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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 10-Q

(Mark One)

 

☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2025

 

OR

 

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

 

For the transition period from ___________ to ______________.

 

Commission File Number 1-32955

 

HOUSTON AMERICAN ENERGY CORP.

(Exact name of registrant as specified in its charter)

 

Delaware   76-0675953
(State or other jurisdiction of incorporation or organization)   (IRS Employer Identification No.)

 

801 Travis Street, Suite 1425, Houston, Texas 77002
(Address of principal executive offices) (Zip Code)

 

(713) 222-6966
(Registrant’s telephone number, including area code)

 

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

 

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

 

Title of each class

  

Trading Symbol(s)

  

Name of each exchange on which registered

Common Stock, $0.001 par value per share

   HUSA   NYSE American

 

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

 

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

 

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

 

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

 

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

 

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

 

As of May 9, 2025, we had 15,686,533 shares of $0.001 par value common stock outstanding.

 

 

 

 

 

 

HOUSTON AMERICAN ENERGY CORP.

 

FORM 10-Q

 

INDEX

 

    Page No.
PART I. FINANCIAL INFORMATION 3
     
Item 1. Financial Statements 3
     
  Consolidated Balance Sheets as of March 31, 2025 (Unaudited) and December 31, 2024 3
     
  Consolidated Statements of Operations for the Three Months Ended March 31, 2025 and 2024 (Unaudited) 4
     
  Consolidated Statements of Changes in Shareholders’ Equity for the Three Months Ended March 31, 2025 and 2024 (Unaudited) 5
     
  Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2025 and 2024 (Unaudited) 6
     
  Notes to Consolidated Financial Statements (Unaudited) 7
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 12
     
Item 3. Quantitative and Qualitative Disclosures About Market Risk 14
     
Item 4. Controls and Procedures 14
     
PART II OTHER INFORMATION 15
     
Item 6. Exhibits 15

 

2

 

 

PART I - FINANCIAL INFORMATION

 

ITEM 1 Financial Statements

 

HOUSTON AMERICAN ENERGY CORP.

CONSOLIDATED BALANCE SHEETS

 

           
  

March 31,

2025

(Unaudited)

  

December 31,

2024

 
ASSETS          
CURRENT ASSETS          
Cash  $5,308,416   $2,960,151 
Accounts receivable – oil and gas sales   36,095    75,074 
Prepaid expenses and other current assets   506,535    175,866 
TOTAL CURRENT ASSETS   5,851,046    3,211,091 
           
PROPERTY AND EQUIPMENT          
Oil and gas properties, full cost method          
Costs subject to amortization   62,775,947    62,770,657 
Office equipment   90,004    90,004 
Total   62,865,951    62,860,661 
Accumulated depletion, depreciation, amortization, and impairment   (61,764,910)   (61,743,025)
           
PROPERTY AND EQUIPMENT, NET   1,101,041    1,117,636 
Right of use asset   49,669    69,901 
Refundable acquisition deposit   160,000    — 
Other assets   3,167    3,167 
           
TOTAL ASSETS  $7,164,923   $4,401,795 
           
LIABILITIES AND SHAREHOLDERS’ EQUITY          
CURRENT LIABILITIES          
Accounts payable  $25,272   $49,542 
Accrued expenses   19,309    17,684 
Current portion of lease liability   50,496    71,082 
TOTAL CURRENT LIABILITIES   95,077    138,308 
           
LONG-TERM LIABILITIES          
Reserve for plugging and abandonment costs   62,470    57,180 
TOTAL LONG-TERM LIABILITIES   62,470    57,180 
TOTAL LIABILITIES   157,547    195,488 
           
COMMITMENTS AND CONTINGENCIES   -      
           
SHAREHOLDERS’ EQUITY          
Common stock, par value $0.001; 20,000,000 shares authorized 15,686,533 and 13,086,533 shares issued and outstanding   15,687    13,087 
Additional paid-in capital   93,239,281    89,408,329 
Accumulated deficit   (86,247,592)   (85,215,109)
TOTAL SHAREHOLDERS’ EQUITY   7,007,376    4,206,307 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY  $7,164,923   $4,401,795 

 

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

 

3

 

 

HOUSTON AMERICAN ENERGY CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024

(Unaudited)

 

           
   Three Months Ended March 31, 
   2025   2024 
         
OIL AND GAS REVENUE  $102,345   $147,686 
           
EXPENSES OF OPERATIONS          
Lease operating expense and severance tax   76,025    163,030 
General and administrative expense   1,066,418    357,807 
Depreciation and depletion   21,885    34,978 
Total operating expenses   1,164,328    555,815 
           
Loss from operations   (1,061,983)   (408,129)
           
OTHER INCOME, NET          
Interest income   29,500    31,214 
Other income   —    361,216 
Total other income   29,500    392,430 
           
Net loss before taxes   (1,032,483)   (15,699)
           
Income tax expense   —    — 
           
Net loss   $(1,032,483)  $(15,699)
           
Basic and diluted loss per common share  $(0.07)  $(0.00)
           
Basic and diluted weighted average number of common shares outstanding   15,050,977    10,906,353 

 

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

 

4

 

 

HOUSTON AMERICAN ENERGY CORP.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024

(Unaudited)

 

                          
           Additional         
   Common Stock   Paid-in   Accumulated     
   Shares   Amount   Capital   Deficit   Total 
                     
Balance at December 31, 2024   13,086,533   $13,087   $89,408,329   $(85,215,109)  $4,206,307 
                          
Stock-based compensation   

—

    

—

    14,057    

—

    14,057 
Issuance of common stock for cash, net   2,600,000    2,600    3,816,895    

—

    3,819,495 
Net loss   

—

    

—

    

—

    (1,032,483)   (1,032,483)
                          
Balance at March 31, 2025   15,686,533   $15,687   $93,239,281   $(86,247,592)  $7,007,376 

 

           Additional         
   Common Stock   Paid-in   Accumulated     
   Shares   Amount   Capital   Deficit   Total 
                     
Balance at December 31, 2023   10,906,353   $10,907   $86,984,001   $(76,998,997)  $9,995,911 
                          
Stock-based compensation   —    —    50,667    —    50,667 
Net loss   

—

    

—

    

—

    

(15,699

)   

(15,699

)
                          
Balance at March 31, 2024   10,906,353   $10,907   $87,034,668   $(77,014,696)  $10,030,879 

 

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

 

5

 

 

HOUSTON AMERICAN ENERGY CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024

(Unaudited)

 

           
   For the Three Months Ended March 31, 
   2025   2024 
         
CASH FLOWS FROM OPERATING ACTIVITIES          
Net loss   $(1,032,483)  $(15,699)
Adjustments to reconcile net loss to net cash used in operations:          
Depreciation and depletion   21,885    34,978 
Accretion of asset retirement obligation   —    1,105 
Stock-based compensation   14,057    50,667 
Amortization of right of use asset   20,232    17,947 
Changes in operating assets and liabilities:          
Decrease (increase) in accounts receivable   38,979    44,563 
Decrease (increase) in prepaid expenses and other current assets   (330,669)   (87,918)
(Decrease) increase in accounts payable and accrued expenses   (22,645)   95,051 
Decrease in operating lease liability   (20,586)   (17,924)
           
Net cash (used in) provided by operating activities   

(1,311,230

)   122,770 
           
CASH FLOWS FROM INVESTING ACTIVITIES          
Payments for capital contribution for equity investment   —    (430,803)
Cash paid for refundable acquisition deposit   (160,000)   — 
           
Net cash used in investing activities   (160,000)   (430,803)
           
CASH FLOWS FROM FINANCING ACTIVITIES          
Proceeds from issuance of common stock for cash, net of offering costs   3,819,495    — 
           
Net cash provided by financing activities   3,819,495    — 
           
Increase (decrease) in cash   2,348,265    (308,033)
Cash, beginning of period   2,960,151    4,059,182
Cash, end of period  $5,308,416   $3,751,149 
           
SUPPLEMENTAL CASH FLOW INFORMATION          
Interest paid  $—   $— 
Taxes paid  $—   $— 
           
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES          
Changes in estimate of asset retirement obligations, net  $5,290   $— 

 

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

 

6

 

 

HOUSTON AMERICAN ENERGY CORP.

Notes to Consolidated Financial Statements

(Unaudited)

 

NOTE 1 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

 

The accompanying unaudited consolidated financial statements of Houston American Energy Corp., a Delaware corporation (the “Company”), have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q. They do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for a complete financial presentation. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation, have been included in the accompanying unaudited consolidated financial statements. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the full year.

 

These unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and footnotes, which are included as part of the Company’s Form 10-K for the year ended December 31, 2024.

 

Consolidation

 

The accompanying consolidated financial statements include all accounts of the Company and its subsidiary (HAEC Louisiana E&P, Inc.). All significant inter-company balances and transactions have been eliminated in consolidation.

 

Segment Reporting

 

The Company’s chief operating decision maker (“CODM”), the Chief Executive Officer, manages the Company’s business activities as a single operating and reportable segment at the consolidated level. Accordingly, our CODM uses net income to measure profit or loss, allocate resources, and assess performance. Further, the CODM is regularly provided with and utilizes consolidated functional expenses, as presented in the accompanying consolidated statements of operations, and total assets at the consolidated level, as included in the consolidated balance sheets herein, to manage the Company’s operations.

 

Liquidity and Capital Requirements

 

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business for the twelve-month period following the issuance date of these consolidated financial statements. The Company has incurred continuing losses since 2011, with an accumulated deficit of $86.2 million as of March 31, 2025.

 

The Company believes that it has the ability to fund, from cash on hand, its operating costs and anticipated drilling operations for at least the next twelve months following the issuance of these financial statements.

 

The actual timing and number of wells drilled during 2025 and beyond will be principally controlled by the operators of the Company’s acreage, based on a number of factors, including but not limited to availability of financing, performance of existing wells on the subject acreage, energy prices and industry condition and outlook, costs of drilling and completion services and equipment and other factors beyond the Company’s control or that of its operators.

 

In the event that the Company pursues additional acreage acquisitions or expands its drilling plans, the Company may be required to secure additional funding beyond our resources on hand. While the Company may, among other efforts, seek additional funding from “at-the-market” sales of common stock, and private sales of equity and debt securities, it presently does not have any commitments to provide additional funding, and there can be no assurance that the Company can secure the necessary capital to fund its share of drilling, acquisition or other costs on acceptable terms or at all. If, for any reason, the Company is unable to fund its share of drilling and completion costs, it would forego participation in one or more of such wells. In such event, the Company may be subject to penalties or to the possible loss of some of its rights and interests in prospects with respect to which it fails to satisfy funding obligations and it may be required to curtail operations and forego opportunities.

 

Accounting Principles and Use of Estimates

 

The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America. In preparing financial statements, management makes informed judgments and estimates that affect the reported amounts of assets and liabilities as of the date of the financial statements and affect the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management reviews its estimates, including those related to such potential matters as litigation, environmental liabilities, income taxes and the related valuation allowance, determination of proved reserves of oil and gas and asset retirement obligations. Changes in facts and circumstances may result in revised estimates and actual results may differ from these estimates.

 

7

 

 

Concentration of Credit Risk

 

Financial instruments that potentially subject the Company to a concentration of credit risk include cash, cash equivalents (if any) and any marketable securities (if any). The Company had cash deposits of $4,938,537 in excess of the FDIC’s current insured limit on interest bearing accounts of $250,000 as of March 31, 2025. The Company has not experienced any losses on its deposits of cash and cash equivalents.

 

Earnings (Loss) per Share

 

Basic earnings (loss) per share is computed by dividing net loss available to common shareholders by the weighted average common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common shares were exercised or converted in common shares that then shared in the earnings of the Company. In periods in which the Company reports a net loss, dilutive securities are excluded from the calculation of diluted net loss per share amounts as the effect would be anti-dilutive.

 

New Accounting Pronouncements

 

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disaggregated information about a reporting entity’s effective tax rate reconciliation, as well as information related to income taxes paid to enhance the transparency and decision usefulness of income tax disclosures. This ASU is effective for the annual period ending December 31, 2025. The Company has applied the ASU but concluded that no further disclosure is necessary given that the Company has significant loss carryforwards and therefore has not paid federal income tax.

 

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). ASU 2024-03 requires additional disclosure of specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. ASU 2024-03 may be applied prospectively with the option for retrospective application for all prior periods presented. The Company is currently evaluating the impact of adopting this guidance on the Company’s current financial position, results of operations or financial statement disclosures.

 

Subsequent Events

 

The Company has evaluated all transactions from March 31, 2025 through the financial statement issuance date for subsequent event disclosure consideration. See Note 8.

 

NOTE 2 – REVENUE FROM CONTRACTS WITH CUSTOMERS

 

Disaggregation of Revenue from Contracts with Customers

 

The following table disaggregates revenue by significant product type for the three-month periods ended March 31, 2025 and 2024:

SCHEDULE OF DISAGGREGATES REVENUE BY SIGNIFICANT PRODUCT

 

           
   Three Months Ended March 31, 
   2025   2024 
Oil sales  $66,556   $103,048 
Natural gas sales   18,427    16,316 
Natural gas liquids sales   17,362    28,322 
Total revenue from customers  $102,345   $147,686 

 

There were no significant contract liabilities or transaction price allocations to any remaining performance obligations as of March 31, 2025 or 2024.

 

NOTE 3 – OIL AND GAS PROPERTIES

 

During the three months ended March 31, 2025 and 2024, the Company recorded depletion expense of $21,885 and $34,978, respectively.

 

Geographical Information

 

The Company currently has properties in the United States. Revenues for the three months ended March 31, 2025 and long-lived assets (net of depletion, amortization, and impairments) as of March 31, 2024 are presented below:

SCHEDULE OF REVENUES AND LONG LIVED ASSETS ATTRIBUTABLE TO GEOGRAPHICAL AREA

 

   Three Months Ended March 31, 2025   Three Months as of March 31, 2025   Three Months Ended March 31, 2024   Three Months as of March 31, 2024 
   Revenues   Long Lived Assets, Net   Revenues   Long Lived Assets, Net 
Total  $102,345    1,101,041   $147,686    1,559,301 

 

8

 

 

NOTE 4 – STOCK-BASED COMPENSATION EXPENSE

 

In 2008, the Company adopted the Houston American Energy Corp. 2008 Equity Incentive Plan (the “2008 Plan”). The terms of the 2008 Plan, as amended in 2012 and 2013, allow for the issuance of up to 480,000 shares of the Company’s common stock pursuant to the grant of stock options and restricted stock.

 

In 2017, the Company adopted the Houston American Energy Corp. 2017 Equity Incentive Plan (the “2017 Plan”). The terms of the 2017 Plan, allow for the issuance of up to 400,000 shares of the Company’s common stock pursuant to the grant of stock options and restricted stock.

 

In 2021, the Company adopted the Houston American Energy 2021 Equity Incentive Plan (the “2021 Plan” and, together with the 2008 Plan and the 2017 Plan, the “Plans”). The terms of the 2021 Plan allow for the issuance of up to 500,000 shares of the Company’s common stock pursuant to the grant of stock options and restricted stock.

 

Persons eligible to participate in the Plans are key employees, consultants and directors of the Company.

 

The Company periodically grants options to employees, directors and consultants under the Plans and is required to make estimates of the fair value of the related instruments and recognize expense over the period benefited, usually the vesting period.

 

Stock Option Activity

 

In November 2024, the Company agreed to issue to its CEO a number of options equal to $15,000 divided by the closing price of our stock on the 15th day of each month. The strike price of each option is equal to the grant price. The options have a ten10-year life and are exercisable at $0.70 per share for the January, February, and March 2025 issuances, vest 20% on the date of grant and 80% ten months from the date of grant. The grant date fair value of these stock options was $13,604 in January 2025, $13,486 in February 2025, and $13,241 in March 2025, based on the Black-Scholes Option Pricing model based on the following assumptions: market value of common stock on grant dates – $1.63, $1.41, and $1.07, respectively; risk free interest rate based on the applicable US Treasury bill rate – 0%; dividend yield – 0%; volatility factor based on the trading history of the Company – 92%; weighted average expected life in years – 10; and expected forfeiture rate – 0%. The Company also issued 15,000 options to a board member as compensation. The options have a ten-year life and are exercisable at $1.63 per share for the January issuance, vest 20% on the date of grant and 80% ten months from the date of grant. The grant date fair value of these stock options was $22,174 in January 2025, based on the Black-Scholes Option Pricing model based on the following assumptions: market value of common stock on grant dates – $1.63; risk free interest rate based on the applicable US Treasury bill rate – 0%; dividend yield – 0%; volatility factor based on the trading history of the Company – 92%; weighted average expected life in years – 10; and expected forfeiture rate – 0%.

 

A summary of stock option activity and related information for the three months ended March 31, 2025 is presented below:

SCHEDULE OF STOCK OPTION ACTIVITY

 

   Options   Weighted-Average Exercise Price   Aggregate Intrinsic Value 
             
Outstanding at January 1, 2025   916,987   $2.06      
Granted   48,859    0.70      
Exercised   —    —      
Forfeited   —    —      
Outstanding at March 31, 2025   965,846   $1.99   $— 
Exercisable at March 31, 2025   860,903   $2.07   $— 

 

During the three months ended March 31, 2025, the Company recognized $14,057 of stock-based compensation expense attributable to the amortization of stock options. As of March 31, 2025, there is $84,980 of unrecognized stock-based compensation expense related to non-vested stock options.

 

As of March 31, 2025, there were 24,969 shares of common stock available for issuance pursuant to future stock or option grants under the Plans.

 

Stock-Based Compensation Expense

 

The following table reflects total stock-based compensation recorded by the Company for the three months ended March 31, 2025 and 2024:

SCHEDULE OF STOCK-BASED COMPENSATION

 

  

Three Months Ended

March 31,

 
   2025   2024 
         
Stock-based compensation expense included in general and administrative expense  $14,057   $50,667 
Earnings per share effect of share-based compensation expense – basic and diluted  $(0.00)  $(0.00)

 

9

 

 

NOTE 5 – CAPITAL STOCK

 

Common Stock

 

On January 22, 2025, the Company entered in a securities purchase agreement pursuant to which the Company sold 2,600,000 shares of the Company’s common stock at a purchase price of $1.70 per share in a registered direct offering. The Company received approximately $3.8 million in net proceeds.

 

Warrants

 

A summary of warrant activity and related information for 2025 is presented below:

SUMMARY OF WARRANT ACTIVITY

 

   Warrants   Weighted-Average
Exercise Price		   Aggregate
Intrinsic Value		 
             
Outstanding at January 1, 2025   94,400   $2.46      
Issued   —    —      
Exercised   —    —      
Expired   —    —      
Outstanding at March 31, 2025   94,400   $2.46   $— 
Exercisable at March 31, 2025   94,400   $2.46   $— 

 

NOTE 6 – EARNINGS PER COMMON SHARE

 

Earnings (loss) per common share-basic is calculated by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Net income (loss) per common share-diluted assumes the conversion of all potentially dilutive securities and is calculated by dividing net (loss) income by the sum of the weighted average number of shares of common stock, as defined above, outstanding plus potentially dilutive securities. Net income per common share-diluted considers the impact of potentially dilutive securities. In periods in which there is a loss because the inclusion of the potential common shares, as defined above, would have an anti-dilutive effect.

 

The calculation of earnings (loss) per common share for the periods indicated below were as follows:

SCHEDULE OF EARNINGS (LOSS) PER COMMON SHARE

 

           
   Three Months Ended March 31, 
   2025   2024 
Numerator:        
Net loss   $(1,032,483)  $(15,699)
           
Effect of common stock equivalents   —    — 
Net loss adjusted for common stock equivalents  $(1,032,483)  $(15,699)
           
Denominator:          
Weighted average common shares – basic   15,050,977    10,906,353 
           
Dilutive effect of common stock equivalents:          
Options and warrants   —    — 
           
Denominator:          
Weighted average common shares – diluted   15,050,977    10,906,353 
           
Loss per common share – basic  $(0.07)  $(0.00)
           
Loss per common share – diluted  $(0.07)  $(0.00)

 

For the three months ended March 31, 2025 and 2024, the following warrants and options to purchase shares of common stock were excluded from the computation of diluted net income (loss) per common share, as the inclusion of such shares would be anti-dilutive:

SCHEDULE OF ANTI-DILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF DILUTED NET INCOME LOSS

 

           
   Three Months Ended March 31, 
   2025   2024 
Stock warrants   94,400    94,400 
Stock options   965,846    908,139 
Total   1,060,246    1,002,539 

 

10

 

 

NOTE 7 – COMMITMENTS AND CONTINGENCIES

 

Lease Commitment

 

The Company leases office facilities under an operating lease agreement that expires October 31, 2025. During the three months ended March 31, 2025, the operating cash outflows related to operating lease liabilities of $24,221 and the expense for the right of use asset for operating leases was $23,867. As of March 31, 2025, the Company’s operating lease had a weighted-average remaining term of 0.58 years and a weighted average discount rate of 12%. As of March 31, 2025, the lease agreement requires future payments as follows:

 

Year  Amount 
2025   52,536 
Total future lease payments   52,536 
Less: imputed interest   (2,040)
Present value of future operating lease payments   50,496 
Less: current portion of operating lease liabilities   (50,496)
Operating lease liabilities, net of current portion  $— 
Right of use assets  $49,669 

 

Total base rental expense was $23,867 and $22,646 for the three months ended March 31, 2025 and 2024, respectively. The Company does not have any capital leases or other operating lease commitments.

 

NOTE 8 – SUBSEQUENT EVENTS

 

During the April 24, 2025 shareholder meeting, all matters put forward before the Company’s stockholders for consideration and approval, as set out in the Company’s definitive proxy statement dated April 11, 2025, were approved by the requisite number of votes cast at the meeting. This included the Company’s proposed acquisition of Abundia Global Impact Group (“AGIG”), a company specializing in converting waste into high-value fuels and chemicals. Under the related Share Exchange Agreement, the Company will issue a number of shares equal to 94% of the Company’s issued and outstanding stock, after taking into account the issuance to the AGIG Unitholders. This will result in the issuance of approximately 245,755,684 shares of the Company’s common stock upon closing of the transaction.

 

11

 

 

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

 

Forward-Looking Information

 

This Form 10-Q quarterly report of Houston American Energy Corp. (the “Company”) for the three months ended March 31, 2025, contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. To the extent that there are statements that are not recitations of historical fact, such statements constitute forward-looking statements that, by definition, involve risks and uncertainties. In any forward-looking statement, where we express an expectation or belief as to future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the statement of expectation or belief will be achieved or accomplished.

 

The actual results or events may differ materially from those anticipated and as reflected in forward-looking statements included herein. Factors that may cause actual results or events to differ from those anticipated in the forward-looking statements included herein include the Risk Factors described in Item 1A herein and in our Form 10-K for the year ended December 31, 2024.

 

Readers are cautioned not to place undue reliance on the forward-looking statements contained herein, which speak only as of the date hereof. We believe the information contained in this Form 10-Q to be accurate as of the date hereof. Changes may occur after that date, and we will not update that information except as required by law in the normal course of our public disclosure practices.

 

Additionally, the following discussion regarding our financial condition and results of operations should be read in conjunction with the financial statements and related notes contained in Item 1 of Part 1 of this Form 10-Q, as well as the Risk Factors in Item 1A and the financial statements in Item 7 of Part II of our Form 10-K for the fiscal year ended December 31, 2024.

 

Critical Accounting Policies

 

The discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. We believe certain critical accounting policies affect the more significant judgments and estimates used in the preparation of our financial statements. A description of our critical accounting policies is set forth in our Form 10-K for the year ended December 31, 2024. As of, and for the three months ended, March 31, 2025, there have been no material changes or updates to our critical accounting policies.

 

Recent Developments

 

Drilling and Operating Activity

 

During the three months ended March 31, 2025, the six wells on the Finkle State Lease in which the Company is participating were in the process of being completed on March 31, 2025. At March 31, 2025, we had 4 wells on production in the U.S. Permian Basin.

 

Results of Operations

 

Oil and Gas Revenues. Total oil and gas revenues decreased 31% to $102,345 in the three months ended March 31, 2025, compared to $147,686 in the three months ended March 31, 2024. The decrease in revenue was primarily due to one well being shut down for a month during the quarter.

 

12

 

 

The following table sets forth the gross and net producing wells, net oil and gas production volumes and average hydrocarbon sales prices for the quarters ended March 31, 2025 and 2024:

 

  

Three Months Ended

March 31,(1)

 
   2025   2024 
Gross producing wells   4    4 
Net producing wells   0.68    0.68 
Net oil production (Bbl)   935    1,393 
Net gas production (Mcf)   7,765    12,686 
Net natural gas liquids production (Gallons)   30,711    42,733 
Average sales price – oil (per barrel)  $71.17   $73.98 
Average sales price – natural gas (per Mcf)  $2.37   $1.29 
Average sales price – natural gas liquids (per Gallon)  $0.57   $0.72 

 

  (1) All well, production and price information excludes wells operated by Hupecol Meta.

 

The change in production volumes was primarily attributable to the natural decline in production.

 

The change in average oil and natural gas sales price realized reflects global energy trends.

 

Oil and gas sales revenues are entirely attributable to our U.S. properties.

 

Lease Operating Expenses. Lease operating expenses decreased 47% to $76,025 during the three months ended March 31, 2025, from $163,030 during the three months ended March 31, 2024. The decrease was primarily attributable to one well being shut for a month and the reporting of only two months of production for the quarter.

 

Depreciation and Depletion Expense. Depreciation and depletion expense was $21,885 and $34,978 for the three months ended March 31, 2025 and 2024, respectively. The change in depreciation and depletion was principally due to one well being shut for a month, and production data for March being unavailable for accruals.

 

General and Administrative Expenses (excluding stock-based compensation). General and administrative expense increased to $1,052,361 during the three months ended March 31, 2025 from $307,140 during the three months ended March 31, 2024. The change in general and administrative expense was primarily attributable to professional fees related to the proposed acquisition of Abundia Global Impact Group, LLC (“AGIG”), which is anticipated to close during the second quarter of 2025. (See Note 8)

 

Stock-Based Compensation. Stock-based compensation decreased to $14,057 during the three months ended March 31, 2025 from $50,667 during the three months ended March 31, 2024. This decrease was largely due to a decline in the Company’s share price from March 31, 2024 to March 31, 2025.

 

Other Income (Expense). Other income/expense, net, totaled $29,500 of income during the three months ended March 31, 2025, compared to $392,430 of income during the three months ended March 31, 2024. Other income consisted of interest earned from bank balances. The decrease in other income was due to no income from Hupecol Meta in 2025.

 

Financial Condition

 

Liquidity and Capital Resources. At March 31, 2025, we had a cash balance of $5,308,416 and working capital of $5,755,969, compared to a cash balance of $4,059,182 and working capital of $3,917,231 at December 31, 2024. This increase was primarily due to the Company’s sale of 2,600,000 shares of common stock in January 2025.

 

Cash Flows. Operating activities used $1,311,230 of cash during the three months ended March 31, 2025, compared to cash provided of $122,770 during the three months ended March 31, 2024. The change in operating cash flow was attributable to an increase in prepaid expenses ($330,669), and professional fees related to the proposed acquisition of Abundia Global Impact Group, LLC (“AGIG”), which is anticipated to close during the second quarter of 2025.

 

Investing activities used $160,000 of cash during the three months ended March 31, 2005, compared to none during the three months ended March 31, 2024. The Company paid a $160,000 refundable deposit as part of the acquisition process for RPD Technologies.

 

Financing activities provided $3,819,495 during the three months ended March 31, 2025, compared to $901,500 provided during the three months ended March 31, 2024. Cash provided by financing activities during the three months ended March 31, 2024 was primarily attributable to funds received from the sale of common stock.

 

Long-Term Liabilities. At March 31, 2025, we had long-term liabilities of $62,470, compared to $114,685 at December 31, 2024. Long-term liabilities at March 31, 2025, consisted of a reserve for plugging costs.

 

13

 

 

Capital and Exploration Expenditures and Commitments.

 

In the event that we pursue additional acreage acquisitions or expand our drilling plans, we may be required to secure additional funding beyond our resources on hand. While we may, among other efforts, seek additional funding from “at-the-market” sales of common stock, and private sales of equity and debt securities, we presently have limited authorized shares of common stock available for issuance to support equity capital raises and we have no commitments to provide additional funding, and there can be no assurance that we can secure the necessary capital to fund our share of drilling, acquisition or other costs on acceptable terms or at all. If, for any reason, we are unable to fund our share of drilling and completion costs and fail to satisfy commitments relative to our interest in our acreage, we may be subject to penalties or to the possible loss of some of our rights and interests in prospects with respect to which we fail to satisfy funding commitments and we may be required to curtail operations and forego opportunities.

 

Off-Balance Sheet Arrangements

 

We had no off-balance sheet arrangements or guarantees of third-party obligations at March 31, 2025.

 

ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Commodity Price Risk

 

The price we receive for our oil and gas production heavily influences our revenue, profitability, access to capital and future rate of growth. Crude oil 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 markets for oil and gas have been volatile, and these markets will likely continue to be volatile in the future. The price we receive for production depends on numerous factors beyond our control.

 

We have not historically entered into any hedges or other transactions designed to manage, or limit, exposure to oil and gas price volatility.

 

ITEM 4 CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

Under the supervision and the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation as of March 31, 2025 of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended. Based on this evaluation under the COSO Framework, management concluded that our internal control over financial reporting was not effective as of December 31, 2024. Such conclusion reflects our chief executive officer’s assumption of duties of the principal financial officer and the resulting lack of an appropriate level of accounting knowledge and experience commensurate with the financial reporting requirements for a public company, in particular with respect to technical accounting knowledge regarding accounting for certain transactions, including reserve inputs, asset retirement obligations, calculation of depreciation, depletion, and amortization, and the full cost ceiling test, and a related lack of segregation of duties. Until we are able to remedy these material weaknesses, we are relying on third party consultants to assist.

 

Changes in Internal Control over Financial Reporting

 

No change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) occurred during the quarter ended March 31, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

14

 

 

PART II

 

ITEM 6 EXHIBITS

 

Exhibit   Number   Description
         
    31.1   Certification of CEO and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
         
    32.1   Certification of CEO and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
         
    101.INS   Inline XBRL Instance Document
         
    101.SCH   Inline XBRL Taxonomy Extension Schema Document
         
    101.CAL   Inline XBRL Taxonomy Extension Calculation Linkbase Document
         
    101.DEF   Inline XBRL Taxonomy Extension Definition Linkbase Document
         
    101.LAB   Inline XBRL Taxonomy Extension Label Linkbase Document
         
    101.PRE   Inline XBRL Taxonomy Extension Presentation Linkbase Document
         
    104   Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

15

 

 

SIGNATURES

 

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

 

  HOUSTON AMERICAN ENERGY CORP.
Date: May 9, 2025    
  By:

/s/ Peter F. Longo

    Peter F. Longo
    CEO and President (Principal Executive Officer and Principal Financial Officer)

 

16

 

 

Exhibit 31.1

 

CERTIFICATION OF CEO PURSUANT TO 15 U.S.C. SECTION 10A, AS ADOPTED

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Peter Longo, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q of Houston American Energy Corp.;
   
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
   
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respect the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
   
4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
     
  b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
  c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
     
  d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

 

  a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
     
  b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

 

Date: May 9, 2025

 

  /s/ Peter F. Longo 
  Peter F. Longo
  Chief Executive Officer and Principal
  Financial Officer

 

 

 

 

Exhibit 32.1

 

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Peter Longo, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Houston American Energy Corp. on Form 10-Q for the quarterly period ended March 31, 2025 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Form 10-Q fairly presents in all material respects the financial condition and results of operations of Houston American Energy Corp.

 

  By: /s/ Peter F. Longo 
  Name: Peter F. Longo
  Title:

Chief Executive Officer and Principal Financial Officer

  Dated: May 9, 2025

 

 

 

v3.25.1
Cover - $ / shares
 3 Months Ended
Mar. 31, 2025
May 09, 2025
Cover [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Quarterly Report true  
Document Transition Report false  
Document Period End Date Mar. 31, 2025  
Document Fiscal Period Focus Q1  
Document Fiscal Year Focus 2025  
Current Fiscal Year End Date --12-31  
Entity File Number 1-32955  
Entity Registrant Name HOUSTON AMERICAN ENERGY CORP.  
Entity Central Index Key 0001156041  
Entity Tax Identification Number 76-0675953  
Entity Incorporation, State or Country Code DE  
Entity Address, Address Line One 801 Travis Street  
Entity Address, Address Line Two Suite 1425  
Entity Address, City or Town Houston  
Entity Address, State or Province TX  
Entity Address, Postal Zip Code 77002  
City Area Code (713)  
Local Phone Number 222-6966  
Title of 12(b) Security Common Stock, $0.001 par value per share  
Trading Symbol HUSA  
Security Exchange Name NYSEAMER  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   15,686,533
Entity Listing, Par Value Per Share $ 0.001  
v3.25.1
Consolidated Balance Sheets - USD ($)
Mar. 31, 2025
Dec. 31, 2024
CURRENT ASSETS    
Cash $ 5,308,416 $ 2,960,151
Accounts receivable – oil and gas sales 36,095 75,074
Prepaid expenses and other current assets 506,535 175,866
TOTAL CURRENT ASSETS 5,851,046 3,211,091
PROPERTY AND EQUIPMENT    
Costs subject to amortization 62,775,947 62,770,657
Office equipment 90,004 90,004
Total 62,865,951 62,860,661
Accumulated depletion, depreciation, amortization, and impairment (61,764,910) (61,743,025)
PROPERTY AND EQUIPMENT, NET 1,101,041 1,117,636
Right of use asset 49,669 69,901
Refundable acquisition deposit 160,000
Other assets 3,167 3,167
TOTAL ASSETS 7,164,923 4,401,795
CURRENT LIABILITIES    
Accounts payable 25,272 49,542
Accrued expenses 19,309 17,684
Current portion of lease liability 50,496 71,082
TOTAL CURRENT LIABILITIES 95,077 138,308
LONG-TERM LIABILITIES    
Reserve for plugging and abandonment costs 62,470 57,180
TOTAL LONG-TERM LIABILITIES 62,470 57,180
TOTAL LIABILITIES 157,547 195,488
COMMITMENTS AND CONTINGENCIES  
SHAREHOLDERS’ EQUITY    
Common stock, par value $0.001; 20,000,000 shares authorized 15,686,533 and 13,086,533 shares issued and outstanding 15,687 13,087
Additional paid-in capital 93,239,281 89,408,329
Accumulated deficit (86,247,592) (85,215,109)
TOTAL SHAREHOLDERS’ EQUITY 7,007,376 4,206,307
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 7,164,923 $ 4,401,795
v3.25.1
Consolidated Balance Sheets (Parenthetical) - $ / shares
Mar. 31, 2025
Dec. 31, 2024
Statement of Financial Position [Abstract]    
Common stock, par value $ 0.001 $ 0.001
Common stock, shares authorized 20,000,000 20,000,000
Common stock, shares issued 15,686,533 13,086,533
Common stock, shares outstanding 15,686,533 13,086,533
v3.25.1
Consolidated Statements of Operations (Unaudited) - USD ($)
 3 Months Ended
Mar. 31, 2025
Mar. 31, 2024
Income Statement [Abstract]    
OIL AND GAS REVENUE $ 102,345 $ 147,686
EXPENSES OF OPERATIONS    
Lease operating expense and severance tax 76,025 163,030
General and administrative expense 1,066,418 357,807
Depreciation and depletion 21,885 34,978
Total operating expenses 1,164,328 555,815
Loss from operations (1,061,983) (408,129)
OTHER INCOME, NET    
Interest income 29,500 31,214
Other income 361,216
Total other income 29,500 392,430
Net loss before taxes (1,032,483) (15,699)
Income tax expense
Net loss $ (1,032,483) $ (15,699)
Basic loss per common share $ (0.07) $ (0.00)
Diluted loss per common share $ (0.07) $ (0.00)
Basic weighted average number of common shares outstanding 15,050,977 10,906,353
Diluted weighted average number of common shares outstanding 15,050,977 10,906,353
v3.25.1
Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($)
Common Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
Total
Balance at Dec. 31, 2023 $ 10,907 $ 86,984,001 $ (76,998,997) $ 9,995,911
Balance, shares at Dec. 31, 2023 10,906,353      
Stock-based compensation 50,667 50,667
Net loss (15,699) (15,699)
Balance at Mar. 31, 2024 $ 10,907 87,034,668 (77,014,696) 10,030,879
Balance, shares at Mar. 31, 2024 10,906,353      
Balance at Dec. 31, 2024 $ 13,087 89,408,329 (85,215,109) 4,206,307
Balance, shares at Dec. 31, 2024 13,086,533      
Stock-based compensation 14,057 14,057
Issuance of common stock for cash, net $ 2,600 3,816,895 3,819,495
Issuance of common stock for cash, net, shares 2,600,000      
Net loss (1,032,483) (1,032,483)
Balance at Mar. 31, 2025 $ 15,687 $ 93,239,281 $ (86,247,592) $ 7,007,376
Balance, shares at Mar. 31, 2025 15,686,533      
v3.25.1
Consolidated Statements of Cash Flows (Unaudited) - USD ($)
 3 Months Ended
Mar. 31, 2025
Mar. 31, 2024
CASH FLOWS FROM OPERATING ACTIVITIES    
Net loss $ (1,032,483) $ (15,699)
Adjustments to reconcile net loss to net cash used in operations:    
Depreciation and depletion 21,885 34,978
Accretion of asset retirement obligation 1,105
Stock-based compensation 14,057 50,667
Amortization of right of use asset 20,232 17,947
Changes in operating assets and liabilities:    
Decrease (increase) in accounts receivable 38,979 44,563
Decrease (increase) in prepaid expenses and other current assets (330,669) (87,918)
(Decrease) increase in accounts payable and accrued expenses (22,645) 95,051
Decrease in operating lease liability (20,586) (17,924)
Net cash (used in) provided by operating activities (1,311,230) 122,770
CASH FLOWS FROM INVESTING ACTIVITIES    
Payments for capital contribution for equity investment (430,803)
Cash paid for refundable acquisition deposit (160,000)
Net cash used in investing activities (160,000) (430,803)
CASH FLOWS FROM FINANCING ACTIVITIES    
Proceeds from issuance of common stock for cash, net of offering costs 3,819,495
Net cash provided by financing activities 3,819,495
Increase (decrease) in cash 2,348,265 (308,033)
Cash, beginning of period 2,960,151 4,059,182
Cash, end of period 5,308,416 3,751,149
SUPPLEMENTAL CASH FLOW INFORMATION    
Interest paid
Taxes paid
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES    
Changes in estimate of asset retirement obligations, net $ 5,290
v3.25.1
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
 3 Months Ended
Mar. 31, 2025
Accounting Policies [Abstract]  
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

NOTE 1 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

 

The accompanying unaudited consolidated financial statements of Houston American Energy Corp., a Delaware corporation (the “Company”), have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q. They do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for a complete financial presentation. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation, have been included in the accompanying unaudited consolidated financial statements. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the full year.

 

These unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and footnotes, which are included as part of the Company’s Form 10-K for the year ended December 31, 2024.

 

Consolidation

 

The accompanying consolidated financial statements include all accounts of the Company and its subsidiary (HAEC Louisiana E&P, Inc.). All significant inter-company balances and transactions have been eliminated in consolidation.

 

Segment Reporting

 

The Company’s chief operating decision maker (“CODM”), the Chief Executive Officer, manages the Company’s business activities as a single operating and reportable segment at the consolidated level. Accordingly, our CODM uses net income to measure profit or loss, allocate resources, and assess performance. Further, the CODM is regularly provided with and utilizes consolidated functional expenses, as presented in the accompanying consolidated statements of operations, and total assets at the consolidated level, as included in the consolidated balance sheets herein, to manage the Company’s operations.

 

Liquidity and Capital Requirements

 

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business for the twelve-month period following the issuance date of these consolidated financial statements. The Company has incurred continuing losses since 2011, with an accumulated deficit of $86.2 million as of March 31, 2025.

 

The Company believes that it has the ability to fund, from cash on hand, its operating costs and anticipated drilling operations for at least the next twelve months following the issuance of these financial statements.

 

The actual timing and number of wells drilled during 2025 and beyond will be principally controlled by the operators of the Company’s acreage, based on a number of factors, including but not limited to availability of financing, performance of existing wells on the subject acreage, energy prices and industry condition and outlook, costs of drilling and completion services and equipment and other factors beyond the Company’s control or that of its operators.

 

In the event that the Company pursues additional acreage acquisitions or expands its drilling plans, the Company may be required to secure additional funding beyond our resources on hand. While the Company may, among other efforts, seek additional funding from “at-the-market” sales of common stock, and private sales of equity and debt securities, it presently does not have any commitments to provide additional funding, and there can be no assurance that the Company can secure the necessary capital to fund its share of drilling, acquisition or other costs on acceptable terms or at all. If, for any reason, the Company is unable to fund its share of drilling and completion costs, it would forego participation in one or more of such wells. In such event, the Company may be subject to penalties or to the possible loss of some of its rights and interests in prospects with respect to which it fails to satisfy funding obligations and it may be required to curtail operations and forego opportunities.

 

Accounting Principles and Use of Estimates

 

The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America. In preparing financial statements, management makes informed judgments and estimates that affect the reported amounts of assets and liabilities as of the date of the financial statements and affect the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management reviews its estimates, including those related to such potential matters as litigation, environmental liabilities, income taxes and the related valuation allowance, determination of proved reserves of oil and gas and asset retirement obligations. Changes in facts and circumstances may result in revised estimates and actual results may differ from these estimates.

 

 

Concentration of Credit Risk

 

Financial instruments that potentially subject the Company to a concentration of credit risk include cash, cash equivalents (if any) and any marketable securities (if any). The Company had cash deposits of $4,938,537 in excess of the FDIC’s current insured limit on interest bearing accounts of $250,000 as of March 31, 2025. The Company has not experienced any losses on its deposits of cash and cash equivalents.

 

Earnings (Loss) per Share

 

Basic earnings (loss) per share is computed by dividing net loss available to common shareholders by the weighted average common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common shares were exercised or converted in common shares that then shared in the earnings of the Company. In periods in which the Company reports a net loss, dilutive securities are excluded from the calculation of diluted net loss per share amounts as the effect would be anti-dilutive.

 

New Accounting Pronouncements

 

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disaggregated information about a reporting entity’s effective tax rate reconciliation, as well as information related to income taxes paid to enhance the transparency and decision usefulness of income tax disclosures. This ASU is effective for the annual period ending December 31, 2025. The Company has applied the ASU but concluded that no further disclosure is necessary given that the Company has significant loss carryforwards and therefore has not paid federal income tax.

 

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). ASU 2024-03 requires additional disclosure of specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. ASU 2024-03 may be applied prospectively with the option for retrospective application for all prior periods presented. The Company is currently evaluating the impact of adopting this guidance on the Company’s current financial position, results of operations or financial statement disclosures.

 

Subsequent Events

 

The Company has evaluated all transactions from March 31, 2025 through the financial statement issuance date for subsequent event disclosure consideration. See Note 8.

 
v3.25.1
REVENUE FROM CONTRACTS WITH CUSTOMERS
 3 Months Ended
Mar. 31, 2025
Revenue from Contract with Customer [Abstract]  
REVENUE FROM CONTRACTS WITH CUSTOMERS

NOTE 2 – REVENUE FROM CONTRACTS WITH CUSTOMERS

 

Disaggregation of Revenue from Contracts with Customers

 

The following table disaggregates revenue by significant product type for the three-month periods ended March 31, 2025 and 2024:

SCHEDULE OF DISAGGREGATES REVENUE BY SIGNIFICANT PRODUCT

 

           
   Three Months Ended March 31, 
   2025   2024 
Oil sales  $66,556   $103,048 
Natural gas sales   18,427    16,316 
Natural gas liquids sales   17,362    28,322 
Total revenue from customers  $102,345   $147,686 

 

There were no significant contract liabilities or transaction price allocations to any remaining performance obligations as of March 31, 2025 or 2024.

 
v3.25.1
OIL AND GAS PROPERTIES
 3 Months Ended
Mar. 31, 2025
Extractive Industries [Abstract]  
OIL AND GAS PROPERTIES

NOTE 3 – OIL AND GAS PROPERTIES

 

During the three months ended March 31, 2025 and 2024, the Company recorded depletion expense of $21,885 and $34,978, respectively.

 

Geographical Information

 

The Company currently has properties in the United States. Revenues for the three months ended March 31, 2025 and long-lived assets (net of depletion, amortization, and impairments) as of March 31, 2024 are presented below:

SCHEDULE OF REVENUES AND LONG LIVED ASSETS ATTRIBUTABLE TO GEOGRAPHICAL AREA

 

   Three Months Ended March 31, 2025   Three Months as of March 31, 2025   Three Months Ended March 31, 2024   Three Months as of March 31, 2024 
   Revenues   Long Lived Assets, Net   Revenues   Long Lived Assets, Net 
Total  $102,345    1,101,041   $147,686    1,559,301 

 

 
v3.25.1
STOCK-BASED COMPENSATION EXPENSE
 3 Months Ended
Mar. 31, 2025
Share-Based Payment Arrangement [Abstract]  
STOCK-BASED COMPENSATION EXPENSE

NOTE 4 – STOCK-BASED COMPENSATION EXPENSE

 

In 2008, the Company adopted the Houston American Energy Corp. 2008 Equity Incentive Plan (the “2008 Plan”). The terms of the 2008 Plan, as amended in 2012 and 2013, allow for the issuance of up to 480,000 shares of the Company’s common stock pursuant to the grant of stock options and restricted stock.

 

In 2017, the Company adopted the Houston American Energy Corp. 2017 Equity Incentive Plan (the “2017 Plan”). The terms of the 2017 Plan, allow for the issuance of up to 400,000 shares of the Company’s common stock pursuant to the grant of stock options and restricted stock.

 

In 2021, the Company adopted the Houston American Energy 2021 Equity Incentive Plan (the “2021 Plan” and, together with the 2008 Plan and the 2017 Plan, the “Plans”). The terms of the 2021 Plan allow for the issuance of up to 500,000 shares of the Company’s common stock pursuant to the grant of stock options and restricted stock.

 

Persons eligible to participate in the Plans are key employees, consultants and directors of the Company.

 

The Company periodically grants options to employees, directors and consultants under the Plans and is required to make estimates of the fair value of the related instruments and recognize expense over the period benefited, usually the vesting period.

 

Stock Option Activity

 

In November 2024, the Company agreed to issue to its CEO a number of options equal to $15,000 divided by the closing price of our stock on the 15th day of each month. The strike price of each option is equal to the grant price. The options have a ten10-year life and are exercisable at $0.70 per share for the January, February, and March 2025 issuances, vest 20% on the date of grant and 80% ten months from the date of grant. The grant date fair value of these stock options was $13,604 in January 2025, $13,486 in February 2025, and $13,241 in March 2025, based on the Black-Scholes Option Pricing model based on the following assumptions: market value of common stock on grant dates – $1.63, $1.41, and $1.07, respectively; risk free interest rate based on the applicable US Treasury bill rate – 0%; dividend yield – 0%; volatility factor based on the trading history of the Company – 92%; weighted average expected life in years – 10; and expected forfeiture rate – 0%. The Company also issued 15,000 options to a board member as compensation. The options have a ten-year life and are exercisable at $1.63 per share for the January issuance, vest 20% on the date of grant and 80% ten months from the date of grant. The grant date fair value of these stock options was $22,174 in January 2025, based on the Black-Scholes Option Pricing model based on the following assumptions: market value of common stock on grant dates – $1.63; risk free interest rate based on the applicable US Treasury bill rate – 0%; dividend yield – 0%; volatility factor based on the trading history of the Company – 92%; weighted average expected life in years – 10; and expected forfeiture rate – 0%.

 

A summary of stock option activity and related information for the three months ended March 31, 2025 is presented below:

SCHEDULE OF STOCK OPTION ACTIVITY

 

   Options   Weighted-Average Exercise Price   Aggregate Intrinsic Value 
             
Outstanding at January 1, 2025   916,987   $2.06      
Granted   48,859    0.70      
Exercised   —    —      
Forfeited   —    —      
Outstanding at March 31, 2025   965,846   $1.99   $— 
Exercisable at March 31, 2025   860,903   $2.07   $— 

 

During the three months ended March 31, 2025, the Company recognized $14,057 of stock-based compensation expense attributable to the amortization of stock options. As of March 31, 2025, there is $84,980 of unrecognized stock-based compensation expense related to non-vested stock options.

 

As of March 31, 2025, there were 24,969 shares of common stock available for issuance pursuant to future stock or option grants under the Plans.

 

Stock-Based Compensation Expense

 

The following table reflects total stock-based compensation recorded by the Company for the three months ended March 31, 2025 and 2024:

SCHEDULE OF STOCK-BASED COMPENSATION

 

  

Three Months Ended

March 31,

 
   2025   2024 
         
Stock-based compensation expense included in general and administrative expense  $14,057   $50,667 
Earnings per share effect of share-based compensation expense – basic and diluted  $(0.00)  $(0.00)

 

 
v3.25.1
CAPITAL STOCK
 3 Months Ended
Mar. 31, 2025
Equity [Abstract]  
CAPITAL STOCK

NOTE 5 – CAPITAL STOCK

 

Common Stock

 

On January 22, 2025, the Company entered in a securities purchase agreement pursuant to which the Company sold 2,600,000 shares of the Company’s common stock at a purchase price of $1.70 per share in a registered direct offering. The Company received approximately $3.8 million in net proceeds.

 

Warrants

 

A summary of warrant activity and related information for 2025 is presented below:

SUMMARY OF WARRANT ACTIVITY

 

   Warrants   Weighted-Average
Exercise Price		   Aggregate
Intrinsic Value		 
             
Outstanding at January 1, 2025   94,400   $2.46      
Issued   —    —      
Exercised   —    —      
Expired   —    —      
Outstanding at March 31, 2025   94,400   $2.46   $— 
Exercisable at March 31, 2025   94,400   $2.46   $— 

 
v3.25.1
EARNINGS PER COMMON SHARE
 3 Months Ended
Mar. 31, 2025
Earnings Per Share [Abstract]  
EARNINGS PER COMMON SHARE

NOTE 6 – EARNINGS PER COMMON SHARE

 

Earnings (loss) per common share-basic is calculated by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Net income (loss) per common share-diluted assumes the conversion of all potentially dilutive securities and is calculated by dividing net (loss) income by the sum of the weighted average number of shares of common stock, as defined above, outstanding plus potentially dilutive securities. Net income per common share-diluted considers the impact of potentially dilutive securities. In periods in which there is a loss because the inclusion of the potential common shares, as defined above, would have an anti-dilutive effect.

 

The calculation of earnings (loss) per common share for the periods indicated below were as follows:

SCHEDULE OF EARNINGS (LOSS) PER COMMON SHARE

 

           
   Three Months Ended March 31, 
   2025   2024 
Numerator:        
Net loss   $(1,032,483)  $(15,699)
           
Effect of common stock equivalents   —    — 
Net loss adjusted for common stock equivalents  $(1,032,483)  $(15,699)
           
Denominator:          
Weighted average common shares – basic   15,050,977    10,906,353 
           
Dilutive effect of common stock equivalents:          
Options and warrants   —    — 
           
Denominator:          
Weighted average common shares – diluted   15,050,977    10,906,353 
           
Loss per common share – basic  $(0.07)  $(0.00)
           
Loss per common share – diluted  $(0.07)  $(0.00)

 

For the three months ended March 31, 2025 and 2024, the following warrants and options to purchase shares of common stock were excluded from the computation of diluted net income (loss) per common share, as the inclusion of such shares would be anti-dilutive:

SCHEDULE OF ANTI-DILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF DILUTED NET INCOME LOSS

 

           
   Three Months Ended March 31, 
   2025   2024 
Stock warrants   94,400    94,400 
Stock options   965,846    908,139 
Total   1,060,246    1,002,539 

 

 
v3.25.1
COMMITMENTS AND CONTINGENCIES
 3 Months Ended
Mar. 31, 2025
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES

NOTE 7 – COMMITMENTS AND CONTINGENCIES

 

Lease Commitment

 

The Company leases office facilities under an operating lease agreement that expires October 31, 2025. During the three months ended March 31, 2025, the operating cash outflows related to operating lease liabilities of $24,221 and the expense for the right of use asset for operating leases was $23,867. As of March 31, 2025, the Company’s operating lease had a weighted-average remaining term of 0.58 years and a weighted average discount rate of 12%. As of March 31, 2025, the lease agreement requires future payments as follows:

 

Year  Amount 
2025   52,536 
Total future lease payments   52,536 
Less: imputed interest   (2,040)
Present value of future operating lease payments   50,496 
Less: current portion of operating lease liabilities   (50,496)
Operating lease liabilities, net of current portion  $— 
Right of use assets  $49,669 

 

Total base rental expense was $23,867 and $22,646 for the three months ended March 31, 2025 and 2024, respectively. The Company does not have any capital leases or other operating lease commitments.

 
v3.25.1
SUBSEQUENT EVENTS
 3 Months Ended
Mar. 31, 2025
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

NOTE 8 – SUBSEQUENT EVENTS

 

During the April 24, 2025 shareholder meeting, all matters put forward before the Company’s stockholders for consideration and approval, as set out in the Company’s definitive proxy statement dated April 11, 2025, were approved by the requisite number of votes cast at the meeting. This included the Company’s proposed acquisition of Abundia Global Impact Group (“AGIG”), a company specializing in converting waste into high-value fuels and chemicals. Under the related Share Exchange Agreement, the Company will issue a number of shares equal to 94% of the Company’s issued and outstanding stock, after taking into account the issuance to the AGIG Unitholders. This will result in the issuance of approximately 245,755,684 shares of the Company’s common stock upon closing of the transaction.
v3.25.1
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)
 3 Months Ended
Mar. 31, 2025
Accounting Policies [Abstract]  
Consolidation

Consolidation

 

The accompanying consolidated financial statements include all accounts of the Company and its subsidiary (HAEC Louisiana E&P, Inc.). All significant inter-company balances and transactions have been eliminated in consolidation.

 
Segment Reporting

Segment Reporting

 

The Company’s chief operating decision maker (“CODM”), the Chief Executive Officer, manages the Company’s business activities as a single operating and reportable segment at the consolidated level. Accordingly, our CODM uses net income to measure profit or loss, allocate resources, and assess performance. Further, the CODM is regularly provided with and utilizes consolidated functional expenses, as presented in the accompanying consolidated statements of operations, and total assets at the consolidated level, as included in the consolidated balance sheets herein, to manage the Company’s operations.

 
Liquidity and Capital Requirements

Liquidity and Capital Requirements

 

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business for the twelve-month period following the issuance date of these consolidated financial statements. The Company has incurred continuing losses since 2011, with an accumulated deficit of $86.2 million as of March 31, 2025.

 

The Company believes that it has the ability to fund, from cash on hand, its operating costs and anticipated drilling operations for at least the next twelve months following the issuance of these financial statements.

 

The actual timing and number of wells drilled during 2025 and beyond will be principally controlled by the operators of the Company’s acreage, based on a number of factors, including but not limited to availability of financing, performance of existing wells on the subject acreage, energy prices and industry condition and outlook, costs of drilling and completion services and equipment and other factors beyond the Company’s control or that of its operators.

 

In the event that the Company pursues additional acreage acquisitions or expands its drilling plans, the Company may be required to secure additional funding beyond our resources on hand. While the Company may, among other efforts, seek additional funding from “at-the-market” sales of common stock, and private sales of equity and debt securities, it presently does not have any commitments to provide additional funding, and there can be no assurance that the Company can secure the necessary capital to fund its share of drilling, acquisition or other costs on acceptable terms or at all. If, for any reason, the Company is unable to fund its share of drilling and completion costs, it would forego participation in one or more of such wells. In such event, the Company may be subject to penalties or to the possible loss of some of its rights and interests in prospects with respect to which it fails to satisfy funding obligations and it may be required to curtail operations and forego opportunities.

 
Accounting Principles and Use of Estimates

Accounting Principles and Use of Estimates

 

The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America. In preparing financial statements, management makes informed judgments and estimates that affect the reported amounts of assets and liabilities as of the date of the financial statements and affect the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management reviews its estimates, including those related to such potential matters as litigation, environmental liabilities, income taxes and the related valuation allowance, determination of proved reserves of oil and gas and asset retirement obligations. Changes in facts and circumstances may result in revised estimates and actual results may differ from these estimates.

 

 
Concentration of Credit Risk

Concentration of Credit Risk

 

Financial instruments that potentially subject the Company to a concentration of credit risk include cash, cash equivalents (if any) and any marketable securities (if any). The Company had cash deposits of $4,938,537 in excess of the FDIC’s current insured limit on interest bearing accounts of $250,000 as of March 31, 2025. The Company has not experienced any losses on its deposits of cash and cash equivalents.

 
Earnings (Loss) per Share

Earnings (Loss) per Share

 

Basic earnings (loss) per share is computed by dividing net loss available to common shareholders by the weighted average common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common shares were exercised or converted in common shares that then shared in the earnings of the Company. In periods in which the Company reports a net loss, dilutive securities are excluded from the calculation of diluted net loss per share amounts as the effect would be anti-dilutive.

 
New Accounting Pronouncements

New Accounting Pronouncements

 

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disaggregated information about a reporting entity’s effective tax rate reconciliation, as well as information related to income taxes paid to enhance the transparency and decision usefulness of income tax disclosures. This ASU is effective for the annual period ending December 31, 2025. The Company has applied the ASU but concluded that no further disclosure is necessary given that the Company has significant loss carryforwards and therefore has not paid federal income tax.

 

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). ASU 2024-03 requires additional disclosure of specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. ASU 2024-03 may be applied prospectively with the option for retrospective application for all prior periods presented. The Company is currently evaluating the impact of adopting this guidance on the Company’s current financial position, results of operations or financial statement disclosures.

 
Subsequent Events

Subsequent Events

 

The Company has evaluated all transactions from March 31, 2025 through the financial statement issuance date for subsequent event disclosure consideration. See Note 8.
v3.25.1
REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables)
 3 Months Ended
Mar. 31, 2025
Revenue from Contract with Customer [Abstract]  
SCHEDULE OF DISAGGREGATES REVENUE BY SIGNIFICANT PRODUCT

The following table disaggregates revenue by significant product type for the three-month periods ended March 31, 2025 and 2024:

SCHEDULE OF DISAGGREGATES REVENUE BY SIGNIFICANT PRODUCT

 

           
   Three Months Ended March 31, 
   2025   2024 
Oil sales  $66,556   $103,048 
Natural gas sales   18,427    16,316 
Natural gas liquids sales   17,362    28,322 
Total revenue from customers  $102,345   $147,686 
v3.25.1
OIL AND GAS PROPERTIES (Tables)
 3 Months Ended
Mar. 31, 2025
Extractive Industries [Abstract]  
SCHEDULE OF REVENUES AND LONG LIVED ASSETS ATTRIBUTABLE TO GEOGRAPHICAL AREA

The Company currently has properties in the United States. Revenues for the three months ended March 31, 2025 and long-lived assets (net of depletion, amortization, and impairments) as of March 31, 2024 are presented below:

SCHEDULE OF REVENUES AND LONG LIVED ASSETS ATTRIBUTABLE TO GEOGRAPHICAL AREA

 

   Three Months Ended March 31, 2025   Three Months as of March 31, 2025   Three Months Ended March 31, 2024   Three Months as of March 31, 2024 
   Revenues   Long Lived Assets, Net   Revenues   Long Lived Assets, Net 
Total  $102,345    1,101,041   $147,686    1,559,301 
v3.25.1
STOCK-BASED COMPENSATION EXPENSE (Tables)
 3 Months Ended
Mar. 31, 2025
Share-Based Payment Arrangement [Abstract]  
SCHEDULE OF STOCK OPTION ACTIVITY

A summary of stock option activity and related information for the three months ended March 31, 2025 is presented below:

SCHEDULE OF STOCK OPTION ACTIVITY

 

   Options   Weighted-Average Exercise Price   Aggregate Intrinsic Value 
             
Outstanding at January 1, 2025   916,987   $2.06      
Granted   48,859    0.70      
Exercised   —    —      
Forfeited   —    —      
Outstanding at March 31, 2025   965,846   $1.99   $— 
Exercisable at March 31, 2025   860,903   $2.07   $— 
SCHEDULE OF STOCK-BASED COMPENSATION

The following table reflects total stock-based compensation recorded by the Company for the three months ended March 31, 2025 and 2024:

SCHEDULE OF STOCK-BASED COMPENSATION

 

  

Three Months Ended

March 31,

 
   2025   2024 
         
Stock-based compensation expense included in general and administrative expense  $14,057   $50,667 
Earnings per share effect of share-based compensation expense – basic and diluted  $(0.00)  $(0.00)
v3.25.1
CAPITAL STOCK (Tables)
 3 Months Ended
Mar. 31, 2025
Equity [Abstract]  
SUMMARY OF WARRANT ACTIVITY

A summary of warrant activity and related information for 2025 is presented below:

SUMMARY OF WARRANT ACTIVITY

 

   Warrants   Weighted-Average
Exercise Price		   Aggregate
Intrinsic Value		 
             
Outstanding at January 1, 2025   94,400   $2.46      
Issued   —    —      
Exercised   —    —      
Expired   —    —      
Outstanding at March 31, 2025   94,400   $2.46   $— 
Exercisable at March 31, 2025   94,400   $2.46   $— 
v3.25.1
EARNINGS PER COMMON SHARE (Tables)
 3 Months Ended
Mar. 31, 2025
Earnings Per Share [Abstract]  
SCHEDULE OF EARNINGS (LOSS) PER COMMON SHARE

The calculation of earnings (loss) per common share for the periods indicated below were as follows:

SCHEDULE OF EARNINGS (LOSS) PER COMMON SHARE

 

           
   Three Months Ended March 31, 
   2025   2024 
Numerator:        
Net loss   $(1,032,483)  $(15,699)
           
Effect of common stock equivalents   —    — 
Net loss adjusted for common stock equivalents  $(1,032,483)  $(15,699)
           
Denominator:          
Weighted average common shares – basic   15,050,977    10,906,353 
           
Dilutive effect of common stock equivalents:          
Options and warrants   —    — 
           
Denominator:          
Weighted average common shares – diluted   15,050,977    10,906,353 
           
Loss per common share – basic  $(0.07)  $(0.00)
           
Loss per common share – diluted  $(0.07)  $(0.00)
SCHEDULE OF ANTI-DILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF DILUTED NET INCOME LOSS

For the three months ended March 31, 2025 and 2024, the following warrants and options to purchase shares of common stock were excluded from the computation of diluted net income (loss) per common share, as the inclusion of such shares would be anti-dilutive:

SCHEDULE OF ANTI-DILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF DILUTED NET INCOME LOSS

 

           
   Three Months Ended March 31, 
   2025   2024 
Stock warrants   94,400    94,400 
Stock options   965,846    908,139 
Total   1,060,246    1,002,539 
v3.25.1
COMMITMENTS AND CONTINGENCIES (Tables)
 3 Months Ended
Mar. 31, 2025
Commitments and Contingencies Disclosure [Abstract]  
SCHEDULE OF FUTURE PAYMENTS UNDER LEASE AGREEMENT
Year  Amount 
2025   52,536 
Total future lease payments   52,536 
Less: imputed interest   (2,040)
Present value of future operating lease payments   50,496 
Less: current portion of operating lease liabilities   (50,496)
Operating lease liabilities, net of current portion  $— 
Right of use assets  $49,669 
v3.25.1
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)
Mar. 31, 2025
Dec. 31, 2024
Accounting Policies [Abstract]    
Accumulated deficit $ 86,247,592 $ 85,215,109
Cash deposits 4,938,537  
Current insured limit on interest bearing accounts $ 250,000  
v3.25.1
SCHEDULE OF DISAGGREGATES REVENUE BY SIGNIFICANT PRODUCT (Details) - USD ($)
 3 Months Ended
Mar. 31, 2025
Mar. 31, 2024
Disaggregation of Revenue [Line Items]    
Total revenue from customers $ 102,345 $ 147,686
Oil Sales [Member]    
Disaggregation of Revenue [Line Items]    
Total revenue from customers 66,556 103,048
Natural Gas Sales [Member]    
Disaggregation of Revenue [Line Items]    
Total revenue from customers 18,427 16,316
Natural Gas Liquids Sales [Member]    
Disaggregation of Revenue [Line Items]    
Total revenue from customers $ 17,362 $ 28,322
v3.25.1
REVENUE FROM CONTRACTS WITH CUSTOMERS (Details Narrative) - USD ($)
Mar. 31, 2025
Mar. 31, 2024
Revenue from Contract with Customer [Abstract]    
Remaining performance obligations $ 0 $ 0
v3.25.1
SCHEDULE OF REVENUES AND LONG LIVED ASSETS ATTRIBUTABLE TO GEOGRAPHICAL AREA (Details) - USD ($)
 3 Months Ended
Mar. 31, 2025
Mar. 31, 2024
Extractive Industries [Abstract]    
Revenues $ 102,345 $ 147,686
Long Lived Assets, Net $ 1,101,041 $ 1,559,301
v3.25.1
OIL AND GAS PROPERTIES (Details Narrative) - USD ($)
 3 Months Ended
Mar. 31, 2025
Mar. 31, 2024
Extractive Industries [Abstract]    
Depletion expense $ 21,885 $ 34,978
v3.25.1
SCHEDULE OF STOCK OPTION ACTIVITY (Details)
 3 Months Ended
Mar. 31, 2025
USD ($)
$ / shares
shares
Share-Based Payment Arrangement [Abstract]  
Options, Outstanding, Beginning Balance | shares 916,987
Weighted-Average Exercise Price, Outstanding, Beginning Balance | $ / shares $ 2.06
Options, Granted | shares 48,859
Weighted-Average Exercise Price, Granted | $ / shares $ 0.70
Options, Exercised | shares
Weighted-Average Exercise Price, Exercised | $ / shares
Options, Forfeited | shares
Weighted-Average Exercise Price, Forfeited | $ / shares
Options, Outstanding, Ending Balance | shares 965,846
Weighted-Average Exercise Price, Outstanding, Ending Balance | $ / shares $ 1.99
Aggregate Intrinsic Value, Outstanding, Ending Balance | $
Options, Exercisable, Ending Balance | shares 860,903
Weighted-Average Exercise Price, Exercisable, Ending Balance | $ / shares $ 2.07
Aggregate Intrinsic Value, Exercisable, Ending Balance | $
v3.25.1
SCHEDULE OF STOCK-BASED COMPENSATION (Details) - USD ($)
 3 Months Ended
Mar. 31, 2025
Mar. 31, 2024
Share-Based Payment Arrangement [Abstract]    
Stock-based compensation expense included in general and administrative expense $ 14,057 $ 50,667
Earnings per share effect of share-based compensation expense - basic $ (0.00) $ (0.00)
Earnings per share effect of share-based compensation expense - diluted $ (0.00) $ (0.00)
v3.25.1
STOCK-BASED COMPENSATION EXPENSE (Details Narrative) - USD ($)
 1 Months Ended 3 Months Ended
Mar. 31, 2025
Feb. 28, 2025
Jan. 31, 2025
Nov. 30, 2024
Mar. 31, 2025
Mar. 31, 2024
Dec. 31, 2021
Dec. 31, 2017
Dec. 31, 2008
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]                  
Ten-year life exercisable $ 2.07       $ 2.07        
Stock-based compensation         $ 14,057 $ 50,667      
Unrecognized share-based compensation expense $ 84,980       $ 84,980        
Common stock available for issuance to future 24,969       24,969        
Chief Executive Officer [Member]                  
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]                  
Number of options granted during period       $ 15,000          
Weighted average remaining contractual term options, outstanding       10 years          
Ten-year life exercisable       $ 0.70          
Description on vesting of stock options       vest 20% on the date of grant and 80% ten months from the date of grant.          
Fair value of options granted $ 13,241 $ 13,486 $ 13,604            
Market value of common stock $ 1.07 $ 1.41 $ 1.63   $ 1.07        
Risk free interest rate       0.00%          
Expected dividend yield       0.00%          
Expected stock volatility       92.00%          
Weighted average expected life (in years)       10 years          
Expected forfeiture rate       0.00%          
Board Member [Member]                  
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]                  
Number of options granted during period       $ 15,000          
Weighted average remaining contractual term options, outstanding       10 years          
Ten-year life exercisable       $ 1.63          
Description on vesting of stock options       vest 20% on the date of grant and 80% ten months from the date of grant.          
Fair value of options granted     $ 22,174            
Market value of common stock     $ 1.63            
Risk free interest rate       0.00%          
Expected dividend yield       0.00%          
Expected stock volatility       92.00%          
Weighted average expected life (in years)       10 years          
Expected forfeiture rate       0.00%          
2008 Equity Incentive Plan [Member] | Maximum [Member]                  
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]                  
Number of options authorized to purchase shares of common stock                 480,000
2017 Equity Incentive Plan [Member] | Maximum [Member]                  
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]                  
Number of options authorized to purchase shares of common stock               400,000  
2021 Equity Incentive Plan [Member] | Maximum [Member]                  
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]                  
Number of options authorized to purchase shares of common stock             500,000    
v3.25.1
SUMMARY OF WARRANT ACTIVITY (Details)
 3 Months Ended
Mar. 31, 2025
USD ($)
$ / shares
shares
Equity [Abstract]  
Warrants Outstanding, Beginning | shares 94,400
Weighted-Average Exercise Price Outstanding, Beginning | $ / shares $ 2.46
Warrants Issued | shares
Weighted-Average Exercise Price Issued | $ / shares
Warrants Exercised | shares
Weighted-Average Exercise Price Outstanding, Exercised | $ / shares
Warrants Expired | shares
Weighted-Average Exercise Price Outstanding, Expired | $ / shares
Warrants Outstanding, Ending | shares 94,400
Weighted-Average Exercise Price Outstanding, Ending | $ / shares $ 2.46
Aggregate Intrinsic Value, Outstanding | $
Warrants Outstanding, Exercisable | shares 94,400
Weighted-Average Exercise Price Outstanding, Exercisable | $ / shares $ 2.46
Aggregate Intrinsic Value, Exercisable | $
v3.25.1
CAPITAL STOCK (Details Narrative) - Common Stock [Member] - USD ($)
$ / shares in Units, $ in Millions
 3 Months Ended
Apr. 24, 2025
Jan. 22, 2025
Mar. 31, 2025
Accumulated Other Comprehensive Income (Loss) [Line Items]      
Shares new issues 245,755,684   2,600,000
Securities Purchase Agreement [Member]      
Accumulated Other Comprehensive Income (Loss) [Line Items]      
Shares new issues   2,600,000  
Purchase price, per share   $ 1.70  
Net proceeds   $ 3.8  
v3.25.1
SCHEDULE OF EARNINGS (LOSS) PER COMMON SHARE (Details) - USD ($)
 3 Months Ended
Mar. 31, 2025
Mar. 31, 2024
Earnings Per Share [Abstract]    
Net loss $ (1,032,483) $ (15,699)
Effect of common stock equivalents
Net loss adjusted for common stock equivalents $ (1,032,483) $ (15,699)
Weighted average common shares – basic 15,050,977 10,906,353
Options and warrants
Weighted average common shares – diluted 15,050,977 10,906,353
Loss per common share – basic $ (0.07) $ (0.00)
Loss per common share – diluted $ (0.07) $ (0.00)
v3.25.1
SCHEDULE OF ANTI-DILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF DILUTED NET INCOME LOSS (Details) - shares
 3 Months Ended
Mar. 31, 2025
Mar. 31, 2024
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Total 1,060,246 1,002,539
Warrant [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Total 94,400 94,400
Share-Based Payment Arrangement, Option [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Total 965,846 908,139
v3.25.1
SCHEDULE OF FUTURE PAYMENTS UNDER LEASE AGREEMENT (Details) - USD ($)
Mar. 31, 2025
Dec. 31, 2024
Commitments and Contingencies Disclosure [Abstract]    
2025 $ 52,536  
Total future lease payments 52,536  
Less: imputed interest (2,040)  
Present value of future operating lease payments 50,496  
Less: current portion of operating lease liabilities (50,496) $ (71,082)
Operating lease liabilities, net of current portion  
Right of use assets $ 49,669 $ 69,901
v3.25.1
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($)
 3 Months Ended
Mar. 31, 2025
Mar. 31, 2024
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]    
Amortization of right of use asset $ 20,232 $ 17,947
Rental expense $ 23,867 $ 22,646
Operating Lease Agreement [Member]    
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]    
Operating lease agreement expire date Oct. 31, 2025  
Operating cash outflows related to operating lease liabilities $ 24,221  
Amortization of right of use asset $ 23,867  
Operating lease, weighted average remaining lease term 6 months 29 days  
Weighted average discount rate 12.00%  
v3.25.1
SUBSEQUENT EVENTS (Details Narrative) - shares
 3 Months Ended
Apr. 24, 2025
Mar. 31, 2025
Common Stock [Member]    
Issuance of shares 245,755,684 2,600,000
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