CJAX 10-K & 10-Q changes, risk factors and insider trading

These factors make it extremely difficult to predict future oil, natural gas and NGLs price movements with any certainty. During the three years ended December 31, 2024,2025, NYMEX WTI prices ranged from a high of $123.64$95.03 per barrel on March 8, 2022, to a low of $65.75 per barrel on September 10,28, 2024,2023, to a low of $54.98 per barrel on December 16, 2025, and NYMEX Henry Hub prices ranged from a high of $9.51$6.40 per MMBtu on AugustFebruary 17,18, 2022, 2025, to a low of $1.21 per MMBtu on November 11, 2024. We make price assumptions that are used for planning purposes, and a significant portion portion of our cash outlays, are largely fixed in nature. Accordingly, if commodity prices are below the expectations on which these commitments were based, our financial results are likely to be adversely and disproportionately affected because these cash outlays are not variable in the short term and cannot be quickly reduced to respond to unanticipated decreases in commodity prices. Specifically, Specifically, prices of oil, and NGLs may adversely affect our revenues, cash flows, earnings and returns; our ability to attract capital to finance our operations and the cost of the capital; the profit or loss we incur in exploring for and developing our reserves; and the value of our oil and natural gas properties.

Our business has become increasingly dependent on digital technologies to conduct certain exploration, development and production activities. We depend on digital technology to estimate quantities of oil, natural gas and NGL reserves, process and record financial and operating data, analyze seismic and drilling information, and communicate with our customers, employees and third-party partners. The U.S. government has issued public warnings that indicate that energy assets might be specific targets of cyber security threats. Our technologies, systems, networks, and those of our vendors, suppliers and other business partners, may become the target of cyberattacks or information security breaches that could result in the unauthorized access to our seismic data, reserves information, customer or employee data or other proprietary or commercially sensitive information could lead to data corruption, communication interruption, or other disruptions in our exploration or production operations or planned business transactions, any of which could have a material adverse impact on our results of operations. If our information technology systems cease to function properly or our cybersecurity is breached, we could suffer disruptions to our normal operations, which may include drilling, completion, production and corporate functions. A cyber-attack involving our information systems and related infrastructure, or that of our business associates, could result in supply chain disruptions that delay or prevent the transportation and marketing of our production, non-compliance leading to regulatory fines or penalties, loss or disclosure of, or damage to, our customer’s, supplier’s or royalty owners’ data or confidential information that could harm our business by damaging our reputation, subjecting us to potential financial or legal liability, and requiring us to incur significant costs, including costs to repair or restore our systems and data or to take other remedial steps.

In addition, certain cyber incidents, such as surveillance, may remain undetected for an extended period. Although we utilize various procedures and controls to monitor and protect against these threats and to mitigate our exposure to such threats, there can be no assurance that these procedures and controls will be sufficient in preventing security threats from materializing. Our systems for protecting against cyber security risks may not be sufficient. While we have not been subject to cybersecurity challenges challenges that have materially impaired our operations or financial standing, we recognize the importance of developing, implementing and and maintaining cybersecurity measures to better safeguard our information systems and protect the confidentiality, integrity and and availability of our data. Our risk management team will work with our IT department to evaluate and address cybersecurity risks risks in alignment with our business objectives and operational needs. In the future, the Company will require the Board and employees to complete cybersecurity training related to the physical security of assets, data privacy and other information security policies and procedures. However, these actions may require us to expend significant additional resources to continue to modify or enhance our protective measures or to investigate and remediate any vulnerabilities to cyberattacks.

Our common stock is currently quoted on PinkOTCID Marketplacemarket of OTC MarketsMarkets, Inc.; however, because our common stock was downgraded to Expert Market, we need to submit a new application for Proprietary Quotations.Quotations may be required to allow brokers to place proprietary quotations on our stock .. We do not have an active, liquid trading market for our common stock and may never develop it.

In October 2021, our Common Stock became eligible for quotations on OTC Markets. Between October 2021 and July 2023, our stock was quoted at the time on the OTC Pink marketplace, which publishespublished brokerage quotations; however, because we were delinquent with our reporting obligations and did not file our 2022 annual report and 2023 quarterly reports timely, our stock was downgraded to Expert Market marketplace until we filed all required reports. While our common stock is currently trading again on the OTC PinkOTCID Marketplace, becausewhich ouris stocka wasnew downgradedtier toof ExpertOTC Market,Markets, indicating that companies on that tier complies with all SEC reporting obligations and additional obligations imposed by OTC Markets, that are current our stock is not eligible for proprietary broker-dealer quotations, and all quotes of our common stock reflect unsolicited customer orders. These unsolicited-only stocks have a higher risk of wider spread, increased volatility, and price dislocations. To be eligible for public brokerage quotations and to provide continuous market making, a market maker needs to submit a new application under SEC Rule15c2-11 which needs to be approved by FINRA. Even if our stock becomes eligible for proprietary quotations, the trading on the OTCOTCID Pinkmarketplace, marketplacewhich is the basic marketplace, is often thin and characterized by wide fluctuations in trading prices, due to many factors that may have little to do with our operations or business prospects. The securities market has from time-to-time experienced significant price and volume fluctuations that are not related to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of shares of our common stock.

Oil and natural gas prices have and may continue to be volatile. Recessionary concerns have placed some downward pressure on commodity prices, causing oil and gas prices to decline in the firstfourth quarter of 20232025 from their earlier highs in 2022.2023. Although supply has has increased throughout the last three years, there is still an element of volatility and uncertainty that we expect to continue at least for the near-term and possibly longer, in part by the impact of the Russian-Ukrainian military conflict on global commodity and financial markets, and the associated effect of trade sanctions on imports of oil and natural gas from Russia. This volatility could negatively impact future prices for oil, natural gas, petroleum products and industrial products.

Revenues were $963,621 for the year ended December 31, 2025, and $971,686 for the year ended December 31, 2024, and $927,983 for the year ended December 31, 2023.2024. The Company is an early-stage company and began producing significant revenue in 2023. The increasedecrease in revenue of $43,703$8,065 is attributable to the acquisitiondecrease in oil prices since prior year and disposal of additionalcertain mineral and oil and gas interests during 2024.2025.

General and administrative expenses consisted primarily of accounting and audit fees, legal and professional services fees, and payroll-related expenses. General and administrative expenses were $919,994$775,792 for the year ended December 31, 2024,2025, compared to $1,038,473$919,994 in the same period in 2023,2024, representing a decrease of 11.4%15.7% or $118,479.$144,202. The decrease was primarily driven by a decrease in managementpayroll fees.expenses.

Lease operating expenses were $355,644$417,967 for the year ended December 31, 2024,2025, compared to $248,642$355,644 in the same period in 2023.2024. The increase in lease operating expenses of 43.0%17.5% or $107,002$62,323 was primarily driven by the result of a full year of operating expenses related to the 2024 acquisition of additional mineral and oil and gas interests that occurred in Q2 and theQ3 operation of those interests.2024.

Total operating loss was $1,029,312 for the year ended December 31, 2025, and $1,608,945 for the year ended December 31, 2024, and $1,627,962 for the year ended December 31, 2023.2024. The change in loss was primarily driven by the decrease in impairment expense and general and administrative expenses, offset by thean increase in lease operating expenses.

Other expense, net was ($901$79,897) for the year ended December 31, 2024,2025, compared to ($1,940$901) for the same period in 2023.2024. The changeincrease in in other expense, net, was attributable to ana increaseloss on disposition of proved reserves not present in interestthe income.prior year.

The Company had cash and cash equivalents of $46,738$77,219 at December 31, 2024.2025. TheDuring the year ended December 31, 2025 the Company hasgenerated $40,569 in operating cash flows. Prior to the year ended December 31, 2025 the Company had incurred net operating losses and operating cash flow deficits since inception,its continuinginception. throughHistorically, the years ended December 31, 2024, and December 31, 2023. Since inception, the primary sources of financing have been a combination of loans or contributions of Jeffrey J. Guzy, an officer and director of the Company, and $53,000 raised in the public offering. This limited funding has been inadequate as of the date of this Annual Report to fund our business strategy. The Company has not attained profitable operations and its ability to pursue any future plan of operation is dependent upon our ability to obtain additional financing.

Net cash from operating activities is derived from net loss from operations adjusted for non-cash items, changes in accounts receivables balances, prepaid expenses, accounts payables, and accrued expenses. For the period ended December 31, 2024,2025, net cash usedprovided by in operating activities was $19,187$40,569 compared to net cash providedused byin operating activities of $48,046$19,187 for the period ended December 31, 2023.2024. The net decreaseincrease in operating cash flows was primarily attributable to athe reduction in net $317,004loss decreasebetween periods, the noncash settlement of payables related to the disposition of proved reserves in the non-cash adjustment for common stock issued for services and salaries. This change was2025, offset by the nettransfer increaseof inreceivables accounts receivable duringrelated to the perioddisposed endedproved December 31, 2024.reserves.

Total net cash used in financing activities was $10,088 for the period ended December 31, 2025. Net cash used in financing activities was $9,983 for the period ended December 31, 2024. Net cash used in financing activities was $9,888 for the periods ended December 31, 2023. The net decreaseincrease was due to the decreaseincrease in payments made ofon the SBA PPP loan.

Executive Summary -– FirstSecond Quarter 2026 Developments and Highlights

Results of Operations – For the Three and Six Months Ended MarchJune 31,30, 2026, and 2025

General and administrative expenses consisted primarily of accounting and audit fees, legal and professional services fees, and payroll-related expenses. GeneralFor the three month periods ended June 2026 and 2025 general and administrative expenses were $193,971$156,332 and $204,253 for the three months ended March 31, 2026, compared to $274,330 in the same period in 2025,respectively, representing a decrease of 29.3%approximately or $80,359.23.5% Theperiod decreaseover was primarily driven by a $31,157 decrease in accounting fees, a $6,892 reduction in management fees, and a $38,606 decrease in reserve evaluations expenses.period.

LossIncome (loss) from Operations

Other expense, net was $450$428 and $853 for the three and six months ended MarchJune 31,30, 2026, as compared to $483$243 and $727 for the three and six months ended MarchJune 31,30, 2025, due to an increase in interest expense on the PPP Loan.

Net income Loss(loss)

As a result of the above factors, for the three months ended MarchJune 31,30, 2026, the Company had a net income of $2,614 compared to a net loss of $265,959$204,061 asfor the three months ended June 30, 2025 and a net loss of $263,345 for the six months ended June 30, 2026 compared to a net loss of $144,806348,867 for the threesix months ended MarchJune 31,30, 2025.

The following table presents our sales volumes and received pricing information for the three-monththree and six month periods ended MarchJune 31, 30, 2026, and 2025:

The Company had cash on hand of $91,056For at March 31, 2026, compared to $ 77,219 at December 31, 2025. For the threesix months ended MarchJune 31,30, 2026, the Company had net cash provided byused in operating activities of $16,375,$17,352, compared to $32,796$21,822 provided by operating activities for the same period of 2025. The decreasechange in cash providedflows byfrom operating activities was driven by the $150,374an increase in accounts payablereceivables and accruedprepaid liabilities andexpenses $12,813 decrease in accounts receivable, offset byfor the $121,153six increasemonths ofended netJune loss30, and2026 $44,569as decreasecompared into depletionthe expense.prior year period.

The Company didhad not have any investing cash flows used in investing activities of $1,800 for the threesix months ended MarchJune 31,30, 20262026, and Marchno 31,investing cash flows for the six months ended June 30, 2025.

Net cash used in financing activities was $ 2,538$5,083 for the three six months ended MarchJune 31,30, 2026, compared to net cash used in financing activities of $ 2,513$5,031 for the same period in 2025.

The Company has yet to [achieve consecutive quarters of] profitable operations, expects to incur further losses in the development of its business, has only recently begun producing positive cash flows from operating activities, and is dependent upon future issuances of equity or other financings to fund ongoing operations, all of which raises substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations or to obtain the necessary financing from shareholders or other sources to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has developed a capital investment proposal plan and is currently pursuing funding opportunities; however, there is no assurance of additional funding being available or on acceptable terms, if at all.