Annual report pursuant to Section 13 and 15(d)

CONSOLIDATED STATEMENTS OF CASH FLOWS

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Cash Flows from Operating Activities    
Net Loss $ (1,875,779) $ (1,856,614)
Adjustment to reconcile net loss to net cash Used in operating activities:    
Depreciation and amortization 74,065 94,964
Accretion of debt discount 171,573 152,980
Finance fee for extension on note payable 79,223 37,500
Impairment of oil & gas properties 0 668,073
Loss on conversion of debt 0 109,879
Cost of warrants issued for PORRI 14,336 0
Loss on disposal of assets 0 497
Debt Issuance costs 38,622 0
Asset retirement obligation accretion 38,998 11,856
Stock-based compensation expense-employees 150,790 185,395
Stock-based compensation expense-consultants and directors 209,125 0
Changes in operating assets and liabilities    
Accounts receivable (150,370) (22,457)
Inventory 33,330 0
Other assets (143) 9,752
Accounts payable 302,821 70,139
Accrued liabilities 161,586 81,707
Deferred salaries 200,000 40,000
Net cash used in operating activities (551,823) (416,329)
Cash Flows from Investing Activities    
Cash acquired from investment in Askarii 114 0
Proceeds from sale of property and equipment 30,000 4,029
Purchase of fixed assets (93,476) (19,854)
Cash used in investing activities (63,362) (15,825)
Cash Flows from Financing Activities    
Proceeds from shareholder advances 388,000 134,000
Proceeds from issuance of common stock 111,352 302,000
Payments of shareholder advances (92,000) [1] (8,000)
Payments on notes payable (1,610) (17,443)
Proceeds from short term loans 275,000 0
Cash provided by financing activities 680,742 410,557
Net change in cash and cash equivalents 65,557 (21,597)
Cash and cash equivalents    
Beginning of period 3,091 24,688
End of period 68,648 3,091
SUPPLEMENTAL DISCLOSURES    
Interest paid 33,088 5,660
Income taxes paid 0 0
NON-CASH INVESTING AND FINANCIAL DISCLOSURES    
Debt conversion, original debt amount [2] 150,000  
Note payable for oil & gas properties 4,000,000 0
Initial recognition of asset retirement obligations 70,384 26,201
Change in estimated cash flows from asset retirement obligation 0 75,096
Fair value of stock issued for oil properties 4,773,186 719,903
Shares Issued as Settlement of Accounts Payable [Member]    
NON-CASH INVESTING AND FINANCIAL DISCLOSURES    
Debt conversion, original debt amount 120,146 0
Shares Issued for Conversion of Debt [Member]    
NON-CASH INVESTING AND FINANCIAL DISCLOSURES    
Debt conversion, original debt amount 146,875 316,800
Shares Issued as Payment of Shareholder Advances [Member]    
NON-CASH INVESTING AND FINANCIAL DISCLOSURES    
Debt conversion, original debt amount $ 150,000 $ 130,000
[1] Funds that were paid in cash by the Company to various related parties to reimburse for funds that were previously loaned as a shareholder advances.
[2] Shares were issued to extinguish outstanding liabilities of the Company. These liabilities could be outstanding shareholder advances, pre-bridge working capital loans or service related accounts payable.