Eos Petro, Inc. - FORM 10-Q

Attached files

file	filename
EX-10.4 - EXHIBIT 10.4 - Eos Petro, Inc.	ex104.htm
EX-10.7 - EXHIBIT 10.7 - Eos Petro, Inc.	ex107.htm
EX-32.1 - EXHIBIT 32.1 - Eos Petro, Inc.	ex321.htm
EX-10.6 - EXHIBIT 10.6 - Eos Petro, Inc.	ex106.htm
EX-31.1 - EXHIBIT 31.1 - Eos Petro, Inc.	ex311.htm
EX-31.2 - EXHIBIT 31.2 - Eos Petro, Inc.	ex312.htm
EX-10.8 - EXHIBIT 10.8 - Eos Petro, Inc.	ex108.htm
EX-10.9 - EXHIBIT 10.9 - Eos Petro, Inc.	ex109.htm
EX-10.5 - EXHIBIT 10.5 - Eos Petro, Inc.	ex105.htm
EX-10.3 - EXHIBIT 10.3 - Eos Petro, Inc.	ex103.htm
EX-32.2 - EXHIBIT 32.2 - Eos Petro, Inc.	ex322.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

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

For the quarterly period ended June 30, 2015

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

For the transition period from _______ to _______.

Commission file number 000-53246

EOS PETRO, INC.

(Exact name of registrant as specified in its charter)

Nevada (State or other jurisdiction of incorporation or organization)	98-0550353 (I.R.S. Employer Identification No.)

1999 Avenue of the Stars, Suite 2520 Los Angeles, California (Address of principal executive offices)	90067 (Zip code)

(310) 552-1555

(Registrant’s telephone number, including area code)

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x No o

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

Large accelerated filer o Accelerated filer x

Non-accelerated filer o Smaller reporting company o

(Do not check if a smaller reporting company)

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

Yes o No x

As of August 14, 2015, the registrant had 47,825,882 outstanding shares of common stock.

EOS PETRO, INC. TABLE OF CONTENTS



			Page No.

PART I. FINANCIAL INFORMATION

	Item 1.	Unaudited Financial Statements	3

	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	26

	Item 3	Quantitative and Qualitative Disclosures About Market Risk	36

	Item 4T.	Controls and Procedures	36

PART II. OTHER INFORMATION

	Item 1	Legal Proceedings	37

	Item 1A	Risk Factors	38

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38

	Item 3.	Defaults Upon Senior Securities	38

	Item 4	Mine Safety Disclosures	38

	Item 5.	Other Information	38

	Item 6.	Exhibits	38

		SIGNATURES	39

Table of Contents

Eos Petro, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets



	June 30,			December 31,
	2015			2014
ASSETS	(unaudited)

Current assets
Cash	$	2,251		$	133,210
Other current assets		21,947			42,959
Total current assets		24,198			176,169

Oil and gas properties, net		1,098,853			1,121,175
Other property plant and equipment, net		6,230			11,257
Long-term deposits		102,441			102,441
Total assets	$	1,231,722		$	1,411,042

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities
Accounts payable	$	1,221,413		$	148,888
Accrued expenses		934,479			1,149,956
Accrued termination fee		5,500,000			-
Accrued structuring fee		4,000,000			-
LowCal convertible and promissory notes payable		8,250,000			8,250,000
Notes payable		1,423,000			1,273,000
Notes payable, related party		156,960			-
Derivative liabilities		5,102,652			11,039,552
Total current liabilities		26,588,504			21,861,396

Asset retirement obligation		88,307			84,102
Total liabilities		26,676,811			21,945,498

Commitments and contingencies

Stockholders' deficit
Series B Preferred stock: $0.0001 par value; 44,000,000 shares authorized,
none issued and outstanding		-			-
Common stock; $0.0001 par value; 300,000,000 shares authorized
47,750,882 and 47,738,882 shares issued and outstanding		4,775			4,774
Additional paid-in capital		105,639,955			89,077,781
Stock subscription receivable		(88,200	)		(88,200	)
Accumulated deficit		(131,001,619	)		(109,528,811	)
Total stockholders' deficit		(25,445,089	)		(20,534,456	)
Total liabilities and stockholders' deficit	$	1,231,722		$	1,411,042


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

Table of Contents

Eos Petro, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations



	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Revenues
Oil and gas sales	$	70,900		$	323,121		$	130,959		$	426,827

Costs and expenses
Lease operating expense		53,228			120,271			64,657			185,529
General and administrative		6,702,470			7,017,399			17,584,220			18,061,358
Structuring fee		-			-			4,000,000			-
Acquisition termination fee		-			-			5,500,000			-
Total costs and expenses		6,755,698			7,137,670			27,148,877			18,246,887

Loss from operations		(6,684,798	)		(6,814,549	)		(27,017,918	)		(17,820,060	)

Other income (expense)

Interest and finance costs		(250,933	)		(5,904,405	)		(391,790	)		(10,456,615	)
Change in fair value of derivative liabilities		3,351,880			-			5,936,900			-
Loss on debt extinguishment		-			-			-			(609,620	)
Total other income (expense)		3,100,947			(5,904,405	)		5,545,110			(11,066,235	)

Net loss	$	(3,583,851	)	$	(12,718,954	)	$	(21,472,808	)	$	(28,886,295	)

Net loss per share attributed to common
stockholders - basic and diluted	$	(0.08	)	$	(0.27	)	$	(0.45	)	$	(0.62	)
Weighted average common shares outstanding
basic and diluted		47,747,366			46,723,366			47,744,374			46,700,772


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

Table of Contents

Eos Petro, Inc. and Subsidiaries
Condensed Consolidated Statement of Stockholders' Deficit
For the Six Months Ended June 30, 2015
(unaudited)


									Additional		Stock						Total
	Series B Preferred Stock				Common Stock				Paid-in		Subscription			Accumulated			Stockholders'
	Shares		Amount		Shares		Amount		Capital		Receivable			Deficit			Deficit

Balance, December 31, 2014		-	$	-		47,738,882	$	4,774	$	89,077,781	$	(88,200	)	$	(109,528,811	)	$	(20,534,456	)
Issuance of common stock for consulting services		-		-		12,000		1		56,478		-			-			56,479
Fair value of warrants issued for consulting services		-		-		-		-		8,157,284		-			-			8,157,284
Fair value of share based compensation		-		-		-		-		4,673,412		-			-			4,673,412
Sale of shares of majority stockholder common stock to a consultant at discount		-		-		-		-		3,675,000		-			-			3,675,000
Net loss		-		-		-		-		-		-			(21,472,808	)		(21,472,808	)
Balance, June 30, 2015 (unaudited)		-	$	-		47,750,882	$	4,775	$	105,639,955	$	(88,200	)	$	(131,001,619	)	$	(25,445,089	)


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

Table of Contents

Eos Petro, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows




	Six Months Ended June 30,
	2015			2014
	(unaudited)			(unaudited)
Cash flows from operating activities
Net loss	$	(21,472,808	)	$	(28,886,295	)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depletion		22,322			37,608
Depreciation		5,027			5,027
Accretion of asset retirement obligation		4,205			3,823
Amortization of debt issuance costs		-			816,660
Non-cash finance costs		-			9,356,500
Loss on debt extinguishment		-			609,620
Fair value of stock issued for services		56,479			454,100
Fair value of warrants issued for consulting services		8,157,284			15,649,564
Fair value of share-based compensation		4,673,412			967,954
Majority stockholers shares sold at discount to consultant		3,675,000			-
Termination fee		5,500,000			-
Structuring fee		4,000,000			-
Change in fair value of derivative liabilities		(5,936,900	)		-
Change in operating assets and liabilities:
Deposits and other current assets		21,012			(51,904	)
Accounts payable		1,072,525			-
Accrued expenses		(215,477	)		297,008
Amounts due shareholder		-			2,950
Net cash used in operating activities		(437,919	)		(737,385	)

Cash flows from financing activities:
Proceeds from issuance of notes payable		150,000			1,500,000
Repayment of notes payable		-			(425,000	)
Proceeds from issuance of notes payable, related party		250,000			-
Repayment of notes payable, related party		(93,040	)		-
Net cash provided by financing activities		306,960			1,075,000

NET INCREASE IN CASH AND CASH EQUIVALENTS		(130,959	)		337,615

CASH AND CASH EQUIVALENTS, beginning of period		133,210			21,951

CASH AND CASH EQUIVALENTS, end of period	$	2,251		$	359,566

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Cash paid for interest	$	-		$	-
Cash paid for income taxes	$	-		$	-

SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES:

600,000 shares of common stock to be issued for convertible notes	$	-		$	7,604,000
Issued 66,000 shares of common stock for extinguishment of debt	$	-		$	693,000
Fair value of shares of beneficial conversion feature
recognized as debt discount	$	-		$	3,252,500


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

Table of Contents

Eos Petro, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended June 30, 2015 and 2014

(Unaudited)

NOTE 1 - ORGANIZATION

The unaudited condensed consolidated financial statements have been prepared by Eos Petro, Inc., (the “Company”), pursuant to the rules and regulations of the Securities and Exchange Commission. The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments) which are, in the opinion of management, necessary to fairly present the financial condition of the Company and its operating results for the respective periods. The condensed consolidated balance sheet at December 31, 2014 has been derived from the Company's audited consolidated financial statements. Certain information and footnote disclosures normally present in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes included in the Company’s Annual Report on Form 10-K/A filed with the Securities and Exchange Commission. The results for the six months ended June 30, 2015 are not necessarily indicative of the results to be expected for the full year ending December 31, 2015.

Organization and Business

The Company was organized under the laws of the state of Nevada in 2007. On October 12, 2012, pursuant to the Merger Agreement entered into by and between the Company, Eos Global Petro, Inc. (“ Eos ”), and Eos Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of the Company (“ Merger Sub ”), dated July 16, 2012, Merger Sub merged into Eos, with Eos being the surviving entity and the Company the legal acquirer (the “Merger ”). As a result of the Merger, Eos became a wholly-owned subsidiary of the Company.

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

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

Business

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

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of our wholly owned and majority owned subsidiaries. Intercompany transactions and balances have been eliminated. Management evaluates its investments on an individual basis for purposes of determining whether or not consolidation is appropriate.

Basic and Diluted Earnings (Loss) Per Share

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

Table of Contents

Eos Petro, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended June 30, 2015 and 2014

(Unaudited)

	June 30,
	2015		2014
Options		1,325,000		700,000
Warrants		16,202,992		11,452,992
Convertible notes		2,000,000		1,250,000
Total		19,527,992		13,402,992

Management Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates reflected in the consolidated financial statements include, but are not limited to, amortization and depletion allowances, the recoverability of the carrying amount and estimated useful lives of long-lived assets, asset retirement obligations, the valuation of equity instruments issued in connection with financing transactions, assumptions used in the valuation of conversion features and derivative liabilities, and share-based compensation costs. Changes in facts and circumstances may result in revised estimates. Actual results could differ from those estimates.

Full Cost Method of Accounting for Oil and Gas Properties

The Company has elected to utilize the full cost method of accounting for its oil and gas activities. In accordance with the full cost method of accounting, the Company capitalizes all costs associated with acquisition, exploration and development of oil and natural gas reserves, including leasehold acquisition costs, geological and geophysical expenditures, lease rentals on undeveloped properties and costs of drilling of productive and non-productive wells into the full cost pool on a country by country basis. Capitalized costs of oil and gas properties, including the estimated future costs to develop proved reserves, are amortized on the unit-of-production method using estimates of proved reserves once proved reserves are determined to exist.

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

Full Cost Ceiling Test

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

Table of Contents

Eos Petro, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended June 30, 2015 and 2014

(Unaudited)

The estimated future net revenues used in the ceiling test are calculated using average quoted market prices for sales of oil and gas on the first calendar day of each month during the preceding 12-month period prior to the end of the current reporting period. Prices are held constant indefinitely and are not changed except where different prices are fixed and determinable from applicable contracts for the remaining term of those contracts. Prices used in the ceiling test computation do not include the impact of derivative instruments because the Company elected not to meet the criteria to qualify its derivative instruments for hedge accounting treatment.

The Company assesses oil and gas properties at least quarterly to ascertain whether impairment has occurred. In assessing impairment, the Company considers factors such as historical experience and other data such as primary lease terms of the property, average holding periods of unproved property, and geographic and geologic data. Through June 30, 2015, the Company has not experienced any impairment of its capitalized oil and gas properties.

The Company recorded depletion expense of $12,261 and $22,322 for the three and six months ended June 30, 2015, respectively, and $28,224 and $37,608 for the three and six months ended June 30, 2014, respectively.

Proceeds from the sale of oil and gas properties are recognized as a reduction of capitalized oil and gas property costs with no gain or loss recognized, unless the sale significantly alters the relationship between capitalized costs and proved reserves of oil and gas attributable to a cost center. Through June 30, 2015, the Company has not had any sales of oil and gas properties that significantly alter that relationship.

Asset Retirement Obligation

The Company accounts for its future asset retirement obligations (“ ARO ”) by recording the fair value of the liability during the period in which it was incurred. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset. The increase in carrying value of a property associated with the capitalization of an ARO is included in proven oil and gas properties in the balance sheets. The ARO consists of costs related to the plugging of wells, removal of facilities and equipment, and site restoration on its oil and gas properties. The asset retirement liability is accreted to operating expense over the useful life of the related asset. As of June 30, 2015 and December 31, 2014, the Company had an ARO of $88,307 and $84,102, respectively.

Oil and Gas Revenue

Revenues are recognized when hydrocarbons have been delivered, the customer has taken title and collection is reasonably assured.

Share-Based Compensation

The Company periodically issues stock options and warrants to employees and non-employees in capital raising transactions, for services and for financing costs. The Company accounts for share-based payments under the guidance as set forth in the Share-Based Payment Topic of the FASB Accounting Standards Codification, which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees, officers, directors, and consultants, including employee stock options, based on estimated fair values. The Company estimates the fair value of share-based payment awards to employees and directors on the date of grant using an option-pricing model, and the value of the portion of the award that is ultimately expected to vest is recognized as expense over the required service period in the Company's Statements of Operations. The Company accounts for stock option and warrant grants issued and vesting to non-employees in accordance with the authoritative guidance where the value of the stock compensation is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) the date at which the necessary performance to earn the equity instruments is complete. Stock-based compensation is based on awards ultimately expected to vest and is reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, as necessary, in subsequent periods if actual forfeitures differ from those estimates.

Table of Contents

Eos Petro, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended June 30, 2015 and 2014

(Unaudited)

Fair Value Measurements

The Company applies the provisions of ASC 820-10, “Fair Value Measurements and Disclosures.” ASC 820-10 defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The three levels of valuation hierarchy are defined as follows:

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

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

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

For certain financial instruments, the carrying amounts reported in the consolidated balance sheets for cash and cash equivalents and current liabilities, including notes payable and convertible notes, each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest.

The Company uses Level 2 inputs for its valuation methodology for the warrant derivative liabilities as their fair values were determined by using a probability weighted average Black-Scholes-Merton pricing model based on various assumptions. The Company’s derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjustments to fair value of derivatives.

At June 30, 2015 and December 31, 2014, the Company identified the following liabilities that are required to be presented on the balance sheet at fair value (see Note 8):

	Fair Value		Fair Value Measurements at
	As of		June 30, 2015
Description	June 30, 2015		Using Fair Value Hierarchy
			Level 1		Level 2		Level 3
Warrant derivative liabilities	$	5,102,652	$	-		5,102,652		-

Total	$	5,102,652	$	-		5,102,652		-

	Fair Value		Fair Value Measurements at
	As of		December 31, 2014
Description	December 31, 2014		Using Fair Value Hierarchy
			Level 1		Level 2		Level 3
Warrant derivative liabilities	$	11,039,552	$	-		11,039,552		-

Total	$	11,039,552	$	-		11,039,552		-

Table of Contents

Eos Petro, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended June 30, 2015 and 2014

(Unaudited)

The Company did not identify any other non-recurring assets and liabilities that are required to be presented in the consolidated balance sheets at fair value in accordance with ASC 815.

Concentrations

The future results of the Company’s oil and natural gas operations will be affected by the market prices of oil and natural gas. The availability of a ready market for oil and natural gas products in the future will depend on numerous factors beyond the control of the Company, including weather, imports, marketing of competitive fuels, proximity and capacity of oil and natural gas pipelines and other transportation facilities, any oversupply or undersupply of oil, natural gas and liquid products, the regulatory environment, the economic environment, and other regional and political events, none of which can be predicted with certainty.

One customer accounts for 100% of oil sales for the three and six months ended June 30, 2015 and 2014. The Company’s oil and gas properties are located in Illinois.

Recently Issued Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“ FASB ”) issued Accounting Standards Update (“ ASU ”) 2014-09, Revenue from Contracts with Customers , which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most current revenue recognition guidance. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. ASU 2014-09 will be effective for the Company in the first quarter of its fiscal year ending June 30, 2018. The Company is currently in the process of evaluating the impact of adoption of this ASU on its consolidated financial statements.

In June 2014, the FASB issued Accounting Standards Update No. 2014-12, Compensation — Stock Compensation (Topic 718), Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (a consensus of the FASB Emerging Issues Task Force) (ASU 2014-12). The guidance applies to all reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. For all entities, the amendments in this Update are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. The effective date is the same for both public business entities and all other entities. The Company is currently evaluating the impact of adopting ASU 2014-12 on the Company’s results of operations or financial condition.

In August 2014, the FASB issued Accounting Standards Update No. 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entities Ability to Continue as a Going Concern (ASU 2014-15). The guidance in ASU 2014-15 sets forth management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern as well as required disclosures. ASU 2014-15 indicates that, when preparing financial statements for interim and annual financial statements, management should evaluate whether conditions or events, in the aggregate, raise substantial doubt about the entity’s ability to continue as a going concern for one year from the date the financial statements are issued or are available to be issued. This evaluation should include consideration of conditions and events that are either known or are reasonably knowable at the date the financial statements are issued or are available to be issued, as well as whether it is probable that management’s plans to address the substantial doubt will be implemented and, if so, whether it is probable that the plans will alleviate the substantial doubt. ASU 2014-15 is effective for annual periods ending after December 15, 2016, and interim periods and annual periods thereafter. Early application is permitted. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements.

Table of Contents

Eos Petro, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended June 30, 2015 and 2014

(Unaudited)

In November 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-16, Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity. The amendments in this ASU do not change the current criteria in U.S. GAAP for determining when separation of certain embedded derivative features in a hybrid financial instrument is required. The amendments clarify that an entity should consider all relevant terms and features, including the embedded derivative feature being evaluated for bifurcation, in evaluating the nature of the host contract. The ASU applies to all entities that are issuers of, or investors in, hybrid financial instruments that are issued in the form of a share and is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. The Company is currently evaluating the impact the adoption of ASU 2014-16 on the Company’s financial statement presentation and disclosures.

In January 2015, the FASB issued Accounting Standards Update (ASU) No. 2015-01 (Subtopic 225-20) - Income Statement - Extraordinary and Unusual Items. ASU 2015-01 eliminates the concept of an extraordinary item from GAAP. As a result, an entity will no longer be required to segregate extraordinary items from the results of ordinary operations, to separately present an extraordinary item on its income statement, net of tax, after income from continuing operations or to disclose income taxes and earnings-per-share data applicable to an extraordinary item. However, ASU 2015-01 will still retain the presentation and disclosure guidance for items that are unusual in nature and occur infrequently. ASU 2015-01 is effective for periods beginning after December 15, 2015. The adoption of ASU 2015-01 is not expected to have a material effect on the Company’s consolidated financial statements. Early adoption is permitted.

In February, 2015, the FASB issued Accounting Standards Update (ASU) No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. ASU 2015-02 provides guidance on the consolidation evaluation for reporting organizations that are required to evaluate whether they should consolidate certain legal entities such as limited partnerships, limited liability corporations, and securitization structures (collateralized debt obligations, collateralized loan obligations, and mortgage-backed security transactions). ASU 2015-02 is effective for periods beginning after December 15, 2015. The adoption of ASU 2015-02 is not expected to have a material effect on the Company’s consolidated financial statements. Early adoption is permitted.

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

NOTE 3 – GOING CONCERN

The accompanying condensed consolidated financial statements have been prepared under the assumption that the Company will continue as a going concern. Such assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business. As of June 30, 2015, the Company had a stockholders’ deficit of $25,445,089, and for the six months ended June 30, 2015, reported a net loss of $21,472,808 and had negative cash flows from operating activities of $437,919. In addition, the Company may have become obligated to pay a $5.5 million termination fee under the "Dune Merger Agreement," as defined in Note 12 below (the “ Parent Termination Fee ,” as more fully defined in the Dune Merger Agreement) (see Note 12) and $4 million that may be due under a structuring fee with GEM Global Yield Fund ("GEM") (see Note 12). Management estimates the Company’s capital requirements for the next twelve months, including drilling and completing wells for the Company's oil and gas "Works Property" located in Illinois and possible acquisitions, will total approximately $2,500,000, excluding any amounts that may be due to Dune under the Dune Merger Agreement or a $4 million structuring fee that may be due to GEM. Errors may be made in predicting and reacting to relevant business trends and the Company will be subject to the risks, uncertainties and difficulties frequently encountered by early-stage companies. The Company may not be able to successfully address any or all of these risks and uncertainties. Failure to adequately do so could cause the Company’s business, results of operations, and financial condition to suffer. As a result, the Company's independent registered public accounting firm, in its report on the Company's December 31, 2014 consolidated financial statements, has raised substantial doubt about the Company's ability to continue as a going concern.

Table of Contents

Eos Petro, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended June 30, 2015 and 2014

(Unaudited)

The Company’s ability to continue as a going concern is an issue due to its net losses and negative cash flows from operations, and its need for additional financing to fund future operations. The Company’s ability to continue as a going concern is subject to its ability to obtain necessary funding from outside sources, including the sale of its securities or loans from financial institutions. There can be no assurance that such funds, if available, can be obtained on terms reasonable to the Company. Any debt financing or other financing of securities senior to common stock that the Company is able to obtain will likely include financial and other covenants that will restrict the Company’s flexibility. At a minimum, the Company expects these covenants to include restrictions on its ability to pay dividends on its common stock in the case of debt financing, or cause substantial dilution for stockholders in the case of convertible debt and equity financing. Any failure to comply with these covenants would have a material adverse effect on the Company’s business, prospects, financial condition, results of operations and cash flows. The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern and do not include any adjustments that may result from the outcome of this uncertainty.

NOTE 4 - LOWCAL CONVERTIBLE AND PROMISSORY NOTES PAYABLE

LowCal convertible and promissory notes payable at June 30, 2015 and December 31, 2014 are as follows:

	June 30,		December 31,
	2015		2014
LowCal Convertible Note	$	5,000,000	$	5,000,000
LowCal Promissory Note		3,250,000		3,250,000
Total	$	8,250,000	$	8,250,000

In February 8, 2013, and subsequently amended, the Company and Eos entered into: (i) a Loan Agreement and Secured Promissory Note; (ii) a Lock-Up/Leak-Out Agreement; (iii) a Guaranty; (iv) a Series B Convertible Preferred Stock Purchase Agreement; (v) a Leasehold Mortgage, Assignment, Security Agreement and Fixture Filing; and (vi) a Compliance/Oversight Agreement (collectively referred to as the “ Loan Agreements ”). Pursuant to the Loan Agreements, LowCal Industries, LLC (“ LowCal ”) agreed to purchase from Eos, for $2,480,000, a promissory note in the principal amount of $2,500,000, with interest at 10% per annum (the “ LowCal Loan ”). At LowCal’s option, LowCal could elect to convert any part of the principal of the LowCal Loan into shares of the Company’s common stock at a conversion price of $5.00 per share. On November 6, 2013, the Company, Eos, LowCal and certain affiliates of LowCal entered into a second amendment to the Loan Agreements. Pursuant to the amended Loan Agreements, the total amount of the LowCal Loan was increased from $2,500,000 to $5,000,000 and the conversion price was changed from $5.00 to $4.00, and on that date, the Company received proceeds in the aggregate amount of $1,000,000. Pursuant to the November 6, 2013 amendment, LowCal further agreed to purchase an additional 1,000,000 restricted shares of the Company’s common stock upon receipt of the remaining funding (the “ LowCal Shares ”). Between the months of January 2014 through June 2014, the Company received the remaining funding of $1,500,000 pursuant to the second amendment of the LowCal Loan. As such, on June 2014, the amended principal balance of the LowCal Loan of $5,000,000 was fully funded. On May 13, 2014, the Company entered into a third amendment to the LowCal Loan, pursuant to which, among others, the conversion price of the LowCal Loan was further reduced from its then conversion price of $4.00 per share to $2.50 per share.

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

Table of Contents

Eos Petro, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended June 30, 2015 and 2014

(Unaudited)

In conjunction with the issuances of the first tranche of the proceeds of the LowCal Loan of $2,500,000 in 2013, the Company issued 950,000 shares of the Company’s common stock valued at $3,239,500. The Company granted, but did not issue, 400,000 of the LowCal Shares valued at $3,370,000 during the year ended December 31, 2013. These shares were issued during 2014 along with the remaining 600,000 of the LowCal Shares as a financing cost with a fair value of $7,604,000. Pursuant to the terms of the third amendment in 2014 to the LowCal Loan, the Company also granted LowCal a warrant to purchase 500,000 shares of the Company’s common stock at an exercise price of $4.00 per share valued at $7,293,171. Furthermore, the Company also determined that since the conversion prices of the notes was less than the market prices of the common stock feature upon the date of issuance or modification, a beneficial conversion feature existed on those dates. The fair value of the common shares and warrants issued, and the value of the beneficial conversion feature that arose on the date of issuance were recorded as financing costs or as a valuation discount at issuance, and had been fully amortized as of December 31, 2014. During the six months ended June 30, 2014, the Company amortized $816,660 of the LowCal Loan discount which was recorded to interest and finance costs.

On January 13, 2015, the Company entered into a fifth amendment to the Loan Agreements (the “Fifth Amendment”). As part of the Fifth Amendment, the Company and LowCal entered into the following: (i) an amended and restated LowCal Loan, still in the principal amount of $5,000,000; and (ii) a new unsecured promissory note in the principal amount of $3,250,000 (the “ Second LowCal Note ”).

Pursuant to the Fifth Amendment:

LowCal forgave approximately $667,000 of accrued interest on the LowCal Loan and eliminated all interest on the LowCal Loan going forward

$750,000, which was advanced to the Company in 2014, was recognized as included in the principal amount of the Second LowCal Note.

The cash exit fee was removed from the LowCal Loan.

The maturity date on the LowCal Loan was extended to June 30, 2015.

The Second LowCal Note shall accrue interest at an annual rate of 10% and has a maturity date of June 30, 2015, but must also be repaid upon the earlier to occur of: (i) the Company closing certain potential acquisition transactions, or (ii) the Company closing a financing for a minimum of $20,000,000.

The parties agreed that, upon repayment in full of the Second LowCal Note, LowCal will forever release, cancel and terminate all of its mortgages and any other liens against the Company.

As the Fifth Amendment reflected the culmination and documenting of transactions that occurred and were agreed to in 2014, the Company recorded the terms and provisions of the Fifth Amendment on the Company’s financial statements as of the year ended December 31, 2014, including the recording of the Second LowCal Note in the principal amount of $3,250,000 and a loss on debt extinguishment of $1,832,576.

On August 14, 2015, the Company entered into a sixth amendment to the Loan Agreements (the “Sixth Amendment”). As part of the Sixth Amendment, the maturity dates of the LowCal Loan and Second LowCal Note were extended to January 1, 2016. For further details on the terms and details of the Sixth Amendment, please see Note 13 below.

NOTE 5 – NOTES PAYABLE

In addition to the notes set forth in Note 4 above and Note 6 below, notes payable at June 30, 2015 and December 31, 2014 are as follows:

Table of Contents

Eos Petro, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended June 30, 2015 and 2014

(Unaudited)

	June 30,		December 31,
	2015		2014

Secured note payable, at 18% (1)	$	600,000	$	600,000
Note payable, at 6% (2)		250,000		250,000
Note payable, at 2%, (3)		100,000		100,000
Note payable at 4%, (4)		323,000		323,000
Note payable at 10%, (5)		150,000		0
Total	$	1,423,000	$	1,273,000

(1) On February 16, 2012, Eos entered into a Secured Promissory Note with Vatsala Sharma (“ Sharma ”) for a secured loan for $400,000 due in 60 days at an interest rate of 18% per annum. On May 9, 2012, the Company and Sharma increased the loan amount from $400,000 to $600,000. In the event the loan is not paid in full by the maturity date, Sharma will receive an additional 275,000 shares of the Company’s common stock. The loan is secured by a blanket security interest in all of Eos’ assets, and newly acquired assets, a mortgage on the Works Property, a 50% security interest in Nikolas Konstant’s personal residence, and his personally held shares in a non-affiliated public corporation. As amended, the maturity date of the Sharma loan is January 1, 2016.

(2) Effective May 22, 2012, the Company entered into a Loan Agreement with Vicki P. Rollins (“ Rollins ”) for a secured loan in the amount of $350,000 originally due on September 22, 2012. The loan is secured by a priority blanket security interest in all of the Company’s assets. When the Loan Agreement was initially entered into, the Company issued to Rollins 175,000 warrants to purchase common stock with an exercise price of $2.50. Such warrants expired on May 22, 2014. On July 1, 2014, Rollins agreed to extend the maturity date of the loan to December 31, 2014 and amend the terms of the loan so that no interest accrues from inception through repayment. The Company issued to Rollins an aggregate of 250,000 new warrants in exchange for such extension and amendment . Pursuant to subsequent amendments to the loan, the maturity date has been further extended to October 1, 2015. The balance of the note payable was $250,000 at June 30, 2015 and December 31, 2014.

(3) On October 9, 2014, the Company issued an unsecured promissory note to Ridelinks, Inc. for $200,000, with interest at 2% and a maturity date of March 15, 2015 that was extended to June 15, 2015 and includes an exit fee of $30,000. Amounts were still owing under the note as of June 15, 2015. The promissory note and exit fee can be prepaid at any time. The Company repaid $100,000 during the year ended December 31, 2014.

(4) On September 30, 2014, the Company issued an unsecured promissory note to Bacchus Investors, LLC for $323,000, with interest at 4%. The unsecured promissory note is due upon demand.

(5) On April 15, 2015, the Company issued an unsecured promissory note to Clearview Partners II, LLC for $150,000, with interest at 10%. The unsecured promissory note is due on September 15, 2015.

NOTE 6 – NOTES PAYABLE, RELATED PARTY

On April 15, 2015, the Company issued an unsecured promissory note to Plethora Enterprises, LLC (“Plethora”) for $150,000, with an interest rate of 10% per annum and due on September 15, 2015. In addition, on May 22, 2015, the Company issued another unsecured promissory notes to Plethora for $100,000, with an interest rate of 10% per annum and due on January 1, 2016. Nikolas Konstant, the Company’s CFO and Chairman of the Board is the sole member and manager of Plethora. During the quarter ended June 30, 2015, $93,040 of the April 15, 2015 note was repaid. At June 30, 2015, the aggregate balance due under the April 15, 2015 and May 22, 2015 notes was $156,960.

Table of Contents

Eos Petro, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended June 30, 2015 and 2014

(Unaudited)

NOTE 7 – ASSET RETIREMENT OBLIGATION

Changes in the Company’s asset retirement obligations were as follows:

	Three Months
	Ended		Year Ended
	June 30, 2015		December 31, 2014
Asset retirement obligation, beginning of period	$	84,102	$	76,457
Additions		-		-
Accretion expense		4,205		7,645
Asset retirement obligations, end of period	$	88,307	$	84,102

NOTE 8 – DERIVATIVE LIABILITIES

In June 2008, the FASB issued authoritative guidance on determining whether an instrument (or embedded feature) is indexed to an entity’s own stock. Under the authoritative guidance, effective January 1, 2009, instruments which do not have fixed settlement provisions are deemed to be derivative instruments. In August 2014, the Company issued warrants to purchase an aggregate of 1,775,000 shares of the Company’s common stock, to a former note holder and certain other related parties. The warrant agreements included an anti-dilution provision that would reduce the exercise price if the Company were to issue additional equities at a price below the exercise price which is in effect at the time of the issuance of the additional equities. Pursuant to ASC Topic 815, “Derivatives and Hedging”, the Company determined that these warrants met the definition of a derivative and are to be re-measured at the end of every reporting period with the change in value reported in the statement of operations.

As of December 31, 2014 and June 30, 2015, the derivative liabilities were valued using a probability weighted average Black-Scholes-Merton pricing model with the following assumptions.

	December 31,			June 30,
	2014			2015
Exercise Price	$	2.50		$	2.50
Stock Price	$	6.50		$	3.20
Risk-free interest rate		1.10	%		1.10	%
Expected life of the options (Years)		3.64			3.14
Expected volatility		188	%		179	%
Expected dividend yield		0	%		0	%
Expected forfeitures		0	%		0	%

Fair Value	$	11,039,552		$	5,102,652

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

The Company recorded an adjustment to the fair value of derivative liabilities of $5,936,900 for six months ended June 30, 2015.

Table of Contents

Eos Petro, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended June 30, 2015 and 2014

(Unaudited)

NOTE 9 - RELATED PARTY TRANSACTIONS

Plethora Enterprises, LLC

The Company has a consulting agreement with Plethora, which is solely owned by Nikolas Konstant, the Company’s chairman of the board and chief financial officer. Under the consulting agreement, for the three and six months ended June 30, 2015, the Company recorded compensation expense of $62,460 and $180,000, respectively, and for the three and six months ended June 30, 2014, the Company recorded compensation expense of $90,000 and $180,000, respectively. There were no amounts due to Mr. Konstant under the Plethora consulting agreement at June 30, 2015 and December 31, 2014, respectively.

Other

On October 3, 2011, the Company entered into an Exclusive Business Partner and Advisory Agreement with Baychester Petroleum, a Ghanaian limited liability company ("Baychester"), which owns a 10% minority interest in EAOG and PBOG. The terms of such agreement were amended in June 2014. Pursuant to the amended agreement dated June 16, 2014, the Company agreed to pay to Baychester $35,000 by September 2014 in exchange for services rendered. Moreover, commencing July 1, 2014 and continuing every month thereafter, the Company agreed to pay to Baychester a monthly consulting fee of $10,000, provided, however, that the Company reserved the right to audit and review Baychester’s provided services every three months, and, if the Company determines the services rendered are not commensurate with $10,000 a month in compensation, the Company may, in its sole and absolute discretion, upon written notice to Baychester, immediately decrease or terminate any and all remaining future monthly cash fee payments to Baychester. Finally, in the event the Ghanaian Ministry of Energy formally invites the Company to a meeting to negotiate the terms of a deal to acquire a concession in Ghana, regardless of the outcome of the meeting, the Company will pay to Baychester an additional $35,000. The Company recorded compensation expense of $0 and $20,000, respectively under the agreement with Baychester consulting agreement, for the six months ended June 30, 2015 and 2014. Pursuant to its own terms, the Exclusive Business Partner and Advisory Agreement expired on June 16, 2015.

Also see Notes 6 and 10.

NOTE 10 - STOCKHOLDERS’ DEFICIT

Stock Issuances for Services

On June 23, 2013, the Company entered into a one year consulting agreement with Hahn Engineering, Inc. (“Hahn”). Pursuant to the agreement, Hahn will be issued 2,000 restricted shares of common stock of the Company per month. While initially such monthly issuances were capped at 24,000 shares, in June 2014 the parties agreed to continue the consulting agreement month to month and to continue to provide 2,000 restricted shares of common stock of the Company to Hahn each such month. At June 30, 2015, the consulting agreement was still in effect and, during the six months ended June 30, 2015, Hahn received 12,000 restricted shares of common stock of the Company valued at $56,479 which was recorded as consulting expense.

Private Share Sale and Option Agreement

On April 6, 2015, and as subsequently amended on May 6, 2015, Plethora entered into an agreement with Jeff Ahlholm and Lloyd Brian Hannan, the co-owners of [AGRA], pursuant to which Plethora sold 376,500 of its shares of the Company’s restricted common stock to Mr. Ahlholm, and 376,500 shares to Mr. Hannan. Nikolas Konstant, our CFO and Chairman of the Board is the sole member and manager of Plethora. Accordingly, the difference between the fair value of the shares and the sales price to the buyers of $3,675,000 was recognized as a cost during the quarter ended June 30, 2015. If certain performance conditions are met by June 27, 2015, Mr. Ahlholm and Mr. Hannan had the option to purchase up to an additional 2,500,000 shares of the Company’s restricted common stock from Plethora. The conditions set forth in the agreement for Mr. Ahlholm and Mr. Hannan to purchase up to an additional 2,500,000 shares were not met as of June 27, 2015, therefore, no value has been recorded for this option.

Table of Contents

Eos Petro, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended June 30, 2015 and 2014

(Unaudited)

NOTE 11 - STOCK OPTIONS AND WARRANTS

Option Activity

A summary of the option activity is presented below:

					Weighted
			Weighted		Average
			Average		Remaining		Aggregate
	Number of		Exercise		Contractual		Intrinsic
	Options		Price ($)		Life (in years)		Value ($)
Outstanding, December 31, 2014		1,300,000		2.50		3.81		5,200,000
Granted		25,000		2.50
Exercised		-
Forfeited/Canceled		-
Outstanding, June 30, 2015		1,325,000		2.50		3.33		927,500
Exercisable, June 30, 2015		1,325,000		2.50		3.33		927,500

The following table summarizes information about options outstanding at June 30, 2015:

Options Outstanding
		Weighted	Weighted
		Average	Average
Exercise	Number of	Remaining	Exercise
Price ($)	Shares	Life (Years)	Price ($)
2.50	1,325,000	3.33	2.50

The following table summarizes information about options exercisable at June 30, 2015:

Options Exercisable
		Weighted	Weighted
		Average	Average
Exercise	Number of	Remaining	Exercise
Price ($)	Shares	Life (Years)	Price ($)
2.50	1,325,000	3.33	2.50

On February 11, 2015, Sudhir Vasudeva was granted an option to purchase 25,000 restricted shares of the Company’s common stock in exchange for his services as a director of the Company. Such options were valued at $98,226 using a Black-Scholes valuation model, vested fully on the date of issuance, have an exercise price of $2.50 per share and expire on May 1, 2016. Furthermore, on February 11, 2015, the Company extended the expiration date of an aggregate of 100,000 options which had previously been granted and vested to certain directors of the Company at an exercise price of $2.50 per share, and which were set to expire on May 1, 2015. As extended, such options now also expire on May 1, 2016. The value of the extension of the options was calculated as $99,684 using a Black-Scholes valuation model. The assumptions used in calculating the fair value of options and extensions granted using the Black-Scholes option- pricing model for options are as follows:

Table of Contents

Eos Petro, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended June 30, 2015 and 2014

(Unaudited)

Expected life of 1.22 years;

Volatility of 182%;

Dividend yield of 0%; and

Risk free interest rate of 1.10%.

During the three and six months ended June 30, 2015, the Company recorded $2,237,751 and $4,475,502, respectively, of share based compensation relating to the vesting of other previously granted options. During the three and six months ended June 30, 2014, the Company recorded $483,977 and $967,954 of share based compensation. As of June 30, 2015, there is no unamortized balance related to future stock based compensation for options previously granted.

Warrant Activity

A summary of warrant activity is presented below:

					Weighted
			Weighted		Average
			Average		Remaining		Aggregate
	Number of		Exercise		Contractual		Intrinsic
	Warrants		Price ($)		Life (in years)		Value ($)
Outstanding, December 31, 2014		14,577,992		4.69		1.96		36,008,468
Granted		1,625,000		2.52
Exercised		-
Forfeited/Canceled		-
Outstanding, June 30, 2015		16,202,992		3.96		1.72		5,430,094
Exercisable, June 30, 2015		11,532,992		3.40		2.27		5,430,094

The following tables summarize information about warrants outstanding at June 30, 2015:

Warrants Outstanding
				Weighted		Weighted
				Average		Average
Exercise		Number of		Remaining		Exercise
Price ($)		Shares		Life (Years)		Price ($)
	2.50		7,084,992		2.51		2.50
	3.00		2,353,000		1.07		3.00
	4.00		575,000		2.25		4.00
	5.35		4,670,000		0.37		5.35
	6.00		20,000		1.84		6.00
	8.00		1,500,000		3.03		8.00
			16,202,992

Table of Contents

Eos Petro, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended June 30, 2015 and 2014

(Unaudited)

The following table summarizes information about warrants exercisable at June 30, 2015:

Warrants Exercisable
				Weighted		Weighted
				Average		Average
Exercise		Number of		Remaining		Exercise
Price ($)		Shares		Life (Years)		Price ($)
	2.50		7,084,992		2.51		2.50
	3.00		2,353,000		1.07		3.00
	4.00		575,000		2.25		4.00
	6.00		20,000		1.84		6.00
	8.00		1,500,000		3.03		8.00
			11,532,992

DVIBRI

On August 26, 2013, the Company engaged DVIBRI, LLC (“DVIBRI”) as a consultant to render financial advice pursuant to a Consulting Agreement. The initial term of DVIBRI's consulting services, pursuant to an amendment to the Consulting Agreement effective as of February 3, 2014, expired on February 28, 2014. The Company issued 20,000 shares valued at $286,000 to DVIBRI on February 21, 2014 as compensation for services provided under the Consulting Agreement.

After the expiration of the initial Consulting Agreement, the Company and DVIBRI entered into a new Consulting Agreement, effective as of March 1, 2014, for the provision of additional consulting services for a one year period. As compensation for the services to be provided, the Company agreed to issue to DVIBRI the following: (i) $10,000 of monthly compensation, payable one half each month with the remainder payable in one lump sum at the end of the term; and (ii) a warrant to purchase 199,992 shares of the Company’s common stock with 16,666 warrants vesting monthly.

The warrants have an exercise price of $2.50 per share and expire on June 30, 2017. The Company expensed $150,224 for the six months ended June 30, 2015. The fair value of the 33,332 warrants that vested during the six months ended June 30, 2015 was determined to be using the Black-Scholes option pricing model with the following assumptions:

Expected life of 2.25 years

Volatility of 182%;

Dividend yield of 0%;

Risk free interest rate of 1.10%

Jerry Astor

On February 12, 2015, in exchange for financial advisory services provided, the Company issued to Jerry Astor two warrants to purchase an aggregate of 100,000 restricted shares of the Company’s common stock. The exercise price of 50,000 warrants is $2.50 per share, and the exercise price of the other 50,000 warrants is $3.00 per share. All of the warrants vested and became exercisable upon issuance and will expire on February 12, 2020.

The fair value of the 100,000 warrants was determined to be $485,078 using the Black-Scholes option pricing model with the following assumptions:

Expected life of 5 years

Volatility of 182%;

Dividend yield of 0%;

Risk free interest rate of 1.10%

Table of Contents

Eos Petro, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended June 30, 2015 and 2014

(Unaudited)

GEM Global Yield Fund

Included in the warrant table above are 4,670,000 warrants granted to GEM and 590 Capital Partners in 2012 that have not yet vested as follows:

The Company issued a warrant to purchase 2,335,000 shares of common stock of the Company to GEM at an exercise price of $5.35 per share ( the “ GEM C Warrant ”). The GEM C Warrant will vest upon either of the following dates: (i) the date that the Company, or a subsidiary or affiliate of the Company, and the Ghanaian Ministry of Energy receive ratification from the Ghanaian Parliament for acquiring a block concession for oil and gas exploration; or (ii) the Company or a Subsidiary closes a deal to acquire assets having a cost greater than $40,000,000. The Company may elect to shorten the term of the GEM C Warrant by moving the expiration date to the date six months (plus any additional days added if the underlying shares remain unregistered after 270 days) from the day that all of the following conditions have been satisfied: (i) either of the preconditions to vesting set forth above have been satisfied; (ii) the Company has publicly announced the ratification from the Ghanaian parliament; (iii) the shares issuable upon exercise of the GEM C Warrant are subject to an effective registration statement; and (iv) the Company provides notice to GEM of its election to shorten the term within twenty business days of the last of the conditions in (i), (ii) and (iii) to occur. These options have not vested as of June 30, 2015.

The Company also granted a warrant to purchase 2,335,000 shares of common stock of the Company, par value $0.0001 per share, to 590 Partners Capital, LLC at an exercise price of $5.35 per share (the “ 590 Partners C Warrant ”). All of the terms in the 590 Partners C Warrant for vesting, exercise, expiration and anti-dilution are identical to those in the GEM C Warrant described above. These options have not vested as of June 30, 2015.

AGRA and BAS Agreements

Pursuant to a consulting agreement effective as of August 1, 2013, as subsequently amended from time to time (the “BAS Agreement ”), between the Company, [AGRA Capital, LLC (“ AGRA ”)] and BA Securities, LLC (“ BAS ”), AGRA and BAS agreed to provide certain financial advisory services to the Company.

On April 6, 2015 the Company entered into an agreement (“ Agreement ”) with Mr. Konstant, AGRA, BAS, Jeff Ahlholm, and Lloyd Brian Hannan (AGRA, BAS, Mr. Ahlholm and Mr. Hannan are collectively referred to herein as “ BAS and Agents ”). The Agreement terminated the BAS Agreement in its entirety. The Agreement further provides that, in the event that the Company completes certain acquisitions or financings on or prior to April 7, 2017, then additional cash and warrant compensation will be paid to BAS and Agents. Further, in consideration for advisory services previously rendered, the Company issued an aggregate of 1,500,000 warrants to BAS and Agents, all vesting immediately with an exercise price of $2.50 per share and an expiration date of May 1, 2019. The fair value of the warrants was determined to be $7,307,825 using a Black-Scholes model. Pursuant to the Agreement, the Company also extended the expiration date of another 600,000 warrants currently held by BAS and Agents to May 1, 2019, and reduced the exercise price from $4.00 per share to $2.50 per share. The fair value of the extension and modification of these warrants was determined to be $121,339. The Company used the following assumptions in determining the fair value:

Expected life of 3.32 to 4.07 years

Volatility of 182%;

Dividend yield of 0%;

Risk free interest rate of 1.10%

Table of Contents

Eos Petro, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended June 30, 2015 and 2014

(Unaudited)

Rick Darnell

On May 19, 2015, the Company issued a warrant to purchase 25,000 restricted shares of the Company’s common stock to Rick Darnell in exchange for consulting services provided. The warrant vested immediately, has a per share exercise price of $2.50 and expires on May 19, 2018.

The fair value of the 25,000 warrants was determined to be $92,818 using the Black-Scholes option pricing model with the following assumptions:

Expected life of 3 years

Volatility of 179%;

Dividend yield of 0%;

Risk free interest rate of 1.01%

NOTE 12 - COMMITMENTS AND CONTINGENCIES

Legal Proceedings

On August 2, 2012, Eos executed a series of agreements with 1975 Babcock, LLC (“ Babcock ”) in order to secure a $300,000 loan (the “ Babcock Loan ”). As of August 3, 2012, Eos also leased 7,500 square feet of office space at 1975 Babcock Road in San Antonio, Texas (the “ Babcock Lease ”) from Babcock. On November 7, 2013, the Company, Eos and Mr. Nikolas Konstant (the Company’s Chairman of the Board and Chief Financial Officer) entered into an agreement for the payment and satisfaction of the Babcock Loan and Babcock Lease, as amended, and all other related agreements. Under the terms and conditions of the agreement, in order to pay off and satisfy the Babcock Loan in full and void the Babcock Lease, including any rent then owed and payable, in its entirety, Eos agreed to pay $330,000. In addition, the Company agreed to issue an aggregate of 70,000 restricted shares of the Company’s common stock to certain affiliates of Babcock, which were issued on January 13, 2014.

The Company has been made aware that a complaint has been filed against the Company and Nikolas Konstant by an entity alleging to be the landlord of the Babcock Lease. The complaint purportedly asks for $149,625 in unpaid rent and late fees for the Babcock Lease, although the Company has not yet been served with a copy of the complaint. The Company denies any breach or the Babcock Lease or other wrongdoing on its part and will vigorously defend against such claims if it is ever served with the complaint.

As discussed further down in this Note 12, Dune has threatened to bring litigation to collect the Parent Termination Fee, as defined in the Dune Merger Agreement. The Company has accordingly recorded a liability for $5,500,000 related to the Parent Termination Fee. No lawsuit has been filed to date against the Company for the Parent Termination Fee, and the Company would vigorously defend itself, should any action ever be brought. The Company believes that it has equitable and legal defenses against payment of all or a portion of the Parent Termination Fee.

Dune Merger Agreement

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

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

Table of Contents

Eos Petro, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended June 30, 2015 and 2014

(Unaudited)

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

GEM Global Yield Fund

The Company and GEM Global Yield Fund, a member of the Global Emerging Markets Group (“ GEM ”), entered into a financing commitment on August 31, 2011, whereby GEM would provide and fund the Company with up to $400 million dollars (the “ Commitment ”), for the Company’s African acquisition activities.

The Company and GEM formalized the Commitment by way of a definitive Common Stock Purchase Agreement and Registration Rights Agreement, both dated as of July 11, 2013 (collectively referred to as the “ Commitment Agreements ”). Pursuant to the Commitment Agreements and subject to certain restrictions contained therein, the Commitment may be drawn down at the Company’s option as the Company issues shares of common stock to GEM in return for funds.

Under the agreed upon structure, and subject to certain prerequisites, the Company controls the timing and amount of any drawdown, and the funds withdrawn by the Company may be used to acquire any oil and gas assets the Company identifies, publicly or privately owned, national or international, as well as for working capital purposes.

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

Financial Consulting Agreement

On June 16, 2015, the Company entered into an agreement with a financial advisor to provide advisory services in connection with potential buy-side and capital raising activities of the Company. The agreement provides for a non-refundable monthly payment to the financial advisor. At the close of certain transactions, the financial advisor is entitled to receive from the Company certain cash success fees. The monthly fees are credited against any cash success fees which become payable. If the Company terminates without cause on or before the four month anniversary of the execution of the agreement, the Company must pay the financial advisor a break-up fee in an amount equal to three monthly payments, which amount shall be creditable, without duplication, against any cash success fees received by the financial advisor under the agreement. In addition, in the event that certain transactions are consummated within a specified period of time after the termination for the agreement for any reason, the financial advisor shall also be paid the entire amount of any applicable cash success fee it otherwise would have been entitled to receive if the agreement were still in effect.

Table of Contents

Eos Petro, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended June 30, 2015 and 2014

(Unaudited)

NOTE 13– SUBSEQUENT EVENTS

Private Share Sale and Additional Financing

On July 13, 2015, Plethora, whose sole member is Nikolas Konstant, the Company’s Chairman and CFO, sold 1,050,000 shares to LowCal in a private sale. Plethora loaned the proceeds from such sale to the Company, and the Company accordingly issued to Plethora an unsecured promissory note dated July 13, 2015for $350,000, with an interest rate of 10% per annum and due on January 1, 2016. Accordingly, the difference between the fair value of the shares and the sales price to the buyers of $1,228,500 will be recognized as a cost during the quarter ended September 30, 2015.

On August 5, 2015, Plethora, sold an aggregate of 720,000 shares of common stock in private resales, for aggregate proceeds of $270,000. 360,000 of such shares were sold to two new investors, while the remaining 360,000 shares were sold to DVIBRI. Plethora then loaned all $270,000 in sale proceeds to the Company. The Company accordingly issued two promissory notes on August 5, 2015 for an aggregate total of $270,000, payable to Plethora. Both notes accrue simple interest at 10% and have maturity dates of January 1, 2016. Accordingly, the difference between the fair value of the shares and the sales price to the buyers of $2,646,000 will be recognized as a cost during the quarter ended September 30, 2015.

Hahn Shares

On July 23, 2015, Hahn received 2,000 restricted shares of the Company’s common stock in exchange for consulting services provided. On August 11, 2015, the Company and Hahn mutually agreed to terminate Hahn’s June 23, 2013 consulting agreement.

DVIBRI public relations services

On July 14, 2015, the Company paid a $100,000 retainer to DVIBRI, LLC in exchange for the provision of public relations, media and other general advisory services through January 31, 2016.

Advisory Votes on Executive Compensation

At the annual meeting of stockholders of the Company, held on June 25, 2015, the Company's stockholders were asked to make a non-binding advisory vote on the frequency for seeking executive compensation advisory votes in the future. The Company's stockholders voted to recommend a non-binding advisory vote on this issue every three years. The results of the vote were disclosed in the Company's Current Report Form 8-K, filed on June 30, 2015.

At a meeting of the Board of Directors on August 12, 2015, the Board voted to adopt a policy to hold a stockholder non-binding advisory vote on executive compensation every third year until the next required vote on the frequency of non-binding advisory votes on executive compensation.

Sixth Amendment to LowCal Agreements

On August 14, 2015, the Company entered into the Sixth Amendment to the Loan Agreements with LowCal and LowCo [EOS/Petro], LLC (“LowCo”). Pursuant to the terms thereof:

The maturity dates of the LowCal Loan and Second LowCal Note were extended to January 1, 2016;

The exercise price of 500,000 warrants originally issued to LowCo on August 14, 2014, were reduced from $4.00 to $2.00, and the expiration date was extended from August 14, 2018 to January 1, 2019.

Table of Contents

Eos Petro, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

For the Six Months Ended June 30, 2015 and 2014

(Unaudited)

As consideration, the Company issued to LowCo 75,000 restricted shares of its common stock, as well as an additional warrant to purchase 500,000 shares of restricted common stock of the Company at an exercise price of $2.00, vesting immediately and expiring January 1, 2019.

The charge to earnings during the quarter ended September 30, 2015 will be as follows:

$275,560 for the repricing and extending the expiration date of 500,000 previously issued warrants

$1,936,558 for the issuance of an additional 500,000 new warrants and

$311,250 for the issuance of 75,000 shares of common stock.

Table of Contents

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

Forward Looking Statements

This Report contains projections, expectations, beliefs, plans, objectives, assumptions, descriptions of future events or performances and other similar statements that constitute “forward looking statements” that involve risks and uncertainties, many of which are beyond our control. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “will continue,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “would” and “outlook,” and similar expressions. All statements, other than statements of historical facts, included in this Report regarding our expectations, objectives, assumptions, strategy, future operations, financial position, estimated revenue or losses, projected costs, prospects and plans and objectives of management are forward-looking statements. All forward-looking statements speak only as of June 30, 2015. Our actual results could differ materially and adversely from those anticipated in such forward-looking statements as a result of certain factors, including, but not limited to, those set forth in this Report. Important factors that may cause actual results to differ from projections include, but are not limited to, for example: adverse economic conditions, inability to raise sufficient additional capital to operate our business, delays, cancellations or cost overruns involving the development or construction of oil wells, the vulnerability of our oil-producing assets to adverse meteorological and atmospheric conditions, unexpected costs, lower than expected sales and revenues, and operating defects, adverse results of any legal proceedings, the volatility of our operating results and financial condition, inability to attract or retain qualified senior management personnel, expiration of certain governmental tax and economic incentives, and other specific risks that may be referred to in this Report. It is not possible for management to predict all of such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained or implied in any forward-looking statement. We undertake no obligation to update any forward-looking statements or other information contained herein. Stockholders and potential investors should not place undue reliance on these forward-looking statements. Although we believe that our plans, intentions and expectations reflected in or suggested by the forward-looking statements in this Report are reasonable, we cannot assure stockholders and potential investors that these plans, intentions or expectations will be achieved. These cautionary statements qualify all forward-looking statements attributable to us or persons acting on our behalf.

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

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

Overview

On October 12, 2012, pursuant to the Merger Agreement, entered into by and between the Company, Eos and Merger Sub, dated July 16, 2012, Merger Sub merged into Eos, with Eos being the surviving entity in the Merger. As a result of the Merger, Eos became a wholly owned subsidiary of the Company. Upon the closing of the Merger, each issued and outstanding share of common stock of Eos was automatically converted into the right to receive one share of our Series B preferred stock. At the closing, we issued 37,850,044 shares of Series B preferred stock to the former Eos stockholders, subject to the rights of the stockholders of Eos to exercise and perfect their appraisal rights under applicable provisions of Delaware law to accept cash in lieu of shares of the equity securities of the Company.

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

We are presently focused on the exploration, development, mining, operation and management of medium-scale oil and gas assets. Our primary activities as of June 30, 2015, have centered on organizing activities but have also included the acquisition of existing assets, evaluation of new assets to be acquired, and pre-development activities for existing assets.

Table of Contents

Our continuing development of oil and gas projects will require the acquisition of land rights, mining equipment and associated consulting activities required to convert the fields into revenue generating assets. Generally, financing is available for these initial project costs where such financing is secured by the assets themselves. From time to time however, our activities may require senior credit facilities, convertible securities and the sale of common and preferred equity at the corporate level.

In connection with our business, we will likely engage consultants with expertise in the oil and gas industries, project financing and oil and gas operations.

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

On September 17, 2014, we entered the Dune Merger Agreement with Dune. Pursuant to the Dune Merger Agreement, we agreed to conduct a tender offer to purchase all of Dune’s issued and outstanding shares of common stock, at $0.30 per share. In addition, we agreed to provide Dune with sufficient funds to pay in full and discharge all of Dune’s outstanding indebtedness and agreed to assume liability for all Dune trade debt, as well as fees and expenses related to the Dune Merger Agreement and the transactions contemplated therein. Following the successful completion of the offer, and subject to the terms and conditions of the Dune Merger Agreement, the Company would have been merged with and into Dune, with Dune surviving as a direct wholly-owned subsidiary of the Company.

At the commencement of the tender offer, we estimated that the total amount of cash required to complete the transactions contemplated by the Dune Merger Agreement would be approximately $140 million dollars, including: (i) approximately $22 million to purchase all of the outstanding shares of Common Stock, (ii) approximately $11 million for the payment of any fees, expenses and other related amounts incurred in connection with the tender offer and the Dune merger, and (iii) approximately $107 million to pay in full and discharge all of Dune’s outstanding indebtedness (other than accrued trade debt of Dune, which would have been assumed by the surviving entity in the merger). The tender offer was not subject to a financing contingency. The tender offer commenced on October 9, 2014 and ultimately expired on February 27, 2015.

After the expiration of the tender offer, Dune was notified by the Company that shares of Dune’s common stock would be returned to the tendering stockholders. On March 4, 2015, Dune provided us with notice of its decision to terminate the Dune Merger Agreement in accordance with Section 8.1(c)(i) of the Dune Merger Agreement.

Pursuant to Section 8.1(c)(i) of the Dune Merger Agreement, Dune’s letter terminating the Dune Merger Agreement demanded the Parent Termination Fee (as defined in the Dune Merger Agreement) of $5,500,000 in cash, and reimbursement for certain unidentified expenses incurred by Dune. Dune has threatened to bring litigation to collect these amounts in connection with its contention that the Company breached the Dune Merger Agreement and is entitled to the Parent Termination Fee. The Company has accordingly recorded a liability for $5,500,000 related to the Parent Termination Fee. No lawsuit has been filed to date against the Company for the Parent Termination Fee, and the Company would vigorously defend itself, should any action ever be brought. The Company believes that it has equitable and legal defenses against payment of all or a portion of the Parent Termination Fee.

Comparison of the three months ended June 30, 2015 to June 30, 2014.

	For the Three Months Ended June 30,
	2015						2014
				% of						% of			Dollar			Percentage
	Amount			Revenue			Amount			Revenue			change			Change
Revenue	$	70,900			100.0	%	$	323,121			100.0	%		(252,221	)		-78.1	%
Lease operating expense		53,228			75.1	%		120,271			37.2	%		(67,043	)		-55.7	%
General and administrative expenses		6,702,470			9453.4	%		7,017,399			2171.8	%		(314,929	)		-4.5	%
Structuring fee		0			0.0	%		0			0.0	%		0			N/A
Termination fee		0			0.0	%		0			0.0	%		0			N/A
Other income (expense), net		3,100,947			4373.7	%		(5,904,405	)		-1827.3	%		9,005,352			-152.5	%
Net loss	$	(3,583,851	)		-5054.8	%	$	(12,718,954	)		-3936.3	%		9,135,103			-71.8	%

Table of Contents

Revenue

We primarily generate revenue from the operation of any oil and gas properties that we own or lease and the sale of hydrocarbons delivered to a customer when that customer has taken title. For the three months ended June 30, 2015 and 2014, our primary revenue has come from one source, the Works Property, located in Southern Illinois. Revenue for the three months ended June 30, 2015 and 2014 was $70,900 and $323,121, respectively. The decrease in revenues for the three months ended June 30, 2015 is due to a decrease in the price per barrels sold and a decrease in the number of barrels sold. For the three months ended June 30, 2015, we sold 1,548 barrels at an average price of $45.80 per barrel, compared to 3,383 barrels at an average price of $95.50 per barrel for the three months ended June 30, 2014. The decrease in the barrels produced in 2015 compared to 2014 is due to shutting down the production of the wells in 2015 due to cold weather related issues.

Lease operating expenses

Lease operating expenses for oil and gas assets were primarily made up of the Works Property. Lease operating expenses for the three months ended June 30, 2015 and 2014 was $53,228 and $120,271, respectively. The decrease in operating expenses was due to lower production in 2015.

General and administrative expenses

General and administrative expenses for the three months ended June 30, 2015 and 2014 were $6,702,470 and $7,017,339, respectively. Our general and administrative expenses have primarily been made up of professional fees (legal and accounting services) required for our organizing activities, acquisition agreements and development agreements. We recognized approximately $411,000, $3,825,000, and $2,318,000 in professional fees, consulting fees and compensation, respectively for the three months ended June 30, 2015. We recognized approximately $77,000, $6,212,000, and $605,000 in professional fees, consulting fees and compensation, respectively for the three months ended June 30, 2014. Other expenses included are temporary professional staffing, rent, utilities, and other overhead expenses. During the three months ended June 30, 2015, we recorded compensation expense of $2,238,000 related to options that were issued to our CEO in August 2014 and vesting though June 2015. In addition, during the three months ended June 30, 2015, we recognized financing cost of $3,675,000 due to our majority stockholder selling shares of common stock to a consultant at a significant discount to market. During the three months ended June 30, 2014 we recorded consulting expense of $4,902,000 related to the amended GEM warrants and $933,000 related to the DVBRI warrants. During the three months ended June 30, 2014, we also recorded compensation expense of $484,000 related to options that were issued to our CEO in June 2013 and vesting though June 2014.

Other income (expenses)

For the three months ended June 30, 2015, net other income was $3,100,947 consisting of interest and finance costs of $250,933 and a gain on change in fair value of derivative liability of $3,351,880. During the three months ended June 30, 2014, net other expenses consisted of interest and finance costs of $5,904,405 During the three months ended June 30, 2014 interest and finance costs was primarily the amortization of the fair value of the beneficial conversion features and expensing of the fair value of shares issued in connection with the LowCal financing.

Table of Contents

Comparison of the six months ended June 30, 2015 to June 30, 2014.

	For the Six Months Ended June 30,
	2015						2014
				% of						% of			Dollar			Percentage
	Amount			Revenue			Amount			Revenue			change			Change
Revenue	$	130,959			184.7	%	$	426,827			132.1	%		(295,868	)		-69.3	%
Lease operating expense		64,657			91.2	%		185,529			57.4	%		(120,872	)		-65.1	%
General and administrative expenses		17,584,220			24801.4	%		18,061,358			5589.7	%		(477,138	)		-2.6	%
Structuring fee		4,000,000			5641.7	%		0			0.0	%		4,000,000			N/A
Termination fee		5,500,000			7757.4	%		0			0.0	%		5,500,000			N/A
Other income (expense), net		5,545,110			7821.0	%		(11,066,235	)		-3424.8	%		16,611,345			-150.1	%
Net loss	$	(21,472,808	)		-30286.0	%	$	(28,886,295	)		-8939.8	%		7,413,487			-25.7	%

Revenue

We primarily generate revenue from the operation of any oil and gas properties that we own or lease and the sale of hydrocarbons delivered to a customer when that customer has taken title. For the six months ended June 30, 2015 and 2014, our primary revenue has come from one source, the Works Property, located in Southern Illinois. Revenue for the six months ended June 30, 2015 and 2014 was $130,959 and $426,827, respectively. The decrease in revenues for the six months ended June 30, 2015 is due to a decrease in the price per barrels sold and a decrease in the number of barrels sold. For the six months ended June 30, 2015, we sold 2,818 barrels at an average price of $46.47 per barrel, compared to 4,509 barrels at an average price of $94.67 per barrel for the six months ended June 30, 2014. The decrease in the barrels produced in 2015 compared to 2014 is due to shutting down the production of the wells in 2015 due to cold weather related issues.

Lease operating expenses

Lease operating expenses for oil and gas assets were primarily made up of the Works Property. Lease operating expenses for the six months ended June 30, 2015 and 2014 was $64,657 and $185,529, respectively. The decrease in operating expenses was due to lower production in 2015 and a refund of $33,223 received from our former operator during the quarter ended March 31, 2015.

General and administrative expenses

General and administrative expenses for the six months ended June 30, 2015 and 2014 were $17,584,220 and $18,061,358, respectively. Our general and administrative expenses have primarily been made up of professional fees (legal and accounting services) required for our organizing activities, acquisition agreements and development agreements. We recognized approximately $526,000, $11,800,000, and $4,910,000 in professional fees, consulting fees and compensation, respectively for the six months ended June 30, 2015. We recognized approximately $250,000, $16,330,000, and $1,201,000 in professional fees, consulting fees and compensation, respectively for the six months ended June 30, 2014. Other expenses included are temporary professional staffing, rent, utilities, and other overhead expenses. During the six months ended June 30, 2015, we recorded compensation expense of $4,476,000 related to options that were issued to our CEO in August 2014 and vesting though June 2015. Also, during the six months ended June 30, 2015, we recognized financing cost of $3,675,000 due to our majority stockholder selling shares of common stock to a consultant at a significant discount to market. In addition, during the six months ended June 30, 2015, we recorded consulting fees of approximately $8,036,000 associated with the issuance of warrants for consulting services. During the six months ended June 30, 2014 we recorded consulting expense of $14,305,000 related to the amended GEM warrants and $933,000 related to the DVBRI warrants. During the six months ended June 30, 2014, we also recorded compensation expense of $968,000 related to options that were issued to our CEO in June 2013 and vesting though June 2014.

Table of Contents

Structuring fee

During the six months ended June 30, 2015, we recorded a charge to earnings related to a structuring fee of $4 million due to GEM Global Yield Fund. There was no such charge during the six months ended June 30, 2014.

Acquisition termination fee

During the six months ended June 30, 2015, we recorded a charge to earnings of $5.5 million related to the Parent Termination Fee associated with our proposed acquisition of Dune. There was no such charge during the six months ended June 30, 2014.

Other income (expenses)

For the six months ended June 30, 2015, net other income was $5,545,110 consisting of interest and finance costs of $391,790 and a gain on change in fair value of derivative liability of $5,936,900. During the six months ended June 30, 2014, net other expenses consisted primarily of interest and finance costs of $10,456,615 and loss debt extinguishment of $609,620. During the six months ended June 30, 2014 interest and finance costs was primarily the amortization of the fair value of the beneficial conversion features and expensing of the fair value of shares issued in onnection with the LowCal financing. Also, we recorded a loss on debt extinguishment of $609,620 for the six months ended June 30, 2014 which is comprised of a loss on debt extinguishment of $639,620 related to the RT Holdings note payable offset by a $30,000 gain on debt extinguishment on the Babcock note payable.

Liquidity and Capital Resources

Since our inception, we have financed operations through consulting and service agreements with limited cash requirements, made up of stock compensation and various debt instruments as more fully described in Stock Based Compensation, Commitments and Contingencies, Material Agreements and Related Party Transactions. Our business calls for significant expenses in connection with the operation and acquisition of oil and gas related projects. In order to maintain our corporate operations and to significantly expand our operations and corresponding revenue from our Works Property, we must raise a significant amount of working capital and capital to fund improvements to the Works Property. As of June 30, 2015, we had cash in the amount of $2,251. At June 30, 2015, we had total liabilities of $26,676,811. Our current financial resources are not sufficient to allow us to meet the anticipated costs of our business plan for the next 12 months and we will require additional financing in order to fund these activities.

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

To finance our operations, we have recently issued the following notes:

Table of Contents

Pursuant to the Fifth Amendment:

LowCal forgave approximately $667,000 of accrued interest on the LowCal Loan and eliminated all interest on the LowCal Loan going forward

$750,000, which was advanced to the Company in 2014, was recognized as included in the principal amount of the Second LowCal Note.

The cash exit fee was removed from the LowCal Loan.

The maturity date on the LowCal Loan was extended to June 30, 2015.

The parties agreed that, upon repayment in full of the Second LowCal Note, LowCal will forever release, cancel and terminate all of its mortgages and any other liens against the Company.

On August 14, 2015, the Company entered into the Sixth Amendment to the Loan Agreements. Pursuant to the terms thereof:

The maturity dates of the LowCal Loan and Second LowCal Note were further extended to January 1, 2016.

As consideration, the exercise price of 500,000 warrants originally issued to LowCo on August 14, 2014, were reduced from $4.00 to $2.00, and the expiration date was extended from August 14, 2018 to January 1, 2019.

As additional consideration, the Company issued to LowCo 75,000 restricted shares of its common stock, as well as an additional warrant to purchase 500,000 shares of restricted common stock of the Company at an exercise price of $2.00, vesting immediately and expiring January 1, 2019.

On April 15, 2015 we issued an unsecured promissory notes Clearview Partners II, LLC. The promissory note has a principal amount of $150,000, with an interest rate of 10% per annum. The maturity date is September 15, 2015.

Also, on April 15, 2015, we issued an unsecured promissory notes to Plethora Enterprises, LLC (“Plethora”) for $150,000, with an interest rate of 10% per annum and due on September 15, 2015. In addition, on May 22, 2015, we issued another unsecured promissory notes to Plethora for $100,000, with an interest rate of 10% per annum and due on January 1, 2016. Nikolas Konstant, our CFO and Chairman of the Board is the sole member and manager of Plethora. During the quarter ended June 30, 2015, $93,040 of the April 15, 2015 note was repaid. At June 30, 2015, the balance due under the April 15, 2015 and May 22, 2015 notes were $56,960 and $100,000, respectively.

On July 13, 2015, the Company issued an unsecured promissory notes to Plethora for $350,000, with an interest rate of 10% per annum and due on January 1, 2016.

On August 5, 2015, we issued two promissory notes for an aggregate total of $270,000, payable to Plethora. Both notes accrue simple interest at 10% and have maturity dates of January 1, 2016.

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

In addition to funding our operations, we may become liable to pay certain other contractual obligations, such as a structuring fee to GEM of $4,000,000. Pursuant to the GEM Commitment Agreements, the Company must use commercially reasonable efforts to uplist to the NYSE, NASDAQ or AMEX stock exchange within 270 days of July 11, 2013, and then to file a registration statement covering the shares and warrants referenced in the Commitment Agreements within 30 days of uplisting. The Company further agreed to pay to GEM a Structuring Fee equal to $4 million, which must be paid on the 18 month anniversary of July 11, 2013 regardless of whether the Company has drawn down from the Commitment at that time. At the Company’s election, the Company may elect to pay the structuring fee in common stock of the Company at a per share price equal to ninety percent of the average closing trading price of the Company’s common stock for the thirty-day period immediately prior to the 18 month anniversary of July 11, 2013. As of January 11, 2015, the 18 month anniversary date of the agreement, the Company had not met this requirement and may now become liable for payment of this structuring fee to GEM.

Table of Contents

In connection with the asserted claim by Dune of the alleged breach of contract by the Company of the Dune Merger Agreement, upon a termination of such agreement, a demand letter was received from Dune on March 4, 2015 demanding payment of $5.5 million in the form of the Parent Termination Fee, plus additional costs and expenses which were undefined. The Company has recorded this liability of $5.5 million as of June 30, 2015. No lawsuit has been filed to date against the Company for the Parent Termination Fee, and the Company would vigorously defend itself, should any action ever be brought. The Company believes that it has equitable and legal defenses against payment of all or a portion of the Parent Termination Fee.

Obtaining additional financing is subject to a number of other factors, including the market prices for the oil and gas. These factors may make the timing, amount, terms or conditions of additional financing unavailable to us. If adequate funds are not available or if they are not available on acceptable terms, our ability to fund our business plan could be significantly limited and we may be required to suspend our business operations. We cannot assure you that additional financing will be available on terms favorable to us, or at all. The failure to obtain such a financing would have a material, adverse effect on our business, results of operations and financial condition.

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

For these reasons, the report of our auditor accompanying our audited financial statements for the year ended December 31, 2014 included a statement that these factors raise substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern will be dependent on our raising of additional capital and the success of our business plan.

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

Cash Flows

Operating Activities

Net cash used in operating activities was $437,919 and $737,385 for the six months ended June 30, 2015 and 2014, respectively. The net cash used in operating activities was primarily due to the costs incurred with the organizing activities more fully described above.

Investing Activities

Net cash used in investing activities was $0 and $0 for the six months ended June 30, 2015 and 2014, respectively.

Financing Activities

Net cash provided by financing activities was $306,960 and $1,075,000 for the six months ended June 30, 2015 and 2014, respectively. Cash generated from financing activities for the six months ended June 30, 2015 was primarily from issuing promissory notes to related and unrelated parties totaling of $400,000 offset by repayment of related party promissory notes of $93,040. Cash generated from financing activities for the six months ended June 30, 2014 was primarily from issuing our convertible notes of $1,500,000 offset by repayment of short term notes payable of $425,000.

Table of Contents

Critical Accounting Policies

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

We believe the following accounting policies to be critical to the estimates used in the preparation of our financial statements.

Use of Estimates

These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and, accordingly, require management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include the following:

Final well closure and associated ground reclamation costs to determine the asset retirement obligation as discussed under “Asset Retirement Obligations;”

Estimated variables used in the Black-Scholes option pricing model used to value options and warrants as discussed below under “Fair Value Measurements;”

Proved oil reserves;

Future costs to develop the reserves; and

Future cash inflows and production development costs.

Actual results could differ from those estimates.

Revenue Recognition

Revenues are recognized when hydrocarbons have been delivered, the customer has taken title and collection is reasonably assured.

Full Cost Method of Accounting for Oil and Gas Properties

We have elected to utilize the full cost method of accounting for its oil and gas activities. In accordance with the full cost method of accounting, we capitalize all costs associated with acquisition, exploration and development of oil and natural gas reserves, including leasehold acquisition costs, geological and geophysical expenditures, lease rentals on undeveloped properties and costs of drilling of productive and non-productive wells into the full cost pool on a country by country basis. Capitalized costs of oil and gas properties, including the estimated future costs to develop proved reserves, are amortized on the unit-of-production method using estimates of proved reserves once proved reserves are determined to exist.

Table of Contents

Full Cost Ceiling Test

Asset Retirement Obligation

Share-Based Compensation

We periodically issue stock options and warrants to employees and non-employees and in connection with capital raising transactions, for services and for financing costs. We account for share-based payments under the guidance as set forth in the Share-Based Payment Topic of the FASB Accounting Standards Codification, which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees, officers, directors, and consultants, including employee stock options, based on estimated fair values. We estimate the fair value of share-based payment awards to employees and directors on the date of grant using an option-pricing model, and the value of the portion of the award that is ultimately expected to vest is recognized as expense over the required service period in the our Statements of Operations. We account for stock option and warrant grants issued and vesting to non-employees in accordance with the authoritative guidance whereas the value of the stock compensation is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) the date at which the necessary performance to earn the equity instruments is complete. Stock-based compensation is based on awards ultimately expected to vest and is reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, as necessary, in subsequent periods if actual forfeitures differ from those estimates.

Recently Issued Accounting Pronouncements

Table of Contents

In January 2015, the FASB issued Accounting Standards Update (ASU) No. 2015- 01 (Subtopic 225-20) - Income Statement -Extraordinary and Unusual Items. ASU 2015-01 eliminates the concept of an extraordinary item from GAAP. As a result, an entity will no longer be required to segregate extraordinary items from the results of ordinary operations, to separately present an extraordinary item on its income statement, net of tax, after income from continuing operations or to disclose income taxes and earnings-per-share data applicable to an extraordinary item. However, ASU 2015-01 will still retain the presentation and disclosure guidance for items that are unusual in nature and occur infrequently. ASU 2015-01 is effective for periods beginning after December 15, 2015. The adoption of ASU 2015-01 is not expected to have a material effect on the Company’s consolidated financial statements. Early adoption is permitted.

Table of Contents

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the Securities Exchange Commission (the “ SEC ”) did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements.

Off-Balance Sheet Arrangements

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

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not Applicable

Item 4. Controls and Procedures

Disclosure Controls and Procedures

The Company’s Chief Executive Officer and Chief Financial Officer has evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of June 30, 2015. Based upon such evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of June 30, 2015, the Company’s disclosure controls and procedures were ineffective.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of June 30, 2015, based on the framework stated by the Committee of Sponsoring Organizations of the Treadway Commission. Furthermore, due to our financial situation, we will be implementing further internal controls as we become operative so as to fully comply with the standards set by the Committee of Sponsoring Organizations of the Treadway Commission.

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

Based on its evaluation as of June 30, 2015, our management concluded that our internal controls over financial reporting were ineffective as of June 30, 2015. A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

Table of Contents

The material weakness relates to the following:

Lack of an independent audit committee;

Lack of formal approval policies by the Board of Directors;

Lack of adequate consciousness over individuals responsible for certain key control activities;

Insufficient number of personnel appropriately qualified to perform control monitoring activities, including the recognition of risks and complexities of its business operations;

An insufficient number of personnel with an appropriate level of GAAP knowledge and experience or training in the application of GAAP commensurate with the Company’s financial reporting requirements.

The Company intends to remedy this material weakness by hiring additional employees, officers, and perhaps directors, and reallocating duties, including responsibilities for financial reporting, among our officers, directors and employees as soon as there are sufficient resources available. However, until such time, this material weakness will continue to exist.

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

Changes in Internal Control over Financial Reporting

There have been no changes in our internal controls over financial reporting (as such term is defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended June 30, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we are a party to claims and legal proceedings arising in the ordinary course of business. Our management evaluates our exposure to these claims and proceedings individually and in the aggregate and provides for potential losses on such litigation if the amount of the loss is determinable and the loss is probable.

Babcock Lease

Dune Termination Fee

On March 4, 2015, Dune provided us with notice of its decision to terminate the Dune Merger Agreement in accordance with Section 8.1(c)(i) of the Dune Merger Agreement. Pursuant to Section 8.1(c)(i) of the Dune Merger Agreement, Dune’s letter terminating the Dune Merger Agreement demanded the Parent Termination Fee (as defined in the Dune Merger Agreement) of $5,500,000 in cash, and reimbursement for certain unidentified expenses incurred by Dune. Dune has threatened to bring litigation to collect these amounts in connection with its contention that the Company breached the Dune Merger Agreement and is entitled to the Parent Termination Fee. The Company has accordingly recorded a liability for $5,500,000 related to the Parent termination Fee. No lawsuit has been filed to date against the Company for the Parent Termination Fee, and the Company would vigorously defend itself, should any action ever be brought. The Company believes that it has equitable and legal defenses against payment of all or a portion of the Parent Termination Fee.

Table of Contents

Item 1A. Risk Factors

In addition to the other information set forth in this Report, you should carefully consider the factors discussed in the section entitled “Risk Factors” in our Annual Report on Form 10-K/A for the year ended December 31, 2014, which to our knowledge have not materially changed. Those risks, which could materially affect our business, financial condition or future results, are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

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

During the quarter, on April 23, 2015, May 23, 2015 and June 23, 2015, Hahn received 2,000 restricted shares of the Company’s common stock for each month, respectively, for an aggregate of 6,000 shares.

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

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

None.

Item 6. Exhibits

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

Reference Number	Item
10.1	Unsecured Promissory Note dated April 15, 2015 from Eos Petro, Inc. payable to Plethora Enterprises, LLC (filed as Exhibit 10.1 to the Form 10-Q filed with the Securities and Exchange Commission by Eos Petro, Inc. on May 18, 2015)
10.2	Unsecured Promissory Note dated April 15, 2015 from Eos Petro, Inc. payable to Clearview Partners, II, LLC (filed as Exhibit 10.2 to the Form 10-Q filed with the Securities and Exchange Commission by Eos Petro, Inc. on May 18, 2015)
10.3	Unsecured Promissory Note dated May 22, 2015 from Eos Petro, Inc. payable to Plethora Enterprises, LLC*
10.4	Unsecured Promissory Note dated July 13, 2015 from Eos Petro, Inc. payable to Plethora Enterprises, LLC*
10.5	Unsecured Promissory Note dated August 5, 2015 from Eos Petro, Inc. payable to Plethora Enterprises, LLC*
10.6	Unsecured Promissory Note dated August 5, 2015 from Eos Petro, Inc. payable to DVIBRI, LLC (as assigned to Plethora Enterprises, LLC)*
10.7	Sixth Amendment to the LowCal Agreements, dated August 14, 2015, by and between Eos Petro, Inc., LowCal Industries, LLC, Eos Global Petro, Inc. and LowCo [EOS/Petro], LLC*
10.8	Letter Agreement with Vicki P. Rollins effective June 30, 2015*
10.9	Letter Agreement with Vatsala Sharma effective June 30, 2015*
31.1	Section 302 Certification of Principal Executive Officer.*
31.2	Section 302 Certification of Principal Financial Officer.*
32.1	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350.*
32.2	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350.*

* Furnished herewith.

Table of Contents

SIGNATURES

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

	EOS PETRO, INC. a Nevada corporation

Date: August 17, 2015	By:	/s/ MARTIN B. ORING
		Martin B. Oring
		President and Chief Executive Officer

Date: August 17, 2015	By:	/s/ NIKOLAS KONSTANT
		Nikolas Konstant
		Chairman of the Board and Chief Financial Officer

Attached files

Stock widget

Investing forum

Eos Petro, Inc. Reports