section entitled “Risk Factors” beginning on page 29 of this prospectus. These and other factors could cause our future performance to differ materially from our assumptions and estimates. Some market and other data included herein, as well as the data of competitors as they relate to Lafayette Energy Corp, is also based on our good faith estimates.

Unless the context otherwise requires, references in this prospectus to “we,” “us,” “our,” the “Registrant”, the “Company,” “Lafayette” and “Lafayette Energy Corp” refer to Lafayette Energy Corp

In addition:

● “Exchange Act” refers to the Securities Exchange Act of 1934, as amended;

● “Nasdaq” means the Nasdaq Capital Market;

● “SEC” or the “Commission” refers to the United States Securities and Exchange Commission; and

● “Securities Act” refers to the Securities Act of 1933, as amended.

Effective on January 24, 2023, our Board of Directors, and on January 26, 2023, stockholders holding a majority of our outstanding voting shares, approved resolutions approving and authorizing the filing of a Second Amended and Restated Certificate of Incorporation of the Company, which affected a two-for-three reverse stock split of the outstanding shares of our common stock (the “Reverse Stock Split”), without any corresponding change in the number of authorized shares of common stock of the Company. On January 31, 2023, the Second Amended and Restated Certificate of Incorporation of the Company was filed with the Secretary of Delaware, and at the same time, the Reverse Stock Split became effective. Except as otherwise indicated and except in our financial statements and the notes thereto, all references to our common stock, share data, per share data and related information retroactively depict and reflect the Reverse Stock Split. The Reverse Stock Split combined each three shares of our outstanding common stock into two shares of common stock, without any change in the par value per share, and the Reverse Stock Split correspondingly adjusted, among other things, the number of shares of common stock available for awards under our equity compensation plans. No fractional shares were issued in connection with the Reverse Stock Split, and any fractional shares resulting from the Reverse Stock Split were rounded up to the nearest whole share on a per stockholder basis.

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PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus. This summary does not contain all of the information that you should consider before deciding to invest in our common stock. You should read this entire prospectus carefully, including the “Risk Factors”  section, our historical financial statements, and the notes thereto, each included elsewhere in this prospectus.

Overview

We are an oil and gas exploration and production company headquartered in Lehi, Utah. The Company was incorporated on February 7, 2022 under the laws of Delaware, with the goal of acquiring, funding and developing, primarily crude oil exploration and development. The Company plans to initially focus its attention on certain oil and gas assets located in Eastern Utah which it hopes to acquire pursuant to the Farm-In Agreement (defined and discussed below), and use anticipated cash flow from those operations to fund development of the Imperial Parish Fields (defined and discussed below). As of the date of this prospectus, we have entered into a farm-in agreement providing us the right to acquire an additional approximately net 2,880 acres in the Uinta Basin, Utah and hold options to purchase leases covering approximately 1,487 gross mineral acres in Imperial Parish, Louisiana. We have no revenue-generating operations as of the date of this prospectus, but we do have the cash resources on hand, and anticipate additional capital  to be raised through, the expected funding of the second $2.5 million tranche of our Series A Convertible Preferred offering (which as discussed in greater detail below, is required to be funded after we produce at least 100 barrels of oil), to drill and complete our first three wells which if successful are expected to allow us to begin to generate revenues.  The first well is scheduled to be drilled and completed at the end of April 2024, and the second and third wells are planned for May and June 2024. Additional funding, including funds from this offering, if successful, will provide additional growth capital.

Asphalt Ridge Option and Farm-In Agreement (Utah)

On November 13, 2023, the Company entered into a Leasehold Acquisition and Development Option Agreement (the “Asphalt Ridge Option Agreement”) with Heavy Sweet Oil, LLC (“Heavy Sweet”). Pursuant to the Asphalt Ridge Option Agreement, we purchased an option to acquire up to a 30% working interest in certain leases in the Uintah Basin, a   long-developed oil and gas area of eastern Utah, southwest of Vernal, Utah, totaling 960 acres. Heavy Sweet holds the right to such leases below 500 ft depth from surface (the “Asphalt Ridge Option Leases”) and the option to participate in Heavy Sweet’s initial 960 acre drilling and production program on such Asphalt Ridge Option Leases (the “Asphalt Ridge Option”).

The Asphalt Ridge Option had a term of nine months, through June 28, 2024. The Asphalt Ridge Option Agreement provided that additional development capital was expected to be secured by Heavy Sweet, and made available for the Company’s participation, by way of a reserve base lending facility (RBL), provided that if such RBL could not be obtained or did not cover all subsequent capital costs, Heavy Sweet agreed to fund a maximum of $5,000,000 of the first funding required for the development program, with the parties splitting any costs thereafter according to their ownership interests. The initial target was three wells, with an estimated cost of $5,000,000 for roads, pads, drilling, and above ground steam and storage facilities, and thereafter the parties anticipated working together to fund further well development based on their proportionate ownership thereof.

As consideration for agreeing to the Asphalt Ridge Option, we issued Heavy Sweet 2,688,000 shares of the Company’s restricted common stock, equal to approximately 19.9% of the Company’s then-issued and outstanding shares of common stock (the “Option Shares”). The Option Shares were subject to vesting upon certain terms set forth in a Restricted Stock Agreement, and have fully-vested to date as a result of our entry into the Farm-In Agreement with Heavy Sweet as discussed below.

On November 10, 2023, as amended December 28, 2023, Heavy Sweet entered into a Leasehold Acquisition and Development Option Agreement with Trio Petroleum Corp. (“Trio”), of which Michael Peterson, the Chief Executive Officer and director of the Company, is also the Chief Executive Officer and director, and Frank C. Ingriselli, our Chairman, is also the Vice Chairman and director (the “Trio Option”). The Trio Option has similar terms as the Asphalt Ridge Option Agreement, except that it allows Trio to obtain a 20% interest in the Asphalt Ridge Option Leases, and did not require Trio to pay any equity compensation.

We and Heavy Sweet agreed that, to the extent Trio did not fully exercise the Trio Option, the Company had the right to acquire up to all 20% of the right set forth in the Trio Option from Heavy Sweet for $2,000,000 cash (or such other amount at the rate of $100,000 for each 1% which Trio had not exercised). To date, Trio has paid $225,000 for a 2.25% working interest in 960 acres of the Asphalt Ridge Option Leases.

The exercise of the Trio Option held by Trio is contingent upon certain requirements and deliverables.

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A Prospective Resource Assessment covering the first 240 acres of the Asphalt Ridge Leases (defined below) that are planned to be developed was issued by Netherland Sewel to Heavy Sweet on November 17, 2023 (as of October 31, 2023), which estimated total oil resources of 58,390,200 barrels (bbls) of oil.

On March 7, 2024 the Company entered into a Farm-In Agreement (the “Farm-In Agreement”) with Heavy Sweet which superseded and terminated in full the Asphalt Ridge Option. According to the Farm-In Agreement, upon certain terms and conditions set forth therein, (i) the Company will farm-into and purchase from Heavy Sweet, and Heavy Sweet will allow the Company to farm-in and sell to the Company, (x) an undivided Ninety-Seven and 3/4^th Percent (97.75% of 8/8ths) interest (100% of 8/8ths reduced by the Trio Option exercised amount discussed above) in and to approximately 960 gross and net acres under the Asphalt Ridge Leases (the “Asphalt Ridge Leases”), and (y) an undivided One Hundred Percent (100.00% of 8/8ths) interest in and to approximately 1,920 gross and net acres, in the adjoining acreage located in the western half of Section 23 and Sections 22, 26, and 27 all in township range and section map T4S, R20, 6^th PM, Uintah County, Utah (the “Asphalt Ridge Acreage”); and (ii) subject to the Trio Option, we may explore and develop the Subject Acreage and the Asphalt Ridge Leases.

The farm-in price payable pursuant to the terms of the Farm-In Agreement is up to 3,400,000 shares of restricted common stock of the Company, with such number of shares due at closing equal to (x) 3,400,000 shares, multiplied by (y) the total number of acres conveyed at closing, divided by (z) 2,880 (the “Farm-In Shares”).

The closing of the transactions contemplated by the Farm-In Agreement is to occur upon completion of the Company’s due diligence on such Asphalt Ridge Leases and Asphalt Ridge Acreage, but no later than August 4, 2024.

The Farm-In Agreement is subject to customary indemnification obligations, confidentiality obligations, representations, warranties and conditions to closing, including satisfactory due diligence by the Company, confirmation by the Company of title information relating to the Asphalt Ridge Leases and Asphalt Ridge Acreage, and determination of the number of net leasehold acres to be acquired.

The Farm-In Agreement also allows us to change our name to Heavy Sweet Oil Corp., or a similar name in our discretion, which name change Heavy Sweet is required to consent to. We have the right to either become the operator or to choose the contract operator for the development of the Asphalt Ridge Leases and Asphalt Ridge Acreage.

The Farm-In Agreement clarifies that the Asphalt Ridge Leases and Asphalt Ridge Acreage are subject to that certain Leasehold Acquisition and Development Agreement, dated November 10, 2023, as amended December 28, 2023, by and between Heavy Sweet and Trio Petroleum Corp (“Trio”) (the “Trio Option”), and as a condition to closing, Heavy Sweet is required to obtain Trio’s agreement to assign the Trio Option to the Company at closing, with the Company assuming operatorship with respect to the Asphalt Ridge Leases and Asphalt Ridge Acreage, and with the Company assuming all rights, duties and responsibilities of Heavy Sweet under the Trio Option, and with the Asphalt Ridge Leases and Asphalt Ridge Acreage remaining subject to the Trio Option in accordance with its terms.  Notwithstanding the foregoing, in the event Trio’s agreement to assign the Trio Option to the Company is not obtained on or prior to closing, the Company, in its sole discretion, may waive that condition and close without receiving the assignment of the Trio Option, in which event (i) Heavy Sweet shall retain the 17.75% working interest that is subject to the Trio Option, (ii) the Farm-In Shares shall be proportionately reduced, and (iii) in the event the Trio Option expires without Trio exercising its full option to acquire all Asphalt Ridge Leases and Asphalt Ridge Acreage as contemplated under the Trio Option, the Company shall have the sole and exclusive right to farm-in and acquire such Asphalt Ridge Leases and Asphalt Ridge Acreage that is not acquired by Trio on the same terms and conditions, and at the same proportionate farm-in price, as set forth under the Farm-In Agreement.

Prior to closing, the parties are required to enter into a mutually agreed Operating Agreement to govern all operations in the contacted area.

As consideration for entering the Farm-In Agreement, the Company agreed to vest in full the previously issued but unvested 2,688,000 shares of restricted common stock that were to vest pursuant to the Asphalt Ridge Option Agreement, and the parties agreed that the Asphalt Ridge Option Agreement was terminated and superseded by the Farm-In Agreement.

Prior to closing, the Company has the right to begin development operations on the Asphalt Ridge Acreage, including, but not limited to, building roads, laying pipelines, building drilling pads, drilling wells, and otherwise improving the Asphalt Ridge Acreage. The Company may do so at its sole cost and expense, and the Company shall have the full right and ability to do so in its sole discretion.  Any hydrocarbon resources produced from any such wells shall be owned by the Company.  The Farm-In Agreement can be terminated prior to closing (a) with the mutual consent of the parties; (b) by us, if Heavy Sweet breaches any representation, warranty or covenant in the Farm-In Agreement, and such breach continues for more than three (3) business days after we provide notice thereof, or if title defects reduce by more than 10% the net acres to be acquired by the Company, or if the closing has not occurred by August 4, 2024; (c) by Heavy Sweet if the closing has not occurred by August 4, 2024. In the event the Farm-In Agreement is terminated for any reason and we have conducted any development activities on the Asphalt Ridge Acreage, Heavy Sweet is required to promptly reimburse us for such costs and expenses.

We currently expect to close the transactions contemplated by the Farm-In Agreement in June 2024, subject to the satisfaction of the conditions to closing set forth therein.

Asphalt Ridge Asset

The initial development of the Asphalt Ridge Asset is expected to be in a 240 acre section (the “Initial Development Acreage”) within the Asphalt Ridge Leases that were identified by Heavy Sweet.

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Description of Properties

The location of the Initial Development Acreage is shown in the graphics below:

The graphic below shows proposed drilling locations in the Initial Development Acreage in the Asphalt Ridge Asset:  

The Company, in consultation with Heavy Sweet, has identified a minimum 16 standard 40-acre spaced wells and 119 wells on 2.5-acre wells under a unitization agreement.   Phase 1 is planned to consist of developing Section 22 and the western half of Section 23 of township range and section map T4S R20E, with development drilling, down hole heaters and/or advanced cyclic steam production techniques planned to exploit the heavy oil resources thought to reside in the Rimrock and Asphalt Ridge sandstone reservoirs.

The Operator has contracted to drill the initial well in late April 2024 and if the well is successful, hopes to begin production in May 2024.  The Company expects to perform multiple tests of the core rock removed as well as any oil extracted in order to confirm its completion and production strategies and test new procedures with the goal to understand and implement a production program to extract the maximum amount of oil possible from the well, in a cost-effective manner. Thereafter, once the Company believes it has designed an appropriate production plan, and assuming the first well is successful, the Company plans to begin to drill and complete the second and third wells in May or June 2024, using the techniques developed for the first well, and then work to complete the additional 116 planned wells in the Initial Development Acreage.  The capital costs for the development plan are expected to be funded first by cash currently held by the Company, the expected $2.5 million second tranche of the Series A Preferred offering (which as discussed in greater detail below, is required to be funded after we produce at least 100 barrels of oil), and the proceeds of this Offering. The Company believes that full development could be funded by the cash flow from the project; however, once development is proceeding, the Company may increase the speed of development by seeking to secure a reserve base lending facility (RBL), though the securing of this RBL is not guaranteed. 

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Resource Estimate

According to the website of the American Geological Society, the largest tar sand deposits in the world are found in Alberta (Canada) and Venezuela. However, according to Utah Geological Society (“UGS”), Utah’s measured tar sand resource is the largest in the United States (Energy News: Taking Another Look at Utah’s Tar Sand Resources, J. Wallace Gwynn (2007) Survey Notes, v. 39 no. 1, January 2007). The UGS estimates that Utah’s tar sand deposits contain between 14 to 15 billion barrels of oil in place; however, these volumes are not all economically/commercially recoverable. Analysis of bitumen extracted from samples show that bitumen is low-sulfur and high-gravity.

While these reports and analysis are just projections, we believe they do indicate that there is a high probability of a significant addressable resource tar-sand/oil targeted structure in this area.

Drilling Plan (Utah)

The drilling program is planned to be completed using conventional drilling techniques and followed up with down hole heaters and/or Conventional Steam & CO2 Flood (“Huff and Puff”)(discussed below).   These are proven methods used in Utah and worldwide.

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Sources:

	a)	“A Review of Steam Soak Operations in California”, Babson and Burns, January 1969.
	b)	“Extraction of petroleum”, Wikimedia Foundation, last modified November 4, 2023, 15:05, https://en.wikipedia.org/wiki/Extraction_of_petroleum.
	c)	“Huff-n-puff gas injection or gas flooding in tight oil reservoirs”, Journal of Petroleum Science and Engineering, Tang & Sheng, January 2022.
	d)	“Quantitative study of C02 huff-n-puff enhanced oil recovery in tight formations using online NMR technology” Science Direct, Liu, Li, Tan, Liu, Zhao, and Wang, Journal of Petroleum Science and Engineering (July 2022).
Field Geology Description According to the Tar-Sand Resources of the Uinta Basin, Utah, complied by Robert E. Blackett, May 1996, the Asphalt Ridge is situated along the northeast edge of the Uintah Basin physiographic subprovince, with the Marginal Benches/Uintah Mountains subprovince of the Middle Rocky Mountains lying less than 10 miles to the north.   The Asphalt Ridge forms the southwest limit to the low-lying farm lands of Ashley Valley.   The Green River, which flows southwestward through the Uinta Basin, flows through the southeast extension of Asphalt Ridge. The Asphalt Ridge is a northwest-southeast trending cuesta, where Cretaceous and Tertiary formations dip to the southwest. Bitumen-saturated outcrops extend for approximately 12 miles northwest-southeast along the strike of the outcrops.

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The town of Vernal, Utah is approximately 4 miles to the northeast in the Ashley Valley, where elevations range between 5,200 and 5,500 feet, the Asphalt Ridge rises from 500 to 1,000 feet above Ashley Valley.   The highest point on the Asphalt Ridge, located near the northwest end, is approximately 6,400 feet in elevation.  

Potential Reserves

A Prospective Resource Assessment covering the Asphalt Ridge Leases was issued by Netherland Sewell to Heavy Sweet on November 17, 2023 (as of October 31, 2023), which estimated total oil resources of 58,390,200 barrels (bbls) of oil.

Market Opportunity

The Company believes that the Utah Asphalt Ridge opportunity provides a very attractive option to participate in a project that, if successful, should provide an attractive cash flow to the Company, beginning six months after successful completion of the first three wells.   The project is ready to begin the development phase and the first well is scheduled to be drilled in late April 2024, with the second and third wells expected to be drilled and completed in May and June 2024. The Company also believes that Utah is a good location for this type of development for many reasons, including existing paths to multiple markets, and attractive Utah State costs and development attributes, especially as compared to other national resource plays. These advantages include low state royalties, low transportation costs, access to rail, low cost of approximately $500,000 to drill and complete wells due to shallow drill depths of approximately 1,200 feet, and favorable state regulations.  

We believe that the Asphalt Ridge Asset offers attractive deployment attributes:

· Low state royalty rate;

· Low transportation costs;

· Shallow wells, which result in less costly drilling expenses; and

· Attractive stimulation costs using steam vs. fracturing processes.

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Set forth below is information regarding the average well cost, well depth, state royalty rate, transportation cost and simulation cost for wells drilled in Utah’s Rimrock sandstone, North Dakota’s Bakken Formation and Texas’ Permian Basin:
	State	Play	Well Cost	Average Well Depth	State Royalty Rate	Trucking/Rail Cost
	Utah	Rimrock	$0.5 million	0.6-1.2k ft	8%	~$4 / bbl
	North Dakota	Bakken	$5.9 million	10k-19k ft	16.7%-18.8%	~$10 / bbl
	Texas	Permian	$2.6 million	9.5k ft	20%-25%	~$8 / bbl

	Sources:
	a)	https://www.pheasantenergy.com/the-numbers-the-permian-excels/ pg. 1
	b)	“Midland County, TX Oil & Gas Activity - MineralAnswers.com pg 2” for Permian avg. well depth
	c)	“Drillnomics Analysis of the Bakken Shale– Mountrail County, ND” (https://www.drillnomics.com/drillnomics-analysis-of-the-bakken-shale-mountrail-county-nd/), pg. 1
	d)	REPORT ON THE FEDERAL OIL AND GAS LEASING PROGRAM U.S. Department of the Interior November 2021, pg. 8
	e)	Crude oil pipeline constraints: A tale of two shales - ScienceDirect , January 2023, pg. 2
	f)	Who Wins as Oil Price Differentials Widen in the Permian Basin_- TX transportation costs pg 1. https://finance.yahoo.com/news/wins-oil-price-differentials-widen-204854624.html
The Asphalt Ridge wells are expected to be drilled and completed by Valkor Oil & Gas LLC, (the “Operator”) a related party to Heavy Sweet, whose principals have extensive experience in oil and gas. The Operator has scheduled the first well to be drilled and completed in late April 2024, and the Company anticipates that the drilling and completion of the first three wells will be completed during the second quarter of 2024, subject to successful drilling completion of the first well. Planned Development Activities We currently anticipate the following three stages of development with Stage 1 using anticipated proceeds of this offering, and Stages 2 and 3 using anticipated cash flow from our Stage 1 investment.

Stage	Description	Estimated Timing	Estimated Cost*
1	Post drilling and completing the first three wells expected to be drilled in the Asphalt Ridge Acreage, begin development activities of at least 5 new wells in the Asphalt Ridge Acreage, assuming the successful closing of the Farm-In Agreement (the “ Initial Development Opportunities ”) that are planned to be drilled within one quarter following the closing of this offering	June to July 2024	$3,000,000
2	Acquire an additional 27,800 of optioned acreage in the Imperial Parish Fields (discussed below)	December 2024 to March 2025	$860,000
3	Conduct 3-D seismic / pre-development activities on our Imperial Parish Fields optioned properties	April 2025 to October 2025	$1,500,000
			$5,360,000

*We anticipate funding the first stage through cash raised in this offering (See “Use of Proceeds”) and future stages from projected cash flow from operations.

As described above and discussed below, subsequent to investing in the Initial Development Opportunities, we plan to use anticipated cash flow to develop the Imperial Parish Fields asset (discussed below) by first securing rights to perform 3-D seismic imaging and develop up to approximately 30,000 acres in the Imperial Parish Fields, second to perform 3-D seismic imaging on the acreage we successfully option, and then to drill and complete wells in the most prospective areas we have optioned. Through our agreement with Saur Minerals (discussed below), we plan to acquire acreage within the Imperial Parish Fields through options that include (1) the right to perform a 3-D seismic shoot on the property; and (2) an option to purchase a mineral lease with rights to drill oil and gas wells on the property.  For most options the Company has paid $12.50 to $25.00 per acre for the seismic right and has entered into an option to pay $75.00 per acre for the mineral and drilling rights for those acres the Company chooses to develop.

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The Imperial Parish Fields Asset

On March 8, 2022, the Company entered into a letter agreement (the “Letter Agreement”) with Saur Minerals LLC (“Saur Minerals”) which is based in Lafayette, Louisiana. Saur Minerals is owned and controlled by Louis E. Bernard, Jr. and Michael L. Schilling, Jr., beneficial owners of an aggregate of less than 1% and 7.9% of the Company’s outstanding common stock as of the date of this prospectus, respectively. Pursuant to the Letter Agreement, Saur Minerals caused its affiliated entity, Two Pearl Energy LLC (“Two Pearl”), to assign approximately 1,487 net acres of oil and gas leasehold interests (the “ St. Landry Leases”) and related assets located within St. Landry Parish, Louisiana to the Company in exchange for (a) $300,000 of cash consideration paid by the Company to Saur Minerals on March 8, 2022, (b) $100,000 cash consideration payable by the Company to Saur Minerals within five days after the closing of the acquisition, which amount has been paid in full, and (c) $200,000 of cash consideration payable by the Company to Saur Minerals within thirty days after the closing of the acquisition, which amount has been paid in full. In addition, the parties agreed that Two Pearl would reserve and retain an overriding royalty interest (“ORRI”) with respect to each Subject Lease in a percentage equal to the positive difference between the royalty interest of the lessor under each Subject Lease and 25%, if the lessor reserves a royalty less than 25%, and 2% if the lessor reserves a royalty interest equal to or greater than 25%.

As part of our diligence into the Imperial Parish Fields, the Company evaluated potential target zones and offset well results, and identified potential well locations and produced an estimate (the “Resource Estimate”) of the resource opportunity of the Imperial Parish Fields, noting that “resource” estimates are not consistent with “proved reserves” as defined by the SEC, and that we do not currently have, and may not have in the future, either proved reserves or production of oil or natural gas in commercial quantities or at all. Based on our Resource Estimate, we believe single well economics in the area on which we hold our options would be robust in today’s commodity price environment.

In connection with the closing of the transactions contemplated by the Letter Agreement, the Company and Saur Minerals entered into an Acquisition and Development Agreement, dated March 8, 2022, as amended June 16, 2022 (the “Development Agreement”), pursuant to which Saur Minerals agreed to seek and pursue opportunities to acquire certain interests for the benefit of the Company and subsequently reconveyed to the Company, or directly acquire on behalf of the Company such interests, within St. Landry Parish, Louisiana (the “Development Area”), on an exclusive basis for a term of five years expiring March 8, 2027, subject to extension by the Company for three additional periods of one year each, and subject to satisfaction of certain pre-authorized economic terms, prices and conditions as set forth therein, the acquisition of which interests are to be reimbursed to Saur Minerals, or paid directly, by the Company.

In addition, in connection with the closing of the transactions contemplated by the Letter Agreement, on March 8, 2022, the Company and Saur Minerals entered into a Seismic License Agreement, pursuant to which, Saur Minerals, as licensor of certain seismic data covering the St. Landry Leases and other mineral interests or leasehold interests within the Development Area, agreed to license such seismic data, on a perpetual, irrevocable, non-exclusive, transferable, sublicensable, royalty-free and fully-paid up basis. The seismic license was granted in connection was the closing of the transactions contemplated under the Letter Agreement, Development Agreement and related transactions, with no additional consideration, royalty or license fee due or owing by the Company to Saur Minerals.

We project that seismic and lease options on an additional 27,800 targeted acres in Phase 1 (the “Targeted Acres”) will cost approximately $860,000, which is anticipated to be funded with anticipated cash flow from the development of our Asphalt Ridge Acreage (see “Use of Proceeds”). Additionally, we plan to use anticipated future cash flow of $1.5 million, when available, to prepare a 3-D seismic survey on the optioned acreage in Phase 1 to analyze three targeted zones – the Frio, Cockfield and Sparta zones. These zones have been proven in offset acreage not held by the Company by companies such as Exxon Mobil, Texaco (Chevron USA Inc.), Halbouty Reserve and Hunt Oil Company, and several smaller independents such as Lynal, Inc., Lyons Petroleum, Inc., and others. All national US Army Corp of Engineer permits are in place to shoot 3-D seismic data for our optioned property. The timeline for shooting and analyzing the 3-D data is anticipated to be six months (the “3-D Seismic Phase”), which we anticipate beginning immediately after acquiring the Phase 1 acreage. In tandem during the 3-D Seismic Phase, we plan to put out a request for proposal (a “RFP”) for drilling contracts with locally identified drilling contractors.

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The anticipated development plan for the Imperial Parish Fields Asset to the extent deployed, is to first acquire options on the Targeted Acres, then shoot 3-D seismic, and following the interpretation of the 3-D seismic data, and assuming that such 3-D seismic data provides us with reasonable validation of the prospectivity of the acreage, we plan to exercise options we hold to acquire leaseholds we deem most prospective, sign a drilling contract, and then diligently work with our contracted drilling contractor to identify optimal locations for four initial wells (the “Drilling Evaluation Process”). We anticipate each well will require approximately 500 acres to form a drilling unit. 

Our current options include an option that allows us to lease the acreage for $75 per acre.  For acreage not under option, we anticipate a total cost of $115 per acre to source and lease.  Therefore, each well would incur acreage leasing costs estimated at between $37,500 to $57,500, with the total estimated acreage leasing cost for the first four wells being between $150,000 and $230,000, which funds for such drilling we anticipate raising through a reserve based lending facility subsequent to this offering, which may not be available on favorable terms, if at all.  We will also need to evaluate and source offtake contracts through the Drilling Evaluation Process. We expect the drilling evaluation process to take up to an additional two months following the 3-D Seismic Phase. The goal of these wells will be to prove up all three zones (Frio, Cockfield, and Sparta). Subject to changes in the discretion of management during the Drilling Evaluation Process, we intend to drill our first four wells in the Imperial Parish Fields in the Sparta zone with each well testing the Cockfield and Frio zones.  We anticipate that the drilling and completion of the first two wells will take approximately two months to complete with hydrocarbons expected to begin flowing from the initial wells after 10 weeks. The second set of wells is anticipated to take a similar time frame. We intend to use the cash flow generated from the Asphalt Ridge Acreage, if any, and a reserve based lending facility (an “RBL”) which we plan to seek to put into place following this offering, to drill the four wells and subsequent wells in our three year drilling plan in our Louisiana assets, noting that we do not currently have, and may not have in the future, either proved reserves or production of oil or natural gas in commercial quantities or at all.   Thus, we expect to have sufficient liquidity to drill further wells out of cash flow and future borrowings. Based on the well results of the first four wells, we plan to drill, subject to available financing, two additional wells each quarter with the next six wells being called the 2^nd Drilling Phase (the “2^nd Drilling Phase”).  We expect these wells in the 2^nd Drilling Phase to be able to be completed with more efficiency and the intention of establishing a type curve that can be replicated throughout the acreage position. We anticipate funds for our 2^nd Drilling Phase to be raised through a reserve-based lending facility subsequent to this offering, which may not be available on favorable terms, if at all. Additionally, with the cash flow generated and anticipated borrowing capacity from the first and 2^nd Drilling Phase, we may look at further exploration options on our acreage, including the deep and highly prospective Cretaceous formation which has been proved to produce commercial quantities of oil and gas by Freeport-McMoran Oil and Gas LLC, BP plc, and Pennington Oil Co.

Business Strategies

Our primary objective is to drill the first three wells on the Asphalt Ridge Acreage, acquire the Asphalt Ridge Leases and Asphalt Ridge Acreage from Heavy Sweet pursuant to the Farm-In Agreement and then continue  developing the Asphalt Ridge assets with the proceeds of this offering. We then plan to use anticipated cash flow, if any, from that Asphalt Ridge operation, to acquire the Targeted Acres and develop our optioned acreage in the Imperial Parish Fields and potentially to acquire and develop other opportunities for oil and gas production in south central Louisiana. Our primary focus is first in Utah, and then in Louisiana, but we may also consider appropriately priced out-of-state oil and gas opportunities in the future.

The primary goal of our collective efforts is to grow the Company into a highly profitable, independent oil and gas company.

Competition

There are many large, medium, and small-sized oil and gas companies and third-parties that are our competitors. Some of these competitors have extensive operational histories, experienced oil and gas industry management, profitable operations, and significant reserves and funding resources. Our ability to acquire properties and to discover reserves in the future will be dependent upon our ability to evaluate and select suitable properties and to consummate transactions in a competitive environment. In addition, because we have fewer financial and human resources than many companies in our industry, we may be at a disadvantage in eventually bidding or consummating transactions.

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There is also competition between natural gas producers and other related and unrelated industries. Furthermore, competitive conditions may be substantially affected by energy legislation or regulation enacted by governments of the United States and other jurisdictions. It is not possible to predict the nature of any such legislation or regulation which may ultimately be adopted or its effects upon our future operations. Such laws and regulations may substantially increase the costs of capitalizing on oil and gas opportunities. Our larger competitors may be able to absorb the burden of existing, and any changes to governmental regulations more easily than we can, which would adversely affect our competitive position.

In the Imperial Parish Fields themselves, which currently is our secondary focus, we anticipate intense competition from other operators, especially if our 3-D seismic project identifies highly-prospective resources and we obtain and publicly disclose (as is our intention) an independent petroleum engineer reserves report detailing reserves in the area. Obtaining mineral leases in order to control development is an integral part of our strategy.

Our larger competitors may be able to absorb the existing and evolved laws and regulations more easily than we can, which would adversely affect our competitiveness. Our ability to acquire properties and to discover reserves in the future will be dependent upon our ability to evaluate and select suitable properties and to consummate transactions in a competitive environment. In addition, because we have fewer financial and human resources than many companies in our industry, we may be at a disadvantage in eventually bidding or consummating transactions.

Government Regulation

We are subject to a number of federal, state, county and local laws, regulations and other requirements relating to oil and natural gas operations. The laws and regulations that affect the oil and natural gas industry are under constant review for amendment or expansion. Some of these laws, regulations and requirements result in challenges, delays and/or obstacles in obtaining permits, and some carry substantial penalties for failure to comply. The regulatory burden on the oil and natural gas industry increases our cost of doing business, can affect and even obstruct our operations and, consequently, can affect our revenues and future ability to become profitable.

Pre-IPO Private Placement Financing

From March to May 2022, we sold an aggregate of 9,562,660 shares of restricted common stock in private transactions to 11 accredited investors, including to Frank C. Ingriselli (880,000 shares)(our Chairman); Graham Patterson (our then Chief Financial Officer)(500,000 shares, of which 100,000 shares were subsequently transferred to Gregory L. Overholtzer, our current Chief Financial Officer and Secretary for no consideration); Louis E. Bernard, Jr. (the Managing Member of Project Operations of Saur Minerals) (1,360,000 shares, of which 680,000 were subsequently transferred to Saur Minerals, LLC, and 633,333 shares were subsequently sold to four other unaffiliated investors); Michael L. Peterson (1,000,000 shares)(our Chief Executive Officer); Michael Schilling (1,360,000 shares, of which 265,000 shares were subsequently sold to five family members of Mr. Peterson (who are not included in Mr. Peterson’s beneficial ownership as they are all adults who live in different households) in private transactions)(the President of Land/Legal of Saur Minerals); Adrian Beeston (1,483,334 shares, of which 133,334 shares were subsequently sold to Michael L. Peterson, our Chief Executive Officer and President, 66,667 shares were subsequently sold to an entity minority owned by Mr. Beeston, and 100,000 shares were subsequently sold to an unaffiliated investor ); and Naia Ventures, LLC (1,200,000 shares, of which 100,000 shares were subsequently sold to a third party around the time of the third party’s subscription for shares of the Company), for $0.00015 per share or $1,439 in aggregate.

From May to September 2022, we sold an aggregate of 789,386 shares of restricted common stock to 44 accredited investors for $1.50 per share, or $1,184,079 in aggregate. All but eight of those investors (36 in total), were also offered the right, at the same time, to subscribe for additional shares of common stock at $0.00015 per share, and an additional 12 investors were also offered the right to subscribe for shares of common stock at $0.0015 per share, and in total we sold 337,990 shares of restricted common stock to 51 accredited investors for an aggregate of $50.70.

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In January 2023, we sold an aggregate of 32,001 shares of restricted common stock to four accredited investors for $3.75 per share, or $120,000 in aggregate. At or around the same time as the sales were completed, one of our founders and one of our affiliates, Louis E. Bernard, Jr. and Saur Minerals, LLC, respectively, sold the purchasers and three other accredited investors, in a separate private transaction, an aggregate of 683,336 shares of our restricted common stock (Louis E. Bernard, Jr. (133,334 shares) and Saur Minerals, LLC (550,002 shares)), for $0.30 per share.

On February 13, 2023, our then Chief Financial Officer, Graham Patterson gifted 100,000 shares of common stock to our current Chief Financial Officer, Gregory L. Overholtzer, for no consideration.

In August 2023, we sold an aggregate of 4,000 shares of restricted common stock to an accredited investor, Adrian Beeston, for $5.00 per share or $20,000 in aggregate. 

In November 2023, we sold 16,667 shares of restricted common stock to an accredited investor, for $3.00 per share, or $50,000 in aggregate. At or around the same time as the sale was completed, one of greater than 5% stockholders, Naia Ventures LLC, sold the purchaser (the Sandhya Ajjarapu revocable Trust dtd 2007), in a separate private transaction, an aggregate of 100,000 shares of our restricted common stock, for $10.00.

In total, from all of the private offerings of common stock described above we raised an aggregate of approximately $1,375,570.

On February 29, 2024, the Company entered into a Subscription Agreement (the “Subscription”) with Trxade, Inc. (“Trxade”), which is a wholly-owned subsidiary of TRxADE HEALTH Inc. (Nasdaq:MEDS)(“TRxADE HEALTH”), pursuant to which we agreed to sell Trxade 2,000,000 shares of a newly designated series of Series A Convertible Preferred Stock of the Company (the “Series A Preferred”), in two tranches, with (a) 1,000,000 shares of Series A Preferred being sold for $2,500,000 on March 5, 2024 (“Tranche 1”), and (b) 1,000,000 shares of Series A Preferred being sold for an additional $2,500,000, within 10 days of the Company notifying Trxade by letter or email, that the Company has successfully drilled its first oil and gas well and produced at least 100 barrels of oil (“Tranche 2”). The Subscription contains standard and customary representations and warranties of the parties, indemnification obligations of the parties. Mr. Michael L. Peterson, the Company’s Chief Executive Officer and Director currently serves as an independent member of the Board of Directors, and as Chairman of the Audit Committee and member of the Compensation Committee and Nominating and Corporate Governance Committee of TRxADE HEALTH.  Mr. Suren Ajjarapu, the Chairman and CEO of TRxADE HEALTH, purchased 16,667 shares of the Company’s common shares from the Company at $3.00 per share in December 2023.  Both Mr. Peterson and Mr. Ajjarapu recused themselves on the TRxADE HEALTH board vote of investing in the Series A Preferred. 

Trxade paid the $2,500,000 due pursuant to Tranche 1 on March 5, 2024, and was issued the 1,000,000 shares of Series A Preferred on March 21, 2024. 

The Series A Preferred is convertible into common stock, initially on a one-for-one basis, and subject to certain anti-dilution rights which increase the number of shares of common stock issuable upon conversion thereof, either at the option of the holder thereof, or automatically upon the receipt by the holder of $2.50 per share in dividend payments. We also agreed to pay the holders of the Series A Preferred stock a quarterly dividend equal to their pro rata portion of 30% of our quarterly earnings before taxes as determined in accordance with U.S. generally accepted accounting principles. The Series A Preferred also carry a $2.50 per share liquidation preference, provided that such Series A Preferred also have the right to participate with the common stock in liquidating distributions, on an as-converted basis, after the payment of such $2.50 liquidation preference.

The Series A Preferred is described in greater detail under “Description of Capital Stock—Preferred Stock—Series A Convertible Preferred Stock”.

Selected Risks Associated with Our Company

Our business is subject to numerous risks and uncertainties, including those in the section entitled “Risk Factors” and elsewhere in this prospectus. These risks include, but are not limited to, the following:

Risks Related to our Operating History and Need for Funding

· The fact that we have a limited operating history and have not generated any operating revenues to date and our ability to generate revenues and/or achieve profitability, our need for additional funding and the availability and terms of such funding;

· Our ability to execute our growth strategy and scale our operations and risks associated with such growth;

· Our need to raise additional funding to complete planned drilling and the terms of such funding, if any;  

Risks Related to The U.S. and Global Economy
	·	Current and future declines in economic activity and recessions, and their effect on the Company, its property, prospects and the supply and demand, and ultimate price of oil and natural gas;
	·	Risks associated with inflation, recessions, and increases in interest rates;

Risks Related to the Oil, NGL and Natural Gas Industry and Our Business
	·	The future price of oil, natural gas and NGL;
	·	The status and availability of oil and natural gas gathering, transportation, and storage facilities owned and operated by third parties;

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· An increase in the differential between the NYMEX or other benchmark prices of oil and natural gas and the wellhead price we receive for our production may adversely affect our business, financial condition, and results of operations;

· The impact of a decline in global oil and natural gas prices for an extended period of time;

· Our ability to generate sufficient cash flow to meet any future debt service and other obligations due to events beyond our control;

· The fact that to date we only hold options to acquire drilling and mineral rights and have not to date acquired any drilling and mineral rights, the acquisition of which will require significant additional capital;

· The fact that all our assets and operations are located in, and planned to be located in,  Utah and the Saint Landry Parish located in south central Louisiana, making us vulnerable to risks associated with operating in only two geographic areas;

· The speculative nature of our oil and gas operations, and general risks associated with the exploration for, and production of oil and gas; including accidents, equipment failures or mechanical problems which may occur while drilling or completing wells or in production activities; operational hazards and unforeseen interruptions for which we may not be adequately insured; the threat and impact of terrorist attacks, cyber-attacks or similar hostilities; declining reserves and production; and losses or costs we may incur as a result of title deficiencies or environmental issues in the properties in which we invest, any one of which may adversely impact our operations;

· Intense competition in the oil and natural gas industry;

· Our competitors use of superior technology and data resources that we may be unable to afford or obtain the use of;

· Uncertainties associated with enhanced recovery methods which may result in us not realizing an acceptable return on our investments in such projects or suffering losses;

· Requirements that we must drill on certain of acreage in order to hold such acreage by production;

· Improvements in or new discoveries of alternative energy technologies that could have a material adverse effect on our financial condition and results of operations;

· Future litigation or governmental proceedings which could result in material adverse consequences, including judgments or settlements;

· Future material impairments of our oil and gas assets;  

Risks Related to Management, Employees and Directors
	·	Our dependence on the continued involvement of our present management;
	·	Potential conflicts of interest that could arise for certain members of our management team and board of directors;

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Risks Relating to Government Regulations
	·	Our ability to comply with government regulations, changing regulations and laws, penalties associated with any non-compliance (inadvertent or otherwise), the effect of new laws or regulations, and our ability to comply with such new laws or regulations;

Risks Associated with Our Governing Documents and Delaware Law
	·	Certain terms and provisions of our governing documents which may prevent a change of control, and which provide for indemnification of officers and directors, limit the liability of officers or directors, and provide for the board of director’s ability to issue blank check preferred stock;

Risks Related to Our Securities and this Offering
	·	The fact that certain recent initial public offerings of companies with public floats comparable to the anticipated public float of the Company have experienced extreme volatility that was seemingly unrelated to the underlying performance of the respective company; and the fact that we may experience similar volatility, which may make it difficult for prospective investors to assess the value of our common stock;
	·	The anticipated volatile nature of the trading prices of our common stock following this offering; dilution experienced by investors in the offering; and dilution which may be caused by future sales of securities;
	·	Rights and privileges associated with our Series A Preferred Stock and dilution caused by the conversion thereof; and
	·	The fact that upon closing of the Farm-In Agreement, Heavy Sweet will own a significant portion of our outstanding common stock and the dilution caused by the closing of such transaction.

Company Information and Formation

Our principal executive offices are located at 3450 N. Triumph Blvd., Suite 102 Lehi, Utah 84043. Our principal website address is www.LafayetteEnergyCorp.com. The information on or accessible through our website is not part of this prospectus.

Nasdaq Capital Market Listing

We have applied to list our common stock on the Nasdaq Capital Market under the symbol “LEC”, and previously received conditional listing approval for such listing; however, there can be no assurance that such listing approval is still effective. If our application to the Nasdaq Capital Market is not approved or we otherwise determine that we will not be able to secure the listing of the common stock on the Nasdaq Capital Market, we will not complete the offering.

Reverse Stock Split

Effective on January 24, 2023, our Board of Directors, and on January 26, 2023, stockholders holding a majority of our outstanding voting shares, approved resolutions approving and authorizing the filing of a Second Amended and Restated Certificate of Incorporation of the Company, which affected a two-for-three reverse stock split of the outstanding shares of our common stock, without any corresponding change in the number of authorized shares of common stock of the Company. On January 31, 2023, the Second Amended and Restated Certificate of Incorporation of the Company was filed with the Secretary of Delaware, and at the same time, the Reverse Stock Split became effective. Except as otherwise indicated and except in our financial statements and the notes thereto, all references to our common stock, share data, per share data and related information retroactively depict and reflect the Reverse Stock Split. The reverse Stock Split combined each three shares of our outstanding common stock into two shares of common stock, without any change in the par value per share, and the Reverse Stock Split correspondingly adjusted, among other things, the number of shares of common stock available for awards under our equity compensation plans. No fractional shares were issued in connection with the Reverse Stock Split, and any fractional shares resulting from the Reverse Stock Split were rounded up to the nearest whole share on a per stockholder basis.

Implications of Being an Emerging Growth Company

As a company with less than $1.235 billion in revenue during our last fiscal year, we qualify as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As an emerging growth company, we have elected to take advantage of reduced reporting requirements and are relieved of certain other significant requirements that are otherwise generally applicable to public companies. As an emerging growth company:

We may take advantage of these provisions until December 31, 2029 (the last day of the fiscal year following the fifth anniversary of our initial public offering) if we continue to be an emerging growth company. We would cease to be an emerging growth company if we have more than $1.235 billion in annual revenue, have more than $700 million in market value of our shares held by non-affiliates or issue more than $1.0 billion of non-convertible debt over a three-year period. We may choose to take advantage of some but not all of these reduced burdens. We have elected to take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act, for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act.

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THE OFFERING

Common stock we are offering	1,200,000 shares (or 1,380,000 shares if the underwriter exercises its over-allotment option in full).
Over-allotment option	We have granted to underwriter an option to purchase up to an additional 180,000 shares of common stock (equal to 15% of the number of shares of common stock sold in the offering) from us, solely to cover over-allotments, if any, at the applicable public offering price less the underwriting discounts and commissions shown on the cover page of this prospectus. The underwriter may exercise this option in full or in part at any time and from time to time until 45 days after the date of this prospectus.
Common stock outstanding immediately before this offering	13,812,379  shares
Common stock outstanding immediately after this offering*	15,745,713  shares, or 15,925,713 shares if the over-allotment option is exercised in full.
Assumed offering price	$4.00  per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus.
Use of proceeds	We expect to receive net proceeds from this offering of approximately $4.162 million (or approximately $4.832 million if the underwriter exercises in full its option to purchase 180,000 additional shares of our common stock), assuming an initial public offering price of $4.00 per share, the midpoint of the estimated price range set forth on the cover page of this prospectus, and after deducting underwriting discounts and commissions and estimated offering expenses. We currently intend to use the net proceeds we receive from this offering to invest in the Initial Development Opportunities, to pay bonuses due to our Chief Executive Officer and Chairman ($120,000), and for general corporate purposes, including working capital and operating expenses. In addition, we may use a portion of the net proceeds of this offering to finance future acquisitions. However, we do not have any agreements or commitments with respect to any such acquisitions or investments at this time.
Risk Factors	The purchase of our common stock involves a high degree of risk. The common stock offered in this prospectus is for investment purposes only and currently no market exists for our common stock. Please refer to the section entitled “Risk Factors” before making an investment in our common stock.
Lock-up	We, our directors, executive officers, employees and certain stockholders have agreed not to offer, issue, sell, contract to sell, encumber, grant any option for the sale of or otherwise dispose of any of our securities for a period of 180 days following the closing of the offering of the shares. See “Underwriting” for more information.
Proposed trading symbol	We have applied to list our common stock on the Nasdaq Capital Market under the symbol “LEC”, and previously received conditional listing approval for such listing; however, there can be no assurance that such listing approval is still effective. If our application to the Nasdaq Capital Market is not approved or we otherwise determine that we will not be able to secure the listing of the common stock on the Nasdaq Capital Market, we will not complete the offering.

* Includes 733,334 shares of restricted common stock that we plan to issue to our Chief Executive Officer and three of its non-employee directors promptly following the closing.

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Unless we indicate otherwise, all information in this prospectus:

· is based on 13,812,379 shares of common stock issued and outstanding as of April 25, 2024;

· assumes no exercise by the underwriter of its option to purchase up to an additional 180,000 shares of common stock to cover over-allotments, if any;

· assumes no issuance of the up to 3,400,000 Farm-In Shares;

· assumes no exercise by the underwriter of warrants to purchase [____________] shares of common stock with an exercise price of [$_______] per share which the underwriter will be granted as partial consideration in connection with this offering; and

· Assumes no awards under the Company’s 2022 Equity Incentive Plan, of which 3,089,803 shares currently remain available for future awards under such plan, except in connection with the number of shares outstanding after this offering, which includes a total of 733,334 shares of restricted common stock that are expected to be issued after the date of this prospectus to our Chief Executive Officer and three of our non-employee directors.

SUMMARY FINANCIAL DATA

The following table presents our summary historical financial data for the periods indicated. The summary historical financial data (a) as of March 31, 2024, and for the three months ended March 31, 2024 and 2023, are derived from the unaudited financial statements included herein, and (b) for the year ended December 31, 2023 and the period from February 7, 2022 (Inception) through December 31, 2022, and the balance sheet data as of December 31, 2023 and 2022, are derived from the audited financial statements included herein. The Company’s fiscal year end is December 31.

Historical results are included for illustrative and informational purposes only and are not necessarily indicative of results we expect in future periods, and results of interim periods are not necessarily indicative of results for the entire year. You should read the following summary financial data in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and related notes appearing elsewhere in this prospectus.

Statements of Operations Data	Three months ended March 31, 2024			Three months ended March 31, 2023
Consulting fees	$	178,425		$	41,000
Consulting fees, related party		—			11,000
Filing fees		25,947			24,733
Professional fees		98,368			154,070
General and administrative expenses – other		651			8,005
Net loss	$	(303,391	)	$	(238,808	)

Statements of Operations Data	Year ended December 31, 2023			From February  7, 2022 (Inception) to December 31, 2022
Consulting fees	$	923,143		$	157,767
Consulting fees, related party		11,000			52,000
Asset impairment		739,458			—
Professional fees		241,142			215,011
General and administrative expenses – other		33,783			14,262
Gain on foreign exchange		—			7,975
Interest expense, related party		—			(37	)
Net loss	$	(1,948,526	)	$	(431,102	)

Balance Sheet Data	March 31, 2024			December 31, 2023			December 31, 2022
Cash and cash equivalents	$	1,749,373		$	20,172		$	64,162
Oil and gas properties - unproved		570,442			—			713,161
Total assets		9,039,815			20,172			777,323
Debt(1)		—			42,845			—
Working capital (deficit)		1,672,110			(104,057	)		41,308
Accumulated deficit		(2,683,019	)		(2,379,628	)		(431,102	)
Total stockholders’ equity (deficit)	$	8,962,552		$	(104,057	)	$	754,469

(1) Represents amounts due to related party.

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RISK FACTORS

Investing in our common stock involves a high degree of risk. You should carefully consider each of the following risks, together with all other information set forth in this prospectus, including the financial statements and the related notes, before making a decision to buy our common stock. If any of the following risks actually occurs, our business could be harmed. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment.

Risks Related to our Operating History and Need for Funding

The Company is recently formed and has no operating history and no operating revenues and there is no assurance that the Company can generate revenues in the future.

We had an accumulated deficit of $2,683,019, $2,379,628 and $431,102 as of March 31, 2024, December 31, 2023 and December 31, 2022, respectively, and a net loss of $303,391, $1,948,526 and $431,102, for the three months ended March 31, 2024, the year ended December 31, 2023, and the period from February 7, 2022 (Inception) through December 31, 2022, respectively. We believe that the funds raised through the Tranche 1 sale of Series A Preferred Stock in March 2024, the expected Tranche 2 closing of the sale of an additional $2.5 million Series A Preferred Stock, at such time as we have produced at least 100 barrels of oil, and in this offering will be sufficient to fund our operations for the next 12 months. We may need to raise additional funding to drill additional wells if our Initial Development Opportunities do not perform as expected and/or if we are unable to obtain the anticipated RBL loan based on the performance of those first wells.   We may be required to raise additional funds through public or private debt or equity financing or other various means to fund our operations and complete exploration and drilling operations and acquire assets. In such a case, adequate funds may not be available when needed or may not be available on favorable terms. If we need to raise additional funds in the future by issuing equity securities, dilution to existing stockholders will result, and such securities may have rights, preferences, and privileges senior to those of our common stock. If funding is insufficient at any time in the future and we are unable to generate sufficient revenue from new business arrangements, to complete planned acquisitions or operations, our results of operations and the value of our securities could be adversely affected.

Additionally, due to the nature of oil and gas interests, i.e., that rates of production generally decline over time as oil and gas reserves are depleted, if we are unable to drill wells and develop reserves, either because we are unable to raise sufficient funding for such development activities, or otherwise, over time, we believe that our future revenues will decline over time. If this were to happen, we may be forced to scale back our business plan, sell or liquidate assets to satisfy outstanding debts, all of which could result in the value of our outstanding securities declining in value.

These conditions increase the risks associated with our business plan. The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Accordingly, the financial statements do not include any adjustments relating to the recoverability of assets and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

We may need additional capital which may not be available on commercially acceptable terms, if at all.

We may need additional capital to support our operations and to undertake our business plan, including the planned drilling of oil and gas wells. We may also require additional funding in the future to support our operations or complete acquisitions. The most likely source of future funds presently available to us will be through the sale of equity capital or debt. Any sale of share capital will result in dilution to existing stockholders. Furthermore, we may incur debt in the future, and may not have sufficient funds to repay our future indebtedness or may default on our future debts, jeopardizing our business viability.

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We may not be able to borrow or raise additional capital in the future to meet our needs or to otherwise provide the capital necessary to expand our operations and business, which might result in the value of our securities decreasing in value or becoming worthless. Additional financing may not be available to us on terms that are acceptable. Consequently, we may not be able to proceed with our intended business plans. Obtaining additional financing contains risks, including:

· additional equity financing may not be available to us on satisfactory terms and any equity we are able to issue could lead to dilution for current stockholders;

· loans or other debt instruments may have terms and/or conditions, such as interest rate, restrictive covenants and control or revocation provisions, which are not acceptable to management or our directors;

· the current environment in capital markets combined with our capital constraints may prevent us from being able to obtain adequate debt financing; and

· if we fail to obtain required additional financing to commercialize our planned products and grow our business, we would need to delay or scale back our business plan, reduce our operating costs, or delay product launches, each of which would have a material adverse effect on our business, future prospects, and financial condition.

Additionally, we may have difficulty obtaining additional funding, and we may have to accept terms that would adversely affect our stockholders. For example, the terms of any future financings may impose restrictions on our right to declare dividends (provided that none are currently planned) or on the manner in which we conduct our business. Additionally, lending institutions or private investors may impose restrictions on a future decision by us to make capital expenditures, acquisitions, or significant asset sales. If we are unable to raise additional funds, we may be forced to curtail or even abandon our business plan.

We have a limited operating history and expect to continue to incur losses for an indeterminable period of time.

We have a limited operating history and are engaged in the initial stages of exploration, development and exploitation of our leasehold acreage and will continue to be so until commencement of substantial production from our oil and natural gas properties, which will depend upon successful drilling results, additional and timely capital funding, and access to suitable infrastructure. Companies in their initial stages of development face substantial business risks and may suffer significant losses. We have generated substantial net losses in the past and may continue to incur net losses as we continue our drilling program. In considering an investment in our shares, you should consider that there is only limited historical and financial operating information available upon which to base your evaluation of our performance. We have incurred net losses of  $2,683,019 for the period from February 7, 2022 (Inception) through March 31, 2024. Additionally, we are dependent on obtaining additional debt and/or equity financing to roll-out and scale our planned principal business operations. Management’s plans in regard to these matters consist principally of seeking equity funding from this offering and future additional debt and/or equity financing combined with expected cash flows from our oil and gas assets held and additional oil and gas assets that we may acquire. Our efforts may not be successful, and funds may not be available on favorable terms, if at all.

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We face challenges and uncertainties in financial planning as a result of the unavailability of historical data and uncertainties regarding the nature, scope and results of our future activities. New companies must develop successful business relationships, establish operating procedures, hire staff, install management information and other systems, establish facilities, and obtain licenses, as well as take other measures necessary to conduct their intended business activities. We may not be successful in implementing our business strategies or in completing the development of the infrastructure necessary to conduct our business as planned. In the event that one or more of our drilling programs is not completed or is delayed or terminated, our operating results will be adversely affected, and our operations will differ materially from the activities described in this prospectus and our subsequent periodic reports. As a result of industry factors or factors relating specifically to us, we may have to change our methods of conducting business, which may cause a material adverse effect on our results of operations and financial condition. The uncertainty and risks described in this prospectus may impede our ability to economically find, develop, exploit, and acquire oil and natural gas reserves. As a result, we may not be able to achieve or sustain profitability or positive cash flows provided by our operating activities in the future.

We may not be able to generate sufficient cash flow to meet our current and any future debt service and other obligations due to events beyond our control.

Our ability to generate cash flows from operations, to make payments on or refinance our current debt or any potential future indebtedness and to fund working capital needs and planned capital expenditures will depend on our future financial performance and our ability to generate cash in the future. Our future financial performance will be affected by a range of economic, financial, competitive, business, and other factors that we cannot control, such as general economic, legislative, regulatory and financial conditions in our industry, the economy generally, interest rates, inflation, the price of oil and other risks described below. A significant reduction in operating cash flows resulting from changes in economic, legislative or regulatory conditions, increased competition or other events beyond our control could increase the need for additional or alternative sources of liquidity and could have a material adverse effect on our business, financial condition, results of operations, prospects and our ability to service our current and future potential debt and other obligations. If we are unable to service our current and any future potential indebtedness or to fund our other liquidity needs, we may be forced to adopt an alternative strategy that may include actions such as reducing or delaying capital expenditures, selling assets, restructuring, or refinancing such indebtedness, seeking additional capital, or any combination of the foregoing. If we raise debt, it would increase our interest expense, leverage and our operating and financial costs. We cannot assure you that any of these alternative strategies could be affected on satisfactory terms, if at all, or that they would yield sufficient funds to make required payments on future potential indebtedness or to fund our other liquidity needs. Reducing or delaying capital expenditures or selling assets could delay future cash flows. In addition, the terms of future debt agreements may restrict us from adopting any of these alternatives. We cannot assure you that our business will generate sufficient cash flows from operations or that future borrowings will be available in an amount sufficient to enable us to pay such future potential indebtedness or to fund our other liquidity needs.

If for any reason we are unable to meet our current or future potential debt service and repayment obligations, we may be in default under the terms of the agreements governing such indebtedness, which could allow our creditors at that time to declare such outstanding indebtedness to be due and payable. Under these circumstances, our lenders could compel us to apply all of our available cash to repay our borrowings. In addition, the lenders under our credit facilities or other secured indebtedness could seek to foreclose on any of our assets that are their collateral. If the amounts outstanding under such indebtedness were to be accelerated, or were the subject of foreclosure actions, our assets may not be sufficient to repay in full the money owed to the lenders or to our other debt holders.

Risks Related to The U.S. and Global Economy

Downturns and volatility in global economies and commodity and credit markets may materially adversely affect our business, results of operations and financial condition.

Our results of operations may be, materially adversely affected by the conditions of the global economies and the credit, commodities, and stock markets. Additionally, a decline in consumer confidence or changing patterns in the availability and use of disposable income by consumers can negatively affect the demand for oil and gas and as a result our results of operations.

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Economic uncertainty may affect our access to capital and/or increase the costs of such capital.

Global economic conditions continue to be volatile and uncertain due to, among other things, consumer confidence in future economic conditions, fears of recession and trade wars, the price of energy, fluctuating interest rates, the availability and cost of consumer credit, the availability and timing of government stimulus programs, levels of unemployment, increased inflation, and tax rates. These conditions remain unpredictable and create uncertainties about our ability to raise capital in the future. In the event required capital becomes unavailable in the future, or more costly, it could have a material adverse effect on our business, results of operations, and financial condition.

Declining general economic, business or industry conditions will have a material adverse effect on our results of operations, liquidity, and financial condition for the foreseeable future.

Concerns over global economic conditions, energy costs, geopolitical issues (including, but not limited to the current Ukraine/Russia conflict and conflict in Israel), changes in inflation and interest rates, and the availability and cost of credit are expected to contribute to increased economic uncertainty and diminished expectations for the global economy. These factors, combined with volatile prices of oil and natural gas, and declining business and consumer confidence, have precipitated an economic slowdown, which could expand to a recession or global depression. If the economic climate in the United States or abroad continues to deteriorate, demand for petroleum products could diminish, which could impact the price at which we can sell our future oil, natural gas and natural gas liquids, affect the ability of our vendors, suppliers and customers to continue operations, and ultimately adversely impact our future results of operations, liquidity and financial condition.

Our industry and the broader U.S. economy experienced higher than expected inflationary pressures in 2022, related to continued supply chain disruptions, labor shortages and geopolitical instability. Should these conditions reoccur our business, results of operations and cash flows could be materially and adversely affected.

2022 saw significant increases in the costs of certain materials, including steel, sand, and fuel, as a result of availability constraints, supply chain disruption, increased demand, labor shortages associated with a fully employed U.S. labor force, high inflation and other factors. Supply and demand fundamentals during 2022 were further aggravated by disruptions in global energy supply caused by multiple geopolitical events, including the ongoing conflict between Russia and Ukraine and the conflict in Israel. Service and materials costs have also increased accordingly with general supply chain and inflation issues seen throughout the industry leading to increased operating costs. While for the most part such inflationary pressures and supply chain constraints have leveled off and are no longer having as significant effect on pricing and availability as they did in 2022, in the future supply chain constraints and inflationary pressures may adversely impact our operating costs and may negatively impact our ability to procure materials and equipment in a timely and cost-effective manner, if at all, which could result in reduced margins and exploration, completion and production delays and, as a result, our business, financial condition, results of operations and cash flows could be materially and adversely affected.

The conflict in Ukraine and related price volatility and geopolitical instability could negatively impact our business.

In late February 2022, Russia launched significant military action against Ukraine. The conflict has caused, and could intensify, volatility in natural gas, oil and NGL prices, and the extent and duration of the military action, sanctions and resulting market disruptions could be significant and could potentially have a substantial negative impact on the global economy and/or our business for an unknown period of time. We believe that the increase in crude oil prices which began in 2022 has partially been due to the impact of the conflict between Russia and Ukraine on the global commodity and financial markets, and in response to economic and trade sanctions that certain countries have imposed on Russia. Any such volatility and disruptions may also magnify the impact of other risks described herein.

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Risks Related to the Oil, NGL and Natural Gas Industry and Our Business

Prices of oil, NGL and natural gas prices, have in the past, and will continue in the future, to be volatile and such volatility may adversely affect our business, financial condition or results of operations and our ability to meet our capital expenditure obligations or targets and financial commitments.

The price we will receive for our oil and, to a lesser extent, natural gas and NGLs, will heavily influence our revenue, profitability, cash flows, liquidity, access to capital, present value and quality of our reserves, the nature and scale of our operations and future rate of growth. Oil, NGL and natural gas are commodities and, therefore, their prices are subject to wide fluctuations in response to relatively minor changes in supply and demand. In recent years, the markets for oil and natural gas have been volatile. These markets will likely continue to be volatile in the future. Further, oil prices and natural gas prices do not necessarily fluctuate in direct relation to each other. We believe our financial results will be sensitive to movements in oil prices. The price of crude oil has experienced significant volatility over the last five years, with the price per barrel of West Texas Intermediate (“WTI”)   crude, dropping below $20 per barrel in 2020 due in part to reduced global demand stemming from the global COVID-19 outbreak, and surging to over $120 a barrel in early March 2022, following Russia’s invasion of the Ukraine, and between $73 and $87 in recent months.  A prolonged period of low market prices for oil and natural gas, or further declines in the market prices for oil and natural gas, will likely result in capital expenditures being further curtailed and will adversely affect our business, financial condition and liquidity and our ability to meet obligations, targets or financial commitments and could ultimately lead to restructuring or filing for bankruptcy, which would have a material adverse effect on our stock price and indebtedness. Additionally, lower oil and natural gas prices have, and may in the future, cause, a decline in our stock price. The below table highlights the recent volatility in oil and gas prices by summarizing the high and low daily NYMEX WTI oil spot price and daily NYMEX natural gas Henry Hub spot price for the periods presented:

	Daily NYMEX WTI oil spot price (per Bbl)					Daily NYMEX natural gas Henry Hub spot price (per MMBtu)
	High		Low			High		Low
Year ended December 31, 2019	$	66.24	$	46.31		$	4.25	$	1.75
Year ended December 31, 2020	$	63.27	$	(36.98	)	$	3.14	$	1.33
Year ended December 31, 2021	$	85.64	$	47.47		$	23.86	$	2.43
Year ended December 31, 2022	$	123.64	$	71.05		$	9.85	$	3.46
Year ended December 31, 2023	$	93.67	$	66.61		$	3.78	$	1.74
Quarter ended March 31, 2024	$	84.39	$	70.62		$	13.2	$	1.25

We hold no actual oil and gas properties as of the date of this prospectus and instead only hold rights under a Farm-In Agreement and options to acquire rights to oil and gas properties.

As discussed in greater detail below under “Business”, to date, we hold only rights under a Farm-In Agreement to acquire the Asphalt Ridge Leases and Asphalt Ridge Acreage, and options to lease approximately 1,487 acres in Imperial Parish, and have no revenue-generating operations as of the date of this prospectus. We plan to use a portion of the funds generated through this offering to exercise certain of those options and acquire the mineral and drilling rights for certain of the acres we plan to develop in the future. Because we hold no actual mineral or drilling rights as of the date of this prospectus, there is a risk that we will not be able to obtain such rights in the future or certain pre-requisites necessary for us to exercise the options and/or maintain such mineral and drilling rights may not exist in the future. Even if we are able to close the Farm-In Agreement and/or validly exercise the options for our properties, we may not ultimately be successful in locating commercial quantities of oil and gas on such properties and similarly may be unable to successfully extract commercial quantities of oil and gas from such properties. Furthermore, pursuant to the terms of the leases associated with such Farm-In Agreement and options, under certain circumstances the leased properties may revert back to the original owners. Consequently, we may not ultimately receive any economic benefit from the options and may not be able to obtain any mineral or drilling rights in the future.

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The oil and natural gas reserves estimated pursuant to any resource and reserve reports we may rely upon may not reflect the actual volumes of oil and natural gas present or commercially recoverable, and significant inaccuracies in these reserve estimates or underlying assumptions will materially affect the quantities and present value of our future production.

The process of estimating accumulations of oil and natural gas is complex and is not exact, due to numerous inherent uncertainties. The process relies on interpretations of available geological, geophysical, engineering and production data. The extent, quality and reliability of this technical data can vary. The process also requires certain economic assumptions related to, among other things, oil and natural gas prices, drilling and operating expenses, capital expenditures, taxes and availability of funds. The accuracy of a reserves estimate is a function of:

· the quality and quantity of available data;

· the interpretation of that data;

· the judgment of the persons preparing the estimate; and

· the accuracy of the assumptions.

The accuracy of any estimates of proved reserves generally increases with the length of the production history. Due to the limited production history of our optioned property, the estimates of future production associated with these properties may be subject to greater variance to actual production than would be the case with properties having a longer production history. As wells produce over time and more data is available, the estimated proved reserves will be re-determined on at least an annual basis and may be adjusted to reflect new information based upon actual production history, results of exploration and development, prevailing oil and natural gas prices and other factors.

Actual future production, oil and natural gas prices, revenues, taxes, development expenditures, operating expenses and quantities of recoverable oil and natural gas most likely will vary from our estimates. It is possible that future production declines in our wells may be greater than we have estimated. Any significant variance to our estimates could materially affect the quantities and present value of our reserves.

We have not obtained a reserve report or oil and gas property audit, prepared in accordance with SEC requirements and guidance for the Asphalt Ridge Acreage or our Imperial Parish Fields optioned oil and gas properties.

As part of our diligence into the Asphalt Ridge Acreage and the Imperial Parish Fields, the Company evaluated potential target zones and any available offset well results, and identified potential well locations and reviewed an independent third-party resource analysis of the Asphalt Ridge Acreage and produced an estimate of the resource opportunity of the Imperial Parish Fields, noting that “resource” estimates are not consistent with “proved reserves” as defined by the SEC, and that we do not currently have, and may not have in the future, either proved reserves or production of oil or natural gas in commercial quantities or at all. Based on our Resource Estimate, we believe single well economics in the Imperial Parish Fields area on which we hold our options would be robust in today’s commodity price environment. Future SEC compliance reserve reports and audits may result in estimates of oil and gas properties significantly less than our current Resource Estimates, which was not prepared in accordance with SEC requirements and guidance, which may have a material adverse effect on our estimated quantities of oil and gas, our projected future revenues and expenses, and management’s plans for future exploration and production activities, as well as the timeline and funding associated therewith. Any of the above may have a material adverse effect on our results of operation and cash flows. We plan to obtain a reserve report in SEC form for the Asphalt Ridge Acreage as soon as we complete our first three wells.

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We may need to raise additional funding to complete our planned drilling activities.       

As described under “Use of Proceeds”, we plan to use the funds from this offering to develop the Asphalt Ridge Asset and also plan to use expected cash flow from those operations to purchase lease options on an additional 27,800 targeted acres and to prepare a 3-D seismic survey on the optioned acreage. There is no guarantee that the Asphalt Ridge Asset will be able to obtain a reserve base loan facility, to the extent we need such a facility, and/or generate funds needed to further develop additional wells. We will need the Asphalt Ridge Asset operation to be successful in producing sufficient cash flow or to raise additional funds to drill wells on our optioned acreage however, and while we expect such funds being provided by a reserve based lending facility, as discussed in the risk factor below, such funding may not be available on favorable terms if at all. If we are unable to raise funding to complete our planned drilling operations, or otherwise acquire producing properties, we will not be able to generate any revenues, may need to curtail or cease our business operations, and any investment in the Company could decrease in value or become worthless.

Our development plan contemplates our potential entry into future reserve-based lending facilities, which may not be available on favorable terms, if at all. To the extent we borrow funds under a future reserve-based lending facility we may not be able to generate sufficient cash to service all our indebtedness and may be forced to take other actions to satisfy our debt obligations that may not be successful.

Part of our development plan contemplates our entering into a reserve-based lending facility following this offering to raise funding for the drilling of subsequent wells on the Asphalt Ridge Asset after the initial three wells  are drilled, completed and have demonstrated expected production.  Though we have had discussions with a lender, there is no assurance that a lending facility will be available on favorable terms, if at all, and to date we have not entered into any definitive agreements regarding such a lending facility. Due to recent increases in interest rates, inflation and economic uncertainty, such planned reserve-based lending facility may not ultimately be available or may be available on unfavorable terms. The unavailability of, or unfavorable terms associated with, a future reserve-based lending facility may have a material adverse effect on our planned future operations, business plan and ability to drill future wells and generate revenues, any of which may have a material adverse effect on the value of our securities.

In the event we are not able to enter into a reserve-based lending facility in the future and if cash flow and capital resources are insufficient to fund such debt service obligations, we may be forced to reduce or delay our planned drilling activities, investments and capital expenditures, sell assets, seek additional capital or restructure or refinance existing indebtedness. In addition, any failure to make payments of interest and principal on outstanding indebtedness on a timely basis may result in a reduction of our credit rating, which could harm our ability to incur additional indebtedness. In the absence of sufficient cash flows and capital resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet debt service and other obligations, any of which may have a material adverse effect on the value of our securities.

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All of our crude oil, natural gas and NGLs production is anticipated to be located in Utah and the Saint Landry Parish located in south central Louisiana, making us vulnerable to risks associated with operating in only two geographic areas.

Our planned future operations are focused first in Utah, and then in Louisiana, solely in the Saint Landry Parish located in south central Louisiana, which means our future properties and drilling opportunities will be geographically concentrated in those two areas. Because our operations will not be as diversified geographically as many of our competitors, the success of our operations and our profitability may be disproportionately exposed to the effect of any regional events, including:

· fluctuations in prices of crude oil, natural gas and NGLs produced from the wells in these areas;

· natural disasters;

· the effects of local quarantines;

· restrictive governmental regulations; and

· curtailment of production or interruption in the availability of gathering, processing or transportation infrastructure and services, and any resulting delays or interruptions of production from existing or planned new wells.

For example, the demand for our oil from refiners in Utah or the bottlenecks in processing and transportation that have occurred in some recent periods in the Saint Landry Parish located in south central Louisiana may negatively affect our future results of operations, and these adverse effects may be disproportionately severe to us compared to our more geographically diverse competitors. Similarly, the concentration of our future assets within a small number of producing formations exposes us to risks, such as changes in field-wide rules that could adversely affect development activities or production relating to those formations. Such an event could have a material adverse effect on our future results of operations and financial condition. The development of the Asphalt Ridge Asset will require access to natural gas and carbon dioxide (CO₂) to perform steam injection which, while currently available, could undergo a supply constraint which, if it were to occur, would make development prohibitive. In addition, in areas where exploration and production activities are increasing, as has been the case in recent years in the Saint Landry Parish located in south central Louisiana, the demand for, and cost of, drilling rigs, equipment, supplies, personnel and oilfield services increase. Shortages or the high cost of drilling rigs, equipment, supplies, personnel or oilfield services could delay or adversely affect our future development and exploration future operations or cause us to incur significant expenditures that are not provided for in our capital forecast, which could have a material adverse effect on our business, financial condition or results of operations.

Drilling for and producing oil and natural gas are highly speculative and involve a high degree of risk, with many uncertainties that could adversely affect our business. We have not recorded proved reserves, and areas that we decide to drill may not yield oil or natural gas in commercial quantities or at all.

Exploring for and developing hydrocarbon reserves involves a high degree of operational and financial risk, which precludes us from definitively predicting the costs involved and time required to reach certain objectives. Our potential drilling locations are in various stages of evaluation, ranging from locations that we believe could be ready to drill, to the majority of locations in the Imperial Parish Fields, where we plan on performing 3-D seismic imaging that will require substantial additional interpretation before they can be drilled. The budgeted costs of planning, drilling, completing, and operating wells are often exceeded, and such costs can increase significantly due to various complications that may arise during the drilling and operating processes. Before a well is spudded, we may incur significant geological and geophysical (seismic) costs, which are incurred whether a well eventually produces commercial quantities of hydrocarbons or is drilled at all. Exploration wells bear a much greater risk of loss than development wells. The analogies we draw from available data from other wells, more fully explored locations or producing fields may not be applicable to our drilling locations. If our actual drilling and development costs are significantly more than our estimated costs, we may not be able to continue our operations as proposed and could be forced to modify our drilling plans accordingly.

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If we decide to drill a certain location, there is a risk that no commercially productive oil or natural gas reservoirs will be found or produced. We may drill or participate in new wells that are not productive. We may drill wells that are productive, but that do not produce sufficient net revenues to return a profit after drilling, operating and other costs. There is no way to predict in advance of drilling and testing whether any particular location will yield oil or natural gas in sufficient quantities to recover exploration, drilling or completion costs or to be economically viable. Even if sufficient amounts of oil or natural gas exist, we may damage the potentially productive hydrocarbon-bearing formation or experience mechanical difficulties while drilling or completing the well, resulting in a reduction in production and reserves from the well or abandonment of the well. Whether a well is ultimately productive and profitable depends on a number of additional factors, including the following:

· general economic and industry conditions, including the prices received for oil and natural gas;

· shortages of, or delays in, obtaining equipment, including hydraulic fracturing equipment, and qualified personnel;

· potential significant water production which could make a producing well uneconomic;

· potential drainage by operators on adjacent properties;

· loss of, or damage to, oilfield development and service tools;

· problems with title to the underlying properties;

· increases in severance taxes;

· adverse weather conditions that delay drilling activities or cause producing wells to be shut down;

· domestic and foreign governmental regulations; and

· proximity to and capacity of transportation facilities.

If we do not drill productive and profitable wells in the future, our business, financial condition, and results of operations could be materially and adversely affected.

Our success is dependent on the prices of oil, NGLs and natural gas. Low oil or natural gas prices and the substantial volatility in these prices are expected to adversely affect, our business, financial condition and results of operations and our ability to meet our capital expenditure requirements and financial obligations.

The prices we receive for our future oil, NGLs and natural gas will heavily influence our revenue, profitability, cash flow available for capital expenditures, access to capital and future rate of growth. Oil, NGLs and natural gas are commodities and, therefore, their prices are subject to wide fluctuations in response to relatively minor changes in supply and demand. Historically, the commodities market has been volatile. For example, the price of crude oil has experienced significant volatility over the last six years, with the price per barrel of WTI crude rising from a low of $27 in February 2016 to a high of $76 in October 2018, then dropping below $20 per barrel in April 2020, due in part to reduced global demand stemming from the recent global COVID-19 outbreak, before surging to over $125 a barrel in early March 2022, following Russia’s invasion of the Ukraine, and currently trading between approximately $73 and $87 per barrel. Prices for natural gas and NGLs experienced declines of similar magnitude. An extended period of continued lower oil prices, or additional price declines, will have further adverse effects on us. The prices we receive for our future production, and the levels of our future production, will depend on numerous factors, including the following:

· the domestic and foreign supply of oil, NGLs and natural gas;

· the domestic and foreign demand for oil, NGLs and natural gas;

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· the prices and availability of competitors’ supplies of oil, NGLs and natural gas;

· the actions of the Organization of Petroleum Exporting Countries, or OPEC, and state-controlled oil companies relating to oil price and production controls;

· the price and quantity of foreign imports of oil, NGLs and natural gas;

· the impact of U.S. dollar exchange rates on oil, NGLs and natural gas prices;

· domestic and foreign governmental regulations and taxes;

· speculative trading of oil, NGLs and natural gas futures contracts;

· localized supply and demand fundamentals, including the availability, proximity, and capacity of gathering and transportation systems for natural gas;

· the availability of refining capacity;

· the prices and availability of alternative fuel sources;

· the threat, or perceived threat, or results, of viral pandemics, for example, as experienced with the COVID-19 pandemic in 2020 and 2021;

· weather conditions and natural disasters;

· political conditions in or affecting oil, NGLs and natural gas producing regions and/or pipelines, including in Eastern Europe, the Middle East, and South America, for example, as experienced with the Russian invasion of the Ukraine in February 2022 and the war in Israel, each of which are still ongoing;

· the continued threat of terrorism and the impact of military action and civil unrest;

· public pressure on, and legislative and regulatory interest within, federal, state, and local governments to stop, significantly limit or regulate hydraulic fracturing activities;

· the level of global oil, NGL and natural gas inventories and exploration and production activity;

· authorization of exports from the Unites States of liquefied natural gas;

· the impact of energy conservation efforts;

· technological advances affecting energy consumption; and

· overall worldwide economic conditions.

Declines in oil, NGL or natural gas prices will not only reduce our future revenue, but will reduce the amount of oil, NGL and natural gas that we can produce economically. Should natural gas, NGL or oil prices decline from current levels and remain there for an extended period of time, we may choose to shut-in our future operated wells, delay some or all of our future exploration and development plans for our prospects, or to cease future exploration or development activities on certain prospects due to the anticipated unfavorable economics from such activities, and, as a result, we may have to make substantial downward adjustments to any future estimated proved reserves, each of which would have a material adverse effect on our business, financial condition and results of operations.

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We have in the past, and may in the future, be forced to write-down material portions of our assets due to low oil prices.

The successful efforts method of accounting is used for oil and gas exploration and production activities. Under this method, all costs for development wells, support equipment and facilities, and proved mineral interests in oil and gas properties are capitalized. We plan to review the carrying value of our long-lived assets annually or whenever events or changes in circumstances indicate that the historical cost-carrying value of an asset may no longer be appropriate. We plan to assess the recoverability of the carrying value of the asset by estimating the future net undiscounted cash flows expected to result from the asset, including eventual disposition. If the future net undiscounted cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset’s carrying value and estimated fair value. This impairment does not impact cash flows from operating activities but does reduce earnings and our stockholders’ equity.

During the year ended December 31, 2023, the Company reviewed its lease options for the likelihood of them being extended and as a result recorded an impairment in the amount of $739,458.

A continued period of low prices may force us to incur additional material write-downs of our oil and natural gas properties, which could have a material effect on the value of our properties and cause the value of our securities to decline in value. Additionally, impairments would occur if we were to experience sufficient downward adjustments to our anticipated estimated proved reserves or the present value of anticipated estimated future net revenues. 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. We have in the past incurred, and may in the future incur, additional impairments of oil and gas properties which may be material.

Our exploration, development and exploitation projects require substantial capital expenditures that may exceed cash on hand, cash flows from operations and potential borrowings, and we may be unable to obtain needed capital on satisfactory terms, which could adversely affect our future growth.

Our exploration and development activities are expected to be capital intensive. We make and expect to continue to make substantial capital expenditures in our business for the development, exploitation, production and acquisition of oil and natural gas reserves. Our cash on hand, our future operating cash flows and future potential borrowings may not be adequate to fund our future acquisitions or future capital expenditure requirements. The rate of our future growth may be dependent, at least in part, on our ability to access capital at rates and on terms we determine to be acceptable.

Our future cash flows from operations and access to capital are expected to be subject to a number of variables, including:

· our future estimated proved oil and natural gas reserves;

· the amount of oil and natural gas we produce from future wells;

· the prices at which we sell our future production;

· the costs of developing and producing our oil and natural gas reserves;

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· our ability to acquire, locate and produce new reserves;

· the general state of the economy;

· the ability and willingness of banks to lend to us; and

· our ability to access the equity and debt capital markets.

In addition, future events, such as terrorist attacks, wars, threat of wars, or combat peace-keeping missions, financial market disruptions, increases in interest rates and inflation, general economic recessions, oil and natural gas industry recessions, large company bankruptcies, accounting scandals, pandemic diseases, overstated reserves estimates by major public oil companies and disruptions in the financial and capital markets have caused financial institutions, credit rating agencies and the public to more closely review the financial statements, capital structures and earnings of public companies, including energy companies. Such events have constrained the capital available to the energy industry in the past, and such events or similar events could adversely affect our access to funding for our operations in the future.

If our future revenues decrease as a result of lower oil and natural gas prices, operating difficulties, declines in reserves or for any other reason, we may have limited ability to obtain the capital necessary to sustain our operations at current levels, further develop and exploit our current properties or invest in additional exploration opportunities. Alternatively, a significant improvement in oil and natural gas prices or other factors could result in an increase in our capital expenditures and we may be required to alter or increase our capitalization substantially through the issuance of debt or equity securities, the sale of production payments, the sale or farm out of interests in our assets, the borrowing of funds or otherwise to meet any increase in capital needs. If we are unable to raise additional capital from available sources at acceptable terms, our business, financial condition, and results of operations could be adversely affected. Further, future debt financings may require that a portion of our cash flows provided by operating activities be used for the payment of principal and interest on our debt, thereby reducing our ability to use cash flows to fund working capital, capital expenditures and acquisitions. Debt financing may involve covenants that restrict our business activities. If we succeed in selling additional equity securities to raise funds, at such time the ownership percentage of our existing stockholders would be diluted, and new investors may demand rights, preferences, or privileges senior to those of existing stockholders. If we choose to farm-out interests in our prospects, we may lose operating control over such prospects.

We may have accidents, equipment failures or mechanical problems while drilling or completing wells or in production activities, which could adversely affect our business.

While we are drilling and completing wells or involved in production activities, we may have accidents or experience equipment failures or mechanical problems in a well that cause us to be unable to drill and complete the well or to continue to produce the well according to our plans. We may also damage a potential geologic formation that has oil and gas reserves during drilling and completion operations. Such incidents may result in a reduction of our production and reserves from the well or in abandonment of the well.

Our operations will be subject to operational hazards and unforeseen interruptions for which we may not be adequately insured.

There are numerous operational hazards inherent in oil and natural gas exploration, development, production and gathering, including:

· unusual or unexpected geologic formations;

· natural disasters;

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· adverse weather conditions;

· unanticipated pressures;

· loss of drilling fluid circulation;

· blowouts where oil or natural gas flows uncontrolled at a wellhead;

· cratering or collapse of the formation;

· pipe or cement leaks, failures, or casing collapses;

· fires or explosions;

· releases of hazardous substances or other waste materials that cause environmental damage;

· pressures or irregularities in formations; and

· equipment failures or accidents.

In addition, there is an inherent risk of incurring significant environmental costs and liabilities in the performance of our operations, some of which may be material, due to our handling of petroleum hydrocarbons and wastes, our emissions to air and water, the underground injection or other disposal of our wastes, the use of hydraulic fracturing fluids and historical industry operations and waste disposal practices.

Any of these or other similar occurrences could result in the disruption or impairment of our operations, substantial repair costs, personal injury or loss of human life, significant damage to property, environmental pollution and substantial revenue losses. The location of our wells, gathering systems, pipelines, and other facilities near populated areas, including residential areas, commercial business centers and industrial sites, could significantly increase the level of damages resulting from these risks. Insurance against all operational risks is not available to us. We are not fully insured against all risks, including development and completion risks that are generally not recoverable from third parties or insurance. In addition, pollution and environmental risks generally are not fully insurable. We anticipate that we will obtain and maintain at least $5 million in general liability coverage and at least $5 million umbrella coverage that covers our and our subsidiaries’ business and operations once operations begin following this offering. With respect to our other non-operated assets, we may elect not to obtain insurance if we believe that the cost of available insurance is excessive relative to the perceived risks presented. Losses could, therefore, occur for uninsurable or uninsured risks or in amounts in excess of existing insurance coverage. Moreover, insurance may not be available in the future at commercially reasonable prices or on commercially reasonable terms. Changes in the insurance markets due to various factors may make it more difficult for us to obtain certain types of coverage in the future. As a result, we may not be able to obtain the levels or types of insurance we would otherwise have obtained prior to these market changes, and the insurance coverage we do obtain may not cover certain hazards or all potential losses that are currently covered and may be subject to large deductibles. Losses and liabilities from uninsured and underinsured events and delay in the payment of insurance proceeds could have a material adverse effect on our business, financial condition, and results of operations.

Our strategy as an onshore resource player may result in operations concentrated in certain geographic areas and may increase our exposure to many of the risks described in this prospectus.

Our current operations are expected to initially be in Utah, and then subsequently in Louisiana. This concentration may increase the potential impact of many of the risks described in this prospectus. For example, we may have greater exposure to regulatory actions impacting these two states, adverse weather and natural disasters in Utah and Louisiana, competition for equipment, services, and materials available in, and access to infrastructure and markets in, these states.

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Unless we replace our future oil and natural gas reserves, our reserves and production will decline, which will adversely affect our business, financial condition, and results of operations.

The rate of production from our oil and natural gas properties will decline as our reserves are depleted. Our future oil and natural gas reserves and production and, therefore, our future income and cash flow, will be highly dependent on our success in (a) efficiently developing and exploiting our future reserves on properties owned by us or by other persons or entities; and (b) economically finding or acquiring additional oil and natural gas producing properties. In the future, we may have difficulty acquiring new properties. During periods of low oil and/or natural gas prices, it will become more difficult to raise the capital necessary to finance expansion activities. If we are unable to replace our future production, our future reserves will decrease, and our business, financial condition and results of operations would be adversely affected.

Our strategy includes acquisitions of oil and natural gas properties, and our failure to identify or complete future acquisitions successfully, or not produce projected revenues associated with the future acquisitions could reduce our earnings and hamper our growth.

We may be unable to identify properties for acquisition or to make acquisitions on terms that we consider economically acceptable. There is intense competition for acquisition opportunities in our industry. Competition for acquisitions may increase the cost of, or cause us to refrain from, completing acquisitions. The completion and pursuit of acquisitions may be dependent upon, among other things, our ability to obtain debt and equity financing and, in some cases, regulatory approvals. Our ability to grow through acquisitions will require us to continue to invest in operations, financial and management information systems and to attract, retain, motivate, and effectively manage our employees. The inability to manage the integration of acquisitions effectively could reduce our focus on subsequent acquisitions and current operations and could negatively impact our results of operations and growth potential. Our financial position and results of operations may fluctuate significantly from period to period as a result of the completion of significant acquisitions during particular periods. If we are not successful in identifying or acquiring any material property interests, our earnings could be reduced and our growth could be restricted.

We may engage in bidding and negotiating to complete successful acquisitions. We may be required to alter or increase substantially our capitalization to finance these acquisitions through the use of cash on hand, the issuance of debt or equity securities, the sale of production payments, the sale of non-strategic assets, the borrowing of funds or otherwise. If we were to proceed with one or more acquisitions involving the issuance of our common stock or preferred stock, our stockholders would suffer dilution of their interests. Furthermore, our decision to acquire properties that are substantially different in operating or geologic characteristics or geographic locations from areas with which our staff is familiar may impact our productivity in such areas.

We may not be able to produce the projected revenues related to future acquisitions. There are many assumptions related to the projection of the revenues of future acquisitions including, but not limited to, drilling success, oil and natural gas prices, production decline curves and other data. If revenues from future acquisitions do not meet projections, this could adversely affect our business and financial condition.

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If we complete acquisitions or enter into business combinations in the future, they may disrupt or have a negative impact on our business.

If we complete acquisitions or enter into business combinations in the future, funding permitting, we could have difficulty integrating the acquired companies’ assets, personnel and operations with our own. Additionally, acquisitions, mergers, or business combinations we may enter into in the future could result in a change of control of the Company, and a change in the board of directors or officers of the Company. In addition, the key personnel of the acquired business may not be willing to work for us. We cannot predict the effect expansion may have on our core business. Regardless of whether we are successful in making an acquisition or completing a business combination, the negotiations could disrupt our ongoing business, distract our management and employees and increase our expenses. In addition to the risks described above, acquisitions and business combinations are accompanied by a number of inherent risks, including, without limitation, the following:

· the difficulty of integrating acquired companies, concepts, and operations;

· the potential disruption of the ongoing businesses and distraction of our management and the management of acquired companies;

· change in our business focus and/or management;

· difficulties in maintaining uniform standards, controls, procedures, and policies;

· the potential impairment of relationships with employees and partners as a result of any integration of new management personnel;

· the potential inability to manage an increased number of locations and employees;

· our ability to successfully manage the companies and/or concepts acquired;

· the failure to realize efficiencies, synergies, and cost savings; or

· the effect of any government regulations which relate to the business acquired.

Our business could be severely impaired if and to the extent that we are unable to succeed in addressing any of these risks or other problems encountered in connection with an acquisition or business combination, many of which cannot be presently identified. These risks and problems could disrupt our ongoing business, distract our management and employees, increase our expenses, and adversely affect our results of operations.

Any acquisition or business combination transaction we enter into in the future could cause substantial dilution to existing stockholders, result in one party having majority or significant control over the Company or result in a change in business focus of the Company.

In the future we may incur increased indebtedness which could reduce our financial flexibility, increase interest expense, and adversely impact our operations and our unit costs.

We currently have limited indebtedness, but we may incur significant amounts of indebtedness in the future in order to make acquisitions or to develop our properties. Our level of indebtedness could affect our operations in several ways, including the following:

· a significant portion of our cash flows could be used to service our indebtedness;

· a high level of debt would increase our vulnerability to general adverse economic and industry conditions;

· any covenants contained in the agreements governing our outstanding indebtedness could limit our ability to borrow additional funds, dispose of assets, pay dividends, and make certain investments;

· a high level of debt may place us at a competitive disadvantage compared to our competitors that are less leveraged and, therefore, may be able to take advantage of opportunities that our indebtedness may prevent us from pursuing; and

· debt covenants to which we may agree may affect our flexibility in planning for, and reacting to, changes in the economy and in our industry.

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A high level of indebtedness increases the risk that we may default on our debt obligations. We may not be able to generate sufficient cash flows to pay the principal or interest on our debt, and future working capital, borrowings or equity financing may not be available to pay or refinance such debt. If we do not have sufficient funds and are otherwise unable to arrange financing, we may have to sell significant assets or have a portion of our assets foreclosed upon which could have a material adverse effect on our business, financial condition, and results of operations.

We may purchase oil and natural gas properties with liabilities or risks that we did not know about or that we did not assess correctly, and, as a result, we could be subject to liabilities that could adversely affect our results of operations.

Before acquiring oil and natural gas properties, we plan to estimate the reserves, future oil and natural gas prices, operating costs, potential environmental liabilities, and other factors relating to the properties. However, our review will involve many assumptions and estimates, and their accuracy is inherently uncertain. As a result, we may not discover all existing or potential problems associated with the properties we buy. We may not become sufficiently familiar with the properties to assess fully their deficiencies and capabilities. We do not generally anticipate performing inspections on every well or property, and we may not be able to observe mechanical and environmental problems even when we conduct an inspection. The seller may not be willing or financially able to give us contractual protection against any identified problems, and we may decide to assume environmental and other liabilities in connection with properties we acquire. If we acquire properties with risks or liabilities we did not know about or that we did not assess correctly, our business, financial condition and results of operations could be adversely affected as we settle claims and incur cleanup costs related to these liabilities.

We may incur losses or costs as a result of title deficiencies in the properties in which we invest.

If an examination of the title history of a property that we purchase reveals an oil and natural gas lease has been purchased in error from a person who is not the owner of the property, our interest would be worthless. In such an instance, the amount paid for such oil and natural gas lease as well as any royalties paid pursuant to the terms of the lease prior to the discovery of the title defect would be lost.

Prior to the drilling of an oil and natural gas well, it is the normal practice in the oil and natural gas industry for the person or company acting as the operator of the well to obtain a preliminary title review of the spacing unit within which the proposed oil and natural gas well is to be drilled to ensure there are no obvious deficiencies in title to the well. Frequently, as a result of such examinations, certain curative work must be done to correct deficiencies in the marketability of the title, and such curative work entails expense. Our failure to cure any title defects may adversely impact our ability in the future to increase production and reserves. In the future, we may suffer a monetary loss from title defects or title failure. Additionally, unproved, and unevaluated acreage has greater risk of title defects than developed acreage. If there are any title defects or defects in assignment of leasehold rights in properties in which we hold an interest, we will suffer a financial loss which could adversely affect our business, financial condition and results of operations.

Our future drilling locations will be identified and development thereof scheduled over several years, making them susceptible to uncertainties that could materially alter the occurrence or timing of their drilling.

Our management team will seek to identify highly prospective drilling locations in our operating areas that we will seek to develop over a multi-year period. Our ability to drill and develop these locations depends on a number of factors, including the availability of equipment and capital, approval by regulators, seasonal conditions, oil and natural gas prices, assessment of risks, costs, and drilling results. The final determination on whether to drill any of these locations will be dependent upon numerous factors, as well as, to some degree, the results of our drilling activities with respect to our established drilling locations. Because of these uncertainties, we do not know if the drilling locations we have identified will be drilled within our expected timeframe or at all or if we will be able to economically produce hydrocarbons from these or any other potential drilling locations. Our actual drilling activities may be materially different from our current expectations, which could adversely affect our business, financial condition, and results of operations.

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We currently license only a limited amount of seismic and other geological data and may have difficulty obtaining additional data at a reasonable cost, which could adversely affect our future results of operations.

We currently license only a limited amount of seismic and other geological data to assist us in exploration and development activities. We may obtain access to additional data in our areas of interest through licensing arrangements with companies that own or have access to that data or by paying to obtain that data directly. Seismic and geological data can be expensive to license or obtain. We may not be able to license or obtain such data at an acceptable cost. In addition, even when properly interpreted, seismic data and visualization techniques are not conclusive in determining if hydrocarbons are present in economically producible amounts and seismic indications of hydrocarbon saturation are generally not reliable indicators of productive reservoir rock.

The unavailability or high cost of drilling rigs, completion equipment and services, supplies and personnel, including hydraulic fracturing equipment and personnel, could adversely affect our ability to establish and execute exploration and development plans within budget and on a timely basis, which could have a material adverse effect on our business, financial condition and results of operations.

Shortages or the high cost of drilling rigs, completion equipment and services, supplies or personnel could delay or adversely affect our operations. When drilling activity in the United States increases, associated costs typically also increase, including those costs related to drilling rigs, equipment, supplies and personnel and the services and products of other vendors to the industry. These costs may increase, and necessary equipment and services may become unavailable to us at economical prices. Should this increase in costs occur, we may delay drilling activities, which may limit our ability to establish and replace reserves, or we may incur these higher costs, which may negatively affect our business, financial condition, and results of operations.

In addition, in the past, the demand for hydraulic fracturing services has exceeded the availability of fracturing equipment and crews across the industry and in our operating areas in particular. The accelerated wear and tear of hydraulic fracturing equipment due to its deployment in unconventional oil and natural gas fields characterized by longer lateral lengths and larger numbers of fracturing stages may further amplify this equipment and crew shortage. Although we believe there is currently sufficient supply of hydraulic fracturing services, if demand for fracturing services increases or the supply of fracturing equipment and crews decreases, then higher costs could result and could adversely affect our business, financial condition, and results of operations.

The marketability of our future production will be dependent upon oil and natural gas gathering and transportation and storage facilities owned and operated by third parties, and the unavailability of satisfactory oil and natural gas transportation arrangements will have a material adverse effect on our revenue.

The availability of a ready market for our planned future oil and natural gas production depends on a number of factors, including the demand for, and supply of, oil and natural gas and the proximity of reserves to pipelines, terminal facilities, and storage facilities. Our ability to market our future planned production will depend in substantial part on the availability and capacity of gathering systems, pipelines and processing facilities owned and operated by third parties. Our failure to obtain these services on acceptable terms could materially harm our business. We do not expect to purchase firm transportation capacity on third-party facilities. Therefore, we expect the transportation of our production to be generally interruptible in nature and lower in priority to those having firm transportation arrangements.

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The disruption of third-party facilities due to maintenance and/or weather could negatively impact our ability to market and deliver our future products. The third parties’ control when or if such facilities are restored after disruption, and what prices will be charged for products. Federal and state regulation of oil and natural gas production and transportation, tax and energy policies, changes in supply and demand, pipeline pressures, damage to or destruction of pipelines and general economic conditions could adversely affect our ability to produce, gather and transport oil and natural gas.

An increase in differential between the NYMEX or other benchmark prices of oil and natural gas and the wellhead price we receive for our future production will adversely affect our business, financial condition, and results of operations.

The prices that we will receive for our oil and natural gas production sometimes may reflect a discount to the relevant benchmark prices, such as the New York Mercantile Exchange (NYMEX), that are used for calculating hedge positions. The difference between the benchmark price and the prices we receive is called a differential. Increases in the differential between the benchmark prices for oil and natural gas and the wellhead price we receive will adversely affect our business, financial condition and results of operations. We do not have, and may not have in the future, any derivative contracts or hedging covering the amount of the basis differentials we experience in respect of our production. As such, we will be exposed to any increase in such differentials.

Financial difficulties encountered by our oil and natural gas purchasers, third-party operators or other third parties could decrease our cash flow from operations and adversely affect the exploration and development of our prospects and assets.

We plan to derive substantially all of our revenues from the sale of our oil and natural gas to unaffiliated third-party purchasers, independent marketing companies and mid-stream companies. Any delays in payments from our purchasers caused by financial problems encountered by them will have an immediate negative effect on our results of operations.

Liquidity and cash flow problems encountered by our working interest co-owners or the third-party operators of our non-operated properties may prevent or delay the drilling of a well or the development of a project. Our working interest co-owners may be unwilling or unable to pay their share of the costs of projects as they become due. In the case of a farmout party, we would have to find a new farmout party or obtain alternative funding in order to complete the exploration and development of the prospects subject to a farmout agreement. In the case of a working interest owner, we could be required to pay the working interest owner’s share of the project costs. We cannot assure you that we would be able to obtain the capital necessary to fund either of these contingencies or that we would be able to find a new farmout party.

Our industry requires us to navigate many uncertainties that could adversely affect our financial condition and results of operations.

Our financial condition and results of operations depend on the success of our development and acquisition activities, which are subject to numerous risks beyond our control, including the risk that development will not result in commercially viable production or uneconomic results or that various characteristics of the drilling process or the well will cause us to abandon the well prior to fully producing commercially viable quantities.

Our decisions to purchase, explore or develop properties will depend in part on the evaluation of data obtained through geophysical and geological analyses, production data and engineering studies, the results of which are often inconclusive or subject to varying interpretations. In addition, our actual development cost for a well could significantly exceed planned levels.

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Further, many factors may curtail, disrupt, delay, or cancel our future scheduled drilling projects and operations, including the following:

· reductions or sustained declines in natural gas prices;

· regulatory compliance, including limitations on wastewater disposal, discharge of greenhouse gases and hydraulic fracturing;

· geological formation irregularities and pressures;

· shortages of or delays in obtaining equipment, supplies and qualified personnel;

· equipment failures, accidents or other unexpected operational events;

· gathering facilities’ capacity or delays in construction of new gathering facilities;

· capacity on transmission pipelines or our inability to make our gas meet quality specifications for such pipeline;

· environmental hazards, such as natural gas leaks, pipeline and tank ruptures and unauthorized discharges of brine and other fluids, toxic gases or other pollutants;

· stockholder activism or activities by others to restrict exploration, development and production of oil and natural gas;

· natural disasters including regional flooding and hurricanes;

· adverse weather conditions;

· compliance with environmental and other governmental or contractual requirements;

· availability of financing at acceptable terms; and

· title issues.

Any of these risks can cause substantial losses, including personal injury or loss of life, damage to property, reserves and equipment, pollution, environmental contamination, and regulatory penalties.

Competition in the oil and natural gas industry is intense, making it difficult for us to acquire properties, market oil and natural gas and secure trained personnel.

Our ability to acquire additional prospects and to find and develop reserves in the future will depend on our ability to evaluate and select suitable properties and to consummate transactions in a highly competitive environment for acquiring properties, marketing oil and natural gas and securing trained personnel. Also, there is substantial competition for capital available for investment in the oil and natural gas industry. Many of our competitors possess and employ financial, technical and personnel resources substantially greater than ours, and many of our competitors have more established presences in the United States than we have. Those companies may be able to pay more for productive oil and natural gas properties and exploratory prospects and to evaluate, bid for and purchase a greater number of properties and prospects than our financial or personnel resources permit. In addition, other companies may be able to offer better compensation packages to attract and retain qualified personnel than we are able to offer. The cost to attract and retain qualified personnel has increased in recent years due to competition and may increase substantially in the future. We may not be able to compete successfully in the future in acquiring prospective reserves, developing reserves, marketing hydrocarbons, attracting and retaining quality personnel and raising additional capital, which could have a material adverse effect on our business, financial condition, and results of operations.

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Our competitors may use superior technology and data resources that we may be unable to afford or that would require a costly investment by us in order to compete with them more effectively.

Our industry is subject to rapid and significant advancements in technology, including the introduction of new products and services using new technologies and databases. As our competitors use or develop new technologies, we may be placed at a competitive disadvantage, and competitive pressures may force us to implement new technologies at a substantial cost. In addition, many of our competitors will have greater financial, technical and personnel resources that allow them to enjoy technological advantages and may in the future allow them to implement new technologies before we can. We cannot be certain that we will be able to implement technologies on a timely basis or at a cost that is acceptable to us. One or more of the technologies that we will use or that we may implement in the future may become obsolete, and we may be adversely affected.

If we do not hedge our exposure to reductions in oil and natural gas prices, we may be subject to significant reductions in prices. Alternatively, we may use oil and natural gas price hedging contracts, which involve credit risk and may limit future revenues from price increases and result in significant fluctuations in our profitability.

In the event that we choose not to hedge our exposure to reductions in future oil and natural gas prices by purchasing futures and/or by using other hedging strategies, we may be subject to a significant reduction in prices which could have a material negative impact on our profitability. Alternatively, we may elect to use hedging transactions with respect to a portion of our future oil and natural gas production to achieve more predictable cash flow and to reduce our exposure to price fluctuations. While the use of hedging transactions limits the downside risk of price declines, their use also may limit future revenues from price increases. Hedging transactions also involve the risk that the counterparty may be unable to satisfy its obligations.

Uncertainties associated with enhanced recovery methods may result in us not realizing an acceptable return on our investments in such projects.

Production and reserves, if any, attributable to the use of enhanced recovery methods are inherently difficult to predict. If our enhanced recovery methods do not allow for the extraction of crude oil, natural gas, and associated liquids in a manner or to the extent that we anticipate, we may not realize an acceptable return on our investments in such projects. In addition, as proposed legislation and regulatory initiatives relating to hydraulic fracturing become law, the cost of some of these enhanced recovery methods could increase substantially.

Competition for hydraulic fracturing services and water disposal could impede our ability to develop our oil and gas plays.

The unavailability or high cost of high-pressure pumping services (or hydraulic fracturing services), chemicals, proppant, water and water disposal and related services and equipment could limit our ability to execute our exploration and development plans on a timely basis and within our budget. The U.S. oil and natural gas industry is experiencing a growing emphasis on the exploitation and development of shale natural gas and shale oil resource plays, which are dependent on hydraulic fracturing for economically successful development. Hydraulic fracturing in oil and gas plays requires high pressure pumping service crews. A shortage of service crews or proppant, chemical, water, or water disposal options, especially if this shortage occurred in Utah or Louisiana, could materially and adversely affect our operations and the timeliness of executing our development plans within our budget.

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Our operations will be substantially dependent on the availability of water. Restrictions on our ability to obtain water may have an adverse effect on our financial condition, results of operations and cash flows.

Water is an essential component of shale oil and natural gas production during both the drilling and hydraulic fracturing processes. When drought conditions occur, governmental authorities may restrict the use of water subject to their jurisdiction for hydraulic fracturing to protect local water supplies. If we are unable to obtain water to use in our operations from local sources or dispose of or recycle water used in operations, or if the price of water or water disposal increases significantly, we may be unable to produce oil and natural gas economically, which could have a material adverse effect on our financial condition, results of operations, and cash flows.

A substantial percentage of our properties will be undeveloped; therefore, the risk associated with our success is greater than would be the case if the majority of such properties were categorized as proved developed producing.

Because a substantial percentage of our properties will be undeveloped, we will require significant additional capital to develop such properties before they may become productive. Further, because of the inherent uncertainties associated with drilling for oil and gas, some of these properties may never be developed to the extent that they result in positive cash flow. Even if we are successful in our development efforts, it could take several years for a significant portion of our undeveloped properties to be converted to positive cash flow.

Prospects that we decide to drill may not yield oil or natural gas in commercially viable quantities.

Most of our prospects will require substantial seismic data processing and interpretation. There is no way to predict in advance of drilling and testing whether any particular prospect will yield oil or natural gas in sufficient quantities to recover drilling or completion costs or to be economically viable. This risk may be enhanced in our situation, due to the fact that a significant percentage of our prospects are undeveloped. The use of seismic data and other technologies and the study of producing fields in the same area will not enable us to know conclusively prior to drilling whether oil or natural gas will be present or, if present, whether oil or natural gas will be present in commercial quantities. We cannot assure you that the analogies we draw from available data obtained by analyzing other wells, more fully explored prospects, or producing fields will be applicable to our drilling prospects.

Negative public perception regarding us and/or our industry could have an adverse effect on our operations.

Negative public perception regarding us and/or our industry resulting from, among other things, concerns raised by advocacy groups about hydraulic fracturing, waste disposal, oil spills, seismic activity, climate change, explosions of natural gas transmission lines and the development and operation of pipelines and other midstream facilities may lead to increased regulatory scrutiny, which may, in turn, lead to new state and federal safety and environmental laws, regulations, guidelines and enforcement interpretations. Additionally, environmental groups, landowners, local groups and other advocates may oppose our operations through organized protests, attempts to block or sabotage our operations or those of our midstream transportation providers, intervene in regulatory or administrative proceedings involving our assets or those of our midstream transportation providers, or file lawsuits or other actions designed to prevent, disrupt or delay the development or operation of our assets and business or those of our midstream transportation providers. These actions may cause operational delays or restrictions, increased operating costs, additional regulatory burdens, and increased risk of litigation. Moreover, governmental authorities exercise considerable discretion in the timing and scope of permit issuance and the public may engage in the permitting process, including through intervention in the courts. Negative public perception could cause the permits we require to conduct our operations to be withheld, delayed, or burdened by requirements that restrict our ability to profitably conduct our business.

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Recently, activists concerned about the potential effects of climate change have directed their attention towards sources of funding for fossil-fuel energy companies, which has resulted in certain financial institutions, funds and other sources of capital restricting or eliminating their investment in energy-related activities. Ultimately, this could make it more difficult to secure funding for exploration and production activities.

Our development and exploratory drilling efforts and our well operations may not be profitable or achieve our targeted returns.

We have acquired  unproved properties and options to purchase unproved property in order to further our development efforts and expect to continue to undertake acquisitions in the future. Development and exploratory drilling and production activities are subject to many risks, including the risk that no commercially productive reservoirs will be discovered. We expect to acquire unproved properties and lease undeveloped acreage that we believe will enhance our growth potential and increase our results of operations over time. However, we cannot assure you that all prospects will be economically viable or that we will not abandon our investments. Additionally, we cannot assure you that unproved property acquired by us or undeveloped acreage leased by us will be profitably developed, that wells drilled by us in prospects that we pursue will be productive or that we will recover all or any portion of our investment in such unproved property or wells.

Risks Relating to Climate Change and Environmental, Social, and Governance Matters

The physical effects of climate change could disrupt our production and cause us to incur significant costs in preparing for or responding to those effects. An economy-wide transition to lower greenhouse gas (GHG) energy sources could have a variety of adverse effects on our operations and financial results.

Many scientists have shown that increasing concentrations of carbon dioxide, methane and other GHGs in the Earth’s atmosphere are changing global climate patterns. One consequence of climate change could be increased severity of extreme weather, such as increased hurricanes and floods. If such events were to occur, or become more frequent, our operations could be adversely affected in various ways, including through damage to our facilities or from increased costs for insurance.

Another possible consequence of climate change is increased volatility in seasonal temperatures. The market for natural gas is generally improved by periods of colder weather and impaired by periods of warmer weather, so any changes in climate could affect the market for the fuels that we produce. As a result, if there is an overall trend of warmer temperatures, it would be expected to have an adverse effect on our business.

Efforts by governments, international bodies, businesses, and consumers to reduce GHGs and otherwise mitigate the effects of climate change are ongoing. The nature of these efforts and their effects on our business are inherently unpredictable and subject to change. However, actions taken by private parties in anticipation of, or to facilitate, a transition to a lower-GHG economy will affect us as well. For example, our cost of capital may increase if lenders or other market participants decline to invest in fossil fuel-related companies for regulatory or reputational reasons. Similarly, increased demand for low-carbon or renewable energy sources from consumers could reduce the demand for, and the price of, the products we produce. Technological changes, such as developments in renewable energy and low-carbon transportation, could also adversely affect demand for our products.

Increasing attention to environmental, social, and governance (ESG) matters may impact our business.

Increasing attention to ESG matters, including those related to climate change and sustainability, increasing societal, investor and legislative pressure on companies to address ESG matters, may result in increased costs, reduced profits, increased investigations and litigation or threats thereof, negative impacts on our stock price and access to capital markets, and damage to our reputation. Increasing attention to climate change, for example, may result in demand shifts for hydrocarbon and additional governmental investigations and private litigation, or threats thereof, against the Company. In addition, organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their approach to ESG matters, including climate change and climate-related risks. Such ratings are used by some investors to inform their investment and voting decisions. Also, some stakeholders, including but not limited to sovereign wealth, pension, and endowment funds, have been divesting and promoting divestment of or screening out of fossil fuel equities and urging lenders to limit funding to companies engaged in the extraction of fossil fuel reserves. Unfavorable ESG ratings and investment community divestment initiatives, among other actions, may lead to negative investor sentiment toward the Company and to the diversion of investment to other industries, which could have a negative impact on our stock price and our access to and costs of capital. Additionally, evolving expectations on various ESG matters, including biodiversity, waste, and water, may increase costs, require changes in how we operate and lead to negative stakeholder sentiment.

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Risks Related to Management, Employees and Directors

We depend significantly upon the continued involvement of our present management.

We depend to a significant degree upon the involvement of our management, specifically, our President and Chief Executive Officer, Michael L. Peterson and our Chief Financial Officer and Secretary, Gregory L. Overholtzer. Our performance and success are dependent to a large extent on the efforts and continued employment of Mr. Peterson and Mr. Overholtzer. We do not believe that Mr. Peterson and Mr. Overholtzer could be quickly replaced with personnel of equal experience and capabilities, and their successor(s) may not be as effective. If Mr. Peterson and Mr. Overholtzer, or any of our other key personnel resign or become unable to continue in their present roles and if they are not adequately replaced, our business operations could be adversely affected.

We also expect to have an active board of directors that anticipates meeting several times throughout the year and expects to be intimately involved in our business and the determination of our operational strategies. Members of our board of directors will work closely with management to identify potential prospects, acquisitions, and areas for further development. If any of our directors resign or become unable to continue in their present role, it may be difficult to find replacements with the same knowledge and experience and as a result, our operations may be adversely affected.

We rely on our management and if they were to not devote sufficient time to our company, our business plan could be adversely affected.

As discussed above, we are largely dependent upon the personal efforts and abilities of our existing management, including Mr. Peterson and Mr. Overholtzer, each of whom plays an active role in our operations. Mr. Peterson and Mr. Overholtzer and certain of our other executives do not work for the Company on a full-time basis. If such executive officers do not devote sufficient time towards our business, we may not be able to effectuate our business plan which would have an adverse effect on our financial conditions and results of operations.

Potential or actual conflicts of interest could arise for certain members of our management team that hold management positions with other entities, including those entities which we have entered into material agreements with.

Michael Peterson, our Chief Executive Officer and member of our board of directors, and Gregory L. Overholtzer, our Chief Financial Officer, hold various other directorship and/or management positions with publicly-traded and privately-held companies, some of which are involved in the oil and gas industry, although none are directly competitive with the Company. We believe these positions require only an immaterial amount of each officers’ time and will not conflict with their roles or responsibilities with our company. If any of these companies enter into one or more transactions with our company, or if the officers’ position with any such company requires significantly more time than currently anticipated, potential conflicts of interests could arise from the officers performing services for us and these other entities.

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Additionally, Michael Peterson, the Chief Executive Officer and director of the Company, is also the Chief Executive Officer and director of Trio Petroleum Corp., and Frank C. Ingriselli, our Chairman, is also the Vice Chairman and director of Trio. Trio is party to a Leasehold Acquisition and Development Option Agreement. We and Heavy Sweet agreed that, to the extent Trio does not fully exercise the Trio Option, the Company had the right to acquire up to all 20% of the right set forth in the Trio Option (or such letter amount which Trio has not exercised), from Heavy Sweet, for $2,000,000 cash. To date, Trio has paid $225,000 for a 2.25% working interest in 960 acres of the Asphalt Ridge Option Leases.

Pursuant to the Farm-In Agreement (discussed above under “Business—Asphalt Ridge Option and Farm-In Agreement (Utah)”), the Company’s acquisition of rights in the Asphalt Ridge Leases and Asphalt Ridge Acreage are subject to the Trio Option, and as a condition to closing of the Farm-In Agreement, Heavy Sweet is required to obtain Trio’s agreement to assign the Trio Option to the Company at closing, with the Company assuming operatorship with respect to the Asphalt Ridge Leases and Asphalt Ridge Acreage, and with the Company assuming all rights, duties and responsibilities of Heavy Sweet under the Trio Option, and with the Asphalt Ridge Leases and Asphalt Ridge Acreage remaining subject to the Trio Option in accordance with its terms.  Notwithstanding the foregoing, in the event Trio’s agreement to assign the Trio option to the Company is not obtained on or prior to closing, the Company, in its sole discretion, may waive that condition and close without receiving the assignment of the Trio Option, in which event (i) Heavy Sweet shall retain the 17.75% working interest that is subject to the Trio Option, (ii) the Farm-In Shares shall be proportionately reduced, and (iii) in the event the Trio Option expires without Trio exercising its full option to acquire all Asphalt Ridge Leases and Asphalt Ridge Acreage as contemplated under the Trio Option, the Company shall have the sole and exclusive right to farm-in and acquire such Asphalt Ridge Leases and Asphalt Ridge Acreage that is not acquired by Trio on same on the same terms and conditions, and at the same proportionate farm-in price, as set forth under the Farm-In Agreement. Trio’s assignment of the Trio Option to the Company may result in conflicts of interest between the Company, Trio and Mr. Peterson and Mr. Ingriselli, who are officers and directors (Mr. Peterson) and directors (Mr. Ingriselli) of Trio, as discussed above, including, but not limited to as a result of their fiduciary obligations to both Trio and the Company.

On February 29, 2024, the Company entered into a Subscription Agreement with Trxade, Inc., which is a wholly-owned subsidiary of TRxADE HEALTH Inc. (Nasdaq:MEDS), pursuant to which we agreed to sell Trxade 2,000,000 shares of a newly designated series of Series A Convertible Preferred Stock of the Company (the “Series A Preferred”), in two tranches, with (a) 1,000,000 shares of Series A Preferred being sold for $2,500,000 on March 5, 2024, and (b) 1,000,000 shares of Series A Preferred being sold for an additional $2,500,000, within 10 days of the Company notifying Trxade by letter or email, that the Company has successfully drilled its first oil and gas well and produced at least 100 barrels of oil . The Subscription contains standard and customary representations and warranties of the parties, indemnification obligations of the parties. Mr. Michael L. Peterson, the Company’s Chief Executive Officer and Director currently serves as an independent member of the Board of Directors, and as Chairman of the Audit Committee and member of the Compensation Committee and Nominating and Corporate Governance Committee of TRxADE HEALTH Mr. Peterson’s position on the Board of Directors of TRxADE HEALTH may result in conflicts of interest between the Company, Mr. Peterson and TRxADE HEALTH, including, but not limited to as a result of his fiduciary obligations to both TRxADE HEALTH and the Company.

Such involvement by management and members of our Board in other businesses (including with Trio, and TRxADE HEALTH) may present an actual or perceived conflict of interest regarding decisions such persons make for us, or such counterparties, or with respect to the amount of time available for us. Such conflicts of interest could result in a material adverse effect on our prospects or operations, transactions and agreements, require either Mr. Peterson and/or Mr. Ingriselli to recuse themselves from Board decisions, and/or result in the value of our securities being worth less than similarly situated companies without conflicts of interest, or becoming devalued in the future. Such conflicts of interest could also lead to future stockholder litigation against such conflicted officers and directors and/or the Company, which could force us to expend significant resources defending and could result in material damages being required to be paid by the Company.

Risks Relating to Alternative Fuel Technologies and Renewable Fuels

Improvements in or new discoveries of alternative energy technologies could have a material adverse effect on our financial condition and results of operations.

Because our future operations will depend on the demand for oil and used oil, any improvement in or new discoveries of alternative energy technologies (such as wind, solar, geothermal, fuel cells and biofuels) that increase the use of alternative forms of energy and reduce the demand for oil, gas and oil and gas related products could have a material adverse impact on our business, financial condition and results of operations. We also face competition from competing energy sources, such as renewable energy sources.

Competition due to advances in renewable fuels may lessen the demand for our products and negatively impact our profitability.

Alternatives to petroleum-based products and production methods are continually under development. For example, a number of automotive, industrial, and power generation manufacturers are developing alternative clean power systems using fuel cells or clean-burning gaseous fuels that may address increasing worldwide energy costs, the long-term availability of petroleum reserves and environmental concerns, which if successful could lower the demand for oil and gas. If these non-petroleum-based products and oil alternatives continue to expand and gain broad acceptance such that the overall demand for oil and gas is decreased, it could have an adverse effect on our operations and the value of our assets. 

Risks Relating to Government Regulations

Federal and state legislative and regulatory initiatives regarding hydraulic fracturing as well as governmental reviews of such activities could increase our costs of doing business, result in additional operating restrictions or delays, limit the areas in which we can operate and reduce our natural gas production, which could adversely impact our production and business.

Hydraulic fracturing is an important and common practice that is used to stimulate production of natural gas and/or oil from dense subsurface rock formations. Hydraulic fracturing involves the injection of water, sand or alternative proppant and chemicals under pressure into target geological formations to fracture the surrounding rock and stimulate production. We regularly use hydraulic fracturing as part of our operations. Recently, there has been increased public concern regarding an alleged potential for hydraulic fracturing to adversely affect drinking water supplies, and proposals have been made to enact separate federal, state, and local legislation that would increase the regulatory burden imposed on hydraulic fracturing.

At present, hydraulic fracturing is regulated primarily at the state level, typically by state oil and natural gas commissions and similar agencies. Along with several other states, Louisiana (where we conduct operations) has adopted laws and proposed regulations that require oil and natural gas operators to disclose chemical ingredients and water volumes used to hydraulically fracture wells, in addition to more stringent well construction and monitoring requirements. In addition, the EPA has asserted federal regulatory authority pursuant to the Safe Drinking Water Act over certain hydraulic fracturing activities involving the use of diesel fuels. In addition, local governments may also adopt ordinances within their jurisdictions regulating the time, place, and manner of drilling activities in general or hydraulic fracturing activities in particular or prohibit the performance of well drilling in general or hydraulic fracturing in particular. If new or more stringent federal, state, or local legal restrictions relating to the hydraulic fracturing process are adopted in areas where we operate, we could incur potentially significant added costs to comply with such requirements, experience delays or curtailment in the pursuit of exploration, development, or production activities, and perhaps even be precluded from drilling wells.

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Changes in the legal and regulatory environment governing the oil and natural gas industry, particularly changes in the current Louisiana forced pooling system, Utah unitization policies, and new federal orders restricting operations on federal lands, could have a material adverse effect on our business.

Our business is subject to various forms of government regulation, including laws, regulations and federal orders concerning the location, spacing, and permitting of the oil and natural gas wells we drill, among other matters. In particular, the unitization regulations in Utah call for 40 acre spacing in the Asphalt Ridge Asset. Likewise, our business in the Saint Landry Parish located in south central Louisiana plans to utilize a methodology available in Louisiana known as “forced pooling,” which refers to the ability of a holder of an oil and natural gas interest in a particular prospective drilling spacing unit to apply to the Louisiana Department of Conservation for an order forcing all other holders of oil and natural gas interests in such area into a common pool for purposes of developing that drilling spacing unit. Changes in the legal and regulatory environment governing our industry, particularly any changes to Louisiana’s forced pooling procedures that make forced pooling more difficult to accomplish, could result in increased compliance costs and operational delays, and adversely affect our business, financial condition and results of operations.

In the event that federal, state or local restrictions or prohibitions are adopted in areas where we conduct operations, that restrict operations or otherwise impose more stringent limitations on the production and development of oil and natural gas, we and similarly situated oil and natural exploration and production operators in the state may incur significant costs to comply with such requirements or may experience delays or curtailment in the pursuit of exploration, development, or production activities, and possibly be limited or precluded in the drilling of wells or in the amounts that we and similarly situated operates are ultimately able to produce from our reserves. Any such increased costs, delays, cessations, restrictions, or prohibitions could have a material adverse effect on our business, prospects, results of operations, financial condition, and liquidity. If new or more stringent federal, state or local legal restrictions relating to the hydraulic fracturing process are adopted in areas where we operate, we could incur potentially significant added cost to comply with such requirements, experience delays or curtailment in the pursuit of exploration, development or production activities, and perhaps even be precluded from drilling wells.

SEC rules could limit our ability to book additional proved undeveloped reserves (“PUDs”) in the future.

SEC rules require that, subject to limited exceptions, PUDs may only be booked if they relate to wells scheduled to be drilled within five years after the date of booking. This requirement has limited and may continue to limit our ability to book additional PUDs as we pursue our drilling program. Moreover, we may be required to write down our PUDs if we do not drill or plan on delaying those wells within the required five-year timeframe. We do not currently have any PUDs as of the date of this prospectus.

New or amended environmental legislation or regulatory initiatives could result in increased costs, additional operating restrictions, or delays, or have other adverse effects on us.

The environmental laws and regulations to which we are subject change frequently, often to become more burdensome and/or to increase the risk that we will be subject to significant liabilities. New or amended federal, state, or local laws or implementing regulations or orders imposing new environmental obligations on, or otherwise limiting, our operations could make it more difficult and more expensive to complete oil and natural gas wells, increase our costs of compliance and doing business, delay or prevent the development of resources (especially from shale formations that are not commercial without the use of hydraulic fracturing), or alter the demand for and consumption of our products. Any such outcome could have a material and adverse impact on our cash flows and results of operations.

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Proposals are made from time to time to adopt new, or amend existing, laws and regulations to address hydraulic fracturing or climate change concerns through further regulation of exploration and development activities. Please read “Business”— “Regulation of the Oil and Gas Industry” and “Regulation of Environmental and Occupational Safety and Health Matters” for a further description of the laws and regulations that affect us. We cannot predict the nature, outcome, or effect on us of future regulatory initiatives, but such initiatives could materially impact our results of operations, production, reserves, and other aspects of our business.

Proposed changes to U.S. tax laws, if adopted, could have an adverse effect on our business, financial condition, results of operations, and cash flows.

From time to time, legislative proposals are made that would, if enacted, result in the elimination of the immediate deduction for intangible drilling and development costs, the elimination of the deduction from income for domestic production activities relating to oil and gas exploration and development, the repeal of the percentage depletion allowance for oil and gas properties, and an extension of the amortization period for certain geological and geophysical expenditures. Such changes, if adopted, or other similar changes that reduce or eliminate deductions currently available with respect to oil and gas exploration and development, could adversely affect our business, financial condition, results of operations, and cash flows.

We may incur substantial costs to comply with the various federal, state, and local laws and regulations that affect our oil and natural gas operations, including as a result of the actions of third parties.

We are affected significantly by a substantial number of governmental regulations relating to, among other things, the release or disposal of materials into the environment, health and safety, land use, and other matters. A summary of the principal environmental rules and regulations to which we are currently subject is set forth in “Business” — “Regulation of the Oil and Gas Industry” and “Regulation of Environmental and Occupational Safety and Health Matters”. Compliance with such laws and regulations often increases our cost of doing business and thereby decreases our profitability. Failure to comply with these laws and regulations may result in the assessment of administrative, civil, and criminal penalties, the incurrence of investigatory or remedial obligations, or the issuance of cease and desist orders.

The environmental laws and regulations to which we are subject may, among other things:

· require us to apply for and receive a permit before drilling commences or certain associated facilities are developed;

· restrict the types, quantities, and concentrations of substances that can be released into the environment in connection with drilling, hydraulic fracturing, and production activities;

· limit or prohibit drilling activities on certain lands lying within wilderness, wetlands and other “waters of the United States,” threatened and endangered species habitat, and other protected areas;

· require remedial measures to mitigate pollution from former operations, such as plugging abandoned wells;

· require us to add procedures and/or staff in order to comply with applicable laws and regulations; and

· impose substantial liabilities for pollution resulting from our operations.

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In addition, we could face liability under applicable environmental laws and regulations as a result of the activities of previous owners of our properties or other third parties. For example, over the years, we have owned or leased numerous properties for oil and natural gas activities upon which petroleum hydrocarbons or other materials may have been released by us or by predecessor property owners or lessees who were not under our control. Under applicable environmental laws and regulations, including The Comprehensive Environmental Response, Compensation, and Liability Act – otherwise known as CERCLA or Superfund, and state laws, we could be held liable for the removal or remediation of previously released materials or property contamination at such locations, or at third-party locations to which we have sent waste, regardless of our fault, whether we were responsible for the release or whether the operations at the time of the release were lawful.

Compliance with, or liabilities associated with violations of or remediation obligations under, environmental laws and regulations could have a material adverse effect on our results of operations and financial condition.

Regulations could adversely affect our ability to hedge risks associated with our business and our operating results and cash flows.

Rules adopted by federal regulators establishing federal regulation of the over-the-counter (“OTC”) derivatives market and entities that participate in that market may adversely affect our ability to manage certain of our risks on a cost-effective basis. Such laws and regulations may also adversely affect our ability to execute our strategies with respect to hedging our exposure to variability in expected future cash flows attributable to the future sale of our oil and gas.

We expect that our potential future hedging activities will be subject to significant and developing regulations and regulatory oversight. However, the full impact of the various U.S. regulatory developments in connection with these activities will not be known with certainty until such derivatives market regulations are fully implemented and related market practices and structures are fully developed.

The Federal Government previously instituted a moratorium on new oil and gas leases and permits on federal onshore and offshore lands, which may have a material adverse effect on the Company and its results of operations.

On January 20, 2021, the Acting U.S. Interior Secretary, instituted a 60-day moratorium on new oil and gas leases and permits on federal onshore and offshore lands, which was subsequently extended indefinitely. In June 2021, a federal judge issued an injunction lifting the moratorium, provided that the federal government is appealing the injunction. It is currently unclear whether the moratorium will be reinstated, or whether such moratorium is the start of a change in federal policies regarding the grant of oil and gas permits on federal lands. It is currently unclear whether the moratorium will be reinstated, or whether such moratorium is the start of a change in federal policies regarding the grant of oil and gas permits on federal lands. The moratorium did not affect the Company, as the Company does not anticipate owning or operating any acreage on federal lands; however, if such prior moratorium was to become permanent, or the federal government in the future were to grant less permits on federal lands, make such permitting process more difficult, costly, or to institute more stringent rules relating to such permitting process, and if the Company desires to acquire acreage interests on federal lands in the future, it could have a material adverse effect on the value of such leases and/or our ability to undertake oil and gas operations on such leases on federal lands.

We will incur significant costs to ensure compliance with U.S. and Nasdaq reporting and corporate governance requirements.

We will incur significant costs associated with our public company reporting requirements and with applicable U.S. and Nasdaq corporate governance requirements, including requirements under the Sarbanes-Oxley Act of 2002 and other rules implemented by the SEC and Nasdaq. We expect all of these applicable rules and regulations to significantly increase our legal and financial compliance costs and to make some activities more time consuming and costly. We also expect that these applicable rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our Board of Directors or as executive officers.

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Future litigation or governmental proceedings could result in material adverse consequences, including judgments or settlements.

From time to time, we may be involved in lawsuits, regulatory inquiries and may be involved in governmental and other legal proceedings arising out of the ordinary course of our business. Many of these matters raise difficult and complicated factual and legal issues and are subject to uncertainties and complexities. The timing of the final resolutions to these types of matters is often uncertain. Additionally, the possible outcomes or resolutions to these matters could include adverse judgments or settlements, either of which could require substantial payments, adversely affecting our results of operations and liquidity.

We may be subject in the normal course of business to judicial, administrative, or other third-party proceedings that could interrupt or limit our operations, require expensive remediation, result in adverse judgments, settlements or fines and create negative publicity.

Governmental agencies may, among other things, impose fines or penalties on us relating to the conduct of our business, attempt to revoke or deny renewal of our operating permits, franchises or licenses for violations or alleged violations of environmental laws or regulations or as a result of third-party challenges, require us to install additional pollution control equipment or require us to remediate potential environmental problems relating to any real property that we or our predecessors ever owned, leased or operated or any waste that we or our predecessors ever collected, transported, disposed of or stored. Individuals, citizens groups, trade associations or environmental activists may also bring actions against us in connection with our operations that could interrupt or limit the scope of our business. Any adverse outcome in such proceedings could harm our operations and financial results and create negative publicity, which could damage our reputation, competitive position, and stock price. We may also be required to take corrective actions, including, but not limited to, installing additional equipment, which could require us to make substantial capital expenditures. We could also be required to indemnify our employees in connection with any expenses or liabilities that they may incur individually in connection with regulatory action against us. These could result in a material adverse effect on our prospects, business, financial condition, and our results of operations.

Risks Associated with Our Governing Documents and Delaware Law

Our Second Amended and Restated Certificate of Incorporation provides for indemnification of officers and directors at our expense, which may result in a major cost to us and hurt the interests of our stockholders because corporate resources may be expended for the benefit of officers or directors.

Our Second Amended and Restated Certificate of Incorporation provides for us to indemnify and hold harmless, to the fullest extent permitted by applicable law, each person who is or was made a party or is threatened to be made a party to or is otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative by reason of the fact that he or she is or was a director or officer of the Company or, while a director or officer of the Company, is or was serving at the request of the Company as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, other enterprise or nonprofit entity, including service with respect to an employee benefit plan. These indemnification obligations may result in a major cost to us and hurt the interests of our stockholders because corporate resources may be expended for the benefit of officers or directors.

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We have been advised that, in the opinion of the SEC, indemnification for liabilities arising under federal securities laws is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification for liabilities arising under federal securities laws, other than the payment by us of expenses incurred or paid by a director, officer or controlling person in the successful defense of any action, suit or proceeding, is asserted by a director, officer or controlling person in connection with our activities, we will (unless in the reasonable opinion of our counsel, the matter has been settled by controlling precedent) submit to a court of appropriate jurisdiction, the question whether indemnification by us is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. The legal process relating to this matter if it were to occur is likely to be very costly and may result in us receiving negative publicity, either of which factors is likely to materially reduce the market and price for our shares.

Our Second Amended and Restated Certificate of Incorporation contains a specific provision that limits the liability of our directors and officers for monetary damages to the Company and the Company’s stockholders and requires us, under certain circumstances, to indemnify officers, directors and employees.

The limitation of monetary liability against our directors, officers and employees under Delaware law and the existence of indemnification rights to them may result in substantial expenditures by us and may discourage lawsuits against our directors, officers and employees.

Our Second Amended and Restated Certificate of Incorporation contains a specific provision that limits the liability of our directors and officers for monetary damages to the Company and the Company’s stockholders. The foregoing indemnification obligations could result in us incurring substantial expenditures to cover the cost of settlement or damage awards against our directors and officers, which the Company may be unable to recoup. These provisions and resultant costs may also discourage us from bringing a lawsuit against our directors and officers for breaches of their fiduciary duties and may similarly discourage the filing of derivative litigation by our stockholders against our directors and officers, even though such actions, if successful, might otherwise benefit us and our stockholders.

Our board of directors can authorize the issuance of preferred stock, which could diminish the rights of holders of our common stock and make a change of control of our company more difficult even if it might benefit our stockholders.

Our board of directors is authorized to issue shares of preferred stock in one or more series and to fix the voting powers, preferences and other rights and limitations of the preferred stock. Shares of preferred stock may be issued by our board of directors without stockholder approval, with voting powers and such preferences and relative, participating, optional or other special rights and powers as determined by our board of directors, which may be greater than the shares of common stock currently outstanding. As a result, shares of preferred stock may be issued by our board of directors which cause the holders to have majority voting power over our shares, provide the holders of the preferred stock the right to convert the shares of preferred stock they hold into shares of our common stock, which may cause substantial dilution to our then common stock stockholders and/or have other rights and preferences greater than those of our common stock stockholders including having a preference over our common stock with respect to dividends or distributions on liquidation or dissolution.  To date we have designated 2,000,000 shares of Series A Convertible Preferred Stock, discussed below under “Description of Capital Stock—Preferred Stock—Series A Convertible Preferred Stock”.

Investors should keep in mind that the board of directors has the authority to issue additional shares of common stock and preferred stock, which could cause substantial dilution to our existing stockholders. Additionally, the dilutive effect of any preferred stock which we may issue may be exacerbated given the fact that such preferred stock may have voting rights and/or other rights or preferences which could provide the preferred stockholders with substantial voting control over us subsequent to the date of this prospectus and/or give those holders the power to prevent or cause a change in control, even if that change in control might benefit our stockholders. As a result, the issuance of shares of common stock and/or preferred stock may cause the value of our securities to decrease.

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Anti-takeover provisions in our Second Amended and Restated Certificate of Incorporation and our Amended and Restated Bylaws, as well as provisions of Delaware law, might discourage, delay or prevent a change in control of our company or changes in our management and, therefore, depress the trading price of our securities.

Our Second Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws and Delaware law contain provisions that may discourage, delay or prevent a merger, acquisition or other change in control that stockholders may consider favorable, including transactions in which you might otherwise receive a premium for our securities. These provisions may also prevent or delay attempts by our stockholders to replace or remove our management. Our corporate governance documents include provisions:

· a classified board of directors, as a result of which our board of directors is divided into three classes, with each class serving for staggered three-year terms;

· the removal of directors only for cause;

· limiting those persons who may call special meetings of stockholders;

· requiring advance notice of stockholder proposals for business to be conducted at meetings of our stockholders and for nominations of candidates for election to our Board of Directors;

· authorizing blank check preferred stock, which could be issued with voting, liquidation, dividend and other rights superior to our common stock; and

· limiting the liability of, and providing indemnification to, our directors and officers.

As a Delaware corporation, we would also generally be subject to provisions of Delaware law, including Section 203 of the Delaware General Corporation Law, which limits the ability of stockholders holding shares representing more than 15% of the voting power of our outstanding voting stock from engaging in certain business combinations with us; provided that our Second Amended and Restated Certificate of Incorporation provides that we are not subject to Section 203 of Delaware General Corporation Law (DGCL). Any provision of our Second Amended and Restated Certificate of Incorporation or Amended and Restated Bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock, and could also affect the price that some investors are willing to pay for our common stock.

The existence of the foregoing provisions and anti-takeover measures could limit the price that investors might be willing to pay in the future for shares of our common stock and warrants. They could also deter potential acquirers of our company, thereby reducing the likelihood that you could receive a premium for your common stock in an acquisition.

Our Second Amended and Restated Certificate of Incorporation contain exclusive forum provisions that may discourage lawsuits against us and our directors and officers.

Our Second Amended and Restated Certificate of Incorporation provides that unless the Company consents in writing to the selection of an alternative forum (an “Alternative Forum Consent”), the Court of Chancery of the State of Delaware is the sole and exclusive forum for: (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim for breach of a fiduciary duty owed by any current or former director, officer, employee or stockholder of the Company to the Company or the Company’s stockholders, (iii) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law (the “DGCL”), the certificate of incorporation or the bylaws of the Company, each as amended, or (iv) any action asserting a claim governed by the internal affairs doctrine; provided, however, that, in the event that the Court of Chancery of the State of Delaware lacks subject matter jurisdiction over any such action or proceeding, the sole and exclusive forum for such action or proceeding shall be another state or federal court located within the State of Delaware, in each such case, unless the Court of Chancery (or such other state or federal court located within the State of Delaware, as applicable) has dismissed a prior action by the same plaintiff asserting the same claims because such court lacked personal jurisdiction over an indispensable party named as a defendant therein.

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The choice of forum provision in our Second Amended and Restated Certificate of Incorporation does not waive our compliance with our obligations under the federal securities laws and the rules and regulations thereunder. Moreover, although our Second Amended and Restated Certificate of Incorporation states that unless we provide an Alternative Forum, the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended and that the exclusive forum provisions do not apply to suits brought to enforce a duty or liability created by the Securities Act, the Exchange Act, or any other claim for which the federal courts have exclusive jurisdiction. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder, and Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts with respect to suits brought to enforce a duty or liability created by the Securities Act or the rules and regulations thereunder. Accordingly, while suits brought to enforce a duty or liability under the Exchange Act are subject to exclusive federal jurisdiction, both state and federal courts have jurisdiction to entertain claims under the Securities Act and a federal court may be held to be the exclusive jurisdiction to enforce a duty or liability created by the Exchange Act or by the Securities Act. Additionally, while the Delaware courts have determined that choice of forum provisions of the type included in our Second Amended and Restated Certificate of Incorporation are facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than those designated in our exclusive forum provision. In such instance, to the extent applicable, we would expect to vigorously assert the validity and enforceability of our exclusive forum provision. This may require additional costs associated with resolving such action in other jurisdictions and there can be no assurance that the provisions will be enforced by a court in those other jurisdictions.

These exclusive forum provisions may limit the ability of the Company’s stockholders to bring a claim in a judicial forum that such stockholders find favorable for disputes with the Company or the Company’s directors or officers, which may discourage such lawsuits against the Company and the Company’s directors and officers. Alternatively, if a court were to find one or more of these exclusive forum provisions inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings described above, we may incur additional costs associated with resolving such matters in other jurisdictions or forums, which could materially and adversely affect our business, financial condition or results of operations.

Risks Related to Our Securities and this Offering

Certain recent initial public offerings of companies with public floats comparable to the anticipated public float of the Company have experienced extreme volatility that was seemingly unrelated to the underlying performance of the respective company. We may experience similar volatility, which may make it difficult for prospective investors to assess the value of our common stock.

In addition to the risks addressed below under the heading “—  Our common stock prices may be volatile and could decline substantially following this offering,” our common stock may be subject to extreme volatility that is seemingly unrelated to the underlying performance of our business. The trading price of our common stock following this offering is likely to be volatile, and our common stock may be subject to rapid and substantial price volatility. Such volatility, including any stock-run up, may be unrelated to our actual or expected operating performance, financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our common stock. There have been recent instances of extreme stock price run-ups followed by rapid price declines following initial public offerings, particularly among companies with relatively smaller public floats, and we expect that such instances may continue and/or increase in the future. Contributing to this risk of volatility are a number of factors. First, our common stock is likely to be more sporadically and thinly traded than that of larger, more established companies. As a consequence of this lack of liquidity, the trading of relatively small quantities of shares by our shareholders may disproportionately influence the price of those shares in either direction, which may cause our stock price to deviate, potentially significantly, from a price that better reflects the underlying performance of our business. The price of our shares could, for example, decline precipitously in the event that a large number of our shares are sold in the market without commensurate demand as compared to a seasoned issuer that could better absorb those sales without an adverse impact on its stock price. Second, we are a speculative investment due to our limited operating history, not being profitable, and not expecting to be profitable in the near term. As a consequence of this enhanced risk, more risk-adverse investors may, under the fear of losing all or most of their investment in the event of negative news or lack of progress, be more inclined to sell their shares on the market more quickly and at greater discounts than would be the case with the stock of a larger, more established company that has a relatively large public float.

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Many of these factors are beyond our control and may decrease the market price of our securities. Such volatility, including any stock run-ups, may be unrelated or disproportionate to our actual or expected operating performance and financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our shares.

Furthermore, the stock market in general, and the market for companies in the oil and gas industry in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies. Broad market and industry factors, as well as general economic, political and market conditions such as recessions, or changes in inflation or interest rates, may seriously affect the market price of our securities, regardless of our actual operating performance. These fluctuations may be even more pronounced in the trading market for our securities shortly following this offering. As a result of this volatility, investors may experience losses on their investment in our common stock. A decline in the market price of our common stock also could adversely affect our ability to issue additional shares of common stock or other securities and our ability to obtain additional financing in the future. No assurance can be given that an active market in our common shares will develop or be sustained. If an active market does not develop, holders of our common stock may be unable to readily sell the shares they hold or may not be able to sell their shares at all. If the market price of our shares after this offering does not exceed the per share offering price, you may not realize any return on your investment in us and may lose some or all of your investment.

Our common stock price may be volatile and could decline substantially following this offering.

The market price of our common stock may be highly volatile and subject to wide fluctuations. Our financial performance, government regulatory action, tax laws, interest rates, and market conditions in general could have a significant impact on the future market price of our common stock.

Some of the factors that could negatively affect or result in fluctuations in the market price of our common stock include:

· actual or anticipated variations in our quarterly operating results;

· changes in market valuations of similar companies;

· adverse market reaction to the level of our indebtedness;

· additions or departures of key personnel;

· actions by stockholders;

· Prices of, and the supply and demand for, oil, gas and NGL;

· speculation in the press or investment community;

· general market, economic, and political conditions, including an economic slowdown or dislocation in the global credit markets;

· our operating performance and the performance of other similar companies;

· changes in accounting principles; and

· passage of legislation or other regulatory developments that adversely affect us or the oil and gas industry.

Other factors unrelated to our performance that may affect the price of the Company’s securities include the following: (i) the extent of analytical coverage available to investors concerning our business may be limited if investment banks with research capabilities do not follow the Company; (ii) lessening in trading volume and general market interest in the Company’s securities may affect an investor’s ability to trade significant numbers of the Company’s securities; (iii) the size of our public float may limit the ability of some institutions to invest in the Company’s securities; and (iv) a substantial decline in the price of the Company’s securities that persists for a significant period of time could cause the Company’s securities, if listed on an exchange, to be delisted from such exchange further reducing market liquidity. As a result of any of these factors, the market price of the Company’s securities at any given point in time may not accurately reflect our long-term value. Class action litigation often has been brought against companies following periods of volatility in the market price of their securities. We may in the future be the target of similar litigation. Securities litigation could result in substantial costs and damages and divert management’s attention and resources.

The fact that no market currently exists for the Company’s securities may affect the pricing of the Company’s securities in the secondary market, the transparency and availability of trading prices and the liquidity of the Company’s securities. The market price of the Company’s securities is affected by many other variables which are not directly related to our success and are therefore not within our control. These include other developments that affect the market for all oil and gas sector securities, the breadth of the public market for our Company’s securities and the attractiveness of alternative investments. The effect of these and other factors on the market price of the Company’s securities is expected to make the price of the Company’s securities volatile in the future, which may result in losses to investors.

We may not receive the additional $2.5 million due pursuant to the terms of the February 2024 Subscription.

On February 29, 2024, the Company entered into a Subscription Agreement with Trxade, which is a wholly-owned subsidiary of TRxADE HEALTH Inc. (Nasdaq:MEDS), pursuant to which we agreed to sell Trxade 2,000,000 shares of a newly designated series of Series A Convertible Preferred Stock of the Company, in two tranches, with (a) 1,000,000 shares of Series A Preferred being sold for $2,500,000 on March 5, 2024, and (b) 1,000,000 shares of Series A Preferred being sold for an additional $2,500,000, within 10 days of the Company notifying Trxade by letter or email, that the Company has successfully drilled its first oil and gas well and produced at least 100 barrels of oil. Mr. Michael L. Peterson, the Company’s Chief Executive Officer and Director currently serves as an independent member of the Board of Directors, and as Chairman of the Audit Committee and member of the Compensation Committee and Nominating and Corporate Governance Committee of TRxADE HEALTH.  Mr. Suren Ajjarapu, the Chairman and CEO of TRxADE HEALTH, purchased 16,667 shares of the Company’s common shares from the Company at $3.00 per share in December 2023.  Both Mr. Peterson and Mr. Ajjarapu recused themselves on the TRxADE HEALTH board vote of investing in the Series A Preferred.  Trxade paid the $2,500,000 due pursuant to Tranche 1 on March 5, 2024, and was issued the 1,000,000 shares of Series A Preferred on March 21, 2024. We may never produce at least 100 barrels of oil and we may never receive the additional $2.5 million of funding in connection with the sale of 1,000,000 shares of Series A Preferred.

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The offering price per share of common stock offered under this prospectus may not accurately reflect the value of your investment.

The offering price per common stock share offered by this prospectus was negotiated between us and the underwriter. Factors considered in determining the price of our common stock include:

· the information set forth in this prospectus and otherwise available to the underwriter;

· the prospects for our Company and the industry in which we operate;

· an assessment of our management;

· our past and present financial and operating performance;

· our prospects for future earnings;

· financial and operating information and market valuations of publicly-traded companies engaged in activities similar to ours;

· the prevailing conditions of United States securities markets at the time of this offering; and

· other factors deemed relevant.

The offering price may not accurately reflect the value of our common stock and may not be realized upon any subsequent disposition of the common stock.

We have outstanding Series A Preferred Stock which has certain preferential rights to approve corporate transactions, and in liquidation and to dividends.

The Series A Designation requires the consent of the holders of at least a majority of the then issued and outstanding shares of Series A Preferred to (i) increase or decrease (other than by redemption or conversion) the total number of authorized shares of Series A Preferred of the Company, (ii) adopt or authorize any new designation of any preferred stock that (x) provides any holder of common stock or preferred stock any rights upon a liquidation of the Company which are prior and superior to those of the holders of the Series A Preferred; or (y) adversely affects the rights, preferences and privileges of the Series A Preferred, (iii) effect an exchange, or create a right of exchange, cancel, or create a right to cancel, of all or any part of the shares of another class of shares into shares of Series A Preferred, or (iv) alter or change the rights, preferences or privileges of the shares of Series A Preferred so as to affect adversely the shares of Series A Preferred.

The Series A Designation also provides that we cannot declare, pay or set aside dividends on any share of any class of series of capital stock of the Company (other than dividends payable solely in common stock), unless the holders of the Series A Preferred first receive, or simultaneously receive, a dividend equal to the amount they would have been due, had such Series A Preferred Stock been converted into common stock immediately prior to the record date for the declaration of such dividend.

Additionally, for so long as any Series A Preferred is issued and outstanding, and until a total of $2.50 has been received for each outstanding Series A Preferred share, holders of the Series A Preferred are entitled to receive, when, as and if authorized and declared by the Board of Directors of the Company, out of any funds legally available therefor, cumulative dividends in an amount equal to 30% of the EBT of the Company for the prior calendar quarter (or such applicable portion thereof that the Series A Preferred has been outstanding) calculated quarterly in arrears on a pro rata basis to the holders of Series A Preferred, commencing with the first full calendar quarter following the date that the Series A Preferred is initially issued. The EBT Payments are payable, on or before the date that is 90 days following the end of each calendar quarter to the extent authorized and declared by the Board of Directors of the Company, out of any funds legally available therefor. As a result, assuming the Tranche 2 Series A Preferred shares are sold, each Series A Preferred share will receive 0.000015% (30% / 2,000,000 = 0.000015% per share) of the Company’s quarterly EBT. EBT means earnings before taxes as determined in accordance with GAAP, as reasonably determined by the Board of Directors on a quarterly basis. To the extent any upward or downward adjustments to a prior period’s EBT as calculated by the Company are made by the Company in subsequent accounting periods, the next EBT Payment due and payable to the holders of Series A Preferred shall be adjusted accordingly.

To the extent the Company is not legally able to pay any EBT Payment by the Payment Date, or such payment is not authorized and declared by the Board of Directors of the Company, the amount of such unpaid (or undeclared) EBT Payments shall remain outstanding and accrue interest at the rate of 5% per annum until paid in full.

In the event of any Liquidity Event (defined below), each holder of a share of Series A Preferred is entitled to receive, subject to the prior preferences and other rights of any class or series of stock of the Company ranking in the case of a Liquidity Event senior to the Series A Preferred, but prior and in preference to any distribution of any of the assets or surplus funds of the Company to holders of common stock or any other class or series of stock of the Company ranking in the case of a Liquidity Event junior to the Series A Preferred, as to the distribution of assets upon any Liquidity Event, by reason of their ownership of such stock, an amount equal to $2.50 per share (as adjusted for any stock dividends, combinations or splits with respect to such shares) together with any Accrued EBT Payments. Following the payment of the Preference Amount to holders of shares of Series A Preferred and all amounts owing to holders of each class or series of capital stock of the Company having a preference or priority over the common stock as to distributions upon the liquidation, dissolution or winding up of the Company, then the holders of shares of Series A Preferred are entitled to participate, with the holders of the common stock and with the holders of any other securities of the Company entitled to participate, pro rata, based upon the number of shares of common stock into which the shares of Series A Preferred are then convertible, as to any amounts remaining for distribution to the holders of common stock upon a Liquidity Event.

A Liquidity Event means (i) any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary or (ii) any sale, merger, consolidation, reorganization or other transaction which results in a Change of Control. A Change of Control means a reorganization, consolidation or merger of the Company with or into any other corporation or corporations (other than a wholly-owned subsidiary), or the sale, transfer, liquidation or other disposition of all or substantially all of the assets of the Company, or the consummation of any transaction or series of related transactions, in each case which results in the Company’s stockholders immediately prior to such transaction or series of related transactions, holding less than fifty percent (50%) of the voting power of the entity surviving or continuing (including the Company or the entity owning all or substantially all of the assets of the Company) following such transaction or series of related transactions; provided a Change of Control shall not apply to a merger effected solely for the purposes of changing the domicile of the Company or public offerings of common stock.

We may be prohibited from undertaking certain actions while the Series A Preferred is outstanding due to the protective provisions of the Series A Designation, as discussed above, we may not be able to legally pay dividends on the Series A Preferred Stock, and such dividends may thereafter accrue interest until paid and the occurrence of certain Liquidity Events under the Series A Designation may prohibit us from undertaking future transactions which are beneficial to stockholders or result in us having to pay a liquidation preference of up to $2.5 million (depending on the then outstanding shares of Series A Preferred), to the holders of the Series A Preferred. All of the above may result in the value of our securities decreasing, being worth less than a similarly situated company without outstanding Series A Preferred, reduce cash flows, and/or have a material adverse effect on our operating results and prospects.

In the event the Farm-In Agreement closes, Heavy Sweet will own a significant portion of our outstanding shares of common stock and such exercise significant voting control over us, may limit stockholders’ abilities to influence corporate matters, could delay or prevent a change in corporate control and will cause significant dilution.

Upon the closing of the Farm-In Agreement, we agreed to issue Heavy Sweet up to 3,400,000 shares of restricted common stock, which together with the 2,688,000 shares of common stock which Heavy Sweet already owns will constitute up to 32% of the Company’s then outstanding common stock following the offering described in this prospectus. As a result, Heavy Sweet will have significant influence on the stockholder vote. Consequently, Heavy Sweet will have the ability to influence matters affecting our stockholders and therefore exercise significant control in determining the outcome of a number of corporate transactions or other matters, including (i) making amendments to our certificate of incorporation; (ii) election of directors; and (iv) any merger or significant corporate transactions, including with itself or other related parties. As a potential investor in the Company, you should keep in mind that even if you own shares of our common stock and wish to vote them at annual or special shareholder meetings, your shares will have little effect on the outcome of corporate decisions. The interests of Heavy Sweet may not coincide with our interests or the interests of other stockholders. In addition, this concentration of ownership might adversely affect the market price of our common stock by: (1) delaying, deferring or preventing a change of control of our Company; (2) impeding a merger, consolidation, takeover or other business combination involving our Company; or (3) discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of our Company. Additionally, the issuance of the Farm-In Shares will cause significant dilution to existing stockholders.

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The issuance of common stock upon conversion of our outstanding Series A Preferred Stock will cause immediate and substantial dilution to existing shareholders and the sale of common stock upon conversion of our outstanding Series A Preferred Stock may depress the market price of our common stock.

As of the date of this prospectus, there are 1,000,000 outstanding shares of Series A Preferred (as discussed and with certain terms related thereto), defined below under “Description of Capital Stock—Preferred Stock—Series A Convertible Preferred Stock”, provided that upon the occurrence of certain events as described herein, we have agreed to sell another 1,000,000 shares of Series A Preferred.

Each share of Series A Preferred (and any Accrued EBT Payments) are convertible, at the option of the holder thereof, at any time into that number of shares of common stock determined (i) by multiplying the number of shares of Series A Preferred subject to conversion, by the Series A Conversion Rate divided by the Conversion Value (initially, a conversion ratio of 1-for-1), and (ii) the total Accrued EBT Payments desired to be converted divided by the Conversion Value, rounded up to the nearest whole share ((i) and (ii), the Conversion Ratios). If at any time during the first six months from the first issuance date of any shares of Series A Preferred the Company sells or grants any option to purchase or sells or grants any right to reprice, or otherwise disposes of or issues (or announces any sale, grant or any option to purchase or other disposition), any common stock or common stock equivalents entitling any person to acquire shares of common stock at an effective price per share that is lower than the then Conversion Value, then, unless such transaction is an exempt issuance, simultaneously with the consummation (or, if earlier, the announcement) of each Dilutive Issuance the Conversion Value shall be reduced to equal the Base Conversion Price. Notwithstanding the above, in no event will the Base Conversion Price be less than $1.00 (as adjusted for any stock dividends, combinations or splits with respect to such shares).

Additionally, each share of Series A Preferred, and all Accrued EBT Payments are to be automatically converted into common stock on the date on which the Company has distributed an aggregate of $2.50 in EBT Payments per share of Series A Preferred Stock.

The conversion of the Series A Preferred Stock into common stock of the Company will cause significant dilution to the then holders of our common stock.

Additionally, if conversions of our outstanding Series A Preferred Stock and sales of such converted shares take place, the price of our common stock may decline. In addition, the common stock issuable upon conversion of our outstanding Series A Preferred Stock may represent overhang that may also adversely affect the market price of our common stock. Overhang occurs when there is a greater supply of a company’s stock in the market than there is demand for that stock. When this happens the price of the Company’s stock will decrease, and any additional shares which shareholders attempt to sell in the market will only further decrease the share price. If the share volume of our common stock cannot absorb converted shares sold by the holder of the Series A Preferred Stock, then the value of our common stock will likely decrease.

There is no existing market for our securities and we do not know if one will develop to provide you with adequate liquidity.

Prior to this offering, there has not been a public market for our securities. We cannot assure you that an active trading market for shares of our common stock will develop following this offering, or if it does develop, it may not be maintained. You may not be able to sell your shares of our common stock quickly or at the market price if trading in our securities is not active. The initial public offering price for the common stock offered hereby will be determined by negotiations between us and the underwriter and may not be indicative of prices that will prevail in the trading market.

Because of the speculative nature of investment risk, you may lose your entire investment.

An investment in the Company’s securities carries a high degree of risk and should be considered as a speculative investment. The Company has no history of earnings, limited cash reserves, a limited operating history, has not paid dividends and is highly unlikely to pay dividends in the immediate or near future. The likelihood of success of the Company must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered in connection with the establishment of any business. An investment in the Company’s securities may result in the loss of an investor’s entire investment. Only potential investors who are experienced in high-risk investments and who can afford to lose their entire investment should consider an investment in the Company.

There is no guarantee that our common stock will be approved for listing on Nasdaq or that we will be able to comply with the Nasdaq’s   continued listing standards in the future.

As a condition to consummating this offering, our common stock offered in this prospectus must be listed on the Nasdaq. Accordingly, we have applied to list our common stock on The Nasdaq Capital Market under the symbol “LEC”, and previously received conditional listing approval for such listing; however, there can be no assurance that such listing approval is still effective. If our application to the Nasdaq Capital Market is not approved or we otherwise determine that we will not be able to secure the listing of the common stock on the Nasdaq Capital Market, we will not complete the offering. Even if our common stock is approved for listing on Nasdaq, there can be no assurance any broker will be interested in trading our securities. Therefore, it may be difficult to sell your shares of common stock if you desire or need to sell them. Our underwriter is not obligated to make a market in our securities, and even if it does make a market, it can discontinue market making at any time without notice. Neither we nor the underwriter can provide any assurance that an active and liquid trading market in our securities will develop or, if developed, that such market will continue.

Furthermore, there is no guarantee that we will be able to maintain our listing on the Nasdaq for any period of time. Among the conditions required for continued listing on The Nasdaq Capital Market, the Nasdaq requires us to maintain at least $2 million in shareholders’ equity, if we reported losses from continuing operations and/or net losses in two out of the last three fiscal years; $4 million in shareholders’ equity, if we reported losses from continuing operations and/or net losses in three out of the last four fiscal years; or $6 million in shareholders’ equity, if we reported losses from continuing operations and/or net losses in the last five years, provided that the Nasdaq will typically not suspend an issuer which does not meet the requirements above if the issuer has at least 1,100,000 publicly held shares, $15 million of market value of publicly-held shares, 400 round lot holders and either a $50 million market capitalization, or total assets and revenue of $50 million each in the last fiscal year or two of the last three fiscal years. The Nasdaq also has the ability to suspend trading in an issuer’s common stock or remove the issuer’s common stock from listing on the Nasdaq if in the opinion of the exchange: (a) the financial condition and/or operating results of the issuer appear to be unsatisfactory; or (b) it appears that the extent of public distribution or the aggregate market value of the issuer’s common stock has become so reduced as to make further dealings on the exchange inadvisable; or (c) the issuer has sold or otherwise disposed of its principal operating assets, or has ceased to be an operating company; or (d) the issuer has failed to comply with its listing agreements with the exchange (which include that the issuer receive additional listing approval from the exchange prior to issuing any shares of common stock); or (e) any other event shall occur or any condition shall exist which makes further dealings on the exchange unwarranted. Additionally, Nasdaq regulations require a listed company to maintain an average trading price for its securities which exceeds $1.00 per share, for each 30 day rolling period. Finally, Nasdaq rules require us, as long as we remain a smaller reporting company, to maintain a majority of independent directors and to have an audit committee of at least three persons.

Our stockholders’ equity may not remain above the Nasdaq’s $2-6 million minimum, we may not be able to maintain independent directors, and we may not be able to maintain a stock price over $0.30 per share. Our failure to meet the continued listing standards of the Nasdaq may result in our securities being delisted from the Nasdaq.

The absence of such a listing may adversely affect the acceptance of our common stock as currency or the value accorded by other parties. Further, if we are delisted, we would also incur additional costs under state blue sky laws in connection with any sales of our securities. These requirements could severely limit the market liquidity of our common stock and the ability of our stockholders to sell our common stock in the secondary market. If our common stock is delisted, our common stock may be eligible to trade on an over-the-counter quotation system, such as the OTCQB Market or OTC Pink Market, where an investor may find it more difficult to sell our securities or obtain accurate quotations as to the market value of our securities. In the event our common stock is delisted from the Nasdaq in the future, we may not be able to list our common stock on another national securities exchange or obtain quotation on an over-the counter quotation system.

We have broad discretion in how we use the proceeds of this offering and may not use these proceeds effectively, which could affect our results of operations and cause the value of our common stock to decline.

We will have considerable discretion in the application of the net proceeds of this offering. As a result, investors will be relying upon management’s judgment with only limited information about our specific intentions for the use of the net proceeds of this offering. We may use the net proceeds for purposes that do not yield a significant return or any return at all for our stockholders. In addition, pending their use, we may invest the net proceeds from this offering in a manner that does not produce income or that loses value.

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If our stock price fluctuates after the offering, you could lose a significant part of your investment.

The market price of our common stock could be subject to wide fluctuations in response to, among other things, the risk factors described in this prospectus, and other factors beyond our control, such as fluctuations in the valuation of companies perceived by investors to be comparable to us. Furthermore, the stock markets have experienced price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These fluctuations often have been unrelated or disproportionate to the operating performance of those companies. These broad market and industry fluctuations, as well as general economic, political, and market conditions, such as recessions, interest rate changes or international currency fluctuations, may negatively affect the market price of our common stock. In the past, many companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could seriously harm our business.

Purchasers in this offering will experience immediate and substantial dilution in net tangible book value.

Because the price per share of our common stock being offered is higher than the book value per share of our common stock, you will suffer substantial dilution in the net tangible book value of the common stock you purchase in this offering. Based on the assumed public offering price of $4.00  per share, the midpoint of the estimated price range set forth on the cover page of this prospectus, and the as adjusted net tangible book value of the common stock of $0.41 per share as of March 31, 2024, following this offering, if you purchase common stock in this offering, you will suffer dilution of $3.59  per share in the net tangible book value of the common stock. See “Dilution“ below for a more detailed discussion of the dilution you will incur if you purchase our common stock in the offering.

Future sales of our common stock, other securities convertible into our common stock, or preferred stock could cause the market value of our common stock to decline and could result in dilution of your shares.

Our Board of Directors is authorized, without your approval, to cause us to issue additional shares of our common stock or to raise capital through the creation and issuance of preferred stock, other debt securities convertible into common stock, options, warrants and other rights, on terms and for consideration as our Board of Directors in its sole discretion may determine.

If our stockholders sell substantial amounts of our common stock in the public market, the market price of our common stock could decrease significantly. The perception in the public market that our stockholders might sell shares of our common stock could also depress the market price of our common stock. A total of 3,656,475 shares of common stock are being registered in the Resale Prospectus and will be available for immediate resale upon effectiveness of the registration statement of which this prospectus forms a part. Additionally, beginning 90 days after the date of this offering a total of an additional  1,750,758  shares of common stock will be available for immediate resale pursuant to Rule 144 of the Securities Act. If our existing stockholders sell, or indicate an intention to sell, substantial amounts of our common stock in the public market, the trading price of our common stock could decline significantly. The underwriter may, at any time, release, or authorize us to release, as the case may be, all or a portion of our common stock subject to the foregoing lock-up provisions. If the restrictions under the lock-up provisions of the lock-up agreements entered into in connection with this offering are waived, shares of our common stock may become available for sale into the market, subject to applicable law, which could reduce the market price for our common stock.

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We intend to file a registration statement on Form S-8 under the Securities Act to register an aggregate of 733,334 shares of restricted common stock which we plan to grant under the 2022 Equity Incentive Plan shortly following the effectiveness of the registration statement of which this registration statement forms a part, and an additional 2,356,469 shares of common stock available for future awards under our 2022 Equity Incentive Plan (see “Executive and Director Compensation— 2022 Equity Incentive Plan”, below). Subject to any vesting requirements, these shares registered on Form S-8 will be eligible for resale in the public markets without restriction, subject to Rule 144 limitations applicable to affiliates, upon issuance/award in the future, subject to the lock-up described below.

We cannot predict the effect, if any, of future sales of our common stock, or the availability of our common stock for future sales, on the value of our common stock. Sales of substantial amounts of our common stock by large stockholders, or the perception that such sales could occur, may adversely affect the market price of our common stock.

The market price for shares of our common stock may drop significantly when such securities are sold in the public markets. A decline in the price of shares of our common stock might impede our ability to raise capital through the issuance of additional shares of our common stock or other equity securities. 

We have no intention of declaring dividends in the foreseeable future.

The decision to pay cash dividends on our common stock rests with our Board of Directors and will depend on our earnings, unencumbered cash, capital requirements and financial condition. We do not anticipate declaring any dividends in the foreseeable future, as we intend to use any excess cash to fund our operations. Investors in our common stock should not expect to receive dividend income on their investment, and investors will be dependent on the appreciation of our common stock to earn a return on their investment.

General Risk Factors

We have a short operating history in an evolving industry and, as a result, our past results may not be indicative of future operating performance.

We have a short operating history in a rapidly evolving industry that may not develop in a manner favorable to our business. Our relatively short operating history makes it difficult to assess our future performance. You should consider our business and prospects in light of the risks and difficulties we may encounter.

Our future success will depend in large part upon our ability to, among other things:

· increase our market share;

· increase consumer awareness of our brand and maintain our reputation;

· anticipate and respond to macroeconomic changes;

· successfully and cost effectively drill new wells, work-over existing wells, and obtain new assets;

· compete effectively;

· avoid interruptions in our business from information technology downtime, cybersecurity breaches, or labor stoppages;

· effectively manage our growth; and

· hire, integrate, and retain talented people at all levels of our organization.

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If we fail to address the risks and difficulties that we face, including those associated with the challenges listed above as well as those described elsewhere in this “Risk Factors” section, our business and our operating results will be adversely affected.

Failure to adequately manage our planned aggressive growth strategy may harm our business or increase our risk of failure.

For the foreseeable future, we intend to pursue an aggressive growth strategy for the expansion of our operations. Our ability to rapidly expand our operations will depend upon many factors, including our ability to work in a regulated environment, establish and maintain strategic relationships with suppliers, and obtain adequate capital resources on acceptable terms. Any restrictions on our ability to expand may have a materially adverse effect on our business, results of operations, and financial condition. Accordingly, we may be unable to achieve our targets for growth, and our operations may not be successful or achieve anticipated operating results.

Additionally, our growth may place a significant strain on our managerial, administrative, operational, and financial resources and our infrastructure. Our future success will depend, in part, upon the ability of our senior management to manage growth effectively. This will require us to, among other things:

· implement additional management information systems;

· further develop our operating, administrative, legal, financial, and accounting systems and controls;

· hire additional personnel;

· develop additional levels of management within our company;

· locate additional office space; and

· maintain close coordination among our operations, legal, finance, sales and marketing, and client service and support personnel.

As a result, we may lack the resources to deploy our services on a timely and cost-effective basis. Failure to accomplish any of these requirements could have an adverse effect on future operating results.

If we make any acquisitions, they may disrupt or have a negative impact on our business.

If we make acquisitions in the future, we could have difficulty integrating the acquired company’s assets, personnel and operations with our own. We do not anticipate that any acquisitions or mergers we may enter into in the future would result in a change of control of the Company. In addition, the key personnel of the acquired business may not be willing to work for us. We cannot predict the effect expansion may have on our core business. Regardless of whether we are successful in making an acquisition, the negotiations could disrupt our ongoing business, distract our management and employees and increase our expenses. In addition to the risks described above, acquisitions are accompanied by a number of inherent risks, including, without limitation, the following:

· the difficulty of integrating acquired assets or operations;

· the potential disruption of the ongoing businesses and distraction of our management and the management of acquired companies;

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· difficulties in maintaining uniform standards, controls, procedures and policies;

· the potential impairment of relationships with employees and members and customers as a result of any integration of new management personnel;

· liability associated with acquired assets;

· the effect of any government regulations which relate to the business acquired;

· potential unknown liabilities associated with acquired businesses, or the defense of any litigation, whether or not successful, resulting from actions of the acquired company prior to our acquisition; and

· potential expenses under the labor, environmental and other laws of various jurisdictions.

Our business could be severely impaired if and to the extent that we are unable to succeed in addressing any of these risks or other problems encountered in connection with an acquisition, many of which cannot be presently identified. These risks and problems could disrupt our ongoing business, distract our management and employees, increase our expenses and adversely affect our results of operations.

We may apply working capital and future funding to uses that ultimately do not improve our operating results or increase the value of our securities.

In general, we have complete discretion over the use of our working capital and any new investment capital we may obtain in the future. Because of the number and variety of factors that could determine our use of funds, our ultimate expenditure of funds (and their uses) may vary substantially from our current intended operating plan for such funds. Our management has broad discretion to use any or all of our available capital reserves. Our capital could be applied in ways that do not improve our operating results or otherwise increase the value of a stockholder’s investment.

Claims, litigation, government investigations, and other proceedings may adversely affect our business and results of operations.

We may be subject to actual and threatened claims, litigation, reviews, investigations, and other proceedings, including proceedings relating to our operations or those of third parties, and other matters. Any of these types of proceedings, may have an adverse effect on us because of legal costs, disruption of our operations, diversion of management resources, negative publicity, and other factors. The outcomes of these matters are inherently unpredictable and subject to significant uncertainties. Determining legal reserves and possible losses from such matters involves judgment and may not reflect the full range of uncertainties and unpredictable outcomes. Until the final resolution of such matters, we may be exposed to losses in excess of the amount recorded, and such amounts could be material. Should any of our estimates and assumptions change or prove to have been incorrect, it could have a material effect on our business, consolidated financial position, results of operations, or cash flows. In addition, it is possible that a resolution of one or more such proceedings, including as a result of a settlement, could require us to make substantial future payments, prevent us from offering certain products or services, require us to change our business practices in a manner materially adverse to our business, requiring development of non-infringing or otherwise altered technologies, damaging our reputation, or otherwise having a material effect on our operations.

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We may incur indebtedness in the future which could reduce our financial flexibility, increase interest expense and adversely impact our operations and our costs.

As of the date of this filing we have no indebtedness. However, we may incur significant amounts of indebtedness in the future. Our level of indebtedness could affect our operations in several ways, including the following:

· a significant portion of our cash flows is required to be used to service our indebtedness;

· a high level of debt increases our vulnerability to general adverse economic and industry conditions;

· covenants contained in the agreements governing our outstanding indebtedness limit our ability to borrow additional funds and provide additional security interests, dispose of assets, pay dividends and make certain investments;

· a high level of debt may place us at a competitive disadvantage compared to our competitors that are less leveraged and, therefore, may be able to take advantage of opportunities that our indebtedness may prevent us from pursuing; and

· debt covenants may affect our flexibility in planning for, and reacting to, changes in the economy and in our industry.

A high level of indebtedness increases the risk that we may default on our debt obligations. We may not be able to generate sufficient cash flows to pay the principal or interest on our debt, and future working capital, borrowings or equity financing may not be available to pay or refinance such debt. If we do not have sufficient funds and are otherwise unable to arrange financing, we may have to sell significant assets or have a portion of our assets foreclosed upon which could have a material adverse effect on our business, financial condition and results of operations.

Because we are a small company, the requirements of being a public company, including compliance with the reporting requirements of the Exchange Act and the requirements of the Sarbanes-Oxley Act and the Dodd-Frank Act, may strain our resources, increase our costs and distract management, and we may be unable to comply with these requirements in a timely or cost-effective manner.

As a public company with listed equity securities, we must comply with the federal securities laws, rules and regulations, including certain corporate governance provisions of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) and the Dodd-Frank Act, related rules and regulations of the SEC and the Nasdaq Capital Market with which a private company is not required to comply. Complying with these laws, rules and regulations will occupy a significant amount of time of our board of directors and management and will significantly increase our costs and expenses, which we cannot estimate accurately at this time. Among other things, we must:

· establish and maintain a system of internal control over financial reporting in compliance with the requirements of Section 404 of the Sarbanes-Oxley Act and the related rules and regulations of the SEC and the Public Company Accounting Oversight Board;

· comply with rules and regulations promulgated by the Nasdaq;

· prepare and distribute periodic public reports in compliance with our obligations under the federal securities laws;

· maintain various internal compliance and disclosures policies, such as those relating to disclosure controls and procedures and insider trading in our common stock;

· involve and retain to a greater degree outside counsel and accountants in the above activities;

· maintain a comprehensive internal audit function; and

· maintain an investor relations function.

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In addition, being a public company subject to these rules and regulations may require us to accept less director and officer liability insurance coverage than we desire or to incur substantial costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified members of our board of directors, particularly to serve on our audit committee, and qualified executive officers.

Our business could be adversely affected by security threats, including cybersecurity threats.

We face various security threats, including cybersecurity threats to gain unauthorized access to our sensitive information, to seek initiation of unauthorized fund transfers, or to render our information or systems unusable, and threats to the security of our facilities and infrastructure or third-party facilities and infrastructure, such as gathering and processing facilities, refineries, rail facilities and pipelines. The potential for such security threats subjects our operations to increased risks that could have a material adverse effect on our business, financial condition and results of operations. For example, unauthorized access to our seismic data, reserves information or other proprietary information could lead to data corruption, communication interruptions, or other disruptions to our operations.

Our implementation of various procedures and controls to monitor and mitigate such security threats and to increase security for our information, systems, facilities and infrastructure may result in increased capital and operating costs. Moreover, there can be no assurance that such procedures and controls will be sufficient to prevent security breaches from occurring. If any of these security breaches were to occur, they could lead to losses of, or damage to, sensitive information or facilities, infrastructure and systems essential to our business and operations, as well as data corruption, reputational damage, communication interruptions or other disruptions to our operations, which, in turn, could have a material adverse effect on our business, financial position and results of operations.

The threat and impact of terrorist attacks, cyber-attacks or similar hostilities may adversely impact our operations.

We cannot assess the extent of either the threat or the potential impact of future terrorist attacks on the energy industry in general, and on us in particular, either in the short-term or in the long-term. Uncertainty surrounding such hostilities may affect our operations in unpredictable ways, including the possibility that infrastructure facilities, including pipelines and gathering systems, production facilities, processing plants and refineries, could be targets of, or indirect casualties of, an act of terror, a cyber-attack or electronic security breach, or an act of war.

We may have difficulty managing growth in our business, which could have a material adverse effect on our business, financial condition and results of operations and our ability to execute our business plan in a timely fashion.

Because of our small size, growth in accordance with our business plans, if achieved, will place a significant strain on our financial, technical, operational and management resources. As we expand our activities, including our planned increase in oil exploration, development and production, and increase the number of projects we are evaluating or in which we participate, there will be additional demands on our financial, technical and management resources. The failure to continue to upgrade our technical, administrative, operating and financial control systems or the occurrence of unexpected expansion difficulties, including the inability to recruit and retain experienced managers, geoscientists, petroleum engineers and landmen could have a material adverse effect on our business, financial condition and results of operations and our ability to execute our business plan in a timely fashion.

Failure to adequately protect critical data and technology systems could materially affect our operations.

Information technology solution failures, network disruptions and breaches of data security could disrupt our operations by causing delays or cancellation of customer orders, impeding processing of transactions and reporting financial results, resulting in the unintentional disclosure of customer, employee or our information, or damage to our reputation. There can be no assurance that a system failure or data security breach will not have a material adverse effect on our financial condition, results of operations or cash flows.

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Stockholders may be diluted significantly through our efforts to obtain financing and satisfy obligations through the issuance of securities.

Wherever possible, our board of directors will attempt to use non-cash consideration to satisfy obligations. In many instances, we believe that the non-cash consideration will consist of shares of our common stock, preferred stock (which may be similar to or different than the Series A Preferred Stock) or warrants to purchase shares of our common stock. Our board of directors has authority, without action or vote of the stockholders, subject to the requirements of the Nasdaq (which generally require stockholder approval for any transactions which would result in the issuance of more than 20% of our then outstanding shares of common stock or voting rights representing over 20% of our then outstanding shares of stock, subject to certain exceptions, including sales in a public offering and/or sales which are undertaken at or above the lower of the closing price immediately preceding the signing of the binding agreement or the average closing price for the five trading days immediately preceding the signing of the binding agreement), to issue all or part of the authorized but unissued shares of common stock, preferred stock or warrants to purchase such shares of common stock. In addition, we may attempt to raise capital by selling shares of our common stock, possibly at a discount to market in the future. These actions will result in dilution of the ownership interests of existing stockholders and may further dilute common stock book value, and that dilution may be material. Such issuances may also serve to enhance existing management’s ability to maintain control of us, because the shares may be issued to parties or entities committed to supporting existing management.

Securities analysts may not cover, or continue to cover, our common stock and this may have a negative impact on the market price of our securities.

The trading market for our common stock will depend, in part, on the research and reports that securities or industry analysts publish about us or our business. We do not have any control over independent analysts (provided that we have engaged various non-independent analysts). We currently only have a few independent analysts that cover our common stock, and these analysts may discontinue coverage of our common stock at any time. Further, we may not be able to obtain additional research coverage by independent securities and industry analysts. If no independent securities or industry analysts continue coverage of us, the trading price for our common stock could be negatively impacted. If one or more of the analysts who cover us downgrades our common stock, changes their opinion of our shares or publishes inaccurate or unfavorable research about our business, our stock price could decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, demand for our common stock could decrease and we could lose visibility in the financial markets, which could cause our stock price and trading volume to decline.

The Company does not insure against all potential losses, which could result in significant financial exposure.

The Company does not have commercial insurance or third-party indemnities to fully cover all operational risks or potential liability in the event of a significant incident or series of incidents causing catastrophic loss. As a result, the Company is, to a substantial extent, self-insured for such events. The Company relies on existing liquidity, financial resources and borrowing capacity to meet short-term obligations that would arise from such an event or series of events. The occurrence of a significant incident, series of events, or unforeseen liability for which the Company is self-insured, not fully insured or for which insurance recovery is significantly delayed could have a material adverse effect on the Company’s results of operations or financial condition.

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Global economic conditions could materially adversely affect our business, results of operations, financial condition and growth.

Adverse macroeconomic conditions, including inflation, slower growth or recession, new or increased tariffs, changes to fiscal and monetary policy, tighter credit, higher interest rates, high unemployment and currency fluctuations could materially adversely affect our operations, expenses, access to capital and the market for oil and gas. In addition, uncertainty about, or a decline in, global or regional economic conditions could have a significant impact on our expected funding sources, suppliers and partners. A downturn in the economic environment could also lead to limitations on our ability to issue new debt; reduced liquidity; and declines in the fair value of our financial instruments. These and other economic factors could materially adversely affect our business, results of operations, financial condition and growth.

We may be adversely affected by climate change or by legal, regulatory or market responses to such change.

The long-term effects of climate change are difficult to predict; however, such effects may be widespread. Impacts from climate change may include physical risks (such as rising sea levels or frequency and severity of extreme weather conditions), social and human effects (such as population dislocations or harm to health and well-being), compliance costs and transition risks (such as regulatory or technology changes) and other adverse effects. The effects of climate change could increase the cost of certain products, commodities and energy (including utilities), which in turn may impact our ability to procure goods or services required for the operation of our business. Climate change could also lead to increased costs as a result of physical damage to or destruction of our facilities, equipment and business interruption due to weather events that may be attributable to climate change. These events and impacts could materially adversely affect our business operations, financial position or results of operation.

We might be adversely impacted by changes in accounting standards.

Our consolidated financial statements are subject to the application of U.S. GAAP, which periodically is revised or reinterpreted. From time to time, we are required to adopt new or revised accounting standards issued by recognized authoritative bodies, including the Financial Accounting Standards Board (“FASB”) and the SEC. It is possible that future accounting standards may require changes to the accounting treatment in our consolidated financial statements and may require us to make significant changes to our financial systems. Such changes might have a materially adverse impact on our financial position or results of operations.

* * * * *

For all of the foregoing reasons and others set forth herein, an investment in our securities involves a high degree of risk.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

We make forward-looking statements under the “Prospectus Summary,” “Risk Factors,” “Business,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in other sections of this prospectus. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “should,” “would,” “could,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “potential” or “continue,” and the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to known and unknown risks, uncertainties and assumptions about us, may include projections of our future financial performance based on our growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. In particular, you should consider the numerous risks and uncertainties described under “Risk Factors.”

While we believe we have identified material risks, these risks and uncertainties are not exhaustive. Other sections of this prospectus describe additional factors that could adversely impact our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible to predict all risks and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

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Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Except as required by U.S. federal securities law, we are under no duty to update any of these forward-looking statements after the date of this prospectus to conform our prior statements to actual results or revised expectations, and we do not intend to do so.

Forward-looking statements include, but are not limited to, statements about:

· business strategy;

· future reserves;

· technology;

· cash flows and liquidity;

· financial strategy, budget, projections and operating results;

· oil and natural gas realized prices;

· timing and amount of future production of oil and natural gas;

· availability of oil field labor;

· the amount, nature and timing of capital expenditures, including future exploration and development costs;

· drilling of wells;

· government regulation and taxation of the oil and natural gas industry;

· changes in, and interpretations and enforcement of, environmental and other laws and other political and regulatory developments, including in particular additional permit scrutiny in Louisiana;

· exploitation projects or property acquisitions;

· costs of exploiting and developing our properties and conducting other operations;

· general economic conditions in the United States and around the world, including high interest rates and inflation, and the effect of regional or global health pandemics (such as, for example COVID-19);

· political conditions in or affecting other oil-producing and natural gas-producing countries, including the current conflicts in the Middle East and involving Russia and Ukraine;

· competition in the oil and natural gas industry;

· effectiveness of our risk management activities;

· environmental liabilities;

· counterparty credit risk;

· developments in oil-producing and natural gas-producing countries;

· future operating results;

· future acquisition transactions; and

· plans, objectives, expectations and intentions contained in this prospectus that are not historical.

We caution you not to place undue reliance on the forward-looking statements, which speak only as of the date of this prospectus in the case of forward-looking statements contained in this prospectus.

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USE OF PROCEEDS

We estimate that the net proceeds to us from the sale of our shares of common stock in this offering will be approximately $4.162 million, assuming an initial public offering price of $4.00 per share, the midpoint of the estimated price range set forth on the cover page of this prospectus after deducting estimated underwriting discounts and commissions and offering expenses. Our net proceeds will increase by approximately $0.6 million if the underwriter’s over-allotment option to purchase additional shares of common stock is exercised in full (based on the same assumed offering price as described in the preceding sentence).

A $0.50 increase (decrease) in the assumed initial public offering price of $4.00 per share of common stock would increase (decrease) the net proceeds to us from this offering by approximately $0.5 million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting estimated underwriting discounts and commissions. Similarly, each increase (decrease) of 0.25 million shares in the number of shares of common stock offered by us would increase (decrease) the net proceeds to us from this offering by approximately $0.9 million, assuming the assumed initial public offering price of $4.00 per share of common stock remains the same, and after deducting estimated underwriting discounts and commissions.

The principal purposes of this offering are to increase our capitalization and financial flexibility, to create a public market for our common stock and to facilitate our future access to the capital markets. As of the date of this prospectus, we cannot specify with certainty all of the particular uses for the net proceeds we receive from this offering. However, we currently intend to use the net proceeds we receive from this offering as follows:

Use of Proceeds	Amount		Percentage
Post drilling and completing the first three wells expected to be drilled in the Asphalt Ridge Acreage, begin development activities of at least 5 new wells in the Asphalt Ridge Acreage, assuming the successful closing of the Farm-In Agreement that are planned to be drilled within one quarter following the closing of this offering (1)	$	3,000,000		72.1	%
Payment of Amounts due to Officers and Directors (2)	$	120,000		2.9	%
Working Capital	$	1,042,000		25.0	%
Total	$	4,162,000		100.0	%

⁽¹⁾ The Company plans to use up to approximately $3 million of the offering proceeds at closing to develop the Asphalt Ridge Acreage expected to be acquired by the Company pursuant to the Farm-In Agreement in the Asphalt Ridge and develop the Initial Development Opportunities in three wells that the Company anticipates will be drilled and completed by Valkor Oil & Gas LLC, our third party operator within the first quarter following the closing of this offering.

⁽²⁾ The Company plans to use a sum total of $120,000 of the offering proceeds at closing to pay Mr. Ingriselli, our Chairman, and Mr. Peterson, our Chief Executive Officer, each a $60,000 bonus for completing a successful IPO in accordance with the terms of their employment/consulting agreements, as discussed in greater detail below under “Executive and Director Compensation — Employment Agreements; and —Consulting Agreements”.

In the event that the underwriter exercises its over-allotment option to purchase up to an additional 180,000 shares of common stock to cover over-allotments, we may raise up to an additional $0.6 million through this offering, net of expenses, which funds we plan to use for acquisitions of additional working interests and general working capital.

We will have broad discretion over how to use the net proceeds we receive from this offering. We intend to invest the net proceeds we receive from this offering that are not used as described above in a variety of capital preservation investments, including short-term, investment-grade, interest-bearing instruments and U.S. government securities.

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This expected use of the net proceeds from this offering represents our intentions based upon our current plans and business conditions, which could change in the future as our plans and business conditions evolve. We may also use a portion of the net proceeds to acquire or invest in other areas of the energy industry.

We believe that the net proceeds from this offering, together with our existing cash and cash equivalents, will enable us to fund our operating expenses and capital expenditure requirements for the next 12 months following the closing of this offering, except that we expect that we will seek to raise the funds needed to develop additional wells after drilling and completing the Initial Development Opportunities, through an RBL, which RBL may not be available on favorable terms, if at all. We have based this estimate on assumptions that may prove to be incorrect, and we could use our available capital resources sooner than we currently expect. To complete exploration and development of resources we may find, if any, we will be required to raise additional capital. We may satisfy our future cash needs through the sale of equity securities, debt financings, working capital lines of credit, corporate collaborations or license agreements, interest income earned on invested cash balances or a combination of one or more of these sources.

DIVIDEND POLICY

We have never declared or paid any cash dividends on our capital stock. We currently intend to retain earnings, if any, to finance the growth and development of our business. We do not expect to pay any cash dividends on our common stock in the foreseeable future. Payment of future dividends, if any, will be at the discretion of our Board of Directors and will depend on our financial condition, results of operations, capital requirements, restrictions contained in any financing instruments, provisions of applicable law and other factors the board deems relevant.

CAPITALIZATION

The following table sets forth our cash and cash equivalents and capitalization as of March 31, 2024, on:

· an actual basis; and

· an as adjusted basis, after giving effect to the sale of 1,200,000 shares of our common stock in this offering at an assumed public offering price of $4.00 per share (the midpoint of the range set forth on the cover page of this prospectus), and our receipt of the estimated $4.162 million in net proceeds from this offering, after deducting underwriting commissions and estimated offering expenses payable by us and the application of the net proceeds of this offering as set forth under “Use of Proceeds.”

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You should read this capitalization table together with “Use of Proceeds,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and the related notes appearing elsewhere in this prospectus.

	Actual			As Adjusted
Cash	$	1,749		$	5,911
Shareholders’ equity:
Series A Convertible Preferred Stock $0.0001 par value, 1,000,000 and 1,000,000 shares outstanding, at March 31, 2024, on an actual and as adjusted basis, respectively	$	—		$	—
Common Stock, $0.0001 par value; 90,000,000 shares authorized; 13,812,379 and 15,745,713 shares issued and outstanding at March 31, 2024, on an actual and as adjusted basis, respectively		1			2
Additional paid-in capital		11,644			15,805
Accumulated deficit		(2,683	)		(2,683	)
Total stockholders’ equity	$	8,963		$	13,124
Total capitalization		8,963			13,124

A $0.50 increase (decrease) in the assumed initial public offering price of $4.00 per share of common stock, the midpoint of the estimated price range set forth on the cover page of this prospectus, would increase (decrease) each of our as adjusted cash, additional paid-in capital, total stockholders’ equity and total capitalization by approximately $0.5 million, and after deducting estimated underwriting discounts and commissions and estimated expenses of the offering. Similarly, each increase (decrease) of 0.25 million shares in the number of shares of common stock offered by us would increase (decrease) each of our as adjusted cash, additional paid-in capital, total stockholders’ equity and total capitalization by approximately $0.9 million, after deducting estimated underwriting discounts and commissions. 

The number of shares of common stock to be outstanding after this offering is based on 13,812,379 shares outstanding as of March 31, 2024 on an actual and 15,745,713 shares outstanding on an as adjusted basis, including the 1,200,000 shares of common stock issuable in the offering and 733,334 shares of restricted common stock expected to be issued to an officer and three of the non-employee directors promptly following the offering, and does not give effect to:

· 180,000 shares of common stock issuable to the underwriter upon the exercise of its option to purchase up additional shares to cover over-allotments, if any;

· the issuance of up to 3,400,000 Farm-In Shares; and

· any future awards under the Company’s 2022 Equity Incentive plan (other than as discussed above).

DILUTION

Purchasers of our common stock in this offering will experience an immediate dilution of net tangible book value per share from the initial public offering price. Dilution in net tangible book value per share represents the difference between the amount per share paid by the purchasers of shares of common stock and the net tangible book value per share immediately after this offering.

As of March 31, 2024, our net tangible book value was $2.2 million, or $0.16 per share of common stock.

Net tangible book value per share represents our total tangible assets, less our total liabilities, divided by the number of outstanding shares of our common stock.

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Dilution in net tangible book value per share of common stock represents the difference between the public offering price per share of our common stock in this offering and the as adjusted net tangible book value per share of our common stock after giving effect to this offering. After giving effect to the sale of shares of common stock in this offering at an assumed offering price of $4.00 per share, the midpoint of the range set forth on the cover page of this prospectus, and after deducting underwriting commissions and estimated offering expenses payable by us, our as adjusted net tangible book value would have been $6.4 million or $0.41 per share. This represents an immediate increase in net tangible book value of $0.25 per share to our existing stockholders, and immediate dilution of $3.59 per share to new investors purchasing shares at the proposed public offering price. The following table illustrates the dilution in net tangible book value per share to new investors as of March 31, 2024:  

Assumed initial public offering price per share of common stock		$	4.00
Net tangible book value per common stock share as of March 31, 2024	0.16
Increase in net tangible book value per share of common stock attributable to this offering	0.25
As adjusted net tangible book per common stock share as of March 31, 2024, after this offering		$	0.41
Dilution per common stock share to investors participating in this offering		$	(3.59	)

The dilution information discussed above is illustrative only and may change based on the actual initial public offering price and other terms of this offering. A $0.50 increase (decrease) in the assumed initial public offering price of $4.00 per share of common stock, the midpoint of the estimated price range set forth on the cover page of this prospectus, would increase (decrease) our as adjusted net tangible book value per share after this offering by approximately $0.04 per share and increase (decrease) the dilution to new investors by approximately $0.46 per share, and after deducting estimated underwriting discounts and commissions. Similarly, each increase or decrease of 0.25 million shares in the number of shares of common stock offered by us would increase (decrease) our as adjusted net tangible book value by approximately $0.05 per share and decrease (increase) the dilution to new investors by approximately $0.06 per share, in each case assuming the assumed initial public offering price of $4.00 per share of common stock remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering expenses.

If the underwriter exercises its option to purchase additional shares of common stock in full, the net tangible book value per share, as adjusted to give effect to this offering, would be approximately $0.45 per share, and the dilution in net tangible book value per share to investors in this offering would be $3.55 per share.

The number of shares of common stock to be outstanding after this offering is based on 13,812,379 shares outstanding as of March 31, 2024 on an actual basis, and 15,745,713 shares outstanding on an as adjusted basis, including the 1,200,000 shares of common stock issuable in the offering and 733,334 shares of restricted common stock expected to be issued to an officer and three of the non-employee directors promptly following the offering, and does not give effect to:

· 180,000 shares of common stock issuable to the underwriter upon the exercise of its option to purchase up additional shares to cover over-allotments, if any; and

· the issuance of up to 3,400,000 Farm-In Shares; and

· any future awards under the Company’s 2022 Equity Incentive plan (other than as discussed above).

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The following table sets forth, as of the date of this prospectus, the number of shares of common stock purchased from us, the total consideration paid to us and the average price per share paid by the existing holders of our common stock and the price to be paid by new investors in this offering at an assumed initial public offering price of $4.00 per share, the midpoint of the estimated price range set forth on the cover page of this prospectus, before deducting estimated underwriting discounts and commissions and estimated offering expenses.

	Shares Purchased					Total Consideration					Average Price
	Number		Percent			Amount		Percent			Per Share
Existing investors before this offering		13,812,379		92.0	%	$	1,375,511		22.3	%	$	0.10
Investors purchasing shares in this offering		1,200,000		8.0	%	$	4,800,000		77.7	%	$	4.00
Total		15,012,379		100.0	%	$	6,175,511		100.00	%	$	0.41

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our financial statements and accompanying notes included elsewhere in this prospectus. The following discussion contains forward-looking statements regarding future events and the future results of the Company that are based on current expectations, estimates, forecasts, and projections about the industry in which the Company operates and the beliefs and assumptions of the management of the Company. Words such as “expects,” “anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” variations of such words, and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed elsewhere in this prospectus, particularly under “Risk Factors,“ and in other reports we file with the SEC. See also “Cautionary Note Regarding Forward-Looking Statements.” The Company undertakes no obligation to revise or update publicly any forward-looking statements for any reason except as required by law. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this prospectus.

The following discussion is based upon our financial statements included elsewhere in this prospectus, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingencies.

Introduction

Our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is provided in addition to the accompanying financial statements and notes to assist readers in understanding our results of operations, financial condition, and cash flows. MD&A is organized as follows:

· Going Concern and Plan of Operations.

· Results of Operations.

· Liquidity and Capital Resources.

· Critical Accounting Policies and Estimates.

This information should be read in conjunction with the financial statements and related notes included in the audited financial statements beginning under “Index to Financial Statements” in this prospectus.

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See also “Glossary of Oil and Gas Industry Terms” above for information on certain of the terms used below.

Going Concern and Plan of Operations

The Company’s financial statements for the three months ended March 31, 2024 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.  The Company reported a net loss of $303,391 for the three months ended March 31, 2024 and had an accumulated deficit of $2,683,019 at March 31, 2024. For the three months ended March 31, 2024, the Company had a negative cash flow from operations of $157,512.

The future success of the Company is dependent on its ability to attract additional capital and ultimately, upon its ability to develop future profitable operations including the successful development of the oil and gas leases located in Uintah County, Utah as part of the Farm-In Agreement dated March 7, 2024. In addition, the Company continues to experience negative cash flows from operations. There can be no assurance that the Company will be successful in obtaining such financing, or that it will attain positive cash flow from operations.  Management believes that actions presently being taken to revise the Company’s operating and financial requirements provide the opportunity for the Company to continue as a going concern.

Results of Operations

For the three months ended March 31, 2024, vs. the three months ended March 31, 2023

We have not produced any hydrocarbons or generated any oil and gas revenues to date.

For the three months ended March 31, 2024, we had total operating expenses of $303,391, consisting of consulting fees of $178,425, representing amounts paid to operational consultants, $25,947 of filing fees in connection with the filing of our IPO registration statement and amendments and exchange listing fees, $98,368 of professional fees relating to the fees payable to our attorneys and auditors, mainly in connection with our initial public offering, and $651 of general and administrative expenses, compared to total operating expenses of $238,808 for the three months ended March 31, 2023, which consisted of consulting fees of $41,000, in connection with finance, legal, accounting and operational consultants, consulting fees, related party of $11,000, in connection with an operational consultant, filing fees of $24,733, in connection with the filing of our IPO registration statement and amendments, professional fees of $154,070, in connection with legal and audit expenses, and other general and administrative expenses of $8,005.

The increase in operating expenses of $64,583, when comparing the current period to the prior three month period, was primarily due to the addition of consulting fees and professional fees, in connection with the use of additional consultants for the purpose to acquire and develop new oil and gas working interests and refile our registration statement for our IPO.

We had a net loss of $303,391 for the three months ended March 31, 2024, compared to a net loss of $238,808 for the three months ended March 31, 2023, which net loss increased by $64,583 for the reasons discussed above.

For the year ended December 31, 2023, vs. the period from February 7, 2022 (Inception) through December 31, 2022

We have not produced any hydrocarbons or generated any oil and gas revenues to date.

For the year ended December 31, 2023, we had total operating expenses of $1,948,526, consisting of consulting fees of $923,143, representing amounts paid to operational consultants, $11,000 of related party consulting fees, representing amounts paid to an operational consultant, our chief financial officer, asset impairment of $739,458, $241,142 of professional fees relating to the fees payable to our attorneys and auditors, mainly in connection with our initial public offering, and $33,783 of general and administrative expenses , compared to total operating expenses of $439,040 for the period from February 7, 2022 (Inception) through December 31, 2022, which consisted of consulting fees of $157,767, in connection with finance, legal accounting and operations consulting fees, consulting fees, related party of $52,000, in connection with land acquisitions, professional fees of $215,011, in connection with legal and audit expenses, and other general and administrative expenses of $14,262.

The increase in operating expenses of $1,509,486, when comparing the 2023 year versus the prior year’s period, was primarily due to the impairment of oil and gas properties equal to $739,458 and an increase in consulting fees of $765,376, in connection with the use of additional operational consultants.

During the year ended December 31, 2023, the Company reviewed its lease options for the likelihood of them being extended and as a result recorded an impairment in the amount of $739,458.      

We had a gain on foreign exchange of $7,975 for the period from February 7, 2022 (Inception) through December 31, 2022, in connection with funds raised in our private offering in GBP denominated currency, compared to no gain on foreign exchange for the year ended December 31, 2023.

We had a net loss of $1,948,526 for the year ended December 31, 2023, compared to a net loss of $431,102 for the period from February 7, 2022 (Inception) through December 31, 2022.  The increase in net loss of $1,517,424, when comparing the current period to the prior year’s period, was primarily due to the increase in operating expenses, discussed in more detail above.

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Liquidity and Capital Resources

On March 31, 2024, we had $1,749,373 of cash on-hand, $9,039,815 of total assets, including $570,442 of unproved properties and $6,720,000 of rights, in connection with the ability to develop and drill on certain oil and gas acreage in Utah and $77,263 of liabilities, consisting of accounts payable.

As of December 31, 2023, we had working capital of $1,672,110 and a total accumulated deficit of $2,683,019.

On December 31, 2023, we had $20,172 of cash on-hand, $20,172 of total assets, and $124,229 of liabilities, consisting of $81,384 of accounts payable and $42,845 of amounts due to Mr. Peterson, as discussed in greater detail below under “Related Party Loans and Advances”.

As of December 31, 2023, we had a working capital deficit of $104,057 and a total accumulated deficit of $2,379,628.

We have mainly relied on related party loans, as well as funds raised through the sale of securities, mainly through the Series A Preferred and private placement offering discussed below, to support our operations since inception. We have primarily used our available cash to pay operating expenses and acquire oil and gas properties.

We have experienced recurring net losses since inception. We believe that we will continue to incur substantial operating expenses in the foreseeable future until such time as we can successfully drill our planned wells and assuming we are able to extract commercial quantities of oil and gas from such drilled wells, all of which require us raising additional funding, which funding we plan to acquire through this offering (see “Use of Proceeds”). However, these efforts may prove more expensive than we anticipate, and we may not succeed in generating revenues or net income to offset these expenses. Accordingly, we may not be able to achieve profitability, and we may incur significant losses for the foreseeable future. However , following our successful Series A Preferred financing in our March 31, 2024, we believe that we will be able to operate as a going concern for at least the next 12 months with our cash on hand.

Cash Flows

	Three months ended March 31, 2024			Three months ended March 31, 2023
Cash provided by (used in):
Operating activities		(157,512	)		(173,146	)
Investing activities		(570,442	)		(27,739	)
Financing activities		2,457,155			147,500
Net increase (decrease) in cash		1,729,201			(53,385	)

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We had $157,512 of net cash used in operating activities for the three months ended March 31, 2024, consisting of $303,391 of net loss, $150,000 of shares issued to a consultant for services, and $4,121 of accounts payable. We had $173,146 of net cash used in operating activities for the three months ended March 31, 2023, consisting of $238,808 of net loss offset by $65,662 of accounts payable.

We had $570,442 of net cash used in investing activities for the three months ended March 31, 2024, consisting of the development costs of our oil and gas interests. We had $27,739 of net cash used in investing activities for the three months ended March 31, 2023, consisting of the development costs of our oil and gas interests.

We had $1,729,201 of net cash provided by financing activities for the three months ended March 31, 2024, consisting of $2,500,000 of the sale of 1,000,000 shares of Series A Convertible Preferred Stock, offset by $42,845 of repayment of funds owed to Mr. Peterson, our Chief Executive Officer and director. We had $53,385 of net cash used by financing activities for the three months ended March 31 , 2023, consisting of $120,000 from the sale of common stock and $27,500 of funds borrowed by Mr. Peterson, all of which have now been repaid.

	Year ended December 31, 2023			For the Period February 7,   2022   (Inception) Through December 31,   2022
Cash provided by (used in):
Operating activities		(250,538	)		(408,248	)
Investing activities		(26,297	)		(713,161	)
Financing activities		232,845			1,185,582
Net increase (decrease) in cash		(42,990	)		(64,125	)

We had $250,538 of net cash used in operating activities for the year ended December 31, 2023, consisting of $1,948,526 of net loss offset by the non-cash asset impairment of $739,458 and $900,000 of shares issued for services. We had $408,248 of net cash used in operating activities for the period from February 7, 2022 (Inception) to December 31, 2022, consisting of $431,102 of net loss offset by $22,854 of accounts payable.

We had $26,297 of net cash used in investing activities for the year ended December 31, 2023, consisting of the costs of acquiring our oil and gas interests. We had $713,161 of net cash used in investing activities for the period from February 7, 2022 (Inception) to December 31, 2022, consisting of the costs of acquiring our oil and gas interests.

We had $232,845 of net cash provided by financing activities for the year ended December 31, 2023, consisting of $190,000 of sale of common stock and $42,845 of funds borrowed from related party, discussed above. We had $1,185,571 of net cash provided by financing activities for the period from February 7, 2022 (Inception) to December 31, 2022, consisting of $1,185,571 of sale of common stock.

Related Party Loans and Advances

During March 2022, we borrowed an aggregate of $110,000 from certain then affiliates of the Company to further fund our strategy and to secure the procurement of property, pursuant to promissory notes bearing no stated interest rate and maturing upon the earlier of (i) five business days after the Company has raised an aggregate of $500,000 through third party debt and/or equity financing or (ii) May 18, 2022.  We have repaid these loans in full.

On August 22, 2022, we borrowed $50,000 from Michael L. Peterson, our President, Chief Executive Officer and Director. In connection therewith we entered into a promissory note with Mr. Peterson, evidencing up to $100,000 which may be loaned to us by Mr. Peterson from time to time pursuant to the terms of the note. Interest on the amounts borrowed accrued interest at the rate of (i) 3.0% per annum. The note could be prepaid at any time without penalty. As of December 31, 2022, all of the amounts borrowed from Mr. Peterson under the note have been repaid and the note has been cancelled.

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On February 21, 2023, Michael L. Peterson, our President, Chief Executive Officer, and Director, paid on behalf of the Company $27,500 in obligations owed by the Company. This amount is non-interest bearing and will be repaid to Mr. Peterson by the Company upon consummation of this offering, with funds raised in such offering.

On April 18, 2023, Michael L. Peterson, our President, Chief Executive Officer, and Director, loaned the Company $13,000 in funds. This amount is non-interest bearing and will be repaid to Mr. Peterson by the Company upon consummation of this offering, with funds raised in such offering.

On August 17, 2023, the Company repaid our President, Chief Executive Officer, and Director, $15,000 of the loans he had made to the Company, leaving a loan balance of $42,500 that has been  repaid to Mr. Peterson by the Company upon consummation of this offering, with funds raised in such offering.

On February 16, 2024, Michael L. Peterson, our President, Chief Executive Officer, and Director loaned the Company $3,000 in funds. 

On March 5, 2024, the Company repaid our President, Chief Executive Officer, and Director, $45,845, repaying in full all loans made by Mr. Peterson.

Private Placements

From March to May 2022, we sold an aggregate of 9,562,660 shares of restricted common stock in private transactions to 11 accredited investors, including to Frank C. Ingriselli (880,000 shares)(our Chairman); Graham Patterson (our then Chief Financial Officer)(500,000 shares, of which 100,000 shares were subsequently transferred to Gregory L. Overholtzer, our current Chief Financial Officer and Secretary for no consideration); Louis E. Bernard, Jr. (the Managing Member of Project Operations of Saur Minerals)(1,360,000 shares, of which 680,000 were subsequently transferred to Saur Minerals, LLC and an aggregate of 633,333 shares were subsequently sold to four other unaffiliated investors); Michael L. Peterson (1,000,000 shares)(our Chief Executive Officer); Michael Schilling (1,360,000 shares, of which 265,000 shares were subsequently sold to five family members of Mr. Peterson (who are not included in Mr. Peterson’s beneficial ownership as they are all adults who live in different households) in private transactions)(the President of Land/Legal of Saur Minerals); Adrian Beeston (1,483,334 shares, of which 133,334 shares were subsequently sold to Michael L. Peterson, our Chief Executive Officer and President, 66,667 shares were subsequently sold to an entity minority owned by Mr. Beeston, and 100,000 shares were subsequently sold to an unaffiliated investor); and Naia Ventures, LLC (1,200,000 shares, of which 100,000 shares were subsequently sold to a third party around the time of the third party’s subscription for shares of the Company), for $0.00015 per share or $1,439 in aggregate.

From May to September 2022, we sold an aggregate of 789,386 shares of restricted common stock to 44 accredited investors for $1.50 per share, or $1,184,079 in aggregate. All but eight of those investors (36 in total), were also offered the right, at the same time, to subscribe for additional shares of common stock at $0.00015 per share, and an additional 12 investors were also offered the right to subscribe for shares of common stock at $0.0015 per share, and in total we sold 337,990 shares of restricted common stock to 51 accredited investors for an aggregate of $50.70.

In January 2023, we sold an aggregate of 32,001 shares of restricted common stock to four accredited investors for $3.75 per share, or $120,000 in aggregate. At or around the same time as the sales were completed, one of our founders and one of our affiliates, Louis E. Bernard, Jr. and Saur Minerals, LLC, respectively, sold the purchasers and three other accredited investors, in a separate private transaction, an aggregate of 766,671 shares of our restricted common stock (Louis E. Bernard, Jr. (133,335 shares) and Saur Minerals, LLC (633,336 shares)), for $0.30 per share.

On February 13, 2023, our then Chief Financial Officer, Graham Patterson gifted 100,000 shares of common stock to our current Chief Financial Officer, Gregory L. Overholtzer, for no consideration.

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In August 2023, we sold an aggregate of 4,000 shares of restricted common stock to Adrian Beeston, a greater than 5% shareholder of the Company, for an aggregate of $20,000 or $5.00 per share.

In November 2023, we sold 16,667 shares of restricted common stock to an accredited investor, for $3.00 per share, or $50,000 in aggregate.

At or around the same time as the sale was completed, one of greater than 5% stockholders, Naia Ventures LLC, sold the purchaser (the Sandhya Ajjarapu revocable Trust dtd 2007), in a separate private transaction, an aggregate of 100,000 shares of our restricted common stock, for $10.00.

In total, from all of the private offerings described above, we raised an aggregate of approximately $1,375,570.

On February 29, 2024, the Company entered into a Subscription Agreement with Trxade, Inc., which is a wholly-owned subsidiary of TRxADE HEALTH Inc. (Nasdaq:MEDS), pursuant to which we agreed to sell Trxade 2,000,000 shares of a newly designated series of Series A Convertible Preferred Stock of the Company (the “Series A Preferred”), in two tranches, with (a) 1,000,000 shares of Series A Preferred being sold for $2,500,000 on March 5, 2024, and (b) 1,000,000 shares of Series A Preferred being sold for an additional $2,500,000, within 10 days of the Company notifying Trxade by letter or email, that the Company has successfully drilled its first oil and gas well and produced at least 100 barrels of oil. The Subscription contains standard and customary representations and warranties of the parties, indemnification obligations of the parties.

Trxade paid the $2,500,000 due pursuant to Tranche 1 on March 5, 2024, and was issued the 1,000,000 shares of Series A Preferred on March 21, 2024. 

The Series A Preferred is convertible into common stock, initially on a one-for-one basis, and subject to certain anti-dilution rights which increase the number of shares of common stock issuable upon conversion thereof, either at the option of the holder thereof, or automatically upon the receipt by the holder of $2.50 per share in dividend payments. We also agreed to pay the holders of the Series A Preferred stock a quarterly dividend equal to their pro rata portion of 30% of our quarterly earnings before taxes as determined in accordance with U.S. generally accepted accounting principles. The Series A Preferred also carry a $2.50 per share liquidation preference, provided that such Series A Preferred also have the right to participate with the common stock in liquidating distributions, on an as-converted basis, after the payment of such $2.50 liquidation preference.

The Series A Preferred is described in greater detail under “Description of Capital Stock—Preferred Stock—Series A Convertible Preferred Stock”.

Need for Future Funding

As discussed above, our current capital resources, combined with the anticipated funding of the second tranche of the Series A Preferred and net proceeds from the offering, are expected to be sufficient for us to fund operations for the next 12 months and depending on the performance of our Initial Development Opportunities, through an RBL to fund the development of the Asphalt Ridge Asset, which RBL may not be available on favorable terms, if at all. Moving forward, after this offering, we also plan to enter into another reserve-based lending facility to fund future Imperial Parish Fields operations.  However, that said, we may need funding in addition to the funding raised in this offering, to support our operations in the future. We may also seek to acquire additional businesses or assets in the future, which may require us to raise funding. We currently anticipate such funding, if required, being raised through the offering of debt or equity. Such additional financing, if required, may not be available on favorable terms, if at all. If debt financing is available and obtained, our interest expense may increase and we may be subject to the risk of default, depending on the terms of such financing. If equity financing is available and obtained it may result in our stockholders experiencing significant dilution. If such financing is unavailable, we may be forced to curtail our business plan, which may cause the value of our securities to decline in value.

Critical Accounting Policies and Estimates 

Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. See “Note 2 – Summary of Significant Accounting Policies” to the audited financial statements included under “Index to Financial Statements,” below.

JOBS Act and Recent Accounting Pronouncements

The JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act, for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act, for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act.

We have implemented all new accounting pronouncements that are in effect and may impact our financial statements and we do not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on our financial position or results of operations.

Recently Issued Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standard Board (“FASB”) that are adopted by the Company as of the specified effective date. If not discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s financial statements upon adoption.

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The Company has reviewed all recently issued but not yet effective accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or results of operations.

BUSINESS

Corporate History

We were formed as a Delaware corporation on February 7, 2022. Effective on November 18, 2022, we amended and restated our Certificate of Incorporation to authorize shares of preferred stock, provide various other customary rights to our Board of Directors, provided for a classified Board of Directors, limited the liability of our directors and officers to the fullest extent allowed pursuant to Delaware law, allowed for consents to action without a meeting to be approved by the stockholders of the Company, provided for certain mandatory forum selection provisions, allowed for our Board of Directors (as well as our stockholders) to amend, alter, change, adopt and repeal the Bylaws of the Company, opt out of Section 203 of Delaware General Corporation Law, which provides for certain rules and requirements associated with Delaware business combinations, and requiring the approval of stockholders holding no less than 66-2/3% of our outstanding voting shares to amend certain provisions of our Certificate of Incorporation relating to our classified Board of Directors.

Effective on January 24, 2023, our Board of Directors, and on January 26, 2023, stockholders holding a majority of our outstanding voting shares, approved resolutions approving and authorizing the filing of a Second Amended and Restated Certificate of Incorporation of the Company, which affected a two-for-three reverse stock split of the outstanding shares of our common stock, without any corresponding change in the number of authorized shares of common stock of the Company, and reduced our authorized shares of common stock from 490,000,000 to 90,000,000. On January 31, 2023, the Second Amended and Restated Certificate of Incorporation was filed with the Secretary of Delaware, and at the same time, the Reverse Stock Split became effective. Except as otherwise indicated and except in our financial statements and the notes thereto, all references to our common stock, share data, per share data and related information retroactively depict and reflect the Reverse Stock Split. The Reverse Stock Split combined each three shares of our outstanding common stock into two shares of common stock, without any change in the par value per share, and the Reverse Stock Split correspondingly adjusted, among other things, the number of shares of common stock available for awards under our equity compensation plans. No fractional shares were issued in connection with the Reverse Stock Split, and any fractional shares resulting from the Reverse Stock Split were rounded up to the nearest whole share on a per stockholder basis.

Overview

The Company plans to initially focus its attention on certain oil and gas assets located in Eastern Utah  which it hopes to acquire pursuant to the Farm-In Agreement (defined and discussed below), and use anticipated cash flow from those operations to fund development of the Imperial Parish Fields (defined and discussed below). As of the date of this prospectus, we have entered into a farm-in agreement providing us the right to acquire an additional approximately net 2,880 acres in the Uinta Basin, Utah and hold options to purchase leases covering approximately 1,487 gross mineral acres in Imperial Parish, Louisiana. We have no revenue-generating operations as of the date of this prospectus, but we do have the cash resources on hand, and anticipate additional capital which we expect to be raised through the expected funding of the second $2.5 million tranche of our Series A Convertible Preferred offering (which as discussed in greater detail below, is required to be funded after we produce at least 100 barrels of oil), to drill and complete our first three wells which if successful are expected to allow us to begin to generate revenues.  The first well is scheduled to be drilled and completed at the end of April 2024, and the second and third wells are planned for May and June 2024. Additional funding, including funds from this offering, if successful, will provide additional growth capital.

Asphalt Ridge Option and Farm-In Agreement (Utah)

On November 13, 2023, the Company entered into a Leasehold Acquisition and Development Option Agreement with Heavy Sweet Oil, LLC.  Pursuant to the Asphalt Ridge Option Agreement, we purchased an option to acquire up to a 30% working interest in certain leases in the Uintah Basin, a long-developed oil and gas area of eastern Utah, southwest of Vernal, Utah, totaling 960 acres. Heavy Sweet holds the right to such leases below 500 ft depth from surface and the option to participate in Heavy Sweet’s initial 960 acre drilling and production program on such Asphalt Ridge Option Leases.

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The Asphalt Ridge Option had a term of nine months, through June 28, 2024. The Asphalt Ridge Option Agreement provided that additional development capital was expected to be secured by Heavy Sweet, and made available for the Company’s participation, by way of a reserve base lending facility (RBL), provided that if such RBL could not be obtained or did not cover all subsequent capital costs, Heavy Sweet agreed to fund a maximum of $5,000,000 of the first funding required for the development program, with the parties splitting any costs thereafter according to their ownership interests. The initial target was three wells, with an estimated cost of $5,000,000 for roads, pads, drilling, and above ground steam and storage facilities, and thereafter the parties anticipated working together to fund further well development based on their proportionate ownership thereof.

As consideration for agreeing to the Asphalt Ridge Option, we issued Heavy Sweet 2,688,000 shares of the Company’s restricted common stock, equal to approximately 19.9% of the Company’s then-issued and outstanding shares of common stock. The Option Shares were subject to vesting upon certain terms set forth in a Restricted Stock Agreement, and have fully-vested to date as a result of our entry into the Farm-In Agreement with Heavy Sweet as discussed below.

On November 10, 2023, as amended December 28, 2023, Heavy Sweet entered into a Leasehold Acquisition and Development Option Agreement with Trio Petroleum Corp., of which Michael Peterson, the Chief Executive Officer and director of the Company, is also the Chief Executive Officer and director, and Frank C. Ingriselli, our Chairman, is also the Vice Chairman and director. The Trio Option has similar terms as the Asphalt Ridge Option Agreement, except that it allows Trio to obtain a 20% interest in the Asphalt Ridge Option Leases, and did not require Trio to pay any equity compensation.

We and Heavy Sweet agreed that, to the extent Trio did not fully exercise the Trio Option, the Company had the right to acquire up to all 20% of the right set forth in the Trio Option from Heavy Sweet for $2,000,000 cash (or such other amount at the rate of $100,000 for each 1% which Trio had not exercised). To date, Trio has paid $225,000 for a 2.25% working interest in 960 acres of the Asphalt Ridge Option Leases.

The exercise of the Trio Option held by Trio is contingent upon certain requirements and deliverables.

A Prospective Resource Assessment covering the first 240 acres of the Asphalt Ridge Leases (defined below) that are planned to be developed was issued by Netherland Sewell to Heavy Sweet on November 17, 2023 (as of October 31, 2023), which estimated total oil resources of 58,390,200 barrels (bbls) of oil.

On March 7, 2024 the Company entered into a Farm-In Agreement with Heavy Sweet which superseded and terminated in full the Asphalt Ridge Option. According to the Farm-In Agreement, upon certain terms and conditions set forth therein, (i) the Company will farm-into and purchase from Heavy Sweet, and Heavy Sweet will allow the Company to farm-in and sell to the Company, (x) an undivided Ninety-Seven and 3/4^th Percent (97.75% of 8/8ths) interest (100% reduced by the Trio Option exercised amount discussed above) in and to approximately 960 gross and net acres under the Asphalt Ridge Leases, and (y) an undivided One Hundred Percent (100.00% of 8/8ths) interest in and to approximately 1,920 gross and net acres, in the adjoining acreage located in the western half of Section 23 and Sections 22, 26, and 27 all in township range and section map T4S, R20, 6^th PM, Uintah County, Utah; and (ii) subject to the Trio Option, we may explore and develop the Subject Acreage and the Asphalt Ridge Leases.

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The farm-in price payable pursuant to the terms of the Farm-In Agreement is up to 3,400,000 shares of restricted common stock of the Company, with such number of shares due at closing equal to (x) 3,400,000 shares, multiplied by (y) the total number of acres conveyed at closing, divided by (z) 2,880.

The closing of the transactions contemplated by the Farm-In Agreement is to occur upon completion of the Company’s due diligence on such Asphalt Ridge Leases and Asphalt Ridge Acreage, no later than August 4, 2024.

The Farm-In Agreement is subject to customary indemnification obligations, confidentiality obligations, representations, warranties and conditions to closing, including satisfactory due diligence by the Company, confirmation by the Company of title information relating to the Asphalt Ridge Leases and Asphalt Ridge Acreage, and determination of the number of net leasehold acres to be acquired.

The Farm-In Agreement also allows us to change our name to Heavy Sweet Oil Corp., or a similar name in our discretion, which name change Heavy Sweet is required to consent to. We have the right to either become the operator or to choose the contract operator for the development of the Asphalt Ridge Leases and Asphalt Ridge Acreage.

The Farm-In Agreement clarifies that the Asphalt Ridge Leases and Asphalt Ridge Acreage are subject to that certain Leasehold Acquisition and Development Agreement, dated November 10, 2023, as amended December 28, 2023, by and between Heavy Sweet and Trio Petroleum Corp, and as a condition to closing, Heavy Sweet is required to obtain Trio’s agreement to assign the Trio Option to the Company at closing, with the Company assuming operatorship with respect to the Asphalt Ridge Leases and Asphalt Ridge Acreage, and with the Company assuming all rights, duties and responsibilities of Heavy Sweet under the Trio Option, and with the Asphalt Ridge Leases and Asphalt Ridge Acreage remaining subject to the Trio Option in accordance with its terms.  Notwithstanding the foregoing, in the event Trio’s agreement to assign the Trio Option to the Company is not obtained on or prior to closing, the Company, in its sole discretion, may waive that condition and close without receiving the assignment of the Trio Option, in which event (i) Heavy Sweet shall retain the 17.75% working interest that is subject to the Trio Option, (ii) the Farm-In Shares shall be proportionately reduced, and (iii) in the event the Trio Option expires without Trio exercising its full option to acquire all Asphalt Ridge Leases and Asphalt Ridge Acreage as contemplated under the Trio Option, the Company shall have the sole and exclusive right to farm-in and acquire such Asphalt Ridge Leases and Asphalt Ridge Acreage that is not acquired by Trio on the same terms and conditions, and at the same proportionate farm-in price, as set forth under the Farm-In Agreement.

Prior to closing, the parties are required to enter into a mutually agreed Operating Agreement to govern all operations in the contacted area.

As consideration for entering the Farm-In Agreement, the Company agreed to vest in full the previously issued but unvested 2,688,000 shares of restricted common stock that were to vest pursuant to the Asphalt Ridge Option Agreement, and the parties agreed that the Asphalt Ridge Option Agreement was terminated and superseded by the Farm-In Agreement.  

Prior to closing, the Company has the right to begin development operations on the Asphalt Ridge Acreage, including, but not limited to, building roads, laying pipelines, building drilling pads, drilling wells, and otherwise improving the Asphalt Ridge Acreage. The Company may do so at is sole cost and expense, and the Company shall have the full rights and ability to do so in its sole discretion.  Any hydrocarbon resources produced from any such wells shall be owned by the Company.  The Farm-In Agreement can be terminated prior to closing (a) with the mutual consent of the parties; (b) by us, if Heavy Sweet breaches any representation, warranty or covenant in the Farm-In Agreement, and such breach continues for more than three (3) business days after we provide notice thereof, or if title defects reduce by more than 10% the net acres to be acquired by the Company, or if the closing has not occurred by August 4, 2024; (c) by Heavy Sweet if the closing has not occurred by August 4, 2024. In the event the Farm-In Agreement is terminated for any reason and we have conducted any development activities on the Asphalt Ridge Acreage, Heavy Sweet is required to promptly reimburse us for such costs and expenses.

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                We currently expect to close the transactions contemplated by the Farm-In Agreement in June 2024, subject to the satisfaction of the conditions to closing set forth therein.

 Asphalt Ridge Asset

The initial development of the Asphalt Ridge Asset is expected to be in a 240 acre section within the Asphalt Ridge Leases that were identified by Heavy Sweet.

Description of Properties

The location of the Initial Development Acreage is shown in the graphics below:

The graphic below shows proposed drilling locations in the Initial Development Acreage in the Asphalt Ridge Asset: 

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The Company, in consultation with Heavy Sweet, has identified a minimum 16 standard 40-acre spaced wells and 119 wells on 2.5-acre wells under a unitization agreement.  Phase 1 is planned to consist of developing Section 22 and the western half of Section 23 of township range and section map T4S R20E, with development drilling, down hole heaters and/or advanced cyclic steam production techniques planned to exploit the heavy oil resources thought to reside in the Rimrock and Asphalt Ridge sandstone reservoirs.

The Operator has contracted to drill the initial well in late April 2024 and if the well is successful, hopes to begin production in May 2024.  The Company expects to perform multiple tests of the core rock removed as well as any oil extracted in order to confirm its completion and production strategies and test new procedures with the goal to understand and implement a production program to extract the maximum amount of oil possible from the well, in a cost-effective manner. Thereafter, once the Company believes it has designed an appropriate production plan, and assuming the first well is successful, the Company plans to begin to drill and complete the second and third wells in May or June 2024, using the techniques developed for the first well, and then work to complete the additional 116 planned wells in the Initial Development Acreage.  The  capital costs for the development plan are expected to be funded first by cash currently held by the Company, the expected $2.5 million second tranche of the Series A Preferred offering (which as discussed in greater detail below, is required to be funded after we produce at least 100 barrels of oil), and the proceeds of this Offering. The Company believes that full development could be funded by the cash flow from the project; however, once development is proceeding, the Company may increase the speed of development by seeking to secure a reserve base lending facility (RBL), though the securing of this RBL is not guaranteed.

Resource Estimate

According to the website of the American Geological Society, the largest tar sand deposits in the world are found in Alberta (Canada) and Venezuela. However, according to Utah Geological Society, Utah’s measured tar sand resource is the largest in the United States (Energy News: Taking Another Look at Utah’s Tar Sand Resources, J. Wallace Gwynn (2007) Survey Notes, v. 39 no. 1, January 2007). The UGS estimates that Utah’s tar sand deposits contain between 14 to 15 billion barrels of oil in place ; however, these volumes are not all economically/commercially recoverable. Analysis of bitumen extracted from samples show that bitumen is low-sulfur and high-gravity.

While these reports and analysis are just projections, we believe they do indicate that there is a high probability of a significant addressable resource tar-sand/oil targeted structure in this area.

Drilling Plan (Utah)

The drilling program is planned to be completed using conventional drilling techniques and followed up with down hole heaters and/or Conventional Steam & CO2 Flood (discussed below).  These are proven methods used in Utah and worldwide.

Sources:

a) “A Review of Steam Soak Operations in California”, Babson and Burns, January 1969.

b) “Extraction of petroleum”, Wikimedia Foundation, last modified November 4, 2023, 15:05, https://en.wikipedia.org/wiki/Extraction_of_petroleum.

c) “Huff-n-puff gas injection or gas flooding in tight oil reservoirs”, Journal of Petroleum Science and Engineering, Tang & Sheng, January 2022.

d) “Quantitative study of C02 huff-n-puff enhanced oil recovery in tight formations using online NMR technology” Science Direct, Liu, Li, Tan, Liu, Zhao, and Wang, Journal of Petroleum Science and Engineering (July 2022).

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Field Geology Description

According to the Tar-Sand Resources of the Uinta Basin, Utah, complied by Robert E. Blackett, May 1996, the Asphalt Ridge is situated along the northeast edge of the Uintah Basin physiographic subprovince, with the Marginal Benches/Uintah Mountains subprovince of the Middle Rocky Mountains lying less than 10 miles to the north.  The Asphalt Ridge forms the southwest limit to the low-lying farm lands of Ashley Valley.  The Green River, which flows southwestward through the Uinta Basin, flows through the southeast extension of Asphalt Ridge. The Asphalt Ridge is a northwest-southeast trending cuesta, where Cretaceous and Tertiary formations dip to the southwest. Bitumen-saturated outcrops extend for approximately 12 miles northwest-southeast along the strike of the outcrops.

The town of Vernal, Utah is approximately 4 miles to the northeast in the Ashley Valley, where elevations range between 5,200 and 5,500 feet.  the Asphalt Ridge rises from 500 to 1,000 feet above Ashley Valley.  The highest point on the Asphalt Ridge, located near the northwest end, is approximately 6,400 feet in elevation. 

Potential Reserves

A Prospective Resource Assessment covering the Asphalt Ridge Leases was issued by Netherland Sewell to Heavy Sweet on November 17, 2023 (as of October 31, 2023), which estimated total oil resources of 58,390,200 barrels (bbls) of oil.

Market Opportunity

The Company believes that the Utah Asphalt Ridge opportunity provides a very attractive option to participate in a project that, if successful, should provide an attractive cash flow to the Company, beginning six months after successful completion of the first three wells.  The project is ready to begin the development phase and the first well is scheduled to be drilled in late April, 2024, with the second and third wells expected to be drilled and completed in May and June 2024. The Company also believes that Utah is a good location for this type of development for many reasons, including existing paths to multiple markets, and attractive Utah State costs and development attributes, especially as compared to other national resource plays. These advantages include low state royalties, low transportation costs, access to rail, low cost of approximately $500,000 to drill and complete wells due to shallow drill depths of approximately 1,200 feet, and favorable state regulations. 

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We believe that the Asphalt Ridge Asset offers attractive deployment attributes:

· Low state royalty rate;

· Low transportation costs;

· Shallow wells, which result in less costly drilling expenses; and

· Attractive stimulation costs using steam vs. fracturing processes.

 

Set forth below is information regarding the average well cost, well depth, state royalty rate, transportation cost and simulation cost for wells drilled in Utah’s Rimrock sandstone, North Dakota’s Bakken Formation and Texas’ Permian Basin:

State	Play	Well Cost	Average Well Depth	State Royalty Rate	Trucking/Rail Cost
Utah	Rimrock	$0.5 million	0.6-1.2k ft	8%	~$4 / bbl
North Dakota	Bakken	$5.9 million	10k-19k ft	16.7%-18.8%	~$10 / bbl
Texas	Permian	$2.6 million	9.5k ft	20%-25%	~$8 / bbl

Sources:

a) https://www.pheasantenergy.com/the-numbers-the-permian-excels/ pg. 1

b) “Midland County, TX Oil & Gas Activity - MineralAnswers.com pg 2” for Permian avg. well depth

c) “Drillnomics Analysis of the Bakken Shale– Mountrail County, ND” (https://www.drillnomics.com/drillnomics-analysis-of-the-bakken-shale-mountrail-county-nd/), pg. 1

d) REPORT ON THE FEDERAL OIL AND GAS LEASING PROGRAM U.S. Department of the Interior November 2021, pg. 8

e) Crude oil pipeline constraints: A tale of two shales - ScienceDirect , January 2023, pg. 2

f) Who Wins as Oil Price Differentials Widen in the Permian Basin_- TX transportation costs pg 1. https://finance.yahoo.com/news/wins-oil-price-differentials-widen-204854624.html

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The  Asphalt Ridge wells are expected to be drilled and completed by Valkor Oil & Gas LLC, a related party to Heavy Sweet, whose principals have extensive experience in oil and gas. The Operator has scheduled the first well to be drilled and completed in late April 2024, and the Company anticipates that the drilling and completion of the first three wells will be completed during the second quarter of 2024, subject to successful drilling completion of the first well.

Planned Development Activities

We currently anticipate the following three stages of development with Stage 1 using anticipated proceeds of this offering, and Stages 2 and 3 using anticipated cash flow from our Stage 1 investment.

Stage		Description	Estimated Timing		Estimated Cost*
1	Post drilling and completing the first three wells expected to be drilled in the Asphalt Ridge Acreage, begin development activities of at least 5 new wells in the Asphalt Ridge Acreage, assuming the successful closing of the Farm-In Agreement that are planned to be drilled within one quarter following the closing of this offering		June to July 2024	$3,000,000
2	Acquire an additional 27,800 of optioned acreage in the Imperial Parish Fields (discussed below)		December 2024 to March 2025	$860,000
3	Conduct 3-D seismic / pre-development activities on our Imperial Parish Fields optioned properties		April 2025 to October 2025	$1,500,000
				$5,360,000

*We anticipate funding the first stage through cash raised in this offering (See “Use of Proceeds”) and future stages from projected cash flow from operations.

As described above and discussed below, subsequent to investing in the Initial Development Opportunities, we plan to use anticipated cash flow to develop the Imperial Parish Fields asset (discussed below) by first securing rights to perform 3-D seismic imaging and develop up to approximately 30,000 acres in the Imperial Parish Fields, second to perform 3-D seismic imaging on the acreage we successfully option, and then to drill and complete wells in the most prospective areas we have optioned. Through our agreement with Saur Minerals (discussed below), we plan to acquire acreage within the Imperial Parish Fields through options that include (1) the right to perform a 3-D seismic shoot on the property; and (2) an option to purchase a mineral lease with rights to drill oil and gas wells on the property.  For most options the Company has paid $12.50 to $25.00 per acre for the seismic right and has entered into an option to pay $75.00 per acre for the mineral and drilling rights for those acres the Company chooses to develop.

The Imperial Parish Fields Asset

On March 8, 2022, the Company entered into a letter agreement with Saur Minerals LLC which is based in Lafayette, Louisiana. Saur Minerals is owned and controlled by Louis E. Bernard, Jr. and Michael L. Schilling, Jr., beneficial owners of an aggregate of less than 1% and 7.9% of the Company’s outstanding common stock as of the date of this prospectus, respectively. Pursuant to the Letter Agreement, Saur Minerals caused its affiliated entity, Two Pearl Energy LLC, to assign approximately 1,487 net acres of oil and gas leasehold interests and related assets located within St. Landry Parish, Louisiana to the Company in exchange for (a) $300,000 of cash consideration paid by the Company to Saur Minerals on March 8, 2022, (b) $100,000 cash consideration payable by the Company to Saur Minerals within five days after the closing of the acquisition, which amount has been paid in full, and (c) $200,000 of cash consideration payable by the Company to Saur Minerals within thirty days after the closing of the acquisition, which amount has been paid in full. In addition, the parties agreed that Two Pearl would reserve and retain an overriding royalty interest with respect to each Subject Lease in a percentage equal to the positive difference between the royalty interest of the lessor under each Subject Lease and 25%, if the lessor reserves a royalty less than 25%, and 2% if the lessor reserves a royalty interest equal to or greater than 25%.

As part of our diligence into the Imperial Parish Fields, the Company evaluated potential target zones and offset well results, and identified potential well locations and produced an estimate of the resource opportunity of the Imperial Parish Fields, noting that “resource” estimates are not consistent with “proved reserves” as defined by the SEC, and that we do not currently have, and may not have in the future, either proved reserves or production of oil or natural gas in commercial quantities or at all. Based on our Resource Estimate, we believe single well economics in the area on which we hold our options would be robust in today’s commodity price environment.

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In connection with the closing of the transactions contemplated by the Letter Agreement, the Company and Saur Minerals entered into an Acquisition and Development Agreement, dated March 8, 2022, as amended June 16, 2022, pursuant to which Saur Minerals agreed to seek and pursue opportunities to acquire certain interests for the benefit of the Company and subsequently reconveyed to the Company, or directly acquire on behalf of the Company such interests, within St. Landry Parish, Louisiana, on an exclusive basis for a term of five years expiring March 8, 2027, subject to extension by the Company for three additional periods of one year each, and subject to satisfaction of certain pre-authorized economic terms, prices and conditions as set forth therein, the acquisition of which interests are to be reimbursed to Saur Minerals, or paid directly, by the Company.

In addition, in connection with the closing of the transactions contemplated by the Letter Agreement, on March 8, 2022, the Company and Saur Minerals entered into a Seismic License Agreement, pursuant to which, Saur Minerals, as licensor of certain seismic data covering the St. Landry Leases and other mineral interests or leasehold interests within the Development Area, agreed to license such seismic data, on a perpetual, irrevocable, non-exclusive, transferable, sublicensable, royalty-free and fully-paid up basis. The seismic license was granted in connection was the closing of the transactions contemplated under the Letter Agreement, Development Agreement and related transactions, with no additional consideration, royalty or license fee due or owing by the Company to Saur Minerals.

We project that seismic and lease options on an additional 27,800 targeted acres in Phase 1 will cost approximately $860,000, which is anticipated to be funded with anticipated cash flow from the development of our Asphalt Ridge Acreage (see “Use of Proceeds”). Additionally, we plan to use anticipated future cash flow of $1.5 million, when available, to prepare a 3-D seismic survey on the optioned acreage in Phase 1 to analyze three targeted zones – the Frio, Cockfield and Sparta zones. These zones have been proven in offset acreage not held by the Company by companies such as Exxon Mobil, Texaco (Chevron USA Inc.), Halbouty Reserve and Hunt Oil Company, and several smaller independents such as Lynal, Inc., Lyons Petroleum, Inc., and others. All national US Army Corp of Engineer permits are in place to shoot 3-D seismic data for our optioned property. The timeline for shooting and analyzing the 3-D data is anticipated to be six months , which we anticipate beginning immediately after acquiring the Phase 1 acreage. In tandem during the 3-D Seismic Phase, we plan to put out a request for proposal for drilling contracts with locally identified drilling contractors.

The anticipated development plan for the Imperial Parish Fields Asset to the extent deployed, is to first acquire options on the Targeted Acres, then shoot 3-D seismic, and following the interpretation of the 3-D seismic data, and assuming that such 3-D seismic data provides us with reasonable validation of the prospectivity of the acreage, we plan to exercise options we hold to acquire leaseholds we deem most prospective, sign a drilling contract, and then diligently work with our contracted drilling contractor to identify optimal locations for four initial wells. We anticipate each well will require approximately 500 acres to form a drilling unit. 

Our current options include an option that allows us to lease the acreage for $75 per acre.  For acreage not under option, we anticipate a total cost of $115 per acre to source and lease.  Therefore, each well would incur acreage leasing costs estimated at between $37,500 to $57,500, with the total estimated acreage leasing cost for the first four wells being between $150,000 and $230,000, which funds for such drilling we anticipate raising through a reserve based lending facility subsequent to this offering, which may not be available on favorable terms, if at all.  We will also need to evaluate and source offtake contracts through the Drilling Evaluation Process. While our current options expire in June 2024, we plan to seek to renew those options prior to expiration. We expect the drilling evaluation process to take up to an additional two months following the 3-D Seismic Phase. The goal of these wells will be to prove up all three zones (Frio, Cockfield, and Sparta). Subject to changes in the discretion of management during the Drilling Evaluation Process, we intend to drill our first four wells in the Imperial Parish Fields in the Sparta zone with each well testing the Cockfield and Frio zones.  We anticipate that the drilling and completion of the first two wells will take approximately two months to complete with hydrocarbons expected to begin flowing from the initial wells after 10 weeks. The second set of wells is anticipated to take a similar time frame. We intend to use the cash flow generated from the Asphalt Ridge Acreage, if any, and a reserve based lending facility which we plan to seek to put into place following this offering, to drill the four wells and subsequent wells in our three year drilling plan in our Louisiana assets, noting that we do not currently have, and may not have in the future, either proved reserves or production of oil or natural gas in commercial quantities or at all.   Thus, we expect to have sufficient liquidity to drill further wells out of cash flow and future borrowings. Based on the well results of the first four wells, we plan to drill, subject to available financing, two additional wells each quarter with the next six wells being called the 2^nd Drilling Phase.   We expect these wells in the 2^nd Drilling Phase to be able to be completed with more efficiency and the intention of establishing a type curve that can be replicated throughout the acreage position. We anticipate funds for our 2^nd Drilling Phase to be raised through a reserve-based lending facility subsequent to this offering, which may not be available on favorable terms, if at all. Additionally, with the cash flow generated and anticipated borrowing capacity from the first and 2^nd Drilling Phase, we may look at further exploration options on our acreage, including the deep and highly prospective Cretaceous formation which has been proved to produce commercial quantities of oil and gas by Freeport-McMoran Oil and Gas LLC, BP plc, and Pennington Oil Co.

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The Imperial Parish Fields have five prospective reservoirs, or zones, including the Frio, Cockfield, Sparta, upper and lower Wilcox zones. All five zones have historically produced commercial amounts of oil and gas by other operators through legacy traditional wells. We also believe, based on the results of a 3-D shoot that was made of an adjacent area, that there is a highly prospective target in the deeper Tertiary and Cretaceous zones.

The Imperial Parish Fields are on trend with numerous oil and gas fields that produce from these prospective zones. These fields from 1988 to 2010, had wildcat discoveries that have discovered over 3,891 billion cubic feet of gas that came from the 3-D seismic boom that peaked between 1995 and 1998 and covered most of South Louisiana.   Our plans to perform 3-D seismic on the Imperial Parish Fields represents one of the last non-3-D seismic acquired areas in south Louisiana. Our technical team has deep roots and broad relationships in Louisiana. We believe that these relationships provide an opportunity to acquire the necessary acreage options and successfully perform the collection of 3-D seismic data in the Imperial Parish Fields. Prior to joining the Company, members of our technical team have performed 3-D seismic shoots throughout Louisiana and specifically in fields that are adjacent to, and appear to be on strike with, the Imperial Parish Fields.

On July 25, 2022, we received the critical 3-D seismic permit from the US Army Corp of Engineers to conduct our planned 3-D seismic program on the Imperial Parish Fields. We will need to  seek to obtain the necessary local permits prior to performing the 3-D seismic program, funding permitting, which funds we plan use from anticipated cash flow from our Asphalt Ridge Asset development program, if any.

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The Company plans to develop the Imperial Parish Fields after successfully producing cashflow from the Asphalt Ridge Asset, if achieved, in two phases, “Phase 1” in the northern part of the Imperial Parish Fields and “Phase 2” in the southern part, with each comprising approximately 30,000 acres. Company representatives have been meeting with the major landowners that they know and, as of the date on this prospectus, the Company has acquired seismic and development options (“Acreage Options”) on approximately 1,487 acres, primarily in Phase 1.

The Acreage Options are structured to give the Company the right to shoot the 3-D seismic and also provide the Company with a 1-year renewable option to shoot seismic and subsequently, if desired, lease the mineral rights and drill within a 4 to 5-year period, subject to the payment of certain pre-agreed cash payments and the obligation to be responsible for any damages caused by our operations. This structure allows the Company to proceed with the 3-D seismic program and then only pay the more expensive lease costs at the time desired and on the leases the Company believes the 3-D seismic shows to be most prospective.  While our current options expire in June 2024, we plan to seek to renew those options prior to expiration.   

Business Strategies

Our primary objective is to drill the first three wells on the Asphalt Ridge Acreage, acquire the Asphalt Ridge Leases and Asphalt Ridge Acreage from Heavy Sweet pursuant to the Farm-In Agreement and continue  developing the Asphalt Ridge assets with the proceeds of this offering. We then plan to use anticipated cash flow, if any, from that Asphalt Ridge operation, to acquire the Targeted Acres and develop our optioned acreage in the Imperial Parish Fields and potentially to acquire and develop other opportunities for oil and gas production in south central Louisiana. Our primary focus is first in Utah, and then in Louisiana, but we may also consider appropriately priced out-of-state oil and gas opportunities in the future.

The primary goal of our collective efforts is to grow the Company into a highly profitable, independent oil and gas company.

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Competition

There are many large, medium, and small-sized oil and gas companies and third-parties that are our competitors. Some of these competitors have extensive operational histories, experienced oil and gas industry management, profitable operations, and significant reserves and funding resources.

Our ability to acquire properties and to discover reserves in the future will be dependent upon our ability to evaluate and select suitable properties and to consummate transactions in a competitive environment. In addition, because we have fewer financial and human resources than many companies in our industry, we may be at a disadvantage in eventually bidding or consummating transactions.

There is also competition between natural gas producers and other related and unrelated industries. Furthermore, competitive conditions may be substantially affected by energy legislation or regulation enacted by governments of the United States and other jurisdictions. It is not possible to predict the nature of any such legislation or regulation which may ultimately be adopted or its effects upon our future operations. Such laws and regulations may substantially increase the costs of capitalizing on oil and gas opportunities. Our larger competitors may be able to absorb the burden of existing, and any changes to governmental regulations more easily than we can, which would adversely affect our competitive position.

In the Imperial Parish Fields themselves, which currently is our secondary focus, we anticipate intense competition from other operators, especially if our 3-D seismic project identifies highly-prospective resources and we obtain and publicly disclose (as is our intention) an independent petroleum engineer reserves report detailing reserves in the area. Obtaining mineral leases in order to control development is an integral part of our strategy.

Our larger competitors may be able to absorb the existing and evolved laws and regulations more easily than we can, which would adversely affect our competitiveness. Our ability to acquire properties and to discover reserves in the future will be dependent upon our ability to evaluate and select suitable properties and to consummate transactions in a competitive environment. In addition, because we have fewer financial and human resources than many companies in our industry, we may be at a disadvantage in eventually bidding or consummating transactions.

Management Team and Experience

Members of the Company’s technical team and the operators of the Asphalt Ridge Asset, Valkor Oil and Gas LLC, have significant prior experience in oil and gas operations, exploration and production, and members of the Company’s management team have extensive experience working with publicly traded oil and gas operators in the U.S. With adequate funding, the Company intends to employ this team-model strategy to help attract and retain experienced oil industry personnel to identify, acquire and efficiently exploit oil and gas opportunities initial in Utah, and secondarily, in Louisiana. Upon the beginning of development efforts in the Imperial Parish Fields, the Company intends to register in Louisiana as an oil and gas operator through the electronic submission of an Organization Report (OR1) to the Louisiana Department of Natural Resources through its online registration system, approval of which registration the Company anticipates will be promptly received as in the experience of management, such registration is largely perfunctory.

Our Growth Strategy

The Company plans to build and grow a substantial independent oil and gas company by developing and exploiting the Asphalt Ridge Asset and then the Imperial Parish Fields, and potentially by acquiring and developing other oil and gas opportunities. We believe that the development of the Asphalt Ridge Asset alone may be sufficient to grow the Company into a substantial and highly profitable, independent oil and gas company.

Regulation of the Oil and Gas Industry

All of our oil and gas operations are substantially affected by federal, state and local laws and regulations. Failure to comply with applicable laws and regulations can result in substantial penalties. The regulatory burden on the industry increases the cost of doing business and affects profitability. Historically, our compliance costs have not had a material adverse effect on our results of operations; however, we are unable to predict the future costs or impact of compliance.

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Additional proposals and proceedings that affect the oil and natural gas industry are regularly considered by Congress, the states, the Federal Energy Regulatory Commission (the “FERC”) and the courts, and, in some states , the county level. We cannot predict when or whether any such proposals may become effective, and it is difficult to estimate the potential impact on our business from rules and regulations adopted by the federal government and states in which we operate. We do not believe that we would be affected by any such action materially differently than similarly situated competitors.

At the state level, our operations in Utah will be regulated by the Utah Division of Oil, Gas and Mining and in Louisiana will be regulated by the Louisiana Department of Natural Resources Office of Conservation.

We anticipate that the Utah Division of Oil, Gas and Mining and the Louisiana Department of Natural Resources Office of Conservation, and other federal, state and local authorities, may adopt new rules and regulations moving forward which might affect our future oil and gas operations and could make it more costly for our operations or limit our activities. We plan to monitor our operations and any new rules and regulations which may affect our operations, to ensure that we remain compliance.

Regulation Affecting Production

The production of oil and natural gas is subject to United States federal and state laws and regulations, and orders of regulatory bodies under those laws and regulations, governing a wide variety of matters. All of the jurisdictions in which we expect to own or operate producing oil and natural gas properties have statutory provisions regulating the exploration for and production of oil and natural gas, including provisions related to permits for the drilling of wells, bonding requirements to drill or operate wells, the location of wells, the method of drilling and casing wells, the surface use and restoration of properties upon which wells are drilled, sourcing and disposal of water used in the drilling and completion process, and the abandonment of wells. Our operations are also subject to various conservation laws and regulations. These include the regulation of the size of drilling and spacing units or proration units, the number of wells which may be drilled in an area, and the unitization or pooling of oil or natural gas wells, as well as regulations that generally prohibit the venting or flaring of natural gas, and impose certain requirements regarding the ratability or fair apportionment of production from fields and individual wells. These laws and regulations may limit the amount of oil and gas wells we can drill. Moreover, each state generally imposes a production or severance tax with respect to the production and sale of oil, NGL and gas within its jurisdiction.

States do not regulate wellhead prices or engage in other similar direct regulation, but there can be no assurance that they will not do so in the future. The effect of such future regulations may be to limit the amounts of oil and gas that may be produced from our wells, negatively affect the economics of production from these wells or limit the number of locations we can drill.

The failure to comply with the rules and regulations of oil and natural gas production and related operations can result in substantial penalties. State laws also may prohibit the venting or flaring of natural gas, which may impact rates of production of crude oil and natural gas from our leases. Leases covering state or federal lands often include additional laws, regulations and conditions which can limit the location, timing and number of wells we can drill and impose other requirements on our operations, all of which can increase our costs. Our competitors in the oil and natural gas industry are subject to the same regulatory requirements and restrictions that affect our operations.

Regulation Affecting Sales and Transportation of Commodities

Sales prices of gas, oil, condensate and NGL are not currently regulated and are made at market prices. Although prices of these energy commodities are currently unregulated, the United States Congress historically has been active in their regulation. We cannot predict whether new legislation to regulate oil and gas, or the prices charged for these commodities might be proposed, what proposals, if any, might actually be enacted by the United States Congress or the various state legislatures and what effect, if any, the proposals might have on our operations. Sales of oil and natural gas may be subject to certain state and federal reporting requirements.

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The price and terms of service of transportation of the commodities, including access to pipeline transportation capacity, are subject to extensive federal and state regulation. Such regulation may affect the marketing of oil and natural gas produced by the Company, as well as the revenues received for sales of such production. Gathering systems may be subject to state ratable take and common purchaser statutes. Ratable take statutes generally require gatherers to take, without undue discrimination, oil and natural gas production that may be tendered to the gatherer for handling. Similarly, common purchaser statutes generally require gatherers to purchase, or accept for gathering, without undue discrimination as to source of supply or producer. These statutes are designed to prohibit discrimination in favor of one producer over another producer or one source of supply over another source of supply. These statutes may affect whether and to what extent gathering capacity is available for oil and natural gas production, if any, of the drilling program and the cost of such capacity. Further state laws and regulations govern rates and terms of access to intrastate pipeline systems, which may similarly affect market access and cost.

The FERC regulates interstate natural gas pipeline transportation rates and service conditions. The FERC is continually proposing and implementing new rules and regulations affecting interstate transportation. The stated purpose of many of these regulatory changes is to ensure terms and conditions of interstate transportation service are not unduly discriminatory or unduly preferential, to promote competition among the various sectors of the natural gas industry and to promote market transparency. We do not believe that our drilling program will be affected by any such FERC action in a manner materially differently than other similarly situated natural gas producers.

In addition to the regulation of natural gas pipeline transportation, the FERC has additional jurisdiction over the purchase or sale of gas or the purchase or sale of transportation services subject to the FERC’s jurisdiction pursuant to the Energy Policy Act of 2005 (“EPAct 2005”). Under the EPAct 2005, it is unlawful for “any entity,” including producers such as us, that are otherwise not subject to FERC’s jurisdiction under the Natural Gas Act of 1938 (“NGA”) to use any deceptive or manipulative device or contrivance in connection with the purchase or sale of gas or the purchase or sale of transportation services subject to regulation by FERC, in contravention of rules prescribed by the FERC. The FERC’s rules implementing this provision make it unlawful, in connection with the purchase or sale of gas subject to the jurisdiction of the FERC, or the purchase or sale of transportation services subject to the jurisdiction of the FERC, for any entity, directly or indirectly, to use or employ any device, scheme or artifice to defraud; to make any untrue statement of material fact or omit to make any such statement necessary to make the statements made not misleading; or to engage in any act or practice that operates as a fraud or deceit upon any person. EPAct 2005 also gives the FERC authority to impose civil penalties for violations of the NGA and the Natural Gas Policy Act of 1978 up to $1.5  million per day, per violation. The anti-manipulation rule applies to activities of otherwise non-jurisdictional entities to the extent the activities are conducted “in connection with” gas sales, purchases or transportation subject to FERC jurisdiction, which includes the annual reporting requirements under FERC Order No. 704 (defined below).

In December 2007, the FERC issued a final rule on the annual natural gas transaction reporting requirements, as amended by subsequent orders on rehearing (“Order No. 704”). Under Order No. 704, any market participant, including a producer that engages in certain wholesale sales or purchases of gas that equal or exceed 2.2 trillion BTUs of physical natural gas in the previous calendar year, must annually report such sales and purchases to the FERC on Form No. 552 on May 1 of each year. Form No. 552 contains aggregate volumes of natural gas purchased or sold at wholesale in the prior calendar year to the extent such transactions utilize, contribute to the formation of price indices. Not all types of natural gas sales are required to be reported on Form No. 552. It is the responsibility of the reporting entity to determine which individual transactions should be reported based on the guidance of Order No. 704. Order No. 704 is intended to increase the transparency of the wholesale gas markets and to assist the FERC in monitoring those markets and in detecting market manipulation. We are not currently subject to the requirement to report on Form No. 552, as we do not yet have any sales of oil and gas, and as such our sales of oil and natural gas do not rise to the minimum level required for reporting by Order No. 704.

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The FERC also regulates rates and terms and conditions of service on interstate transportation of liquids, including oil and NGL, under the Interstate Commerce Act, as it existed on October 1, 1977 (“ICA”). Prices received from the sale of liquids may be affected by the cost of transporting those products to market. The ICA requires that certain interstate liquids pipelines maintain a tariff on file with the FERC. The tariff sets forth the established rates as well as the rules and regulations governing the service. The ICA requires, among other things, that rates and terms and conditions of service on interstate common carrier pipelines be “just and reasonable.” Increases in liquids transportation rates may result in lower revenue and cash flows for the Company. Such pipelines must also provide jurisdictional service in a manner that is not unduly discriminatory or unduly preferential. Shippers have the power to challenge new and existing rates and terms and conditions of service before the FERC.

In addition, due to common carrier regulatory obligations of liquids pipelines, capacity must be prorated among shippers in an equitable manner in the event there are nominations in excess of capacity or new shippers. Therefore, new shippers or increased volume by existing shippers may reduce the capacity available to us. Any prolonged interruption in the operation or curtailment of available capacity of the pipelines that we rely upon for liquids transportation could have a material adverse effect on our business, financial condition, results of operations and cash flows. However, we believe that access to liquids pipeline transportation services generally will be available to us to the same extent as to our similarly situated competitors.

Rates for intrastate pipeline transportation of liquids are subject to regulation by state regulatory commissions. The basis for intrastate liquids pipeline regulation, and the degree of regulatory oversight and scrutiny given to intrastate liquids pipeline rates, varies from state to state. We believe that the regulation of liquids pipeline transportation rates will not affect our operations in any way that is materially different from the effects on our similarly situated competitors.

In addition to the FERC’s regulations, we are required to observe anti-market manipulation laws with regard to our physical sales of energy commodities. In November 2009, the Federal Trade Commission (“FTC”) issued regulations pursuant to the Energy Independence and Security Act of 2007, intended to prohibit market manipulation in the petroleum industry. Violators of the regulations face civil penalties of up to $1.3  million per violation per day. In July 2010, Congress passed the Dodd-Frank Act, which incorporated an expansion of the authority of the Commodity Futures Trading Commission (“CFTC”) to prohibit market manipulation in the markets regulated by the CFTC. This authority, with respect to oil swaps and futures contracts, is similar to the anti-manipulation authority granted to the FTC with respect to oil purchases and sales. In July 2011, the CFTC issued final rules to implement their new anti-manipulation authority. The rules subject violators to a civil penalty of up to the greater of $1.1 million or triple the monetary gain to the person for each violation.

Environmental and Occupational Safety and Health Matters

Our operations  are subject to stringent federal, state and local laws and regulations governing occupational safety and health aspects of our operations, the discharge of materials into the environment and environmental protection. Numerous governmental entities, including the U.S. Environmental Protection Agency (“EPA”) and analogous state agencies have the power to enforce compliance with these laws and regulations and the permits issued under them, often requiring difficult and costly actions. These laws and regulations may, among other things (i) require the acquisition of permits to conduct drilling and other regulated activities; (ii) restrict the types, quantities and concentration of various substances that can be released into the environment or injected into formations in connection with oil and natural gas drilling and production activities; (iii) limit or prohibit drilling activities on certain lands lying within wilderness, wetlands and other protected areas; (iv) require remedial measures to mitigate pollution from former and ongoing operations, such as requirements to close pits and plug abandoned wells; (v) apply specific health and safety criteria addressing worker protection; and (vi) impose substantial liabilities for pollution resulting from drilling and production operations. Any failure to comply with these laws and regulations may result in the assessment of administrative, civil and criminal penalties, the imposition of corrective or remedial obligations, the occurrence of delays or restrictions in permitting or performance of projects, and the issuance of orders enjoining performance of some or all of our operations.

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These laws and regulations may also restrict the rate of oil and natural gas production below the rate that would otherwise be possible. The regulatory burden on the oil and natural gas industry increases the cost of doing business in the industry and consequently affects profitability. The trend in environmental regulation is to place more restrictions and limitations on activities that may affect the environment, and thus any changes in environmental laws and regulations or re-interpretation of enforcement policies that result in more stringent and costly well drilling, construction, completion or water management activities, or waste handling, storage transport, disposal, or remediation requirements could have a material adverse effect on our financial position and results of operations. We may be unable to pass on such increased compliance costs to our customers. Moreover, accidental releases or spills may occur in the course of our operations, and we cannot assure you that we will not incur significant costs and liabilities as a result of such releases or spills, including any third-party claims for damage to property, natural resources or persons. Continued compliance with existing requirements is not expected to materially affect us. However, there is no assurance that we will be able to remain in compliance in the future with such existing or any new laws and regulations or that such future compliance will not have a material adverse effect on our business and operating results.

The following is a summary of the more significant existing and proposed environmental and occupational safety and health laws, as amended from time to time, to which our business operations are or may be subject and for which compliance may have a material adverse impact on our capital expenditures, results of operations or financial position.

Air Emissions     

Our operations are subject to the Clean Air Act (the “CAA”) and comparable state and local requirements. The CAA contains provisions that may result in the gradual imposition of certain pollution control requirements with respect to air emissions from our operations. The EPA and state governments continue to develop regulations to implement these requirements. We may be required to make certain capital investments in the next several years for air pollution control equipment in connection with maintaining or obtaining operating permits and approvals addressing other air emission-related issues.

In June 2016, the EPA implemented new requirements focused on achieving additional methane and volatile organic compound reductions from the oil and natural gas industry. The rules imposed, among other things, new requirements for leak detection and repair, control requirements for oil well completions, replacement of certain pneumatic pumps and controllers and additional control requirements for gathering, boosting and compressor stations.

On November 15, 2021, the EPA published a proposed rule that would update and expand existing requirements for the oil and gas industry, as well as creating significant new requirements and standards for new, modified, and existing oil and gas facilities. The proposed new requirements would include, for example, new standards and emission limitations applicable to storage vessels, well liquids unloading, pneumatic controllers, and flaring of natural gas at both new and existing facilities. In November 2022, the EPA published a supplemental proposal to update, strengthen, and expand the standards proposed in November 2021.  The EPA announced the final rule on December 2, 2023, which, among other things, requires the phase out of routine flaring of natural gas from new oil wells and routine leak monitoring at all well sites and compressor stations. Notably, EPA updated the applicability date for Subparts OOOOb and OOOOc to December 6, 2022, meaning that sources constructed prior to that date will be considered existing sources with later compliance dates under state plans. The final rule gives states, along with federal tribes that wish to regulate existing sources, two years to develop and submit their plans for reducing methane from existing sources. The final emissions guidelines under Subpart OOOOc provide three years from the plan submission deadline for existing sources to comply.

In November 2022, the BLM published a proposed rule that would regulate venting, flaring and leaks during oil and gas production activities on federal and Indian leases. If finalized as proposed, the rule would limit gas that may be flared royalty-free during well completions, production testing, and emergencies; establish a monthly volume limit on royalty-free flaring due to pipeline capacity constraints, midstream processing failures, or other similar events; require vapor recovery systems on oil tanks; require operators to maintain leak detection and repair (“LDAR”) programs; prohibit the use of certain natural-gas-activated pneumatic controllers and pneumatic diaphragm pumps; and require operators to submit waste minimization plans with applications for permit to drill, among other requirements.

Compliance with these and other air pollution control, air monitoring, gas capture, and permitting requirements has the potential to delay the development of crude oil and natural gas projects and increase our costs of development and production, which costs could be significant.

Hydraulic Fracturing

Hydraulic fracturing is an important and common practice that is used to stimulate production of natural gas and/or oil from dense subsurface rock formations. We plan to regularly use hydraulic fracturing as part of our operations. Hydraulic fracturing involves the injection of water, sand or alternative proppant and chemicals under pressure into targeted geological formations to fracture the surrounding rock and stimulate production. Hydraulic fracturing is typically regulated by state oil and natural gas commissions. However, several federal agencies have asserted regulatory authority over certain aspects of the process.

The federal Safe Drinking Water Act (“SDWA”) and comparable state statutes may restrict the disposal, treatment, or release of water produced or used during oil and gas development. Subsurface emplacement of fluids, primarily via disposal wells or enhanced oil recovery (“EOR”) wells, is governed by federal or state regulatory authorities that, in some cases, include the state oil and gas regulatory or the state’s environmental authority. The federal Energy Policy Act of 2005 amended the Underground Injection Control provisions of the SDWA to expressly exclude certain hydraulic fracturing from the definition of “underground injection,” but disposal of hydraulic fracturing fluids and produced water or their injection for EOR is not excluded.

Federal agencies have periodically considered additional regulation of hydraulic fracturing. The EPA has published guidance for issuing underground injection permits that would regulate hydraulic fracturing using diesel fuel. This guidance eventually could encourage other regulatory authorities to adopt permitting and other restrictions on the use of hydraulic fracturing. In June 2016, the EPA finalized regulations that address discharges of wastewater pollutants from onshore unconventional extraction facilities to publicly-owned treatment works. The EPA also published a study of the impact of hydraulic fracturing on drinking water resources, which concluded that drinking water resources can be affected by hydraulic fracturing under specific circumstances. The results of this study could result in additional regulations, which could lead to operational burdens similar to those described above. On November 30, 2022, the BLM also issued a proposed rule to reduce the waste of natural gas from venting, flaring and leaks during oil and gas production activities on Federal and Indian leases. Future litigation regarding the rules, and any alternative future rule therefore creates some uncertainty as to how BLM’s regulation of venting and flaring will impact our business.

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In addition, oil and natural gas exploration, development and production activities on federal lands, including American Indian lands and lands administered by the BLM, are subject to the National Environmental Policy Act (“NEPA”). NEPA requires federal agencies, including the BLM, to evaluate major agency actions having the potential to significantly impact the environment. In the course of such evaluations, an agency will prepare an Environmental Assessment that assesses the potential direct, indirect and cumulative impacts of a proposed project and, if necessary, will prepare a more detailed Environmental Impact Statement that may be made available for public review and comment. Authorizations under NEPA also are subject to protest, appeal, or litigation, which can delay or halt projects. In July 2020, the Council on Environmental Quality (“CEQ”) revised NEPA’s implementing regulations to make the NEPA process more efficient, effective, and timely. The rule required federal agencies to develop procedures consistent with the new rule within one year of the rule’s effective date (which was extended to two years in June 2021). These regulations are subject to ongoing litigation in several federal district courts, and in October 2021, CEQ issued a notice of proposed rulemaking to amend the NEPA regulatory changes adopted in 2020 in two phases. Phase I of the CEQ’s proposed rulemaking process was finalized in April 2022, and generally restored provisions that were in effect prior to 2020. In July 2023, CEQ issued a proposed rule for the Phase II rulemaking. The proposed Phase II rule restores certain mitigation language from the pre-2020 version of the NEPA regulations, proposes further revisions to ensure the NEPA process “provides for efficient and effective environmental reviews,” and meets environmental, environmental justice, and climate change objectives. A final rule is expected in April 2024. The CEQ’s proposed changes could result in increased NEPA review timelines for projects involving agency action regarding federal lands, federal money, or federal permits or approvals. We expect to have limited exploration, development and production activities on federal lands, and our future exploration, development and production activities may include leasing and development of federal mineral interests, which will require the acquisition of governmental permits or authorizations that are subject to the requirements of NEPA. This process has the potential to delay or limit, or increase the cost of, the development of oil and natural gas projects. Authorizations under NEPA are also subject to protest, appeal or litigation, any or all of which may delay or halt projects. Moreover, depending on the mitigation strategies recommended in Environmental Assessments or Environmental Impact Statements, we could incur added costs, which may be substantial.

On January 20, 2021, the Acting U.S. Interior Secretary, instituted a 60-day moratorium on new oil and gas leases and permits on federal onshore and offshore lands, which was subsequently extended indefinitely. In June 2021, a federal judge issued an injunction lifting the moratorium, provided that the federal government is appealing the injunction. President Biden subsequently announced that his administration would resume onshore oil and gas lease sales on federal lands effective April 18, 2022.  It is currently unclear whether future moratoriums will be imposed, if any, and whether such actions herald the start of a change in federal policies regarding the grant of oil and gas permits on federal lands.

At this time, it is not possible to estimate the potential impact on our business of recent state and local actions or the enactment of additional federal or state legislation or regulations affecting hydraulic fracturing. The adoption of future federal, state, or local laws or implementing regulations imposing new environmental obligations on, or otherwise limiting, our operations could make it more difficult and more expensive to complete crude oil and natural gas wells, increase our costs of compliance and doing business, delay or prevent the development of certain resources (including especially shale formations that are not commercial without the use of hydraulic fracturing), or alter the demand for and consumption of our future products. We cannot assure that any such outcome would not be material, and any such outcome could have a material and adverse impact on our cash flows and results of operations.

If new or more stringent federal, state or local legal restrictions relating to the hydraulic fracturing process are adopted in areas where we operate, including, for example, on federal and American Indian lands, we could incur potentially significant added costs to comply with such requirements, experience delays or curtailment in the pursuit of exploration, development or production activities, and perhaps even be precluded from drilling wells.

In the event that local or state restrictions or prohibitions are adopted in areas where we conduct operations, that impose more stringent limitations on the production and development of oil and natural gas, including, among other things, the development of increased setback distances, we and similarly situated oil and natural exploration and production operators in the state may incur significant costs to comply with such requirements or may experience delays or curtailment in the pursuit of exploration, development, or production activities, and possibly be limited or precluded in the drilling of wells or in the amounts that we and similarly situated operates are ultimately able to produce from our reserves. Any such increased costs, delays, cessations, restrictions or prohibitions could have a material adverse effect on our business, prospects, results of operations, financial condition, and liquidity. If new or more stringent federal, state or local legal restrictions relating to the hydraulic fracturing process are adopted in areas where we operate, including, for example, on federal and American Indian lands, we could incur potentially significant added cost to comply with such requirements, experience delays or curtailment in the pursuit of exploration, development or production activities, and perhaps even be precluded from drilling wells.

Water Discharges

The Federal Clean Water Act (“CWA”) and comparable state laws impose restrictions and strict controls regarding the discharge of pollutants, including produced waters and other oil and natural gas wastes, into or near navigable and other regulated waters. The discharge of pollutants into regulated waters is prohibited, except in accordance with the terms of a permit issued by the EPA or the state. The discharge of dredge and fill material in regulated waters, including wetlands, is also prohibited, unless authorized by a permit issued by the U.S. Army Corps of Engineers (the “USACE”). Whether CWA permitting is required depends upon whether and the extent to which “Waters of the United States” (“WOTUS”) may be impacted by the planned activity—for example, construction of drilling pads, access roads, or pipelines. Rulemaking by EPA and the USACE to define WOTUS has been heavily litigated, resulting in the rule taking effect at times in some states but not others and creating definitions that are more inclusive of certain waters effective in some states and those that are less inclusive effective in other states. EPA’s and USACE’s WOTUS definition rulemaking published in the Federal Register on January 18, 2023 (the “January 2023 Rule”) incorporated “relatively permanent” and “significant nexus” standards for determining jurisdiction over adjacent wetlands and additional waters, thereby expanding the types of waters that could be considered WOTUS. However, this WOTUS definition was litigated and eventually amended on August 29, 2023, when EPA and USACE issued a final rule to conform the WOTUS definition to the U.S. Supreme Court’s May 25, 2023, decision in Sackett v. Environmental Protection Agency, which invalidated parts of the January 2023 Rule. With the August 2023 rulemaking, EPA and USACE implemented a narrower definition of WOTUS by, for example, removing “interstate wetlands”; redefining “adjacent” to mean “having a continuous surface connection”; and removing the “significant nexus” standard from the provisions regarding tributaries, adjacent wetlands, and intrastate lakes and ponds. To the extent any litigation or future amendments to the rule expand the scope of the Clean Water Act’s jurisdiction, the Company could face increased costs and delays with respect to obtaining permits for dredge and fill activities in wetland areas or in connection with stream crossings and preparation and implementation of oil spill prevention, control, and countermeasure “SPCC”) plans.

The primary federal law related specifically to oil spill liability is the Oil Pollution Act of 1990 (“OPA”), which amends and augments the oil spill provisions of the CWA and imposes certain duties and liabilities on certain “responsible parties” related to the prevention of oil spills and damages resulting from such spills in or threatening waters of the United States or adjoining shorelines. In addition, operators of certain oil and natural gas facilities must develop, implement and maintain facility response plans, conduct annual spill training for certain employees and provide varying degrees of financial assurance. Owners or operators of a facility, vessel or pipeline that is a source of an oil discharge or that poses a substantial threat of discharge is one type of “responsible party” who is liable. The OPA applies joint and several liability, without regard to fault, to each liable party for oil removal costs and a variety of public and private damages. Although defenses exist, they are limited. As such, a violation of the OPA has the potential to adversely affect the Company’s operations.

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SPCC regulations promulgated under the CWA and later amended by the Oil Pollution Act of 1990 require operators of certain oil and natural gas facilities that store oil in more than threshold quantities, the release of which could reasonably be expected to reach jurisdictional waters, to develop, implement, and maintain an SPCC plan. The SPCC plan must describe oil handling operations, spill prevention practices, discharge or drainage controls, and the personnel, equipment and resources at the facility that are used to prevent oil spills from reaching navigable and other regulated waters or adjoining shorelines, and reviewed at least every five years.

Pursuant to CWA laws and regulations, the Company may also be required to obtain and maintain approvals or permits for the discharge of wastewater, including produced water, or storm water. Obtaining permits has the potential to delay the development of oil and natural gas projects. These laws and any implementing regulations provide for administrative, civil and criminal penalties for any unauthorized discharges of oil and other substances and may impose substantial potential liability for the costs of removal, remediation and damages.

Hazardous Substances and Wastes

The Federal Resource Conservation and Recovery Act (“RCRA”), and comparable state statutes, regulate the generation, transportation, treatment, storage, disposal and cleanup of hazardous and non-hazardous wastes. Pursuant to rules issued by the EPA, the individual states administer some or all of the provisions of RCRA, sometimes in conjunction with their own, more stringent requirements. Drilling fluids, produced waters, and most of the other wastes associated with the exploration, development, and production of oil or natural gas, if properly handled, are currently exempt from regulation as hazardous waste under RCRA and, instead, are regulated under RCRA’s less stringent non-hazardous waste provisions, state laws or other federal laws. However, it is possible that certain oil and natural gas drilling and production wastes now classified as non-hazardous could be classified as hazardous wastes in the future. Stricter regulation of wastes generated during our operations could result in an increase in our, as well as the oil and natural gas exploration and production industry’s costs to manage and dispose of wastes, which could have a material adverse effect on our results of operations and financial position.

In December 2016, the U.S. District Court for the District of Columbia approved a consent decree between the EPA and a coalition of environmental groups. The consent decree requires the EPA to review and determine whether it will revise the RCRA regulations for exploration and production waste to treat such waste as hazardous waste. In April 2019, the EPA, pursuant to the consent decree, determined that revision of the regulations was not necessary. Information comprising the EPA’s review and decision is contained in a document entitled “Management of Exploration, Development and Production Wastes: Factors Informing a Decision on the Need for Regulatory Action”. The EPA indicated that it will continue to work with states and other organizations to identify areas for continued improvement and to address emerging issues to ensure that exploration, development and production wastes continue to be managed in a manner that is protective of human health and the environment. Environmental groups, however, expressed dissatisfaction with the EPA’s decision and will likely continue to press the issue at the federal and state levels.

The Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), also known as the Superfund law, and comparable state laws impose joint and several liability, without regard to fault or legality of conduct, on classes of persons who are considered to be responsible for the release of a hazardous substance into the environment. These persons include the current and former owners and operators of the site where the release occurred and anyone who disposed or arranged for the disposal of a hazardous substance released at the site. Under CERCLA, such persons may be subject to joint and several liability for the costs of cleaning up the hazardous substances that have been released into the environment, for damages to natural resources and for the costs of certain health studies. CERCLA also authorizes the EPA and, in some instances, third parties to act in response to threats to the public health or the environment and to seek to recover from the responsible classes of persons the costs they incur. In addition, it is not uncommon for neighboring landowners and other third parties to file claims for personal injury and property damage allegedly caused by the hazardous substances released into the environment. We expect to generate materials in the course of our operations that may be regulated as hazardous substances.

We expect to lease or operate numerous properties that have been used for oil and natural gas exploration, production and processing for many years. Although we believe that the prior owners of our properties have utilized operating and waste disposal practices that were standard in the industry at the time, hazardous substances, wastes, or petroleum hydrocarbons may have been released on, under or from the properties owned or leased by us, or on, under or from other locations, including off-site locations, where such substances have been taken for treatment or disposal. In addition, some of our properties have been operated by third parties or by previous owners or operators whose treatment and disposal of hazardous substances, wastes, or petroleum hydrocarbons was not under our control. These properties and the substances disposed or released on, under or from them may be subject to CERCLA, RCRA and analogous state laws. Under such laws, we could be required to undertake response or corrective measures, which could include removal of previously disposed substances and wastes, cleanup of contaminated property or performance of remedial plugging or pit closure operations to prevent future contamination, the costs of which could be substantial.

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Subsurface Injections

In the course of our operations, we produce water in addition to oil and natural gas. Water that is not recycled may be disposed of in disposal wells, which inject the produced water into non-producing subsurface formations. Underground injection operations are regulated pursuant to the Underground Injection Control (“UIC”) program established under the federal Safe Drinking Water Act (“SDWA”) and analogous state laws. The UIC program requires permits from the EPA or an analogous state agency for the construction and operation of disposal wells, establishes minimum standards for disposal well operations, and restricts the types and quantities of fluids that may be disposed. A change in UIC disposal well regulations or the inability to obtain permits for new disposal wells in the future may affect our ability to dispose of produced water and ultimately increase the cost of our operations. For example, in response to recent seismic events near belowground disposal wells used for the injection of oil and natural gas-related wastewaters, regulators in some states, have imposed more stringent permitting and operating requirements for produced water disposal wells. Additionally, legal disputes may arise based on allegations that disposal well operations have caused damage to neighboring properties or otherwise violated state or federal rules regulating waste disposal. These developments could result in additional regulation, restriction on the use of injection wells by us or by commercial disposal well vendors whom we may use from time to time to dispose of wastewater, and increased costs of compliance, which could have a material adverse effect on our capital expenditures and operating costs, financial condition, and results of operations.

On November 20, 2023, EPA issued draft guidance outlining the factors that may be considered when evaluating whether discharges through groundwater may be the “functional equivalent” of a direct discharge, and thereby subject to regulation under the CWA National Pollutant Discharge Elimination System Permit Program (which permits point sources to discharge specified amounts of pollutant(s) to waters of the United States under specified conditions, and describes the types of information that should be used in determination). Comments on the draft guidance were due to the agency by December 27, 2023, and to date EPA has not finalized the guidance. The U.S. Supreme Court’s ruling in County of Maui, Hawaii v. Hawaii Wildlife Fund could result in increased operational costs for the Company if permits are required under the CWA for disposal of the Company’s flowback and produced water in disposal wells.

Regulation of Flowlines

Pipelines, gathering systems, and terminal operations are subject to increasingly strict safety laws and regulations. Both the transportation and storage of refined products and crude oil involve a risk that hazardous liquids may be released into the environment, potentially causing harm to the public or the environment. In turn, such incidents may result in substantial expenditures for response actions, significant penalties, liability for natural resources damages, and significant business interruption. The U.S. Department of Transportation has adopted safety regulations with respect to the design, construction, operation, maintenance, inspection, and management of our pipeline and storage facilities. These regulations contain requirements for the development and implementation of pipeline integrity management programs, which include the inspection and testing of pipelines and the correction of anomalies. These regulations also require that pipeline operation and maintenance personnel meet certain qualifications and that pipeline operators develop comprehensive spill response plans.

There have been recent initiatives to strengthen and expand pipeline safety regulations and to increase penalties for violations. The Pipeline Safety, Regulatory Certainty, and Job Creation Act was signed into law in early 2012. In addition, the Pipeline and Hazardous Materials Safety Administration (“PHMSA”) has issued new rules to strengthen federal pipeline safety enforcement programs. In 2015, PHMSA proposed to expand its regulations in a number of ways, including through the increased regulation of gathering lines, even in rural areas. In 2016, PHMSA increased its regulations to require crude oil sampling and reporting as an “offeror” (as defined under the PHMSA) and increased its civil penalty structure. In November 2021, PHMSA issued its final rule extending reporting requirements to all onshore gas gathering operators and applying a set of minimum safety requirements to certain onshore gas gathering pipelines with large diameters and high operating pressures.

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Global Warming and Climate Change

The EPA has published findings that emissions of carbon dioxide, methane and other GHGs present an endangerment to public health and the environment because such emissions are, according to the EPA, contributing to warming of the earth’s atmosphere and other climatic changes. These findings provide the basis for the EPA to adopt and implement regulations that would restrict emissions of GHGs under existing provisions of the CAA. In June 2010, the EPA began regulating GHG emissions from stationary sources.

In August 2022, President Biden signed into law the Inflation Reduction Act of 2022. Among other things, the Inflation Reduction Act includes a methane emissions reduction program that amends the CAA to include a Methane Emissions and Waste Reduction Incentive Program for petroleum and natural gas systems. This program requires the EPA to impose a “waste emissions charge” on certain oil and gas sources that are already required to report under EPA’s Greenhouse Gas Reporting Program. In order to implement the program, the Inflation Reduction Act required revisions to GHG reporting regulations for petroleum and natural gas systems (Subpart W) by 2024. In July 2023, the EPA proposed to expand the scope of the Greenhouse Gas Reporting Program for petroleum and natural gas facilities, as required by the Inflation Reduction Act. Among other things, the proposed rule expands the emissions events that are subject to reporting requirements to include “other large release events” and applies reporting requirements to certain new sources and sectors. The rule is currently scheduled to be finalized in the spring of 2024 and would take effect on January 1, 2025, in advance of the deadline for GHG reporting for 2024 (March 2025). The fee imposed under the Methane Emissions and Waste Reduction Incentive Program for 2024 would be $900 per ton emitted over annual methane emissions thresholds, and will increase to $1,200 in 2025, and $1,500 in 2026. In addition, a number of state and regional efforts have emerged that are aimed at tracking and/or reducing GHG emissions by means of carbon taxes, policies, and incentives to encourage the use of renewable energy or alternative low-carbon fuels, the development of greenhouse gas inventories, and cap and trade programs that typically require major sources of GHG emissions, such as electric power plants, to acquire and surrender emission allowances in return for emitting those GHGs.

Additionally, on March 6, 2024, the SEC issued its final rule regarding the enhancement and standardization of mandatory climate-related disclosures for investors, which requires large accelerated and accelerated filers to provide climate-related disclosures in their annual reports and registration statements beginning with annual reports for the year ending December 31, 2025 for calendar-year-end filers, and beginning with annual reports for the year ending December 31, 2027 for smaller reporting companies like ours. The final rule requires large accelerated and accelerated filers to provide Scope 1 and Scope 2 GHG emissions disclosures and more extensive GHG-related financial statement disclosure requirements.  The most stringent disclosure and reporting provisions under the SEC’s final rule do not apply to the Company as it is a smaller reporting company, but should the Company become an accelerated filer, or should future SEC rules be issued that apply such disclosure requirements on smaller reporting companies, such rules could impose significant disclosure requirements and costs on our operations.  On April 4, 2024, the Securities and Exchange Commission (SEC) voluntarily stayed implementation of these recently adopted climate disclosure rules pending completion of judicial review of consolidated challenges to the rules by the Court of Appeals for the Eighth Circuit. In its stay order, the SEC noted that it intends to vigorously defend the validity of the new climate disclosure rules.

In addition, a number of state and regional efforts have emerged that are aimed at tracking and/or reducing GHG emissions by means of carbon taxes, policies, and incentives to encourage the use of renewable energy or alternative low-carbon fuels, the development of greenhouse gas inventories, and cap and trade programs that typically require major sources of GHG emissions, such as electric power plants, to acquire and surrender emission allowances in return for emitting those GHGs.  We do not anticipate that such fees will have material effect on our financial condition or results of operations. Congress may adopt additional significant legislation in the future to reduce emissions of GHGs.

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Additionally, in April 2021, President Biden announced that the United States would aim to cut its greenhouse gas emissions 50 percent to 52 percent below 2005 levels by 2030. This commitment will be part of the United States’ “nationally determined contribution,” or NDC, to the Paris Climate Agreement. The NDC will commit the United States to a voluntary GHG emission reduction target and outline domestic climate mitigation measures to achieve that target.

Regulation of methane and other GHG emissions associated with oil and natural gas production could impose significant requirements and costs on our operations.  

Endangered Species and Migratory Birds Considerations

The federal Endangered Species Act (“ESA”), and comparable state laws were established to protect endangered and threatened species. Pursuant to the ESA, if a species is listed as threatened or endangered, restrictions may be imposed on activities adversely affecting that species or that species’ habitat. Similar protections are offered to migrating birds under the Migratory Bird Treaty Act. We may conduct operations on oil and natural gas leases in areas where certain species that are listed as threatened or endangered are known to exist, and where other species that potentially could be listed as threatened or endangered under the ESA may exist. Moreover, as a result of one or more agreements entered into by the U.S. Fish and Wildlife Service, the agency is required to make a determination on listing of numerous species as endangered or threatened under the ESA pursuant to specific timelines. The identification or designation of the lesser prairie chicken as endangered, and previously unprotected species as threatened or endangered, in areas where underlying property operations are conducted, could cause us to incur increased costs arising from species protection measures, time delays or limitations on our exploration and production activities that could have an adverse impact on our ability to develop and produce reserves.

Other

We are also subject to rules regarding worker safety and similar matters promulgated by the U.S. Occupational Safety and Health Administration (“OSHA”) and other governmental authorities. OSHA has established workplace safety standards that provide guidelines for maintaining a safe workplace in light of potential hazards, such as employee exposure to hazardous substances. To this end, OSHA adopted a new rule governing employee exposure to silica, including during hydraulic fracturing activities, in March 2016.

Democratic control of the House, Senate and White House could lead to increased regulatory oversight and increased regulation and legislation, particularly around oil and gas development on federal lands, climate impacts and taxes.

Private Lawsuits

Lawsuits have been filed against other operators in several states alleging contamination of drinking water as a result of hydraulic fracturing activities. Should private litigation be initiated against us, it could result in injunctions halting our development and production operations, thereby reducing our cashflow from operations, and incurrence of costs and expenses to defend any such litigation.

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Related Permits and Authorizations

Many environmental laws require us to obtain permits or other authorizations from state and/or federal agencies before initiating certain drilling, construction, production, operation, or other oil and natural gas activities, and to maintain these permits and compliance with their requirements for on-going operations. These permits are generally subject to protest, appeal, or litigation, which can in certain cases delay or halt projects and cease production or operation of wells, pipelines, and other operations.

We are not able to predict the timing, scope and effect of any currently proposed or future laws or regulations regarding hydraulic fracturing, but the direct and indirect costs of such laws and regulations (if enacted) could materially and adversely affect our business, financial conditions and results of operations. See further discussion in “Item 1A. Risk Factors.”

Insurance

Our oil and gas properties are subject to hazards inherent in the oil and gas industry, such as accidents, blowouts, explosions, implosions, fires and oil spills. These conditions can cause:

· damage to or destruction of property, equipment and the environment;

· personal injury or loss of life; and

· suspension of operations.

Upon commencement of our exploration activities following the offering, we plan to obtain and maintain insurance coverage customary in the industry against these types of hazards. However, we may not be able to obtain or maintain adequate insurance in the future at rates we consider reasonable. In addition, our insurance may be subject to coverage limits and some policies may exclude coverage for damages resulting from environmental contamination. The occurrence of a significant event or adverse claim in excess of the insurance coverage that we maintain or that is not covered by insurance could have a material adverse effect on our financial condition and results of operations.

Title to Property

We believe that we have satisfactory title to our oil and natural gas assets in accordance with standards generally accepted in the international oil and gas industry. Our licenses are subject to customary royalty and other interests, restrictions and encumbrances customary in the oil and gas industry that we believe do not materially interfere with the use of, or affect the carrying value of, our interests.

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Intellectual Property

We believe that our ability to preserve the confidentiality of our trade secrets, seismic data and interpretations thereof, and operate without violating the intellectual property rights of others will be important to our success. We plan to rely on a combination of patent (where applicable, provided we do not currently have any patents or pending patents), trademark, copyright, trade secret, including federal, state and common law rights in the United States and other countries, nondisclosure agreements, and other measures to protect our intellectual property. Despite any measures taken to protect our intellectual property, unauthorized parties may attempt to copy aspects of our products or to obtain and use information that we regard as proprietary. Our business is affected by our ability to protect against misappropriation and infringement of our intellectual property and other proprietary rights.

Our intellectual property includes the content of our websites, our registered domain names, our unregistered trademarks, and certain trade secrets.

Legal Proceedings

Although we may, from time to time, be involved in litigation and claims arising out of our operations in the normal course of business, we are not currently a party to any material legal proceeding. In addition, we are not aware of any material legal or governmental proceedings against us or contemplated to be brought against us.

Employees

We currently utilize independent contractors for all of our human resource needs.  Following the offering, we plan to commence hiring employees, and converting a number of our current independent contractors to employees, including Michael Peterson, our Chief Executive Officer and President, and Gregory L. Overholtzer, our Chief Financial Officer and Secretary.

Properties

Oil and Gas Properties

Currently, the Company is party to the Farm-In Agreement, whereby the Company has the right to acquire (x) an undivided Ninety-Seven and 3/4^th Percent (97.75% of 8/8ths) interest in and to approximately 960 gross and net acres under the Asphalt Ridge Leases, and (y) an undivided One Hundred Percent (100.00% of 8/8ths) interest in and to approximately 1,920 gross and net acres, located in the western half of Section 23 and Sections 22, 26, and 27 all in township range and section map T4S, R20, 6^th PM, Uintah County, Utah, and owns options to acquire oil and gas leases covering an aggregate of 1,487 acres with expirations ranging from 1 year to 5 years, with the right to extend most options for two years upon the payment of $12.50 to $25.00 per acre, per year.  Most options can be exercised by the Company, and the leaseholds acquired, upon payment by the Company of $75.00 per acre underlying the option.  To the extent these options are scheduled to expire prior to our performance of 3-D seismic with respect to the acreage underlying the options, we plan to renew such options until we perform our 3-D seismic shoot.  The following table details the options we currently hold and their expiration dates:

Office Space

From June 9, 2022 until November 30, 2023, the Company had its corporate headquarters at 383 N. Corona Street, Suite 635, Denver, Colorado 80209.  Effective December 1, 2023, the Company moved its headquarters to 3450 N. Triumph Blvd. Suite 102 Lehi, Utah 84043, by entering into a workspace use agreement for use of a “hot desk” space and related office services that continues on a month-to-month basis until terminated, at a base monthly rate of approximately $56. 

We believe our facilities are sufficient to meet our current needs and that suitable space will be available as and when needed.

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MANAGEMENT

Set forth below is certain information regarding our directors, executive officers and director nominees as of April 25, 2024:

Name	Position	Age	Director Since
Michael L. Peterson	President, Chief Executive Officer and Director	62	May 2022
Gregory L. Overholtzer	Chief Financial Officer and Secretary	67	—
Frank C. Ingriselli	Chairman	69	May 2022
Cynthia L. Welch	Director Nominee*	51	—
Andrew J. Secrist	Director Nominee*	40	—
Jeffrey Holt	Director Nominee*	65	—

* This individual has indicated his/her assent to occupy such position on the effective date of the registration statement of which this prospectus is a part.

Business Experience

The following is a brief description of the education and business experience of our directors and executive officers.

Michael L. Peterson – President, Chief Executive Officer and Director

Mr. Peterson commenced serving as President, Chief Executive Officer and as a member of the Board of Directors of the Company in April 2022, and his appointments were confirmed by the Board of Directors in May 2022. Mr. Peterson currently spends approximately 35 hours per week on Company matters and operations, which number of weekly hours varies based on the Company’s operations, which the Company believes is adequate to provide for his management of the Company. Mr. Peterson also expects to be able to make himself more available when the Company’s operations demand more of his time. Since October 2023, Mr. Peterson has served as President, CEO, and since July 2022, as a member of the Board of Directors, of Trio Petroleum Corp. (NYSE American: TPET), an oil and gas company with assets in the State of California. Since September 2021 Mr. Peterson has served as a member of the Board of Directors of Ocean Biomedical, Inc., formerly Aesther Healthcare Acquisition Corp. (Nasdaq:OCEA), a former special purpose acquisition company which recently acquired a biopharmaceutical company. From September 2021 to February 2023, Mr. Peterson served on the Audit Committee (Chair), Compensation Committee and Nominating and Corporate Governance Committee of Ocean Biomedical, Inc. Mr. Peterson served as the president of Nevo Motors, Inc. from December 2020 to June 2023, which was established to commercialize a range extender generator technology for the heavy-duty electric vehicle market but is currently non-operational. Since February 2021, Mr. Peterson has served on the board of directors and as the Chairman of the Audit Committee of Indonesia Energy Corporation Limited (NYSE American: INDO). Mr. Peterson previously served as the president of the Taipei Taiwan Mission of The Church of Jesus Christ of Latter-day Saints, in Taipei, Taiwan from June 2018 to June 2021. Mr. Peterson served as an independent member of the Board of Directors of TRxADE HEALTH, Inc. (formerly Trxade Group, Inc.) from August 2016 to May 2021 (Nasdaq:MEDS), and has served as an independent member of the Board of Directors, and as Chairman of the Audit Committee and member of the Compensation Committee and Nominating and Corporate Governance Committee of TRxADE HEALTH, Inc. since January 2023. Mr. Peterson served as the Chief Executive Officer of PEDEVCO Corp. (NYSE American:PED), a public company engaged primarily in the acquisition, exploration, development and production of oil and natural gas shale plays in the US from May 2016 to May 2018. Mr. Peterson served as Chief Financial Officer of PEDEVCO between July 2012 and May 2016, and as Executive Vice President of Pacific Energy Development (PEDEVCO’s predecessor) from July 2012 to October 2014, and as PEDEVCO’s President from October 2014 to May 2018. Mr. Peterson joined Pacific Energy Development as its Executive Vice President in September 2011, assumed the additional office of Chief Financial Officer in June 2012, and served as a member of its board of directors from July 2012 to September 2013. Mr. Peterson formerly served as Interim President and CEO (from June 2009 to December 2011) and as director (from May 2008 to December 2011) of Pacific Energy Development, as a director (from May 2006 to July 2012) of Aemetis, Inc. (formerly AE Biofuels Inc.), a Cupertino, California-based global advanced biofuels and renewable commodity chemicals company (NASDAQ:AMTX), and as Chairman and Chief Executive Officer of Nevo Energy, Inc. (NEVE) (formerly Solargen Energy, Inc.), a Cupertino, California-based developer of utility-scale solar farms which he helped form in December 2008 (from December 2008 to July 2012). From 2005 to 2006, Mr. Peterson served as a managing partner of American Institutional Partners, a venture investment fund based in Salt Lake City. From 2000 to 2004, he served as a First Vice President at Merrill Lynch, where he helped establish a new private client services division to work exclusively with high-net-worth investors. From September 1989 to January 2000, Mr. Peterson was employed by Goldman Sachs & Co. in a variety of positions and roles, including as a Vice President. Mr. Peterson received his MBA at the Marriott School of Management and a BS in statistics/computer science from Brigham Young University.

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We believe that Mr. Peterson’s skills in managing businesses in public corporations, financial planning and strategic management are a great asset to the Company, and as such, believe that Mr. Peterson is well qualified to serve on the Board of Directors of the Company.

Gregory L. Overholtzer – Chief Financial Officer and Secretary

Mr. Overholtzer commenced serving as the Chief Financial Officer and Secretary of the Company in February 2023. Mr. Overholtzer expects to spend approximately twenty hours per week in this position, but his hours will vary based on the Company’s needs, and may expand if/when the Company’s operations require more of his time. The Company believes he will be able to adequately provide for the management of duties as Chief Financial Officer of the Company. Since February 2022, Mr. Overholtzer has served as part-time Chief Financial Officer of Trio Petroleum Corp. (NYSE American: TPET), an oil and gas company with assets in the State of California. Since January 2019, Mr. Overholtzer has worked as a part-time Chief Financial Officer of Indonesia Energy Corporation Limited (NYSE American: INDO), an oil and gas company engaged in the exploration, development and production of strategic, high-growth energy projects in Indonesia. In addition, since November 2019, Mr. Overholtzer has served as a Consulting Director of Ravix Consulting Group, which provides senior level accounting and finance consulting services. From December 2018 until November 2019, Mr. Overholtzer served as a Field Consultant at Resources Global Professionals. From January 2012 until December 2018, Mr. Overholtzer served as the Chief Financial Officer, Chief Accounting Officer and Controller of PEDEVCO Corp. (NYSE AMERICAN: PED). Mr. Overholtzer holds a Bachelors of Arts degree in Zoology and an MBA in Finance from the University of California, Berkeley.

Frank C. Ingriselli – Chairman

Mr. Ingriselli has served as the Chairman of the board of directors since April 2022, which appointment was confirmed by the Board of Directors in May 2022. From February 2022 to October 2023, Mr. Ingriselli served as the Chief Executive Officer of Trio Petroleum Corp. (NYSE American: TPET), an oil and gas company with assets in the State of California, and Mr. Ingriselli has served as a director of Trio Petroleum Corp. since February 2022.  Since February 2019, Mr. Ingriselli has served as the President of Indonesia Energy Corporation Limited (NYSE American: INDO), an oil and gas company engaged in the exploration, development and production of strategic, high-growth energy projects in Indonesia.  Since September 2019, Mr. Ingriselli served as an independent member of the Board of Directors of NXT Energy Solutions Inc. (TSX:SFD; OTC QB:NSFDF) from 2019 until January 2023, which entity offers geophysical services to the upstream oil and gas industry. Additionally, since February 2022, he has served on the Board of Directors of Elephant Oil Corp, an oil and gas company with assets in Africa. From July 2012 to May 2016, Mr. Ingriselli served as Chief Executive Officer of PEDEVCO Corp. (NYSE American: PED), and from July 2012 to May 2016, he served as the President of PEDEVCO Corp. Mr. Ingriselli also served as the President, Chief Executive Officer, and Director of Pacific Energy Development since its inception in February 2011 through September 2018. Mr. Ingriselli began his career at Texaco, Inc. in 1979 and held management positions in Texaco’s Producing-Eastern Hemisphere Department, Middle East/Far East Division, and Texaco’s International Exploration Company. While at Texaco, Mr. Ingriselli negotiated a successful foreign oil development investment contract in China in 1983. In 1992, Mr. Ingriselli was named President of Texaco International Operations Inc. and over the next several years directed Texaco’s global initiatives in exploration and development. In 1996, he was appointed President and CEO of the Timan Pechora Company, a Houston, Texas headquartered company owned by affiliates of Texaco, Exxon, Amoco and Norsk Hydro, which was developing an investment in Russia. In 1998, Mr. Ingriselli returned to Texaco’s Executive Department with responsibilities for Texaco’s power and natural gas operations, merger and acquisition activities, pipeline operations and corporate development. In August 2000, Mr. Ingriselli was appointed President of Texaco Technology Ventures, which was responsible for all of Texaco’s global technology initiatives and investments. In 2001, Mr. Ingriselli retired from Texaco after its merger with Chevron, and founded Global Venture Investments LLC, which we refer to as GVEST, an energy consulting firm, for which Mr. Ingriselli continues to serve as the President and Chief Executive Officer. From February 2016 until December 2018, Mr. Ingriselli founded and served as President and Chief Executive Officer of Blackhawk Energy Ventures Inc., which we refer to as BEV, an energy consulting firm wholly-owned by him. In 2005, Mr. Ingriselli founded Pacific Asia Petroleum Inc (NYSE American: PAP) where he served as its President, Chief Executive Officer and a member of its board of directors from 2005 to July 2010 and returned as Chairman of its renamed entity, Erin Energy Corporation, from May 2017 to July 2018.

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Mr. Ingriselli currently sits on the Advisory Board of Directors of the Eurasia Foundation, a Washington D.C.-based non-profit that funds programs that build democratic and free market institutions in Central Asia. Mr. Ingriselli is the founder and CEO of Brightening Lives Foundation Inc., a private charitable foundation.

Mr. Ingriselli graduated from Boston University in 1975 with a Bachelor of Science degree in Business Administration. He also earned a Master of Business Administration degree from New York University in both Finance and International Finance in 1977 and a Juris Doctor degree from Fordham University School of Law in 1979.

Mr. Ingriselli brings to the board of directors over 40 years of experience in the energy industry. The Board of Directors believes that Mr. Ingriselli’s experience with, and the insights he has gained from, his energy industry experience will benefit our future plans to evaluate and acquire additional oil producing properties and that they qualify him to serve as our director.

Cynthia L. Welch – Director Nominee

Cynthia L. Welch will join our Board of Directors upon effectiveness of the registration statement of which this prospectus forms a part.  Ms. Welch is a Texas licensed Professional Geoscientist with over 20 years of experience in a wide variety of depositional environments and basins.  Over her career, she has been involved in drilling over 100 horizontal and vertical wells in multiple basins as well as developing expertise in multiple areas, including reservoir characterization, petrophysics, sequence stratigraphy, and project management.  Since August 2022, Ms. Welch has served as the co-founder of Cirrus Oil & Gas, a technically driven company focused on acquiring non-operated oil and gas interests in proven resource plays. Since October 2021, Ms. Welch has served as the co-founder of Tier 1 Resource Partners III, LLC, an oil and gas company. Since November 2019, Mrs. Welch has served as the co-founder of Tier 1 Resource Partners II, LLC, an oil and gas company. Tier 1 Resource Partners is a Houston, Texas-based investment firm focusing primarily on non-operated, asset-level investments in the oil and gas sector. Since November 2016, she has served as co-Founder of Resonance Resources LLC, an oil and gas sector company which is currently inactive. From March 2012 to November 2016, Ms. Welch served as Geoscience Manager at South Texas Reservoir Alliance. From July 2006 to November 2011, Ms. Welch worked with Citation Oil & Gas, as Senior Geologist. From June 2001 to July 2006, Ms. Welch served as a Geologist with Chevron USA.

Ms. Welch received her Bachelor of Science and Master’s Degrees in Geophysics from Texas Tech University. Ms. Welch is licensed as a Professional Geologist in the State of Texas. Ms. Welch was honored in 2019 as one of Oil & Gas Investor Magazine’s 25 Influential Women in Energy. She is a member of American Association of Petroleum Geologists.

We believe Ms. Welch’s over 20 years of oil and gas experience, including being involved in the drilling of over 100 horizontal and vertical wells, as well as her background as a geologist, will be of substantial benefit to the Board of Directors.

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Andrew J. Secrist – Director Nominee

Andrew J. Secrist will join our Board of Directors upon effectiveness of the registration statement of which this prospectus forms a part. Since June 2022, Mr. Secrist has served as Managing Partner/Portfolio Manager with Firstlight Management, LP, a fundamental long/short equity hedge fund. Mr. Secrist also currently serves as an adjunct professor of finance at the University of Utah, Eccles School of Business. From April 2021 to January 2022, Mr. Secrist was engaged as a Senior Analyst with Hawk Ridge Capital Management, a hedge fund, and was a member of the investment team actively investing $2 billion of capital in a long/short equity strategy. From April 2016 to October 2018, Mr. Secrist served as Managing Partner/Portfolio Manager of Sparrow Fund Management, a fundamental long/short equity hedge fund. From December 2013 to March 2016, Mr. Secrist served as an Analyst and Portfolio Manager at Tiger Management, a hedge fund where he ran a multimillion dollar long/short equity portfolio. From July 2008 to July 2010, Mr. Secrist served as an Associate with Leonard Green & Partners, a private equity firm. From July 2006 to July 2008, Mr. Secrist was an Analyst with Goldman Sachs & Co.

Mr. Secrist received a Bachelor of Arts in Business Economics from the University of California, Los Angeles, a Master of Science degree in Financial Economics from Oxford University in Oxford, England, and a Masters of Business Administration from Stanford University’s Stanford Graduate School of Business in Stanford, California.

The Board of Directors believes that Mr. Secrist’s significant business, economic and investment management experience will make him a well-qualified member of the Board of Directors.

Jeffrey Holt – Director Nominee

Mr. Holt will join our Board of Directors upon effectiveness of the registration statement of which this prospectus forms a part. Mr. Holt is a retired investment banker, having spent 40 years with several Wall Street firms including Goldman Sachs, Morgan Stanley and the Bank of Montreal. He focused the last thirty years of his career on the Port and Goods Movement sector, advising dozens of buy and sell-side clients on container port assets and short line railroads. He led the team on the sale of Fortress Infrastructure’s Central Maine and Quebec Railroad to the Canadian Pacific. Most recently, Mr. Holt represented Rio Tinto Alcan on their sale of waterfront land in Kitimat, BC to Royal Dutch Shell for their new LNG export facility. His banking successes include financings for Disney’s California Adventure, the Seismic Retrofit for the Golden Gate Bridge, the new span of the Tacoma Narrows bridge, the expansion of the Rose Bowl, and expansions of over a dozen of the largest Container Ports in North America. He was also the lead banker for the Alameda Corridor project, an over $2 billion freight train freeway through Los Angeles, California, connecting the two largest ports in North America with the Union Pacific and Burlington Northern railroads. Mr. Holt spent seven years as the Chairman of the Utah Transportation Commission and for six of those years sat on the Executive Committee of the Transportation Research Board of the National Academies of Science, Engineering and Medicine. He retired from the Bank of Montreal where he served as Managing Director, and was responsible for North American Port and Short Line Railroad Coverage, in December 2019, a position he had held since February 2009. Prior to that Mr. Holt served in various investment banking roles with Goldman Sachs & Co. (Vice President – June 1998 to February 2009); PaineWebber Inc. (Director – August 1991 to June 1998); The First Boston Corporation (Vice President – November 1986 to August 1991); Morgan Stanley Inc. (Associate – September 1984 to November 1986); Prudential-Bache Securities Inc. (Vice President – April 1981 to September 1984); and Burros Smith & Co. (Associate – February 1980 to April 1981). Mr. Holt has ten years of experience managing quantitative analysis departments for Wall Street investment banking firms; he developed several award-winning products for the Municipal Bond industry, including the creation of the Forward Municipal Bond; and he has specific experience working with and for the Counties and government agencies in Eastern Utah, where our Utah asset is located, as part of his investment banking work and pro-bono agency work. Mr. Holt received a bachelor’s degree in finance from the University of Utah in Salt Lake City, Utah.

The Board of Directors believes that Mr. Holt's background in investment banking and his vast experience working on large scale projects, including in Utah, will make him a well-qualified member of the Board of Directors.

Terms of Office of Officers and Directors

In accordance with Nasdaq corporate governance requirements, we are not required to hold an annual meeting in the year in which we complete our initial public offering and as such, we do not currently anticipate holding an annual meeting until fiscal 2025. The term of office of our directors will expire at the end of their class term, as discussed below, subject to re-nomination and reappointment to the board by our stockholders.

Our officers are appointed by the Board of Directors and serve at the discretion of the Board of Directors, rather than for specific terms of office. Our Board of Directors is authorized to appoint persons to the offices set forth in our Amended and Restated Bylaws as it deems appropriate. Our Amended and Restated Bylaws provide that our officers shall include a Chief Executive Officer, a President and a Secretary and may also include a Chairperson of the Board, a Vice Chairperson of the Board, a Financial Officer, a Treasurer, one or more Vice Presidents, one or more Assistant Vice Presidents, one or more Assistant Treasurers, one or more Assistant Secretaries, and any such other officers as may be appointed in accordance with the provisions of the Amended and Restated Bylaws.

Corporate Governance

Family Relationships amongst Directors and Officers

There are no family relationships among our directors and executive officers.

Arrangements between Officers and Directors

To our knowledge, there is no arrangement or understanding between any of our officers or directors and any other person, including directors, pursuant to which the officer was selected to serve as an officer or director.

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Involvement in Certain Legal Proceedings

None of our executive officers or directors has been involved in any of the following events during the past ten years: (1) any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (2) any conviction in a criminal proceeding or being a named subject to a pending criminal proceeding (excluding traffic violations and minor offenses); (3) being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; (4) being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities law; (5) being the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of (i) any Federal or State securities or commodities law or regulation; (ii) any law or regulation respecting financial institutions or insurance companies, including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or (iii) any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or (6) being the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act), any registered entity (as defined in Section (1a)(40) of the Commodity Exchange Act), or any equivalent exchange, association, entity, or organization that has disciplinary authority over its members or persons associated with a member.

Board Leadership Structure

Our Board of Directors has the responsibility for selecting the appropriate leadership structure for the Company. In making leadership structure determinations, the Board of Directors considers many factors, including the specific needs of the business and what is in the best interests of the Company’s stockholders. Our current leadership structure is composed of a separate Chairman of the Board of Directors and Chief Executive Officer (“CEO”). Mr. Frank C. Ingriselli, an independent member of the Board of Directors, serves as Chairman and Mr. Michael L. Peterson serves as CEO. The Board of Directors does not have a policy as to whether the Chairman should be an independent director, an affiliated director, or a member of management. Our Board of Directors believes that the Company’s current leadership structure is appropriate because it effectively allocates authority, responsibility, and oversight between management (the Company’s CEO, Mr. Peterson) and the members of our Board of Directors. It does this by giving primary responsibility for the operational leadership and strategic direction of the Company to its CEO, while enabling our Chairman to facilitate our Board of Directors’ oversight of management, promote communication between management and our Board of Directors, and support our Board of Directors’ consideration of key governance matters. The Board of Directors believes that its programs for overseeing risk, as described below, would be effective under a variety of leadership frameworks and therefore do not materially affect its choice of structure.

Risk Oversight

Effective risk oversight is an important priority of the Board of Directors. Because risks are considered in virtually every business decision, the Board of Directors discusses risk throughout the year generally or in connection with specific proposed actions. The Board of Directors’ approach to risk oversight includes understanding the critical risks in the Company’s business and strategy, evaluating the Company’s risk management processes, allocating responsibilities for risk oversight, and fostering an appropriate culture of integrity and compliance with legal responsibilities. The directors exercise direct oversight of strategic risks to the Company.

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Other Directorships

 No director of the Company is also a director of an issuer with a class of securities registered under Section 12 of the Exchange Act (or which otherwise are required to file periodic reports under the Exchange Act), except for our Chief Executive Officer and Director, Mr. Michael L. Peterson, who also serves as a member of the Board of Directors of Ocean Biomedical, Inc., formerly Aesther Healthcare Acquisition Corp. (Nasdaq: OCEA), as a member of the Board of Directors of Trio Petroleum Corp. (NYSE American: TPET), and as a member of the Board of Directors and as the Chairman of the Audit Committee of Indonesia Energy Corporation Limited (NYSE American: INDO), TRxADE HEALTH, Inc (Nasdaq: MEDS), and the following SPACS: Powerup Acquisition Corp (Nasdaq: PWUP), Ocean Tech Acquisitions (Nasdaq: OTEC), Kernel Group Holdings (Nasdaq: KRNL), and our Chairman, Frank C. Ingriselli, who serves as a member of the Board of Directors of Trio Petroleum Corp. (NYSE American: TPET).

Classified Board of Directors

Our Second Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws provide for a classified board of directors consisting of three classes of directors, each serving staggered three-year terms. As a result, only one class of directors will be elected at each annual meeting of our stockholders, with the other classes continuing for the remainder of their respective three-year terms. Our directors are divided among the three classes as follows:

· the Class One director is Frank C. Ingriselli and his term will expire at the first annual meeting of stockholders to be held after the date of this offering;

· the Class Two director is Michael L. Peterson and his term will expire at the second annual meeting of stockholders to be held after the date of this offering; and

· the Company does not currently have any Class Three directors whose term will expire at the third annual meeting of stockholders to be held after the date of the offering.

In accordance with Nasdaq corporate governance requirements, we are not required to hold an annual meeting until the year after our initial public offering and as such, we do not currently anticipate holding an annual meeting until fiscal 2025.

Our director nominees, Cynthia L. Welch, Andrew Secrist and Jeffrey Holt, will be appointed to each of the three classes of directors above in the discretion of the Board of Directors in connection with their appointment to the Board of Directors upon effectiveness of the registration statement of which this prospectus forms a part. We currently anticipate such persons being appointed to the following director classes Cynthia L. Welch (Class Three), Andrew Secrist (Class Two ) and Jeffrey Holt (Class One).

Each director’s term continues until the election and qualification of his or her successor, or his or her earlier death, resignation or removal. Our Second Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws authorize only our board of directors to fill vacancies on our board of directors. Any increase or decrease in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors. This classification of our board of directors may have the effect of delaying or preventing changes in control of our company. See the section titled “Description of Capital Stock—Anti-Takeover Effects of Our Certificate of Incorporation and Bylaws— Classified Board of Directors.”

Committees of the Board

Upon effectiveness of the registration statement of which this prospectus forms a part, our Board of Directors will have three standing committees: an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. Subject to phase-in rules, Nasdaq rules and Rule 10A-3 of the Exchange Act require that the Audit Committee of a listed company be comprised solely of independent directors, and Nasdaq rules require that the compensation of the chief executive officer of a listed company must be determined, or recommended to the Board for determination, either by a Compensation Committee comprised of independent directors or by a majority of the independent directors on its Board of Directors.

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Board Committee Membership

Committee membership of the Board of Directors is expected to be as follows upon the effective date of the registration statement of which this prospectus forms a part:

	Independent	Audit  Committee		Compensation   Committee		Nominating    and Corporate    Governance    Committee
Michael L. Peterson
Frank C. Ingriselli (1)	x
Cynthia L. Welch	x		M		M		C
Andrew J. Secrist	x		C		M		M
Jeffrey Holt	x		M		C		M

(1) Chairman of Board of Directors.  

C - Chairman of Committee.   

M - Member.

Audit Committee

Prior to the consummation of this offering, we will establish an Audit Committee of the Board of Directors. Ms. Welch, Mr. Ingriselli and Mr. Secrist will serve as members of our Audit Committee, and Mr. Secrist will chair the Audit Committee. Under the Nasdaq listing standards and applicable SEC rules, we are required to have at least three members of the Audit Committee, all of whom must be independent. Each of Messrs. Secrist and Holt and Ms. Welch meet the independent director standard under Nasdaq listing standards and under Rule 10-A-3(b)(1) of the Exchange Act.

As discussed above, the Board has determined that Mr. Secrist, is an “audit committee financial expert” (as defined in the SEC rules) because he has the following attributes: (i) an understanding of generally accepted accounting principles in the United States of America (“GAAP”) and financial statements; (ii) the ability to assess the general application of such principles in connection with accounting for estimates, accruals and reserves; (iii) experience analyzing and evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by our financial statements; (iv) an understanding of internal control over financial reporting; and (v) an understanding of Audit Committee functions. Mr. Secrist has acquired these attributes as a result of his accounting study in his college education, financial business experience, MBA degree and his experience and training as an adjunct professor of Finance at an accredited university.

We have adopted an Audit Committee Charter, which details the principal functions of the Audit Committee, including:

· the appointment, compensation, retention, replacement, and oversight of the work of the independent registered public accounting firm engaged by us;

· pre-approving all audit and permitted non-audit services to be provided by the independent registered public accounting firm engaged by us, and establishing pre-approval policies and procedures;

· setting clear hiring policies for employees or former employees of the independent registered public accounting firm, including but not limited to, as required by applicable laws and regulations;

· setting clear policies for audit partner rotation in compliance with applicable laws and regulations;

· obtaining and reviewing a report, at least annually, from the independent registered public accounting firm describing (i) the independent registered public accounting firm’s internal quality-control procedures, (ii) any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues and (iii) all relationships between the independent registered public accounting firm and us to assess the independent registered public accounting firm’s independence;

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· reviewing and approving any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior to us entering into such transaction; and

· reviewing with management, the independent registered public accounting firm, and our legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding our financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities.

The Audit Committee also has the sole authority, at its discretion and at our expense, to retain, compensate, evaluate and terminate our independent auditors and to review, as it deems appropriate, the scope of our annual audits, our accounting policies and reporting practices, our system of internal controls, our compliance with policies regarding business conduct and other matters. In addition, the Audit Committee has the authority, at its discretion and at our expense, to retain special legal, accounting or other advisors to advise the Audit Committee.

Compensation Committee and Nominating and Corporate Governance Committee

Prior to the consummation of this offering, we will establish a Compensation Committee of the Board of Directors. Mr. Secrist, Mr. Holt, and Ms. Welch will serve as members of our Compensation Committee. Under Nasdaq listing standards and applicable SEC rules, the compensation of the chief executive officer of a listed company must be determined, or recommended to the Board for determination, either by a Compensation Committee comprised of independent directors or by a majority of the independent directors on its Board of Directors, and we plan to maintain a Compensation Committee with at least three members, all of whom will be independent. Each of Messrs. Secrist and Holt and Ms. Welch are independent, and Mr. Holt will chair the Compensation Committee.

We have adopted a Compensation Committee Charter, which will detail the principal functions of the Compensation Committee, including:

· reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, if any is paid by us, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation;

· reviewing and approving on an annual basis the compensation, if any is paid by us, of all of our other officers;

· reviewing on an annual basis our executive compensation policies and plans;

· implementing and administering our incentive compensation equity-based remuneration plans;

· assisting management in complying with our proxy statement and annual report disclosure requirements;

· approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our officers and employees;

· if required, producing a report on executive compensation to be included in our annual proxy statement; and

· reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.

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The charter also provides that the Compensation Committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other adviser and will be directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the Compensation Committee will consider the independence of each such adviser, including the factors required by the  Nasdaq and the SEC.

Nominations for Directors

Upon the effectiveness of the registration statement of which this prospectus forms a part, we will establish a Nominating and Corporate Governance Committee. The members of our nominating and corporate governance will be Messrs. Secrist and Holt, and Ms. Welch. Ms. Welch will serve as chair of the Nominating and Corporate Governance Committee.

The primary purposes of our Nominating and Corporate Governance Committee is to assist the board in:

· identifying, screening and reviewing individuals qualified to serve as directors and recommending to the Board of Directors candidates for nomination for election at the annual meeting of stockholders or to fill vacancies on the Board of Directors;

· developing, recommending to the Board of Directors and overseeing implementation of our corporate governance guidelines;

· coordinating and overseeing the annual self-evaluation of the Board of Directors, its committees, individual directors and management in the governance of the company; and

· reviewing on a regular basis our overall corporate governance and recommending improvements as and when necessary.

The Nominating and Corporate Governance Committee is governed by a charter which we have adopted that complies with the rules of the Nasdaq.

Our Nominating and Corporate Governance Committee will recommend to the Board of Directors candidates for nomination for election at the annual meeting of the stockholders. The Board of Directors will also consider director candidates recommended for nomination by our stockholders during such times as they are seeking proposed nominees to stand for election at the next annual meeting of stockholders (or, if applicable, a special meeting of stockholders).

We have not formally established any specific, minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying and evaluating nominees for director, the Board of Directors considers educational background, diversity of professional experience, knowledge of our business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of our stockholders.

Director Independence

Nasdaq listing standards require that at least a majority of our Board of Directors be independent as long as we remain a smaller reporting company. An “independent director” is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship which in the opinion of the company’s Board of Directors, would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director. We expect that our Board of Directors will determine that Frank C. Ingriselli, Cynthia L. Welch, Jeffrey Holt, and Andrew J. Secrist are “independent directors” as defined in the Nasdaq listing standards and applicable SEC rules. Our independent directors will have regularly scheduled meetings at which only independent directors are present.

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In assessing director independence, the Board considers, among other matters, the nature and extent of any business relationships, including transactions conducted, between the Company and each director and between the Company and any organization for which one of our directors is a director or executive officer or with which one of our directors is otherwise affiliated.

Stockholder Communications with the Board

A stockholder who wishes to communicate with our Board of Directors may do so by directing a written request addressed to our Secretary, 3450 N. Triumph Blvd., Suite 102 Lehi, Utah 84043, who, upon receipt of any communication other than one that is clearly marked “Confidential,” will note the date the communication was received, open the communication, make a copy of it for our files and promptly forward the communication to the director(s) to whom it is addressed. Upon receipt of any communication that is clearly marked “Confidential,” our Secretary will not open the communication, but will note the date the communication was received and promptly forward the communication to the director(s) to whom it is addressed.

Policy on Equity Ownership

The Company does not have a policy on equity ownership at this time.

Policy Against Hedging

The Company recognizes that hedging against losses in Company shares may disturb the alignment between stockholders and executives that equity awards are intended to build; however, while ‘short sales’ are discouraged by the Company, the Company does not currently have a policy prohibiting such transactions. We plan to implement a policy prohibiting such transactions in the future.

Compensation Recovery and Clawback Policy

Under the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), in the event of misconduct that results in a financial restatement that would have reduced a previously paid incentive amount, we can recoup those improper payments from our Chief Executive Officer and Chief Financial Officer (if any). The SEC also recently adopted rules which direct national stock exchanges to require listed companies to implement policies intended to recoup bonuses paid to executives if the company is found to have misstated its financial results. Nasdaq has also recently adopted rules to require listed companies to adopt clawback policies and we plan to implement a clawback policy in the future prior to the effectiveness of the registration statement of which this prospectus forms a part.  

Code of Ethics

We have adopted a Code of Ethical Business Conduct (“Code of Ethics”) that applies to all of our directors, officers and employees. We intend to disclose any amendments to our Code of Ethics and any waivers with respect to our Code of Ethics granted to our principal executive officer, our principal financial officer, or any of our other employees performing similar functions in a Current Report on Form 8-K.

There have been no waivers granted with respect to our Code of Ethics to any such officers or employees.

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Whistleblower Protection Policy

The Company has adopted a Whistleblower Protection Policy (“Whistleblower Policy”) that applies to all of its directors, officers, employees, consultants, contractors and agents of the Company. The Whistleblower Policy has been reviewed and approved by the Board.

Board Diversity

While we do not have a formal policy on diversity, our Board of Directors considers diversity to include the skill set, background, reputation, type and length of business experience of our board members as well as a particular nominee’s contributions to that mix. Our Board of Directors believes that diversity promotes a variety of ideas, judgments and considerations to the benefit of our Company and stockholders.

On August 6, 2021, the Securities and Exchange Commission approved a proposed rule from Nasdaq on diversity of boards of directors of companies listed on Nasdaq. Pursuant to the rule as approved (the “Diversity Rule”), any company newly listing on The Nasdaq Capital Market that was not previously subject to a substantially similar requirement of another national securities exchange, is required to have, explain why it does not have, at least two Diverse (as defined below) directors by the later of: (a) two years from the date of listing; or (b) the date the company files its proxy statement or its information statement (or, if the company does not file a proxy, in its Form 10-K) for the company’s second annual meeting of stockholders subsequent to the company’s listing; provided that if the company has a board of five or fewer members it need only have, or explain why it does not have, one Diverse director. Unless exempt from the rules as discussed below, at least one Diverse director must self-identify as female and at least one Diverse director must self-identify as an underrepresented minority or as LGBTQ+ (unless we remain as a smaller reporting company, in which case both Diverse directors may self-identify as female). “Diverse” means an individual who self-identifies as one or more of the following: female, LGBTQ+, or an underrepresented individual based on national, racial, ethnic, indigenous, cultural, religious or linguistic identity in the country of the Company’s principal executive offices.

EXECUTIVE AND DIRECTOR COMPENSATION

Executive Compensation

Summary Compensation Table

The following table sets forth the compensation for services paid in all capacities for 2023, and for the period from inception (February 7, 2022) to December 31, 2022 to Michael L. Peterson, our President, Chief Executive Officer and Director, Graham Patterson, our former Chief Financial Officer and Secretary (collectively, the “Named Executive Officers”). We had no other executive officers from February 7, 2022 to December 31, 2023.

Name and Principal Position	Fiscal Year	Salary ($)			Bonus ($)		Stock Awards ($)			Option Awards ($)		All Other Compensation ($)		Total ($)
Michael L. Peterson	2023		—	(1)		—		—	(2)		—		—		—	(1)
CEO and President	2022		—	(1)		—		—	(2)		—		—		—	(1)
Gregory L. Overholtzer CFO and Secretary*	2023		35,000	(3)		—		—			—		—		35,000
Graham Patterson	2023		11,000			—		—			—		—		11,000
Former CFO and Secretary*	2022		52,000	(4)		—		—			—		—		52,000	(4)

*Former CFO and Secretary from April 1, 2022, through February 21, 2023. Effective February 21, 2023, Gregory L. Overholtzer was appointed as CFO and Secretary replacing Mr. Patterson.

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Does not include perquisites and other personal benefits or property, unless the aggregate amount of such compensation is more than $10,000. No executive officer earned any non-equity incentive plan compensation or nonqualified deferred compensation during the periods reported above. No executive officer serving as a director received any compensation for services on the Board of Directors separate from the compensation paid as an executive for the periods above.

(1)	Mr. Peterson is not due any compensation for services rendered to the Company until the closing of this offering, at which time he is due a $60,000 bonus pursuant to the terms of Mr. Peterson’s employment agreement discussed below under “Employment Agreements”.
(2)	Does not include the value of 433,334 restricted shares of common stock which the Company has agreed to grant to Mr. Peterson upon effectiveness of the registration statement of which this prospectus forms a part, as discussed in greater detail below under “Employment Agreements”.
(3)	Mr. Overholtzer was paid compensation of $5,000 per month for seven months of service to the Company during 2023, which was paid in April 2024.
(4)	The Company entered into an agreement effective April 1, 2022 with Graham Patterson, its then Chief Financial Officer to perform certain services that includes compensation at the rate of $5,000 per month. The agreement was terminated effective February 28, 2023.  See also the terms of Mr. Patterson’s employment agreement discussed below under “Employment Agreements”.

Outstanding Equity Awards at Fiscal Year-End

The Company: (i) did not grant any stock options to its executive officers or directors during the period from February 7, 2022 (Inception) to December 31, 2023; (ii) did not have any outstanding equity awards as of December 31, 2023; and (iii) had no options exercised by its Named Executive Officers during the period from February 7, 2022 (Inception) to December 31, 2023.

There are no outstanding options as of the date of this prospectus.

Employment Agreements

Michael L. Peterson

Effective as of April 1, 2022, we entered into an employment agreement with our Chief Executive Officer, Michael L. Peterson, which was amended and restated on January 20, 2023, to be effective as of April 1, 2022. Mr. Peterson is initially engaged as a consultant, effective April 1, 2022, through the first date the Company’s shares are publicly traded on any public exchange (the “IPO Date”). Upon the IPO Date, Mr. Peterson’s consultancy shall end and he shall become an employee of the Company, for a term ending on December 31, 2024, subject to automatic one-year renewals thereafter unless either party provides the other at least 90 days’ notice of non-renewal before the applicable renewal date. Mr. Peterson will report directly the Board and shall perform his services from Utah.

We have agreed to pay Mr. Peterson a one-time $60,000 bonus within five business days of the IPO Date, and that effective as of IPO Date, when his employment with the Company commences, the Company shall pay Mr. Peterson an annual base salary of $350,000. Mr. Peterson’s base salary may be increased from time to time in the discretion of the Board, which increases in salary need not be evidenced by amendments to the agreement. He is eligible for an annual discretionary bonus, beginning in 2022, targeted at 50% of his base salary, as determined by the Compensation Committee of the Board, based on his performance and achievement by the Company of certain financial, operating and other objectives set by the Board. Mr. Peterson is also eligible for other bonuses in the discretion of the Board or the Compensation Committee, in cash or equity.

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Mr. Peterson is further eligible for a grant of 433,334 restricted shares of common stock (“RS”) which will be granted within five business days of the IPO Date, and subject to his continued employment, vest over two year vesting schedule, pursuant to which 25% of the RS will vest upon the earlier of 3 months after the IPO Date or 6 months after the grant date, and the remainder shall vest in equal tranches every 6 months thereafter until either the RS is fully vested or Mr. Peterson’s Continuous Service (as defined in the 2022 Plan) terminates, whichever occurs first. Mr. Peterson also receives a standard benefit package, and reimbursement for reasonable business and travel expenses. He also is eligible for twenty-five vacation days per year. Although Mr. Peterson is employed pursuant to a term, either Mr. Peterson or the Company may terminate his Agreement earlier. We may terminate Mr. Peterson’s employment with or without Cause. “Cause” means: (a) conviction of, or plea of nolo contendere to any felony or crime involving dishonesty or moral turpitude (whether or not a felony); (b) any action by Mr. Peterson involving fraud, breach of the duty of loyalty, malfeasance or willful misconduct; (c) the failure or refusal by Mr. Peterson to perform any material duties under the agreement or to follow any lawful and reasonable direction of the Company; (d) intentional damage to any property of the Company; (e) chronic neglect or absenteeism in the performance of Mr. Peterson’s duties; (f) willful misconduct, or other willful material violation of Company policy or code of conduct that causes a material adverse effect upon the Company; or (g) material uncured breach of any written agreement with the Company. We anticipate granting these RSs shortly after the effectiveness of the registration statement of which this registration statement forms a part, and after filing a Form S-8 Registration Statement, which will become effective immediately upon filing, to register the 3,089,803 shares of common stock available for awards under our 2022 Equity Incentive Plan.

Mr. Peterson may resign at any time with 90 days’ written notice.

In the event of a termination without Cause, we have agreed, if Mr. Peterson signs a release in a form provided by the Company, to pay Mr. Peterson, as severance, the equivalent of twelve months of Base Salary. Delaware law governs Mr. Peterson’s agreement, provided that any disputes are resolved via arbitration in Salt Lake City, Utah.

Mr. Peterson has also entered into a standard form of Non-Disclosure and Assignment Agreement as a condition of execution of the Agreement.

Graham Patterson (former agreement, now terminated)

Effective as of April 1, 2022, we entered into an employment agreement with our then Chief Financial Officer and Secretary, Graham Patterson. Mr. Patterson was initially engaged as a consultant, effective April 1, 2022, through the IPO Date. Upon the IPO Date, Mr. Patterson’s consultancy was to end and he was to become an employee of the Company, for a term ending on December 31, 2024, subject to automatic one-year renewals thereafter unless either party provided the other at least 90 days’ notice of non-renewal before the applicable renewal date. Mr. Patterson’s agreement was terminated effective February 21, 2023, in connection with his resignation as Chief Financial Officer of the Company.

We agreed to pay Mr. Patterson a consulting fee of $5,000 per month pursuant to the agreement. During the year ended December 31, 2023, the Company paid $11,000 in compensation to Mr. Patterson.

Mr. Patterson has also entered into a standard form of Non-Disclosure and Assignment Agreement as a condition of execution of the Agreement.

Gregory L. Overholtzer

Effective as of February 14, 2023, we entered into an employment agreement with Gregory L. Overholtzer, who was appointed as our Chief Financial Officer and Secretary effective February 21, 2023. Mr. Overholtzer is initially engaged as a consultant, effective February 14, 2023, through the IPO Date. Upon the IPO Date, Mr. Overholtzer’s consultancy shall end and he shall become an employee of the Company, on a month-to-month basis thereafter unless either party provides the other at least 30 days’ notice of termination. Mr. Overholtzer will report directly the Chief Executive Officer and shall perform his services from California.

We have agreed to pay Mr. Overholtzer a consulting fee of $5,000 per month, provided, however, effective as of IPO Date, when his employment with the Company commences, the Company shall pay Mr. Overholtzer at a rate of $10,000 per month. Mr. Overholtzer’s base salary may be increased from time to time in the discretion of the Board, which increases in salary need not be evidenced by amendments to the agreement. Mr. Overholtzer is also eligible for other bonuses in the discretion of the Board or the Compensation Committee, in cash or equity.

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Mr. Overholtzer may resign at any time with 30 days’ written notice.

Delaware law governs Mr. Overholtzer’s agreement, provided that any disputes are resolved via arbitration in Salt Lake City, Utah.

Mr. Overholtzer has also entered into a standard form of Non-Disclosure and Assignment Agreement as a condition of execution of the Agreement.

Compensation of Directors

Summary Director Compensation Table

The following table provides information regarding all compensation awarded to, earned by or paid to each person who served as a non-executive director of the Company during the year ended December 31, 2023. Other than as set forth in the table and described more fully below, the Company did not pay any fees, make any equity or non-equity awards, or pay any other compensation, to its non-employee directors. All compensation paid to its employee directors is set forth in the tables summarizing executive officer compensation above.

Name	Fees Earned or paid in cash			Stock Awards		Option Awards		All Other Compensation		Total
Frank C. Ingriselli	$	—	(1)		—		—		—	$	—

The table above does not include the amount of any expense reimbursements paid to the above directors. No directors received any Non-Equity Incentive Plan Compensation, Change in Pension Value and Nonqualified Deferred Compensation Earnings during the period presented. Does not include perquisites and other personal benefits, or property, unless the aggregate amount of such compensation is more than $10,000.

(1) Mr. Ingriselli is not due any compensation from the Company until the closing of this offering, at which time he is due a bonus of $60,000 pursuant to the terms of Mr. Ingriselli’s employment agreement discussed below under “Consulting Agreement”.

We have not yet established a compensation policy for our non-executive members of our Board of Directors (other than our Chairman, Mr. Ingriselli, whose consulting agreement is discussed below). We anticipate paying compensation to our non-executive director(s) in the future, which may be in the form of cash or equity, or a combination of both. No specific board compensation policy has been adopted to date; however, the material terms of the non-employee director compensation program, as it is currently contemplated, are summarized below.

The non-employee director compensation program is expected to provide for annual retainer fees and/or long-term equity awards to our non-employee directors. We expect each non-employee director will receive an annual retainer of $40,000, plus an additional $10,000 for each board committee Chairman position that he or she serves on. The non-employee directors are also expected to be issued 100,000 shares of restricted common stock that will vest over 3 years. 

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Compensation under our non-employee director compensation policy will be subject to the annual limits on non-employee director compensation set forth in the Company’s 2022 Equity Incentive Plan (the “2022 Plan”), as described below, with increased limits in the first year such non-employee director is appointed to the Board, or in the case of any non-employee chairperson of the Board, as discussed below. Our Board of Directors or an authorized committee may modify the non-employee director compensation program from time to time in the exercise of its business judgment, taking into account such factors, circumstances and considerations as it shall deem relevant from time to time, subject to the annual limit on non-employee director compensation set forth in the 2022 Plan.

Consulting Agreements

Frank C. Ingriselli Consulting Agreement

On April 1, 2022, we entered into a Consulting Agreement with Frank C. Ingriselli, our Chairman, which was amended and restated on January 20, 2023, effective as of April 1, 2022. Pursuant to the Consulting Agreement, Mr. Ingriselli agreed to provide services to the Company commensurate with such title as Chairman of the Board of Directors, as determined by the Company’s Board of Directors. Mr. Ingriselli is not due any monthly consideration during the term of the agreement, except that he is due $60,000 as a bonus within five business days of the IPO Date. The agreement remains in effect until terminated by either party with at least 10 days prior notice to the other and expires on the IPO Date.

Mr. Ingriselli also agreed to not, at any time during the term of the agreement, undertake any activities, directly or indirectly, on his or her own behalf or on behalf of any third party, which are competitive with those provided by the Company and to indemnify the Company and hold it harmless, from and against any and all claims, liabilities, and/or expenses (including, without limitation, attorneys’ fees and expenses) resulting from, arising out of, or relating to any of any breach of the representations or warranties or provisions of the agreement. The Consulting Agreement also includes customary confidentiality, work for hire and non-disclosure obligations of Mr. Ingriselli. The agreement provides that Mr. Ingriselli is prohibited from participating in any retirement, pension, disability, or other benefit plan of the Company, including any bonus, incentive or other equity compensation plan of the Company.

Key Man Insurance

We have no key man insurance on any of our executive officers, nor does the Company plan to obtain any keyman insurance on any of its executive officers.

2022 Equity Incentive Plan

On November 16, 2022, the Board of Directors and on November 18, 2022, our majority stockholders adopted the Company’s 2022 Equity Incentive Plan (the “2022 Plan”).

The 2022 Plan provides an opportunity for any employee, officer, director or consultant of the Company, subject to limitations provided by federal or state securities laws, to receive (i) incentive stock options (to eligible employees only); (ii) nonqualified stock options; (iii) stock appreciation rights; (iv) restricted stock awards; (v) restricted stock units; (vi) shares in performance of services; (vii) other awards of equity or equity based compensation; or (viii) any combination of the foregoing. In making such determinations, the Board may take into account the nature of the services rendered by such person, his or her present and potential contribution to the Company’s success, and such other factors as the Board in its discretion shall deem relevant.

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Shares Available Under the 2022 Plan; Evergreen Provision

Subject to adjustment in connection with the payment of a stock dividend, a stock split or subdivision or combination of the shares of common stock, or a reorganization or reclassification of the Company’s common stock, the aggregate number of shares of common stock which may be issued pursuant to awards under the 2022 Plan is the sum of (i) 2,000,000 shares, and (ii) an automatic increase on April 1st of each year for a period of nine years commencing on April 1, 2023 (the number of shares available for issuance under the 2022 Plan increased by 536,085 shares, to 2,536,085 shares on April 1, 2023 and by 553,718 shares to 3,089,803 on April 1, 2024) and ending on (and including) April 1, 2032, in an amount equal to the lesser of (A) five percent (5%) of the total shares of common stock of the Company outstanding on the last day of the immediately preceding fiscal year (the “Evergreen Measurement Date”); and (B) 666,667 shares of common stock; provided, however, that the Board may act prior to April 1st of a given year to provide that the increase for such year will be a lesser number of shares of common stock. This is also known as an “evergreen” provision. Notwithstanding the foregoing, no more than a total of 8,000,000 shares of common stock (or awards) may be issued or granted under the 2022 Plan in aggregate, and no more than 8,000,000 shares of common stock may be issued pursuant to the exercise of Incentive Stock Options.

If an award granted under the 2022 Plan entitles a holder to receive or purchase shares of our common stock, then on the date of grant of the award, the number of shares covered by the award (or to which the award relates) will be counted against the total number of shares available for granting awards under the 2022 Plan. As a result, the shares available for granting future awards under the 2022 Plan will be reduced as of the date of grant. However, certain shares that have been counted against the total number of shares authorized under the 2022 Plan in connection with awards previously granted under such 2022 Plan will again be available for awards under the 2022 Plan as follows: shares of our common stock covered by an award or to which an award relates which were not issued because the award terminated or was paid in cash or any portion thereof that was forfeited or cancelled without the delivery of shares will again be available for awards, including, but not limited to shares forfeited to pay any exercise price or tax obligation.

In addition, shares of common stock related to awards that expire, are forfeited, or cancelled or terminate for any reason without the issuance of shares shall not be treated as issued pursuant to the 2022 Plan.

The shares available for awards under the 2022 Plan will be authorized but unissued shares of our common stock or shares acquired in the open market or otherwise.

Administration

The Company is the issuer (manager) of the 2022 Plan. The 2022 Plan is administered by either (a) the entire Board of Directors of the Company, or (b) the Compensation Committee; or (b) as determined from time to time by the Board of Directors (the “Administrator”). Subject to the terms of the 2022 Plan, the Administrator may determine the recipients, the types of awards to be granted, the number of shares of our Common Stock subject to or the cash value of awards, and the terms and conditions of awards granted under the 2022 Plan, including the period of their exercisability and vesting. The Administrator also has the authority to provide for accelerated exercisability and vesting of awards. Subject to the limitations set forth below, the Administrator also determines the fair market value applicable to an award and the exercise or strike price of stock options and stock appreciation rights granted under the 2022 Plan.

The Administrator may also delegate to one or more executive officers the authority to designate employees who are not executive officers to be recipients of certain awards and the number of shares of our common stock subject to such awards. Under any such delegation, the Administrator will specify the total number of shares of our common stock that may be subject to the awards granted by such executive officer. The executive officer may not grant an award to himself or herself.

On or after the date of grant of an award under the 2022 Plan, the Administrator may (i) accelerate the date on which any such award becomes vested, exercisable or transferable, as the case may be, (ii) extend the term of any such award, including, without limitation, extending the period following a termination of a participant’s employment during which any such award may remain outstanding, or (iii) waive any conditions to the vesting, exercisability or transferability, as the case may be, of any such award; provided, that the Administrator shall not have any such authority to the extent that the grant of such authority would cause any tax to become due under Section 409A of the Internal Revenue Code (the “Code”).

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Eligibility

All of our employees (including our affiliates), non-employee directors and consultants are eligible to participate in the 2022 Plan and may receive all types of awards other than incentive stock options. Incentive stock options may be granted under the 2022 Plan only to our employees (including our affiliates).

No awards are issuable by the Company under the 2022 Plan (a) in connection with services associated with the offer or sale of securities in a capital-raising transaction; or (b) where the services directly or indirectly promote or maintain a market for the Company’s securities.

Limit on Non-Employee Director Compensation

The maximum number of shares subject to awards granted during a single calendar year to any non-employee director, taken together with any cash fees paid during the compensation year to the non-employee director, in respect of the director’s service as a member of the Board during such year (including service as a member or chair of any committees of the Board), will not exceed $250,000, or $500,000 in the first year such non-employee director is appointed to the Board, or in the case of any non-employee chairperson of the Board, in total value (calculating the value of any such awards based on the grant date fair value of such awards for financial reporting purposes). Compensation will count towards this limit for the fiscal year in which it was granted or earned, and not later when distributed, in the event it is deferred.

Option Terms

Stock options may be granted by the Administrator and may be either non-qualified (non-statutory) stock options or incentive stock options. The Administrator, in its sole discretion, determines the exercise price of any options granted under the Plan which exercise price is set forth in the agreement evidencing the option, provided however that at no time can the exercise price be less than the $0.0001 par value per share of the Company’s common stock. Stock options are subject to the terms and conditions, including vesting conditions, set by the Administrator (and incentive stock options are subject to further statutory restrictions that will be set forth in the grant agreement for those options). The exercise price for all stock options granted under the 2022 Plan will be determined by the Administrator, except that no stock options can be granted with an exercise price that is less than 100% of the fair market value of the Company’s common stock on the date of grant. Further, stockholders who own greater than 10% of the Company’s voting stock will not be granted incentive stock options that have an exercise price less than 110% of the fair market value of the Company’s common stock on the date of grant.

The term of all stock options granted under the 2022 Plan will be determined by the Administrator, but the term of an incentive stock option may not exceed 10 years (five years for incentive stock options granted to stockholders who own greater than 10% of the Company’s voting stock). Each stock option gives the grantee the right to receive a number of shares of the Company’s common stock upon exercise of the stock option and payment of the exercise price. The exercise price may be paid in cash or if approved by the Administrator, shares of the Company’s common stock. The Administrator may also permit other ways for a grantee to pay the exercise price.

Options granted under the 2022 Plan may be exercisable in cumulative increments, or “vest,” as determined by the Administrator.

Incentive stock options granted under the 2022 Plan are intended to qualify as “incentive stock options” within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended, which we refer to as the Code. Nonqualified (non-statutory stock options) granted under the 2022 Plan are not intended to qualify as incentive stock options under the Code.

The Administrator may impose limitations on the transferability of stock options granted under the 2022 Plan in its discretion. Generally, a participant may not transfer a stock option granted under the 2022 Plan other than by will or the laws of descent and distribution or, subject to approval by the Administrator, pursuant to a domestic relations order. However, the Administrator may permit transfer of a stock option in a manner that is not prohibited by applicable tax and securities laws. Options may not be transferred to a third party financial institution for value.

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Unless the terms of an optionholder’s stock option agreement, or other written agreement between us and the optionholder, provide otherwise, if an optionholder’s service relationship with us or any of our affiliates ceases for any reason other than disability, death, or cause, the optionholder may generally exercise any vested options for a period of three months following the cessation of service. This period may be extended in the event that exercise of the option is prohibited by applicable securities laws or the immediate sale of shares acquired upon exercise of the option is prohibited by our insider trading policy. If an optionholder’s service relationship with us or any of our affiliates ceases due to death, or an optionholder dies within a certain period following cessation of service, the optionholder or a beneficiary may generally exercise any vested options for a period of 18 months following the date of death. If an optionholder’s service relationship with us or any of our affiliates ceases due to disability, the optionholder may generally exercise any vested options for a period of 12 months following the cessation of service. In the event of a termination for cause, options generally terminate upon the termination date. In no event may an option be exercised beyond the expiration of its term. Acceptable consideration for the purchase of common stock issued upon the exercise of a stock option will be determined by the administrator and may include (i) cash, check, bank draft or money order; (ii) a broker-assisted cashless exercise; (iii) the tender of shares of our common stock previously owned by the optionholder; (iv) a net exercise of the option (to the extent allowed); or (v) other legal consideration approved by the administrator.

Except as explicitly provided otherwise in a participant’s stock option agreement or other written agreement with us or one of our affiliates, the term “cause” is defined in the 2022 Plan to mean any event which would qualify as cause for termination under the participant’s employment agreement with the Company, or, if there is no such employment agreement, any of the following (i) the recipient’s dishonest statements or acts with respect to the Company or any affiliate of the Company, or any current or prospective customers, suppliers, vendors or other third parties with which such entity does business; (ii) the recipient’s commission of (A) a felony or (B) any misdemeanor involving moral turpitude, deceit, dishonesty or fraud; (iii) the recipient’s failure to perform the recipient’s assigned duties and responsibilities to the reasonable satisfaction of the Company which failure continues, in the reasonable judgment of the Company, after written notice given to the recipient by the Company; (iv) the recipient’s gross negligence, willful misconduct or insubordination with respect to the Company or any affiliate of the Company; or (v) the recipient’s material violation of any provision of any agreement(s) between the recipient and the Company relating to noncompetition, non-solicitation, nondisclosure and/or assignment of inventions.

Restricted Stock Unit Awards

Restricted stock unit (RSU) awards are granted under restricted stock unit award agreements adopted by the administrator. Restricted stock unit awards may be granted in consideration for any form of legal consideration that may be acceptable to our Board of Directors and permissible under applicable law. A restricted stock unit award may be settled by cash, delivery of stock, a combination of cash and stock as deemed appropriate by the administrator, or in any other form of consideration set forth in the restricted stock unit award agreement. Additionally, dividend equivalents may be credited in respect of shares covered by a restricted stock unit award. Except as otherwise provided in the applicable award agreement, or other written agreement between us and the recipient, restricted stock unit awards that have not vested will be forfeited once the participant’s continuous service ends for any reason.

Restricted Stock Awards

Restricted stock awards are granted under restricted stock award agreements adopted by the administrator. A restricted stock award may be awarded in consideration for cash, check, bank draft or money order, past or future services to us, or any other form of legal consideration that may be acceptable to our Board of Directors and permissible under applicable law. The administrator determines the terms and conditions of restricted stock awards, including vesting and forfeiture terms. If a participant’s service relationship with us ends for any reason, we may receive any or all of the shares of common stock held by the participant that have not vested as of the date the participant terminates service with us through a forfeiture condition or a repurchase right.

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Stock Appreciation Rights

Stock appreciation rights are granted under stock appreciation right agreements adopted by the administrator. The administrator determines the purchase price or strike price for a stock appreciation right, which generally will not be less than 100% of the fair market value of our common stock on the date of grant. A stock appreciation right granted under our 2022 Plan will vest at the rate specified in the stock appreciation right agreement as determined by the administrator. Stock appreciation rights may be settled in cash or shares of our common stock or in any other form of payment as determined by our Board of Directors and specified in the stock appreciation right agreement.

The administrator determines the term of stock appreciation rights granted under our 2022 Plan, up to a maximum of 10 years. If a participant’s service relationship with us or any of our affiliates ceases for any reason other than cause, disability, or death, the participant may generally exercise any vested stock appreciation right for a period of three months following the cessation of service. This period may be further extended in the event that exercise of the stock appreciation right following such a termination of service is prohibited by applicable securities laws. If a participant’s service relationship with us, or any of our affiliates, ceases due to disability or death, or a participant dies within a certain period following cessation of service, the participant or a beneficiary may generally exercise any vested stock appreciation right for a period of 12 months in the event of disability and 18 months in the event of death. In the event of a termination for cause, stock appreciation rights generally terminate upon the termination date. In no event may a stock appreciation right be exercised beyond the expiration of its term.

Performance Awards

Our 2022 Plan permits the grant of performance awards that may be settled in stock, cash, or other property. Performance awards may be structured so that the stock or cash will be issued or paid only following the achievement of certain pre-established performance goals during a designated performance period. Performance awards that are settled in cash or other property are not required to be valued in whole or in part by reference to, or otherwise based on, our common stock.

The performance goals may be based on any measure of performance selected by our Board of Directors. The performance goals may be based on company-wide performance or performance of one or more business units, divisions, affiliates, or business segments, and may be either absolute or relative to the performance of one or more comparable companies or the performance of one or more relevant indices. Unless specified otherwise by our Board of Directors at the time the performance award is granted, our Board of Directors will appropriately make adjustments in the method of calculating the attainment of performance goals as follows: (i) to exclude restructuring and/or other nonrecurring charges; (ii) to exclude exchange rate effects; (iii) to exclude the effects of changes to generally accepted accounting principles; (iv) to exclude the effects of any statutory adjustments to corporate tax rates; (v) to exclude the effects of items that are “unusual” in nature or occur “infrequently” as determined under generally accepted accounting principles; (vi) to exclude the dilutive effects of acquisitions or joint ventures; (vii) to assume that any business divested by us achieved performance objectives at targeted levels during the balance of a performance period following such divestiture; (viii) to exclude the effect of any change in the outstanding shares of our common stock by reason of any stock dividend or split, stock repurchase, reorganization, recapitalization, merger, consolidation, spin-off, combination or exchange of shares or other similar corporate change, or any distributions to common stockholders other than regular cash dividends; (ix) to exclude the effects of stock based compensation and the award of bonuses under our bonus plans; (x) to exclude costs incurred in connection with potential acquisitions or divestitures that are required to be expensed under generally accepted accounting principles; and (xi) to exclude the goodwill and intangible asset impairment charges that are required to be recorded under generally accepted accounting principles.

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Other Stock Awards

The administrator may grant other awards based in whole or in part by reference to our common stock. The administrator will set the number of shares under the stock award (or cash equivalent) and all other terms and conditions of such awards.

Tax Withholding Adjustments

To the extent provided by the terms of an option or other award, or otherwise agreed to by the Administrator, a participant may satisfy any federal, state or local tax withholding obligation relating to the exercise of such option, or award by a cash payment upon exercise, or in the discretion of the Administrator, by authorizing our company to withhold a portion of the stock otherwise issuable to the participant, by delivering already-owned shares of our common stock or by a combination of these means.

Changes to Capital Structure

In the event there is a specified type of change in our capital structure, such as a stock split, reverse stock split, or recapitalization, appropriate adjustments will be made to (i) the class and maximum number of shares reserved for issuance under our 2022 Plan, (ii) the class and maximum number of shares by which the share reserve may increase automatically each year, (iii) the class and maximum number of shares that may be issued on the exercise of ISOs, and (iv) the class and number of shares and exercise price, strike price, or purchase price, if applicable, of all outstanding stock awards.

Corporate Transactions

In the event of a corporate transaction (as defined in the 2022 Plan), unless otherwise provided in a participant’s stock award agreement or other written agreement with us or one of our affiliates or unless otherwise expressly provided by the administrator at the time of grant, any stock awards outstanding under our 2022 Plan may be assumed, continued or substituted for by any surviving or acquiring corporation (or its parent company), and any reacquisition or repurchase rights held by us with respect to the stock award may be assigned to the successor (or its parent company). If the surviving or acquiring corporation (or its parent company) does not assume, continue or substitute for such stock awards, then (i) with respect to any such stock awards that are held by participants whose continuous service has not terminated prior to the effective time of the corporate transaction, or current participants, the vesting (and exercisability, if applicable) of such stock awards will be accelerated in full (or, in the case of performance awards with multiple vesting levels depending on the level of performance, vesting will accelerate at 100% of the target level) to a date prior to the effective time of the corporate transaction (contingent upon the effectiveness of the corporate transaction), and such stock awards will terminate if not exercised (if applicable) at or prior to the effective time of the corporate transaction, and any reacquisition or repurchase rights held by us with respect to such stock awards will lapse (contingent upon the effectiveness of the corporate transaction); and (ii) any such stock awards that are held by persons other than current participants will terminate if not exercised (if applicable) prior to the effective time of the corporate transaction, except that any reacquisition or repurchase rights held by us with respect to such stock awards will not terminate and may continue to be exercised notwithstanding the corporate transaction.

In the event a stock award will terminate if not exercised prior to the effective time of a corporate transaction, the administrator may provide, in its sole discretion, that the holder of such stock award may not exercise such stock award but instead will receive a payment equal in value to the excess (if any) of (i) the value of the property the participant would have received upon the exercise of the stock award, over (ii) any per share exercise price payable by such holder, if applicable. In addition, any escrow, holdback, earn out or similar provisions in the definitive agreement for the corporate transaction may apply to such payment to the same extent and in the same manner as such provisions apply to the holders of our common stock.

Change in Control

Stock awards granted under our 2022 Plan may be subject to acceleration of vesting and exercisability upon or after a change in control (as defined in the 2022 Plan) as may be provided in the applicable stock award agreement or in any other written agreement between us or any affiliate and the participant, but in the absence of such provision, no such acceleration will automatically occur.

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Repricing; Cancellation and Re-Grant of Stock Options or Stock Appreciation Rights

The Administrator has the right, to effect, at any time and from time to time, subject to the consent of any participant whose award is materially impaired by such action, (1) the reduction of the exercise price (or strike price) of any outstanding option or SAR; (2) the cancellation of any outstanding option or SAR and the grant in substitution therefor of (A) a new option, SAR, restricted stock award, RSU award or other award, under the 2022 Plan or another equity plan of the Company, covering the same or a different number of shares of common stock, (B) cash and/or (C) other valuable consideration (as determined by the Board); or (3) any other action that is treated as a repricing under generally accepted accounting principles.

Duration; Termination of the 2022 Plan

Our Board of Directors has the authority to amend, suspend, or terminate our 2022 Plan at any time, provided that such action does not materially impair the existing rights of any participant without such participant’s written consent. Certain material amendments also require the approval of our stockholders. No incentive stock options may be granted after the tenth anniversary of the date our Board of Directors adopted our 2022 Plan. No stock awards may be granted under our 2022 Plan while it is suspended or after it is terminated.

Current Available Shares

As of the date of this prospectus an aggregate of 3,089,803 shares are available for awards under the 2022 Plan.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Except as discussed below or otherwise disclosed above under “Executive and Director Compensation”, which information is incorporated by reference where applicable in this “Certain Relationships and Related Transactions” section, the following sets forth a summary of all transactions since February 7, 2022 (Inception), or any currently proposed transaction, in which the Company was to be a participant and the amount involved exceeded or exceeds the lesser of $120,000 or one percent of the average of the Company’s total assets at December 31, 2023 or 2022, and in which any officer, director, or any stockholder owning greater than five percent (5%) of our outstanding voting shares, nor any member of the above referenced individual’s immediate family, had or will have a direct or indirect material interest. We believe the terms obtained or consideration that we paid or received, as applicable, in connection with the transactions described below were comparable to terms available or the amounts that would be paid or received, as applicable, in arm’s-length transactions.

Related Party Transactions

Related Party Loans

During March 2022, the Company borrowed an aggregate of $110,000 from two then greater than 5% stockholders of the Company, Adrian Beeston ($55,000); and Ron Bauer ($55,000), to further fund the Company’s strategy and to secure the procurement of property, pursuant to promissory notes bearing no stated interest rate and maturing upon the earlier of (i) five business days after the Company has raised an aggregate of $500,000 through third party debt and/or equity financing or (ii) May 18, 2022.  The Company repaid these loans in full in April 2022.

On August 22, 2022, we borrowed $50,000 (the “Initial Draw”) from Michael L. Peterson, our President, Chief Executive Officer, and Director. In connection therewith we entered into a promissory note with Mr. Peterson, evidencing up to $100,000 which may be loaned to us by Mr. Peterson from time to time pursuant to the terms of the note. Interest on the amounts borrowed accrue at the rate of (i) 3.0% per annum on the Initial Draw, and (ii) at the then applicable federal rate for short-term loans with respect to each Subsequent Draw (as defined below). Upon written request by the Company to Mr. Peterson, the Company may request additional draw-downs of principal under the note (each, a “Subsequent Draw”), up to $100,000 in aggregate. Mr. Peterson may fund any or all Subsequent Draws in his sole discretion, and is not required to fund any such Subsequent Draw. The note may be prepaid at any time without penalty.

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All unpaid principal and accrued interest under the note is payable upon the earlier of (a) upon written demand from Mr. Peterson, at any time after November 22, 2022; (b) the initial closing of a Qualified Event (defined below); (c) the insolvency of the Company; (d) the commission of any act of bankruptcy by the Company; (e) the execution by the Company of a general assignment for the benefit of creditors; (f) the filing by or against the Company of a petition in bankruptcy or any petition for relief under the federal bankruptcy act or the continuation of such petition without dismissal for a period of 90 days or more, or (g) the appointment of a receiver or trustee to take possession of the property or assets of the Company. At December 31, 2022, the note had been repaid in full and cancelled.

On February 21, 2023, Michael L. Peterson, our President, Chief Executive Officer, and Director, paid on behalf of the Company $27,500 in obligations owed by the Company. This loan is non-interest bearing and will be repaid to Mr. Peterson by the Company upon consummation of this offering, with funds raised in such offering.

On April 18, 2023, Michael L. Peterson, our President, Chief Executive Officer, and Director, loaned the Company $13,000 in funds. This loan is non-interest bearing and will be repaid to Mr. Peterson by the Company upon consummation of this offering, with funds raised in such offering.

On May 9, 2023, Michael L. Peterson, our President, Chief Executive Officer, and Director, paid on behalf of the Company $11,000 in obligations owed by the Company. This loan is non-interest bearing and will be repaid to Mr. Peterson by the Company upon consummation of this offering, with funds raised in such offering.

On June 20, 2023, Michael L. Peterson, our President, Chief Executive Officer, and Director, loaned the Company $6,000.  This loan is non-interest bearing and will be repaid to Mr. Peterson by the Company upon consummation of this offering, with funds raised in such offering.

On August 17, 2023, the Company repaid Michael L. Peterson, our President, Chief Executive Officer, and Director, $15,000 of the loans he had made to the Company, leaving a loan balance of $42,500.

On February 16, 2024, Michael L. Peterson, our President, Chief Executive Officer, and Director loaned the Company $3,000 in funds. 

On March 5, 2024, the company repaid our President, Chief Executive Officer, and Director, $45,845 repaying in full all loans made by Mr. Peterson.

Agreements with Saur Minerals

On March 8, 2022, the Company entered into a letter agreement (the “Letter Agreement”) with Saur Minerals. Pursuant to the Letter Agreement, Saur Minerals caused its affiliated entity, Two Pearl Energy LLC (“Two Pearl”), to assign approximately 4,200 net acres of oil and gas leasehold interests (the “St. Landry  Leases”) and related assets located within St. Landry Parish, Louisiana to the Company in exchange for (a) $300,000 of cash consideration paid by the Company to Saur Minerals on March 8, 2022, (b) $100,000 cash consideration payable by the Company to Saur Minerals within five days after the closing of the acquisition, which amount has been paid in full, and (c) $200,000 of cash consideration payable by the Company to Saur Minerals within thirty days after the closing of the acquisition, which amount has been paid in full. In addition, the parties agreed that Two Pearl would reserve and retain an overriding royalty interest (“ORRI”) with respect to each Subject Lease in a percentage equal to the positive difference between the royalty interest of the lessor under each Subject Lease and 25%, if the lessor reserves a royalty less than 25%, and 2% if the lessor reserves a royalty interest equal to or greater than 25%. Further, the Company agreed that, for a period of six months after the closing of the acquisition, that it would use commercially reasonable efforts to seek and obtain third party equity and/or debt financing on terms and conditions reasonably satisfactory to the Company of an amount up to $1,620,000 (the “Post-Closing Financing”), which would be used to acquire up to 59,400 additional net mineral acres of leasehold interests within the Development Area (defined below); which reasonable efforts were used and acquired options giving rights to acquire an additional 6,699 net mineral acres of leasehold interests within the Development Area, bringing the Company’s total options to acquire leasehold interests to an aggregate of 10,948 but chose not to renew certain options, and instead to pursue the Asphalt Ridge Asset as the initial development target resulting in the Company currently only owning options on 1,487 acres.

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In connection with the closing of the transactions contemplated by the Letter Agreement, the Company and Saur Minerals entered into an Acquisition and Development Agreement, dated March 8, 2022, as amended June 16, 2022 (the “Development Agreement”), pursuant to which Saur Minerals agreed to seek and pursue opportunities to acquire certain interests for the benefit of the Company and subsequently reconveyed to the Company, or directly acquire on behalf of the Company such interests, within St. Landry Parish, Louisiana (the “Development Area”), on an exclusive basis for a term of five years expiring March 8, 2027, subject to extension by the Company for three additional periods of one year each, and subject to satisfaction of certain pre-authorized economic terms, prices and conditions as set forth therein, the acquisition of which interests are to be reimbursed to Saur Minerals, or paid directly, by the Company.

Employment Agreement

 As discussed above under “Executive and Director Compensation—Employment Agreement”, we have entered into employment agreements with Michael L. Peterson, our Chief Executive Officer and Director and Gregory L. Overholtzer, our Chief Financial Officer and Secretary.

Consulting Agreements

As discussed above under “Executive and Director Compensation—Consulting Agreements”, we have entered into consulting agreements with Frank C. Ingriselli, our Chairman.

Acquisition of Shares and Transfers

From March to May 2022, we sold an aggregate of 9,562,660 shares of restricted common stock in private transactions to 11 accredited investors, including to Frank C. Ingriselli (880,000 shares)(our Chairman); Graham Patterson (our then Chief Financial Officer)(500,000 shares, of which 100,000 shares were subsequently transferred to Gregory L. Overholtzer, our current Chief Financial Officer and Secretary for no consideration); Louis E. Bernard, Jr. (the Managing Member of Project Operations of Saur Minerals)(1,360,000 shares, of which 680,000 were subsequently transferred to Saur Minerals, LLC, and an aggregate of 633,333 shares were subsequently sold to four other unaffiliated investors); Michael L. Peterson (1,000,000 shares)(our Chief Executive Officer); Michael Schilling (1,360,000 shares, of which 265,000 shares were subsequently sold to five family members of Mr. Peterson (who are not included in Mr. Peterson’s beneficial ownership as they are all adults who live in different households) in private transactions)(the President of Land/Legal of Saur Minerals); Adrian Beeston (1,483,334 shares, of which 133,334 shares were subsequently sold to Michael L. Peterson, our Chief Executive Officer and President in October 2022, for $50,000, and 66,667 shares were subsequently sold to an entity minority owned by Mr. Beeston in October 2022, for $50,000, and 100,000 shares were subsequently sold to an unaffiliated investor, in April 2023, for $30,000); and Naia Ventures, LLC (1,200,000 shares, of which 100,000 shares were subsequently sold to a third party around the time of the third party’s subscription for shares of the Company), for $0.00015 per share or $1,439 in aggregate.

In May 2022, Michael L. Peterson, our Chief Executive Officer and President, sold 296,667 shares of common stock to two third parties for an aggregate of $42,500.

In January 2023, we sold an aggregate of 32,001 shares of restricted common stock to four accredited investors for $3.75 per share, or $120,000 in aggregate. At or around the same time as the sales were completed, one of our founders and one of our affiliates, Louis E. Bernard, Jr. and Saur Minerals, LLC, respectively, sold the purchasers and three other accredited investors, in a separate private transaction, an aggregate of 683,336 shares of our restricted common stock (Louis E. Bernard, Jr. (133,334 shares) and Saur Minerals, LLC (550,002 shares)), for $0.30 per share.

On February 13, 2023, our then Chief Financial Officer, Graham Patterson gifted 100,000 shares of common stock to our current Chief Financial Officer, Gregory L. Overholtzer, for no consideration.

In April 2023, Adrian Beeston, a greater than 5% stockholder of the Company, transferred 100,000 shares of common stock which he held to a third party.

In August 2023, we sold an aggregate of 4,000 shares of restricted common stock to Adrian Beeston, a greater than 5% shareholder of the Company, for an aggregate of $20,000 or $5.00 per share.  

In November 2023, we sold 16,667 shares of restricted common stock to an accredited investor, for $3.00 per share, or $50,000 in aggregate. At or around the same time as the sale was completed, one of greater than 5% stockholders, Naia Ventures LLC, sold the purchaser (the Sandhya Ajjarapu revocable Trust dtd 2007), in a separate private transaction, an aggregate of 100,000 shares of our restricted common stock, for $10.

On March 25, 2024, Michael L. Shilling, a greater than 5% stockholder of the Company, sold an aggregate of 265,000 shares of the Company’s restricted common stock for $0.20 per share to (a) Chandler Bruce, the adult son-in-law of Mr. Michael L. Peterson, the Company’s Chief Executive Officer and Chairman (53,000 shares for $10,600); (b) Clark Peterson, the adult son of Mr. Michael L. Peterson (53,000 shares for $10,600); (c) Brandt Gessel, the son-in-law of Mr. Michael L. Peterson (53,000 shares for $10,600); (d) Matthew Peterson, the adult son of Mr. Michael L. Peterson (53,000 shares for $10,600); and (e) Spencer Peterson, the adult son of Mr. Michael L. Peterson (53,000 shares for $10,600), in a private transaction, pursuant to the terms of a Stock Purchase Agreement. Such persons’ ownership are not included in Mr. Peterson’s beneficial ownership as they are all adults who live in different households.

On February 29, 2024, the Company entered into a Subscription Agreement with Trxade, Inc., which is a wholly-owned subsidiary of TRxADE HEALTH Inc. (Nasdaq:MEDS), pursuant to which we agreed to sell Trxade 2,000,000 shares of a newly designated series of Series A Convertible Preferred Stock of the Company (the “Series A Preferred”), in two tranches, with (a) 1,000,000 shares of Series A Preferred being sold for $2,500,000 on March 5, 2024, and (b) 1,000,000 shares of Series A Preferred being sold for an additional $2,500,000, within 10 days of the Company notifying Trxade by letter or email, that the Company has successfully drilled its first oil and gas well and produced at least 100 barrels of oil . The Subscription contains standard and customary representations and warranties of the parties, indemnification obligations of the parties. Mr. Michael L. Peterson, the Company’s Chief Executive Officer and Director currently serves as an independent member of the Board of Directors, and as Chairman of the Audit Committee and member of the Compensation Committee and Nominating and Corporate Governance Committee of TRxADE HEALTH Mr. Peterson’s position on the Board of Directors of TRxADE HEALTH may result in conflicts of interest between the Company, Mr. Peterson and TRxADE HEALTH, including, but not limited to as a result of his fiduciary obligations to both TRxADE HEALTH and the Company.

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Trxade paid the $2,500,000 due pursuant to Tranche 1 on March 5, 2024, and was issued the 1,000,000 shares of Series A Preferred on March 21, 2024. 

The Series A Preferred is convertible into common stock, initially on a one-for-one basis, and subject to certain anti-dilution rights which increase the number of shares of common stock issuable upon conversion thereof, either at the option of the holder thereof, or automatically upon the receipt by the holder of $2.50 per share in dividend payments. We also agreed to pay the holders of the Series A Preferred stock a quarterly dividend equal to their pro rata portion of 30% of our quarterly earnings before taxes as determined in accordance with U.S. generally accepted accounting principles. The Series A Preferred also carry a $2.50 per share liquidation preference, provided that such Series A Preferred also have the right to participate with the common stock in liquidating distributions, on an as-converted basis, after the payment of such $2.50 liquidation preference.

The Series A Preferred is described in greater detail under “Description of Capital Stock—Preferred Stock—Series A Convertible Preferred Stock”.

On March 29, 2024, Henry Chamberlain, a then greater than 5% stockholder of the Company, sold 200,000 shares of our restricted common stock to a third party in a private transaction for $200,000, or $1.00 per share.

Trio Option Agreement

On or around November 10, 2023, as amended December 28, 2023, Heavy Sweet entered into a Leasehold Acquisition and Development Option Agreement with Trio Petroleum Corp., of which Michael Peterson, the Chief Executive Officer and director of the Company, is also the Chief Executive Officer and director, and Frank C. Ingriselli, our Chairman, is also the Vice Chairman and director. The Trio Option has similar terms as the Asphalt Ridge Option Agreement (discussed above under “Business—Asphalt Ridge Option and Farm-In Agreement (Utah)”), except that it allows Trio to obtain a 20% interest in the Asphalt Ridge Option Leases, and did not require Trio to pay any equity compensation.

We and Heavy Sweet agreed that, to the extent Trio does not fully exercise the Trio Option, the Company had the right to acquire up to all 20% of the right set forth in the Trio Option (or such letter amount which Trio has not exercised), from Heavy Sweet, for $2,000,000 cash. To date, Trio has paid $225,000 for a 2.25% working interest in 960 acres of the Asphalt Ridge Option Leases.

Pursuant to the Farm-In Agreement (discussed above under “Business—Asphalt Ridge Option and Farm-In Agreement (Utah)”), the Company’s acquisition of rights in the Asphalt Ridge Leases and Asphalt Ridge Acreage are subject to the Trio Option, and as a condition to closing of the Farm-In Agreement, Heavy Sweet is required to obtain Trio’s agreement to assign the Trio Option to the Company at closing, with the Company assuming operatorship with respect to the Asphalt Ridge Leases and Asphalt Ridge Acreage, and with the Company assuming all rights, duties and responsibilities of Heavy Sweet under the Trio Option, and with the Asphalt Ridge Leases and Asphalt Ridge Acreage remaining subject to the Trio Option in accordance with its terms.  Notwithstanding the foregoing, in the event Trio’s agreement to assign the Trio Option to the Company is not obtained on or prior to closing, the Company, in its sole discretion, may waive that condition and close without receiving the assignment of the Trio Option, in which event (i) Heavy Sweet shall retain the 17.75% working interest that is subject to the Trio Option, (ii) the Farm-In Shares shall be proportionately reduced, and (iii) in the event the Trio Option expires without Trio exercising its full option to acquire all Asphalt Ridge Leases and Asphalt Ridge Acreage as contemplated under the Trio Option, the Company shall have the sole and exclusive right to farm-in and acquire such Asphalt Ridge Leases and Asphalt Ridge Acreage that is not acquired by Trio on same on the same terms and conditions, and at the same proportionate farm-in price, as set forth under the Farm-In Agreement. Trio’s assignment of the Trio Option to the Company may result in conflicts of interest between the Company, Trio and Mr. Peterson and Mr. Ingriselli, who are officers and directors (Mr. Peterson) and directors (Mr. Ingriselli) of Trio, as discussed above, including, but not limited to as a result of their fiduciary obligations to both Trio and the Company.

Review, Approval and Ratification of Related Party Transactions

Given our small size and limited financial resources, we have not adopted formal policies and procedures for the review, approval, or ratification of transactions, such as those described above, with our executive officers, directors and significant stockholders. However, all of the transactions described above were approved and ratified by our directors. In connection with the approval of the transactions described above, our directors took into account various factors, including his fiduciary duty to the Company; the relationships of the related parties described above to the Company; the material facts underlying each transaction; the anticipated benefits to the Company and related costs associated with such benefits; whether comparable products or services were available; and the terms the Company could receive from an unrelated third party.

Moving forward, and prior to the effectiveness of the registration statement of which this prospectus forms a part, we intend to form an Audit Committee which will review related party transactions to determine whether such transactions are fair to the Company and its stockholders. The Audit Committee of the Board of Directors of the Company will be tasked with reviewing and approving any issues relating to conflicts of interests and all related party transactions of the Company (“Related Party Transactions”). The Audit Committee, in undertaking such review and will analyze the following factors, in addition to any other factors the Audit Committee deems appropriate, in determining whether to approve a Related Party Transaction: (1) the fairness of the terms for the Company (including fairness from a financial point of view); (2) the materiality of the transaction; (3) bids / terms for such transaction from unrelated parties; (4) the structure of the transaction; (5) the policies, rules and regulations of the U.S. federal and state securities laws; (6) the policies of the Committee; and (7) interests of each related party in the transaction.

The Audit Committee will only approve a Related Party Transaction if the Audit Committee determines that the terms of the Related Party Transaction are beneficial and fair (including fair from a financial point of view) to the Company and are lawful under the laws of the United States. In the event multiple members of the Audit Committee are deemed a related party, the Related Party Transaction will be considered by the disinterested members of the Board of Directors in place of the Committee.

In addition, our Code of Business Conduct and Ethics (described above under “Management—Code of Ethics“), which is applicable to all of our employees, officers and directors, requires that all employees, officers and directors avoid any conflict, or the appearance of a conflict, between an individual’s personal interests and our interests.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding the beneficial ownership of our common stock and Series A Convertible Preferred Stock, as of  April 25, 2024 (the “Date of Determination”) by (i) each Named Executive Officer, as such term is defined above under “Executive and Director Compensation”, (ii) each member of our Board of Directors, (iii) each person deemed to be the beneficial owner of more than five percent (5%) of our common stock, and (iv) all of our executive officers and directors as a group. Unless otherwise indicated, each person named in the following table is assumed to have sole voting power and investment power with respect to all shares of our common stock and Series A Convertible Preferred Stock listed as owned by such person.

The column titled “Beneficial Ownership- Percent Prior to Offering” is based on a total of 13,812,379 shares of our common stock and 1,000,000 shares of our Series A Convertible Preferred Stock outstanding as of the Date of Determination. The column titled “Beneficial Ownership- Percent After Offering” is based on 15,734,713 shares of our common stock and 1,000,000 shares of our Series A Convertible Preferred Stock to be outstanding after this offering, which gives further effect to the issuance of 1,200,000 shares of common stock in this offering, and the issuance of 733,334 restricted stock shares to the Company’s Chief Executive Officer (433,334 shares) and three of the Company’s non-executive directors (100,000 shares), as discussed under “Equity Compensation Plan Information”, below, and assumes no exercise of the underwriter’s option to purchase additional shares to cover overallotments and no issuance of the up to 3,400,000 Farm-In Shares.

Beneficial ownership is determined in accordance with the rules of the SEC and includes voting and/or investing power with respect to securities. These rules generally provide that shares of common stock subject to options, warrants or other convertible securities that are currently exercisable or convertible, or exercisable or convertible within 60 days of the Date of Determination, are deemed to be outstanding and to be beneficially owned by the person or group holding such options, warrants or other convertible securities for the purpose of computing the percentage ownership of such person or group, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person or group.

To our knowledge, except as indicated in the footnotes to this table and pursuant to applicable community property laws, as of the Date of Determination, (a) the persons named in the table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, subject to applicable community property laws; and (b) no person owns more than 5% of our common stock. Unless otherwise indicated, the address for each of the officers or directors listed in the table below is 3450 N. Triumph Blvd., Suite 102 Lehi, Utah 84043.

		Number of Common Stock Shares Beneficially Owned			Beneficial Ownership
	Name of Beneficial Owner				Percent Prior to Offering			Percent After Offering
	Directors, Executive Officers, and Director Nominees
Common Stock	Michael L. Peterson		1,301,646			9.4	%		11.0	%(1)
Common Stock	Gregory L. Overholtzer		100,000			*	%		*	%(2)
Common Stock	Frank C. Ingriselli		880,000			6.4	%		5.6	%(2)
Common Stock	Cynthia L. Welch		—			—			*	%(2)
Common Stock	Andrew J. Secrist		—			—			*	%(2)
Common Stock	Jeffrey Holt		—			—			*	%(2)
	All executive officers, directors and director nominees, as a group (five persons)		2,281,646			16.5	%		19.1	%(1)(2)
	5% Stockholders
Common Stock	Heavy Sweet Oil, LLC (2)		2,688,000	(3)		19.5	%		17.2	%
Common Stock	Michael Schilling (4)		1,095,000			7.9	%		7.0	%
Common Stock	Adrian Beeston (5)		1,183,334			8.6	%		7.6	%
Common Stock	Naia Ventures, LLC (6)		1,100,000			8.0	%		7.0	%
Common Stock	Trxade, Inc. (7)		1,000,000	(8)		6.8	%		6.2	%
Series A Convertible Preferred Stock	Trxade, Inc. (7)		1,000	(9)		100	%		100	%

* Less than 1%.

(1) Includes 433,334 restricted stock shares which we plan to grant to Mr. Peterson, promptly following, the effectiveness of the registration statement of which this registration statement forms a part, as discussed in greater detail under “Executive and Director Compensation—Employment Agreements—Michael L. Peterson”, and also includes for purposes of the percentage ownership, an aggregate of 400,000 restricted stock shares which we plan to grant to three of our non-executive members of the Board of Directors (each director other than Mr. Ingriselli), promptly following, the effectiveness of the registration statement of which this registration statement forms a part (100,000 shares each). Following the offering, and the issuance of the 433,334 restricted stock shares to Mr. Peterson, he will own 1,734,980 shares of common stock.

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(2) Includes 100,000 restricted stock shares which we plan to grant to each non-executive member of the Board of Directors, promptly following, the effectiveness of the registration statement of which this registration statement forms a part, as discussed in greater detail under “Equity Compensation Plan Information”, below, and also includes for purposes of the percentage ownership, the 433,334 restricted stock shares we plan to issue to Mr. Peterson (see footnote (1)). Following the offering, each of Ms. Welch, Mr. Secrist and Mr. Holt will hold 100,000 shares of common stock.

(3) The shares of common stock held by Heavy Sweet Oil, LLC, are beneficially owned by Steven Byle, its Chairman. Address 1090 Center Dr., Park City, Utah 84098. Does not include up to 3,400,000 shares of restricted common stock of the Company which may be issued to Heavy Sweet pursuant to the Farm-In Agreement, as such shares will not be due until the closing of the Farm-In Agreement.

(4) Address: 110 Linda Lee, Lafayette, Louisiana 70506. Mr. Schilling is the President of Land/Legal of Saur Minerals, our affiliate, provided that Mr. Schilling is not deemed to beneficially own the shares of common stock held by Saur Minerals.

(5) Address: Calle Major, Palma, Calvia, Spain 07196.

(6) Shares held by Naia Ventures, LLC are beneficially owned by Arlene Mosshart, its 100% managing member. Address: 6435 Zumirez Drive #13, Malibu, California 90265.

(7) Trxade, Inc. is beneficially owned by Suren Ajjarapu, its Chief Executive Officer. Address: 2420 Brunello Trace, Lutz, Florida 33558.

(8) Represents shares of common stock issuable upon conversion of outstanding Series A Convertible Preferred Stock (see Footnote 10).

(9) The 1,000,000 shares of Series A Convertible Preferred Stock are convertible into 1,000,000 shares of our Common Stock. See “Description of Capital Stock—Preferred Stock—Series A Convertible Preferred Stock”.

Change of Control

The Company is not aware of any arrangements which may at a subsequent date result in a change of control of the Company.

Equity Compensation Plan Information

On November 16, 2022, the Board of Directors and on November 18, 2022, our majority stockholders approved the Company’s 2022 Equity Incentive Plan, which is discussed under “Executive and Director Compensation— 2022 Equity Incentive Plan”. There are not currently any awards outstanding under the 2022 Equity Compensation Plan.

Promptly following the effectiveness of the registration statement of which this registration statement forms a part, we plan to file a Form S-8 Registration Statement, which will become effective immediately upon filing, to register the 3,089,803 shares of common stock available for awards under our 2022 Equity Incentive Plan, and thereafter we plan to award Mr. Michael L. Peterson, the Chief Executive Officer, President and Director of the Company, an aggregate of 433,334 restricted stock shares, as discussed in greater detail above under “Executive and Director Compensation—Employment Agreements” and each of our non-executive directors other than Mr. Ingriselli, a total of 100,000 shares of restricted common stock (300,000 in aggregate), which will vest over three years.

DESCRIPTION OF CAPITAL STOCK

The following summary is a description of the material terms of our capital stock and is not complete. You should also refer to the Lafayette Energy Corp Certificate of Incorporation, as amended and Amended and Restated Bylaws, which are included as exhibits to the registration statement of which this prospectus forms a part, and the applicable provisions of the Delaware General Corporation Law.

Authorized Capitalization

The total number of authorized shares of our common stock is 90,000,000 shares, $0.0001 par value per share. The total number of “blank check” authorized shares of our preferred stock is 10,000,000 shares, $0.0001 par value per share. We currently have 2,000,000 shares of designated Series A Convertible Preferred Stock, of which 1,000,000 shares are outstanding and 1,000,000 shares are reserved for issuance upon the closing of Tranche 2 of the Subscription, discussed in greater detail under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Business—Liquidity and Capital Resources—Private Placements”.

Common Stock

Voting Rights. Each share of our common stock is entitled to one vote on all stockholder matters. Shares of our common stock do not possess any cumulative voting rights.

Except for the election of directors, if a quorum is present, an action on a matter is approved if it receives the affirmative vote of the holders of a majority of the voting power of the shares of capital stock present in person or represented by proxy at the meeting and entitled to vote on the matter, unless otherwise required by applicable law. The election of directors will be determined by a plurality of the votes cast in respect of the shares present in person or represented by proxy at the meeting and entitled to vote, meaning that the nominees with the greatest number of votes cast, even if less than a majority, will be elected. The rights, preferences and privileges of holders of common stock are subject to, and may be impacted by, the rights of the holders of shares of any series of preferred stock that we have designated, or may designate and issue in the future.

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Dividend Rights. Each share of our common stock is entitled to equal dividends and distributions per share with respect to the common stock when, as and if declared by our Board of Directors, subject to any preferential or other rights of any outstanding preferred stock.

Liquidation and Dissolution Rights. Upon liquidation, dissolution or winding up, our common stock will be entitled to receive pro rata on a share-for-share basis, the assets available for distribution to the stockholders after payment of liabilities and payment of preferential and other amounts, if any, payable on any outstanding preferred stock.

No Preemptive, Conversion, or Redemption Rights. Holders of our outstanding common stock have no preemptive, conversion, or redemption rights. Shares of our common stock are not assessable. To the extent that additional shares of our common stock may be issued in the future, the relative interests of the then existing stockholders may be diluted.

Fully Paid Status. All outstanding shares of the Company’s common stock are validly issued, fully paid and non-assessable.

Listing. We have applied to list our common stock on the Nasdaq Capital Market under the symbol “LEC”, and previously received conditional listing approval for such listing; however, there can be no assurance that such listing approval is still effective. If our application to the Nasdaq Capital Market is not approved or we otherwise determine that we will not be able to secure the listing of the common stock on the Nasdaq Capital Market, we will not complete the offering.

Preferred Stock

Our Board of Directors has the authority to issue undesignated shares of “blank check” preferred stock in one or more series and to fix the designation, relative powers, preferences and rights and qualifications, limitations or restrictions of all shares of each such series, including, without limitation, dividend rates, conversion rights, voting rights, redemption and sinking fund provisions, liquidation preferences and the number of shares constituting each such series, without any further vote or action by the stockholders. The issuance of additional preferred stock could decrease the amount of earnings and assets available for distribution to holders of our common stock or adversely affect the rights and powers, including voting rights, of the holders of our common stock and could, among other things, have the effect of delaying, deferring or preventing a change in control of our company without further action by the stockholders. We have no present plans to issue any shares of preferred stock other than the Series A Preferred Stock.

Series A Convertible Preferred Stock

                On March 21, 2024, the Company filed a Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock (the “Series A Designation”), with the Secretary of State of Delaware. The Series A Designation designated 2,000,000 shares of Series A Preferred, with the following rights and preferences:

Voting Rights . Each outstanding share of Series A Preferred votes, together with the common stock, on all stockholder matters, such number of voting shares equal to the total number of shares of common stock as such share of Series A Preferred may be converted into as of the record date for such vote, provided that any fractional voting shares are to be rounded to the nearest whole share.

The Series A Designation also requires the consent of the holders of at least a majority of the then issued and outstanding shares of Series A Preferred to (i) increase or decrease (other than by redemption or conversion) the total number of authorized shares of Series A Preferred of the Company, (ii) adopt or authorize any new designation of any preferred stock that (x) provides any holder of common stock or preferred stock any rights upon a liquidation of the Company which are prior and superior to those of the holders of the Series A Preferred; or (y) adversely affects the rights, preferences and privileges of the Series A Preferred, (iii) effect an exchange, or create a right of exchange, cancel, or create a right to cancel, of all or any part of the shares of another class of shares into shares of Series A Preferred, or (iv) alter or change the rights, preferences or privileges of the shares of Series A Preferred so as to affect adversely the shares of Series A Preferred.

Dividend Rights . We agreed to not declare, pay or set aside dividends on any share of any class of series of capital stock of the Company (other than dividends payable solely in common stock), unless the holders of the Series A Preferred first receive, or simultaneously receive, a dividend equal to the amount they would have been due, had such Series A Preferred Stock been converted into common stock immediately prior to the record date for the declaration of such dividend.

Additionally, for so long as any Series A Preferred is issued and outstanding, and until a total of $2.50 has been received for each outstanding Series A Preferred share, holders of the Series A Preferred are entitled to receive, when, as and if authorized and declared by the Board of Directors of the Company, out of any funds legally available therefor, cumulative dividends in an amount equal to 30% of the EBT (as defined below) of the Company for the prior calendar quarter (or such applicable portion thereof that the Series A Preferred has been outstanding) calculated quarterly in arrears on a pro rata basis to the holders of Series A Preferred, commencing with the first full calendar quarter following the date that the Series A Preferred is initially issued (each, an “EBT Payment,” and collectively, the “EBT Payments”). The EBT Payments are payable, on or before the date that is 90 days following the end of each calendar quarter (each a “Payment Date”) to the extent authorized and declared by the Board of Directors of the Company, out of any funds legally available therefor. As a result, assuming the Tranche 2 Series A Preferred shares are sold, each Series A Preferred share will receive 0.000015% (30% / 2,000,000 = 0.000015% per share) of the Company’s quarterly EBT. “EBT” means earnings before taxes as determined in accordance with U.S. generally accepted accounting principles (“GAAP”), as reasonably determined by the Board of Directors on a quarterly basis. To the extent any upward or downward adjustments to a prior period’s EBT as calculated by the Company are made by the Company in subsequent accounting periods, the next EBT Payment due and payable to the holders of Series A Preferred shall be adjusted accordingly.

To the extent the Company is not legally able to pay any EBT Payment by the Payment Date, or such payment is not authorized and declared by the Board of Directors of the Company, the amount of such unpaid (or undeclared) EBT Payments shall remain outstanding and accrue interest at the rate of 5% per annum until paid in full (“Accrued EBT Payments”).

Liquidation Preference . In the event of any Liquidity Event (defined below), each holder of a share of Series A Preferred is entitled to receive, subject to the prior preferences and other rights of any class or series of stock of the Company ranking in the case of a Liquidity Event senior to the Series A Preferred, but prior and in preference to any distribution of any of the assets or surplus funds of the Company to holders of common stock or any other class or series of stock of the Company ranking in the case of a Liquidity Event junior to the Series A Preferred, as to the distribution of assets upon any Liquidity Event, by reason of their ownership of such stock, an amount equal to $2.50 per share (as adjusted for any stock dividends, combinations or splits with respect to such shares) together with any Accrued EBT Payments (the “Preference Amount”). Following the payment of the Preference Amount to holders of shares of Series A Preferred and all amounts owing to holders of each class or series of capital stock of the Company having a preference or priority over the common stock as to distributions upon the liquidation, dissolution or winding up of the Company, then the holders of shares of Series A Preferred are entitled to participate, with the holders of the common stock and with the holders of any other securities of the Company entitled to participate, pro rata, based upon the number of shares of common stock into which the shares of Series A Preferred are then convertible, as to any amounts remaining for distribution to the holders of common stock upon a Liquidity Event.

A “Liquidity Event” means (i) any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary (a “Liquidation”) or (ii) any sale, merger, consolidation, reorganization or other transaction which results in a Change of Control. A “Change of Control” means a reorganization, consolidation or merger of the Company with or into any other corporation or corporations (other than a wholly-owned subsidiary), or the sale, transfer, liquidation or other disposition of all or substantially all of the assets of the Company, or the consummation of any transaction or series of related transactions, in each case which results in the Company’s stockholders immediately prior to such transaction or series of related transactions, holding less than fifty percent (50%) of the voting power of the entity surviving or continuing (including the Company or the entity owning all or substantially all of the assets of the Company) following such transaction or series of related transactions; provided a Change of Control shall not apply to a merger effected solely for the purposes of changing the domicile of the Company or public offerings of common stock.

Conversion Rights . Each share of Series A Preferred (and any Accrued EBT Payments) are convertible, at the option of the holder thereof (an “Optional Conversion”), at any time into that number of shares of common stock determined (i) by multiplying the number of shares of Series A Preferred subject to conversion, by the Series A Conversion Rate (defined below) divided by the Conversion Value (defined below)(initially, a conversion ratio of 1-for-1), and (ii) the total Accrued EBT Payments desired to be converted divided by the Conversion Value, rounded up to the nearest whole share ((i) and (ii), the “Conversion Ratios”).

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Additionally, each share of Series A Preferred, and all Accrued EBT Payments are to be automatically converted into common stock on the Trigger Date (defined below) pursuant to the Conversion Ratios. “Trigger Date” means the date on which the Company has distributed an aggregate of $2.50 in EBT Payments per share of Series A Preferred Stock.

The “Series A Conversion Rate” means $2.50 and “Conversion Value” initially means $2.50, each subject to equitable adjustment in the event of stock splits. However, if at any time during the first six months from the first issuance date of any shares of Series A Preferred the Company sells or grants any option to purchase or sells or grants any right to reprice, or otherwise disposes of or issues (or announces any sale, grant or any option to purchase or other disposition), any common stock or common stock equivalents entitling any person to acquire shares of common stock at an effective price per share that is lower than the then Conversion Value (such lower price, the “Base Conversion Price” and such issuances, collectively, a “Dilutive Issuance”), then, unless such transaction is an Exempt Issuance, simultaneously with the consummation (or, if earlier, the announcement) of each Dilutive Issuance the Conversion Value shall be reduced to equal the Base Conversion Price. Notwithstanding the above, in no event will the Base Conversion Price be less than $1.00 (as adjusted for any stock dividends, combinations or splits with respect to such shares).

“Exempt Issuance” means the issuance of (i) shares of common stock or options to employees, officers, consultants or directors of the Company pursuant to any stock or option plan duly adopted by a majority of the non-employee members of the Board of Directors of the Company or a majority of the members of a committee of non-employee directors established for such purpose, (ii) securities upon the exercise or exchange of or conversion of any shares of Series A Preferred or any securities exercisable or exchangeable for or convertible into shares of common stock issued and outstanding on the date of first issuance of shares of Series A Preferred, provided that such securities have not been amended since such date to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of any such securities or to extend the term of such securities, and (iii) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company, provided, that any such issuance shall only be to a person (or to the equityholders of a person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities.

Redemption Rights . None.

Transfer Agent, Registrar and Warrant Agent

Our transfer agent, registrar and warrant agent is Issuer Direct Corporation. Their phone number is (919) 481-4000.

Anti-Takeover Effects of Our Certificate of Incorporation and Bylaws

The provisions of our Second Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws summarized below may have an anti-takeover effect and may delay, defer or prevent a tender offer or takeover attempt that you might consider in your best interest, including an attempt that might result in your receipt of a premium over the market price for your shares. These provisions are also designed, in part, to encourage persons seeking to acquire control of us to first negotiate with our Board of Directors, which could result in an improvement of their terms.

Authorized but Unissued Shares of Common Stock. Shares of our authorized and unissued common stock are available for future issuances without additional stockholder approval. While the additional shares are not designed to deter or prevent a change of control, under some circumstances we could use the additional shares to create voting impediments or to frustrate persons seeking to affect a takeover or otherwise gain control by, for example, issuing those shares in private placements to purchasers who might side with our Board of Directors in opposing a hostile takeover bid.

Authorized but Unissued Shares of Preferred Stock. Under our Second Amended and Restated Certificate of Incorporation, our Board of Directors has the authority, without further action by our stockholders, to issue up to 10,000,000 shares of preferred stock in one or more series and to fix the voting powers, designations, preferences and the relative participating, optional or other special rights and qualifications, limitations and restrictions of each series, including dividend rights, dividend rates, conversion rights, voting rights, terms of redemption, liquidation preferences and the number of shares constituting any series. The existence of authorized but unissued preferred stock could reduce our attractiveness as a target for an unsolicited takeover bid since we could, for example, issue shares of preferred stock to parties who might oppose such a takeover bid or shares that contain terms the potential acquirer may find unattractive. This may have the effect of delaying or preventing a change of control, may discourage bids for the common stock at a premium over the market price of the common stock, and may adversely affect the market price of, and the voting and other rights of the holders of, our common stock.

Classified Board of Directors. In accordance with the terms of our Second Amended Certificate of Incorporation, our Board of Directors is divided into three classes, Class I, Class II, and Class III, with members of each class serving staggered three-year terms. Under our Second Amended and Restated Certificate of Incorporation, our Board of Directors consists of such number of directors as may be determined from time to time by resolution of the Board of Directors, but in no event may the number of directors be less than one or more than fifteen. Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors. Our Second Amended and Restated Certificate of Incorporation provides that any vacancy on our board of directors, including a vacancy resulting from an enlargement of our board of directors, may be filled only by the affirmative vote of a majority of our directors then in office, even if less than a quorum, or by a sole remaining director. Any director elected to fill a vacancy will hold office until such director’s successor shall have been duly elected and qualified or until such director’s earlier death, resignation, or removal. Our classified Board of Directors could have the effect of delaying or discouraging an acquisition of us or a change in our management.

Removal of Directors. Our Amended and Restated Bylaws provide that directors may be removed only for cause and upon the affirmative vote of holders of at least a majority of the outstanding shares of common stock then entitled to vote at an election of directors.

Special Meetings of Stockholders. Our Amended and Restated Bylaws provide that a special meeting of stockholders may be called only by (i) the Chief Executive Officer or President of the Company; (ii) an officer of the Company other than the Chief Executive Officer or President pursuant to a resolution adopted by a majority of the directors then in office, or (iii) the Chairperson of the Board (if any).

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Stockholder Advance Notice Procedure. Our Amended and Restated Bylaws establish an advance notice procedure for stockholders to make nominations of candidates for election as directors or to bring other business before an annual meeting of our stockholders. The Amended and Restated Bylaws provide that any stockholder wishing to nominate persons for election as directors at, or bring other business before, an annual meeting must deliver to our corporate secretary a written notice of the stockholder’s intention to do so. These provisions may have the effect of precluding the conduct of certain business at a meeting if the proper procedures are not followed. We expect that these provisions may also discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of our company. To be timely, the stockholder’s notice must be delivered to our corporate secretary at our principal executive offices not less than 90 days nor more than 120 days before the first anniversary date of the annual meeting for the preceding year; provided, however, that in the event that the annual meeting is set for a date that is more than 30 days before or more than 60 days after the first anniversary date of the preceding year’s annual meeting, a stockholder’s notice must be delivered to our corporate secretary (x) not less than 90 days prior to the meeting or (y) no later than the close of business on the 10th day following the day on which a public announcement of the date of the meeting is first made by us.

Action by Written Consent. Any action required or permitted to be taken by our common stockholders may be affected by written consent of the stockholders having not less than the minimum percentage of the vote required by DGCL for the proposed corporate action.

Vacancies on the Board of Directors. Our Second Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws provide that, subject to the rights of the holders of any outstanding series of preferred stock and unless otherwise required by law or resolution of our board of directors, vacancies on the board of directors arising through death, resignation, retirement, disqualification or removal, an increase in the number of directors or otherwise may be filled by a majority of the directors then in office, though less than a quorum.

Amendment to Amended and Restated Bylaws by Stockholders. Subject to certain limitations preventing amendments which decrease or diminish indemnification rights provided for in our Bylaws, our Second Amended and Restated Certificate of Incorporation and Bylaws provide that any amendment to such Amended and Restated Bylaws undertaken solely by our stockholders requires the affirmative vote of at least  sixty-six and two-third percent (66 2/3%) of the voting power of all the then-outstanding shares of capital stock of the Corporation entitled to vote thereon.

Supermajority Approval Required For Certain Amendments to the Second Amended and Restated Certificate of Incorporation. Our Second Amended and Restated Certificate of Incorporation provides that in addition to any vote of the holders of any class or series of the stock of the Company required by law or by the Certificate of Incorporation, as amended, the affirmative vote of the holders of at least sixty-six and two-thirds percent (66-2/3%) of the voting power of all of the then outstanding shares of the capital stock of the Company entitled to vote generally in the election of directors, voting together as a single class, shall be required to amend or repeal the provisions of the Second Amended and Restated Certificate of Incorporation (a) dealing with the supermajority amendment requirement; or (b) relating to the number of the directors of the Company, the Classes of directors, the terms of office of directors, vacancies on the Board of Directors and the removal of directors.

Forum selection clause. Our Second Amended and Restated Certificate of Incorporation provides that unless the Company consents in writing to the selection of an alternative forum (an “Alternative Forum Consent”), the Court of Chancery of the State of Delaware is the sole and exclusive forum for: (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim for breach of a fiduciary duty owed by any current or former director, officer, employee or stockholder of the Company to the Company or the Company’s stockholders, (iii) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law (the “DGCL”), the certificate of incorporation or the bylaws of the Company, each as amended, or (iv) any action asserting a claim governed by the internal affairs doctrine; provided, however, that, in the event that the Court of Chancery of the State of Delaware lacks subject matter jurisdiction over any such action or proceeding, the sole and exclusive forum for such action or proceeding shall be another state or federal court located within the State of Delaware, in each such case, unless the Court of Chancery (or such other state or federal court located within the State of Delaware, as applicable) has dismissed a prior action by the same plaintiff asserting the same claims because such court lacked personal jurisdiction over an indispensable party named as a defendant therein.

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The preceding provisions would not however apply to suits brought to enforce a duty or liability created by the Securities Act, the Exchange Act, or any other claim for which the U.S. federal courts have exclusive jurisdiction. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder and Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act, and an investor cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Notwithstanding the above, to prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our Second Amended and Restated Certificate of Incorporation provides that unless the Company gives an Alternative Forum Consent, the U.S. federal district courts will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act and that the exclusive forum provisions do not apply to suits brought to enforce a duty or liability created by the Securities Act, the Exchange Act, or any other claim for which the federal courts have exclusive jurisdiction. However, there is uncertainty as to whether a court would enforce such a provision. While the Delaware courts have determined that such choice of forum provisions are facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions. In such instance, we would expect to vigorously assert the validity and enforceability of the exclusive forum provisions of our Second Amended and Restated Certificate of Incorporation. This may require significant additional costs associated with resolving such action in other jurisdictions and there can be no assurance that the provisions will be enforced by a court in those other jurisdictions.

These exclusive forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage lawsuits against us and our directors, officers, and other employees. If a court were to find either exclusive-forum provision in our vigorously assert the validity and enforceability to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with resolving the dispute in other jurisdictions, all of which could seriously harm our business. See “Risk Factors— Risks Associated with Our Governing Documents and Delaware Law—Our Second Amended and Restated Certificate of Incorporation contain exclusive forum provisions that may discourage lawsuits against us and our directors and officers.”

Anti-Takeover Effects Under Section 203 of Delaware General Corporation Law

Section 203 of Delaware General Corporation Law prohibits a Delaware corporation from engaging in any business combination with any interested stockholder for a period of three years after the date that such stockholder became an interested stockholder, with the following exceptions:

■ before such date, the Board of Directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder;

■ upon completion of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85 percent of the voting stock of the corporation outstanding at the time the transaction began, excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned (i) by persons who are directors and also officers and (ii) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or an exchange offer; or

■ on or after such date, the business combination is approved by our Board of Directors and authorized at an annual or a special meeting of the stockholders, and not by written consent, by the affirmative vote of at least 66 2/3 percent of the outstanding voting stock that is not owned by the interested stockholder.

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In general, Section 203 defines “business combination” to include the following:

■ any merger or consolidation involving the corporation or any direct or indirect majority owned subsidiary of the corporation and the interested stockholder or any other corporation, partnership, unincorporated association, or other entity if the merger or consolidation is caused by the interested stockholder and as a result of such merger or consolidation the transaction is not excepted as described above;

■ any sale, transfer, pledge, or other disposition (in one transaction or a series) of 10% or more of the assets of the corporation involving the interested stockholder;

■ subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder;

■ any transaction involving the corporation that has the effect of increasing the proportionate share of the stock or any class or series of the corporation beneficially owned by the interested stockholder; or

■ the receipt by the interested stockholder of the benefit of any loss, advances, guarantees, pledges, or other financial benefits by or through the corporation.

In general, Section 203 defines an “interested stockholder” as an entity or a person who, together with the person’s affiliates and associates, beneficially owns, or within three years prior to the time of determination of interested stockholder status did own, 15 percent or more of the outstanding voting stock of the corporation.

A Delaware corporation may “opt out” of these provisions with an express provision in its original certificate of incorporation or an express provision in its certificate of incorporation or bylaws resulting from a stockholders’ amendment approved by at least a majority of the outstanding voting shares. We have opted out of these provisions. As a result, mergers or other takeover or change in control attempts of us will not be limited by Section 203 of Delaware law.

Warrants and Options

As of the date of this prospectus we have no outstanding warrants or options.

Limitations on Liability and Indemnification of Officers and Directors

Our Second Amended and Restated Certificate of Incorporation (“Certificate of Incorporation”) provides that all of our directors, officers, employees and agents shall be entitled to be indemnified by us to the fullest extent permitted by Section 145 of the Delaware General Corporation Law (“DGCL”). Section 145 of the DGCL concerning indemnification of officers, directors, employees and agents is set forth below.

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Section 145. Indemnification of officers, directors, employees and agents; insurance.

(a) A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person’s conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the person’s conduct was unlawful.

(b)	A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys’ fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.
(c)	To the extent that a present or former director or officer of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (a) and (b) of this section, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith.
(d)	Any indemnification under subsections (a) and (b) of this section (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the present or former director, officer, employee or agent is proper in the circumstances because the person has met the applicable standard of conduct set forth in subsections (a) and (b) of this section. Such determination shall be made, with respect to a person who is a director or officer of the corporation at the time of such determination (1) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum; or (2) by a committee of such directors designated by majority vote of such directors, even though less than a quorum; or (3) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion; or (4) by the stockholders.
(e)	Expenses (including attorneys’ fees) incurred by an officer or director of the corporation in defending any civil, criminal, administrative or investigative action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation as authorized in this section. Such expenses (including attorneys’ fees) incurred by former directors and officers or other employees and agents of the corporation or by persons serving at the request of the corporation as directors, officers, employees or agents of another corporation, partnership, joint venture, trust or other enterprise may be so paid upon such terms and conditions, if any, as the corporation deems appropriate.

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(f)	The indemnification and advancement of expenses provided by, or granted pursuant to, the other — subsections of this section shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office. A right to indemnification or to advancement of expenses arising under a provision of the Certificate of Incorporation or a bylaw shall not be eliminated or impaired by an amendment to the Certificate of Incorporation or the bylaws (as amended and restated) after the occurrence of the act or omission that is the subject of the civil, criminal, administrative or investigative action, suit or proceeding for which indemnification or advancement of expenses is sought, unless the provision in effect at the time of such act or omission explicitly authorizes such elimination or impairment after such action or omission has occurred.
(g)	A corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the corporation would have the power to indemnify such person against such liability under this section.
(h)	For purposes of this section, references to “the corporation” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this section with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued.
(i)	For purposes of this section, references to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to any employee benefit plan; and references to “serving at the request of the corporation” shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the corporation” as referred to in this section.
(j)	The indemnification and advancement of expenses provided by, or granted pursuant to, this section shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.
(k)	The Court of Chancery is hereby vested with exclusive jurisdiction to hear and determine all actions for advancement of expenses or indemnification brought under this section or under any bylaw, agreement, vote of stockholders or disinterested directors, or otherwise. The Court of Chancery may summarily determine a corporation’s obligation to advance expenses (including attorneys’ fees).

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In accordance with Section 102(b)(7) of the DGCL, our Certificate of Incorporation provides that no director (or such other person or persons, if any, who exercise or perform any of the powers or duties otherwise conferred or imposed upon the board of directors) or officer (including the president, chief executive officer, chief operating officer, chief financial officer, chief legal officer, controller, treasurer or chief accounting officer, if any, and each person other than the above which is or was identified in the Company’s public filings with the SEC because such person is or was one of the most highly compensated executive officers of the Company at any time during the course of conduct alleged in the action or proceeding to be wrongful) shall be personally liable to us or any of our stockholders for monetary damages resulting from breaches of his or her fiduciary duty as a director or officer, as applicable, except to the extent such limitation on or exemption from liability is not permitted under the DGCL or unless he or she violated his or her duty of loyalty to us or our stockholders, acted in bad faith, knowingly or intentionally violated the law, authorized unlawful payments of dividends (as to directors only), unlawful stock purchases or unlawful redemptions (as to directors only), or derived improper personal benefit from his or her action as a director or officer. The effect of this provision of our Certificate of Incorporation is to eliminate our rights and those of our stockholders (through stockholders’ derivative suits on our behalf) to recover monetary damages against a director or officer for breach of the fiduciary duty of care as a director or officer, as applicable, including breaches resulting from negligent or grossly negligent behavior, except as restricted by Section 102(b) of the DGCL. However, this provision does not limit or eliminate our rights or the rights of any stockholder to seek non-monetary relief, such as an injunction or rescission, in the event of a breach of a director’s duty of care. This also does not limit the liability of an officer in any action by or in the right of the corporation. Additionally, this provision in our Certificate of Incorporation does not eliminate or limit the liability of a director or officer for any act or omission occurring prior to the date when such provision became effective.

If the DGCL is amended to authorize corporate action further eliminating or limiting the liability of directors, then, in accordance with our Certificate of Incorporation, the liability of our directors and officers to us or our stockholders will be eliminated or limited to the fullest extent authorized by the DGCL, as so amended. Any repeal or amendment of provisions of our Certificate of Incorporation limiting or eliminating the liability of directors, whether by our stockholders or by changes in law, or the adoption of any other provisions inconsistent therewith, will (unless otherwise required by law) be prospective only, except to the extent such amendment or change in law permits us to further limit or eliminate the liability of directors on a retroactive basis.

Our Certificate of Incorporation also provides that we will, to the fullest extent authorized or permitted by applicable law, indemnify our current and former officers and directors, as well as those persons who, while directors or officers of our corporation, are or were serving as directors, officers, employees or agents of another entity, trust or other enterprise, including service with respect to an employee benefit plan, in connection with any threatened, pending or completed proceeding, whether civil, criminal, administrative or investigative, against all expense, liability and loss (including, without limitation, attorneys’ fees, judgments, fines, ERISA excise taxes and penalties and amounts paid in settlement) reasonably incurred or suffered by any such person in connection with any such proceeding. Notwithstanding the foregoing, a person eligible for indemnification pursuant to our Certificate of Incorporation will be indemnified by us in connection with a proceeding initiated by such person only if such proceeding was authorized by our board of directors, except for proceedings to enforce rights to indemnification and advancement of expenses.

The right to indemnification conferred by our Certificate of Incorporation is a contract right that includes the right to be paid by us the expenses incurred in defending or otherwise participating in any proceeding referenced above in advance of its final disposition, provided, however, that if the DGCL requires, an advancement of expenses incurred by our officer or director (solely in the capacity as an officer or director of our corporation) will be made only upon delivery to us of an undertaking, by or on behalf of such officer or director, to repay all amounts so advanced if it is ultimately determined that such person is not entitled to be indemnified for such expenses under our Certificate of Incorporation or otherwise.

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The rights to indemnification and advancement of expenses will not be deemed exclusive of any other rights which any person covered by our Certificate of Incorporation may have or hereafter acquire under law, our Certificate of Incorporation, our bylaws (as amended and restated), an agreement, vote of stockholders or disinterested directors, or otherwise.

Any repeal or amendment of provisions of our Certificate of Incorporation affecting indemnification rights, whether by our stockholders or by changes in law, or the adoption of any other provisions inconsistent therewith, will (unless otherwise required by law) be prospective only, except to the extent such amendment or change in law permits us to provide broader indemnification rights on a retroactive basis, and will not in any way diminish or adversely affect any right or protection existing at the time of such repeal or amendment or adoption of such inconsistent provision with respect to any act or omission occurring prior to such repeal or amendment or adoption of such inconsistent provision. Our Certificate of Incorporation will also permit us, to the extent and in the manner authorized or permitted by law, to indemnify and to advance expenses to persons other than those specifically covered by our Certificate of Incorporation.

Our Bylaws as amended and restated (“Bylaws”) include the provisions relating to advancement of expenses and indemnification rights consistent with those set forth in our Certificate of Incorporation. In addition, our Bylaws provide for a right of indemnitee to bring a suit in the event a claim for indemnification or advancement of expenses is not paid in full by us within a specified period of time. Our Bylaws also permit us to purchase and maintain insurance, at our expense, to protect us and/or any director, officer, employee or agent of our corporation or another entity, trust or other enterprise against any expense, liability or loss, whether or not we would have the power to indemnify such person against such expense, liability or loss under the DGCL.

Any repeal or amendment of provisions of our Bylaws affecting indemnification rights, whether by our board of directors, stockholders or by changes in applicable law, or the adoption of any other provisions inconsistent therewith, will (unless otherwise required by law) be prospective only, except to the extent such amendment or change in law permits us to provide broader indemnification rights on a retroactive basis, and will not in any way diminish or adversely affect any right or protection existing thereunder with respect to any act or omission occurring prior to such repeal or amendment or adoption of such inconsistent provision.

We have entered into indemnification agreements with each of our officers and directors. These agreements require us to indemnify these individuals to the fullest extent permitted under applicable law against liabilities that may arise by reason of their service to us, and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified.

Listing

We  plan to apply to list our common stock on The Nasdaq Capital Market under the symbol “LEC”.

SHARES ELIGIBLE FOR FUTURE SALE

Future sales of substantial amounts of common stock in the public market after this offering could adversely affect market prices prevailing from time to time and could impair our ability to raise capital through the sale of our equity securities. We are unable to estimate the number of shares of common stock that may be sold in the future.

Prior to this offering, there has been no active market for our common stock. Future sales of substantial amounts of our common stock in the public market could adversely affect market prices prevailing from time to time.

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Upon completion of this offering, assuming an offering size of shares of common stock and an initial public offering price equal to $4.00 (the midpoint of the estimated price range set forth on the cover of this prospectus), and the issuance of 733,334 shares of restricted common stock to the officer (433,334 shares) and three non-employee directors (100,000 shares) of the Company as discussed in greater detail under “Security Ownership of Certain Beneficial Owners and Management—Equity Compensation Plan Information”, we will have outstanding an aggregate of 15,745,713 shares of common stock. Of these outstanding shares of common stock, the 1,200,000 shares of common stock sold in this offering and the 3,656,475 shares being registered pursuant to the Resale Prospectus will be freely transferable without restriction or registration under the Securities Act, except for any shares purchased by any of our existing “affiliates,” as that term is defined in Rule 144 under the Securities Act and 733,334 shares will be issued under the 2022 Equity Incentive Plan, which is planned to be registered on a Form S-8 Registration Statement shortly after this registration statement is declared effective by the SEC. The remaining 10,152,738 shares of common stock are “restricted securities” as defined in Rule 144. Restricted securities may be sold in the public market only if registered or if they qualify for an exemption from registration under Rules 144 or 701 of the Securities Act, as described below. As a result of the contractual 180-day lock-up period described below and the provisions of Rules 144 and 701, these shares will be available for sale in the public market as follows:

Number of Shares	Date
4,856,475	On the date of this prospectus.
1,750,758	At 90 days from the date of this prospectus .(£).
8,351,980	At or after 180 days* from the date of this prospectus .(*)

* This 180 day period corresponds to the end of the lock-up period described below under “Underwriting.”

£ An additional 50,000 shares of common stock will be eligible for sale pursuant to Rule 144 in September 2024.

Rule 144

In general, under Rule 144, beginning 90 days after this offering, a person, or persons whose shares are aggregated, other than any affiliate of ours, who owns shares that were purchased from us or any affiliate of ours at least six months previously, is entitled to sell such shares as long as current public information about us is available. In addition, our affiliates who own shares that were purchased from us or any affiliate of ours at least six months previously are entitled to sell within any three-month period a number of shares that does not exceed the greater of (1) one percent of our then-outstanding shares of common stock, which will equal approximately 157,457 shares immediately after this offering, and (2) the average weekly trading volume of our common stock on the Nasdaq during the four calendar weeks preceding the filing of a notice of the sale on Form 144, or, if no such notice is required, the date of the receipt of the order to execute the sale. Sales under Rule 144 by our affiliates are also subject to manner of sale provisions, notice requirements in specified circumstances and the availability of current public information about us.

Furthermore, under Rule 144, a person who is not deemed to have been one of our affiliates at any time during the three months preceding a sale, and who owns shares within the definition of “restricted securities” under Rule 144 that were purchased from us, or any affiliate, at least one year previously, would be entitled to sell shares under Rule 144 without regard to the volume limitations, manner of sale provisions, public information requirements or notice requirements described above.

We are unable to estimate the number of shares that will be sold under Rule 144 since this will depend on the market price for our common stock, the personal circumstances of the stockholder and other factors.

Rule 701

In general, under Rule 701, any of our employees, directors, officers, consultants or advisors who purchased shares from us in connection with a compensatory stock or option plan or other written agreement before the effective date of this offering is entitled to resell such shares 90 days after the effective date of this offering in reliance on Rule 144, without having to comply with the holding period requirement or other restrictions contained in Rule 144.

The SEC has indicated that Rule 701 will apply to typical stock options granted by an issuer before it becomes subject to the reporting requirements of the Exchange Act, along with the shares acquired upon exercise of such options, including exercises after the date of this prospectus.

None of our outstanding shares of common stock were issued in consideration for compensation.

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Stock Options and Warrants; Stock Plan

As of the date of this prospectus we have no outstanding warrants or options.

Promptly following the effectiveness of the registration statement of which this registration statement forms a part, we plan to file a Form S-8 Registration Statement, which will become effective immediately upon filing, to register the 3,089,803 shares of common stock available for awards under our 2022 Equity Incentive Plan (see “Executive and Director Compensation— 2022 Equity Incentive Plan“, above), and thereafter we plan to award Mr. Michael L. Peterson, the Chief Executive Officer, President and Director of the Company an aggregate of 433,334 restricted stock shares, as discussed in greater detail above under “Executive and Director Compensation—Employment Agreements” and each of our non-executive directors other than Mr. Ingriselli, a total of 100,000 shares of restricted common stock (300,000 in aggregate), which will vest over three years. Subject to any vesting requirements, these shares registered on Form S-8 will be eligible for resale in the public markets without restriction, subject to Rule 144 limitations applicable to affiliates, upon issuance/award in the future, subject to the lock-up described below.

Lock-Up Agreements

Upon completion of this offering all of our directors and executive officers and the holders of 5% percent or greater of our capital stock will have signed lock-up agreements that prevent them from selling any shares of our common stock or any securities convertible into or exercisable or exchangeable for shares of our common stock, subject to certain exceptions, for a period of not less 180 days from the date of this prospectus without the prior written consent of the underwriter. The underwriter may in its sole discretion and at any time without notice release some or all of the shares subject to lock-up agreements prior to the expiration of the period. When determining whether or not to release shares from the lock-up agreements, the underwriter will consider, among other factors, the stockholder’s reasons for requesting the release, the number of shares for which the release is being requested and market conditions at the time.

Selling Stockholder Resale Prospectus

As described in the Explanatory Note to the registration statement of which this prospectus forms a part, the registration statement also contains the Resale Prospectus to be used in connection with the potential resale by certain selling stockholders of our common stock. These shares of common stock have been registered to permit public resale of such shares, and the selling stockholders may offer the shares for resale from time to time pursuant to the Resale Prospectus. The selling stockholders may also sell, transfer or otherwise dispose of all or a portion of their shares in transactions exempt from the registration requirements of the Securities Act or pursuant to another effective registration statement covering those shares. No sales of the shares covered by the Resale Prospectus shall occur until the common stock sold in our initial public offering begin trading on the Nasdaq Capital Market. Thereafter, any sales will occur at prevailing market prices or in privately negotiated prices.

UNDERWRITING

In connection with this offering, we expect to enter an underwriting agreement with Spartan Capital Securities, LLC (the “underwriter”), with respect to the securities being sold in this offering. Under the terms and subject to the conditions contained in the underwriting agreement, the underwriter has agreed to purchase, and we have agreed to sell to the underwriter, at the public offering price per share less the underwriting discounts and commissions set forth on the cover page of this prospectus, the number of shares of common stock set forth opposite its name in the following table.

Underwriter	Number of Shares
Spartan Capital Securities, LLC.
Total

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The shares of common stock sold by the underwriter to the public will initially be offered at the initial public offering price set forth on the cover page of this prospectus. Any shares of common stock sold by the underwriter to securities dealers may be sold at a discount from the initial public offering price not to exceed $[●] per share. If all of the shares are not sold at the initial offering price, the underwriter may change the offering price and the other selling terms. The underwriter has advised us that it does not intend to make sales to discretionary accounts. The underwriting agreement will provide that the obligations of the underwriter to pay for and accept delivery of the shares of common stock are subject to the passing upon certain legal matters by counsel and certain conditions such as confirmation of the accuracy of representations and warranties by us about our financial condition and operations and other matters. The obligation of the underwriter to purchase the shares of common stock is conditioned upon the Company receiving approval to list the shares of common stock for trading on The Nasdaq Capital Market.

The underwriting agreement provides that the underwriters are obligated to purchase all of the shares of common stock offered by this prospectus if any of the shares are purchased.

Over-Allotment Option

If the underwriter sells more shares of common stock than the total number set forth in the table above, we have granted to the underwriter an option, exercisable one or more times in whole or in part, not later than 45 days after the date of this prospectus, to purchase up to 180,000 additional shares of common stock at the public offering price less the underwriting discounts and commissions set forth on the cover page of this prospectus, constituting 15% of the total number of shares of common stock to be offered in this offering (excluding shares subject to this option). The underwriter may exercise this option solely for the purpose of covering over-allotments in connection with this offering. This offering is being conducted on a firm commitment basis. Any shares of common stock issued or sold under the option will be issued and sold on the same terms and conditions as the other shares of common stock that are the subject of this offering. If this option is exercised in full, the total proceeds to us will be $[●], before deduction of underwriting discounts and estimated offering expenses.

Discounts and Commissions; Expenses

The following table summarizes the public offering price and the underwriting discounts and commissions payable to the underwriters by us in connection with this offering (assuming both the exercise in full and non-exercise of the over-allotment option that we have granted to the underwriter):

	Per Share		Total
	Without Over- Allotment	With Over- Allotment	Without Over- Allotment	With Over- Allotment
Public offering price	$	$	$	$
Underwriting discount payable by us (8.0%)(1)	$	$	$	$
Non-accountable expense payable by us	$	$	$	$
Proceeds, before expenses, to us	$	$	$	$

(1) Does not include (i) the warrant to purchase a number of shares of common stock equal to 5% of the number of shares sold in the offering, or (ii) amounts representing reimbursement of certain out-of-pocket expenses, each as described below.

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We have agreed to pay the underwriter a non-accountable expense allowance equal to 1.0% of the total gross proceeds of the Offering. We have also agreed to pay all expenses relating to the offering, including: (a) all filing fees and expenses relating to the registration of the securities with the Commission; (b) all fees and expenses relating to the listing of the common stock on Nasdaq; (c) all fees associated with the review of the offering by FINRA; (d) all fees, expenses and disbursements relating to the registration, qualification or exemption of shares offered under “blue sky” securities laws or the securities laws of foreign jurisdictions designated by the underwriter, including the reasonable fees and expenses of the underwriter’s blue sky counsel; (e) all fees, expenses and disbursements relating to the registration, qualification or exemption of the shares under the securities laws of such foreign jurisdictions; (f) the costs of mailing and printing the offering materials; (g) transfer and/or stamp taxes, if any, payable upon our transfer of the shares to the underwriter; and (h) the fees and expenses of our accountants and legal counsel; and (i) actual accountable expenses of the underwriter not to exceed $125,000, which amount includes expenses for the underwriter’s legal counsel. In addition, we have agreed to pay for the use of a third-party electronic road show service. Any advance payments made to the underwriter will be returned to us to the extent any portion of the advance is not actually incurred, in accordance with FINRA Rule 5110(g)(4)(A).

Discretionary Accounts

The underwriter does not intend to confirm sales of the securities offered hereby to any accounts over which it has discretionary authority.

Underwriter’s Warrants

We have agreed to issue to the underwriter (or its designed affiliates) warrants (the “Underwriter’s Warrants”) to purchase shares of Common Stock equal to total of 5% of the shares of the common stock sold in this offering. The Underwriter’s Warrants will be exercisable at any time and from time to time, in whole or in part, during the four-year six (6) month period commencing on the date that is six months from the commencement of the sales of the offering under the registration statement, subject to resale restrictions under applicable securities laws and regulations. The Underwriter’s Warrants will be exercisable at a price equal to $[____________], 110% of the public offering price per share of common stock in connection with this offering. The Underwriter’s Warrants shall not be redeemable. The Company has registered the shares of common stock underlying the Underwriter’s Warrants under the Securities Act in this offering. The Underwriter’s Warrants may not be sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the securities by any person for a period of 180 days following the commencement of sales under the registration statement of which this prospectus forms a part, except that they may be assigned, in whole or in part, to any officer or partner of the underwriter. The Underwriter’s Warrants provide for cashless exercise in the event an effective registration statement for the shares of Common Stock issuable upon exercise of the Underwriter’s Warrants is not available. Furthermore, the Underwriter’s Warrants have piggyback registration rights with a duration of five years from the commencement of sales of the public offering in compliance with FINRA Rule 5110(g)(8)(D).

The registration statement, of which this prospectus is a part, also registers for sale the 69,000 shares of common stock underlying the Underwriter’s Warrants that we intend to issue to the Underwriter in connection with this offering (which represents the maximum number of shares underlying such warrants issuable to the representative of the underwriters in the event the underwriter’s over-allotment option is exercised).

Right of First Refusal

For the period of twelve (12) months from after the closing of the offering, we have granted the underwriter a right of first refusal to act as the sole book-runner, sole underwriter or sole placement agent or financial advisor, with respect to (a) any transaction pursuant to which we will dispose of or acquire business units or acquire any of our outstanding securities or make any exchange or tender offer or enter into a merger, consolidation or other business combination or any recapitalization, reorganization, restructuring or other similar transaction, including without limitation, an extraordinary dividend or distribution or a spin-off or split-off, and in the event the Company decides to retain a financial advisor for such transaction, or (b) if we decide to finance or refinance any indebtedness using a a manager or agent; or (c) we decide to raise funds by means of a public offering (including through an at-the-market facility) or a private placement or any other capital-raising financing of equity, equity-linked or debt securities using an underwriter or a placement agent.

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Determination of Offering Price

Before this offering, there has been no public market for our common stock. Accordingly, the public offering price will be negotiated between us and the underwriter. Among the factors to be considered in these negotiations are:

· the information set forth in this prospectus and otherwise available to the underwriter;

· the prospects for our Company and the industry in which we operate;

· an assessment of our management;

· our past and present financial and operating performance;

· our prospects for future earnings;

· financial and operating information and market valuations of publicly traded companies engaged in activities similar to ours;

· the prevailing conditions of United States securities markets at the time of this offering; and

· other factors deemed relevant.

Neither we nor the underwriter can assure investors that an active trading market will develop for shares of our common stock, or that the shares will trade in the public market at or above the initial public offering price.

Lock-Up Agreements

Our executive officers, directors, employees and stockholders holding at least 5% of the outstanding shares of Common Stock have agreed not to, without the prior written consent of the underwriter, directly or indirectly, offer to sell, sell, pledge or otherwise transfer or dispose of any of shares of our common stock (or enter into any transaction or device that is designed to, or could be expected to, result in the transfer or disposition by any person at any time in the future of our common stock, enter into any swap or other derivatives transaction that transfers to another, in whole or in part, any of the economic benefits or risks of ownership of shares of Common Stock, make any demand for or exercise any right or cause to be filed a registration statement, including any amendments thereto, with respect to the registration of any shares of Common Stock or securities convertible into or exercisable or exchangeable for shares of Common Stock or any other of our securities or publicly disclose the intention to do any of the foregoing, subject to customary exceptions, for a period of one hundred eighty (180) days from the closing date of the offering.

Additionally, without the prior written consent of the underwriter, the Company has agreed, for a period of one hundred eighty (180) days from the closing date of the offering, that it will not (a) offer, sell, contact to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of capital stock of the Company or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company; (b) file or caused to be filed any registration statement with the Commission relating to the offering of any shares of capital stock of the Company; (c) complete any offering of debt securities of the Company, other than entering into a line of credit with a traditional bank; or (d) enter into any swap or other arrangement that transfers to another, in whole or part, any of the economic consequences of ownership of capital stock of the company. The above restrictions shall not apply to (i) the adoption of an equity incentive plan and the grant of awards or equity pursuant to any equity incentive plan, and the filing of a registration statement on Form S-8; (ii) securities issued or issuable upon exercise or exchange of or conversion of any securities exercisable or exchangeable for or convertible into common stock issued and outstanding on the date of the offering, or in connection therewith, provided that such securities have not been amended since the date of the closing, to increase the number of such securities or to decrease the exercise price, exchange price, or conversion price of such securities; and (iii) the issuance of equity securities in connection with an acquisition or a strategic relationship, which may include the sale of equity securities.

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Electronic Offer, Sale, and Distribution of Securities

A prospectus in electronic format may be made available on the websites maintained by the underwriter. The underwriter may agree to allocate a number of shares to underwriter and selling group members for sale to their online brokerage account holders. Internet distributions will be allocated by the underwriter and selling group members that will make internet distributions on the same basis as other allocations. Other than the prospectus in electronic format, the information on these websites is not part of, nor incorporated by reference into, this prospectus or the registration statement of which this prospectus forms a part, has not been approved or endorsed by us, and should not be relied upon by investors.

Listing

We have applied to list our common stock on the Nasdaq Capital Market under the symbol “LEC”, and previously received conditional listing approval for such listing; however, there can be no assurance that such listing approval is still effective. If our application to the Nasdaq Capital Market is not approved or we otherwise determine that we will not be able to secure the listing of the common stock on the Nasdaq Capital Market, we will not complete the offering.

Stabilization

In connection with this offering, the underwriter may engage in stabilizing transactions, over-allotment transactions, syndicate-covering transactions, penalty bids, and purchases to cover positions created by short sales.

· Stabilizing transactions permit bids to purchase securities so long as the stabilizing bids do not exceed a specified maximum and are engaged in for the purpose of preventing or retarding a decline in the market price of the securities while the offering is in progress.

· Over-allotment transactions involve sales by the underwriter of securities in excess of the number of securities the underwriter is obligated to purchase. This creates a syndicate short position which may be either a covered short position or a naked short position. In a covered short position, the number of securities over-allotted by the underwriter is not greater than the number of securities that they may purchase in the over-allotment option. In a naked short position, the number of securities involved is greater than the number of securities in the over-allotment option. The underwriter may close out any short position by exercising their over-allotment option and/or purchasing securities in the open market.

· Syndicate covering transactions involve purchases of securities in the open market after the distribution has been completed in order to cover syndicate short positions. In determining the source of securities to close out the short position, the underwriter will consider, among other things, the price of securities available for purchase in the open market as compared with the price at which they may purchase securities through exercise of the over-allotment option. If the underwriter sells more securities than could be covered by exercise of the over-allotment option and, therefore, have a naked short position, the position can be closed out only by buying securities in the open market. A naked short position is more likely to be created if the underwriter is concerned that after pricing there could be downward pressure on the price of the securities in the open market that could adversely affect investors who purchase in the offering.

· Penalty bids permit the underwriter to reclaim a selling concession from a syndicate member when the securities originally sold by that syndicate member are purchased in stabilizing or syndicate covering transactions to cover syndicate short positions.

These stabilizing transactions, over-allotment transactions, syndicate covering transactions, and penalty bids may have the effect of raising or maintaining the market price of our securities or preventing or retarding a decline in the market price of our securities. As a result, the price of our securities in the open market may be higher than it would otherwise be in the absence of these transactions. Neither we nor the underwriter make any representation or prediction as to the effect that the transactions described above may have on the price of our securities. These transactions may be affected on The Nasdaq Stock Market, in the over-the-counter market or otherwise and, if commenced, may be discontinued at any time.

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Passive Market Making

In connection with this offering, underwriter, and selling group members may engage in passive market making transactions in our securities on The Nasdaq Stock Market in accordance with Rule 103 of Regulation M under the Exchange Act, during a period before the commencement of offers or sales of the shares and extending through the completion of the distribution. A passive market maker must display its bid at a price not in excess of the highest independent bid of that security. However, if all independent bids are lowered below the passive market maker’s bid, then that bid must then be lowered when specified purchase limits are exceeded.

Certain Relationships

From time to time, the underwriter and/or its affiliates may in the future provide, various investment banking and other financial services for us for which services it may in the future receive, customary fees.

Except for the services provided in connection with this offering, the underwriter has not provided any investment banking or other financial to us.

LEGAL MATTERS

The validity of the securities offered by this prospectus will be passed upon for us by The Loev Law Firm, PC, Bellaire, Texas. David M. Loev, the Managing Partner, President and sole owner of The Loev Law Firm, PC, beneficially owns approximately 2.3% of the outstanding shares of our common stock prior to this offering. Certain legal matters in connection with this offering will be passed upon for the underwriter by Sichenzia Ross Ference Carmel LLP, New York, New York.

EXPERTS

The financial statements of Lafayette Energy Corp for the year ended December 31, 2023 and the period from February 7, 2022 (Inception) through December 31, 2022, included in this prospectus and the registration statement have been audited by BF Borgers CPA PC, Lakewood, Colorado, independent registered public accounting firm, as stated in their report dated April 24, 2024, has been so included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a registration statement on Form S-1 (File No. 333-276319) under the Securities Act, with respect to the securities offered by this prospectus. This prospectus, which is part of the registration statement, omits certain information, exhibits, schedules and undertakings set forth in the registration statement. For further information pertaining to us and our common stock, reference is made to the registration statement and the exhibits and schedules to the registration statement. Statements contained in this prospectus as to the contents or provisions of any documents referred to in this prospectus are not necessarily complete, and in each instance where a copy of the document has been filed as an exhibit to the registration statement, reference is made to the exhibit for a more complete description of the matters involved.

You may read registration statements and certain other filings made with the SEC electronically are publicly available through the SEC’s website at https://www.sec.gov. The registration statement, including all exhibits and amendments to the registration statement, has been filed electronically with the SEC. If you do not have internet access, requests for copies of such documents should be directed to Michael L. Peterson, the Company’s Chief Executive Officer, at Lafayette Energy Corp, 3450 N. Triumph Blvd., Suite 102 Lehi, Utah 84043.

Upon completion of this offering, we will become subject to the information and periodic reporting requirements of the Exchange Act and, accordingly, will file annual reports containing financial statements audited by an independent public accounting firm, quarterly reports containing unaudited financial data, current reports, proxy statements and other information with the SEC. You will be able to inspect and copy such periodic reports, proxy statements and other information at the SEC’s public reference room, and the website of the SEC referred to above.

We maintain a corporate website at www.LafayetteEnergyCorp.com (currently under construction). Information contained in, or that can be accessed through, our website does not constitute a part of this prospectus. We have included our website address in this prospectus solely as an inactive textual reference. We will post on our website any materials required to be so posted on such website under applicable corporate or securities laws and regulations.

140

INDEX TO FINANCIAL STATEMENTS

Unaudited Financial Statements  

	Page
Balance Sheets as of March 31, 2024 and 2023	F-2
Statement of Operations for the three months ended March 31, 2024 and 2023	F-3
Statements of Changes in Stockholders’  Equity for the three months ended March 31, 2024 and 2023	F-4
Statements of Cash Flows for the three months ended March 31, 2024 and 2023	F-5
Notes to Unaudited Financial Statements	F-6

Audited Financial Statements

	Page
Report of Independent Registered Public Accounting Firm	F-10
Balance Sheets as of December 31, 2023 and 2022	F-11
Statement of Operations for the year ended December 31, 2023 and the period from February 7, 2022 (Inception) through December 31, 2022	F-12
Statements of Changes in Stockholders’ Equity for the year ended December 31, 2023 and the period from February 7, 2022 (Inception) through December 31, 2022	F-13
Statements of Cash Flows for the year ended December 31, 2023 and the period from February 7, 2022 (Inception) through December 31, 2022	F-14
Notes to Audited Financial Statements	F-15

F-1

Lafayette Energy Corp
Balance Sheets
	March 31, 2024			December 31. 2023
	(Unaudited)			(Audited)
ASSETS
Current assets
Cash and cash equivalents	$	1,749,373		$	20,172
Property
Oil and gas properties - unproved		570,442			-
Other Assets
Rights		6,720,000			-
Total assets	$	9,039,815		$	20,172
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$	77,263		$	81,384
Due to officer		-			42,845
Total liabilities		77,263			124,229
Commitments and Contingencies					-
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred shares, $0.0001 par value, 10,000,000 shares authorized; Series A convertible preferred shares; 1,000,000 and 0 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively		100			-
Common shares, $0.0001 par value, 90,000,000 shares authorized; 13,812,379 and 11,074,379 shares outstanding at March 31, 2024 and December 31, 2023, 13,812,379 and 11,074,379 shares outstanding at March 31, 2024 and December 31, 2023, respectively		1,381			1,107
Additional paid in capital		11,644,090			2,274,464
Accumulated deficit		(2,683,019	)		(2,379,628	)
Total stockholders' equity (deficit)		8,962,552			(104,057	)
Total liabilities and stockholders' equity	$	9,039,815		$	20,172
The accompanying notes are an integral part of these financial statements.

F-2

Lafayette Energy Corp
Statements of Operations
(Unaudited)
	Three Months Ended March 31,
	2024			2023
Operating expenses:
Consulting fees	$	178,425		$	41,000
Consulting fees, related party		-			11,000
Filing fees		25,947			24,733
Professional fees		98,368			154,070
General and administrative expenses - other		651			8,005
Total operating expenses		303,391			238,808
(Loss) from operations		(303,391	)		(238,808	)
Income taxes		-			-
Net (loss)	$	(303,391	)	$	(238,808	)
Net (loss) per common share
Basic and diluted	$	(0.03	)	$	(0.02	)
Weighted average number of common shares		11,366,233			10,748,023
The accompanying notes are an integral part of these financial statements.

F-3

Lafayette Energy Corp
Statement of Changes in Stockholders Equity
(Unaudited)
	Preferred Shares				Common Shares				Additional					Total
	$0.0001 Par Value				$0.0001 Par Value				Paid-in		Accumulated			Stockholders'
	Shares		Amount		Shares		Amount		Capital		Deficit			Equity
BALANCES, December 31, 2022		-	$	-		10,721,711	$	1,072	$	1,184,499	$	(431,102	)	$	754,469
Sale of shares for cash		-		-		32,001		3		119,997		-			120,000
Net (loss)		-		-		-		-		-		(238,808	)		(238,808	)
BALANCES, March 31, 2023		-	$	-		10,753,712	$	1,075	$	1,304,496	$	(669,910	)	$	635,661
BALANCES, December 31, 2023		-	$	-		11,074,379	$	1,107	$	2,274,464	$	(2,379,628	)	$	(104,057	)
Sale of shares for cash		1,000,000		100		-		-		2,499,900		-			2,500,000
Issuance of shares for services		-		-		50,000		5		149,995		-			150,000
Issuance of shares for property		-		-		2,688,000		269		6,719,731		-			6,720,000
Net (loss)		-		-		-		-		-		(303,391	)		(303,391	)
BALANCES, March 31, 2024		1,000,000	$	100		13,812,379	$	1,381	$	11,644,090	$	(2,683,019	)	$	8,962,552
The accompanying notes are an integral part of these financial statements.

F-4

Lafayette Energy Corp
Statements of Cash Flows
(Unaudited)
	Three Months Ended March 31,
	2024			2023
OPERATING ACTIVITIES
Net (loss)	$	(303,391	)	$	(238,808	)
Adjustments to reconcile net (loss) to net cash flows used in operating activities:
Shares issued for services		150,000			-
Changes in:
Accounts payable		(4,121	)		65,662
Net cash (used in) operating activities		(157,512	)		(173,146	)
INVESTING ACTIVITIES
Development of oil and gas properties		(570,442	)		(27,739	)
FINANCING ACTIVITIES
Sale of preferred shares		2,500,000			120,000
Repayment of funds borrowed from related party		(42,845	)		-
Funds borrowed from related party		-			27,500
Net cash provided by financing activities		2,457,155			147,500
NET CHANGE IN CASH		1,729,201			(53,385	)
CASH, Beginning		20,172			64,162
CASH, Ending	$	1,749,373		$	10,777
Interest paid	$	-		$	-
Income taxes paid	$	-		$	-
The accompanying notes are an integral part of these financial statements.

F-5

Note 1 – Organization and History

Nature of Operations and Organization

Lafayette Energy Corp (the “Company”) is an oil and gas exploration and development company that was incorporated in Delaware on February 7, 2022

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation

The accompanying financial statements are prepared in accordance with accounting principles generally accepted in the United States of America.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates, and such differences may be material to the financial statements.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all cash and highly liquid investments with initial maturities of three months or less to be cash equivalents.

Concentration of Credit Risk

The Company, from time to time during the periods covered by these financial statements, may have bank balances in excess of its insured limits. Management has deemed this a normal business risk.

Property

The Company follows the full cost method of accounting for oil and natural gas operations. Under this method all productive and nonproductive costs incurred in connection with the acquisition, exploration, and development of oil and natural gas reserves are capitalized. No gains or losses are recognized upon the sale or other disposition of oil and natural gas properties except in transactions that would significantly alter the relationship between capitalized costs and proved reserves. The costs of unevaluated oil and natural gas properties are excluded from the amortizable base until the time that either proven reserves are found or it has been determined that such properties are impaired. As properties become evaluated, the related costs transfer to proved oil and natural gas properties using full cost accounting. None of the capitalized costs in the amount of $570,442 were part of the amortization base at March 31, 2024 nor did the Company expense any capitalized costs for the three months ended March 31, 2024 and 2023. The Company has only unproved oil and natural gas properties at March 31, 2024 as its properties are still in the exploration and development phase.

Other Comprehensive (Loss)

The Company has no material components of other comprehensive (loss) and accordingly, net (loss) is equal to comprehensive (loss) for the period.

Income Taxes

The Company uses the liability method of accounting for income taxes under which deferred tax assets and liabilities are recognized for the future tax consequences of temporary differences between the accounting bases and the tax bases of the Company’s assets and liabilities. The deferred tax assets and liabilities are computed using enacted tax rates in effect for the year in which the temporary differences are expected to reverse.

F-6

The Company's deferred income taxes include certain future tax benefits.  The Company records a valuation allowance against any portion of those deferred income tax assets when it believes, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred income tax asset will not be realized.

The Company has adopted ASC guidance regarding accounting for uncertainty in income taxes. This guidance clarifies the accounting for income taxes by prescribing the minimum recognition threshold an income tax position is required to meet before being recognized in the consolidated financial statements and applies to all income tax positions. Each income tax position is assessed using a two-step process. A determination is first made as to whether it is more likely than not that the income tax position will be sustained, based upon technical merits, upon examination by the taxing authorities. If the income tax position is expected to meet the more likely than not criteria, the benefit recorded in the consolidated financial statements equals the largest amount that is greater than 50% likely to be realized upon its ultimate settlement. At March 31, 2024, there were no uncertain tax positions that required accrual.

(Loss) Per Share

(Loss) per share requires presentation of both basic and diluted (loss) per common share. Common share equivalents, if used, would consist of any options, warrants and contingent shares, and would not be included in the weighted average calculation since their effect would be anti-dilutive due to the net (loss). At March 31, 2024, the Company has no outstanding options, warrants or contingent shares.

Recent Accounting Pronouncements

The Company has reviewed all recently issued but not yet effective accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or results of operations.

Off-Balance Sheet Arrangements

As part of its ongoing business, the Company has not participated in transactions that generate relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities (SPEs), which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. For the period February 7, 2022 through March 31, 2024, the Company has not been involved in any unconsolidated SPE transactions.

Subsequent Events

The Company evaluates events and transactions after the balance sheet date but before the financial statements are issued.

F-7

Note 3 – Rights and Farm-In Agreement

On March 7, 2024 (the “Execution Date”), the Company issued 2,688,000 shares of its restricted common stock valued at $6,720,000 or $2.50 per share to Heavy Sweet Oil LLC (“HSO”) (the option agreement dated November 13, 2023 previously entered into by the Company and HSO has no further force or effect) in exchange for the Company to have the Right to review and then decide during a 150 day period from the Execution Date (“Due Diligence Review Period”) whether to: (i) farm-into and purchase from HSO: (a) an undivided 97.75% interest in certain oil and gas leases totaling approximately 960 net acres, and (b) an undivided 100% interest in certain oil and gas lease totaling approximately 1,920 net acres; and (ii) the Company may explore and develop these acreages (“Net Leasehold Acres”). At the end of the Due Diligence Review Period, the Company will then notify HSO of how many of the Net Leasehold Acres it will purchase. As a result, the Company will issue an additional 3,400,000 shares of its restricted common stock to HSO, subject to a reduction adjustment based upon the number of Net Leasehold Acres the Company eventually decides not to purchase. Further, during the Due Diligence Review Period, the Company will have the Right at its own cost and expense to perform any development operations on the Net Leasehold Acres, that includes building roads, laying pipelines, building drilling pads, and drilling wells. Any oil and gas produced from such wells shall be the ownership of the Company. See Note 4 – Stockholders’ Equity – Common Shares.

Note 4 – Stockholders’ Equity

Preferred Shares

The Company is authorized to issue 10,000,000 shares of $0.0001 par value preferred stock of which includes 2,000,000 authorized shares of $0.0001 par value Series A Convertible Preferred Stock (“Series A Preferred”).

Series A Preferred

At March 31, 2024 and December 31, 2023, there are a total of 1,000,000 and 0 shares of Series A Preferred issued and outstanding, respectively. At March 31, 2024, each share of Series A Preferred is convertible, at the option of the holder into one share of common stock, subject to future adjustments, and shall have voting rights and powers like those holders of shares of common stock. In addition, the holder of the shares of Series A Preferred is entitled to a dividend and liquidation preference of the Company senior to all other securities of the Company. 

As part of a subscription agreement offered by the Company totaling 2,000,000 shares of Series A Preferred for $5,000,000 (the “Subscription Agreement”), the Company on February 29, 2024, sold 1,000,000 shares of such Subscription Agreement for $2,500,000 in cash or at $2.50 per share of Series A Preferred. The remaining 1,000,000 shares of Series A Preferred will be sold by the Company to the subscriber for $2,500,000 in cash within 10 days of the Company notifying the subscriber, to the subscriber’s satisfaction, that the Company has successfully drilled the first oil and gas well and produced at least 100 barrels of oil. See Note 3 – Rights and Farm-In Agreement.

Common Shares

The Company is authorized to issue 90,000,000 shares of $0.0001 par value common stock. At March 31, 2024 and December 31, 2023, there were a total of 13,812,379 shares of common stock issued with 13,812,379 and 11,074,379 outstanding, respectively.  Effective January 26, 2023, the Company changed the number of its authorized shares of common stock from 490,000,000 to 90,000,000 shares and effected a three-for-two stock split of its common stock of record. These financial statements reflect such changes to its authorized shares of common stock and shares issued and outstanding at and for the three months ended March 31, 2024 and 2023 because of the stock split.

F-8

On March 7, 2024, the Company issued 2,688,000 shares of its common stock to HSO and pursuant to ASC 845 Non-Monetary Transactions valued the shares at $6,720,000 or $2.50 per share in exchange for the right to review and then decide whether to purchase certain oil and gas leasehold interests. See Note 4 – Stockholders’ Equity – Preferred Shares.

During January, 2023, the Company sold 32,001 (48,000 pre-split) shares of its common stock for $120,000 in cash.

During January, 2024, the Company issued 50,000 shares of its common stock to a consultant for services valued at $150,000 of which such amount was expensed.

Note 5 – Equity Based Payments

The Company accounts for equity-based payment accruals under authoritative guidance as set forth in the Topics of the ASC. The guidance requires all equity-based payments to employees and non-employees, including grants of employee and non-employee stock options and warrants, to be recognized in the financial statements based at their fair values.

2022 Equity Incentive Plan

Effective November 18, 2022, the Company adopted its 2022 Equity Incentive Plan (the “2022 Plan”). Under the 2022 Plan, the Board of Directors may grant various forms of awards to purchase common stock to employees, director and consultants who provide services to the Company or any related company. The participants to whom awards are granted, the type of awards granted, the number of shares covered for each award, and the purchase price, conditions and other terms of each award are determined by the Board of Directors subject to certain statutory requirements. A total of 3 million shares of the Company’s common stock are initially subject to the 2022 Plan with annual adjustments to the total number of shares; however, there is a total of 8,000,000 shares of the Company’s common stock that is subject to Incentive Stock Options. During the three months ended March 31, 2024 and,2023, the Company granted no awards under the 2022 Plan. 

Note 6 – Related Party Transactions

Consulting Fees.

During the three months ended March 31, 2024 and 2023, the Company incurred consulting fees with its chief financial officer in the amount of $0 and $11,000 respectively.

Due to Related Party

During the three months ended March 31, 2024, the Company’s President loaned the Company funds of $3,000, and these funds are non-interest bearing and due on demand. Subsequently, the Company during the three months ended March 31, 2024, repaid the President $45,845 and at March 31, 2024, these loans are paid in full.

F-9

Report of Independent Registered Public Accounting Firm

To the shareholders and the board of directors of Lafayette Energy Corp

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Lafayette Energy Corp (the "Company") as of December 31, 2023 and 2022, the related statement of operations, stockholders' equity (deficit), and cash flows for the period February 7, 2022 (Inception) through December 31, 2022 and through December 31, 2023, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for the period February 7, 2022 (Inception) through December 31, 2022 and through December 31, 2023, in conformity with accounting principles generally accepted in the United States.

Basis for Opinion

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

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

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

/s BF Borgers CPA PC

BF Borgers CPA PC (PCAOB ID 5041)

We have served as the Company's auditor since 2022

Lakewood, CO

April 24, 2024

F-10

Lafayette Energy Corp
Balance Sheets
	December 31,
	2023			2022
ASSETS
Current assets
Cash and cash equivalents	$	20,172		$	64,162
Property
Oil and gas properties, net - unproved		-			713,161
Total assets	$	20,172		$	777,323
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$	81,384		$	22,854
Due to related party		42,845			-
Total liabilities		124,229			22,854
Commitments and Contingencies					-
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred shares, $0.0001 par value, 10,000,000 shares authorized; no shares issued and outstanding		-			-
Common shares, $0.0001 par value, 90,000,000 shares authorized; 13,812,379 and 10,721,711 shares issued at December 31, 2023 and 2022, respectively 11,074,379 and 10,721,711 shares outstanding at December 31, 2023 and 2022, respectively		1,107			1,072
Additional paid in capital		2,274,464			1,184,499
Accumulated deficit		(2,379,628	)		(431,102	)
Total stockholders' equity (deficit)		(104,057	)		754,469
Total liabilities and stockholders' equity	$	20,172		$	777,323
The accompanying notes are an integral part of these financial statements.

F-11

Lafayette Energy Corp
Statements of Operations
	For the Year Ended			February 7, 2022 (Inception)
	December 31, 2023			Through December 31, 2022
Operating expenses:
Consulting fees	$	923,143		$	157,767
Consulting fees, related party		11,000			52,000
Asset impairment		739,458			-
Professional fees		241,142			215,011
General and administrative expenses - other		33,783			14,262
Total operating expenses		1,948,526			439,040
(Loss) from operations		(1,948,526	)		(439,040	)
Other income (expense)
Gain on foreign exchange		-			7,975
Interest expense, related party		-			(37	)
Total other income		-			7,938
(Loss) before income taxes		(1,948,526	)		(431,102	)
Income taxes		-			-
Net (loss)	$	(1,948,526	)	$	(431,102	)
Net (loss) per common share
Basic and diluted	$	(0.18	)	$	(0.04	)
Weighted average number of common shares		10,793,730			10,471,800
The accompanying notes are an integral part of these financial statements.

F-12

Lafayette Energy Corp
Statement of Changes in Stockholders Equity
	Preferred Shares				Common Shares				Additional					Total
	$0.0001 Par Value				$0.0001 Par Value				Paid-in		Accumulated			Stockholders'
	Shares		Amount		Shares		Amount		Capital		Deficit			Equity (Deficit)
BALANCES, February 7, 2022 (Inception)		-	$	-		-	$	-	$	-	$	-		$	-
Sale of shares for cash		-		-		617,314		62		30		-			92
Sale of shares for cash, related party						9,314,979		931		466		-			1,397
Sale of shares for cash, private placement		-		-		789,388		79		1,184,003		-			1,184,082
Rounding from stock split						30		-		-		-			-
Net (loss)		-		-		-		-		-		(431,102	)		(431,102	)
BALANCES, December 31, 2022		-		-		10,721,711		1,072		1,184,499		(431,102	)		754,469
Sale of shares for cash		-		-		52,668		5		189,995		-			190,000
Shares issued for services		-		-		300,000		30		899,970					900,000
Net (loss)		-		-		-		-		-		(1,948,526	)		(1,948,526	)
BALANCES, December 31, 2023		-	$	-		11,074,379	$	1,107	$	2,274,464	$	(2,379,628	)	$	(104,057	)
The accompanying notes are an integral part of these financial statements.

F-13

Lafayette Energy Corp
Statements of Cash Flows
				For the Period
	For the Year Ended			February 7, 2022 (Inception)
	December 31, 2023			Through December 31, 2022
OPERATING ACTIVITIES
Net (loss)	$	(1,948,526	)	$	(431,102	)
Adjustments to reconcile net (loss) to net cash flows used in operating activities:
Asset impairment		739,458			-
Shares issued for services		900,000
Changes in:
Accounts payable		58,530			22,854
Net cash (used in) operating activities		(250,538	)		(408,248	)
INVESTING ACTIVITIES
Purchase of oil and gas properties		(26,297	)		(713,161	)
FINANCING ACTIVITIES
Sale of common shares		190,000			1,185,571
Loans from related parties		42,845			160,000
Loans repaid to related parties					(160,000	)
Net cash provided by financing activities		232,845			1,185,571
NET CHANGE IN CASH		(43,990	)		64,162
CASH, Beginning		64,162			-
CASH, Ending	$	20,172		$	64,162
Interest paid	$	-		$	37
Income taxes paid	$	-		$	-
The accompanying notes are an integral part of these financial statements.

F-14

Note 1 – Organization and History

Nature of Operations and Organization

Lafayette Energy Corp (the “Company”) is an oil and gas exploration and development company that was incorporated in Delaware on February 7, 2022 (“Inception”). 

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation

The accompanying financial statements are prepared in accordance with accounting principles generally accepted in the United States of America.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates, and such differences may be material to the financial statements.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all cash and highly liquid investments with initial maturities of three months or less to be cash equivalents.

Concentration of Credit Risk

The Company, from time to time during the periods covered by these financial statements, may have bank balances that are more than their insured limits. Management has deemed this a normal business risk.

Property

The Company follows the full cost method of accounting for oil and natural gas operations. Under this method all productive and nonproductive costs incurred in connection with the acquisition, exploration, and development of oil and natural gas reserves are capitalized. No gains or losses are recognized upon the sale or other disposition of oil and natural gas properties except in transactions that would significantly alter the relationship between capitalized costs and proved reserves. The costs of unevaluated oil and natural gas properties are excluded from the amortizable base until the time that either proven reserves are found or it has been determined that such properties are impaired. As properties become evaluated, the related costs are transferred to proved oil and natural gas properties using full cost accounting. The Company’s capitalized costs in the amount of $739,458, including legal fees of $131,248 and consulting fees to a related party of $129,464 at December 31, 2023 have been totally impaired.

During the year ended December 31, 2023, the Company reviewed its lease options for the likelihood of them being extended and as a result recorded an impairment in the amount of $739,458. 

Capitalized costs	$	739,458
Impairment		(739,458	)
	$	-

F-15

Other Comprehensive Income

The Company has no material components of other comprehensive loss and accordingly, net loss is equal to comprehensive loss for the period.

Income Taxes

The Company uses the liability method of accounting for income taxes under which deferred tax assets and liabilities are recognized for the future tax consequences of temporary differences between the accounting bases and the tax bases of the Company’s assets and liabilities. The deferred tax assets and liabilities are computed using enacted tax rates in effect for the year in which the temporary differences are expected to reverse.

The Company's deferred income taxes include certain future tax benefits.  The Company records a valuation allowance against any portion of those deferred income tax assets when it believes, based on the weight of available evidence, it is more likely than not that some portion or all the deferred income tax asset will not be realized.

The Company has adopted ASC guidance regarding accounting for uncertainty in income taxes. This guidance clarifies the accounting for income taxes by prescribing the minimum recognition threshold an income tax position is required to meet before being recognized in the consolidated financial statements and applies to all income tax positions. Each income tax position is assessed using a two-step process. A determination is first made as to whether it is more likely than not that the income tax position will be sustained, based upon technical merits, upon examination by the taxing authorities. If the income tax position is expected to meet the more likely than not criteria, the benefit recorded in the consolidated financial statements equals the largest amount that is greater than 50% likely to be realized upon its ultimate settlement. At December 31, 2023 and 2022, there were no uncertain tax positions that required accrual.

Loss Per Share

Loss per share requires presentation of both basic and diluted loss per common share. Common share equivalents, if used, would consist of any options, warrants and contingent shares, and would not be included in the weighted average calculation since their effect would be anti-dilutive due to the net loss. At December 31, 2033 and 2022, the Company has no outstanding options, warrants or contingent shares.

Foreign Exchange Transactions

The Company records transactions in connection with the subscription of its shares of common stock denominated in the foreign currency of GBP at the exchange rate in effect at the date of the transaction. The Company had no assets or liabilities denominated in any foreign currency at December 31, 2033 and 2022. The differences resulting from unrealized changes in foreign exchange rates during period February 7, 2022 (Inception) through December 31, 2022 were recorded as Gain on foreign exchange in the amount of $7,975 which is included as a component of total other income in the statement of operations. 

Recent Accounting Pronouncements

The Company has reviewed all recently issued but not yet effective accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or results of operations.

Off-Balance Sheet Arrangements

As part of its ongoing business, the Company has not participated in transactions that generate relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities (SPEs), which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. For the year ended December 31, 2023 and during the period February 7, 2022 (Inception) through December 31, 2022, the Company has not been involved in any unconsolidated SPE transactions.

F-16

Subsequent Events

The Company evaluates events and transactions after the balance sheet date but before the financial statements are issued.

Note 3 – Going Concern and Management Plans

The Company’s financial statements for the year ended December 31, 2023 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.  The Company reported a net loss of $1,948,526 for the year ended December 31, 2023 and an accumulated deficit of $2,379,628 at December 31, 2023. For the year ended December 31, 2023, the Company had a negative cash flow from operations of $250,538.

The future success of the Company is dependent on its ability to attract additional capital and ultimately, upon its ability to develop future profitable operations. In addition, the Company continues to experience negative cash flows from operations. There can be no assurance that the Company will be successful in obtaining such financing, or that it will attain positive cash flow from operations.  Management believes that actions presently being taken to revise the Company’s operating and financial requirements provide the opportunity for the Company to continue as a going concern.

Note 4 – Stockholders’ Equity

Preferred Shares

The Company is authorized to issue 10,000,000 shares of $0.0001 par value preferred stock. At December 31, 2023 and 2022, the Company has no preferred shares issued and outstanding.

Common Shares

The Company is authorized to issue 90,000,000 shares of $0.0001 common stock.

At December 31, 2023 and 2022, there were a total of 13,812,379 and 10,721,711 shares of common stock outstanding, respectively.

At December 31, 2023 and 2022, there were a total of 11,074,379 and 10,721,711 shares of common stock issued, respectively.

Effective January 26, 2023, the Company changed the number of its authorized shares of common stock from 490,000,000 to 90,000,000 shares and effected a three-for-two stock split of its common stock of record. These financial statements reflect such changes to its authorized shares of common stock and shares issued and outstanding at and for the year ended December 31, 2023 and at and for the period February 7, 2022 (Inceptio9n) through December 31, 2022 because of the stock split.

During March, 2022, the Company sold 617,314 shares of its common stock to investors and consultants for $92.

During March, 2022, the Company also sold 9,314,979 shares of its common stock to officers, directors, and affiliates of the Company for $1,397

During the period February 7, 2022 (Inception) through December 31, 2022, as part of private placements, the Company sold 789,388 shares of its common stock to investors for $1,184,082 and during the year ended December 31, 2023, the Company sold 52,668 shares of its common stock to investors for $190,000.

During the year ended December 31, 2023, the Company issued 300,000 shares of its common stock to consultants for services valued at $900,000 of which such amount was expensed.

F-17

Effective November 13, 2023, the Company issued 2,688,000 shares of its common stock as part of an agreement with an oil and gas company in exchange for an option to acquire certain mineral interests in oil and gas properties. These issued shares of common stock will be held in escrow subject to various performance restrictions by both parties and therefore, the shares will not be recorded as outstanding and thus included in stockholders’ equity due to the likely outcome that the performance by both parties is not probable. The Company will review the transaction at each subsequent reporting period to determine its likely outcome. 

Note 5 – Income Taxes

The effective income tax rate for the year ended December 31, 2023 and for the period February 7, 2022 (Inception) through September 30, 2022 differs from the U.S. Federal statutory rate due to the following:

	December 31,
	202 3			2022
Federal statutory income tax rate	$	409,000		$	90,000
State income taxes, net of federal benefit		71,000			16,000
Permanent items		-			-
Change in valuation allowance	$	(480,000	)	$	(106,000	)
Long-term deferred tax assets:
Net operating loss carryforwards	$	480,000		$	106,000
Long- deferred tax liabilities:
Valuation allowance		(480,000	)		(106,000	)
Net long-term deferred tax assets	$	-		$	-

Note 6 – Equity Based Payments

The Company accounts for equity-based payment accruals under authoritative guidance as set forth in the Topics of the ASC. The guidance requires all equity-based payments to employees and non-employees, including grants of employee and non-employee stock options and warrants, to be recognized in the financial statements based at their fair values.

2022 Equity Incentive Plan

Effective November 18, 2022, the Company adopted its 2022 Equity Incentive Plan (the “2022 Plan”). Under the 2022 Plan, the Board of Directors may grant various forms of awards to purchase common stock to employees, director and consultants who provide services to the Company or any related company. The participants to whom awards are granted, the type of awards granted, the number of shares covered for each award, and the purchase price, conditions and other terms of each award are determined by the Board of Directors subject to certain statutory requirements. A total of 3 million shares of the Company’s common stock are initially subject to the 2022 Plan with annual adjustments to the total number of shares; however, there is a total of 8,000,000 shares of the Company’s common stock that is subject to Incentive Stock Options. During the year ended December 31, 2023 and for the period February 7, 2022 (Inception) through December 31, 2022, the Company granted no awards under the 2022 Plan. 

Note 7 – Commitments and Contingencies

Agreements

Chief Financial Officer

The Company entered into an agreement effective April 1, 2022 with its chief financial officer to perform certain services that includes compensation at the rate of $5,000 per month (effective October 2022 the compensation is at the rate of $5,500 per month). The agreement was terminated effective February 28, 2023. During the year ended December 31, 2023 and for the period February 7, 2022 (Inception) through December 31, 2022, the Company incurred $11,000 and $52,000, respectively in consulting fees.

Legal Services

F-18

The Company entered into a month-to-month agreement effective April 18, 2022 with its in-house legal counsel to perform certain legal services that includes compensation at the rate of $5,000 per month based upon a rate of 15 hours per month of services whereby the compensation shall increase to $10,000 per months based upon a rate of 30 hours per month of services. During the year ended December 31, 2023 and for the period February 7, 2022 (Inception) through December 31, 2022, the Company paid $45,000 and $45,000, respectively in professional fees.

Note 8 – Related Party Transactions

Consulting Fees.

During the year ended December 31, 2023 and for the period February 7, 2022 (Inception) through December 31, 2022, the Company incurred consulting fees with its chief financial officer of $11,000 and $52,000, respectively. See Note 7 – Commitments and Contingencies – Consulting Agreements.

Due to Related Party

During the year ended December 31, 2023, the Company’s President loaned the Company funds of $4,000, net of a repayment of $15,000 as well as paid on behalf of the Company $38,845 of obligations incurred by the Company and these funds are non-interest bearing and due on demand. At December 31, 2023, the Company owes the President $42,845.

Promissory Notes

During March 2022, the Company borrowed $110,000 from affiliates and the Company repaid such loans in full.

On August 22, 2022, the Company borrowed $50,000 from an officer of the Company and such loan is evidenced by an unsecured promissory note whereby the unpaid principal amount of the Note is due and payable on Demand at any time on or after November 22, 2022 including any unpaid and accrued interest at the rate of three percent (3%) per annum of the outstanding principal (the “Note).  At December 31, 2022, the Company paid in full the $50,000 on the Note plus accrued interest in the amount of $37.

F-19

1,200,000 shares

Lafayette Energy Corp

common stock 

PROSPECTUS

Underwriter

Spartan Capital Securities, LLC

__________, 2024

Through and including         , 2024 (the 25th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

[Alternate Page for Resale Prospectus]

The information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting offers to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED  APRIL  25, 2024

Lafayette Energy Corp

3, 656,475 Shares of Common Stock

This prospectus relates to 3,656,475 shares of common stock, par value $0.0001 per share, of Lafayette Energy Corp that may be sold from time to time by the selling stockholders named in this prospectus following the closing of our initial public offering, as described in the Public Offering Prospectus (defined below).

We will not receive any proceeds from the sales of outstanding common stock by the selling stockholders.

Our common stock began trading on The Nasdaq Capital Market on _________, 2024, under the symbol “LEC”, and the closing sales price of our common stock on ___________, 2024, was$_____________ per share. 

The selling stockholders may offer and sell the common stock being offered by this prospectus from time to time in public or private transactions, or both. Sales will occur at fixed prices, at market prices prevailing at the time of sale, at prices related to prevailing market prices, or at negotiated prices. The selling stockholders may sell shares to or through underwriters, broker-dealers or agents, who may receive compensation in the form of discounts, concessions or commissions from the selling stockholders, the purchasers of the shares, or both. Any participating broker-dealers and any selling stockholders who are affiliates of broker-dealers may be deemed to be “underwriters” within the meaning of the Securities Act of 1933, as amended, and any commissions or discounts given to any such broker-dealer or affiliates of a broker-dealer may be regarded as underwriting commissions or discounts under the Securities Act of 1933, as amended. See “Plan of Distribution” for a more complete description of the ways in which the shares may be sold.

At the same time as the offering set forth in this prospectus (the “Resale Prospectus”), on _________, 2024, we entered into an Underwriting Agreement for the sale of 1,200,000 shares of common stock, through a separate prospectus (the “Public Offering Prospectus”) through the underwriter named on the cover page of the Public Offering Prospectus, each of which prospectuses were filed as part of the same registration statement of which this prospectus forms a part. The closing of the offering described in the Public Offering Prospectus (our initial public offering), and the approval of the listing of our common stock on The Nasdaq Capital Market, are each conditions precedent to the offering described in this Resale Prospectus. No sales of the shares covered by this prospectus shall occur until the common stock sold in our initial public offering begin trading on the Nasdaq Capital Market. We anticipate our initial public offering to be consummated on or about ________, 2024 at a public offering price of $________ per share of common stock.

We are an “emerging growth company” as defined in Section 2(a) of the Securities Act of 1933, as amended, and, as such, may elect to comply with certain reduced public company reporting requirements for future filings. This prospectus complies with the requirements that apply to an issuer that is an emerging growth company.

An investment in our common stock involves a high degree of risk. You should carefully consider the risk factors set forth under “Risk Factors,” beginning on page [ ] of this prospectus before you make your decision to invest in our common stock.

Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

The date of this prospectus is ____________, 2024.

A-1

[Alternate Page for Resale Prospectus]

The Offering

Common stock offered by the selling stockholders:	This prospectus relates to 3,656,475 shares of common stock that may be sold from time to time by the selling stockholders named in this prospectus.
Shares outstanding prior to and after this offering(1):	15,745,713 shares of common stock.
Use of proceeds:	We will not receive any proceeds from the sales of outstanding common stock by the selling stockholders (see also “Use of Proceeds,” below).
Risk factors:	Investing in our securities involves a high degree of risk. As an investor, you should be able to bear a complete loss of your investment. You should carefully consider the information set forth in the “Risk Factors” below.
Trading market and symbol:	Our common stock is listed on the Nasdaq Capital Market under the symbol “LEC”.

⁽¹⁾ Assumes the sale of all shares of common stock pursuant to the Public Offering Prospectus (but no exercise of the underwriter’s overallotment option in connection therewith ), and including 733,334 shares of common stock which the Company plans to issues to its officer and three non-employee directors shorty after the date of this prospectus as discussed herein.

In this prospectus, unless otherwise indicated, the number of shares of our common stock and other capital stock, and the other information based thereon, is as of April 25, 2024 and excludes:

·	no awards under the Company’s 2022 Equity Incentive Plan, of which 3,089,803 shares currently remain available for future awards under such plan and a total of 733,334 shares of restricted common stock are expected to be issued after the date of our initial public offering to our Chief Executive Officer and three of our non-employee directors.
Additionally, unless otherwise stated, all information in this prospectus:
·	reflects all currency in United States dollars.

A-2

[Alternate Page for Resale Prospectus]

PRIVATE PLACEMENT OFFERINGS

From March to May 2022, we sold an aggregate of 9,562,660 shares of restricted common stock in private transactions to 11 accredited investors, including to Frank C. Ingriselli (880,000 shares)(our Chairman); Graham Patterson (our then Chief Financial Officer)(500,000 shares, of which 100,000 shares were subsequently transferred to Gregory L. Overholtzer, our current Chief Financial Officer and Secretary for no consideration); Louis E. Bernard, Jr. (the Managing Member of Project Operations of Saur Minerals)(1,360,000 shares, of which 680,000 were subsequently transferred to Saur Minerals, LLC, and an aggregate of 633,333 shares were subsequently sold to four other unaffiliated investors); Michael L. Peterson (1,000,000 shares)(our Chief Executive Officer); Michael Schilling (1,360,000 shares, of which 265,000 shares were subsequently sold to five family members of Mr. Peterson (who are not included in Mr. Peterson’s beneficial ownership as they are all adults who live in different households)  in private transactions)(the President of Land/Legal of Saur Minerals); Adrian Beeston (1,483,334 shares, of which 133,334 shares were subsequently sold to Michael L. Peterson, our Chief Executive Officer and President, and 66,667 shares were subsequently sold to an entity minority owned by Mr. Beeston, and 100,000 shares were subsequently sold to an unaffiliated investor); and Naia Ventures, LLC (1,200,000 shares, of which 100,000 shares were subsequently sold to a third party around the time of the third party’s subscription for shares of the Company), for $0.00015 per share or $1,439 in aggregate.

From May to September 2022, we sold an aggregate of 789,386 shares of restricted common stock to 44 accredited investors for $1.50 per share, or $1,184,079 in aggregate. All but eight of those investors (36 in total), were also offered the right, at the same time, to subscribe for additional shares of common stock at $0.00015 per share, and an additional 12 investors were also offered the right to subscribe for shares of common stock at $0.0015 per share, and in total we sold 337,990 shares of restricted common stock to 51 accredited investors for an aggregate of $50.70.

In January 2023, we sold an aggregate of 32,001 shares of restricted common stock to four accredited investors for $3.75 per share, or $120,000 in aggregate. At or around the same time as the sales were completed, one of our founders and one of our affiliates, Louis E. Bernard, Jr. and Saur Minerals, LLC, respectively, sold the purchasers and three other accredited investors, in a separate private transaction, an aggregate of 683,336 shares of our restricted common stock (Louis E. Bernard, Jr. (133,334 shares) and Saur Minerals, LLC (550,002 shares)), for $0.30 per share.

In August 2023, we sold an aggregate of 4,000 shares of restricted common stock to an accredited investor, Adrian Beeston, for $5.00 per share, or $20,000 in aggregate. 

In November 2023, we sold 16,667 shares of restricted common stock to an accredited investor, for $3.00 per share, or $50,000 in aggregate. At or around the same time as the sale was completed, one of greater than 5% stockholders, Naia Ventures LLC, sold the purchaser (the Sandhya Ajjarapu revocable Trust dtd 2007), in a separate private transaction, an aggregate of 100,000 shares of our restricted common stock, for $10.00.

In total, from all of the private offerings of common stock described above we raised an aggregate of approximately $1,375,570.

On February 29, 2024, the Company entered into a Subscription Agreement (the “Subscription”) with Trxade, Inc.(“Trxade”), which is a wholly-owned subsidiary of TRxADE HEALTH Inc. (Nasdaq:MEDS)(“TRxADE HEALTH”), pursuant to which we agreed to sell Trxade 2,000,000 shares of a newly designated series of Series A Convertible Preferred Stock of the Company (the “Series A Preferred”), in two tranches, with (a) 1,000,000 shares of Series A Preferred being sold for $2,500,000 on March 5, 2024 (“Tranche 1”), and (b) 1,000,000 shares of Series A Preferred being sold for an additional $2,500,000, within 10 days of the Company notifying Trxade by letter or email, that the Company has successfully drilled its first oil and gas well and produced at least 100 barrels of oil (“Tranche 2”). The Subscription contains standard and customary representations and warranties of the parties, indemnification obligations of the parties. Mr. Michael L. Peterson, the Company’s Chief Executive Officer and Director currently serves as an independent member of the Board of Directors, and as Chairman of the Audit Committee and member of the Compensation Committee and Nominating and Corporate Governance Committee of TRxADE HEALTH.

Trxade paid the $2,500,000 due pursuant to Tranche 1 on March 5, 2024, and was issued the 1,000,000 shares of Series A Preferred on March 21, 2024. 

The Series A Preferred is convertible into common stock, initially on a one-for-one basis, and subject to certain anti-dilution rights which increase the number of shares of common stock issuable upon conversion thereof, either at the option of the holder thereof, or automatically upon the receipt by the holder of $2.50 per share in dividend payments. We also agreed to pay the holders of the Series A Preferred stock a quarterly dividend equal to their pro rata portion of 30% of our quarterly earnings before taxes as determined in accordance with U.S. generally accepted accounting principles. The Series A Preferred also carry a $2.50 per share liquidation preference, provided that such Series A Preferred also have the right to participate with the common stock in liquidating distributions, on an as-converted basis, after the payment of such $2.50 liquidation preference.

The Series A Preferred is described in greater detail under “Description of Capital Stock—Preferred Stock—Series A Convertible Preferred Stock”.

Pursuant to a separate confirmation, each selling stockholder agreed to comply with all prospectus delivery requirements of the Securities Act as applicable in connection with sales of any securities pursuant to this prospectus.

A-3

[Alternate Page for Resale Prospectus]

USE OF PROCEEDS

We are registering the shares of common stock for the benefit of the selling stockholders. We are not selling any securities under this prospectus and we will not receive any of the proceeds from the sale or other disposition by the selling stockholders or their transferees of the shares of common stock covered hereby.

We will pay all costs, expenses and fees relating to registering the shares of our common stock referenced in this prospectus. The selling stockholders will pay any underwriting discounts and commissions and expenses incurred by the selling stockholders for brokerage, accounting, tax or legal services or any other expenses incurred by the selling stockholders in disposing of the shares.

See “Selling Stockholders” and “Plan of Distribution” described below.

A-4

[Alternate Page for Resale Prospectus]

SELLING STOCKHOLDERS

This prospectus covers the resale from time to time by the selling stockholders identified in the table below of up to 3,656,475 shares of common stock through this prospectus.

We are registering the shares to permit the selling stockholders and any of their pledgees, donees, transferees, assignees and successors-in-interest to, from time to time, sell any or all of the shares through public or private transactions at prevailing market prices, at prices related to prevailing market prices or at privately negotiated prices of common stock on any stock exchange, market or trading facility on which the shares are traded or in private transactions when and as they deem appropriate in the manner described in “Plan of Distribution.” For purposes of the calculations below, we have used [15,745,713] shares of our common stock issued and outstanding, which includes [1,200,000] shares of common stock sold in our initial public offering pursuant to the Public Offering Prospectus and 733,334 shares of restricted common stock which the Company plans to issue to its officer and three of our non-employee directors shortly after the date of this prospectus.

The following table sets forth, as of the date of this prospectus, the name of each selling stockholder, the number and percentage of shares of our common stock beneficially owned by each selling stockholder prior to the offering for resale of the shares under this prospectus, the number of shares of our common stock beneficially owned by each selling stockholder that may be offered from time to time under this prospectus, and the number and percentage of shares of our common stock beneficially owned by the selling stockholder after the offering of the shares (assuming all of the offered shares are sold by the selling stockholder). The selling stockholders can offer all, some or none of their shares of common stock, and thus we have no way of determining the number of shares of common stock each selling stockholder will hold after this offering.

There are no agreements between the Company and any selling stockholder pursuant to which the shares subject to this registration statement were issued. None of the selling stockholders has ever been an executive officer or director of the Company or has had a material relationship with us at any time within the past three years unless disclosed in the footnotes below. None of the selling stockholders is a registered broker-dealer or an affiliate of a registered broker-dealer, except as discussed in the footnotes below.

Beneficial ownership is determined in accordance with the rules of the SEC, and includes any shares of common stock as to which a person has sole or shared voting power or investment power and any shares of common stock which the person has the right to acquire within sixty (60) days through the exercise of any option, warrant or right, through conversion of any security or pursuant to the automatic termination of a power of attorney or revocation of a trust, discretionary account or similar arrangement.

A-5

		Number of Shares of Common Stock Beneficially Owned Prior to this Offering (1)					Number of Shares of Common Stock Being			Beneficial Ownership of Common Stock After Registration Assuming All Shares Are Sold (#)
Name of Selling Shareholder		Number		Percentage			Offered			Number		Percentage
Alanna Scott	(a)		66,667		*			66,667	(2)		—		—
Andrea Helen Moore			8,440		*			8,440	(22)		—		—
Andrew Readman			6,330		*			6,330	(23)		—		—
Brandt W. Gessel	(b)		79,667		*			79,667	(21)		—		—
Breakspear Ventures Ltd	(c)		173,334		1.1	%		173,334	(3)		—		—
Chandler Bruce	( b )		79,667		*			79,667	(21)		—		—
Christopher McBride			6,330		*			6,330	(24)		—		—
Clark Peterson	(b)		79,667		*			79,667	(21)		—		—
Clark R. Moore	(d)		333,334		2.1	%		333,334	(5)		—		—
Clive Roberts			100,000		*			33,333	(2)		66,667		*
Colin Locke			16,878		*			16,878	(6)		—		—
Edward Spencer			8,440		*			8,440	(25)		—		—
Emily Bavin			16,667		*			16,667	(2)		—		—
Greg Bealer			77,334		*			77,334	(7)		—		—
James Dubois	(e)		114,980		*			83,334	(8)		31,646		*
Joanna Parker			9,283		*			9,283	(26)		—		—
Jon D. Tingey			100,000		*			100,000	(9)		—		—
Jonathan Richard Auckland			6,330		*			6,330	(27)		—		—
Karen P. Christensen			200,000		1.3	%		200,000	(10)		—		—
KP Growth Management Limited	(f)		12,659		*			12,659	(28)		—		—
Marisa Anderson			333,334		2.1	%		333,334	(11)		—		—
Matthew Peterson	(b)		79,667		*			79,667	(21)		—		—
Neil Packer			8,018		*			8,018	(29)		—		—
Nicola Baldwin			16,667		*			16,667	(2)		—		—
Nicola Sheehy	(g)		16,667		*			16,667	(2)		—		—
Niki Angelos			38,667		*			38,667	(12)		—		—
Peter Davies			14,769		*			14,769	(30)		—		—
Peter Nicholas Ashford			6,330		*			6,330	(31)		—		—
Richard Alan Abel			13,503		*			13,503	(32)		—		—
Richard D. McCloskey, Jr.			346,667		2.2	%		346,667	(13)		—		—
Ronald and Dawn Wagner			77,334		*			77,334	(14)		—		—
Rory Kelso			16,878		*			16,878	(33)		—		—
Sally Lines			8,018		*			8,018	(34)		—		—
Sandhya Ajjarapu Revocable Trust dtd 2007	(h)		116,667		*			116,667	(15)		—		—
Sanjay Ashok Shah			12,659		*			12,659	(35)		—		—
Scot Robinson			38,667		*			38,667	(17)		—		—
Sebastian Marr			500,000		3.2	%		500,000	(16)		—		—
Spencer Peterson	(b)		79,667		*			79,667	(21)		—		—
Streeterville Capital, LLC	(i)		100,000		*			100,000	(20)		—		—
The Loev Family Partnership, Ltd.	(j)		316,667		2.0	%		316,667	(18)		—		—
Thomas Fordyce			8,440		*			8,440	(36)		—		—
Valerie Anne Beeston	(k)		66,667		*			66,667	(19)		—		—
Vusimbe Zivave			9,494		*			9,494	(37)		—		—
Winona K. Peterson	(b)		33,334		*			33,334	(4)		—		—
			3,754,788					3,656,475

* Less than one percent (1%).

# Assumes the sale of all shares offered herein.

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(1) “Beneficial ownership” means that a person, directly or indirectly, has or shares voting or investment power with respect to a security or has the right to acquire such power within 60 days. The percentage is based upon [15,745,713] shares of our common stock issued and outstanding as of _______________, 2024, which includes [1,200,000] shares of common stock sold in our initial public offering pursuant to the Public Offering Prospectus and 733,334 shares of restricted common stock we plan to issue to our officer and three of our non-employee directors shortly after the date of this prospectus.

(2) Represents shares of common stock purchased from the Company in a private placement for $0.00015 per share.

(3) Represents 23,334 shares of common stock purchased from the Company in a private placement for $1.50 per share and 66,667 shares of common stock sold to Breakspear Ventures Ltd. in a private transaction from Adrian Beeston, a greater than 5% stockholder of the Company and a minority owner of Breakspear Ventures Ltd.

(4) Represents shares of common stock gifted to the selling stockholder from Michael L. Peterson, the Chief Executive Officer, President and Director.

(5) Includes 133,334 shares of common stock acquired from the Company in a private transaction for $0.00015 per share and 100,000 shares of common stock purchased from Mr. Michael L. Peterson, the Company’s Chief Executive Officer, President and Director, in a private transaction, for $0.15 per share.

(6) Includes 8,439 shares of common stock acquired from the Company in a private transaction for $1.50 per share and 8,440 shares of common stock acquired from the Company in a private transaction for $0.00015 per share.

(7) Represents 10,667 shares of common stock purchased from the Company in a private placement for $2.50 per share and 66,667 shares of common stock sold to Breakspear Ventures Ltd. in a private transaction from Adrian Beeston, a greater than 5% stockholder of the Company and a minority owner of Breakspear Ventures Ltd.

(8) Represents 83,334 shares of common stock acquired from Saur Minerals, LLC in a private transaction for $0.30 per share.

(9) Represents 100,000 shares of common stock issued in consideration for consulting services rendered.

(10) Represents 200,000 shares of common stock acquired from the Company in a private transaction for $1.50 per share.

(11) Represents 33,334 shares of common stock purchased from Saur Minerals, LLC in a private transaction for $0.30 per share.

(12) Represents 5,334 shares of common stock purchased from the Company in a private placement for $2.50 per share and 33,334 shares of common stock purchased from Saur Minerals, LLC in a private transaction for $0.30 per share.

(13) Includes 200,000 shares of common stock acquired from the Company in a private transaction for $1.50 per share and 220,000 shares of common stock purchased from Mr. Michael L. Peterson, the Company’s Chief Executive Officer, President and Director, in a private transaction, for $0.15 per share.

(14) Represents 10,667 shares of common stock purchased from the Company in a private placement for $2.50 per share and 66,667 shares of common stock acquired from Louis E. Bernard, a greater than 5% stockholder of the Company and the Managing Member of Project Operations of Saur Minerals, an affiliate of the Company, in a private transaction for $0.30 per share in a private transaction.  

(15) Represents 16,667 shares of common stock purchased from the Company in a private transaction for $3.00 per share and 100,000 shares purchased in a private transaction for an aggregate of $10, from Naia Ventures LLC, a greater than 5% stockholder of the Company.

(16) Represents 500,000 shares of common stock acquired from Louis E. Bernard, a greater than 5% stockholder of the Company and the Managing Member of Project Operations of Saur Minerals, an affiliate of the Company, in a private transaction for $0.30 per share in a private transaction.  

(17) Represents 5,334 shares of common stock purchased from the Company in a private placement for $2.50 per share and 33,333 shares of common stock acquired from Louis E. Bernard, a greater than 5% stockholder of the Company and the Managing Member of Project Operations of Saur Minerals, an affiliate of the Company, in a private transaction for $0.30 per share in a private transaction.  

(18) Includes 66,667 shares of common stock acquired from the Company in a private transaction for $0.00015 per share, 100,000 shares of common stock issued in consideration for services rendered, and 150,000 shares of common stock purchased from Mr. Michael L. Peterson, the Company’s Chief Executive Officer, President and Director, in a private transaction, for $0.15 per share.

(19) Represents shares of common stock acquired from Louis E. Bernard, a greater than 5% stockholder of the Company and the Managing Member of Project Operations of Saur Minerals, an affiliate of the Company, in a private transaction for $0.30 per share in a private transaction.  

(20) Represents 100,000 shares of common stock acquired from Adrian Beeston, a greater than 5% stockholder of the Company, in a private transaction for $0.30 per share.

(21) Includes 26,667 shares of common stock gifted to the selling stockholder by from Michael L. Peterson, the Chief Executive Officer, President and Director of the Company (a family member of the selling stockholder), and 53,000 shares of common stock purchased by the selling stockholder from Michael Shilling for $0.20 per share.

(22) Includes 4,220 shares of common stock purchased from the Company at par value (prior to adjusting for the 2-for-3 reverse stock split effective January 30, 2023) and 4,220 shares of common stock purchased from the Company at $0.67 per share.

(23) Includes 2,110 shares of common stock purchased from the Company at par value (prior to adjusting for the 2-for-3 reverse stock split effective January 30, 2023) and 4,220 shares of common stock purchased from the Company at $0.67 per share.

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(24) Includes 2,110 shares of common stock purchased from the Company at par value (prior to adjusting for the 2-for-3 reverse stock split effective January 30, 2023) and 4,220 shares of common stock purchased from the Company at $0.67 per share.

(25) Includes 4,220 shares of common stock purchased from the Company at par value (prior to adjusting for the 2-for-3 reverse stock split effective January 30, 2023) and 4,220 shares of common stock purchased from the Company at $0.67 per share.

(26) Includes 5,063 shares of common stock purchased from the Company at par value (prior to adjusting for the 2-for-3 reverse stock split effective January 30, 2023) and 4,220 shares of common stock purchased from the Company at $0.67 per share.

(27) Includes 2,110 shares of common stock purchased from the Company at par value (prior to adjusting for the 2-for-3 reverse stock split effective January 30, 2023) and 4,220 shares of common stock purchased from the Company at $0.67 per share.

(28) Includes 4,220 shares of common stock purchased from the Company at par value (prior to adjusting for the 2-for-3 reverse stock split effective January 30, 2023) and 8,439 shares of common stock purchased from the Company at $0.67 per share.

(29) Includes 3,798 shares of common stock purchased from the Company at par value (prior to adjusting for the 2-for-3 reverse stock split effective January 30, 2023) and 4,220 shares of common stock purchased from the Company at $0.67 per share.

(30) Includes 6,330 shares of common stock purchased from the Company at par value (prior to adjusting for the 2-for-3 reverse stock split effective January 30, 2023) and 8,439 shares of common stock purchased from the Company at $0.67 per share.

(31) Includes 2,110 shares of common stock purchased from the Company at par value (prior to adjusting for the 2-for-3 reverse stock split effective January 30, 2023) and 4,220 shares of common stock purchased from the Company at $0.67 per share.

(32) Includes 6,751 shares of common stock purchased from the Company at par value (prior to adjusting for the 2-for-3 reverse stock split effective January 30, 2023) and 6,752 shares of common stock purchased from the Company at $0.67 per share.

(33) Includes 8,439 shares of common stock purchased from the Company at par value (prior to adjusting for the 2-for-3 reverse stock split effective January 30, 2023) and 8,439 shares of common stock purchased from the Company at $0.67 per share.

(34) Includes 3,798 shares of common stock purchased from the Company at par value (prior to adjusting for the 2-for-3 reverse stock split effective January 30, 2023) and 4,220 shares of common stock purchased from the Company at $0.67 per share.

(35) Includes 4,220 shares of common stock purchased from the Company at par value (prior to adjusting for the 2-for-3 reverse stock split effective January 30, 2023) and 8,439 shares of common stock purchased from the Company at $0.67 per share.

(36) Includes 4,220 shares of common stock purchased from the Company at par value (prior to adjusting for the 2-for-3 reverse stock split effective January 30, 2023) and 4,220 shares of common stock purchased from the Company at $0.67 per share.

(37) Includes 3,164 shares of common stock purchased from the Company at par value (prior to adjusting for the 2-for-3 reverse stock split effective January 30, 2023) and 6,330 shares of common stock purchased from the Company at $0.67 per share.

(a) Alanna Scott is Vice President of Operations (a non-executive employee) of the Company.

(b) Chandler Bruce is the adult son-in-law of Mr. Michael L. Peterson; Clark Peterson is the adult son of Mr. Michael L. Peterson; Brandt Gessel is the son-in-law of Mr. Michael L. Peterson; Matthew Peterson is the adult son of Mr. Michael L. Peterson; Spencer Peterson is the adult son of Mr. Michael L. Peterson; and Winona K. Peterson is the mother of Mr. Michael L. Peterson. None of such persons live in the same household as Mr. Peterson and Mr. Peterson is not deemed to beneficially own any of the securities held by such persons.

(c) The beneficial owners of the shares of common stock held by Breakspear Ventures Ltd. are Paul McKillen and Nicola Baldwin, its Directors. Additionally, Nicola Baldwin, Clive Roberts, Colin Locke and Emily Bavin, each selling stockholders, are minority shareholders, of Breakspear Ventures Ltd. Adrian Beeston, a greater than 5% stockholder of the Company, is also a minority owner of Breakspear Ventures Ltd.

(d) Foundation Law Group LLP, which Mr. Moore serves as a Partner of, has been engaged as legal counsel to the Company pursuant to a customary legal services engagement agreement

(e) Beneficial ownership includes 31,646 shares of common stock held by DFM Nominees Ltd, which shares Mr. Dubois is deemed to beneficially own.

(f) KP Growth Management Limited is beneficially owned by James Knowles, its officer-director and control person.

(g)  Nicola Sheehy is the adult daughter of Adrian Beeston, a greater than 5% stockholder of the Company. Nicola Sheehy is not a member of Mr. Beeston’s household.

(h) Does not include 1,000,000 shares of Series A Preferred Stock or the 1,000,000 shares of common stock currently issuable upon conversion thereof, which are held by Trxade which Mr. Suren Ajjarapu, the wife of Sandya Ajjarapu, the Trustee of the trust, which Mr. Ajjarapu may be deemed to beneficially own due to his position as Chairman and CEO of Trxade.

(i) The beneficial owner of the shares of common stock held by Streeterville Capital, LLC is John Fife.

(j) The beneficial owner of the shares of common stock held by The Loev Family Partnership, Ltd., is David M. Loev, the Managing Partner, President and sole owner of The Loev Law Firm, PC.

(k) Valerie Beeston is the mother of Adrian Beeston, a greater than 5% stockholder of the Company; however, she does not live in the same household as Mr. Beeston and Mr. Beeston does not have voting or dispositive control over the shares held by Valerie Beeston.

We may require the Selling Stockholders to suspend the sales of the securities offered by this prospectus upon the occurrence of any event that makes any statement in this prospectus, or the related registration statement, untrue in any material respect, or that requires the changing of statements in these documents in order to make statements in those documents not misleading. We will file a post-effective amendment to this registration statement to reflect any material changes to this prospectus.

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[Alternate Page for Resale Prospectus]

PLAN OF DISTRIBUTION

Each Selling Stockholder and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their securities covered hereby on any stock exchange, market or trading facility on which the securities are traded or in private transactions. These sales will occur at fixed prices, at market prices prevailing at the time of sale, at prices related to prevailing market prices, or at negotiated prices. A Selling Stockholder may use any one or more of the following methods when selling securities:

· ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

· block trades in which the broker-dealer will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction;

· purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

· an exchange distribution in accordance with the rules of the applicable exchange;

· privately negotiated transactions;

· settlement of short sales;

· in transactions through broker-dealers that agree with the selling stockholders to sell a specified number of such securities at a stipulated price per security;

· through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;

· a combination of any such methods of sale; or

· any other method permitted pursuant to applicable law.

The selling stockholders may also sell shares under Rule 144 under the Securities Act, if available, rather than under this prospectus.

Broker-dealers engaged by the Selling Stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the Selling Stockholders, or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser, in amounts to be negotiated. The Selling Stockholders do not expect these commissions and discounts to exceed what is customary in the types of transactions involved.

The Selling Stockholders may from time to time pledge or grant a security interest in some or all of the shares owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell shares of our common stock from time to time under this prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act amending the list of selling security holders to include the pledgee, transferee or other successors in interest as selling security holders under this prospectus.

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Upon our being notified in writing by a Selling Stockholder that any material arrangement has been entered into with a broker-dealer for the sale of our common stock through a block trade, special offering, exchange distribution or secondary distribution or a purchase by a broker or dealer, a supplement to this prospectus will be filed, if required, pursuant to Rule 424(b) under the Securities Act, disclosing (i) the name of each such Selling Stockholder and of the participating broker-dealer(s), (ii) the number of shares involved, (iii) the price at which such the shares of our common stock were sold, (iv)the commissions paid or discounts or concessions allowed to such broker-dealer(s), where applicable, (v) that such broker-dealer(s) did not conduct any investigation to verify the information set out or incorporated by reference in this prospectus, and (vi) other facts material to the transaction. In addition, upon our being notified in writing by a Selling Stockholder that a donee or pledgee intends to sell more than 500 shares of our common stock, a supplement to this prospectus will be filed if then required in accordance with applicable securities law.

The Selling Stockholders also may transfer the shares of our common stock in other circumstances, in which case the transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.

The Selling Stockholders and any broker-dealers or agents that are involved in selling the shares may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Discounts, concessions, commissions and similar selling expenses, if any, that can be attributed to the sale of Securities will be paid by the Selling Stockholder and/or the purchasers. Each Selling Stockholder has represented and warranted to us that it acquired the securities subject to this prospectus in the ordinary course of such Selling Stockholder’s business and, at the time of its purchase of such securities such Selling Stockholder had no agreements or understandings, directly or indirectly, with any person to distribute any such securities.

We have advised each Selling Stockholder that it may not use shares registered on this prospectus to cover short sales of our common stock made prior to the date on which this prospectus shall have been declared effective by the Commission. If a Selling Stockholder uses this prospectus for any sale of our common stock, it will be subject to the prospectus delivery requirements of the Securities Act. The Selling Stockholders will be responsible to comply with the applicable provisions of the Securities Act and Exchange Act, and the rules and regulations thereunder promulgated, including, without limitation, Regulation M, as applicable to such Selling Stockholders in connection with resales of their respective shares under this prospectus.

We will pay all fees and expenses incident to the registration of the shares, but we will not receive any proceeds from the sale of our common stock.

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[Alternate Page for Resale Prospectus]

LEGAL MATTERS

The validity of the common stock covered by this prospectus will be passed upon by The Loev Law Firm, PC. David M. Loev, the Managing Partner, President and sole owner of The Loev Law Firm, PC, beneficially owns 316,667 shares of the outstanding shares of our common stock, representing approximately 2.1% of the Company’s outstanding shares of common stock (when including the 733,334 shares of restricted common stock expected to be issued to the Company’s Chief Executive Officer (433,334 shares) and three of our non-employee directors (100,000 shares each), shortly following the date hereof), the resale of which shares are being registered in this Resale Prospectus.

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PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.

The following table sets forth the estimated costs and expenses to be incurred in connection with the issuance and distribution of the securities of Lafayette Energy Corp (the “Registrant”) which are registered under this Registration Statement on Form S-1 (this “Registration Statement”), other than underwriting discounts and commissions. All amounts are estimates except the Securities and Exchange Commission registration fee and the Financial Industry Regulatory Authority, Inc. filing fee.

The following expenses will be borne solely by the Registrant:

	Amount to be Paid
SEC Registration fee	$	3,018	*
Financial Industry Regulatory Authority, Inc. filing fee		3,956	*
Exchange Listing fees		55,000
Printing and engraving expenses		5,500	*
Legal fees and expenses		400,000	*
Accounting fees and expenses		50,000	*
Transfer Agent’s fees		4,700	*
Miscellaneous fees and expenses		35,000	*
Total	$	557,174	*

* Estimates.

Item 14. Indemnification of Directors and Officers.

Our Second Amended and Restated Certificate of Incorporation (“Certificate of Incorporation”) provides that all of our directors, officers, employees and agents shall be entitled to be indemnified by us to the fullest extent permitted by Section 145 of the Delaware General Corporation Law (“DGCL”). Section 145 of the DGCL concerning indemnification of officers, directors, employees and agents is set forth below.

Section 145. Indemnification of officers, directors, employees and agents; insurance.

(a) A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person’s conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the person’s conduct was unlawful.

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(b)	A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys’ fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.
(c)	To the extent that a present or former director or officer of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (a) and (b) of this section, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith.
(d)	Any indemnification under subsections (a) and (b) of this section (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the present or former director, officer, employee or agent is proper in the circumstances because the person has met the applicable standard of conduct set forth in subsections (a) and (b) of this section. Such determination shall be made, with respect to a person who is a director or officer of the corporation at the time of such determination (1) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum; or (2) by a committee of such directors designated by majority vote of such directors, even though less than a quorum; or (3) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion; or (4) by the stockholders.
(e)	Expenses (including attorneys’ fees) incurred by an officer or director of the corporation in defending any civil, criminal, administrative or investigative action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation as authorized in this section. Such expenses (including attorneys’ fees) incurred by former directors and officers or other employees and agents of the corporation or by persons serving at the request of the corporation as directors, officers, employees or agents of another corporation, partnership, joint venture, trust or other enterprise may be so paid upon such terms and conditions, if any, as the corporation deems appropriate.
(f)	The indemnification and advancement of expenses provided by, or granted pursuant to, the other — subsections of this section shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office. A right to indemnification or to advancement of expenses arising under a provision of the Certificate of Incorporation or a bylaw shall not be eliminated or impaired by an amendment to the Certificate of Incorporation or the bylaws (as amended and restated) after the occurrence of the act or omission that is the subject of the civil, criminal, administrative or investigative action, suit or proceeding for which indemnification or advancement of expenses is sought, unless the provision in effect at the time of such act or omission explicitly authorizes such elimination or impairment after such action or omission has occurred.

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(g)	A corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the corporation would have the power to indemnify such person against such liability under this section.
(h)	For purposes of this section, references to “the corporation” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this section with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued.
(i)	For purposes of this section, references to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to any employee benefit plan; and references to “serving at the request of the corporation” shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the corporation” as referred to in this section.
(j)	The indemnification and advancement of expenses provided by, or granted pursuant to, this section shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.
(k)	The Court of Chancery is hereby vested with exclusive jurisdiction to hear and determine all actions for advancement of expenses or indemnification brought under this section or under any bylaw, agreement, vote of stockholders or disinterested directors, or otherwise. The Court of Chancery may summarily determine a corporation’s obligation to advance expenses (including attorneys’ fees).

In accordance with Section 102(b)(7) of the DGCL, our Certificate of Incorporation provides that no director (or such other person or persons, if any, who exercise or perform any of the powers or duties otherwise conferred or imposed upon the board of directors) or officer (including the president, chief executive officer, chief operating officer, chief financial officer, chief legal officer, controller, treasurer or chief accounting officer, if any, and each person other than the above which is or was identified in the Company’s public filings with the SEC because such person is or was one of the most highly compensated executive officers of the Company at any time during the course of conduct alleged in the action or proceeding to be wrongful) shall be personally liable to us or any of our stockholders for monetary damages resulting from breaches of his or her fiduciary duty as a director or officer, as applicable, except to the extent such limitation on or exemption from liability is not permitted under the DGCL or unless he or she violated his or her duty of loyalty to us or our stockholders, acted in bad faith, knowingly or intentionally violated the law, authorized unlawful payments of dividends (as to directors only), unlawful stock purchases or unlawful redemptions (as to directors only), or derived improper personal benefit from his or her action as a director or officer. The effect of this provision of our Certificate of Incorporation is to eliminate our rights and those of our stockholders (through stockholders’ derivative suits on our behalf) to recover monetary damages against a director or officer for breach of the fiduciary duty of care as a director or officer, as applicable, including breaches resulting from negligent or grossly negligent behavior, except as restricted by Section 102(b) of the DGCL. However, this provision does not limit or eliminate our rights or the rights of any stockholder to seek non-monetary relief, such as an injunction or rescission, in the event of a breach of a director’s duty of care. This also does not limit the liability of an officer in any action by or in the right of the corporation. Additionally, this provision in our Certificate of Incorporation does not eliminate or limit the liability of a director or officer for any act or omission occurring prior to the date when such provision became effective.

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If the DGCL is amended to authorize corporate action further eliminating or limiting the liability of directors, then, in accordance with our Certificate of Incorporation, the liability of our directors and officers to us or our stockholders will be eliminated or limited to the fullest extent authorized by the DGCL, as so amended. Any repeal or amendment of provisions of our Certificate of Incorporation limiting or eliminating the liability of directors, whether by our stockholders or by changes in law, or the adoption of any other provisions inconsistent therewith, will (unless otherwise required by law) be prospective only, except to the extent such amendment or change in law permits us to further limit or eliminate the liability of directors on a retroactive basis.

Our Certificate of Incorporation also provides that we will, to the fullest extent authorized or permitted by applicable law, indemnify our current and former officers and directors, as well as those persons who, while directors or officers of our corporation, are or were serving as directors, officers, employees or agents of another entity, trust or other enterprise, including service with respect to an employee benefit plan, in connection with any threatened, pending or completed proceeding, whether civil, criminal, administrative or investigative, against all expense, liability and loss (including, without limitation, attorneys’ fees, judgments, fines, ERISA excise taxes and penalties and amounts paid in settlement) reasonably incurred or suffered by any such person in connection with any such proceeding. Notwithstanding the foregoing, a person eligible for indemnification pursuant to our Certificate of Incorporation will be indemnified by us in connection with a proceeding initiated by such person only if such proceeding was authorized by our board of directors, except for proceedings to enforce rights to indemnification and advancement of expenses.

The right to indemnification conferred by our Certificate of Incorporation is a contract right that includes the right to be paid by us the expenses incurred in defending or otherwise participating in any proceeding referenced above in advance of its final disposition, provided, however, that if the DGCL requires, an advancement of expenses incurred by our officer or director (solely in the capacity as an officer or director of our corporation) will be made only upon delivery to us of an undertaking, by or on behalf of such officer or director, to repay all amounts so advanced if it is ultimately determined that such person is not entitled to be indemnified for such expenses under our Certificate of Incorporation or otherwise.

The rights to indemnification and advancement of expenses will not be deemed exclusive of any other rights which any person covered by our Certificate of Incorporation may have or hereafter acquire under law, our Certificate of Incorporation, our bylaws (as amended and restated), an agreement, vote of stockholders or disinterested directors, or otherwise.

Any repeal or amendment of provisions of our Certificate of Incorporation affecting indemnification rights, whether by our stockholders or by changes in law, or the adoption of any other provisions inconsistent therewith, will (unless otherwise required by law) be prospective only, except to the extent such amendment or change in law permits us to provide broader indemnification rights on a retroactive basis, and will not in any way diminish or adversely affect any right or protection existing at the time of such repeal or amendment or adoption of such inconsistent provision with respect to any act or omission occurring prior to such repeal or amendment or adoption of such inconsistent provision. Our Certificate of Incorporation will also permit us, to the extent and in the manner authorized or permitted by law, to indemnify and to advance expenses to persons other that those specifically covered by our Certificate of Incorporation.

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Our Bylaws as amended and restated (“Bylaws”) include the provisions relating to advancement of expenses and indemnification rights consistent with those set forth in our Certificate of Incorporation. In addition, our Bylaws provide for a right of indemnitee to bring a suit in the event a claim for indemnification or advancement of expenses is not paid in full by us within a specified period of time. Our Bylaws also permit us to purchase and maintain insurance, at our expense, to protect us and/or any director, officer, employee or agent of our corporation or another entity, trust or other enterprise against any expense, liability or loss, whether or not we would have the power to indemnify such person against such expense, liability or loss under the DGCL.

Any repeal or amendment of provisions of our Bylaws affecting indemnification rights, whether by our board of directors, stockholders or by changes in applicable law, or the adoption of any other provisions inconsistent therewith, will (unless otherwise required by law) be prospective only, except to the extent such amendment or change in law permits us to provide broader indemnification rights on a retroactive basis, and will not in any way diminish or adversely affect any right or protection existing thereunder with respect to any act or omission occurring prior to such repeal or amendment or adoption of such inconsistent provision.

We have entered into indemnification agreements with each of our officers and directors. These agreements require us to indemnify these individuals to the fullest extent permitted under applicable law against liabilities that may arise by reason of their service to us, and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified.

Item 15. Recent Sales of Unregistered Securities.

The following is a summary of transactions by us within the past three years involving sales or our securities that were not registered under the Securities Act.

From March to May 2022, we sold an aggregate of 9,562,660 shares of restricted common stock in private transactions to 11 accredited investors, including to Frank C. Ingriselli (880,000 shares)(our Chairman); Graham Patterson (500,000 shares, of which 100,000 shares were subsequently transferred to Gregory L. Overholtzer, our Chief Financial Officer and Secretary for no consideration); Louis E. Bernard, Jr. (the Managing Member of Project Operations of Saur Minerals)(1,360,000 shares, of which 680,000 were subsequently transferred to Saur Minerals, LLC, and an aggregate of 633,333 shares were subsequently sold to four other unaffiliated investors); Michael L. Peterson (1,000,000 shares)(our Chief Executive Officer); Michael Schilling (1,360,000 shares, of which 265,000 shares were subsequently sold to five family members of Mr. Peterson (who are not included in Mr. Peterson’s beneficial ownership as they are all adults who live in different households) in private transactions)(the President of Land/Legal of Saur Minerals); Adrian Beeston (1,483,334 shares, of which 133,334 shares were subsequently sold to Michael L. Peterson, our Chief Executive Officer and President, and 66,667 shares were subsequently sold to an entity minority owned by Mr. Beeston, and 100,000 shares were subsequently sold to an unaffiliated investor); and Naia Ventures, LLC (1,200,000 shares, of which 100,000 shares were subsequently sold to a third party around the time of the third party’s subscription for shares of the Company), for $0.00015 per share or $1,439 in aggregate.

From May to September 2022, we sold an aggregate of 789,386 shares of restricted common stock to 44 accredited investors for $1.50 per share, or $1,184,079 in aggregate. All but eight of those investors (36 in total), were also offered the right, at the same time, to subscribe for additional shares of common stock at $0.00015 per share, and an additional 12 investors were also offered the right to subscribe for shares of common stock at $0.0015 per share, and in total we sold 337,990 shares of restricted common stock to 51 accredited investors for an aggregate of $50.70.

In January 2023, we sold an aggregate of 32,001 shares of restricted common stock to four accredited investors for $3.75 per share, or $120,000 in aggregate. At or around the same time as the sales were completed, one of our founders and one of our affiliates, Louis E. Bernard, Jr. and Saur Minerals, LLC, respectively, sold the purchasers and three other accredited investors, in a separate private transaction, an aggregate of 683,336 shares of our restricted common stock (Louis E. Bernard, Jr. (133,334 shares) and Saur Minerals, LLC (550,002 shares)), for $0.30 per share.

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In August 2023, we sold an aggregate of 4,000 shares of restricted common stock to Adrian Beeston, a greater than 5% shareholder of the Company, for an aggregate of $20,000 or $5.00 per share.

In November 2023, we issued 100,000 shares of restricted common stock to The Loev Law Firm, PC, which entity is passing upon the validity of the common stock covered by the prospectus which forms a part of this registration statement, in consideration for services rendered.

In November 2023, we issued 100,000 shares of restricted common stock to Jon D. Tingey, in consideration for stock market, economic, and general investment advisory services.

In November 2023, we sold 16,667 shares of restricted common stock to an accredited investor, for $3.00 per share, or $50,000 in aggregate. At or around the same time as the sale was completed, one of greater than 5% stockholders, Naia Ventures LLC, sold the purchaser (the Sandhya Ajjarapu revocable Trust dtd 2007), in a separate private transaction, an aggregate of 100,000 shares of our restricted common stock, for $10.

On November 13, 2023, the Company entered into a Leasehold Acquisition and Development Option Agreement with Heavy Sweet. Pursuant to the Asphalt Ridge Option Agreement, we purchased an option to acquire up to a 30% working interest in certain leases in the Uintah Basin, a long-developed oil and gas area of eastern Utah, southwest of Vernal, Utah, totaling 960 acres. As consideration for agreeing to the Asphalt Ridge Option, we issued Heavy Sweet 2,688,000 shares of the Company’s restricted common stock, equal to approximately 19.9% of the Company’s then-issued and outstanding shares of common stock, which were originally subject to vesting and forfeiture.

                On January 30, 2024, the Company entered into a Consulting Agreement with David DesLauriers, pursuant to which Mr. DesLauriers agreed to provide such heavy oil and minerals advisory services to the Company as the Company may from time to time request for the six month term of the agreement (which may be terminated by either party at any time with written notice), in consideration for 50,000 shares of restricted common stock.

On February 29, 2024, the Company entered into a Subscription Agreement with Trxade, Inc., which is a wholly-owned subsidiary of TRxADE HEALTH Inc. (Nasdaq:MEDS), pursuant to which we agreed to sell Trxade 2,000,000 shares of a newly designated series of Series A Convertible Preferred Stock of the Company (the “Series A Preferred”), in two tranches, with (a) 1,000,000 shares of Series A Preferred being sold for $2,500,000 on March 5, 2024, and (b) 1,000,000 shares of Series A Preferred being sold for an additional $2,500,000, within 10 days of the Company notifying Trxade by letter or email, that the Company has successfully drilled its first oil and gas well and produced at least 100 barrels of oil. The Subscription contains standard and customary representations and warranties of the parties, indemnification obligations of the parties. Mr. Michael L. Peterson, the Company’s Chief Executive Officer and Director currently serves as an independent member of the Board of Directors, and as Chairman of the Audit Committee and member of the Compensation Committee and Nominating and Corporate Governance Committee of TRxADE HEALTH.

Trxade paid the $2,500,000 due pursuant to Tranche 1 on March 5, 2024, and was issued the 1,000,000 shares of Series A Preferred on March 21, 2024.

The Series A Preferred is convertible into common stock, initially on a one-for-one basis, and subject to certain anti-dilution rights which increase the number of shares of common stock issuable upon conversion thereof, either at the option of the holder thereof, or automatically upon the receipt by the holder of $2.50 per share in dividend payments. We also agreed to pay the holders of the Series A Preferred stock a quarterly dividend equal to their pro rata portion of 30% of our quarterly earnings before taxes as determined in accordance with U.S. generally accepted accounting principles. The Series A Preferred also carry a $2.50 per share liquidation preference, provided that such Series A Preferred also have the right to participate with the common stock in liquidating distributions, on an as-converted basis, after the payment of such $2.50 liquidation preference.

On March 7, 2024 the Company entered into a Farm-In agreement (the “Farm-In Agreement”) with Heavy Sweet which superseded and terminated in full the Asphalt Ridge Option. According to the Farm-In Agreement, upon certain terms and conditions set forth therein, (i) the Company will farm-into and purchase from Heavy Sweet, and Heavy Sweet will allow the Company to farm-in and sell to the Company, (x) an undivided Ninety-Seven and 3/4^th Percent (97.75% of 8/8ths) interest in and to approximately 960 gross and net acres under the Asphalt Ridge Leases, and (y) an undivided One Hundred Percent (100.00% of 8/8ths) interest in and to approximately 1,920 gross and net acres, located in the western half of Section 23 and Sections 22, 26, and 27 all in township range and section map T4S, R20, 6^th PM, Uintah County, Utah; and (ii) subject to the Trio Option, we may explore and develop the Subject Acreage and the Asphalt Ridge Leases.

The farm-in price payable pursuant to the terms of the Farm-In Agreement is up to 3,400,000 shares of restricted common stock of the Company, with such number of shares due at closing equal to (x) 3,400,000 shares, multiplied by (y) the total number of acres conveyed at closing, divided by (z) 2,880.

The closing of the transactions contemplated by the Farm-In Agreement is to occur upon completion of the Company’s due diligence on such Asphalt Ridge Leases and Asphalt Ridge Acreage, no later than August 4, 2024.

 * * * * * * *

The use of proceeds associated with the above listed sales of unregistered securities for cash was for general working capital purposes.

The issuances and grants described above were exempt from (and in connection with the Farm-In Option and Tranche 2 of the Series A Preferred Stock, are expected to be exempt from) registration pursuant to Section 4(a)(2) and/or Rule 506 of Regulation D of the Securities Act, since the foregoing issuances and grants did not (will not) involve a public offering, the recipients took (will take) the securities for investment and not resale, we took (will take) take appropriate measures to restrict transfer, and the recipients were (a) “accredited investors”; (b) had access to similar documentation and information as would be required in a Registration Statement under the Securities Act; and/or (c) were officers or directors of the Company. The securities are (will be) subject to transfer restrictions, and the certificates evidencing the securities contain (will contain) an appropriate legend stating that such securities have not been registered under the Securities Act and may not be offered or sold absent registration or pursuant to an exemption therefrom. The securities were not (will not be) registered under the Securities Act and such securities may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act and any applicable state securities laws.

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Item 16. Exhibits and Financial Statement Schedules.

(a) Exhibits: Exhibits Pursuant to Item 601 of Regulation S-K:

Exhibit Number	Description of Exhibit
1.1*	Form of Underwriting Agreement
3.1€	Certificate of Incorporation of Lafayette Energy Corp, filed with the Secretary of State of Delaware on February 7, 2022
3.2€	Second Amended and Restated Certificate of Incorporation of Lafayette Energy Corp, filed with the Secretary of State of Delaware on January 31, 2023
3.3*	Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock of Lafayette Energy Corp, filed with the Secretary of State of Delaware on March 21, 2024
3.4€	Amended and Restated Bylaws of Lafayette Energy Corp
4.1*	Form of Underwriter’s Warrant
4.2€	Form of Common Stock Certificate
5.1**	Opinion and consent of The Loev Law Firm, PC re: the legality of the securities being registered
10.1€	Form of Subscription Agreement (2022-2023 Private Placements)
10.2€£	Letter Agreement Re Transfer of Assets and Related Matters dated March 8, 2022, by and between Lafayette Energy Corp and Saur Minerals, LLC
10.3€	First Amendment to Letter Agreement Re Transfer of Assets and Related Matters dated March 8, 2022, by and between Lafayette Energy Corp and Saur Minerals, LLC dated June 16, 2022
10.4€	Second Amendment to Letter Agreement Re Transfer of Assets and Related Matters dated March 8, 2022, by and between Lafayette Energy Corp and Saur Minerals, LLC dated August 31, 2022
10.5€£	Acquisition and Development Agreement dated March 8, 2022, by and between Lafayette Energy Corp and Saur Minerals, LLC
10.6€	Seismic License Agreement dated March 8, 2022, by and between Lafayette Energy Corp and Saur Minerals, LLC
10.7€#	Amended and Restated Executive Employment Agreement dated January 20, 2023, and effective April 1, 2022, by and between Lafayette Energy Corp and Michael L. Peterson
10.8€#	Executive Employment Agreement dated February 14, 2023, by and between Lafayette Energy Corp and Gregory L. Overholtzer
10.9€#	$100,000 Promissory Note dated August 22, 2022, by Lafayette Energy Corp, as borrower and Michael L. Peterson, as lender
10.10€#	Amended and Restated Consulting Agreement dated January 20, 2023 and effective April 1, 2022, by and between Lafayette Energy Corp and Frank Ingriselli
10.11€#	Consulting Agreement dated April 1, 2022, by and between Lafayette Energy Corp and ASD Ltd
10.12€#	Amended and Restated Lafayette Energy Corp 2022 Equity Incentive Plan
10.13€£	3-D Seismic Acquisition and Development Option Agreement dated December 20, 2022, by and between Lafayette Energy Corp and Cruciform Properties LLC
10.14€	First Amendment to 3-D Seismic Acquisition and Development Agreement dated March 23, 2023, by and between Lafayette Energy Corp and Cruciform Properties LLC
10.15€	Second Amendment to 3-D Seismic Acquisition and Development Agreement dated May 15, 2023, by and between Lafayette Energy Corp and Cruciform Properties LLC
10.16€£	Leasehold Acquisition and Development Option Agreement dated November 13, 2023, by and between Heavy Sweet Oil LLC and Lafayette Energy Corp
10.17€	Restricted Stock Agreement dated November 13, 2023, between Lafayette Energy Corp. and Heavy Sweet Oil LLC
10.18*#	Subscription Agreement dated February 29, 2024, by and between Lafayette Energy Corp and Trxade, Inc., relating to the purchase of shares of Series A Convertible Preferred Stock
10.19*£#	Farm-In Agreement dated March 7, 2024, by and between Lafayette Energy Corp , as buyer, and Heavy Sweet Oil LLC, as seller
14.1€	Code of Business Conduct and Ethics
23.1*	Consent of BF Borgers CPA PC
23.2**	Consent of The Loev Law Firm, PC (included in Exhibit 5.1)
24.1€	Power of Attorney (included on the signature page to the original Registration Statement)
99.1€	Audit Committee Charter
99.2€	Compensation Committee Charter
99.3€	Nominating and Corporate Governance Committee Charter
99.4*	Consent of Cynthia L. Welch
99.5€	Consent of Andrew Secrist
99.6*	Consent of Jeffrey Holt
107€	Filing Fee Table

II-7

* Filed herewith.

** To be filed by amendment.

€ Previously filed.

# Indicates management contract or compensatory plan or arrangement.

≠ Certain information has been redacted pursuant to Item 601(a)(6) of Regulation S-K, as the disclosure of such information would constitute a clearly unwarranted invasion of personal privacy.

£ Certain schedules, exhibits, annexes, and similar attachments have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule or exhibit will be furnished supplementally to the Securities and Exchange Commission upon request; provided, however, that Lafayette Energy Corp may request confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended, for any schedule or exhibit so furnished.

(b) Financial Statement Schedule.

All financial statement schedules are omitted because the information called for is not required or is shown either in the financial statements or the notes thereto.

Item 17. Undertakings.

The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement to:

(i) Include any prospectus required by Section 10(a)(3) of the Securities Act;

(ii) Reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

(iii) Include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

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(4) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

(5) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

(6) That, for the purpose of determining liability of the Registrant under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned Registrant undertakes that in a primary offering of securities of the undersigned Registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned Registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i) Any preliminary prospectus or prospectus of the undersigned Registrant relating to the offering required to be filed pursuant to Rule 424;

(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned Registrant or used or referred to by the undersigned registrant;

(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned Registrant or its securities provided by or on behalf of the undersigned Registrant; and

(iv) Any other communication that is an offer in the offering made by the undersigned Registrant to the purchaser.

(7) The undersigned registrant hereby undertakes that:

(i) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b) (1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(ii) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Lehi, Utah, on the 25th day of April 2024.

LAFAYETTE ENERGY CORP
By:	/s/ Michael L. Peterson
Name:	Michael L. Peterson
Title:	President, Chief Executive Officer and Director

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Mr. Michael L. Peterson, with full power of substitution, as his or her, true and lawful attorneys-in-fact and agents, with full power of substitution and re-substitution for him/her and in his/her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he/she might or could do in person, hereby ratifying and confirming all that each of said attorney-in-fact or his/her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.

NAME	POSITION	DATE
/s/ Michael L. Peterson	President, Chief Executive Officer and Director	April 25, 2024
Michael L. Peterson	(Principal Executive Officer)
/s/ Gregory L. Overholtzer	Chief Financial Officer and Secretary	April 25, 2024
Gregory L. Overholtzer	(Principal Financial and Accounting Officer)
/s/ Frank C. Ingriselli	Chairman	April 25, 2024
Frank C. Ingriselli

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EX-1.1

EXHIBIT 1.1

UNDERWRITING AGREEMENT

Dated [____________] [__], 2024

between

LAFAYETTE ENERGY CORP

and

SPARTAN CAPITAL SECURITIES, LLC

as Representative of the several Underwriters named on Schedule I attached hereto

TABLE OF CONTENTS

Article I. DEFINITIONS	3
Article II. PURCHASE AND SALE	7
Article III. REPRESENTATIONS AND WARRANTIES	10
Article IV. OTHER AGREEMENTS OF THE PARTIES	21
Article V. DEFAULT BY UNDERWRITERS	26
Article VI. INDEMNIFICATION	26
Article VII. MISCELLANEOUS	29
Schedule I Schedule of Underwriters	33
Schedule II Pricing Information	34
Exhibit A Form of Representative Warrant	35
Exhibit B Form of Lock-Up Agreement	36
Exhibit C Form of Officer’s Certificate	37
Exhibit D Form of Secretary’s Certificate	38
Exhibit E Form of CFO Certificate	39

2

[ ______ ] SHARES OF COMMON STOCK

LAFAYETTE ENERGY CORP.

UNDERWRITING AGREEMENT

[____________] [__], 2024

Spartan Capital Securities, LLC as Representative of the several Underwriters named on Schedule I attached hereto

45 Broadway, 19^th Floor

New York, NY 10006

Ladies and Gentlemen:

The undersigned, Lafayette Energy Corp, a company incorporated under the laws of the State of Delaware (the “Company”), hereby confirms its agreement (this “Agreement”) with the several underwriters (such underwriters, including the Representative (as defined below), the “Underwriters” and each an “Underwriter”) named in Schedule I hereto for which Spartan Capital Securities, LLC (“Spartan”), is acting as representative to the several Underwriters (in such capacity, the “Representative” and if there are no Underwriters other than the Representative, references to multiple Underwriters shall be disregarded and the term Representative as used herein shall have the same meaning as Underwriter) on the terms and conditions set forth herein.

It is understood that the several Underwriters are to make a public offering of the Public Securities (as defined below) as soon as the Representative deems it advisable to do so. The Public Securities are to be initially offered to the public at the public offering price set forth in the Prospectus. The Representative may from time to time thereafter change the public offering price and other selling terms.

It is further understood that Spartan will act as the Representative for the Underwriters in the offering and sale of the Closing Shares (as defined below) and, if any, the Option Shares (as defined below) in accordance with this Agreement.

ARTICLE I.
DEFINITIONS

Section 1.01 Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the meanings set forth in this Section 1.01.

“Action” shall have the meaning ascribed to such term in Section 3.01(k).

“Advance” shall have the meaning ascribed to such term in Section 4.06(d).

“Affiliate” means with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with such Person as such terms are used in and construed under Rule 405 under the Securities Act.

“Authorizations” mean all requisite power and authority, and all necessary consents, approvals, authorizations, orders, registrations, qualifications, licenses, filings, and permits of, with and from all governmental, judicial, regulatory, or administrative agency, body, or court, domestic or foreign, having jurisdiction over the Company or any of their assets or business and all third parties, foreign and domestic.

“Benefit Arrangements” shall have the meaning ascribed to such term in Section 3.01(pp).

“Board” means the Board of Directors of the Company.

“Business Day” means any day other than Saturday, Sunday, or other day on which commercial banks in the City of New York are authorized or required by law to remain closed; provided that banks shall not be deemed to be authorized or obligated to be closed due to a “shelter in place,” “non-essential employee,” or similar closure of physical branch locations at the direction of any governmental authority if such banks’ electronic funds transfer systems (including for wire transfers) are open for use by customers on such day.

3

“Closing” means the closing of the purchase and sale of the Closing Shares pursuant to Section 2.01.

“Closing Date” means the hour and the date on the Trading Day on which all conditions precedent to (i) the Underwriters’ obligations to pay the Closing Purchase Price and (ii) the Company’s obligations to deliver the Closing Shares, in each case, have been satisfied or waived, but in no event later than 10:00 a.m. (New York City time) on the second (2nd) Trading Day following the date hereof or at such earlier time as shall be agreed upon by the Representative and the Company.

“Closing Purchase Price” shall have the meaning ascribed to such term in Section 2.01(a), which aggregate purchase price shall be net of underwriting discounts and commissions.

“Closing Shares” shall have the meaning ascribed to such term in Section 1.01(a).

 “Commission” means the United States Securities and Exchange Commission.

“Common Stock” means the common stock of the Company, par value $0.0001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.

“Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant, or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

“Company” shall have the meaning ascribed to such term in the initial paragraph.

“Company Auditor” means BF Borgers CPA PC, with offices located at 5400 W. Cedar Ave, Lakewood, CO 80226.

“Company IT Systems” shall have the meaning ascribed to such term in Section 3.01(qq).

“Company’s Counsel” means The Loev Law Firm, PC, with offices located at 6300 West Loop South, Suite 280, Bellaire, Texas 77401.

“EDGAR” shall have the meaning ascribed to such term in Section 3.01(f).

“Effective Date” means the date and time as of which the Registration Statement became effective in accordance with the rules and regulations under the Securities Act.

“Employee Plans” shall have the meaning ascribed to such term in Section 3.01(pp).

“Engagement Agreement” shall have the meaning scribed to such term in Section 3.01(u).

“Environmental Laws” shall have the meaning ascribed to such term in Section 3.01(n).

“ERISA” shall have the meaning ascribed to such term in Section 3.01(pp).

“ERISA Affiliate” shall have the meaning ascribed to such term in Section 3.01(pp).

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

4

“Execution Date” shall mean the date on which the parties execute and enter into this Agreement.

“Exempt Issuance” means the issuance of (a) shares of Common Stock, restricted stock, restricted stock units, or options to employees, officers, consultants or other service providers, or directors of the Company pursuant to any stock or option plan duly adopted for such purpose, by a majority of the non-employee members of the Board or a majority of the members of a committee of non-employee directors established for such purpose, for services rendered to the Company, (b) securities upon the exercise or exchange of or conversion of any Securities issued hereunder and/or other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise price, exchange price, or conversion price of such securities (other than in connection with automatic price resets, stock splits, adjustments, or combinations as set forth in such securities) or to extend the term of such securities, (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company, and (d) securities agreed to be issued pursuant to the terms of the Farm-In Agreement between the Company and Heavy Sweet, LLC, dated on or around March 7, 2024.

“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended.

“FINRA” means the Financial Industry Regulatory Authority.

“GAAP” shall have the meaning ascribed to such term in Section 3.01(i).

“General Disclosure Package” shall have the meaning ascribed to such term in Section 3.01(f).

“Hazardous Materials” shall have the meaning ascribed to such term in Section 3.01(n).

“Indebtedness” means (a) any liabilities for borrowed money or amounts owed in excess of $100,000 (other than trade accounts payable incurred in the ordinary course of business); (b) all guaranties, endorsements, and other contingent obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (c) the present value of any lease payments in excess of $100,000 due under leases required to be capitalized in accordance with GAAP.

“Intellectual Property Rights” shall have the meaning ascribed to such term in Section 3.01(q).

“Lien” means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

“Lock-Up Agreements” mean the lock-up agreements that are delivered on the date hereof by each of the Company’s officers, directors, and any record holder of 5% or more of the Company’s shares of Common Stock in the form of Exhibit B attached hereto.

“Material Adverse Effect” shall have the meaning assigned to such term in Section 3.01(b).

“Material Permit” shall have the meaning ascribed to such term in Section 3.01(ff).

“Offering” shall have the meaning ascribed to such term in Section 2.01(b).

“Option Closing Date” shall have the meaning ascribed to such term in Section 2.02(c).

“Option Closing Purchase Price” means the aggregate purchase price of the Option Shares on a Closing Option Date net of the underwriting discounts and commissions.

“Option Shares” shall have the meaning ascribed to such term in Section 2.02(a).

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“Over-Allotment Option” shall have the meaning ascribed to such term in Section 2.02(a).

“Permitted Free-Writing Prospectus” shall have the meaning set forth in Section 4.02(c).

“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof), or other entity of any kind.

“Preliminary Prospectus” shall have the meaning ascribed to such term in Section 3.01(f).

“Proceeding” means an action, claim, suit, investigation, or proceeding (including, without limitation, an informal investigation or partial proceeding, such as a deposition), whether commenced or threatened.

“Prospectus” shall have the meaning ascribed to such term in Section 3.01(f).

“Public Securities” means, collectively, the Closing Shares and, if any, the Option Shares and any shares subject to the Representative’s Warrant.

“Registration Statement” shall have the meaning ascribed to such term in Section 3.01(f).

“Representative” shall have the meaning ascribed to such term in the initial paragraph.

“Representative’s Warrant” shall have the meaning ascribed to such term in Section 2.01(c).

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.

“Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.

“Securities” means the Closing Shares, the Option Shares, and the shares subject to the Representative’s Warrant.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Shares” means, collectively, the shares of Common Stock delivered to the Underwriters in accordance with Section 1.01(a) and Section 2.02(a).

“Subsidiary” means any subsidiary of the Company and shall, where applicable, also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.

“Trading Day” means a day on which the principal Trading Market is open for trading.

“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the OTCQB Venture Market, the NYSE American, the OTCQX Best Market, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, or the New York Stock Exchange (or any successors to any of the foregoing).

“Transaction Documents” means this Agreement and all exhibits and schedules hereto, the Lock-Up Agreements, and any other documents or agreements executed in connection with the transactions contemplated hereunder.

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“Transfer Agent” means Issuer Direct Corporation., with offices located at 1 Glenwood Ave Suite 1001, Raleigh, NC 27603, and any successor transfer agent of the Company.

“Underwriter’s Counsel” means Sichenzia Ross Ference Carmel, with offices located at 1185 Avenue of the Americas, 31^st floor, New York, NY 10036.

“Underwriters’ Information” shall have the meaning ascribed to such term in Section 6.01.

ARTICLE II.
PURCHASE AND SALE

Section 2.01 Closing.

(a) Upon the terms and subject to the conditions set forth herein, the Company agrees to sell in the aggregate 1,200,000 shares of Common Stock (the “Closing Shares”), subject to the terms and conditions stated herein, and each Underwriter agrees to purchase, severally and not jointly, at the Closing, the Closing Shares set forth opposite the name of such Underwriter on Schedule I attached hereto and made a part hereof at a purchase price of $[______] per Closing Share (the “Closing Purchase Price”). The Closing Shares are to be offered initially to the public at the offering price set forth on the cover page of the Prospectus (as defined in Section 3.01(f) hereof).

(b) On the Closing Date, each Underwriter shall deliver or cause to be delivered to the Company, via wire transfer of immediately available funds equal to such Underwriter’s Closing Purchase Price and the Company shall deliver to, or as directed by, such Underwriter its respective Closing Shares and the Company shall deliver the other items required pursuant to Section 2.03 deliverable at the Closing. Upon satisfaction of the covenants and conditions set forth in Section 2.03 and Section 2.04, the Closing shall occur at the offices of the Underwriter’s Counsel or such other location (including remotely by facsimile or other electronic transmission) as the Company and the Representative shall mutually agree. The Public Securities are to be offered initially to the public at the offering price set forth on the cover page of the Prospectus (the “Offering”).

(c) The Company hereby agrees to issue to the Representative (and /or its designees) on the Closing Date a warrant for the purchase of the number of shares of Common Stock equal to 5% of the shares of Common Stock issued in the Offering, pursuant to a warrant agreement in the form attached hereto as Exhibit A (the “Representative’s Warrant”), at an initial exercise price of $[●] per share, which is equal to 110% of the public offering price per Common Stock. The Representative understands and agrees that there are significant restrictions pursuant to FINRA Rule 5110(e)(1) against transferring the Representative’s Warrant and the underlying securities during the 180 days after the commencement date of sales in the Offering and by its acceptance thereof shall agree that it will not sell, transfer, assign, pledge, or hypothecate the Representative’s Warrant, or any portion thereof, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of such securities for a period of 180 days beginning on the date of commencement of sales of the Closing Shares in the Offering, except as expressly permitted by FINRA Rule 5110(e)(2), and only if any such transferee agrees to the foregoing lock-up restrictions. Delivery of the Representative’s Warrant shall be made on the Closing Date and shall be issued in the name or names and in such authorized denominations as the Representative may reasonably request.

Section 2.02 Over-Allotment Option.

(a) For the purposes of covering any over-allotments in connection with the distribution and sale of the Closing Shares, the Representative is hereby granted an option (the “Over-Allotment Option”) to purchase up to 180,000 shares of Common Stock, representing fifteen percent (15%) of the Closing Shares sold in the Offering (the “Option Shares”), which may be purchased at the Closing Purchase Price.

(b) In connection with an exercise of the Over-Allotment Option, the purchase price to be paid for any Option Shares is equal to the product of the Closing Purchase Price multiplied by the number of Option Shares to be purchased. On an Option Closing Date, the Option Closing Purchase Price shall be paid.

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(c) The Over-Allotment Option granted pursuant to this Section 2.02 may be exercised by the Representative as to all (at any time) or any part (from time to time) of the Option Shares within forty-five (45) days after the Closing Date. An Underwriter will not be under any obligation to purchase any Option Shares prior to the exercise of the Over-Allotment Option by the Representative. The Over-Allotment Option granted hereby may be exercised by the giving of oral notice to the Company from the Representative, which must be confirmed in writing by overnight mail or facsimile or other electronic transmission setting forth the number of Option Shares to be purchased and the date and time for delivery of and payment for the Option Shares (each, an “Option Closing Date”), which will not be later than the earlier of (i) forty-five (45) days after the Closing Date and (ii) two (2) full Business Days after the date of the notice or such other time as shall be agreed upon by the Company and the Representative, at the offices of the Underwriter’s Counsel or at such other place (including remotely by facsimile or other electronic transmission) as shall be agreed upon by the Company and the Representative. If such delivery and payment for the Option Shares does not occur on the Option Closing Date, each Option Closing Date will be as set forth in the notice. Upon exercise of the Over-Allotment Option, the Company will become obligated to convey to the Underwriters, and, subject to the terms and conditions set forth herein, the Underwriters will become obligated to purchase, the number of Option Shares specified in such notice. The Representative may cancel the Over-Allotment Option at any time prior to the expiration of the Over-Allotment Option by written notice to the Company.

Section 2.03 Deliverables. The Company shall deliver or cause to be delivered to each Underwriter (if applicable) the following:

(a) At the Closing Date, the Closing Shares and, as to each Option Closing Date, if any, the applicable Option Shares, which shares shall be delivered via The Depository Trust Company Deposit or Withdrawal at Custodian system for the accounts of the several Underwriters;

(b) At the Closing Date and at each Option Closing Date, if any, the duly executed and delivered legal opinion and negative assurance letter of Company’s Counsel addressed to the Underwriters, dated as of the Closing Date and each Option Closing Date, if any, in form and substance satisfactory to counsel to the Underwriters;

(c) Contemporaneously herewith, a comfort letter, addressed to the Underwriters and in form and substance satisfactory in all respects to the Representative from the Company Auditor dated, respectively, as of the date of this Agreement and a bring-down letter dated as of the Closing Date and each Option Closing Date, if any;

(d) On the Closing Date, and each Option Closing Date, if any, the duly executed and delivered Representative’s Warrant, substantially in the form required by Exhibit A attached hereto.

(e) On the Closing Date, and each Option Closing Date, if any, the duly executed and delivered Lock-up Agreements, substantially in the form required by Exhibit B attached hereto.

(f) On the Closing Date and on each Option Closing Date, if any, the duly executed and delivered Officers’ Certificate, substantially in the form required by Exhibit C attached hereto;

(g) On the Closing Date and on each Option Closing Date, if any, the duly executed and delivered Secretary’s Certificate, substantially in the form required by Exhibit D attached hereto;

(h) On the Closing Date and on each Option Closing Date, if any, a duly executed and delivered Chief Financial Officer’s Certificate, substantially in the form required by Exhibit E attached hereto, addressed to the Underwriters; and

(i) Such other customary certificates or documents as the Underwriters and Underwriter’s Counsel may have reasonably requested.

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Section 2.04 Closing Conditions. The respective obligations of each Underwriter hereunder in connection with the Closing and each Option Closing Date are subject to the following conditions being met:

(a) the accuracy in all material respects when made and on the date in question (other than representations and warranties of the Company already qualified by materiality, which shall be true and correct in all respects) of the representations and warranties of the Company contained herein (unless as of a specific date therein);

(b) all obligations, covenants, and agreements of the Company required to be performed at or prior to the date in question shall have been performed or such performance shall have been waived by the Representative;

(c) the delivery by the Company of the items set forth in Section 2.03 of this Agreement;

(d) the Registration Statement shall be effective on the date of this Agreement and at each of the Closing Date and each Option Closing Date, if any, no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been instituted or shall be pending or contemplated by the Commission and any request on the part of the Commission for additional information shall have been complied with to the reasonable satisfaction of the Representative;

(e) by the Execution Date, if required by FINRA, the Underwriters shall have received a notice of no objections from FINRA as to the amount of compensation allowable or payable to and the terms and arrangements for acting as the Underwriters as described in the Registration Statement;

(f) the shares of Common Stock, including the Closing Shares, and the Option Shares, have been approved for listing on the Nasdaq Capital Market;

(g) the Company has filed with the Commission a Form 8-A (File No: 000- [__________]) providing for the registration pursuant to Section 12(b) under the Exchange Act of the shares of Common Stock; and such Form 8-A has become effective under the Exchange Act. The Company has taken no action designed to, or likely to have the effect of, terminating the registration of the shares of Common Stock under the Exchange Act, nor has the Company received any notification that the Commission is contemplating terminating such registration; and

(h) prior to and on each of the Closing Date and each Option Closing Date, if any: (i) there shall have been no material adverse change or development involving a prospective material adverse change in the condition or prospects or the business activities, financial or otherwise, of the Company from the latest dates as of which such condition is set forth in the Registration Statement, the General Disclosure Package, and Prospectus; (ii) no action suit or proceeding, at law or in equity, shall have been pending or threatened against the Company or any Affiliate of the Company before or by any court or federal or state commission, board, or other administrative agency wherein an unfavorable decision, ruling, or finding may materially adversely affect the business, operations, prospects, or financial condition or income of the Company, except as set forth in the Registration Statement, the General Disclosure Package, and Prospectus; (iii) no stop order applicable to the Company shall have been issued under the Securities Act and no proceedings therefor shall have been initiated or threatened by the Commission; (iv) since the date of the latest balance sheet included in the Registration Statement, the General Disclosure Package, or the Prospectus, the Company has not incurred any material liabilities or obligations, direct or contingent, nor has it entered into any material transactions not in the ordinary course of business, other than pursuant to this Agreement and the transactions referred to herein or those liabilities, obligations, and transactions which are disclosed in the Registration Statement, the General Disclosure Package, and the Prospectus; (v) the Company has not paid or declared any dividends or other distributions of any kind on any class of its capital stock; (vi) the Company has not altered its method of accounting; and (vii) the Registration Statement, the General Disclosure Package, and the Prospectus and any amendments or supplements thereto shall contain all material statements which are required to be stated therein in accordance with the Securities Act and the rules and regulations thereunder and shall conform in all material respects to the requirements of the Securities Act and the rules and regulations thereunder, and neither the Registration Statement, the General Disclosure Package, nor the Prospectus nor any amendment or supplement thereto shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

If any of the conditions specified in this Section 2.04 shall not have been fulfilled when and as required by this Agreement, or if any of the certificates, opinions, written statements, or letters furnished to the Representative or to Representative’s counsel pursuant to this Section 2.04 shall not be reasonably satisfactory in form and substance to the Representative and to Representative’s counsel, all obligations of the Underwriters hereunder may be cancelled by the Representative at, or at any time prior to, the consummation of the Closing. Notice of such cancellation shall be given to the Company in writing or orally. Any such oral notice shall be confirmed promptly thereafter in writing.

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ARTICLE III.
REPRESENTATIONS AND WARRANTIES

Section 3.01 Representations and Warranties of the Company. The Company represents and warrants to the Underwriters as of the Execution Date, as of the Closing Date and as of each Option Closing Date, if any, as follows:

(a) Subsidiaries. All of the Subsidiaries of the Company, if any, are set forth in the Prospectus. The Company owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all of the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable, and free of preemptive and similar rights to subscribe for or purchase securities. If the Company has no subsidiaries, all other references to the Subsidiaries or any of them in the Transaction Documents shall be disregarded.

(b) Organization and Qualification. Each of the Company and its Subsidiaries is an entity duly incorporated or otherwise organized, validly existing, and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws, or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity, or enforceability of any Transaction Document, a material adverse effect on the results of operations, assets, business, prospects, or condition (financial or otherwise) of the Company and its Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii), or (iii), a “Material Adverse Effect”) and no Proceeding has been instituted in any such jurisdiction revoking, limiting, or curtailing or seeking to revoke, limit, or curtail such power and authority or qualification.

(c) Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and each of the other Transaction Documents to which it is a party and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, the Board, or the Company’s stockholders in connection herewith or therewith other than in connection with the Required Approvals (as defined below in clause (e)). This Agreement and each other Transaction Document to which the Company is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies, and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

(d) No Conflicts. The execution, delivery, and performance by the Company of this Agreement and the other Transaction Documents to which it is a party, the issuance and sale of the Securities, and the consummation by it of the transactions contemplated hereby and thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws, or other organizational or charter documents, (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration, or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt, or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals (as defined below in clause (e)), conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree, or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.

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(e) Filings, Consents, and Approvals. The Company is not required to obtain any consent, waiver, authorization, or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local, or other governmental authority or other Person in connection with the execution, delivery, and performance by the Company of the Transaction Documents, other than: (i) the filing with the Commission of the Prospectus, (ii) such filings as are required to be made under applicable state securities laws, (iii) the rules and regulations of FINRA and (iv) application(s) to each applicable Trading Market for the listing of the Shares for trading thereon in the time and manner required thereby (collectively, the “Required Approvals”).

(f) Registration Statement. The Company has filed with the Commission the Registration Statement, including any related Preliminary Prospectus or Prospectuses, for the registration of the Securities under the Securities Act, which Registration Statement has been prepared by the Company in conformity in all material respects with the requirements of the Securities Act and the rules and regulations of the Commission under the Securities Act. The registration of the Common Stock under the Exchange Act has been declared effective by the Commission on the date hereof. Copies of such Registration Statement and of each amendment thereto, if any, including the related Preliminary Prospectuses, heretofore filed by the Company with the Commission have been delivered to the Underwriters. The term “Registration Statement” means such registration statement on Form S-1 (File No. 333-276319) as amended, as of the relevant Effective Date, including financial statements, all exhibits and any information deemed to be included or incorporated by reference therein, including any information deemed to be included pursuant to Rule 430A or Rule 430B of the Securities Act. If the Company files a registration statement to register a portion of the Securities and relies on Rule 462(b) of the Securities Act for such registration statement to become effective upon filing with the Commission (a “Rule 462 Registration Statement”), then any reference to the “Registration Statement” shall be deemed to include a Rule 462 Registration Statement, as amended from time to time. The term “Preliminary Prospectus” as used herein means a preliminary prospectus as contemplated by Rule 430 or Rule 430A of the Securities Act as included at any time as part of, or deemed to be part of or included in, the Registration Statement. The term “Prospectus” means the final prospectus in connection with the Offering as first filed with the Commission pursuant to Rule 424(b) of the Securities Act and the rules and regulations thereunder or, if no such filing is required, the form of final prospectus included in the Registration Statement at the Effective Date, except that if any revised prospectus or prospectus supplement shall be provided to the Representative by the Company for use in connection with the Securities which differs from the Prospectus (whether or not such revised prospectus or prospectus supplement is required to be filed by the Company pursuant to Rule 424(b)), the term “Prospectus” shall also refer to such revised prospectus or prospectus supplement, as the case may be, from and after the time it is first provided to the Representative for such use. Any reference herein to the terms “amend,” “amendment,” or “supplement” with respect to the Registration Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include: (i) the filing of any document under the Exchange Act after the Effective Date, the date of such Preliminary Prospectus or the date of the Prospectus, as the case may be, which is incorporated therein by reference, and (ii) any such document so filed. All references in this Agreement to the Registration Statement, a Preliminary Prospectus, and the Prospectus, or any amendments or supplements to any of the foregoing, shall be deemed to include any copy thereof filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval System (“EDGAR”). The term “General Disclosure Package” means, collectively, the Permitted Free Writing Prospectus(es) (as defined below) issued at or prior to the date hereof, the most recent preliminary prospectus related to the Offering, and the information included on Schedule I and Schedule II hereto.

(g) Issuance of Common Stock. The Closing Shares and Option Shares are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, and free and clear of all Liens imposed by the Company. The Company has reserved, or will reserve, from its duly authorized capital stock the maximum number of shares of Common Stock and Option Shares issuable pursuant to the Representative’s Warrant and Over-Allotment Option. The Closing Shares, Option Shares, and shares underlying the Representative’s Warrant underlying shares are not and will not be subject to the preemptive rights of any holders of any security of the Company or similar contractual rights granted by the Company. All corporate action required to be taken for the authorization, issuance, and sale of the Closing Shares the Option Shares, and the Representative’s Warrant together with its underlying shares have been duly and validly taken. The Closing Shares, Option Shares, and Representative’s Warrant will conform in all material respects to all statements with respect thereto contained in the Registration Statement, the General Disclosure Package, and the Prospectus.

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(h) Capitalization. The capitalization of the Company as of the date hereof is as set forth in the Registration Statement, General Disclosure Package, and Prospectus under the heading “Capitalization”. Except as set forth in the Registration Statement, General Disclosure Package, and Prospectus, the Company has not issued any capital stock, other than pursuant to the exercise of employee stock options under the Company’s stock option plans, the issuance of shares of Common Stock to employees pursuant to the Company’s employee stock purchase plans, and pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding as of the date of the Registration Statement. No Person other than the Representative has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents, except such rights which have been waived prior to the date hereof. Except as set forth in the Prospectus or a result of the purchase and sale of the Securities, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights, or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock or the capital stock of any Subsidiary, or contracts, commitments, understandings, or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents or the capital stock of any Subsidiary. Except as disclosed in the Registration Statement, the issuance and sale of the Securities will not obligate the Company or any Subsidiary to issue shares of Common Stock or other securities to any Person (other than the Underwriters). Other than as disclosed in the Registration Statement, there are no outstanding securities or instruments of the Company or any Subsidiary that contain any redemption or similar provisions, and there are no contracts, commitments, understandings, or arrangements by which the Company or any Subsidiary is or may become bound to redeem a security of the Company or such Subsidiary. Except as disclosed on the Registration Statement, the Company does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities and other laws or the applicable statute of limitations has expired, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. The authorized shares of the Company conform in all material respects to all statements relating thereto contained in the Registration Statement, the General Disclosure Package, and the Prospectus. The offers and sales of the Company’s securities were at all relevant times either registered under the Securities Act and the applicable state securities or “blue sky” laws or, based in part on the representations and warranties of the purchasers, exempt from such registration requirements or the applicable statute of limitations has expired. No further approval or authorization of any stockholder, the Board, or others is required for the issuance and sale of the Securities. Other than what is disclosed in the Prospectus, there are no stockholders agreements, voting agreements, or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders.

(i) Financial Statements. The financial statements of the Company included in the Registration Statement, the Preliminary Prospectus, the General Disclosure Package, and the Prospectus, comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. The agreements and documents described in the Registration Statement, the Preliminary Prospectus, the General Disclosure Package, and the Prospectus, conform in all material aspects to the descriptions thereof contained therein and there are no agreements or other documents required by the Securities Act and the rules and regulations thereunder to be described in the Registration Statement, the Preliminary Prospectus, the General Disclosure Package, or the Prospectus, or to be filed with the Commission as exhibits to the Registration Statement, that have not been so described or filed. Each agreement or other instrument (however characterized or described) to which the Company or a Subsidiary is a party or by which it or such subsidiary is or may be bound or affected and (i) that is referred to in the Registration Statement, the General Disclosure Package, or the Prospectus, or (ii) is material to the Company’s business, has been duly authorized and validly executed by the Company or a Subsidiary, respectively, is in full force and effect in all material respects and is enforceable against the Company or such Subsidiary and, to the Company’s knowledge, the other parties thereto, in accordance with its terms, except (x) as such enforceability may be limited by bankruptcy, insolvency, reorganization, or similar laws affecting creditors’ rights generally, (y) as enforceability of any indemnification or contribution provision may be limited under the federal and state securities laws, and (z) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefore may be brought. Except as described in the Registration Statement, none of such agreements or instruments has been assigned by the Company or Subsidiary, and neither the Company nor, to the Company’s knowledge, a Subsidiary or any other party is in default thereunder and, to the Company’s knowledge, no event has occurred that, with the lapse of time or the giving of notice, or both, would constitute a default thereunder. To the Company’s knowledge, performance by the Company or the Subsidiary of the material provisions of such agreements or instruments will not result in a violation of any existing applicable law, rule, regulation, judgment, order, or decree of any governmental agency or court, domestic or foreign, having jurisdiction over the Company, a subsidiary, or any of their assets or businesses, including, without limitation, those relating to environmental laws and regulations.

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(j) Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest unaudited financial statements included within the Registration Statement, except as specifically disclosed in the Registration Statement, the Preliminary Prospectus, the General Disclosure Package, or the Prospectus, (i) there has been no event, occurrence, or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed, or made any agreements to purchase or redeem any shares of its capital stock, and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock option plans and the issuance of Common Stock Equivalents as disclosed in the Registration Statement. The Company does not have pending before the Commission any request for confidential treatment of information. Except for the issuance of the Securities contemplated by this Agreement, no event, liability, fact, circumstance, occurrence, or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their respective businesses, prospects, properties, operations, assets, or financial condition that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed made that has not been publicly disclosed at least one (1) Trading Day prior to the date that this representation is made. Unless otherwise disclosed in the Registration Statement, the Company has not: (i) issued any securities or incurred any liability or obligation, direct or contingent, for borrowed money; or (ii) declared or paid any dividend or made any other distribution on or in respect to its capital stock.

(k) Litigation. Except as set forth in the Registration Statement, General Disclosure Package, and Prospectus, there has not been, and to the knowledge of the Company there is not pending or contemplated, any action, suit, inquiry, notice of violation, proceeding, or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental, or administrative agency or regulatory authority (federal, state, county, local, or foreign) (collectively, an “Action”) which (i) adversely affects or challenges the legality, validity, or enforceability of any of the Transaction Documents or the Securities or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor, to the Company’s knowledge, any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. To the knowledge of the Company, there has not been, and there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the Company. The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.

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(l) Labor Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or the Subsidiaries’ employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither the Company nor any of the Subsidiaries is a party to a collective bargaining agreement, and the Company and the Subsidiaries believe that their relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure, or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued employment of each such executive officer does not subject the Company or any of the Subsidiaries to any liability with respect to any of the foregoing matters that would reasonably be expected to have a Material Adverse Effect. The Company and the Subsidiaries are in compliance with all U.S. federal, state, local, and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment, and wages and hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(m) Compliance. Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan, or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree, or order of any court, arbitrator, or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance, or regulation of any governmental authority, including without limitation all foreign, federal, state, and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety, and employment and labor matters, except in each case as could not have or reasonably be expected to result in a Material Adverse Effect.

(n) Environmental Laws. The Company and the Subsidiaries (i) are in compliance with all federal, state, local, and foreign laws relating to pollution or protection of human health or the environment (including ambient air, surface water, groundwater, land surface, or subsurface strata), including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations, issued, entered, promulgated, or approved thereunder (“Environmental Laws”); (ii) have received all permits licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses; and (iii) are in compliance with all terms and conditions of any such permit, license, or approval where in each clause (i), (ii), and (iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.

(o) Authorizations. The Company has filed and received approval of all Authorizations issued by, and has made all declarations and filings with all federal, state, local, or foreign governmental or regulatory authority that are necessary for the ownership or lease of its properties or the conduct of its business as described in the Registration Statement, the General Disclosure Package, and the Prospectus. To its knowledge, the Company is in compliance with and is not in violation of, or in default under, any such Authorization. To the knowledge of the Company, no event has occurred which allows, or after notice or lapse of time would allow, revocation, termination, or modification of any Authorization or result in any other material impairment of the rights of the holder of any Authorization and the Company does not have any reason to believe that any Authorization will not be renewed in the ordinary course.

(p) Title to Assets. Except as described in the Registration Statement, the General Disclosure Package, or the Prospectus, the Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them and good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries, in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and (ii) Liens for the payment of federal, state, or other taxes, for which appropriate reserves have been made therefor in accordance with GAAP and, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting, and enforceable leases with which the Company and the Subsidiaries are in compliance.

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(q) Intellectual Property. Except as disclosed in the Registration Statement, General Disclosure Package, and Prospectus, the Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses, and other intellectual property rights and similar rights it believes are necessary or required for use in connection with their respective businesses as described in the Registration Statement, the General Disclosure Package, or the Prospectus and which the failure to do so could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). To the knowledge of the Company, the Company is not now infringing, and except as disclosed in the Prospectus, upon commercialization will not infringe, any valid claim of any issued patents, copyrights, or trademarks of others. The Company has not conducted a “freedom to operate” study. Neither the Company nor any Subsidiary has received a notice (written or otherwise) that any of the Intellectual Property Rights has expired, terminated, or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement, except where such action would not reasonably be expected to have a Material Adverse Effect. Other than as specifically described in the Registration Statement, the General Disclosure Package, or the Prospectus, neither the Company nor any Subsidiary has received, since the date of the latest audited financial statements included within the Registration Statement, the General Disclosure Package, or the Prospectus, a written notice of a claim or otherwise has any knowledge that the Company’s products or planned products as described in the Registration Statement, the General Disclosure Package, or the Prospectus violate or infringe upon the rights of any Person, except as could not have or reasonably be expected to not have a Material Adverse Effect. To the knowledge of the Company, all of the Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights. The Company and the Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality, and value of all of their intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(r) Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and, to their knowledge, customary in the businesses in which the Company and the Subsidiaries are engaged. The Company has in effect directors and officers liability insurance with an insurer rated at least AA or better in the most recent edition of “Best’s Life Reports”. Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.

(s) Transactions With Affiliates and Employees. Except as set forth in the Registration Statement, General Disclosure Package or Prospectus, none of the officers or directors of the Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers, and directors), including any contract, agreement, or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, providing for the borrowing of money from or lending of money to or otherwise requiring payments to or from, any officer, director, or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member, or partner, in each case in excess of $120,000 other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company, and (iii) other employee benefits, including, without limitation, stock option agreements under any stock option plan of the Company.

(t) Sarbanes-Oxley; Internal Accounting Controls. The Company’s disclosure controls and procedures and internal controls are effective. Except as set forth in the Registration Statement, the Company and the Subsidiaries are in material compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the Commission thereunder that are effective as of the date hereof and as of the Closing Date. The Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as otherwise disclosed in the Registration Statement, Disclosure Package, and Prospectus, since the Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined in the Exchange Act) of the Company and the Subsidiaries that have materially affected, or is reasonably likely to materially affect, the internal control over financial reporting of the Company and the Subsidiaries.

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(u) Certain Fees. Except as set forth in the Registration Statement, General Disclosure Package, and Prospectus or in Section 2.01(a) of this Agreement, no brokerage or finder’s fees or commissions are or will be payable by the Company, any Subsidiary, or Affiliate of the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank, or other Person with respect to the transactions contemplated by the Transaction Documents. There are no other arrangements, agreements, or understandings of the Company or, to the Company’s knowledge, any of its stockholders that may affect the Underwriters’ compensation, as determined by FINRA. Other than payments to the Underwriters for the Offering or as disclosed in the Registration Statement or set forth under Section 2.01(a) of this Agreement, or may be made pursuant to the Engagement Agreement dated as of October 11, 2023 (the “Engagement Agreement”), the Company has not made and has no agreements, arrangements, or understanding to make any direct or indirect payments (in cash, securities, or otherwise) to: (i) any person, as a finder’s fee, consulting fee, or otherwise, in consideration of such person raising capital for the Company or introducing to the Company persons who raised or provided capital to the Company; (ii) any FINRA member; or (iii) any person or entity that has any direct or indirect affiliation or association with any FINRA member, within the one hundred eighty (180)-day period preceding the initial filing of the Registration Statement through the ninety (90)-day period after the Effective Date. None of the net proceeds of the Offering will be paid by the Company to any participating FINRA member or its affiliates, except as specifically authorized herein.

(v) Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended. The Company shall conduct its business in a manner so that it will not become an “investment company” subject to registration under the Investment Company Act of 1940, as amended.

(w) Registration Rights. No Person has any right to cause the Company or any Subsidiary to effect the registration under the Securities Act of any securities of the Company or any Subsidiary, other than those rights that have been disclosed in the Registration Statement or have been waived or satisfied.

(x) Compliance with Exchange Act. (i) The Common Stock, Option Shares, and the shares subject to the Representative’s Warrant have been registered pursuant to Section 12(b) of the Exchange Act and the Company has filed with the Commission a Form 8-A (File No. 000-[______]) providing for the registration of the Common Stock pursuant to Section 12(b) under the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock, the Option Shares, and shares subject to the Representative’s Warrant under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration. The Company has not, in the twelve (12) months preceding the date hereof, received notice from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. The Common Stock is currently eligible for electronic transfer through The Depository Trust Company, or another established clearing corporation and the Company is current in payment of the fees of The Depository Trust Company (or such other established clearing corporation) in connection with such electronic transfer. The shares of Common Stock, including the Closing Shares the Option Shares, and shares subject to the Representative’s Warrant have been approved for listing on the Nasdaq Capital Market. The Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such applicable listing and maintenance requirements of the Nasdaq Capital Market.

(y) Application of Takeover Protections. Except as set forth in the Registration Statement the General Disclosure Package, and the Prospectus, the Company and the Board have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s articles of incorporation (or similar charter documents) or the laws of its state of incorporation that is or could become applicable as a result of the Underwriters and the Company fulfilling their obligations or exercising their rights under the Transaction Documents.

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(z) Disclosure; 10b-5. The Registration Statement (and any further documents to be filed with the Commission in connection with the Offering) contains all exhibits and schedules as required by the Securities Act. Each of the Registration Statement and any post-effective amendment thereto, if any, at the time it became effective, complied in all material respects with the Securities Act and the Exchange Act and did not and, as amended or supplemented, if applicable, will not, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The Preliminary Prospectus and the Prospectus, each as of its respective date, comply in all material respects with the Securities Act and the Exchange Act. The Prospectus, as amended or supplemented, did not and will not contain as of the date thereof any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to the Underwriters’ Information. As of its date and the date hereof, the General Disclosure Package did not and does not include any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. Any documents so filed and incorporated by reference in the Prospectus, when such documents are filed with the Commission, will conform in all material respects to the requirements of the Exchange Act and the applicable rules and regulations, as applicable, and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made not misleading. No post-effective amendment to the Registration Statement reflecting any facts or events arising after the date thereof which represent, individually or in the aggregate, a fundamental change in the information set forth therein is required to be filed with the Commission. There are no documents required to be filed with the Commission in connection with the transaction contemplated hereby that (x) have not been filed as required pursuant to the Securities Act or (y) will not be filed within the requisite time period. There are no contracts or other documents required to be described in the Preliminary Prospectus or the Prospectus, or to be filed as exhibits or schedules to the Registration Statement, which have not been described or filed as required. The press releases disseminated by the Company during the twelve (12) months preceding the date of this Agreement taken as a whole do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made and when made, not misleading.

(aa) No Integrated Offering. Neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause the Offering of the Securities to be integrated with prior offerings by the Company for purposes of any applicable shareholder approval provisions of any Trading Market on which any of the securities of the Company are listed or designated.

(bb) Solvency. Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by the Company of the proceeds from the sale of the Securities hereunder,

(i) the fair saleable value of the Company’s assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known contingent liabilities) as they mature,

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(ii) the Company’s assets do not constitute unreasonably small capital to carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the business conducted by the Company, consolidated and projected capital requirements and capital availability thereof, through the first [six (6)] months of 2024], and

(iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one (1) year from the Closing Date. Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.

(cc) Tax Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company and the Subsidiaries each (i) has made or filed all United States federal, state, and local income and all foreign income and franchise tax returns, reports, and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports, and declarations, and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods subsequent to the periods to which such returns, reports, or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any Subsidiary know of no basis for any such claim. The provisions for taxes payable, if any, shown on the financial statements filed with or as part of the Registration Statement are sufficient for all accrued and unpaid taxes, whether or not disputed, and for all periods to and including the dates of such consolidated financial statements. The term “taxes” mean all federal, state, local, foreign, and other net income, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license, lease, service, service use, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, windfall profits, customs, duties, or other taxes, fees, assessments, or charges of any kind whatsoever, together with any interest and any penalties, additions to tax, or additional amounts with respect thereto. The term “returns” means all returns, declarations, reports, statements, and other documents required to be filed in respect to taxes.

(dd) Foreign Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent or other person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment, or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf of which the Company is aware) which is in violation of law, or (iv) violated in any material respect any provision of FCPA. The Company has taken reasonable steps to ensure that its accounting controls and procedures are sufficient to cause the Company to comply in all material respects with the FCPA.

(ee) Accountants. To the knowledge and belief of the Company, the Company Auditor (i) is an independent registered public accounting firm as required by the Exchange Act and (ii) either the Company Auditor or its replacement, shall express its opinion with respect to the financial statements to be included in the Company’s Annual Report for the fiscal years ending December 31, 2024 and December 31, 2023.

(ff) Regulatory. The Company and the Subsidiaries possess all certificates, authorizations, and permits issued by the appropriate federal, state, local, or foreign regulatory authorities, or by any similar foreign, federal, state, or local governmental or regulatory authority performing functions similar to those performed by such authorities necessary to conduct their respective businesses as described in the Registration Statement, the General Disclosure Package, or the Prospectus, except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (each, a “Material Permit”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material Permit. The disclosures in the Registration Statement concerning the effects of federal, state, local, and all foreign regulation on the Company’s business as currently contemplated are correct in all material respects.

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(gg) Stock Option Plans. As of the Execution Date, there are no outstanding stock options under the Company’s stock incentive plans other than what is disclosed in the Prospectus, if any.

(hh) Office of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any director, officer, agent, employee, or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department.

(ii) U.S. Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended (the “Code”), and the Company shall so certify upon the Representative’s request.

(jj) Bank Holding Company Act. Neither the Company nor any of the Subsidiaries or Affiliates is subject to the Bank Holding Company Act of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve”). Neither the Company nor any of the Subsidiaries or Affiliates owns or controls, directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent (25%) or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of the Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.

(kk) Money Laundering. The operations of the Company and the Subsidiaries are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”), and no action, suit, or proceeding by or before any court or governmental agency, authority, or body or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.

(ll) D&O Questionnaires. To the Company’s knowledge, all information contained in the questionnaires completed by each of the Company’s directors and officers immediately prior to the Offering is true and correct in all respects and the Company has not become aware of any information which would cause the information disclosed in such questionnaires to become inaccurate and incorrect.

(mm) FINRA Affiliation. No officer, director or, to the Company’s knowledge, any beneficial owner of ten percent (10%) or more of the Company’s shares of Common Stock or Common Stock Equivalents, has any direct or indirect affiliation or association with any FINRA member (as determined in accordance with the rules and regulations of FINRA) that is participating in the Offering. Except for securities purchased on the open market, no Company Affiliate is an owner of stock or other securities of any member of FINRA. No Company Affiliate has made a subordinated loan to any member of FINRA. Except as set forth in the Registration Statement, the General Disclosure Package, and the Prospectus, no proceeds from the sale of the Securities (excluding underwriting compensation as disclosed in the Registration Statement and the Prospectus) will be paid to any FINRA member, any persons associated with a FINRA member or an affiliate of a FINRA member. Except as disclosed in the Prospectus, the Company has not issued any warrants or other securities or granted any options, directly or indirectly, to the Representative or any of the Underwriters named on Schedule I hereto within the one hundred eighty (180)-day period prior to the initial filing date of the Prospectus. Except as disclosed in the Registration Statement and except for securities issued to the Representative as disclosed in the Prospectus and securities sold by the Representative on behalf of the Company, no person to whom securities of the Company have been privately issued within the one hundred eighty (180)-day period prior to the initial filing date of the Prospectus is a FINRA member, is a person associated with a FINRA member, or is an affiliate of a FINRA member. To the Company’s knowledge, no FINRA member participating in the Offering has a conflict of interest with the Company. For this purpose, a “conflict of interest” exists when a FINRA member, the parent, or affiliate of a FINRA member or any person associated with a FINRA member in the aggregate beneficially own ten percent (10%) or more of the Company’s outstanding subordinated debt or common equity, or ten percent (10%) or more of the Company’s preferred equity. “FINRA member participating in the Offering” includes any associated person of a FINRA member that is participating in the Offering, any member of such associated person’s immediate family, and any affiliate of a FINRA member that is participating in the Offering. “Any person associated with a FINRA member” means (1) a natural person who is registered or has applied for registration under the rules of FINRA and (2) a sole proprietor, partner, officer, director, or branch manager of a FINRA member, or other natural person occupying a similar status or performing similar functions, or a natural person engaged in the investment banking or securities business who is directly or indirectly controlling or controlled by a FINRA member. When used in this Section 3.01(mm) the term “affiliate of a FINRA member” or “affiliated with a FINRA member” means an entity that controls, is controlled by, or is under common control with a FINRA member. The Company will advise the Representative and Underwriter’s Counsel if it learns that any officer, director, or owner of ten percent (10%) or more of the Company’s outstanding shares of Common Stock or Common Stock Equivalents is or becomes an affiliate or associated person of a FINRA member firm.

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(nn) Officers’ Certificate. Any certificate signed by any duly authorized officer of the Company and delivered to Underwriter’s Counsel on behalf of the Representative shall be deemed a representation and warranty by the Company to the Underwriters as to the matters covered thereby.

(oo) Board of Directors. The Board is comprised of the persons set forth under the heading of the Prospectus captioned “Management.” The qualifications of the persons serving as board members and the overall composition of the Board comply with the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder applicable to the Company and the rules of the Trading Market. At least one member of the Board qualifies as a “financial expert” as such term is defined under the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder and the rules of the Trading Market. In addition, immediately following the Closing Date, at least a majority of the persons serving on the Board will qualify as “independent” as defined under the rules of the Trading Market.

(pp) ERISA. The Company is not a party to an “employee benefit plan,” as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) (an “Employee Plan”), which: (i) is subject to any provision of ERISA and (ii) is or was at any time maintained, administered, or contributed to by the Company or any of its ERISA Affiliates (as defined hereafter). These plans are referred to collectively herein as the “Employee Plans.” An “ERISA Affiliate” of any person or entity means any other person or entity which, together with that person or entity, could be treated as a single employer under Section 414(b), (c), (m), or (o) of the Code. Each Employee Plan has been maintained in material compliance with its terms and the requirements of applicable law. No Employee Plan is subject to Title IV of ERISA. The Registration Statement, the Preliminary Prospectus, and the Prospectus identify each employment, severance, or other similar agreement, arrangement, or policy and each material plan or arrangement required to be disclosed pursuant to the Rules and Regulations providing for insurance coverage (including any self-insured arrangements), workers’ compensation, disability benefits, severance benefits, supplemental unemployment benefits, vacation benefits, or retirement benefits, or deferred compensation, profit-sharing, bonuses, stock options, stock appreciation rights, or other forms of incentive compensation, or post-retirement insurance, compensation, or benefits, which: (i) is not an Employee Plan; (ii) is entered into, maintained or contributed to, as the case may be, by the Company or any of its ERISA Affiliates; and (iii) covers any officer or director or former officer or director of the Company or any of its ERISA Affiliates. These agreements, arrangements, policies, or plans are referred to collectively as “Benefit Arrangements”. Each Benefit Arrangement has been maintained in material compliance with its terms and with the requirements of applicable law. Except as disclosed in the Registration Statement, the Preliminary Prospectus, and the Prospectus, there is no liability in respect of post-retirement health and medical benefits for retired employees of the Company or any of its ERISA Affiliates, other than medical benefits required to be continued under applicable law. No “prohibited transaction” (as defined in either Section 406 of ERISA or Section 4975 of the Code) has occurred with respect to any Employee Plan; and each Employee Plan that is intended to be qualified under Section 401(a) of the Code is so qualified, and nothing has occurred, whether by action or by failure to act, which could cause the loss of such qualification.

(qq) IT Systems. Except as would not, individually or in the aggregate, have a Material Adverse Effect, the Company reasonably believes that (i) the Company and the Subsidiaries own or have a valid right to access and use all computer systems, networks, hardware, software, databases, websites, and equipment used to process, store, maintain, and operate data, information, and functions used in connection with the business of the Company and the Subsidiaries (the “Company IT Systems”), (ii) the Company IT Systems are adequate for, and operate and perform as required in connection with, the operation of the business of the Company and the Subsidiaries as currently conducted, and (iii) the Company and the Subsidiaries have implemented commercially reasonable backup, security, and disaster recovery technology consistent with applicable regulatory standards.

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(rr) Ineligible Issuer Status. At the time of filing the Registration Statement and at the date hereof, the Company was and is an “ineligible issuer,” as defined under Rule 405 under the Securities Act.

ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES

Section 4.01 Amendments to Registration Statement. The Company has delivered, or will as promptly as practicable deliver, to the Underwriters complete conformed copies of the Registration Statement and of each consent and certificate of experts, as applicable, filed as a part thereof, and conformed copies of the Registration Statement (without exhibits), the Prospectus, as amended or supplemented, and the General Disclosure Package in such quantities and at such places as an Underwriter reasonably requests. Neither the Company nor any of its directors and officers has distributed and none of them will distribute, prior to the Closing Date, any offering material in connection with the offering and sale of the Securities other than the Prospectus, the General Disclosure Package, and the Registration Statement. The Company shall not file any such amendment or supplement to which the Representative shall reasonably and timely object in writing.

Section 4.02 Federal Securities Laws.

(a) Compliance. During the time when a Prospectus is required to be delivered under the Securities Act, the Company will use its best efforts to comply with all requirements imposed upon it by the Securities Act and the Exchange Act, as from time to time in force, so far as necessary to permit the continuance of sales of or dealings in the Securities in accordance with the provisions hereof and the Prospectus. If at any time when a Prospectus relating to the Securities is required to be delivered under the Securities Act, any event shall have occurred as a result of which, in the opinion of counsel for the Company or counsel for the Representative, the Prospectus, as then amended or supplemented, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, or if it is necessary at any time to amend the Prospectus to comply with the Securities Act, the Company will notify the Underwriters promptly and prepare and file with the Commission, subject to Section 4.01 hereof, an appropriate amendment or supplement in accordance with Section 10 of the Securities Act.

(b) Exchange Act Registration. For a period of three (3) years from the Execution Date, the Company will use its best efforts to maintain the registration of the Common Stock, the Option Shares, and shares subject to the Representative’s Warrant under the Exchange Act; provided, that such provision shall not prevent a sale, merger, or similar transaction involving the Company. The Company will not deregister the Common Stock under the Exchange Act without the prior written consent of the Representative, which consent shall not be unreasonably withheld and provided that such provision shall not prevent a sale, merger, or similar transaction involving the Company.

(c) Free Writing Prospectuses. The Company represents and agrees that it has not made and will not make any offer relating to the Securities that would constitute an issuer free writing prospectus, as defined in Rule 433 of the rules and regulations under the Securities Act, without the prior written consent of the Representative. Any such free writing prospectus consented to by the Representative is herein referred to as a “Permitted Free Writing Prospectus”. The Company represents that it will treat each Permitted Free Writing Prospectus as an “issuer free writing prospectus” as defined in the rules and regulations under the Securities Act, and has complied and will comply with the applicable requirements of Rule 433 of the Securities Act, including timely Commission filing where required, legending and record keeping.

Section 4.03 Delivery to the Underwriters of Prospectuses. The Company will deliver to the Underwriters, without charge, from time to time during the period when the Prospectus is required to be delivered under the Securities Act or the Exchange Act such number of copies of each Prospectus as the Underwriters may reasonably request.

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Section 4.04 Effectiveness and Events Requiring Notice to the Underwriters. The Company will use its best efforts to cause the Registration Statement to remain effective with a current prospectus until the later of nine (9) months from the Execution Date and the date on which the Representative’s Warrant is no longer outstanding, and will notify the Underwriters immediately and confirm the notice in writing: (i) of the effectiveness of the Registration Statement and any amendment thereto; (ii) of the issuance by the Commission of any stop order or of the initiation, or the threatening, of any proceeding for that purpose; (iii) of the issuance by any state securities commission of any proceedings for the suspension of the qualification of the Securities for offering or sale in any jurisdiction or of the initiation, or the threatening, of any proceeding for that purpose; (iv) the electronic filing with the Commission of any amendment or supplement to the Registration Statement or the Prospectus; (v) of the receipt of any comments or request for any additional information from the Commission; and (vi) of the happening of any event during the period described in this Section 4.04 that, in the judgment of the Company, makes any statement of a material fact made in the Registration Statement, the General Disclosure Package, or the Prospectus untrue or that requires the making of any changes in the Registration Statement, the General Disclosure Package, or the Prospectus in order to make the statements therein, in light of the circumstances under which they were made, not misleading. If the Commission or any state securities commission shall enter a stop order or suspend such qualification at any time, the Company will make every reasonable effort to obtain promptly the lifting of such order.

Section 4.05 Review of Financial Statements. For a period of three (3) years from the Execution Date, the Company shall file with the Commission all reports required to be filed pursuant to the Exchange Act and, at its expense, shall cause its regularly engaged independent registered public accounting firm to review (but not audit except as required by law) the Company’s financial statements included in such reports, provided that such provision shall not prevent a sale, merger, or similar transaction involving the Company.

Section 4.06 Reports to the Underwriters; Expenses of the Offering.

(a) Periodic Reports, etc. For a period of three (3) years from the Execution Date, the Company will furnish or make available to the Underwriters copies of such financial statements and other periodic and special reports as the Company from time to time furnishes generally to holders of any class of its securities registered under the Exchange Act and also promptly furnish or make available to the Underwriters: (i) a copy of each periodic report the Company shall be required to file with the Commission; (ii) a copy of every press release and every news item and article with respect to the Company or its affairs which was released by the Company; (iii) a copy of each Form 8-K prepared and filed by the Company; (iv) a copy of each registration statement filed by the Company under the Securities Act; and (v) such additional documents and information with respect to the Company and the affairs of any future Subsidiaries of the Company as the Representative may from time to time reasonably request; provided that the Underwriters shall each sign, if requested by the Company, a Regulation FD compliant confidentiality agreement which is reasonably acceptable to the Representative in connection with such Underwriter’s receipt of such information. Documents filed with the Commission pursuant to its EDGAR system shall be deemed to have been delivered to the Underwriters pursuant to this Section 4.06.

(b) Transfer Sheets. For a period of three (3) years from the Execution Date, the Company shall retain the Transfer Agent or a transfer and registrar agent acceptable to the Representative and will furnish to the Underwriters at the Company’s sole cost and expense such transfer sheets of the Company’s securities as an Underwriter may reasonably request, including the daily and monthly consolidated transfer sheets of the Transfer Agent and the DTC, provided, however, that such requests cannot be made more than once monthly; and provided that such provision shall not prevent a sale, merger, or similar transaction involving the Company.

(c) Trading Reports. For a period of one (1) year after the date of this Agreement, the Company shall provide to the Underwriters, at the Company’s expense, such reports published by the Trading Market relating to price and trading of such securities, as the Underwriters shall reasonably request; provided that such provision shall not prevent a sale, merger, or similar transaction involving the Company.

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(d) General Expenses Related to the Offering. The Company hereby agrees to pay on each of the Closing Date and each Option Closing Date, if any, to the extent not paid at the Closing Date, all expenses incident to the performance of the obligations of the Company under this Agreement, including, but not limited to: (a) all filing fees and communication expenses relating to the registration of the Securities to be sold in the Offering (including the Option Shares and shares subject to the Representative’s Warrant) with the Commission; (b) all FINRA Public Offering Filing System fees associated with the review of the Offering by FINRA; all fees and expenses relating to the listing of such Closing Shares the Option Shares, and the shares subject to the Representative’s Warrant on the Trading Market and such other stock exchanges as the Company and the Representative together determine in good faith; (c) all fees, expenses, and disbursements relating to the registration or qualification of such Securities under the “blue sky” securities laws of such states and other jurisdictions as Representative may reasonably designate (including, without limitation, all filing and registration fees); (d) the costs of all mailing and printing of the underwriting documents (including, without limitation, the Underwriting Agreement, and any “blue sky” surveys and, if appropriate, any agreement among Underwriters, any agreements with selected dealers, Underwriters’ questionnaire and power of attorney), Registration Statements, Prospectuses, and all amendments, supplements, and exhibits thereto and as many preliminary and final Prospectuses as the Representative may reasonably deem necessary; (e) the cost and expense of the public relations firm referred to in Section 4.20 of this Agreement; (f) the costs of preparing, printing, and delivering the Securities; (g) fees and expenses of the Transfer Agent for the Securities (including, without limitation, any fees required for same-day processing of any instruction letter delivered by the Company); (h) stock transfer and/or stamp taxes, if any, payable upon the transfer of securities from the Company to the Underwriters; (i) the fees and expenses of the Company’s accountants; (j) the fees and expenses of the Company’s legal counsel and other agents and representatives; (k) the Underwriters’ costs of mailing prospectuses to prospective investors; (l) all fees, expenses, and disbursements relating to background checks of the Company’s officers and directors; (m) the fees and expenses associated with the Underwriters’ use of an electronic road show service; (n) the Company’s actual “road show” expenses for the Offering and (o) preparation of leather-bound volumes and Lucite Cube mementos in such quantities as the Representative may reasonably request. The Underwriters may also deduct from the net proceeds of the Offering payable to the Company on the Closing Date, or each Option Closing Date, if any, all out-of-pocket fees, expenses, and disbursements (including legal fees and expenses) of the Underwriters incurred as a result of providing services related to the Offering to be paid by the Company to the Underwriters.

(e) Non-Accountable Expenses. The Company further agrees that, in addition to the expenses payable pursuant to Section 4.06(d), on the Closing Date, it shall pay to the Representative, by deduction from the net proceeds of the Offering contemplated herein (i) up to $125,000 for invoiced and documented fees and expenses of legal counsel and other out-of-pocket expenses, (ii) roadshow expenses and cost of background checks and (iii) a non-accountable expense allowance equal to one percent (1%) of the gross proceeds received by the Company from the sale of the Closing Shares and Option Shares.

Section 4.07 Application of Net Proceeds. The Company will apply the net proceeds from the Offering received by it in a manner consistent with the application described under the caption “Use of Proceeds” in the Prospectus.

Section 4.08 Stabilization. Neither the Company, nor, to its knowledge, any of its employees, directors, or shareholders (without the consent of the Representative) has taken or will take, directly or indirectly, any action designed to or that has constituted or that might reasonably be expected to cause or result in, under the Exchange Act, or otherwise, stabilization, or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities.

Section 4.09 Internal Controls. The Company will implement and maintain a system of internal accounting controls sufficient to provide reasonable assurances that: (i) transactions are executed in accordance with management’s general or specific authorization; (ii) transactions are recorded as necessary in order to permit preparation of financial statements in accordance with GAAP and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

Section 4.10 Accountants. For a period of three (3) years from the Effective Date, the Company shall continue to retain a nationally recognized, independent PCAOB registered public accounting firm. The Underwriters acknowledge that the Company Auditor is acceptable to the Underwriters.

Section 4.11 FINRA. The Company shall advise the Underwriters (who shall make an appropriate filing with FINRA) if it is aware that any officer, director, 10% or greater shareholder of the Company or Person that received the Company’s unregistered equity securities in the past one hundred eighty (180) days is or becomes an affiliate or associated person of a FINRA member firm prior to the earlier of the termination of this Agreement or the conclusion of the distribution of the Offering.

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Section 4.12 No Fiduciary Duties. The Company acknowledges and agrees that the Underwriters’ responsibility to the Company is solely contractual and commercial in nature, based on arms-length negotiations, and that neither the Underwriters nor their affiliates or any selected dealer shall be deemed to be acting in a fiduciary capacity, or otherwise owes any fiduciary duty to the Company or any of its affiliates in connection with the Offering and the other transactions contemplated by this Agreement. Notwithstanding anything in this Agreement to the contrary, the Company acknowledges that the Underwriters may have financial interests in the success of the Offering that are not limited to the difference between the price to the public and the purchase price paid to the Company by the Underwriters for the shares and the Underwriters have no obligation to disclose, or account to the Company for, any of such additional financial interests. The Company hereby waives and releases, to the fullest extent permitted by law, any claims that the Company may have against the Underwriters with respect to any breach or alleged breach of fiduciary duty by the Underwriters.

Section 4.13 Board Composition and Board Designations. The qualifications of the persons serving as board members of the Company and the overall composition of the Board shall comply with the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder and with the listing requirements of The Nasdaq Stock Market LLC and, if applicable, at least one (1) member of the Board must qualify as a “financial expert” as such term is defined under the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder.

Section 4.14 Securities Laws Disclosure; Publicity. At the request of the Representative, by 9:00 a.m. (New York City time) on the date hereof, the Company shall issue a press release disclosing the material terms of the Offering. The Company and the Representative shall consult with each other in issuing any press releases with respect to the Offering, and neither the Company nor any Underwriter shall issue any such press release nor otherwise make any such public statement without the prior consent of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication. The Company will not issue press releases or engage in any other publicity, without the Representative’s prior consent, which consent will not be unreasonably withheld, for a period ending at 5:00 p.m. (New York City time) on the first (1^st) business day following the forty-fifth (45^th) day following the Closing Date, other than normal and customary releases issued in the ordinary course of the Company’s business.

Section 4.15 Shareholder Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that any Underwriter of the Securities is an “Acquiring Person” under any control share acquisition, business combination, poison pill (including any distribution under a rights agreement), or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company, or that any Underwriter of Securities could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities.

Section 4.16 Reservation of Common Stock. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available at all times while any of the Over-Allotment Option or Representative’s Warrant are outstanding, free of preemptive rights, a sufficient number of shares of Common Stock for the purpose of enabling the Company to issue Option Shares pursuant to the Over-Allotment Option and pursuant to any exercise of the Representative’s Warrant.

Section 4.17 Listing of Common Stock. The Company agrees to use its commercially reasonable best efforts to effect and maintain the trading of its Common Stock on the Nasdaq Capital Market for at least three (3) years after the Closing Date; provided that such provision shall not prevent a sale, merger, or similar transaction involving the Company.

Section 4.18 Subsequent Equity Sales.

(a) From the date hereof until one hundred eighty (180) days after the Closing Date, neither the Company nor any Subsidiary shall issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of Common Stock or Common Stock Equivalents, without the prior written approval of the Representative.

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(b) Notwithstanding the foregoing, this Section 4.18 shall not apply in respect of an Exempt Issuance.

Section 4.19 Capital Changes. Until ninety (90) days after the Closing Date, the Company shall not undertake a reverse or forward stock split or reclassification of the Common Stock without the prior written consent of Spartan.

Section 4.20 Reserved.

Section 4.21 Public Relations Firm. As of the Execution Date, the Company has retained a financial public relations firm reasonably acceptable to the Representative and the Company, which shall initially be Catalyst Corporate Solutions LLC, which firm is experienced in assisting issuers in public offerings of securities and in their relations with their security holders, and shall retain such firm or another firm reasonably acceptable to the Representative for a period of not less than two (2) years after the Execution Date.

Section 4.22 Research Independence. The Company acknowledges that each Underwriter’s research analysts and research departments, if any, are required to be independent from their respective investment banking divisions and are subject to certain regulations and internal policies, and that such Underwriter’s research analysts may hold and make statements or investment recommendations and/or publish research reports with respect to the Company and/or the Offering that differ from the views of its investment bankers. The Company hereby waives and releases, to the fullest extent permitted by law, any claims that the Company may have against such Underwriter with respect to any conflict of interest that may arise from the fact that the views expressed by their independent research analysts and research departments may be different from or inconsistent with the views or advice communicated to the Company by such Underwriter’s investment banking divisions. The Company acknowledges that each Representative is a full service securities firm and as such from time to time, subject to applicable securities laws, may effect transactions for its own account or the account of its customers and hold long or short position in debt or equity securities of the Company.

Section 4.23 Corporation Records Service. As of the Execution Date, the Company has registered with the Corporation Records Service (including annual report information) published by Standard & Poor’s Corporation and shall maintain such registration for a period of three (3) years from the Closing.

Section 4.25 Right of First Refusal. If, from the date hereof until the 12 month anniversary following consummation of the Offering, the Company or any of its subsidiaries (a) decides to dispose of or acquire business units or acquire any of its outstanding securities or make any exchange or tender offer or enter into a merger, consolidation or other business combination or any recapitalization, reorganization, restructuring or other similar transaction, including, without limitation, an extraordinary dividend or distribution or a spin-off or split-off, and the Company decides to retain a financial advisor for any such transaction Spartan (or any Affiliate designated by Spartan) shall have the right to act as the Company’s exclusive financial advisor for any such transaction; or (b) decides to finance or refinance any indebtedness using a manager or agent, Spartan (or any Affiliate designated by Spartan) shall have the right to act as sole book-runner, sole manager, sole placement agent with respect to such financing or refinancing; or (c) decides to raise funds by means of a public offering (including at-the-market facility) or a private placement or any other capital-raising financing of equity, equity-linked or debt securities using an underwriter or placement agent , Spartan (or any Affiliate designated by Spartan) shall have the right to act as sole book-running manager, sole underwriter or sole placement agent for such financing. If Spartan or one of its Affiliates decides to accept any such engagement, the agreement covering such engagement will contain, among other things, provisions for customary fees for transactions of similar size and nature and the provisions of this Agreement, including indemnification, which are appropriate to such a transaction, all such terms to be negotiated in good faith between the Company and Spartan.

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ARTICLE V.
DEFAULT BY UNDERWRITERS

If on the Closing Date or any Option Closing Date, if any, any Underwriter shall fail to purchase and pay for the portion of the Closing Shares or Option Shares, as the case may be, which such Underwriter has agreed to purchase and pay for on such date (otherwise than by reason of any default on the part of the Company), the Representative, or if a Representative is the defaulting Underwriter, the non-defaulting Underwriters, shall use their reasonable efforts to procure within thirty-six (36) hours thereafter one or more of the other Underwriters, or any others, to purchase from the Company such amounts as may be agreed upon and upon the terms set forth herein, the Closing Shares or Option Shares, as the case may be, which the defaulting Underwriter or Underwriters failed to purchase. If during such thirty-six (36) hours the Representative shall not have procured such other Underwriters, or any others, to purchase the Closing Shares or Option Shares, as the case may be, agreed to be purchased by the defaulting Underwriter or Underwriters, then (a) if the aggregate number of Closing Shares or Option Shares, as the case may be, with respect to which such default shall occur does not exceed ten percent (10%) of the Closing Shares or Option Shares, as the case may be, covered hereby, the other Underwriters shall be obligated, severally, in proportion to the respective numbers of Closing Shares or Option Shares, as the case may be, which they are obligated to purchase hereunder, to purchase the Closing Shares or Option Shares, as the case may be, which such defaulting Underwriter or Underwriters failed to purchase, or (b) if the aggregate number of Closing Shares or Option Shares, as the case may be, with respect to which such default shall occur exceeds ten percent (10%) of the Closing Shares or Option Shares, as the case may be, covered hereby, the Company or the Representative will have the right to terminate this Agreement without liability on the part of the non-defaulting Underwriters or of the Company except to the extent provided in Article VI hereof. In the event of a default by any Underwriter or Underwriters, as set forth in this Article V, the applicable Closing Date may be postponed for such period, not exceeding seven (7) days, as the Representative, or if a Representative is the defaulting Underwriter, the non-defaulting Underwriters, may determine in order that the required changes in the Prospectus or in any other documents or arrangements may be effected. The term “Underwriter” includes any person substituted for a defaulting Underwriter. Any action taken under this Article V shall not relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this Agreement.

ARTICLE VI.
INDEMNIFICATION

Section 6.01 Indemnification of the Underwriters. The Company shall indemnify and hold harmless each Underwriter, its affiliates, the directors, officers, employees, and agents of such Underwriter and each person, if any, who controls such Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act from and against any and all losses, claims, liabilities, expenses, and damages (including any and all investigative, legal, and other expenses reasonably incurred in connection with, and any amount paid in settlement of, any action, suit, or proceeding between any of the indemnified parties and any indemnifying parties or between any indemnified party and any third party, or otherwise, or any claim asserted), to which they, or any of them, may become subject under the Securities Act, the Exchange Act, or other federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, liabilities, expenses, or damages arise out of or are based on (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), including the information deemed to be a part of the Registration Statement at the time of effectiveness and at any subsequent time pursuant to Rules 430A and 430B of the Securities Act and the rules and regulations thereunder, as applicable, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading, or (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus, any preliminary prospectus supplement, any Permitted Free Writing Prospectus, or the Prospectus (or any amendment or supplement to any of the foregoing) or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, or (iii) any untrue statement or alleged untrue statement of a material fact contained in any materials or information provided to investors by, or with the approval of, the Company in connection with the marketing of the Offering of the Securities, including any roadshow or investor presentations made to investors by the Company (whether in person or electronically) or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, or (iv) in whole or in part any inaccuracy in any material respect in the representations and warranties of the Company contained herein; provided, however, that the Company shall not be liable to the extent that such loss, claim, liability, expense, or damage is based on any untrue statement or omission or alleged untrue statement or omission made in reliance on and in conformity with Underwriters’ Information. This indemnity agreement will be in addition to any liability that the Company might otherwise have. For all purposes of this Agreement, the information set forth in the Prospectus in the “Discretionary Accounts,” “Price Stabilization, Short Positions and Penalty Bids,” and “Electronic Distribution” sections under the caption “Underwriting” constitutes the only information (the “Underwriters’ Information”) relating to the Underwriters furnished in writing to the Company by the Underwriters through the Representative specifically for inclusion in the preliminary prospectus, the Registration Statement, or the Prospectus.

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Section 6.02 Indemnification of the Company. Each Underwriter, severally and not jointly, agrees to indemnify and hold harmless the Company, its affiliates, the directors, officers, employees, and agents of the Company and each other person or entity, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, against any losses, liabilities, claims, damages, and expenses whatsoever, as incurred (including but not limited to reasonable attorneys’ fees and any and all reasonable expenses whatsoever, incurred in investigating, preparing, or defending against any litigation, commenced or threatened, or any claim whatsoever, and any and all amounts paid in settlement of any claim or litigation), joint or several, to which they or any of them may become subject under the Securities Act, the Exchange Act, or otherwise, insofar as such losses, liabilities, claims, damages, or expenses (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement at the time of effectiveness and at any subsequent time pursuant to Rules 430A and 430B of the Securities Act and the rules and regulations thereunder, any Preliminary Prospectus, the Prospectus, or any amendment or supplement to any of them, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that any such loss, liability, claim, damage, or expense (or action in respect thereof) arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon the Underwriters’ Information; provided, however, that in no case shall any Underwriter be liable or responsible for any amount in excess of the underwriting discount and commissions applicable to the Securities purchased by such Underwriter hereunder.

Section 6.03 Indemnification Procedures. Any party that proposes to assert the right to be indemnified under this Article VI shall, promptly after receipt of notice of commencement of any action against such party in respect of which a claim is to be made against an indemnifying party or parties under this Article VI, notify each such indemnifying party of the commencement of such action, enclosing a copy of all papers served, but the omission so to notify such indemnifying party shall not relieve the indemnifying party from any liability that it may have to any indemnified party under the foregoing provisions of this Article VI unless, and only to the extent that, such omission results in the forfeiture of substantive rights or defenses by the indemnifying party. If any such action is brought against any indemnified party and it notifies the indemnifying party of its commencement, the indemnifying party will be entitled to participate in and, to the extent that it elects by delivering written notice to the indemnified party promptly after receiving notice of the commencement of the action from the indemnified party, jointly with any other indemnifying party similarly notified, to assume the defense of the action, with counsel satisfactory to the indemnified party, and after notice from the indemnifying party to the indemnified party of its election to assume the defense, the indemnifying party will not be liable to the indemnified party for any legal or other expenses except as provided below and except for the reasonable out-of-pocket costs of investigation subsequently incurred by the indemnified party in connection with the defense. The indemnified party will have the right to employ its own counsel in any such action, but the fees, expenses, and other charges of such counsel will be at the expense of such indemnified party unless (i) the employment of counsel by the indemnified party has been authorized in writing by one of the indemnifying parties in connection with the defense of such action, (ii) the indemnified party has reasonably concluded (based on advice of counsel) that there may be legal defenses available to it or other indemnified parties that are different from or in addition to those available to the indemnifying party, (iii) the indemnified party has reasonably concluded that a conflict or potential conflict exists (based on advice of counsel to the indemnified party) between the indemnified party and the indemnifying party (in which case the indemnifying party shall not have the right to direct the defense of such action on behalf of the indemnified party), (iv) the indemnifying party does not diligently defend the action after assumption of the defense, or (v) the indemnifying party has not in fact employed counsel satisfactory to the indemnified party to assume the defense of such action within a reasonable time after receiving notice of the commencement of the action, in each of which cases the reasonable fees, disbursements, and other charges of counsel shall be at the expense of the indemnifying party or parties. It is understood that the indemnifying party or parties shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees, disbursements, and other charges of more than one separate firm admitted to practice in such jurisdiction at any one time for all such indemnified party or parties. All such fees, disbursements, and other charges shall be reimbursed by the indemnifying party promptly as they are incurred. An indemnifying party shall not be liable for any settlement of any action or claim effected without its written consent (which consent will not be unreasonably withheld or delayed). No indemnifying party shall, without the prior written consent of each indemnified party, settle, or compromise or consent to the entry of any judgment in any pending or threatened claim, action, or proceeding relating to the matters contemplated by this Article VI (whether or not any indemnified party is a party thereto), unless (x) such settlement, compromise, or consent (i) includes an unconditional release of each indemnified party from all liability arising or that may arise out of such claim, action, or proceeding and (ii) does not include a statement as to or an admission of fault, culpability, or a failure to act by or on behalf of any indemnified party, and (y) the indemnifying party confirms in writing its indemnification obligations hereunder with respect to such settlement, compromise, or judgment. Notwithstanding the foregoing, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by subsection (a) of this Section 6.03 effected without its written consent if (A) such settlement is entered into more than forty-five (45) days after receipt by such indemnifying party of the aforesaid request, (B) such indemnifying party shall have received notice of the terms of such settlement at least thirty (30) days prior to such settlement being entered into, and (iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement.

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Section 6.04 Contribution. In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in the foregoing paragraphs of this Article VI is applicable in accordance with its terms but for any reason is held to be unavailable, the Company and the Underwriters shall contribute to the total losses, claims, liabilities, expenses, and damages (including any investigative, legal, and other expenses reasonably incurred in connection with, and any amount paid in settlement of, any action, suit, or proceeding or any claim asserted, but after deducting any contribution received by the Company from persons other than the Underwriters, such as persons who control the Company within the meaning of the Securities Act, officers of the Company who signed the Registration Statement and directors of the Company, who may also be liable for contribution), to which the Company and the Underwriter may be subject in such proportion as shall be appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other from the Offering of the Securities pursuant to this Agreement. The relative benefits received by the Company and the Underwriters shall be deemed to be in the same proportion as (x) the total proceeds from the Offering (net of underwriting discount and commissions but before deducting expenses) received by the Company bears to (y) the underwriting discount and commissions received by the Underwriters, in each case as set forth in the table in Exhibit 107 of the Prospectus. If, but only if, the allocation provided by the foregoing sentence is not permitted by applicable law, the allocation of contribution shall be made in such proportion as is appropriate to reflect not only the relative benefits referred to in the foregoing sentence but also the relative fault of the Company, on the one hand, and the Underwriters, on the other, with respect to the statements or omissions which resulted in such loss, claim, liability, expense, or damage, or action in respect thereof, as well as any other relevant equitable considerations with respect to such offering. Such relative fault shall be determined by reference to whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or the Underwriters, the intent of the parties and their relative knowledge, access to information, and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contributions pursuant to this Section 6.04 were to be determined by pro rata allocation or by any other method of allocation (even if the Underwriters were treated as one entity for such purpose) which does not take into account the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, liability, expense, or damage, or action in respect thereof, referred to above in this Section 6.04 shall be deemed to include, for purpose of this Section 6.04, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 6.04, no Underwriter shall be required to contribute any amount in excess of the underwriting discounts and commissions received by it. No person found guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 6.04, any person who controls a party to this Agreement within the meaning of the Securities Act will have the same rights to contribution as that party, and each officer of the Company who signed the Registration Statement will have the same rights to contribution as the Company, and each director, officer, employee, counsel, or agent of an Underwriter will have the same rights to contribution as such Underwriter, subject in each case to the provisions hereof. Any party entitled to contribution, promptly after receipt of notice of commencement of any action against such party in respect of which a claim for contribution may be made under this Section 6.04, will notify any such party or parties from whom contribution may be sought, but the omission so to notify will not relieve the party or parties from whom contribution may be sought from any other obligation it or they may have under this Section 6.04. The obligations of the Underwriters to contribute pursuant to this Section 6.04 are several in proportion to the respective number of Securities to be purchased by each of the Underwriters hereunder and not joint. No party will be liable for contribution with respect to any action or claim settled without its written consent (which consent will not be unreasonably withheld).

Section 6.05 Survival. The indemnity and contribution agreements contained in this Article VI and the representations and warranties of the Company contained in this Agreement shall remain operative and in full force and effect regardless of (i) any investigation made by or on behalf of any Underwriter or any controlling Person thereof, (ii) acceptance of any of the Securities and payment therefor, or (iii) any termination of this Agreement.

28

ARTICLE VII.
MISCELLANEOUS

Section 7.01 Termination.

(a) Termination Right. The Representative shall have the right to terminate this Agreement by notifying the Company at any time prior to any Closing Date, (i) if any domestic or international event or act or occurrence has materially disrupted, or in their opinion will in the immediate future materially disrupt, general securities markets in the United States; or (ii) if trading on any Trading Market shall have been suspended or materially limited, or minimum or maximum prices for trading shall have been fixed, or maximum ranges for prices for securities shall have been required by FINRA or by order of the Commission or any other government authority having jurisdiction, or (iii) if the United States shall have become involved in a new war or a material increase in major hostilities, or (iv) if a banking moratorium has been declared by a New York State or federal authority, or (v) if a moratorium on foreign exchange trading has been declared which materially adversely impacts the United States securities markets, or (vi) if the Company shall have sustained a material loss by fire, flood, accident, hurricane, earthquake, theft, sabotage, or other calamity or malicious act which, whether or not such loss shall have been insured, will, in the Representative’s opinion, make it inadvisable to proceed with the delivery of the Securities, or (vii) if the Company is in material breach of any of its representations, warranties, or covenants hereunder which have not been cured within ten (10) days after notification has been given to the Company by the Representative or which by its nature is uncurable, or (viii) if the Representative shall have become aware after the date hereof of such a material adverse change in the conditions or prospects of the Company, or such adverse material change in general market conditions as in the Representative’s judgment would make it impracticable to proceed with the Offering, sale and/or delivery of the Securities, or to enforce contracts made by the Underwriters for the sale of the Securities.

(b) Expenses. In the event this Agreement shall be terminated pursuant to Section 7.01(a), within the time specified herein or any extensions thereof pursuant to the terms herein, the Company shall be obligated to pay to Spartan its actual and accountable out of pocket expenses related to the transactions contemplated herein then due and payable up to $125,000 (provided, however, that such expense cap in no way limits or impairs the indemnification and contribution provisions of this Agreement). Notwithstanding the foregoing, any Advance received by the Representative will be reimbursed to the Company to the extent not actually incurred in compliance with FINRA Rule 5110(g)(4)(A).

(c) Indemnification. Notwithstanding any contrary provision contained in this Agreement, any election hereunder or any termination of this Agreement, and whether or not this Agreement is otherwise carried out, the provisions of Article VI shall not be in any way effected by such election or termination or failure to carry out the terms of this Agreement or any part hereof.

Section 7.02 Entire Agreement. The Transaction Documents, together with the exhibits and schedules thereto, any Preliminary Prospectus and the Prospectus, contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits, and schedules. Notwithstanding anything herein to the contrary, the Engagement Agreement dated shall continue to be effective and the terms therein, shall continue to survive and be enforceable by Spartan in accordance with its terms, provided that, in the event of a conflict between the terms of the foregoing agreements and this Agreement, the terms of this Agreement shall prevail.

29

Section 7.03 Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number or e-mail attachment at the email address set forth on the signature pages attached hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number or e-mail attachment at the e-mail address as set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2^nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages attached hereto.

Section 7.04 Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented, or amended except in a written instrument signed, in the case of an amendment, by the Company and Spartan. No waiver of any default with respect to any provision, condition, or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition, or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.

Section 7.05 Headings. The headings herein are for convenience only, do not constitute a part of this Agreement, and shall not be deemed to limit or affect any of the provisions hereof.

Section 7.06 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.

Section 7.07 Governing Law. All questions concerning the construction, validity, enforcement, and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all disputes and other legal proceedings concerning the interpretations, enforcement, and defense of this Agreement and the transactions contemplated herein and within any other Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees, or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any action, suit or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action, or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action, or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If either party shall commence an action or proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the Company under Article VI, the substantially prevailing party in such action, suit, or proceeding shall be reimbursed by the other party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation, and prosecution of such action or proceeding.

Section 7.08 Survival. The representations and warranties and the indemnification provisions contained herein shall survive the Closing and the Option Closing, if any, and the delivery of the Securities.

30

Section 7.09 Counterparts; Execution. This Agreement may be executed in counterparts, each of which will be deemed to be an original copy and all of which, when taken together, shall be deemed to constitute one and the same document. This Agreement may be executed and delivered by customary or other commercially acceptable electronic means (including DocuSign or similar service, or any other electronic signature complying with the U.S. federal ESIGN Act of 2000, as the same may be amended, from time to time); a manual or electronic signature so affixed to this Agreement whose image shall have been transmitted via facsimile, e-mail or other customary electronic means shall have the same force and effect as original ink signature for all purposes.

Section 7.10 Severability. If any term, provision, covenant, or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void, or unenforceable, the remainder of the terms, provisions, covenants, and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired, or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant, or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants, and restrictions without including any of such that may be hereafter declared invalid, illegal, void, or unenforceable.

Section 7.11 Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, the Underwriters and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby agree to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.

Section 7.12 Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.

Section 7.13 Construction. The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations, and other similar transactions of the Common Stock that occur after the date of this Agreement.

Section 7.14 WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVE FOREVER ANY RIGHT TO TRIAL BY JURY.

Section 7.15 No Third-Party Beneficiaries. The provisions of this Agreement shall be binding upon and shall inure solely to the benefit of the parties hereto, are not intended to confer upon any Person other than the parties hereto, and the Underwriters where so indicated any rights, benefits, remedies, obligations, or liabilities hereunder.

[SIGNATURE PAGE FOLLOWS]

(Remainder of page intentionally left blank)

31

If the foregoing correctly sets forth the understanding between the Underwriters and the Company, please so indicate in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement among the Company and the several Underwriters in accordance with its terms.

	COMPANY: LAFAYETTE ENERGY CORP.
Address for Notice:	By:
3450 N. Triumph Blvd., Suite 102,	Name:	Michael L. Peterson
Lehi, Utah 84043	Title:	President and CEO

Attn: Michael L. Peterson

T: (303) 625 6709

Copy to (which shall not constitute notice):

The Loev Law Firm, PC

6300 West Loop South, Suite 280

Bellaire, Texas 77401

Attn: David M. Loev, Esq.

 John S. Gillies, Esq.

Tel: (713) 524-4110

Email: dloev@loevlaw.com

   john@loevlaw.com

Accepted by the Representative, acting for themselves and as Representative of the Underwriters named on Schedule I hereto, as of the date first above written:

	REPRESENTATIVE: Spartan Capital Securities, LLC
Address for Notice:
45 Broadway, 19th Floor	By:
New York, NY 10006	Name:	[Name]
590 Madison Avenue, 39th Floor Title:	[Title]	(Authorized Person)

New York, NY 10022

Attn: Jason Diamond, Managing Dir., Head of Investment Banking

Tel:

Copy to (which shall not constitute notice):

Sichenzia Ross Ference Carmel LLP

1185 Avenue of the Americas, 31^st floor

New York, NY 10036

Attn: Ross D. Carmel, Esq.

 Barry P. Biggar, Esq

Tel: (212) 658-0458

Email: rcarmel@srfc.com

bbiggar@srfc.law

32

Schedule I

Schedule of Underwriters

Underwriters	Closing Shares	Closing Purchase Price
Spartan Capital Securities, LLC		$
Total		$

33

Schedule II

Pricing Information

Number of Closing Shares:
Number of Option Shares:
Public Offering Price per Closing Share:	$
Public Offering Price per Option Share:	$
Underwriting Discount per Closing Share:	$
Underwriting Discount per Option Share:	$
Proceeds to Company per Closing Share (before expenses):	$
Proceeds to Company per Option Share (before expenses):	$

34

Exhibit A

Form of Representative Warrant

[Shared separately]

35

Exhibit B

Form of Lock-Up Agreement

[Shared separately]

36

Exhibit C

Form of Officer’s Certificate

[Shared separately]

37

Exhibit D

Form of Secretary’s Certificate

[Shared separately]

38

Exhibit E

Form of CFO Certificate

[Shared separately]

39

EX-3.3

EXHIBIT 3.3

CERTIFICATE OF DESIGNATION OF

PREFERENCES, RIGHTS AND LIMITATIONS OF

SERIES A CONVERTIBLE PREFERRED STOCK OF

LAFAYETTE ENERGY CORP

Pursuant to Section 151 of the General Corporation Law

of the State of Delaware

The undersigned, Michael L. Peterson, President and Chief Executive Officer of Lafayette Energy Corp, a Delaware corporation (the “Corporation”), hereby certifies that, pursuant to the authority expressly vested in the Board of Directors of the Corporation (the “Board of Directors”) by the Certificate of Incorporation of the Corporation, as amended and restated, and in accordance with the provisions of Sections 103 and 151 of the General Corporation Law of the State of Delaware, the Board of Directors has duly adopted the following resolutions:

RESOLVED, that, pursuant to Article IV.C of the Second Amended and Restated Certificate of Incorporation of the Corporation (which authorizes 10,000,000 shares of preferred stock, par value $0.0001 per share of the Corporation (the “Preferred Stock”)), the Board of Directors hereby fixes the powers, designations, preferences and relative, participating, optional and other special rights, and the qualifications, limitations and restrictions, of a series of Preferred Stock as follows:

RESOLVED, that each share of such series of Preferred Stock shall be subject to the following provisions:

1. Designation of Shares. The designation of this series of Preferred Stock is “Series A Convertible Preferred Stock,” par value $0.0001 per share.

2. Number of Shares. The number of shares constituting the Series A Convertible Preferred Stock (the “Series A Preferred”) shall be 2,000,000 shares.

3. Voting. The holders of shares of Series A Preferred shall have full voting rights and powers, and, except as may be otherwise provided by law, shall vote together with all other classes and series of stock of the Corporation as a single class on all actions to be taken by the stockholders of the Corporation. Each holder of shares of Series A Preferred shall be entitled to the number of votes equal to the number of shares of Common Stock into which the shares of Series A Preferred held by such holder could be converted on the record date for the vote which is being taken. Fractional votes shall not, however, be permitted and, with respect to each holder of Series A Preferred, any fractional voting rights resulting from the above (after aggregating all shares of Common Stock into which shares of Series A Preferred held by a holder could be converted) shall be rounded to the nearest whole number (with one-half being rounded upward).

4. Dividend Rights. The Corporation shall not declare, pay or set aside any dividends on shares of any class or series of capital stock of the Corporation (other than dividends on shares of Common Stock payable in shares of Common Stock) unless the holders of the Series A Preferred then outstanding shall first receive, or simultaneously receive, a dividend on each outstanding share of Series A Preferred in an amount equal to the dividend per share that such holders would have received had they converted their shares of Series A Preferred into shares of Common Stock immediately prior to the record date for the declaration of the Common Stock dividend. “Common Stock” means the common stock, par value $0.0001 per share, of the Corporation and common stock that may hereinafter be authorized and issued by the Corporation and any share of successor or replacement stock. The Series A Preferred shall also have the dividend rights set forth in Section 5.C hereof.

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5. Preference.

A. In the event of any Liquidity Event (defined below), distributions to stockholders of the Corporation shall be made in the following manner: Each holder of a share of Series A Preferred shall be entitled to receive, subject to the prior preferences and other rights of any class or series of stock of the Corporation ranking in the case of a Liquidity Event senior to the Series A Preferred, but prior and in preference to any distribution of any of the assets or surplus funds of the Corporation to holders of Common Stock or any other class or series of stock of the Corporation ranking in the case of a Liquidity Event junior to the Series A Preferred, as to the distribution of assets upon any Liquidity Event, by reason of their ownership of such stock, an amount equal to $2.50 per share (as adjusted for any stock dividends, combinations or splits with respect to such shares) together with any Accrued EBT Payments (the “Preference Amount”). In the event the funds or assets legally available for distribution to the holders of shares of Series A Preferred are insufficient to pay in full the Preference Amount as described above, then all funds or assets available for distribution to the holders of capital stock after the payment of amounts to any class or series of stock of the Corporation ranking in the case of a Liquidity Event senior to the Series A Preferred on a parity with any class or series of stock of the Corporation ranking in parity with the Series A Preferred, shall be paid to the holders of Series A Preferred pro rata based on the full Preference Amount to which they are entitled. Following the payment of the Preference Amount to holders of shares of Series A Preferred and all amounts owing to holders of each class or series of capital stock of the Corporation having a preference or priority over the Common Stock as to distributions upon the liquidation, dissolution or winding up of the Corporation, then the holders of shares of Series A Preferred shall be entitled to participate, with the holders of the Common Stock and with the holders of any other securities of the Corporation entitled to participate, pro rata, based upon the number of shares of Common Stock into which the shares of Series A Preferred are then convertible, as to any amounts remaining for distribution to the holders of Common Stock upon a Liquidity Event.

B. A “Liquidity Event” means (i) any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary (a “Liquidation”) or (ii) any sale, merger, consolidation, reorganization or other transaction which results in a Change of Control. A “Change of Control” means a reorganization, consolidation or merger of the Corporation with or into any other corporation or corporations (other than a wholly-owned subsidiary), or the sale, transfer, liquidation or other disposition of all or substantially all of the assets of the Corporation, or the consummation of any transaction or series of related transactions, in each case which results in the Corporation’s stockholders immediately prior to such transaction or series of related transactions, holding less than fifty percent (50%) of the voting power of the entity surviving or continuing (including the Corporation or the entity owning all or substantially all of the assets of the Corporation) following such transaction or series of related transactions; provided a Change of Control shall not apply to a merger effected solely for the purposes of changing the domicile of the Corporation or public offerings of Common Stock.

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C. Valuation of Non-Cash Consideration. If any assets of the Corporation distributed to stockholders in connection with any liquidation, dissolution, or winding up of the Corporation are other than cash, then the value of such assets shall be their fair market value as determined in good faith by the Board of Directors. In the event of a merger or other acquisition of the Corporation by another entity, the distribution date shall be deemed to be the date such transaction closes.

D. EBT Payments. For so long as any Series A Preferred is issued and outstanding, holders of the Series A Preferred shall be entitled to receive, when, as and if authorized and declared by the Board of Directors of the Corporation, out of any funds legally available therefor, cumulative dividends in an amount equal to thirty percent (30%) of the EBT of the Corporation for the prior calendar quarter (or such applicable portion thereof that the Series A Preferred has been outstanding) calculated quarterly in arrears on a pro rata basis to the holders of Series A Preferred, commencing with the first full calendar quarter following the date that the Series A Preferred is initially issued (each, an “EBT Payment,” and collectively, the “EBT Payments”). The EBT Payments shall be payable, on or before the date that is ninety (90) days following the end of each calendar quarter (the “Payment Date”) to the extent authorized and declared by the Board of Directors of the Corporation, out of any funds legally available therefor. Each Convertible Preferred A share held by a holder will receive 0.000015% (30% / 2,000,000 = 0.000015% per share) of the Company’s quarterly EBT with each EBT Payment. Each share of Preferred A Stock will be entitled to receive $2.50 in total payout ($5,000,000 divided by 2,000,000 shares = $2.50 per share) in total and after such $2.50 in total payout is received, no further EBT Payment shall be due. Any Series A Preferred share converted into Common Stock will no longer receive an EBT Payment. “EBT” means earnings before taxes as determined in accordance with U.S. generally accepted accounting principles (“GAAP”), as reasonably determined by the Board of Directors on a quarterly basis. To the extent any upward or downward adjustments to a prior period’s EBT as calculated by the Corporation are made by the Corporation in subsequent accounting periods, the next EBT Payment due and payable to the holders of Series A Preferred shall be adjusted accordingly. 

E. Interest on EBT Payments. To the extent the Corporation is not legally able to pay each EBT Payment by the Payment Date, or such payment is not authorized and declared by the Board of Directors of the Corporation, the amount of such unpaid (or undeclared) EBT Payments shall remain outstanding and accrue interest at the rate of 5% per annum until paid in full (“Accrued EBT Payments”).

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6. Conversion.

A. Optional Conversion. Each share of Series A Preferred (and any Accrued EBT Payments) shall be convertible, at the option of the holder thereof (an “Optional Conversion”), at any time, at the office of the Corporation or any Transfer Agent for the Series A Preferred, into that number of fully-paid, nonassessable shares of Common Stock determined (i) by multiplying the number of shares of Series A Preferred subject to conversion, by the Series A Conversion Rate divided by the Conversion Value, and (ii) the total Accrued EBT Payments desired to be converted divided by the Conversion Value calculated as of the date of the Notice of Conversion. In order to effectuate the Option Conversion, the holder must provide the Corporation a written notice of conversion (the “Notice of Conversion”), setting forth the Series A Preferred shares and Accrued EBT Payments to be converted, and the name, address and account information of the holder. The Notice of Conversion must be dated no earlier than three Business Days from the date the Notice of Conversion is actually received by the Corporation.

B. Mandatory Conversion. The Series A Preferred shall be subject to the following mandatory conversion provisions:

(i) Upon the Trigger Date (defined below), all outstanding shares of Series A Preferred (and any Accrued EBT Payments) shall be converted automatically into the number of shares of Common Stock into which (a) such shares of Series A Preferred are then convertible pursuant to this Section 6 (subject to adjustment as provided herein), and (b) all Accrued EBT Payments shall be convertible into such number of shares of Common Stock as equals the Accrued EBT Payments due, divided by the then Conversion Value, rounded up to the nearest whole share of Common Stock, without any further action by the holders of such shares and whether or not the certificates representing such shares of Series A Preferred are surrendered to the Corporation or its transfer agent.

(ii) Definitions. “Trigger Date” means the date on which the Corporation has distributed an aggregate of $2.50 in EBT Payments per share held by the holders of Series A Preferred. For example, if 1,000,000 shares of Series A Preferred have previously been converted into Common Stock by the holder, leaving 1,000,000 shares of Series A Preferred outstanding, a Trigger Date would occur when an aggregate of $2,500,000 has been distributed to the 1,000,000 shares of Series A Preferred still outstanding (1,000,000 shares x $2.50 = $2,500,000).

(iii) Procedure Upon Conversion and Mandatory Conversion. Upon 1) conversion of Series A Preferred by the holder (the date and time of such conversion being referred to as the “Conversion Date”); or 2) upon the effectiveness of the mandatory conversion of the Series A Preferred (the date and time of such effectiveness being referred to as the “Mandatory Conversion Date”), the holders of shares of Series A Preferred shall surrender the certificates (if any) representing such Series A Preferred shares at the office of the Corporation or of its transfer agent for the Common Stock. Thereupon, there shall be issued and delivered to each such holder a certificate or certificates for the number of shares of Common Stock into which such shares of Series A Preferred so surrendered were convertible on the Conversion Date or Mandatory Conversion Date and cash, as provided in Section E, in respect of any fraction of a share of Common Stock issuable upon such conversion. Upon the Conversion Date or the Mandatory Conversion Date, the rights of the holder as holder of the shares of Series A Preferred shall cease and the person or persons in whose name or names any certificate or certificates for shares of Common Stock shall be issuable upon such conversion shall be deemed to have become the holder or holders of record of the shares of Common Stock represented thereby. The Corporation shall not be obligated to issue certificates evidencing the shares of Common Stock issuable upon such conversion unless certificates evidencing such shares of Series A Preferred so converted are either delivered to the Corporation or any such transfer agent or the holder notifies the Corporation or any such transfer agent that such certificates have been lost, stolen or destroyed and executes an agreement satisfactory to the Corporation to indemnify the Corporation from any loss incurred by it in connection therewith.

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C. Conversion Rate. The “Series A Conversion Rate” in effect at any time with respect to shares of Series A Preferred shall be the quotient obtained by dividing $2.50 by the Conversion Value, calculated as provided in Section D hereof.

D. Conversion Value. The “Conversion Value” with respect to shares of Convertible Preferred shall initially be $2.50, subject to adjustment in accordance with Section E hereof.

E. Adjustments to Conversion Value.

(i) Upon the happening of an Extraordinary Common Stock Event (defined below), the Conversion Value shall, simultaneously with the happening of such Extraordinary Common Stock Event, be adjusted equitably by multiplying the then-effective Conversion Value by a fraction, (1) the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such Extraordinary Common Stock Event; and (2) the denominator of which shall be the number of shares of Common Stock outstanding immediately after such Extraordinary Common Stock Event, and the product so obtained shall thereafter be the Conversion Value. The Conversion Value, as so adjusted, shall be readjusted in the same manner upon the happening of any successive Extraordinary Common Stock Event or Events. An “Extraordinary Common Stock Event” shall mean: (i) the issuance of additional shares of Common Stock as a dividend or other distribution on the outstanding shares of Common Stock, (ii) the subdivision of outstanding shares of Common Stock into a greater number of shares of Common Stock, or (iii) the combination of the outstanding shares of Common Stock into a smaller number of shares of Common Stock. 

(ii) If, at any time during the first six months from the first issuance date of any shares of Series A Preferred the Corporation sells or grants any option to purchase or sells or grants any right to reprice, or otherwise disposes of or issues (or announces any sale, grant or any option to purchase or other disposition), any Common Stock or Common Stock Equivalents entitling any person to acquire shares of Common Stock at an effective price per share that is lower than the then Conversion Value (such lower price, the “Base Conversion Price” (subject to the last sentence of this Section E ii) and such issuances, collectively, a “Dilutive Issuance”) (if the holder of the Common Stock or Common Stock Equivalents so issued shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance, be entitled to receive shares of Common Stock at an effective price per share that is lower than the Conversion Value, such issuance shall be deemed to have occurred for a price for less than the Conversion on such date of the Dilutive Issuance), then simultaneously with the consummation (or, if earlier, the announcement) of each Dilutive Issuance the Conversion Value shall be reduced to equal the Base Conversion Price. Notwithstanding the foregoing, no adjustment will be made under this Subsection E ii in respect of an Exempt Issuance. The Corporation shall notify the holder(s) of the Series A Preferred in writing, no later than the two business days following the issuance of any Common Stock or Common Stock Equivalents subject to this Subsection E ii, indicating therein the applicable issuance price, or applicable reset price, exchange price, conversion price and other pricing terms (such notice, the “Dilutive Issuance Notice”). For purposes of clarification, whether or not the Corporation provides a Dilutive Issuance Notice pursuant to this Subsection E ii upon the occurrence of any Dilutive Issuance, the Holders are entitled to receive a number of shares of Common Stock upon a conversion based upon the Base Conversion Price on or after the date of such Dilutive Issuance, regardless of whether a Holder accurately refers to the Base Conversion Price in the Notice of Conversion. For purposes of this Subsection E ii, (a) “Common Stock Equivalents” means any securities of the Corporation which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock; and (b) “Exempt Issuance” means the issuance of (i) shares of Common Stock or options to employees, officers, consultants or directors of the Corporation pursuant to any stock or option plan duly adopted by a majority of the non-employee members of the Board of Directors of the Corporation or a majority of the members of a committee of non-employee directors established for such purpose, (ii) securities upon the exercise or exchange of or conversion of any shares of Series A Preferred or any securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of first issuance of shares of Series A Preferred, provided that such securities have not been amended since such date to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of any such securities or to extend the term of such securities, and (iii) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Corporation, provided, that any such issuance shall only be to a person (or to the equityholders of a person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with the business of the Corporation and shall provide to the Corporation additional benefits in addition to the investment of funds, but shall not include a transaction in which the Corporation is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities. Notwithstanding the above, in no event will the Base Conversion Price be less than $1.00 (as adjusted for any stock dividends, combinations or splits with respect to such shares).

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F. No Fractional Shares. No fractional shares of Common Stock or scrip representing fractional shares shall be issued upon any conversion of shares of Series A Preferred. Instead of any fractional shares of Common Stock which would otherwise be issuable upon conversion of shares of Series A Preferred, the Corporation shall issue to the holder of shares of Series A Preferred which were converted (after aggregating all shares due to the converting holder) an additional share of Common Stock. The determination as to whether or not any fractional shares are issuable shall be based upon the total number of shares of Series A Preferred so converted at any one time by any holder thereof, and not upon each share of Series A Preferred so converted.

G. Reservation of Common Stock. The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of shares of Series A Preferred, such number of shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series A Preferred, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series A Preferred, the Corporation shall take such corporate action as may be commercially necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purpose.

H. Unless the shares of Common Stock issuable upon conversion hereof are covered by a valid and effective registration under the Securities Act of 1933, as amended (the “Securities Act”), or the holder provides a valid opinion from an attorney stating that such shares of Common Stock issuable in connection with the conversion can be issued free of restrictive legend, which shall be determined by the Corporation (or the Transfer Agent) in its sole discretion, such shares shall be issued as Restricted Shares. “Restricted Shares” means shares of the Corporation’s Common Stock which are restricted from being transferred by the Holder thereof unless the transfer is effected in compliance with the Securities Act and applicable state securities laws (including investment suitability standards, which shares shall bear the following restrictive legend (or one substantially similar)): “The securities represented by this certificate have not been registered under the Securities Act of 1933 or any state securities act. The securities have been acquired for investment and may not be sold, transferred, pledged or hypothecated unless (i) they shall have been registered under the Securities Act of 1933 and any applicable state securities act, or (ii) the corporation shall have been furnished with an opinion of counsel, satisfactory to counsel for the corporation, that registration is not required under any such acts.”

7. Amendments; and Protective Provisions.

A. None of the terms of the Series A Preferred set forth herein may be amended, modified or waived without the written consent or affirmative vote of the holders of at least a majority of the then outstanding shares of Series A Preferred, voting together as a single class (a “Simple Majority”) and no amendment hereof shall require the vote or approval of any other stockholders of the Corporation, including, but not limited to Common Stock holders or any holders of any other series of Preferred Stock of the Corporation.

B. For so long as any Series A Preferred are outstanding, the Corporation shall not, without first obtaining the approval (at a meeting duly called or by written consent, as provided by law) of a Simple Majority:

(i) Increase or decrease (other than by redemption or conversion) the total number of authorized shares of Series A Preferred of the Corporation;

(ii) Adopt or authorize any new designation of any Preferred Stock or capital stock or amend the Certificate of Incorporation of the Corporation in a manner which (i) provides any holder of Common Stock or Preferred Stock any rights upon a liquidation of the Corporation which are prior and superior to those of the holders of the Series A Preferred as set forth herein; or (ii) adversely affects the rights, preferences and privileges of the Series A Preferred (provided that no (1) increase in the number of authorized shares of Common Stock or Preferred Stock of the Corporation; or (2) designation of a new series of Preferred Stock of the Corporation which has rights junior or pari passu (except in the event of a Liquidation Event, in which case the rights of the Series A Preferred shall be senior) to the Series A Preferred shall be deemed to adversely affect the rights, preferences and privileges of the Series A Preferred Stock);

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(iii) Effect an exchange, or create a right of exchange, cancel, or create a right to cancel, of all or any part of the shares of another class of shares into shares of Series A Preferred; and

(iv) Alter or change the rights, preferences or privileges of the shares of Series A Preferred so as to affect adversely the shares of such series.

Notwithstanding the above, the number of authorized shares of the Common Stock or Preferred Stock of the Corporation (or any other designations of Preferred Stock of the Corporation other than the Series A Preferred) may be increased or decreased by the affirmative vote of the holders of a majority in voting power of the capital stock of the Corporation entitled to vote thereon irrespective of the provisions of Delaware Law, and no vote of the holders of any of the Common Stock or Series A Preferred voting separately as a class shall be required therefor.

8. Redemption Rights. None.

9. Exclusion of Other Rights and Privileges. Except as may otherwise be required by law, the Series A Preferred shall not have any preferences or relative, participating, optional or other special rights, other than those specifically set forth in this Certificate of Designations (as such resolution may be amended from time to time pursuant to Section 7 hereof).

10. Record Holders. To the fullest extent permitted by applicable law, the Corporation may deem and treat the record holder of any share of Series A Preferred as the absolute owner of such share of Series A Preferred for the purpose of making any payment and settling any conversion or redemption of such share of Series A Preferred and for all other purposes under this Certificate of Designations, and the Corporation shall not be affected by any notice to the contrary.

11. Severability. If any term of this Certificate of Designations is invalid, unlawful or incapable of being enforced by reason of any rule of law or public policy, all other terms set forth herein that can be given effect without the invalid, unlawful or unenforceable term will, nevertheless, remain in full force and effect, and no term herein set forth will be deemed dependent upon any other such term unless expressed stated herein.

12. Withholding. All payments and distributions (or deemed distributions) on the shares of Series A Preferred (and any share of Common Stock issued upon the conversion of any share of Series A Preferred) shall be subject to withholding and backup withholding of taxes to the extent required by applicable law, subject to applicable exemptions, and amounts withheld, if any, shall be treated as received by the Holders to the extent timely paid by the Corporation or the Transfer Agent to the appropriate taxing authority.

RESOLVED, that each of the above resolutions were adopted by all necessary action on the part of the Corporation.

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IN WITNESS WHEREOF, the undersigned has duly executed this Certificate of Designations in the name and on behalf of Lafayette Energy Corp on the 21st day of March 2024, and the statements contained herein are affirmed as true under penalty of perjury.

LAFAYETTE ENERGY CORP
By:	/s/ Michael Peterson
	Michael L. Peterson President and Chief Executive Officer

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EX-4.1

EXHIBIT 4.1

Exhibit A

Form of Representative’s Warrant Agreement

THE REGISTERED HOLDER OF THIS COMMON STOCK PURCHASE WARRANT BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL NOT SELL, TRANSFER, OR ASSIGN THIS COMMON STOCK PURCHASE WARRANT EXCEPT AS HEREIN PROVIDED AND THE REGISTERED HOLDER OF THIS COMMON STOCK PURCHASE WARRANT AGREES THAT IT WILL NOT SELL, TRANSFER, ASSIGN, PLEDGE, OR HYPOTHECATE THIS COMMON STOCK PURCHASE WARRANT FOR A PERIOD OF ONE HUNDRED EIGHTY (180) DAYS FOLLOWING THE COMMENCEMENT OF SALES OF COMMON STOCK IN THE PUBLIC OFFERING TO ANYONE OTHER THAN (I) SPARTAN CAPITAL SECURITIES (“SPARTAN”) OR AN UNDERWRITER OR A SELECTED DEALER IN CONNECTION WITH THE OFFERING, OR (II) A BONA FIDE OFFICER OR PARTNER OF SPARTAN OR OF ANY SUCH UNDERWRITER OR SELECTED DEALER.

THIS COMMON STOCK PURCHASE WARRANT IS NOT EXERCISABLE PRIOR TO [________________] [DATE THAT IS 180 DAYS FROM THE COMMENCEMENT OF SALES OF COMMON STOCK IN THE PUBLIC OFFERING]. VOID AFTER 5:00 P.M., EASTERN TIME, [___________________] [DATE THAT IS FIVE YEARS FROM THE COMMENCEMENT OF SALES OF COMMON STOCK IN THE PUBLIC OFFERING].

COMMON STOCK PURCHASE WARRANT

LAFAYETTE ENERGY CORP

Warrant Shares: [_______]

Initial Exercise Date: [___________] [__], 2024

THIS COMMON STOCK PURCHASE WARRANT (“Warrant”) certifies that, for value received, _____________ or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after [___________] [__], 2024 (the “Initial Exercise Date”) and, in accordance with FINRA Rule 5110(g)(8)(A), prior to at 5:00 p.m. (New York time) on the date that is four (4) years and six (6) months following the Initial Exercise Date (the “Termination Date”) but not thereafter, to subscribe for and purchase from Lafayette Energy Corp, a company incorporated under the laws of the State of Delaware (the “Company”), up to [______] shares of Common Stock, par value $0.0001 per share, of the Company (the “Warrant Shares”), as subject to adjustment hereunder. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).

1. Definitions. In addition to the terms defined elsewhere in this Warrant, the following terms have the meanings indicated in this Section 1:

“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.

“Alternate Consideration” shall have the meaning set forth in Section 3(d).

“Beneficial Ownership Limitation” shall have the meaning set forth in Section 2(e).

“Business Day” means any day other than Saturday, Sunday, or other day on which commercial banks in the City of New York are authorized or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home,” “shelter-in-place,” “non-essential employee,” or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in the City of New York generally are open for use by customers on such day.

“Buy-In” shall have the meaning set forth in Section 2(d)(iv).

“Commission” means the United States Securities and Exchange Commission.

“Company” shall have the meaning set forth in the Preamble.

“Demand Notice” shall have the meaning set forth in Section 5(a)(i).

“Distribution” shall have the meaning set forth in Section 3(c).

“DWAC” shall have the meaning set forth in Section 2(d)(i).

“Effective Date” means the effective date of the registration statement on Form S-1 (File No. 333-276319), including any related prospectus or prospectuses, for the registration of the Company’s Common Stock, par value $0.0001 per share, and the Warrant Shares under the Securities Act, that the Company has filed with the Commission.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“Fundamental Transaction” shall have the meaning set forth in Section 3(d).

“Holder” shall have the meaning set forth in the Preamble.

“Initial Exercise Date” shall have the meaning set forth in the Preamble.

“Majority Holders” shall have the meaning set forth in Section 5(a)(i).

“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof), or other entity of any kind.

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“Purchase Rights” shall have the meaning set forth in Section 3(b).

“Registrable Securities” shall have the meaning set forth in Section 5(a)(i).

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Successor Entity” shall have the meaning set forth in Section 3(d).

 “Termination Date” shall have the meaning set forth in the Preamble.

“Trading Day” means a day on which the Common Stock is traded on a Trading Market.

“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, or the New York Stock Exchange, OTCQB or OTCQX (or any successors to any of the foregoing).

“Underwriting Agreement” shall have the meaning set forth in Section 5(c)(i).

“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:00 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Majority Holders and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

“Warrant” shall have the meaning set forth in the Preamble.

“Warrant Register” shall have the meaning set forth in Section 4(c).

“Warrant Share Delivery Date” shall have the meaning set forth in Section 2(d)(i).

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“Warrant Shares” shall have the meaning set forth in the Preamble.

2. Exercise.

(a) Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of the Holder appearing on the books of the Company) of a duly executed facsimile copy (or e-mail attachment) of the Notice of Exercise Form attached hereto as Exhibit A. Within two (2) Trading Days following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer of immediately available funds or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise form be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within five (5) Trading Days of the date the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise Form within two (2) Business Days of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.

(b) Exercise Price. The exercise price per share of the Common Stock under this Warrant shall be $[____] (110% of the price of the Common Stock sold in the public offering), subject to adjustment hereunder (the “Exercise Price”).

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(c) Cashless Exercise. In lieu of exercising this Warrant by delivering the aggregate Exercise Price by wire transfer or cashier’s check, at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein is not available for, the issuance of the Warrant Shares, at the election of the Holder this Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive the number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

(A) =	as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b)(64) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;
(B) =	the Exercise Price of this Warrant, as adjusted hereunder; and
(X) =	the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.

If Warrant Shares are issued in such a “cashless exercise,” the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised, and the holding period of the Warrants being exercised may be tacked on to the holding period of the Warrant Shares. The Company agrees not to take any position contrary to this Section 2(c). 

Notwithstanding anything herein to the contrary, on the Termination Date, this Warrant shall be automatically exercised via cashless exercise pursuant to this Section 2(c).

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(d) Mechanics of Exercise.

(i) Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by its transfer agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by Holder, or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule 144 and, in either case, the Warrant Shares have been sold by the Holder prior to the Warrant Share Delivery Date (as defined below), and otherwise by physical delivery of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is two (2) Trading Days after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”). If the Warrant Shares can be delivered via DWAC, the transfer agent shall have received from the Company, at the expense of the Company, any legal opinions or other documentation required by it to deliver such Warrant Shares without legend (subject to receipt by the Company of reasonable back up documentation from the Holder, including with respect to affiliate status) and, if applicable and requested by the Company prior to the Warrant Share Delivery Date, the transfer agent shall have received from the Holder a confirmation of sale of the Warrant Shares (provided the requirement of the Holder to provide a confirmation as to the sale of Warrant Shares shall not be applicable to the issuance of non-legend bearing Warrant Shares upon a cashless exercise of this Warrant if the Warrant Shares are then eligible for resale pursuant to Rule 144(b)(1)). The Warrant Shares shall be deemed to have been issued, and Holder or any other person so designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date the Warrant has been exercised, with payment to the Company of the Exercise Price (or by cashless exercise, if permitted) and all taxes required to be paid by the Holder, if any, pursuant to Section 2(d)(vi) prior to the issuance of such shares, having been paid. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the second (2^nd) Trading Day following the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifth (5^th) Trading Day after such liquidated damages begin to accrue) for each Trading Day after the second (2^nd) Trading Day following such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise.

(ii) Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

(iii) Rescission Rights. If the Company fails to cause its transfer agent to deliver to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise; provided, however, that the Holder shall be required to return any Warrant Shares or Common Stock subject to any such rescinded exercise notice concurrently with the return to Holder of the aggregate Exercise Price paid to the Company for such Warrant Shares and the restoration of Holder’s right to acquire such Warrant Shares pursuant to this Warrant (including, issuance of a replacement warrant certificate evidencing such restored right).

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(iv) Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if the Company fails to cause its transfer agent to transmit to the Holder the Warrant Shares pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.

(v) No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.

(vi) Charges, Taxes, and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto as Exhibit B duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all transfer agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.

(vii) Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.

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(viii) Signature. This Section 2 and the Notice of Exercise form attached hereto set forth the totality of the procedures required of the Holder in order to exercise this Warrant. Without limiting the preceding sentences, no ink-original exercise form shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any exercise form be required in order to exercise this Warrant. No additional legal opinion, other information, or instructions shall be required of the Holder to exercise this Warrant. The Company shall honor exercises of this Warrant and shall deliver shares underlying this Warrant in accordance with the terms, conditions, and time periods set forth herein.

(e) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company, or (C) a more recent written notice by the Company or the Company’s transfer agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within two (2) Trading Days confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the sixty-first (61^st) day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant. 

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3. Certain Adjustments.

(a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination, or re-classification. For the purposes of clarification, the Exercise Price of this Warrant will not be adjusted in the event that the Company or any Subsidiary thereof, as applicable, sells or grants any option to purchase, or sell or grant any right to reprice, or otherwise dispose of or issue (or announce any offer, sale, grant, or any option to purchase or other disposition) any Common Stock or Common Stock Equivalents, at an effective price per share less than the Exercise Price then in effect.

(b) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues, or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities, or other property pro rata to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance, or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue, or sale of such Purchase Rights (provided, however, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

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(c) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend (other than cash dividends) or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of shares or other securities, property, or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement, or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation). To the extent that this Warrant has not been partially or completely exercised at the time of such Distribution, such portion of the Distribution shall be held in abeyance for the benefit of the Holder until the Holder has exercised this Warrant.

(d) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person (other than a transaction solely to change the domicile of the Corporation), (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance, or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer, or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender, or exchange their shares for other securities, cash, or property and has been accepted by the holders of fifty percent (50%) or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization, or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash, or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than fifty percent (50%) of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable by holders of Common Stock as a result of such Fundamental Transaction for each share of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash, or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant in accordance with the provisions of this Section 3(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant with the same effect as if such Successor Entity had been named as the Company herein.

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(e) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

(f) Notice to Holder.

(i) Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly mail to the Holder a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.

(ii) Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation, or merger to which the Company is a party (other than a transaction solely to change the domicile of the Corporation), any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash, or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation, or winding up of the affairs of the Company, then, in each case, the Company shall cause to be mailed a notice to the Holder at its last address as it shall appear upon the Warrant Register of the Company, at least twenty (20) calendar days prior to the applicable record or effective date hereinafter specified, stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights, or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights, or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer, or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash, or other property deliverable upon such reclassification, consolidation, merger, sale, transfer, or share exchange; provided that the failure to provide such notice or any defect therein shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

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4. Transfer of Warrant.

(a) Transferability. Pursuant to FINRA Rule 5110(g)(1), neither this Warrant nor any Warrant Shares issued upon exercise of this Warrant shall be sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the securities by any person for a period of one hundred eighty (180) days immediately following the commencement of sales of the offering pursuant to which this Warrant is being issued, except the transfer of any security:

(i) by operation of law or by reason of reorganization of the Company;

(ii) to any FINRA member firm participating in the offering and the officers or partners thereof, if all securities so transferred remain subject to the lock-up restriction in this Section 4(a) for the remainder of the time period;

(iii) if the aggregate amount of securities of the Company held by the Holder or related person do not exceed one percent (1%) of the securities being offered;

(iv) that is beneficially owned on a pro-rata basis by all equity owners of an investment fund, provided that no participating member manages or otherwise directs investments by the fund, and participating members in the aggregate do not own more than ten percent (10%) of the equity in the fund; or

(v) the exercise or conversion of any security, if all securities received remain subject to the lock-up restriction in this Section 4(a) for the remainder of the time period.

Subject to the foregoing restriction, any applicable securities laws and the conditions set forth in Section 4(d), this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date the Holder delivers an assignment form to the Company assigning this Warrant full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.

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(b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial issuance date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.

(c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

(d) Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exempted under the Securities Act.

 5. Registration Rights.

(a) Demand Registration.

(i) Grant of Right. The Company, upon written demand (a “Demand Notice”) of the Holder(s) of at least fifty-one percent (51%) of the Warrants and/or the underlying Warrant Shares (“Majority Holders”), agrees to register, on one occasion, all or any portion of the Warrant Shares underlying the Warrants (collectively, the “Registrable Securities”). On such occasion, the Company will file a registration statement with the Commission covering the Registrable Securities within sixty (60) days after receipt of a Demand Notice and use its reasonable best efforts to have the registration statement declared effective promptly thereafter, subject to compliance with review by the Commission; provided, however, that the Company shall not be required to comply with a Demand Notice if the Company has filed a registration statement with respect to which the Holder is entitled to piggyback registration rights pursuant to Section 5(b) hereof and either: (i) the Holder has elected to participate in the offering covered by such registration statement or (ii) if such registration statement relates to an underwritten primary offering of securities of the Company, until the offering covered by such registration statement has been withdrawn or until thirty (30) days after such offering is consummated. The demand for registration may be made at any time beginning on the Initial Exercise Date and expiring on the fifth (5^th) anniversary of the Effective Date. The Company covenants and agrees to give written notice of its receipt of any Demand Notice by any Holder(s) to all other registered Holders of the Warrants and/or the Registrable Securities within ten (10) days after the date of the receipt of any such Demand Notice.

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(ii) Terms. The Company shall bear all fees and expenses attendant to the registration of the Registrable Securities pursuant to Section 5(a)(i), but the Holders shall pay any and all underwriting commissions and the expenses of any legal counsel selected by the Holders to represent them in connection with the sale of the Registrable Securities. The Company agrees to use its reasonable best efforts to cause the filing required herein to become effective promptly and to qualify or register the Registrable Securities in such States as are reasonably requested by the Holder(s); provided, however, that in no event shall the Company be required to register the Registrable Securities in a State in which such registration would cause: (i) the Company to be obligated to register or license to do business in such State or submit to general service of process in such State, or (ii) the principal shareholders of the Company to be obligated to escrow their shares of capital stock of the Company. The Company shall cause any registration statement filed pursuant to the demand right granted under Section 5(a)(i) to remain effective for a period of at least twelve (12) consecutive months after the date that the Holders of the Registrable Securities covered by such registration statement are first given the opportunity to sell all of such securities. The Holders shall only use the prospectuses provided by the Company to sell the Warrant Shares covered by such registration statement, and will immediately cease to use any prospectus furnished by the Company if the Company advises the Holder that such prospectus may no longer be used due to a material misstatement or omission. Notwithstanding the provisions of this Section 5(a)(ii), the Holder shall be entitled to a demand registration under this Section 5(a)(ii) on only one occasion and such demand registration right shall terminate on the fifth (5^th) anniversary of the date of the Underwriting Agreement (as defined in Section 5(c) below) in accordance with FINRA Rules 5110(g)(8)(B) and 5110(g)(8)(C).

(b) “Piggy-Back” Registration.

(i) Grant of Right. In addition to the demand right of registration described in Section 5(a) hereof, the Holder shall have the right, for a period of no more than three (3) years from the Initial Exercise Date in accordance with FINRA Rule 5110(g)(8)(D), to include the Registrable Securities as part of any other registration of securities filed by the Company (other than in connection with a transaction contemplated by Rule 145(a) promulgated under the Securities Act or pursuant to Form S-8 or any equivalent form); provided, however, that if, solely in connection with any primary underwritten public offering for the account of the Company, the managing underwriter(s) thereof shall, in its reasonable discretion, impose a limitation on the number of Shares which may be included in the registration statement because, in such underwriter(s)’ judgment, marketing, or other factors dictate such limitation is necessary to facilitate public distribution, then the Company shall be obligated to include in such Registration Statement only such limited portion of the Registrable Securities with respect to which the Holder requested inclusion hereunder as the underwriter shall reasonably permit. Any exclusion of Registrable Securities shall be made pro rata among the Holders seeking to include Registrable Securities in proportion to the number of Registrable Securities sought to be included by such Holders; provided, however, that the Company shall not exclude any Registrable Securities unless the Company has first excluded all outstanding securities, the holders of which are not entitled to inclusion of such securities in such Registration Statement or are not entitled to pro rata inclusion with the Registrable Securities.

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(ii) Terms. The Company shall bear all fees and expenses attendant to registering the Registrable Securities pursuant to Section 5(b)(i) hereof, but the Holders shall pay any and all underwriting commissions and the expenses of any legal counsel selected by the Holders to represent them in connection with the sale of the Registrable Securities. In the event of such a proposed registration, the Company shall furnish the then Holders of outstanding Registrable Securities with not less than thirty (30) days written notice prior to the proposed date of filing of such registration statement. Such notice to the Holders shall continue to be given for each registration statement filed by the Company during the two (2) year period following the Initial Exercise Date until such time as all of the Registrable Securities have been sold by the Holder. The holders of the Registrable Securities shall exercise the “piggy-back” rights provided for herein by giving written notice within ten (10) days of the receipt of the Company’s notice of its intention to file a registration statement. Except as otherwise provided in this Warrant, there shall be no limit on the number of times the Holder may request registration under this Section 5(b)(ii); provided, however, that such registration rights shall terminate on the second (2^nd) anniversary of the Initial Exercise Date.

(c) General Terms.

(i) Indemnification. The Company shall indemnify the Holder(s) of the Registrable Securities to be sold pursuant to any registration statement hereunder and each person, if any, who controls such Holders within the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act against all loss, claim, damage, expense, or liability (including all reasonable attorneys’ fees and other expenses reasonably incurred in investigating, preparing, or defending against any claim whatsoever) to which any of them may become subject under the Securities Act, the Exchange Act, or otherwise, arising from such registration statement but only to the same extent and with the same effect as the provisions pursuant to which the Company has agreed to indemnify the Underwriters contained in Section 6.01 of the Underwriting Agreement dated as of [___________] [__], 2024, by and between the Company and Spartan Capital Securities, LLC, as representatives of the underwriters set forth therein (the “Underwriting Agreement”). The Holder(s) of the Registrable Securities to be sold pursuant to such registration statement, and their successors and assigns, shall severally, and not jointly, indemnify the Company, against all loss, claim, damage, expense, or liability (including all reasonable attorneys’ fees and other expenses reasonably incurred in investigating, preparing, or defending against any claim whatsoever) to which they may become subject under the Securities Act, the Exchange Act, or otherwise, arising from information furnished by or on behalf of such Holders, or their successors or assigns, in writing, for specific inclusion in such registration statement to the same extent and with the same effect as the provisions contained in Section 6.02 of the Underwriting Agreement pursuant to which the Underwriters have agreed to indemnify the Company.

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(ii) Exercise of Warrants. Nothing contained in this Warrant shall be construed as requiring the Holder(s) to exercise their Warrants prior to or after the initial filing of any registration statement or the effectiveness thereof.

(iii) Documents Delivered to Holders. The Company shall furnish to each Holder participating in any of the foregoing offerings and to each underwriter of any such offering, if any, a signed counterpart, addressed to such Holder or underwriter, of: (i) an opinion of counsel to the Company, dated the effective date of such registration statement (and, if such registration includes an underwritten public offering, an opinion dated the date of the closing under any underwriting agreement related thereto), and (ii) a “cold comfort” letter dated the effective date of such registration statement (and, if such registration includes an underwritten public offering, a letter dated the date of the closing under the underwriting agreement) signed by the independent registered public accounting firm which has issued a report on the Company’s financial statements included in such registration statement, in each case covering substantially the same matters with respect to such registration statement (and the prospectus included therein) and, in the case of such accountants’ letter, with respect to events subsequent to the date of such financial statements, as are customarily covered in opinions of issuer’s counsel and in accountants’ letters delivered to underwriters in underwritten public offerings of securities. The Company shall also deliver promptly to each Holder participating in the offering requesting the correspondence and memoranda described below and to the managing underwriter, if any, copies of all correspondence between the Commission and the Company, its counsel or auditors and all memoranda relating to discussions with the Commission or its staff with respect to the registration statement and permit each Holder and underwriter to do such investigation, upon reasonable advance notice, with respect to information contained in or omitted from the registration statement as it deems reasonably necessary to comply with applicable securities laws or rules of FINRA. Such investigation shall include access to books, records, and properties and opportunities to discuss the business of the Company with its officers and independent auditors, all to such reasonable extent and at such reasonable times as any such Holder shall reasonably request.

(iv) Underwriting Agreement. The Company shall enter into an underwriting agreement with the managing underwriter(s), if any, selected by any Holders whose Registrable Securities are being registered pursuant to this Section 5, which managing underwriter shall be reasonably satisfactory to the Company. Such agreement shall be reasonably satisfactory in form and substance to the Company, each Holder, and such managing underwriters, and shall contain such representations, warranties, and covenants by the Company and such other terms as are customarily contained in agreements of that type used by the managing underwriter. The Holders shall be parties to any underwriting agreement relating to an underwritten sale of their Registrable Securities and may, at their option, require that any or all the representations, warranties, and covenants of the Company to or for the benefit of such underwriters shall also be made to and for the benefit of such Holders. Such Holders shall not be required to make any representations or warranties to or agreements with the Company or the underwriters except as they may relate to such Holders, their Warrant Shares, and their intended methods of distribution.

16

(v) Documents to be Delivered by Holder(s). Each of the Holder(s) participating in any of the foregoing offerings shall furnish to the Company a completed and executed questionnaire provided by the Company requesting information customarily sought of selling security holders.

(vi) Damages. Should the registration or the effectiveness thereof required by Sections 5(a) and 5(b) hereof be delayed by the Company or the Company otherwise fails to comply with such provisions, the Holder(s) shall, in addition to any other legal or other relief available to the Holder(s), be entitled to obtain specific performance or other equitable (including injunctive) relief against the threatened breach of such provisions or the continuation of any such breach, without the necessity of proving actual damages and without the necessity of posting bond or other security.

 6. Miscellaneous.

(a) No Rights as Stockholder Until Exercise. This Warrant does not entitle the Holder to any voting rights, dividends, or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i).

(b) Loss, Theft, Destruction, or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction, or mutilation of this Warrant or any certificate relating to the Warrant Shares, and in case of loss, theft, or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

(c) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Trading Day, then, such action may be taken or such right may be exercised on the next succeeding Trading Day.

17

(d) Authorized Shares. The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid, and nonassessable, and free from all taxes, liens, and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).

Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amend its certificate of incorporation, as amended, or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue, or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant, and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions, or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.

Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

(e) Jurisdiction. All questions concerning the construction, validity, enforcement, and interpretation of this Warrant shall be determined in accordance with the provisions of the Underwriting Agreement.

(f) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.

(g) Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers, or remedies. Without limiting any other provision of this Warrant or the Underwriting Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

18

(h) Notices. Any notice, request, or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Underwriting Agreement.

(i) Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

(j) Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

(k) Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.

(l) Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.

(m) Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

(n) Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

[Signature page follows]

19

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

COMPANY

LAFAYETTE ENERGY CORP

a Delaware corporation

By:

Name:

Title:

Signature Page to Common Stock Purchase Warrant

EXHIBIT A

NOTICE OF EXERCISE

TO:                    LAFAYETTE ENERGY CORP

_________________________

(1) The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.

(2) Payment shall take the form of (check applicable box):

[ ] in lawful money of the United States; or

[ ] if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).

(3) Please register and issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:

_______________________________

The Warrant Shares shall be delivered to the following DWAC Account Number or by physical delivery of a certificate to:

_______________________________

_______________________________

_______________________________

(4) Accredited Investor. If the Warrant is being exercised via cash exercise, the undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended

A-1

[SIGNATURE OF HOLDER]

Name of Investing Entity:

___________________________________________________________________________________

Signature of Authorized Signatory of Investing Entity:

___________________________________________________________________________________

Name of Authorized Signatory:

___________________________________________________________________________________

Title of Authorized Signatory:

___________________________________________________________________________________

Date:

___________________________________________________________________________________

A-2

EXHIBIT B

ASSIGNMENT FORM

(To assign the foregoing warrant, execute this form and supply required information. Do not use this form to exercise the warrant.)

FOR VALUE RECEIVED, [____] all of or [_______] shares of the foregoing Warrant and all rights evidenced thereby are hereby assigned to

_______________________________________________ whose address is

_______________________________________________________________.

_______________________________________________________________

Dated: ______________, _______

Holder’s Signature: _____________________________

Holder’s Address: _____________________________

    _____________________________

NOTE: The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever. Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant.

B-1

EX-10.18

 EXHIBIT 10.18

LAFAYETTE ENERGY CORP

SUBSCRIPTION AGREEMENT

Series A Convertible Preferred Stock at $2.50 per Share

Date: February 29th, 2024 Full Subscription Commitment: $5,000,000.00

1. Subscription:

(a) The undersigned (individually and/or collectively, the “Participant”) hereby applies to purchase restricted Series A Convertible Preferred Stock (the “Series A Preferred” or the “Shares”) of Lafayette Energy Corp, a Delaware corporation (the “Company”), in accordance with the terms and conditions of (1) this Subscription Agreement (the “Subscription”); (2) the Company’s Amended and Restated Certificate of Incorporation (the “Amended Certificate”), attached hereto as Exhibit A; and (3) the Certificate of Designation (“Certificate of Designation”), attached hereto as Exhibit B.

(b) Before this Subscription is considered, the Participant must complete, execute and deliver to the Company the following:

(i) This Subscription Agreement;

(ii) The Certificate of Accredited Investor Status, attached hereto as Exhibit C; and

(iii) The Participant’s check for the first tranche (the “Tranche 1”) in the amount of $2,500,000.00 in exchange for 1,000,000 Shares purchased, or wire transfer sent according to the Company’s instructions below; and

(iv) Within 10 days of the Company notifying the Participant by letter or email containing detail deemed sufficient to Participant that the Company has successfully drilled the first oil and gas well and produced at least 100 barrels of oil, the Participant will wire transfer an amount of $2,500,000.00 in exchange for an additional 1,000,000 Shares purchased (the “Tranche 2”).

(v) Wire Transfer Instructions:

Bank: XXXXXXXXXXXX

Address: XXXXXXXXXXXX

Routing #: XXXXXXXXXXXX

Account #: XXXXXXXXXXXX

Account Name: Lafayette Energy Corp.

Address: XXXXXXXXXXXX

Contact: Michael Peterson

Phone: XXXXXXXXXXXX

(c) This Subscription is irrevocable by the Participant.

(d) This Subscription is not transferable or assignable by the Participant.

		Subscription Agreement
Participant’s Initials	1	Lafayette Energy Corp

(e) This Subscription may be rejected in whole or in part by the Company in its sole discretion prior to the Initial Closing Date (as defined in Section 1(f) hereof), regardless of whether Participant’s funds have theretofore been deposited by the Company). Participant’s execution and delivery of this Subscription will not constitute an agreement between the undersigned and the Company until this Agreement has been accepted and executed by the Company. In the event this Subscription is rejected by the Company, all funds and documents tendered by the Participant shall be returned and the parties' obligations hereunder, shall terminate.

(f) This offering (the “Offering”) is scheduled to have two closings upon receipt of the deliverables described herein for Tranche 1 and Tranche 2, each a closing date (as applicable, the “Closing Date”, with the Closing Date for Tranche 1 being defined herein as the “Initial Closing Date” and such Closing Date for Tranche 2 being defined herein as the “Second Closing Date”, and the closing in connection therewith, the “Second Closing”). Within five days of each Closing the Company shall deliver to Participant a certificate (or other book entry evidence) representing the Shares purchased at the applicable Closing. The Company’s obligation to close upon the Tranche 2 at the Second Closing is conditioned up each of the representations and warranties of the Company set forth in Section 3 of this Subscription Agreement being accurate in all material respects on the Second Closing Date (unless as of a specific date therein in which case they shall be accurate in all material respects (or, to the extent representations or warranties are qualified by materiality, in all respects) as of such date).

2. Representations by Participant. In consideration of the Company’s acceptance of the Subscription, Participant makes the following representations and warranties to the Company and to its principals, jointly and severally, which warranties and representations shall survive any acceptance of the Subscription by the Company:

(a) Prior to the time of purchase of any Shares, Participant received a copy of the Amended Certificate and the Certificate of Designation. Participant has reviewed the Amended Certificate and the Certificate of Designation, and Participant has had the opportunity to ask questions and receive any additional information from persons acting on behalf of the Company to verify Participant’s understanding of the terms thereof and of the Company’s business and status thereof, and such questions, if any, have been answered to the satisfaction of the Participant. Participant acknowledges that no officer, director, broker-dealer, placement agent, finder or other person affiliated with the Company has given Participant any information or made any representations, oral or written, other than as provided in the Amended Certificate and the Certificate of Designation, on which Participant has relied upon in deciding to invest in the Shares, including without limitation, any information with respect to future acquisitions, mergers or operations of the Company or the economic returns which may accrue as a result of the purchase of the Shares.

(b) Participant acknowledges that Participant has not seen, received, been presented with, or been solicited by any leaflet, public promotional meeting, newspaper or magazine article or advertisement, radio or television advertisement, or any other form of advertising or general solicitation with respect to the Shares.

(c) The Shares are being purchased for Participant’s own account for investment purposes only and not with a view to, or for sale in connection with, a distribution, as that term is used in Section 2(11) of the Securities Act of 1933, as amended (the “Securities Act”), in a manner which would require registration under the Securities Act or any state securities laws. No other person or entity will have any direct or indirect beneficial interest in, or right to, the Shares.

_______________		Subscription Agreement
Participant’s Initials	2	Lafayette Energy Corp

(d) Participant acknowledges that the Shares have not been registered under the Securities Act, or qualified under Delaware securities law, or any other applicable blue sky laws, in reliance, in part, on Participant’s representations, warranties and agreements made herein.

(e) Participant represents, warrants and agrees that the Company and the officers of the Company (the “Company’s Officers”) are under no obligation to register or qualify the Shares under the Securities Act or under any state securities law, or to assist the undersigned in complying with any exemption from registration and qualification.

(f) Participant represents that Participant meets the criteria for participation because: (i) Participant has a pre-existing personal or business relationship with the Company or one or more of its partners, officers, directors or controlling persons; or (ii) by reason of Participant’s business or financial experience, or by reason of the business or financial experience of its financial advisors who are unaffiliated with, and are not compensated, directly or indirectly, by the Company or any affiliate or selling agent of the Company, Participant is capable of evaluating the risk and merits of an investment in the Shares and of protecting its own interests.

(g) Participant represents that Participant is an “accredited investor” within the meaning of Rule 501 of Regulation D under the Securities Act and Participant has executed the Certificate of Accredited Investor Status, attached hereto as Exhibit C.

(h) Participant understands that the Shares are illiquid, and until registered with the Securities Exchange Commission, or an exemption from registration becomes available, cannot be readily sold as there will not be a public market for them, and that Participant may not be able to sell or dispose of the Shares, or to utilize the Shares as collateral for a loan. Participant must not purchase the Shares unless Participant has liquid assets sufficient to assure Participant that such purchase will cause it no undue financial difficulties, and that Participant can still provide for current and possible personal contingencies, and that the commitment herein for the Shares, combined with other investments of Participant, is reasonable in relation to its net worth.

(i) Participant understands that the right to transfer the Shares will be restricted unless the transfer is not in violation of the Securities Act, and any applicable state securities laws (including investment suitability standards), that the Company will not consent to a transfer of the Shares unless the transferee represents that such transferee meets the financial suitability standards required of an initial participant, and that the Company has the right, in its absolute discretion, to refuse to consent to such transfer.

(j) Participant has been advised to consult with its own attorney or attorneys regarding all legal matters concerning an investment in the Company and the tax consequences of purchasing the Shares, and has done so, to the extent Participant considers necessary.

(k) Participant acknowledges that the tax consequences of investing in the Company will depend on particular circumstances, and neither the Company, the Company’s officers, any other investors, nor the partners, shareholders, members, directors, agents, officers, directors, employees, affiliates or consultants of any of them, will be responsible or liable for the tax consequences to Participant of an investment in the Company. Participant will look solely to and rely upon its own advisers with respect to the tax consequences of this investment.

_______________		Subscription Agreement
Participant’s Initials	3	Lafayette Energy Corp

(l) All information which Participant has provided to the Company concerning Participant, its financial position and its knowledge of financial and business matters, and any information found in the Certificate of Accredited Investor Status, is truthful, accurate, correct, and complete as of the date set forth herein.

(m) Participant is able to bear the economic risk of the investment in the Shares and Participant has sufficient net worth to sustain a loss of Participant’s entire investment in the Company without economic hardship if such a loss should occur.

(l) Each certificate or instrument representing securities issuable pursuant to this Agreement, if any, will be endorsed with the following legend:

THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE TRANSFER IS MADE IN COMPLIANCE WITH RULE 144 PROMULGATED UNDER SUCH ACT OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THESE SECURITIES WHICH IS REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.

3. Representations and Warranties by the Company. The Company represents and warrants that:

(a) Due Formation and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation and has the requisite corporate power to own its properties and to carry on its business as now being conducted. The Company is duly qualified as a foreign entity to do business and is in good standing in each jurisdiction where the nature of the business conducted or property owned by it makes such qualification necessary, other than those jurisdictions in which the failure to so qualify would not have a material adverse effect on the business, operations or financial condition of the Company.

(b) Outstanding Stock. The Company’s capitalization is as set forth in the Registration Statement on Form S-1 filed by the Company with the Securities and Exchange Commission on December 29, 2023 (the “S-1”). All issued and outstanding capital stock of the Company has been duly authorized and validly issued and are fully paid and non-assessable.

(c) Authority; Enforceability. This Subscription, Amended Certificate and the Certificate of Designation delivered together with this Subscription or in connection herewith have been or prior to the Initial Closing, will be, duly authorized, executed, and delivered by the Company and this Subscription Agreement is a valid and binding agreement, enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium, and similar laws of general applicability relating to or affecting creditors' rights generally and to general principles of equity; and the Company has full corporate power and authority necessary to enter into this Subscription, and to file the Certificate of Designation with the Secretary of State of the State of Delaware, and to perform its obligations hereunder and under all other agreements entered into by the Company relating hereto. The execution and delivery of this Subscription Agreement by the Company and the consummation by it of the transactions contemplated hereby will not violate the Company’s charter or other governance documents, or any applicable laws or regulations, and no further consent or authorization is required by the Company, its Board of Directors or its stockholders.

_______________		Subscription Agreement
Participant’s Initials	4	Lafayette Energy Corp

(d) Issuance of the Securities. The Shares (together with any shares of Company Common Stock issuable upon the conversion thereof) are duly authorized and, when issued and paid for in accordance with this Agreement, will be duly and validly issued, fully paid and nonassessable, free and clear of all liens, charges, security interests, encumbrances, rights of first refusal, preemptive rights or other restrictions imposed by the Company, other than restrictions on the transfer of the Securities imposed by applicable securities laws. The Company shall reserve from its duly authorized capital stock the maximum number of shares of Common Stock issuable pursuant to this Subscription Agreement and the Certificate of Designation.

(e) No General Solicitation. Neither the Company, nor any of its affiliates, nor to its knowledge, any person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection with the offer or sale of the Shares.

(f) Subsidiaries. The Company does not currently own or control, directly or indirectly, any interest in any other corporation, association, or other business entity, and the Company is not a participant in any joint venture, partnership or similar arrangement.

(g) Governmental Consents. No consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any federal, state or local governmental authority on the part of the Company is required in connection with the consummation of the transactions contemplated by this Subscription, except for filings pursuant to any applicable state securities laws and Regulation D of the Securities Act.

(h) Litigation. There is no action, suit, proceeding or investigation pending or, to the Company’s knowledge, currently threatened against the Company or any of its subsidiaries that questions the validity of this Subscription or the right of the Company to enter into it, or to consummate the transactions contemplated hereby or thereby, or that might result, either individually or in the aggregate, in any material adverse changes in the assets, condition or affairs of the Company, financially or otherwise, or any change in the current equity ownership of the Company, nor is the Company aware that there is any basis for the foregoing. Neither the Company nor any of its subsidiaries is a party or subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality. There is no action, suit, proceeding or investigation by the Company or any of its subsidiaries currently pending or which the Company or any of its subsidiaries intends to initiate. The foregoing includes, without limitation, actions, suits, proceedings or investigations pending or threatened in writing (or any basis therefor known to the Company) involving the prior employment of any of the Company’s employees, their use in connection with the Company’s business, or any information or techniques allegedly proprietary to any of their former employers, or their obligations under any agreements with prior employers. 

(i) Compliance with Other Instruments.

(i) The Company is not in violation or default of any provisions of its Amended Certificate or Bylaws or of any instrument, judgment, order, writ, decree or contract to which it is a party or by which it is bound or, to its knowledge, of any provision of federal or state statute, rule or regulation applicable to the Company. The execution, delivery and performance of this Subscription and the consummation of the transactions contemplated hereby will not result in any such violation or be in conflict with or constitute, with or without the passage of time and giving of notice, either a default under any such provision, instrument, judgment, order, writ, decree or contract or an event which results in the creation of any lien, charge or encumbrance upon any assets of the Company.

_______________		Subscription Agreement
Participant’s Initials	5	Lafayette Energy Corp

(ii) To its knowledge, the Company has avoided every condition, and has not performed any act, the occurrence of which would result in the Company’s loss of any right granted under any license, distribution agreement or other agreement.

(j) Tax Returns and Payments. The Company has filed all tax returns and reports as required by law. These returns and reports are true and correct in all material respects. The Company has paid all taxes and other assessments due.

(k) Permits. The Company and each of its subsidiaries has all franchises, permits, licenses and any similar authority necessary for the conduct of its business, the lack of which could materially and adversely affect the business, properties, prospects, or financial condition of the Company. The Company is not in default in any material respect under any of such franchises, permits, licenses or other similar authority.

(l) Environmental Laws. The Company (i) is in compliance with all federal, state, local and foreign laws relating to pollution or protection of human health or the environment (including ambient air, surface water, groundwater, land surface or subsurface strata), including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental Laws”); (ii) has received all permits licenses or other approvals required of the Company under applicable Environmental Laws to conduct its business; and (iii) is in compliance with all terms and conditions of any such permit, license or approval where in each clause (i), ii) and (iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate, a material adverse effect.

(m) Title to Assets. The Company has good and marketable title in fee simple to all real property assets owned by it and good and marketable title in all personal property owned by it that is material to the business of the Company, in each case free and clear of all liens, except for (i) liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and (ii) liens for the payment of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance with GAAP and, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company are held by them under valid, subsisting and enforceable leases with which the Company is in compliance.

(n) Material Changes. Since the date of the latest financial statements included within the S-1, and except as specifically disclosed in the S-1: (i) there has been no event, occurrence or development that has had or that would reasonably be expected to result in a material adverse effect on the Company or its business and assets, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (yy) trade payables, bridge loans and accrued expenses incurred in the ordinary course of business consistent with past practice and (zz) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock, and (e) the Company has not issued any equity securities to any officer, director or affiliate, except pursuant to existing Company equity incentive plans.

_______________		Subscription Agreement
Participant’s Initials	6	Lafayette Energy Corp

(o) Solvency. Based on the consolidated financial condition of the Company as of each Closing Date, after giving effect to the receipt by the Company of the proceeds from the sale of the Shares hereunder (i) the fair saleable value of the Company’s assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known contingent liabilities) as they mature, and (ii) the Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year from each Closing Date. The Company is not in default with respect to any of its indebtedness.

4. Indemnity.

(a) Participant hereby agrees to indemnify and hold harmless the Company, its principals, the Company’s officers, directors, attorneys, and agents, from any and all damages, costs and expenses (including actual attorneys’ fees) which they may incur (“Losses”): (i) by reason of Participant’s failure to fulfill any of the terms and conditions of this Subscription; (ii) by reason of Participant’s breach of any representations, warranties or agreements contained herein (including the Certificate of Accredited Investor Status); or (iii) with respect to any and all claims made by or involving any person, other than Participant personally, claiming any interest, right, title, power, or authority in respect to the Shares, except to the extent such claims arise as a result of the gross negligence or willful misconduct of the Company, its principals, the Company’s officers, directors, attorneys, or agents. Participant further agrees and acknowledges that these indemnifications shall survive any sale or transfer, or attempted sale or transfer, of any portion of the Shares.

(b) The Company agrees to indemnify and hold harmless the Participant, its affiliates and their respective officers, directors, employees, agents and controlling persons (collectively, the “Company Indemnified Parties”) from and against any and all Losses suffered or incurred by any Company Indemnified Party by reason of any misrepresentation or breach of warranty by the Company or, after any applicable notice and/or cure periods, nonfulfillment of any covenant or agreement to be performed or complied with by the Company under this Subscription Agreement, the Amended Certificate and the Certificate of Designation; and will promptly reimburse the Company Indemnified Parties for all expenses (including reasonable fees and expenses of legal counsel) as incurred in connection with the investigation of, preparation for or defense of any pending or threatened claim related to or arising in any manner out of any of the foregoing, or any proceeding, whether or not such Company Indemnified Party is a formal party to any such Proceeding.

5. Subscription Binding on Heirs, etc. This Subscription, upon acceptance by the Company, shall be binding upon the heirs, executors, administrators, successors and assigns of the Participant, including, but not limited to the Participant’s obligation to purchase the Shares at the Second Closing. If the undersigned is more than one person, the obligations of the undersigned shall be joint and several and the representations and warranties shall be deemed to be made by and be binding on each such person and his or her heirs, executors, administrators, successors, and assigns.

_______________		Subscription Agreement
Participant’s Initials	7	Lafayette Energy Corp

6. Execution Authorized. If this Subscription is executed on behalf of a corporation, partnership, trust or other entity, the undersigned has been duly authorized and empowered to legally represent such entity and to execute this Subscription and all other instruments in connection with the Shares and the signature of the person is binding upon such entity.

7. Adoption of Terms and Provisions. The Participant hereby adopts, accepts and agrees to be bound by all the terms and provisions hereof.

8. Governing Law. This Subscription shall be construed in accordance with the laws of the State of Delaware.

9. Dispute Resolution. In the event of any dispute arising out of or relating to this Subscription, then such dispute shall be submitted to binding arbitration with the Delaware branch of the American Arbitration Association (“AAA”) to be governed by AAA’s Commercial Rules of Arbitration (the “AAA Rules”) and heard before one arbitrator. The parties shall attempt to mutually select the arbitrator. In the event they are unable to mutually agree, the arbitrator shall be selected by the procedures prescribed by the AAA Rules. Notwithstanding anything in the AAA Rules to the contrary, discovery shall be limited exclusively to the mutual production of documents, and written submissions to the arbitrator shall be limited to one brief from each party and one responsive brief from each party.

_______________		Subscription Agreement
Participant’s Initials	8	Lafayette Energy Corp

10. Collection of Personal Information. The Participant (on its own behalf and, if applicable, on behalf of any person for whose benefit the Participant is subscribing) acknowledges and consents to the fact the Company is collecting the Participant’s (and any beneficial purchaser’s) personal information pursuant to this Agreement. The Participant (on its own behalf and, if applicable, on behalf of any person for whose benefit the Participant is subscribing) acknowledges and consents to the Company retaining the personal information for as long as permitted or required by applicable law or business practices. The Participant (on its own behalf and, if applicable, on behalf of any person for whose benefit the Participant is subscribing) further acknowledges and consents to the fact the Company may be required by applicable securities laws and stock exchange rules to provide regulatory authorities any personal information provided by the Participant respecting itself (and any beneficial purchaser). By executing this Agreement, the Participant is deemed to be consenting to the foregoing collection, use and disclosure of the Participant’s (and any beneficial purchaser’s) personal information. The Participant also consents to the filing of copies or originals of any of the Participant’s documents described herein as may be required to be filed with any stock exchange or securities regulatory authority in connection with the transactions contemplated hereby. The Participant represents and warrants that it has the authority to provide the consents and acknowledgments set out in this paragraph on behalf of all beneficial purchasers.

11. Investor Information: (This must be consistent with the form of ownership selected below and the information provided in the Certificate of Accredited Investor Status (Exhibit C, included herewith.)

Name (please print):	Trxade, Inc
If entity named above,	By:	Suren Ajjarapu
	Its:	CEO
Social Security or Taxpayer I.D. Number:	XXXXXXXXXXXX
Business Address (including zip code):	6308 Benjamin Road Suite # 708 Tampa, FL -33634
Business Phone:
Residence Address (including zip code):
Email Address:
Residence Phone:
All communications to be sent to:
_______________Business or	_____________Residence Address.                                     Email

_______________		Subscription Agreement
Participant’s Initials	9	Lafayette Energy Corp

Please indicate below the form in which you will hold title to your interest in the Shares. PLEASE CONSIDER CAREFULLY. ONCE YOUR SUBSCRIPTION IS ACCEPTED, A CHANGE IN THE FORM OF TITLE CONSTITUTES A TRANSFER OF THE INTEREST IN THE SHARES AND MAY THEREFORE BE RESTRICTED BY THE TERMS OF THIS SUBSCRIPTION, AND MAY RESULT IN ADDITIONAL COSTS TO YOU.  Participants should seek the advice of their attorneys in deciding in which of the forms they should take ownership of the interest in the Shares, because different forms of ownership can have varying gift tax, estate tax, income tax, and other consequences, depending on the state of the investor's domicile and his or her particular personal circumstances.

             INDIVIDUAL OWNERSHIP (one signature required)

             JOINT TENANTS WITH RIGHT OF SURVIVORSHIP AND NOT AS TENANTS IN COMMON (both or all parties must sign)

             COMMUNITY PROPERTY (one signature required if interest held in one name, i.e., managing spouse; two signatures required if interest held in both names)

             TENANTS IN COMMON (both or all parties must sign)

             GENERAL PARTNERSHIP (fill out all documents in the name of the PARTNERSHIP, by a PARTNER authorized to sign)

             LIMITED PARTNERSHIP (fill out all documents in the name of the LIMITED PARTNERSHIP, by a GENERAL PARTNER authorized to sign)

             LIMITED LIABILITY COMPANY (fill out all documents in the name of the LIMITED LIABILITY COMPANY, by a member authorized to sign)

X          CORPORATION (fill out all documents in the name of the CORPORATION, by the President or other officer authorized to sign)

             TRUST (fill out all documents in the name of the TRUST, by the Trustee, and include a copy of the instrument creating the trust and any other documents necessary to show the investment by the Trustee is authorized. The date of the trust must appear on the Notarial where indicated.)

_______________		Subscription Agreement
Participant’s Initials	10	Lafayette Energy Corp

Subject to acceptance by the Company, the undersigned has completed this Subscription Agreement to evidence his/her subscription for participation in the Shares of the Company, this 29th    day of February, 2024.

PARTICIPANT
Trxade, Inc
	(Signature
By:	/s/ Suren Ajjarapu
Name:	Suren Ajjarapu
Title:	Ceo

The Company has accepted this subscription this 29th day of February, 2024

“COMPANY” LAFAYETTE ENERGY CORP, a Delaware corporation
By:	/s/ Michael L. Peterson
	Michael L. Peterson President and Chief Executive Officer
Address for notice: Lafayette Energy Corp 3450 N. Triumph Blvd., Suite 102 Lehi, Utah 84043 Attn: President and Chief Executive Officer

_______________		Subscription Agreement
Participant’s Initials	11	Lafayette Energy Corp

Exhibit A

Amended Certificate

_______________		Subscription Agreement
Participant’s Initials	1	Lafayette Energy Corp

Exhibit B

Certificate of Designation

_______________		Subscription Agreement
Participant’s Initials	2	Lafayette Energy Corp

Exhibit C

CERTIFICATE OF ACCREDITED INVESTOR STATUS

EX-10.19

EXHIBIT 10.19

FARM-IN AGREEMENT

Dated March 7, 2024

between

LAFAYETTE ENERGY CORP

as Buyer

and

HEAVY SWEET OIL LLC

as Seller

FARM-IN AGREEMENT

THIS FARM-IN AGREEMENT (this “Agreement”), dated March 7, 2024 (the “Execution Date”), is by and among Heavy Sweet Oil LLC, a Utah limited liability company (“HSO” or “Seller”), and Lafayette Energy Corp, a Delaware corporation (“LEC” or “Buyer”). Each Seller and LEC may be referred to herein as a “Party” and, collectively, as the “Parties.”

R E C I T A L S

WHEREAS, Sellers own interests in oil and gas leases covering approximately 2,880 gross acres and approximately 2,880 net acres, which leases are more particularly described in Appendix 2 attached hereto and incorporated by reference herein (the “Subject Leases,” and the acreage and lands covered by the Subject Leases (the “Subject Acreage”) being the western half of Section 23 and Section 22, all in T4S, R20, 6^th PM, Uintah County, Utah INSOFAR AND ONLY INSOFAR as the Appendix 2 Leases cover the Appendix 2 Acreage to all depths below 500 feet from the surface of the earth (the “Deep Horizons”);

WHEREAS, the Parties are party to that certain Leasehold Acquisition and Development Option Agreement, dated November 13, 2023, pursuant to which LEC was granted an option by Seller to acquire certain interests in the Subject Acreage (the “Option Agreement”), pursuant to which LEC previously issued 2,688,000 shares of restricted Common Stock of LEC as consideration (the “Restricted Shares”), which Restricted Shares shall become fully vested pursuant to this Agreement, and the Option Agreement shall be superseded in full by ths Agreement and have no further force or effect; and

WHEREAS, the Parties hereto desire to enter into this Agreement to evidence the terms and conditions upon which: (i) LEC will farm-into and purchase from Seller, and Seller will allow LEC to farm-in and will sell to LEC, (x) an undivided Ninety-Seven and 3/4^th Percent (97.75% of 8/8ths) interest in and to approximately 960 gross acres and approximately 960 net acres under the Subject Leases, insofar and only insofar as the Subject Leases cover and affect the Deep Horizons Sellers will sell to LEC (the “97.75% Interest”), and (y) an undivided One Hundred Percent (100.00% of 8/8ths) interest in and to approximately 1,920 gross acres and approximately 1,920 net acres under the Subject Leases (the “100% Interest”), in each case insofar and only insofar as the Subject Leases cover and affect the Deep Horizons (collectively, the “Designated Interests”), and subject to the Trio Option (as defined herein); and (ii) LEC may explore and develop the Subject Acreage and the Subject Leases. All capitalized terms used but not otherwise defined in the body of this Agreement shall have the meanings assigned to such terms in Appendix 1.

A G R E E M E N T

Subject to the terms and provisions of this Agreement and in consideration of the mutual covenants and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and LEC agree as follows:

ARTICLE 1– Farm-In; Farm-In Price and Closing

1.1 Farm-In. Subject to the terms and conditions herein set forth, LEC shall farm-into and purchase from Seller, and Seller agrees to allow LEC to farm-in and will sell, assign and deliver to LEC, and LEC agrees to farm-into, purchase and acquire from Sellers at Closing (defined in Section 1.3 below), but effective as of 7:00 a.m., Mountain Time, on the Effective Date:

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(a). the Designated Interests along with a copy of all records and data of Sellers or any Affiliate of any Seller concerning the Subject Leases or the Subject Acreage, including all technical data and interpretations made up until the time of Closing (the “Records”).

1.2 Farm-In Price. The farm-in price (the “Farm-In Price”) for the Designated Interests shall be the issuance of up to 3,400,000 shares of restricted Common Stock of LEC (assuming the full 2,880 Approved Net Leasehold Acres are conveyed at Closing), which number shall be adjusted at Closing as set forth in Section 2.2 below (the “Closing Shares”).

1.3 Execution Date and Closing. The Execution Date shall be the date as defined above. Subject to Buyer’s completion of its due diligence review of the Subject Leases and Subject Acreage, Closing shall be held in Lehi, Utah on a date that is no later than one hundred and fifty (150) days from the execution date of this Agreement, the date of which Closing shall be in Buyer’s sole discretion. The Parties shall attend a closing in the offices of LEC (the “Closing”) at which the Parties shall perform the following obligations:

(a). Upon the Execution Date and at Closing and thereafter, as applicable, LEC shall perform all of the following:

1. Option Agreement Termination and Vesting of Restricted Shares Upon Execution Date: Upon the Execution Date, the Option Agreement shall be superseded in full by this Agreement, and the Option Agreement shall have no further force and effect, and, further, the Restricted Shares shall become fully vested and no longer subject to forfeiture or cancellation by Buyer; and

2. Issuance of Closing Shares: At Closing, Buyer shall issue to Seller the Closing Shares (assuming the full 2,880 Approved Net Leasehold Acres are conveyed at Closing). At the Closing, Sellers shall execute and deliver to Buyer the Restricted Stock Agreement in the form of Appendix 7 hereto.

(b). At Closing, Seller shall perform the following:

1. Seller shall execute, acknowledge and deliver to Buyer an Assignment of Oil, Gas And Mineral Leases in a form to be mutually agreed by the Parties and to be attached hereto as Appendix 3, which assignment shall convey the Designated Interests to Buyer (the “Assignment”);

2. Seller shall execute and deliver to Buyer a Certificate of Non-Foreign Status in the form attached hereto as Appendix 4.

(c). At Closing, Seller shall deliver a copy of the Records to Buyer.

(d). On or before Closing, pursuant to Section 5.2, the Parties shall enter into an Operating Agreement as mutually agreed by the Parties, which shall be attached as Appendix 5 hereto (the “Operating Agreement”).

The equity issuances LEC is required to make under Section 1.2 shall be made in book entry only, with no physical stock certificates issued.

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ARTICLE 2 – Review Period; Cure Period

2.1 Review Period; Costs of Title Information and Environmental Due Diligence. For a period ending at 5:00 p.m. local time in Lehi, Utah, thirty (30) days prior to the date of the Closing (the “Review Period”), LEC and its representatives will have the right to review all land, legal, well and regulatory files and information in any Seller’s possession that pertain to the Subject Acreage and the Subject Leases. Seller shall provide LEC with true and correct copies of all land, legal, title, well and regulatory information in Seller’s possession covering the Subject Acreage and the Subject Leases, including copies of all of the Subject Leases and copies of all title documentation, assignments, title opinions, abstracts of title, run-sheets and other title information and environmental reports or assessments in Seller’s possession with respect to the Subject Acreage and the Subject Leases. The costs of title run sheets, title opinions and environmental assessments prepared for LEC will be the sole responsibility of LEC. LEC will provide copies of all title run sheets, title opinions, title curative information and environmental reports or assessments that LEC acquires to Seller during the Review Period. Except as expressly provided in this Agreement, no Party makes any representation as to the accuracy or reliability of any title information or data furnished to any other Party hereunder. During the Review Period, Seller shall permit LEC and its representatives at reasonable times and at LEC’s sole risk, cost and expense, to conduct reasonable inspections of the Subject Leases and the Subject Acreage.

2.2 LEC’s Determination of Approved Net Leasehold Acres. On or before the expiration of the Review Period, LEC shall determine, the number of Net Leasehold Acres covered by each of the Appendix 2 Leases that are acceptable to LEC in the good faith exercise of reasonable discretion (the “Approved Net Leasehold Acres”). In its determination of the Approved Net Leasehold Acres covered by Subject Lease, LEC will use the formula set forth in the definition of Net Leasehold Acres in Appendix 1; provided, however, that LEC may exclude:

(a). any of the Subject Leases that a prudent person engaged in the business of the ownership, development and operation of oil and gas properties with knowledge of all the facts and their legal bearing would be unwilling to accept;

(b). any of the Subject Leases with respect to which LEC determines that there are material environmental liabilities that are unacceptable to LEC in the good faith exercise of reasonable discretion; and

(c). interests in oil, gas and other minerals covered by the Subject Leases and leasehold working interests in the Subject Leases that LEC determines, in the good faith exercise of reasonable discretion to be subject to any Title Defect (defined in Appendix 1).

The Approved Net Leasehold Acres attributable to the Subject Leases excluded for the reasons set forth in Section 2.2(a) and Section 2.2(b) above (the “Excluded Leases”) will be zero unless the reasons for exclusion are removed during the Cure Period to the satisfaction of LEC in the good faith exercise of reasonable discretion. All Excluded Leases shall be excluded from the Assignment from Seller to LEC. LEC will acquire no rights in such Excluded Leases and following Closing, Seller will have no further obligations to LEC with respect to such Excluded Leases under this Agreement. To the extent Subject Leases become Excluded Leases, the number of Closing Shares issuable to Seller by LEC at Closing shall be proportionately reduced based on the proportion of Approved Net Leasehold Acres bears to the Net Leasehold Acres as represented by Seller as owned by Seller as of the Execution Date, with the number of Closing Shares calculated as follows: (Approved Net Leasehold Acres/Net Leasehold Acres) x 3,400,000.

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2.3 Notice of Title Defects and Cure Period. On or before the expiration of the Review Period, LEC shall give Seller written notice identifying in reasonable detail all Title Defects that will be taken into account in determining the Approved Net Leasehold Acres and identifying any Excluded Leases and the reasons for such exclusion (the “Defect Notice”). All matters which would otherwise qualify as Title Defects, or would cause LEC to reduce the amount of Approved Net Leasehold Acres and which are not reflected in a timely submitted Defect Notice will be deemed waived by LEC as of the expiration of the Post-Closing Cure Period; provided, however, that the foregoing shall not abrogate or limit Seller’s indemnity and hold harmless obligations under Section 5.8 or Seller’s special warranty of title set forth in the Assignment. On or before 5:00 p.m. local time in Lehi, Utah, three (3) days prior to the date of the Closing (the “Cure Period”), at Seller’s sole cost and expense, Seller will have the right to cure any Title Defects referred to in the Defect Notice and to attempt to remediate or remove any facts or circumstances that caused one or more of the Subject Leases to be Excluded Leases. Prior to the expiration of the Cure Period, Seller will give LEC notice of all Title Defects that Seller believes it has cured and any change in circumstances or additional facts that should be considered by LEC in evaluating whether a lease should be an Excluded Lease. Seller will furnish LEC with said notice, all title curative materials reflecting that the Title Defects referred to in Seller’s notice do not exist or have been cured and information as to the change in circumstances or additional facts that should be considered by LEC in evaluating whether a lease should be an Excluded Lease. In the event LEC and Seller cannot agree as to whether any Lease identified in the Defect Notice for which Seller believes it has cured any Title Defect should be treated as an Excluded Lease, the Parties will submit the matter to binding arbitration pursuant to Section 10.11. The Buyer has the right to waive any Title Defects that are uncured by Closing, and accept any Subject Leases for acquisition at Closing, in its sole discrection.

ARTICLE 3 – Determination of Farm-In Price and Closing

3.1 Determination of the Farm-In Price for the Designated Interests. At the expiration of the Cure Period, LEC shall evaluate the title curative material, if any, submitted by Seller during the Cure Period and determine the number of Approved Net Leasehold Acres included in each of the Subject Leases. LEC shall promptly give Seller a written notice stating: (i) the number of Approved Net Leasehold Acres covered by each of the Subject Leases; and (ii) the number of Closing Shares to be issued, calculated in the manner described in Article 2 based on the number of Approved Net Leasehold Acres. Said notice shall identify any of the Subject Leases that are Excluded Leases.

3.2 Post-Closing Title Curative. From and after the date of Closing through the date that is six (6) months following the Closing (the “Post-Closing Cure Period”), Seller will have the continuing right, but not the obligation, to cure any Title Defects or otherwise satisfy LEC with respect to any matters reflected in the Defect Notice that were not cured or resolved as of the Closing. In the event Seller cures or resolves any matter reflected in the Defect Notice to LEC’s reasonable satisfaction during the Post-Closing Cure Period, a second closing will occur with respect to the additional Approved Net Leasehold Acres resulting from Seller’s efforts (the “Second Closing”). The Second Closing will be conducted in the same manner as the Closing, and the Parties will have the same rights, duties and obligations with respect to the additional Approved Net Leasehold Acres.

3.3 Pre-Closing Covenants. From the Execution Date to the date of the Closing, except as provided herein, or as otherwise consented to in writing by LEC, Seller shall: (a) not sell, assign, transfer, dispose of or relinquish any of the Subject Leases (other than relinquishments resulting from the expiration of any of the Subject Leases which Seller does not have a right or option to renew); (b) exercise all rights or options it has to renew or extend any of the Subject Leases that are due to expire in 2024; (c) not incur any expenditures or liabilities with respect to the Subject Leases in excess of Ten Thousand Dollars ($10,000), individually, or in excess of Twenty-Five Thousand Dollars ($25,000) in the aggregate, or enter into any agreements committing to same, unless in case of an emergency; (d) not enter into any material new contract burdening any of the Subject Leases or any part thereof; and (e) promptly notify LEC upon receipt of written notice of any claim, demand or notice by any third party, governmental agency or court relating to the Subject Leases or the Subject Acreage, or any part thereof.

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ARTICLE 4 – Trio Option Assignment

4.1 Assignment of Trio Option. The Parties agree and acknowledge that the Subject Leases and Subject Acreage are subject to that certain Leasehold Acquisition and Development Agreement, dated November 10, 2023, as amended December 28, 2023, by and between Seller and Trio Petroleum Corp (“Trio”) (the “Trio Option”). The Parties agree and acknowledge that, as a condition to Closing, Seller shall obtain Trio’s agreement to assign the Trio Option to Buyer at Closing, with Buyer assuming operatorship with respect to the Subject Leases and Subject Acreage, and with Buyer assuming all rights, duties and responsibilities of Seller under the Trio Option, and with the Subject Leases and Subject Acreage remaining subject to the Trio Option in accordance with its terms. Notwithstanding the foregoing, in the event Trio’s agreement to assign the Trio Option to Buyer is not obtained on or prior to Closing, Buyer, in its sole discretion, may waive this Closing condition and close without receiving the assignment of the Trio Option, in which event (i) Seller shall retain the 17.75% working interest that is subject to the Trio Option, (ii) the Farm-In Price shall be proportionately reduced as provided in Section 2.2, and (iii) in the event the Trio Option expires without Trio exercising its full option to acquire all Subject Leases and Subject Acreage as contemplated under the Trio Option, Buyer shall have the sole and exclusive right to farm-in and acquire such Subject Leases and Subject Acreage that is not acquired by Trio on same on the same terms and conditions, and at the same proportionate farm-in price, as set forth under this Agreement.

ARTICLE 5– Operational, Development and Other Provisions

5.1 Operator. Operations, if any, on the Subject Acreage and lands pooled therewith and the extent and duration thereof shall be solely within the discretion and at the will of LEC or LEC’s designee. At Closing, Valkor Oil & Gas LLC, LEC or LEC’s designee, shall serve as the operator unless otherwise designated by Buyer.

5.2 Operations and Cost Sharing. On or prior to Closing, the Parties shall enter into the Operating Agreement as mutually agreed by the Parties, which shall be attached as Appendix 5 hereto, and shall govern all operations on the lands and leases to be identified in Exhibit “A” to the Operating Agreement (the “Contract Area”). LEC may waive entry into the Operating Agreement as a condition to Closing in its sole discretion. LEC or LEC’s designee, as authorized pursuant to the terms of the Operating Agreement, shall be named as the operator in the Operating Agreement. The Operating Agreement shall be deemed a separate agreement: (i) covering each drilling and spacing unit, and (ii) covering all other portions of the Contract Area and the Subject Acreage not included in a drilling and spacing unit until such time as such portions of the Contract Area and the Subject Acreage are included in a drilling and spacing unit. The Operating Agreement shall be binding on the Parties when this Agreement is fully executed notwithstanding that parties have not signed the Operating Agreement. In the event of a conflict between this Agreement and the Operating Agreement, this Agreement shall control.

5.3 Roads and Easements. All roads constructed and easements obtained by Seller in connection with the Contract Area or the Subject Acreage may be used by LEC in its operations on the Contract Area and the Subject Acreage in accordance with the applicable agreements and applicable law.

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5.4 Ingress and Egress. To the extent that it may lawfully do so, Seller hereby grants to LEC the right of ingress and egress over, across and under any portion of the Subject Acreage and the Contract Area and over, across and under any other lands and/or leases owned by Seller in the vicinity of the Subject Acreage and the Contract Area in order for LEC to have the right of ingress and egress to and from the Subject Acreage and the Contract Area and to lay and maintain pipelines and other facilities to treat, store, transport oil, gas and other minerals that may be produced from or attributable to the Subject Acreage and the Contract Area.

5.5 Non-Interference. Seller hereby agrees and covenants that, with respect to rights in the Subject Acreage, Seller will not grant any rights, title or interest to any third party that unreasonably interfere with LEC’s ability to fully and effectively drill, develop and commercialize the rights and interests in the Subject Acreage acquired by LEC.

5.6 Development Activities. Between the Execution Date and the Closing, in the event LEC desires to conduct any development operations on the Subject Acreage and the Contract Area, including, but not limited to, building roads, laying pipelines, building drilling pads, drilling wells, and otherwise improving the Subject Acreage and the Contract Area, LEC may do so at is sole cost and expense, and LEC shall have the full rights and ability to do so in its sole discretion. Any hydrocarbon resources produced from any such wells shall be owned by LEC.

5.7 Reserve Report. Upon request of LEC, Seller shall instruct its independent reserves engineer, Netherland, Sewell & Associates, Inc. (“NSAI”), to reissue that certain Summary Projection of Resources and Cash Flow as of October 31, 2023 under the name of LEC.

5.8 Indemnification. Seller shall indemnify, defend and hold harmless LEC from and against any and all claims, demands, causes of action, suits, judgments, orders, damages, awards, fines, penalties, charges, appeals, settlements, losses, liabilities, costs and expenses (including court costs, expert witness fees and reasonable attorneys’ fees) (collectively, “Claims”) arising in connection with or related to the Subject Leases or the Subject Acreage attributable to the period of time prior to the date of the Closing, or any Claims that are attributable to a breach by Seller of any of Seller’s representations, warranties or covenants hereunder. All of Seller’s indemnities set forth in this Agreement, including those set forth in this Section 5.8, shall survive the Closing for the applicable statute of limitations period.

5.9 LEC Name Change. In LEC’s sole discretion, LEC may change its legal name to “Heavy Sweet Oil Corp” (or similar name), which name change Seller shall approve and consent to if and as requested by LEC.

ARTICLE 6 – Representations

6.1 Representations of LEC. LEC represents to Seller as of the date hereof and as of the date of Closing, unless a representation below is expressly made only as of the date of Closing:

(a). LEC is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, and is duly qualified to carry on its business in all jurisdictions in which it is conducting business.

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(b). LEC has all requisite power and authority to carry on business as presently conducted, to enter this Agreement, and to perform its obligations under this Agreement. The consummation of the transactions contemplated hereby will not violate, nor be in conflict with, any provision of LEC’s Certificate of Incorporation or other governing documents, or any agreement or instrument to which LEC is a party or is bound, or any judgment, decree, order, statute, rule or regulation applicable to LEC.

(c). The execution, delivery and performance of this Agreement and the transactions contemplated hereby have been duly and validly authorized by all requisite action on the part of LEC.

(d). LEC has incurred no obligation or liability, contingent or otherwise, for brokers’ or finders’ fees with respect to the matters provided for in this Agreement for which Seller shall have any responsibility whatsoever; and any such obligation or liability that might exist shall be the sole obligation of LEC.

(e). LEC is not a foreign person within the meaning of Sections 1445 and 7701 of the Internal Revenue Code of 1986, as amended.

(f). As of the date of the Closing, LEC, or an operating subsidiary thereof, shall be authorized to do business in and to own and operate oil and gas leases in the State of Utah and in good standing in the State of Utah.

(g). From the date hereof until the date of the Closing, LEC has made available to Seller LEC’s officers for any inquiries pertaining to matters reasonably relevant to the transactions contemplated hereunder.

(h). As of the date of the Closing, LEC shall be an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated by the Securities and Exchange Commission under the Securities Act of 1933, as amended.

6.2 Representations of Seller. Seller represents and warrants to LEC as of the date hereof and as of the date of Closing, unless a representation below is expressly made only as of the date of Closing:

(a). Seller is a limited liability company duly formed, validly existing and in good standing under the laws of the State of Utah, and is duly qualified to carry on its business in all jurisdictions in which it is conducting business.

(b). Seller has all requisite power and authority to carry on business as presently conducted, to enter this Agreement, and to perform its obligations under this Agreement. The consummation of the transactions contemplated by this Agreement will not violate, nor be in conflict with, any provision of Seller’s formation or governing documents, or any agreement or instrument to which Seller is a party or is bound, or any judgment, decree, order, statute, rule or regulation applicable to Seller.

(c). The execution, delivery and performance of this Agreement and the transactions contemplated hereby have been duly and validly authorized by all requisite action on the part of Seller.

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(d). Seller is not a foreign person within the meaning of Sections 1445 and 7701 of the Internal Revenue Code of 1986, as amended.

(e). Seller has incurred no obligation or liability, contingent or otherwise, for brokers’ or finders’ fees with respect to the matters provided for in this Agreement for which LEC shall have any responsibility whatsoever; and any such obligation or liability that might exist shall be the sole obligation of Seller.

(f). To the best of its knowledge, Seller is in compliance with the terms of the Subject Leases. Seller is in compliance with all permits relating to the Subject Leases. All of said permits are valid and are in full force and effect. The Subject Leases are valid, binding and enforceable in accordance with their terms and are in full force and effect.

(g). To the best of its knowledge, Seller has Good and Defensible Title to its interests in the Subject Leases.

(h). No agreement applicable to the Subject Leases (other than this Agreement) contains express provisions that require the drilling of wells or other material development operations in order to earn or to continue all or any portion of the Subject Leases in force and effect.

(i). Seller has not entered into any agreement under which LEC will be obligated, by virtue of a prepayment arrangement, a gas balancing agreement, a production payment or any other agreement or dedication to deliver hydrocarbons from the Subject Leases at some future time without then or thereafter receiving full payment therefore, or to make payment at some future time for hydrocarbons already produced and sold.

(j). All rentals and other payments due under the Subject Leases have been properly and timely paid and all conditions necessary to keep the Subject Leases in force and effect have been fully performed.

(k). Seller has not received any notice that any part of the Subject Acreage must be remediated under the provisions of any environmental law and, to the best of Seller’s knowledge, Seller has complied with all applicable laws governing its ownership and operation of the Subject Leases.

(l). Seller has paid in full all taxes and assessments that have accrued and are due against any part of the leasehold interests covered by this Agreement or against Seller in respect to any of said leasehold interests by any local, state, federal or other taxing authority.

(m). There are no contracts or agreements that cover, affect or burden the Subject Leases, this Agreement, and any other contracts and agreements that are listed in Appendix 6.

(n). None of the statements, representations or warranties made by Seller in this Agreement contains any untrue statements of any fact or fails to disclose any fact necessary to be disclosed in order to make the statements, representations or warranties contained herein not misleading. Seller has no knowledge of any matter that adversely affects (or may adversely affect) the Subject Leases that has not been disclosed to LEC in writing.

(o). Seller is authorized to do business in the State of Utah and is in good standing in the State of Utah.

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(p). There are no consents to assignment or preferential rights to purchase with respect to any of the Subject Leases, except as set forth in Appendix 8.

(q). None of the Subject Leases are subject to any tax partnership agreement pursuant to Subchapter K of Chapter 1 of Subtitle A of the Internal Revenue Code.

(r). Seller is an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated by the Securities and Exchange Commission under the Securities Act of 1933, as amended. Additional investor qualification representations shall be included in the Restricted Stock Agreement attached as Appendix 7.

ARTICLE 7 – Conditions Precedent

7.1 Conditions Precedent to the Obligations of Seller. The obligations of Seller to be performed at Closing are subject to the satisfaction by LEC or waiver by Seller before or at Closing, of each of the following conditions:

(a). Representations and Warranties. The representations and warranties by LEC set forth in this Agreement shall be true and correct in all material respects at and as of the date of Closing as though made at and as of Closing; and LEC shall have performed and complied with, in all material respects, all covenants and agreements required to be performed and satisfied by LEC at or prior to Closing.

(b). No Litigation. There shall be no suits, actions or other proceedings pending or threatened to enjoin the consummation of any of the transactions contemplated by this Agreement or seeking substantial damages against Seller in connection therewith.

(c). Approvals. All approvals required to be obtained for the assignment of the Subject Leases to be conveyed by Seller to LEC at Closing shall have been obtained or waived or shall have expired without being exercised.

7.2 Conditions Precedent to the Obligations of LEC. The obligations of LEC to be performed at Closing are subject to the satisfaction by Seller or waiver by LEC before or at Closing, of each of the following conditions:

(a). Representations and Warranties. Except with respect to Seller’s representation in Section 6.2(g), which is governed by Article 2, the representations and warranties by Seller set forth in this Agreement shall be true and correct in all material respects at and as of the date of Closing as though made at and as of Closing; and Seller shall have performed and complied with, in all material respects, all covenants and agreements required to be performed and satisfied by Seller at or prior to Closing.

(b). No Litigation. There shall be no suits, actions or other proceedings pending or threatened to enjoin the consummation of any of the transactions contemplated by this Agreement or seeking substantial damages against LEC in connection therewith.

(c). Approvals. All approvals required to be obtained for the assignment of the Subject Leases to be conveyed by Seller to LEC at Closing shall have been obtained or waived or shall have expired without being exercised.

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(d) Casualty and Condemnation. A substantial part of the Subject Leases or the Subject Acreage: (i) shall not have been destroyed by a casualty loss; and (ii) shall not have been taken in condemnation and no proceedings for the purpose of condemnation shall be pending.

ARTICLE 8 – Option Agreement

8.1 Option Agreement Termination and Vesting of Restricted Shares upon Execution Date. In consideration for Seller agreeing to (i) increase the total working interest and Subject Acreage available for farm-in and acquisition by Buyer, (ii) extend the timeline for Buyer’s consummation of the transactions contemplated under this Agreement, and (iii) supersede the Option Agreement and replace it with this Agreement, upon the Execution Date, the Option Agreement shall be superseded in full by this Agreement, the Option Agreement shall have no further force and effect, and the Restricted Shares shall become fully vested and no longer subject to forfeiture or cancellation by Buyer. The Restricted Shares shall remain in book entry only, with no physical stock certificates issued.

ARTICLE 9 – Termination

9.1 Termination. This Agreement may be terminated at any time before Closing as follows:

(a). By mutual written agreement of the Parties;

(b). By LEC, upon written notice to Seller at any time prior to Closing if (i) Seller has breached any representation, warranty, or covenant contained in this Agreement, LEC has notified Seller of the breach, and the breach has continued without cure for a period of three (3) business days after the notice of the breach, (ii) LEC has given Seller notice pursuant to Section 3.1 that the Farm-In Price is reduced by more than Ten Percent (10%) due to adjustments for Title Defects, or (iii) Closing shall not have occurred on or before 10:00 a.m. local time in Lehi, Utah, one hundred and fifty (150) days after the execution date of this Agreement, by reason of the failure of any condition precedent under Section 7.2;

(c). By Seller upon written notice to LEC from Seller at any time prior to Closing if Closing shall not have occurred on or before 10:00 a.m. local time in Lehi, Utah, one hundred and fifty (150) days from the execution date of this Agreement.

9.2 Effect of Termination. If this Agreement is terminated by LEC because Seller: (i) breached any representation, warranty, or covenant made by Seller in this Agreement, and failed to cure such breach within three (3) business days after LEC gave notice of the breach; or (ii) failed to perform its obligations at Closing under circumstances in which all conditions precedent to Seller’s obligations set forth in Article 7 have been satisfied, then LEC shall be entitled to all rights or remedies that LEC has or may have under law or in equity for Seller’s breach or failure to perform under this Agreement. Likewise, if this Agreement is terminated by Seller because LEC: (i) breached any representation, warranty, or covenant made by LEC in this Agreement, and failed to cure such breach within three (3) business days after Seller gave notice of the breach; or (ii) failed to perform its obligations at Closing under circumstances in which all conditions precedent to LEC’s obligations set forth in Article 7 have been satisfied, then Seller shall be entitled to all rights or remedies that Seller have or may have under law or in equity for LEC’s breach or failure to perform under this Agreement. In the event of termination of this Agreement for any reason, and LEC has conducted any development activities on the Subject Acreage or Contract Area as permitted under Section 5.6, then Seller shall promptly reimburse LEC for all cost and expenses of the same against deliver of evidence thereof by LEC to Seller.

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ARTICLE 10 – Miscellaneous

10.1 Further Assurances. Each Seller and LEC shall execute, acknowledge and deliver or cause to be executed, acknowledged and delivered such instruments and take such other action as may be necessary or advisable to carry out such Party’s obligations under this Agreement and under any exhibit, appendix, document, certificate or other instrument delivered pursuant hereto.

10.2 Notices. All notices and other communications that are required or that may be given under the provisions of this Agreement shall be in writing addressed as set forth below, and the same shall be deemed to have been given on the same day if delivered upon the earliest of: (a) actual receipt by the Party to be notified; (b) three (3) days after deposit with the United States Postal Service, certified mail, postage prepaid, return receipt requested; (c) two (2) days after deposit with Federal Express or other reputable overnight service) for overnight delivery; (d) upon acknowledgment of receipt of telefax, email or other electronic transmission. All such notices shall be addressed as follows:

If to Seller:	Heavy Sweet Oil LLC
	2511 South Redwood Rd Woods Cross, UT 84087 Attn.: Steven Byle
	Tel. No.: XXXXXXXXXXXX FAX No.: n/a Email: XXXXXXXXXXXX
If to LEC:	Lafayette Energy Corp
	3450 N. Triumph Blvd., Suite 102 Lehi, Utah 84043 Attn.: Michael L. Peterson, President and Chief Executive Officer With a copy to: General Counsel Tel. No. FAX No. Email:

From time to time Seller or LEC may designate another address or facsimile number or email address or telephone number for all purposes of this Agreement by notifying the other Parties of such change in accordance with the provisions hereof.

10.3 Incorporation of Appendices. The appendices attached hereto are incorporated in this Agreement and are made a part of this Agreement.

10.4 Entire Agreement. This Agreement (including the appendices attached hereto) constitutes the entire agreement among the Parties with respect to the subject matter hereof and supersedes all prior agreements and undertakings, written and oral.

10.5 Amendment; Waiver. This Agreement may not be altered or amended except by a written document signed by LEC and the Seller, unless such alteration or amendment would have a material adverse effect on those Sellers not signing such alteration or amendment, in which case the signatures of such Sellers shall also be required on such written document. No rights hereunder may be waived, except by a written document signed by the Party or Parties to be charged with such waiver.

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10.6 Announcements. No Party shall issue any press release or make any public announcement relating to the subject matter of this Agreement prior to Closing without the prior written approval of LEC and HSO; provided, however, that any Party may make any public disclosure that such disclosing Party believes in good faith is required by applicable law, the rules of any recognized stock exchange on which the securities of such Party are traded or any listing or trading agreement concerning any Party’s publicly-traded securities.

10.7 Confidentiality.

(a). From and after the date of this Agreement and until Closing, each Party shall treat all information exchanged and relating the transactions contemplated hereby as confidential (the “Confidential Information”). Each Party shall take reasonable precautions as may be necessary to prevent the disclosure of any portion of the Confidential Information to any third party. Without the prior written consent of the other Parties, no Party shall disclose any of the Confidential Information, except to any of the following (on a confidential basis): (1) members, partners, managers, officers, directors, employees, attorneys, accountants, engineers and other agents or consultants engaged by such Party; (2) any bona fide third party who in good faith is seeking to purchase, acquire, invest, finance or otherwise participate with such Party in an interest in any portion of the lands, or the wells, lands or leases therein, including any investors or potential investors in LEC, subject to the terms of a written confidentiality agreement; or (3) any parties to which such Party is required to disclose such information by law or by the rules of any recognized stock exchange on which the securities of such Party are traded. The Parties acknowledge that the breach of the terms of this provision may cause irreparable harm for which monetary damages would be inadequate and difficult to ascertain. Therefore, the Parties hereby agree that, in the event of a breach or threatened breach hereof, the non- breaching Party or Parties may seek an injunction, restraining order, specific performance, and such other remedies and relief, in law or at equity, or any combination thereof, which the non-breaching Party or Parties may deem in the sole discretion of such Party or Parties as necessary or advisable. The filing of any particular cause of action hereunder shall not be deemed an election of remedies.

(b). For purposes of this Agreement, “Confidential Information” does not include information that: (1) is already known to the receiving Party as of the date of disclosure hereunder; (2) is already in possession of the public or becomes available to the public other than through the breach of this Agreement by the receiving Party or of any other person to whom Confidential Information is distributed pursuant to this Agreement; (3) is required to be disclosed under applicable law, stock exchange regulations, court order, or by a governmental order, decree, regulation or rule (provided that the receiving Party shall make all reasonable efforts to deliver prompt written notice to the disclosing Party prior to such disclosure); (4) is acquired independently from a third party that represents it has the right to disseminate such information at the time it is acquired by the receiving Party; or (5) is developed by the receiving Party independently of the Confidential Information received from the disclosing Party.

10.8 Force Majeure. If LEC is rendered unable, wholly or in part, by force majeure to carry out its obligations within the deadlines established under this Agreement, it will give HSO prompt written notice of the force majeure event with reasonably full particulars concerning it. The obligations or deadlines of LEC shall be suspended during the continuation of the force majeure event. LEC shall use all reasonable diligence to remove the force majeure as quickly as possible. The term “force majeure” as employed herein shall mean an act of God, strike, lockout or other industrial disturbance, act of the public enemy, war, blockade, public riot, lightening, fire, storm, flood, explosion, governmental restraint including but not limited to a drilling moratorium or a moratorium on hydraulic fracturing operations, governmental inaction, restriction upon or prohibition of surface rights, nonavailability of drilling equipment or other equipment or personnel at reasonable commercial rates; and any other cause, whether of the kind specifically enumerated or otherwise, which is not reasonably within the control of LEC.

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10.9 Binding Effect; Benefits. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns. Nothing expressed or implied in this Agreement is intended to or shall be construed to give any person other than the Parties or their respective successors or assigns any legal or equitable right, remedy or claim under or in respect of this Agreement, it being the intention of the Parties that this Agreement shall be for the sole and exclusive benefit of the Parties and their respective successors and assigns and for the benefit of no other person.

10.10 Governing Law. This Agreement and the transactions contemplated hereby shall be construed in accordance with, and governed by, the laws of the State of Utah.

10.11 BINDING ARBITRATION. ANY DISPUTE, CLAIM OR CONTROVERSY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE EXISTENCE OF TITLE DEFECTS OR ENVIRONMENTAL LIABILITIES, THE BREACH, TERMINATION, ENFORCEMENT, INTERPRETATION OR VALIDITY OF THIS AGREEMENT, INCLUDING THE DETERMINATION OF THE SCOPE OR APPLICABILITY OF THIS AGREEMENT TO ARBITRATE, SHALL BE DETERMINED BY ARBITRATION IN THE STATE OF UTAH IN ACCORDANCE WITH THE PREVAILING COMMERCIAL ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIATION. THE HEARING SHALL BE COMMENCED WITHIN THIRTY (30) DAYS AFTER THE SELECTION OF THE ARBITRATOR AND A WRITTEN DECISION SHALL BE RENDERED BY THE ARBITRATOR WITHIN THIRTY (30) DAYS OF THE CONCLUSION OF THE HEARING. NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, JUDGMENT ON THE AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. THIS CLAUSE SHALL NOT PRECLUDE THE PARTIES FROM SEEKING PROVISIONAL REMEDIES IN AID OF ARBITRATION FROM A COURT OF APPROPRIATE JURISDICTION. THE ARBITRATOR SHALL NOT AWARD CONSEQUENTIAL OR PUNITIVE DAMAGES TO ANY PARTY. THE COSTS AND EXPENSES OF THE ARBITRATION PROCEEDING, INCLUDING THE FEES OF THE ARBITRATOR AND ALL COSTS AND EXPENSES, INCLUDING LEGAL FEES AND WITNESS FEES, INCURRED BY THE PREVAILING PARTY OR PARTIES, SHALL BE BORNE BY THE NON-PREVAILING PARTY OR PARTIES.

10.12 Specific Performance. The Parties agree and acknowledge that money damages may not be an adequate remedy for a breach of a provision of this Agreement by Seller or LEC. As such, Seller or LEC, in their sole discretion, may apply to a court for specific performance and/or injunctive relief in order to enforce or prevent any violations of the provisions of this Agreement by Seller or LEC.

10.13 Expenses. Except as otherwise specifically provided in this Agreement, all fees, costs and expenses incurred by LEC or any Seller in negotiating this Agreement or in consummating the transactions contemplated by this Agreement shall be paid by the Party incurring the same, including with limitation, legal and accounting fees, costs and expenses.

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10.14 Cost. If any legal action, arbitration or other proceeding is brought for the enforcement of this Agreement, or because of an alleged dispute, breach, default or misrepresentation in connection with this Agreement, the prevailing Party or Parties shall be entitled to recover reasonable attorney’s fees and other costs incurred in such action, arbitration or other proceeding, in addition to other relief to which such Party or Parties may be entitled.

10.15 Severability. Each section, subsection and lesser section of this Agreement constitutes a separate and distinct undertaking, covenant or provision hereof. In the event that any provision of this Agreement shall be determined to be invalid or unenforceable, such provision shall be deemed limited by construction in scope and effect to the minimum extent necessary to render the same valid and enforceable, and, in the event such a limiting construction is impossible, such invalid or unenforceable provision shall be deemed severed from this Agreement, but every other provision of this Agreement shall remain in full force and effect.

10.16 Presumption Concerning Interpretation and Construction. Notwithstanding the fact that preliminary drafts of this Agreement were prepared by LEC, Seller and LEC and their respective counsel have had opportunity to participate in the drafting of the final form of this Agreement, and each Party hereto and their respective counsel have had opportunity to review the final form of this Agreement. Accordingly, in the event of any ambiguity in the provisions of this Agreement, there shall be no presumption in favor of any Party hereto with respect to the interpretation or construction thereof. The Parties will treat the words “include,” “includes” and “including” as if followed by “without limitation.” Pronouns in masculine, feminine, and neuter genders will be construed to include any other gender, and words in the singular form will be construed to include the plural and vice versa, unless the context otherwise requires.

10.17 Survival. Except for each Seller’s representation in Section 6.2(g), which shall expire upon Closing, and as otherwise specifically set forth herein, the representations and warranties of the Parties hereto shall survive the execution of this Agreement and the Closing for a period of two (2) years from the date of the Closing; provided, however, that the foregoing shall not abrogate or limit Sellers’ indemnity and hold harmless obligations under Section 5.8 or Seller’s special warranty of title set forth in the Assignment.

10.18 Headings. The section and subsection headings used in this Agreement are inserted for convenience only and shall be disregarded in construing this Agreement.

10.19 Timing. Time is of the essence hereof.

10.20 Counterparts; Facsimile and Electronic Signatures. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same agreement. Furthermore, this Agreement may be executed by the facsimile or electronic signature of any Party hereto, it being agreed that the facsimile or electronic signature of any Party hereto shall be deemed an original for all purposes.

[Signature page follows.]

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EXECUTED to be effective as of the Execution Date.

SELLER:

HEAVY SWEET OIL LLC

By:	/s/ Steven Byle
Name:	Steven Byle
Title:	Chairman/CEO

BUYER:

LAFAYETTE ENERGY CORP

By:	/s/ Michael L. Peterson
	Michael L. Peterson
	President and Chief Executive Officer

Appendices:

Appendix 1: Defined Terms

Appendix 2: Subject Leases

Appendix 3: Form of Assignment of Oil, Gas and Mineral Leases

Appendix 4: Form of Certificate of Non-Foreign

Appendix 5: Form of Operating Agreement

Appendix 6: Description of Contracts of Agreements

Appendix 7: Restricted Stock Agreement

Appendix 8: Schedule of Leases Requiring Consent to Assignment

Signature page to Purchase and Sale Agreement

APPENDIX 1

DEFINED TERMS

Unless such terms are otherwise defined herein, the following terms set forth below shall have the meanings ascribed to them below.

Affiliate means, with respect to a Person, any other Person directly or indirectly, Controlling, or under common Control with, the Person in question and includes any subsidiary of such Person and any “affiliate” of such Person within the meaning of Reg. §240.12b-2 promulgated under the Securities Exchange Act of 1934, and with respect to a Person who is an individual, the ancestors and descendants of such Person and members of such Person’s nuclear family and trusts of which such Persons are beneficiaries.

Agreement has the meaning set forth in the first sentence of this Agreement.

Approved Net Leasehold Acres has the meaning set forth in Section 2.2.

Assignment has the meaning set forth in Section 1.3(b)1.

Buyer has the meaning set forth in the first sentence of this Agreement.

Claims has the meaning set forth in Section 5.8. Closing has the meaning set forth in Section 1.3. Contract Area has the meaning set forth in Section 5.2.

Control means the possession, directly or indirectly, through one or more intermediaries, of the following: (a) in the case of a corporation, more than fifty percent (50%) of the outstanding voting securities thereof; or (b) in the case of any Person, the power or authority, through ownership of voting securities, by contract or otherwise, to direct the management, activities or policies of the Person.

Confidential Information has the meaning set forth in Section 10.7.

Cure Period has the meaning set forth in Section 2.3.

Defect Notice has the meaning set forth in Section 2.3.

Designated Interests has the meaning set forth in the recitals of this Agreement.

Effective Date means one hundred and fifty (150) days from the execution date of this Agreement

Encumbrances means pledges, liens, mortgages, security interests, contract obligations, options, claims, defects and encumbrances. Notwithstanding anything to the contrary, for purposes of this Agreement, any of the Subject Leases with an expiration date occurring during 2024 shall be deemed to be subject to an Encumbrance hereunder.

Excluded Leases has the meaning set forth in Section 2.2.

Force Majeure has the meaning set forth in Section 10.8.

Good and Defensible Title means, for each of the Subject Leases, such record title that: (i) is free and clear of all Encumbrances, except Permitted Encumbrances; (ii) entitles Seller to receive not less than the Net Revenue Interest set forth in Appendix 2 in all hydrocarbons produced from the Subject Leases described in Appendix 2 at any time during the productive life thereof (after satisfaction of all royalties, overriding royalties, nonparticipating royalties, net profits interests or other similar burdens on or measured by production of hydrocarbons); and (iii) obligates Seller to bear not more than the Working Interest set forth in Appendix 2 in the Subject Leases described in Appendix 2 at any time during the productive life or abandonment thereof.

Defined Terms

Appendix 1 Page 1

Net Leasehold Acres means, with respect to each of the Subject Leases: (i) the number of gross acres covered by such Lease, times (ii) the percentage of the oil, gas and other minerals covered by such Lease, times (iii) the percentage of the estate of the lessee in said Lease (working interest) owned by Seller. For example, the number of Net Leasehold Acres attributable to a Lease covering an undivided one half interest in the oil, gas and other minerals rights in and under a 100 acre tract of land in which Seller owns 90% of the estate of the original lessee in such Lease would be 45 Net Leasehold Acres. The 45 Net Leasehold Acres in this example is derived as follows: (100 acres) times 50% (the landowner’s interest in the oil, gas and other mineral rights) times 90% (Seller’s ownership percentage of the estate of the original lessee).

Operating Agreement has the meaning set forth in Section 5.2.

Party and Parties have the meanings set forth in the second sentence of this Agreement.

LEC has the meaning set forth in the first sentence of this Agreement.

Permitted Encumbrances means and includes the following:

(i)	production burdens that do not reduce Seller’s net revenue interest in any of the Appendix 2 Leases below the amounts set forth in Appendix 2;
(ii)	the overriding royalties to be reserved by HSO as set forth in this Agreement;
(iii)	Liens for taxes or assessments or governmental charges not yet delinquent;
(iv)	Easements, rights-of-way, servitudes, permits, surface leases and other rights in respect of surface operations incidental to the ownership of the Subject Leases provided that same do not materially interfere with the operation, value or use of any of the Subject Leases;
(v)	All rights of consent required by any governmental authority (if any) in connection with the change of ownership or control of an interest in any federal, state or other lease if the same are customarily obtained after such change of ownership or control by timely filings or other actions;
(vi)	rights of reassignment, to the extent any exist as of the date of this Agreement, upon the surrender or expiration of any of the Subject Leases;
(vii)	all rights reserved to or vested in any governmental entity to control or regulate operations on any of the Subject Leases and all applicable laws;
(viii)	all defects and irregularities of title that would not reasonably be expected to result in claims that would materially and adversely affect Seller’s title to, or ownership, operations, or value of the Subject Leases, including, without limitation (a) defects in the early chain of title consisting of the failure to recite marital status or the omission of succession or heirship proceedings; (b) defects or irregularities arising out of the lack of a survey; (c) defects or irregularities arising out of or relating to the lack of powers of attorney from corporations to execute and deliver documents on their behalf or lack of spousal joinder; (d) defects of title which result from the failure to file assignments or other documents in the state or federal records so long as such assignments or other documents are properly recorded in the county records; and (e) irregularities cured by possession under applicable statutes of limitation and statutes relating to acquisitive (or liberative) prescription; and

Defined Terms

Appendix 1 Page 2

(ix) all other liens, charges, encumbrances, instruments, obligations, defects and irregularities affecting the Subject Leases which, individually or in the aggregate, do not: (a) interfere materially with the operation, value, or use of any of the Subject Leases; or (b) do not prevent LEC from receiving the proceeds of production from any wells to be drilled on the Subject Leases.

Person means an individual, corporation, partnership, limited liability company, trust, unincorporated organization, government, any agency or political subdivision of any government, or any other form of entity.

Post-Closing Cure Period has the meaning set forth in Section 3.2.

Farm-In Price has the meaning set forth in Section 1.2.

Records has the meaning set forth in Section 1.1(a). Review Period has the meaning set forth in Section 2.1. Second Closing has the meaning set forth in Section 3.2.

Seller has the meaning set forth in the first sentence of this Agreement.

Subject Acreage has the meaning ascribed to such term in the recitals of this Agreement.

Subject Leases has the meaning set forth in the recitals of this Agreement.

Title Defect means any fact that renders Seller’s title to any of the Subject Leases less than Good and Defensible Title, including any Encumbrance (or any claim of an Encumbrance) other than a Permitted Encumbrance.

Defined Terms

Appendix 1 Page 3

APPENDIX 2

SUBJECT LEASES

Utah State Institutional Trust Lands (SITLA) bituminous sand mineral leases ML 53832, ML 53831, and ML 53805.

APPENDIX 3

FORM OF ASSIGNMENT OF OIL, GAS AND MINERAL LEASES

To be attached prior to Closing.

APPENDIX 4

FORM OF CERTIFICATE OF NON-FOREIGN STATUS

APPENDIX 5

FORM OF OPERATING AGREEMENT

To be attached prior to Closing.

APPENDIX 6

DESCRIPTION OF CONTRACTS OR AGREEMENTS

None.

APPENDIX 7

RESTRICTED STOCK AGREEMENT

APPENDIX 8

SCHEDULE OF LEASES REQUIRING CONSENT TO ASSIGNMENT

None.

EX-23.1

EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation in this Registration Statement on Form S-1-A1 of our report dated April 24, 2024, relating to the financial statements of Lafayette Energy Corp for the year ended December 31, 2023 and for the period from February 7, 2022 (Inception) through December 31, 2022 and to all references to our firm included in this Registration Statement. 

Certified Public Accountants

Lakewood, CO

April 25, 2024

EX-99.4

EXHIBIT 99.4

Consent to be Named as a Director Nominee

In connection with the filing by Lafayette Energy Corp of the Registration Statement on Form S-1 with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”), I hereby consent, pursuant to Rule 438 of the Securities Act, to being named as a nominee to the board of directors of by Lafayette Energy Corp in the Registration Statement and any and all amendments and supplements thereto. I also consent to the filing of this consent as an exhibit to such Registration Statement and any amendments thereto.

Dated: December 29, 2023	/s/ Cynthia L. Welch
	Cynthia L. Welch

EX-99.6

EXHIBIT 99.6

Consent to be Named as a Director Nominee

In connection with the filing by Lafayette Energy Corp of the Registration Statement on Form S-1 with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”), I hereby consent, pursuant to Rule 438 of the Securities Act, to being named as a nominee to the board of directors of by Lafayette Energy Corp in the Registration Statement and any and all amendments and supplements thereto. I also consent to the filing of this consent as an exhibit to such Registration Statement and any amendments thereto.

Dated: 4/18, 2024	By:	/s/ Jeffrey D. Holt
	Printed Name:	Jeffrey D. Holt