美國
證券交易委員會
華盛頓，DC 20549
表格
(馬克 一)
| 根據1934年證券交易法第13或第15(d)節提交的季度報告 |
截至季度結束
或者
| 根據1934年證券交易法第13或15（d）節提交的過渡報告書 |
在從___________過渡到____________的過渡期間。
委員會文件號
（公司章程中指定的準確公司名稱）
（國家或其他管轄區的 公司成立或組織） |
（美國國內國稅局僱主 唯一識別號碼） |
（地址 主要行政辦公室）（郵政編碼）
根據交易所法規（17 CFR 240.14a-12）第14a-12規定的招股材料
(公司更名、更改地址和更改財年情況的以往名稱、以前地址和以前財年，如與上次報告有所改變)
根據法案第12(b)節註冊的證券:
每個類型的標題 |
交易 標的 |
在註冊的每個交易所上，請使用你的moomoo賬號訪問該功能。 | ||
請通過勾選來指示登記人（1）在過去12個月內（或在登記人要求提交此類報告的較短期間內）是否已提交根據1934年證券交易法第13條或第15(d)條要求提交的所有報告，以及（2）在過去90天內是否受此類提交要求的約束。
通過勾選圓圈表明註冊者是否在過去12個月內(或註冊者需要提交這些文件的較短期限內)已經遞交規章S-T(本章第232.405條)規定的每個交互式數據文件。
請用勾選標記指示登記人是大型加速報告人、加速報告人、非加速報告人、小型報告公司或新興成長公司。 請在《交易所法》第120億.2條中查看"大型加速報告人"、"加速報告人"、"小型報告公司"和"新興成長公司"的定義。（選擇一項）：
| 大型加速文件提交人 | ☐ | 加速文件提交人 | ☐ | ☒ | |
| 小型報告公司 | 新興成長公司 |
如果是新興成長型企業，請打勾，以表明註冊人已選擇不使用遵守《證券交易法》第13(a)條所規定的任何新的或修訂後的財務會計準則的延長過渡期。 ☐
請在複選標記中表明註冊申請人是否是外殼公司（如《交易所法》120億.2規定）。是 ☐ 否
截至2024年11月14日，我們擁有 $，總股數 面值普通股流通在外。
休斯敦美國能源公司
☒季度報告，根據1934年證券交易法第13條或第15（d）條
指數
| 頁碼 | ||
| 部分 一. | 財務信息 | 3 |
| 項目 1. | 基本報表 | 3 |
| 2024年9月30日的合併資產負債表（未經審計）和2023年12月31日 | 3 | |
| 截至2024年9月30日和2023年9月30日的三個月和九個月的未經審計的綜合經營表 | 4 | |
| 截至2024年9月30日和2023年9月30日的三個月和九個月的未經審計的股東權益變動表 | 5 | |
| 截至2024年9月30日和2023年的現金流量表（未經審計） | 6 | |
| 合併財務報表附註（未經審計） | 7 | |
| 項目 2. | 分銷計劃 | 12 |
| 項目 3. | 有關市場風險的定量和定性披露 | 15 |
| 項目 4. | 控制和程序 | 15 |
| 第二部分 | 其他信息 | 16 |
| 項目 6. | 展示資料 | 16 |
| 2 |
| 項目 1 | 財務報表 |
第I部分 - 財務信息
休斯敦美國能源公司
彙總資產負債表
2024年9月30日 | 2023年12月 | |||||||
| (未經審計) | ||||||||
| 資產 | ||||||||
| 流動資產 | ||||||||
| 現金 | $ | $ | ||||||
| 應收賬款 – 石油和燃料幣銷售 | ||||||||
| 預付的費用和其他流動資產 | ||||||||
| 總流動資產 | ||||||||
| 物業和設備 | ||||||||
| 石油和燃料幣資產， 完全成本法 | ||||||||
| 需攤銷的成本 | ||||||||
| 辦公設備 | ||||||||
| 總計 | ||||||||
| 累計 消耗、折舊、攤銷和減值 | ( | ) | ( | ) | ||||
| 資產及設備，淨值 | ||||||||
| 股權投資 – Hupecol Meta LLC | ||||||||
| 使用權資產 | ||||||||
| 其他資產 | ||||||||
| 總資產 | $ | $ | ||||||
| 負債和股東權益 | ||||||||
| 流動負債 | ||||||||
| 應付賬款 | $ | $ | ||||||
| 應計費用 | ||||||||
| 當前 租賃負債部分 | ||||||||
| 總流動負債合計 | ||||||||
| 開多期債務 | ||||||||
| 租賃負債，淨額 當前部分 | ||||||||
| 撥備 用於封堵和放棄費用 | ||||||||
| 總計 開多負債 | ||||||||
| 總負債 開多 | ||||||||
| 承諾和 contingencies | ||||||||
| 股東權益 | ||||||||
| 普通股，每股面值 $，授權股數：百萬股；發行股數：分別爲2024年6月30日和2023年12月31日：百萬股；流通股數：分別爲2024年6月30日和2023年12月31日：百萬股; 授權的股份 已發行且在外流通的股份 | ||||||||
| 額外實收資本 | ||||||||
| 累計虧損 | ( | ) | ( | ) | ||||
| 股東權益合計 | ||||||||
| 負債和股東權益總計 | $ | $ | ||||||
附註是這些未經審計的基本報表的一部分。
| 3 |
休斯敦美國能源公司
綜合損益表
截至2024年和2023年9月30日的九個月
(未經審計)
| 九個月 | 三個月 | |||||||||||||||
| 截至9月30日， | 截至9月30日， | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| 石油和燃料幣營業收入 | $ | $ | ||||||||||||||
| 營業費用 | ||||||||||||||||
| 租賃營業費用和離職稅 | ||||||||||||||||
| 一般和行政費用 | ||||||||||||||||
| 折舊和遞耗 | ||||||||||||||||
| 總營業費用 | ||||||||||||||||
| 營運虧損 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 其他收入，淨額 | ||||||||||||||||
| 利息收入 | ||||||||||||||||
| 其他收入 | ||||||||||||||||
| 總其他收入 | ||||||||||||||||
| 稅前淨(虧損)收入 | ( | ) | ( | ) | ||||||||||||
| 所得稅費用 | ||||||||||||||||
| 淨利潤（損失） | $ | ( | ) | $ | ( | ) | ||||||||||
| 基本和稀釋（虧損） 每普通股的收益 | $ | ) | $ | ) | ||||||||||||
| 基於和稀釋的加權 普通股平均在外流通股份數 | ||||||||||||||||
附註是這些未經審計的基本報表的一部分。
| 4 |
休斯敦美國能源公司
股東權益變動表
截至2024年和2023年9月30日的三個月和九個月
(未經審計)
| 額外內容 | ||||||||||||||||||||
| 普通 股票 | 實繳 | 累積 | ||||||||||||||||||
| 股份 | 金額 | 資本 | 赤字 | 總計 | ||||||||||||||||
| 2023年12月31日的餘額 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| 基於股票的薪酬 | — | |||||||||||||||||||
| 淨損失 | — | ( | ) | ( | ) | |||||||||||||||
| 2024年3月31日結存餘額 | ( | ) | ||||||||||||||||||
| 股票酬勞 | — | |||||||||||||||||||
| 淨虧損 | — | ( | ) | ( | ) | |||||||||||||||
| 2024年6月30日餘額 | ( | ) | ||||||||||||||||||
| 股票酬勞 | — | |||||||||||||||||||
| 淨虧損 | — | ( | ) | ( | ) | |||||||||||||||
| 截至2024年9月30日的餘額 | $ | $ | $ | ( | ) | |||||||||||||||
| 額外內容 | ||||||||||||||||||||
| 普通 股票 | 實繳 | 累積 | ||||||||||||||||||
| 股份 | 金額 | 資本 | 赤字 | 總計 | ||||||||||||||||
| 截至2022年12月31日的餘額 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| 基於股票的補償 | — | |||||||||||||||||||
| 普通股發行 | ||||||||||||||||||||
| 淨虧損 | — | |||||||||||||||||||
| 截至2023年3月31日的餘額 | ( | ) | ||||||||||||||||||
| 基於股票的補償 | — | |||||||||||||||||||
| 普通股發行 | ||||||||||||||||||||
| 淨虧損 | — | ( | ) | ( | ) | |||||||||||||||
| 截至2023年6月30日的餘額 | ( | ) | ||||||||||||||||||
| 基於股票的補償 | — | |||||||||||||||||||
| 淨利潤 | — | |||||||||||||||||||
| 截至2023年9月30日的餘額 | $ | $ | $ | ( | ) | $ | ||||||||||||||
這個 附註是這些未經審計的合併財務報表的組成部分。
| 5 |
休斯敦美國能源公司
合併 現金流量表
2024年和2023年截至2024年9月30日的九個月
(未經審計)
截至九個月年底 9月30日 | ||||||||
| 2024 | 2023 | |||||||
| 經營活動產生的現金流量 | ||||||||
| 淨虧損/收益 | $ | ( | ) | $ | ||||
| 用於調節淨利潤（損失） 以匹配運營中使用的淨現金： | ||||||||
| 折舊和遞耗 | ||||||||
| 資產養老 義務的遞增 | ||||||||
| 股票酬勞 | ||||||||
| 使用資產攤銷 | ||||||||
| 經營性資產負債的變化： | ||||||||
| 應收賬款減少（增加） | ( | ) | ||||||
| 從Hupecol Meta，LLC應計收益分配減少（增加） | ( | ) | ||||||
| 預付款項和其他流動資產增加 | ( | ) | ( | ) | ||||
| 應付賬款和應計費用增加 | ||||||||
| 經營租賃負債減少 | ( | ) | ( | ) | ||||
| 經營活動提供的淨現金（使用） | ( | ) | ( | ) | ||||
| 投資活動產生的現金流量 | ||||||||
| 資本投入款 用於股權投資 | ( | ) | ( | ) | ||||
| 投資活動使用的淨現金 | ( | ) | ( | ) | ||||
| 籌資活動產生的現金流量 | ||||||||
| 發行普通股予現金收益 淨的發行成本 | ||||||||
| 籌資活動提供的淨現金流量 | ||||||||
| 現金流量的淨增加額 | ( | ) | ( | ) | ||||
| 期初現金 | ||||||||
| 期末現金 | $ | $ | ||||||
| 補充現金流量資料 | ||||||||
| 已支付利息 | $ | $ | ||||||
| 已繳納的稅款 | $ | $ | ||||||
| 補充的非現金投資和融資 活動 | ||||||||
| 資產退休責任估計變化，淨值 | $ | $ | ||||||
應計石油和燃料幣開發成本變動 | $ | $ | ||||||
| 應計股權投資款項變動 投資款項及分配變動 | $ | $ | ||||||
這個 附註是這些未經審計的合併財務報表的組成部分。
| 6 |
休斯敦美國能源公司
合併財務報表附註
(未經審計)
注意 1 - 報告的基礎及重要會計政策
附帶的未經審計的合併基本報表來自休斯頓美國能源公司，一家特拉華州公司（「公司」）， 已按照美國通用會計原則針對中期財務信息以及10-Q表格的指導原則編制。它們未包含美國通用會計原則所要求的所有信息和腳註， 以進行完整的財務報告。在管理層看來，所有調整， 僅由正常的經常性調整組成，被認爲對公正呈現是必要的，已包含在附帶的 未經審計的合併基本報表中。所呈現期間的經營結果不一定能反映出 預計全年可能的結果。
這些未經審計的綜合財務報表應與公司的經審計的綜合財務報表及附註一起閱讀，這些內容作爲截至2023年12月31日的公司10-k表格的一部分。
合併
相關的合併基本報表包括公司的所有帳戶及其子公司（HAEC Louisiana E&P, Inc.）。 所有重大內部公司餘額和交易在合併中已被消除。
流動性 和資本要求
附帶的合併基本報表是基於公司將持續經營的假設編制的，這意味着在這些合併基本報表的發行日期之後的十二個月內，將在正常的業務過程中實現資產並滿足負債。自2011年以來，公司持續虧損，累計赤字爲$
公司相信，它有能力從手頭現金中資助其運營成本和預期鑽探操作，至少持續到這些基本報表發出後的十二個月。
2024年及以後的實際鑽井時間和數量將主要由公司的土地運營商控制，具體取決於多個因素，包括但不限於融資可用性、該土地上現有油井的表現、能源價格和行業板塊的狀況與前景、鑽探和完工服務及設備的成本，以及公司或其運營商無法控制的其他因素。
如果公司追求額外的土地收購或擴大鑽井計劃，公司可能需要超出手頭資源的額外資金。儘管公司可能通過其他途徑尋求額外資金，比如「市場上的」普通股銷售和私人股票和債券的銷售，但目前並沒有任何提供額外資金的承諾，擁有有限的普通股用於支持籌資努力，公司也無法保證能夠以可接受的條件或根本無法獲得必要的資金來資助其鑽井、收購或其他成本的份額。如果因爲任何原因，公司無法爲其鑽井和竣工成本提供資金，它將放棄參與該井的一個或多個。在這種情況下，公司可能會受到處罰，或者可能會失去其在未能履行資金義務而擁有權益的潛在權益，並可能需要削減業務並放棄機會。
會計 原則及估算的使用
合併基本報表已按照美國普遍接受的會計原則編制。在編製基本報表時，管理層會進行知情的判斷和估計，這些判斷和估計會影響基本報表日期的資產和負債報告金額，以及在報告期間的收入和支出報告金額。管理層會持續檢討其估計，包括與潛在事項如訴訟、環保母基負債、所得稅及相關的估值準備金、有證明儲量的石油和燃料幣的確定以及資產養老義務相關的估計。事實和情況的變化可能會導致估計的修訂，實際結果可能與這些估計不同。
| 7 |
信用風險的集中度
潛在將公司置於信用風險集中的金融工具包括現金、現金及等價物（如有）和任何有價證券（如有）。截至2024年9月30日，公司的現金存款超出了FDIC當前的承保利息軸承帳戶上限$
基本每股盈餘（虧損）是通過將可分配給普通股東的淨虧損除以期間加權平均的普通股發行量來計算的。稀釋後每股盈餘反映了若行使或轉換證券或其他合同為普通股，然後分享公司收益所可能發生的稀釋。在公司報告淨虧損的期間，稀釋性證券被排除在計算稀釋後每股淨虧損金額之外，因為這樣的影響會是反稀釋的。
最近發布的會計公報
2023年12月，財務會計準則委員會"FASB"發佈了會計準則更新"ASU"，編號2023-09，關於所得稅（主題740）：所得稅披露的改進（"ASU 2023-09"）。ASU 2023-09中的指導通過更細緻地分解利率和按司法管轄區分解的所得稅支付信息，提高了所得稅披露的透明度。該標準對於從2024年12月15日後開始的財政年度生效，可提前採納。公司目前正在評估採用ASU 2023-09可能對其合併基本報表和相關披露產生的影響。
在 2023年11月，FASB發佈了ASU 2023-07，行業報告（主題280）。本次更新的修訂擴大了行業披露要求， 包括對擁有單一可報告行業的實體的新行業披露要求以及其他披露要求。此 更新適用於2023年12月15日後開始的財政年度及2024年12月15日後開始的財政年度中的臨時期間。預期採用本標準不會對公司的合併基本報表產生重大影響。
後續事件
公司已經評估了從2024年9月30日至財務報表發行日期的所有交易，以便進行後續事件披露考慮。2024年11月11日，在本報告涵蓋的期間之後，公司出售了 普通股給一位投資者，合計收益約爲$
注意 2 - 營業收入
以下表格將三個月和六個月時間內的營業收入按重要產品類型分解爲2024年6月30日和2023年6月30日：
下表按重要產品類型列出了截至2024年和2023年9月30日的三個月和九個月期間的營業收入：
| 截至9月30日的三個月 | 截至9月30日的九個月 | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| 油品銷售 | $ | $ | ||||||||||||||
| 天然氣銷售 | ( | ) | ||||||||||||||
| 天然氣液體 銷售 | ||||||||||||||||
| 來自 客戶的總營業收入 | $ | $ | ||||||||||||||
有
五百零二萬五千五百零五股Sonnet BioTherapeutics Holdings，Inc.的每股股份已發行和流通，截至2024年8月14日。
注意 3 – 石油和燃氣資產
截至2024年9月30日的三個月和九個月內，公司記錄了耗盡費用$
地理 資訊
目前，該公司在美國擁有資產。以下是截至2024年9月30日九個月的收入及2024年9月30日長期資產（扣除耗竭、攤銷和減值）:
| 截至2024年9月30日的九個月 | 截至2024年9月30日 | |||||||
| 收入 | 長期資產，淨值 | |||||||
| 美國 | $ | $ | ||||||
| 總計 | $ | $ | ||||||
營收 及歸屬於公司對Hupecol Meta LLC（「Hupecol Meta」）的投資及其在哥倫比亞的基礎 資產和業務的長期資產，均不包括在上述表格中。
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注意事項 4 - 股權投資
The Company’s carrying value of its holdings in Hupecol Meta is reflected in the line item “equity investment – Hupecol Meta LLC” on the Company’s Consolidated Balance Sheet.
During
the three months ended September 30, 2024, the Company made capital contributions totaling $
In 2008, the Company adopted the Houston American Energy Corp. 2008 Equity Incentive Plan (the “2008 Plan”). The terms of the 2008 Plan, as amended in 2012 and 2013, allow for the issuance of up to shares of the Company’s common stock pursuant to the grant of stock options and restricted stock.
In 2017, the Company adopted the Houston American Energy Corp. 2017 Equity Incentive Plan (the “2017 Plan”). The terms of the 2017 Plan, allow for the issuance of up to shares of the Company’s common stock pursuant to the grant of stock options and restricted stock.
In 2021, the Company adopted the Houston American Energy 2021 Equity Incentive Plan (the “2021 Plan” and, together with the 2008 Plan and the 2017 Plan, the “Plans”). The terms of the 2021 Plan allow for the issuance of up to shares of the Company’s common stock pursuant to the grant of stock options and restricted stock.
Persons eligible to participate in the Plans are key employees, consultants and directors of the Company.
The Company periodically grants options to employees, directors and consultants under the Plans and is required to make estimates of the fair value of the related instruments and recognize expense over the period benefited, usually the vesting period.
Stock Option Activity
| Options | Weighted-Average Exercise Price |
Aggregate Intrinsic Value | ||||||||||
| Outstanding at January 1, 2024 | $ | |||||||||||
| Granted | ||||||||||||
| Exercised | ||||||||||||
| Expired | ( | ) | ||||||||||
| Outstanding at September 30, 2024 | $ | $ | ||||||||||
| Exercisable at September 30, 2024 | $ | $ | ||||||||||
During the nine months ended September 30, 2024, options to purchase an aggregate of shares of the Company’s common stock were granted to the Company’s directors. The options have a life, are exercisable at $ per share, The grant date fair value of these stock options was $ based on the Black-Scholes Option Pricing model based on the following assumptions: market value of common stock on grant date – $; risk free interest rate based on the applicable US Treasury bill rate – %; dividend yield – %; volatility factor based on the trading history of the Company – %; weighted average expected life in years – ; and expected forfeiture rate – %.
During the three and nine-months ended September 30, 2024, the Company recognized $ and $, respectively, of stock-based compensation expense attributable to the vesting amortization of stock options. As of September 30, 2024, total unrecognized stock-based compensation expense related to non-vested stock options was approximately $. The unrecognized expense is expected to be recognized over a weighted average period of years and the weighted average remaining contractual term of the outstanding options and exercisable options at September 30, 2024 is years and years, respectively.
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As of September 30, 2024, there were shares of common stock available for issuance pursuant to future stock or option grants under the Plans.
Stock-Based Compensation Expense
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Stock-based compensation expense included in general and administrative expense | $ | $ | $ | ||||||||||||
| Earnings per share effect of share-based compensation expense – basic and diluted | $ | ) | ) | $ | ) | ) | |||||||||
NOTE 6 – CAPITAL STOCK
Warrants
A summary of warrant activity and related information for 2024 is presented below:
| Warrants | Weighted-Average Exercise Price | Aggregate Intrinsic Value | ||||||||||
| Outstanding at January 1, 2024 | $ | |||||||||||
| Issued | ||||||||||||
| Exercised | ||||||||||||
| Expired | ||||||||||||
| Outstanding at September 30, 2024 | $ | $ | ||||||||||
| Exercisable at September 30, 2024 | $ | $ | ||||||||||
Earnings (loss) per common share-basic is calculated by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Net income (loss) per common share-diluted assumes the conversion of all potentially dilutive securities and is calculated by dividing net (loss) income by the sum of the weighted average number of shares of common stock, as defined above, outstanding plus potentially dilutive securities. Net income (loss) per common share-diluted considers the impact of potentially dilutive securities except in periods in which there is a loss because the inclusion of the potential common shares, as defined above, would have an anti-dilutive effect.
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Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Numerator: | ||||||||||||||||
| Net (loss) income | $ | ( | ) | $ | ( | ) | ||||||||||
| Effect of common stock equivalents | ||||||||||||||||
| Net (loss) income adjusted for common stock equivalents | $ | ( | ) | $ | ( | ) | ||||||||||
| Denominator: | ||||||||||||||||
| Weighted average common shares – basic | ||||||||||||||||
| Dilutive effect of common stock equivalents: | ||||||||||||||||
| Options and warrants | ||||||||||||||||
| Denominator: | ||||||||||||||||
| Weighted average common shares – diluted | ||||||||||||||||
| (Loss) earnings per common share – basic | $ | ) | $ | ) | ||||||||||||
| (Loss) earnings per common share – diluted | $ | ) | $ | ) | ||||||||||||
Nine Months Ended September 30, | Three Months Ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Stock warrants | ||||||||||||||||
| Stock options | ||||||||||||||||
| Total | ||||||||||||||||
NOTE 8 – COMMITMENTS AND CONTINGENCIES
Lease Commitment
The
Company leases office facilities under an operating lease agreement that expires
| Year | Amount | |||
| 2024 | ||||
| 2025 | ||||
| Total future lease payments | ||||
| Less: imputed interest | ( | ) | ||
| Present value of future operating lease payments | ||||
| Less: current portion of operating lease liabilities | ( | ) | ||
| Operating lease liabilities, net of current portion | $ | |||
| Right of use assets | $ | |||
Total
base rental expense was $
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| ITEM 2 | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Forward-Looking Information
This Form 10-Q quarterly report of Houston American Energy Corp. (the “Company”) for the three months ended September 30, 2024, contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. To the extent that there are statements that are not recitations of historical fact, such statements constitute forward-looking statements that, by definition, involve risks and uncertainties. In any forward-looking statement, where we express an expectation or belief as to future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the statement of expectation or belief will be achieved or accomplished.
The actual results or events may differ materially from those anticipated and as reflected in forward-looking statements included herein. Factors that may cause actual results or events to differ from those anticipated in the forward-looking statements included herein include the Risk Factors described in Item 1A herein and in our Form 10-K for the year ended December 31, 2023.
Readers are cautioned not to place undue reliance on the forward-looking statements contained herein, which speak only as of the date hereof. We believe the information contained in this Form 10-Q to be accurate as of the date hereof. Changes may occur after that date, and we will not update that information except as required by law in the normal course of our public disclosure practices.
Additionally, the following discussion regarding our financial condition and results of operations should be read in conjunction with the financial statements and related notes contained in Item 1 of Part 1 of this Form 10-Q, as well as the Risk Factors in Item 1A and the financial statements in Item 7 of Part II of our Form 10-K for the fiscal year ended December 31, 2023.
Critical Accounting Policies
The discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. We believe certain critical accounting policies affect the more significant judgments and estimates used in the preparation of our financial statements. A description of our critical accounting policies is set forth in our Form 10-K for the year ended December 31, 2023. As of, and for the three months ended, September 30, 2024, there have been no material changes or updates to our critical accounting policies.
Recent Developments
Drilling and Operating Activity
During the three months ended September 30, 2024, no drilling activities were conducted on properties of Hupecol Meta. At September 30, 2024, we had 4 wells on production in the U.S. Permian Basin.
Our Frost 2-H well was reworked during the quarter to repair its electric submersible pump.
In June 2024, the Company entered into a joint venture agreement with EOG Resources, Inc. (“EOG”) with respect to the drilling of six wells on the State Finkle Unit in the Wolfcamp formation in Reeves County, Texas. During June 2024, the Company elected to participate in all six wells.
Pursuant to the joint venture agreement, EOG will act as operator of the unit and is the principal working interest owner in the unit. The unit includes acreage subject to our existing O’Brien lease. We will hold an approximately 0.00370542% working interest in the unit, which is less than previously disclosed due to title issues. The first well was scheduled to spud June 23, 2024 with all six wells anticipated to be in production by the second quarter of 2025. Houston American’s cost of participating in the drilling program is estimated at $550,000. Drilling activity continued during the quarter.
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Operations, Planned Drilling and Divestiture in Colombia
At September 30, 2024, Hupecol Meta operated four wells in the Venus Exploration Area of the CPO-11 block in Colombia. Each of the four wells operated by Hupecol Meta were shut-in from February 20 to March 18, 2024 as a result of a dispute with local residents regarding maintenance of the road serving the wells.
During the quarter, Hupecol Meta drilled the Jupiter 1 well, which resulted in a dry hole.
We own an approximately 18% interest in Hupecol Meta, representing an approximately 16% interest in the wells operated in the Venus Exploration Area. We do not report results of Hupecol Meta in our consolidated operating results but include our investment in Hupecol Meta on our balance sheet as “Equity Investment – Hupecol Meta” with distributions from Hupecol Meta reported as “Other Income” on our Statement of Operations.
Hupecol Meta has advised that it intends to evaluate potential monetization or some form of divestiture of its assets in Colombia, including the interest in the CPO-11 block held by Hupecol Meta. Pending the outcome of Hupecol Meta’s evaluation of, and potential efforts regarding, divestiture or monetization of the CPO-11 block in the fourth quarter of 2024, we have no planned drilling operations, or other planned operations, in Colombia. As a result, we expect to continue to operate our existing wells in the CPO-11 block. There is no assurance as to the timing or outcome of Hupecol Meta’s potential monetization or divestiture of assets.
Capital Investments
During the quarter ended September 30, 2024, our capital investment expenditures totaled $1,072,364, attributable to investments in our equity investment in Hupecol Meta LLC (“Hupecol Meta”).
Distributions from Equity Investment
During the three and nine months ended September 30, 2024, we received distributions, totaling $268,817 and $922,959, respectively, from Hupecol Meta, representing our share of distributable net income and reflected as “Other Income” on our Statement of Operations.
Management and Board Changes
On November 11, 2024, subsequent to the period covered by this report, we sold 2,180,180 shares of our common stock to one investor for aggregate proceeds of approximately $2.5 million. In connection with this transaction, John F. Terwilliger resigned as Chief Executive Officer (“CEO”), and Peter Longo was appointed as CEO. Mr. Terwilliger remains an advisor to the Company until the end of this year. Also, as part of the foregoing transaction, Mr. Terwilliger received $800,000 in exchange for the waiver of certain claims pursuant to his change in control agreement with the Company. In addition, James A. Schoonover resigned as a director on November 11, 2024, and Robert J. Bailey was appointed as a director.
Results of Operations
Oil and Gas Revenues. Total oil and gas revenues increased 15% to $130,239 in the three months ended September 30, 2024, compared to $112,994 in the three months ended September 30, 2023. Oil and gas revenues declined 28% to $393,729 in the nine months ended September 30, 2024, compared to $547,408 for the nine months ended September 30, 2023. The change in revenue was due to decreases in average sales price of natural gas (down 92%), oil production (down 28%), and natural gas production (down 13%), and partially offset by an increase in average sales price of oil (up 6%).
The following table sets forth the gross and net producing wells, net oil and gas production volumes and average hydrocarbon sales prices for the quarters ended September 30, 2024 and 2023:
Nine Months Ended September 30,(1) | Three Months Ended September 30,(1) | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Gross producing wells | 4 | 4 | 4 | 4 | ||||||||||||
| Net producing wells | 0.68 | 0.68 | 0.68 | 0.68 | ||||||||||||
| Net oil production (Bbl) | 4,101 | 5,667 | 1,411 | 1,308 | ||||||||||||
| Net gas production (Mcf) | 34,883 | 40,188 | 13,719 | 6,732 | ||||||||||||
| Average sales price – oil (per barrel) | $ | 76.70 | $ | 72.09 | $ | 77.29 | $ | 73.01 | ||||||||
| Average sales price – natural gas (per Mcf) | $ | 0.11 | $ | 1.33 | $ | - | $ | 1.72 | ||||||||
| (1) | All well, production and price information excludes wells operated by Hupecol Meta. |
The change in production volumes was primarily attributable to the natural decline in production.
The change in average oil and natural gas sales price realized reflects global energy trends.
Oil and gas sales revenues are entirely attributable to our U.S. properties.
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Lease Operating Expenses. Lease operating expenses increased 78% to $229,210 during the three months ended September 30, 2024, from $128,918 during the three months ended September 30, 2023. Lease operating expenses increased 55% to $534,443 during the nine months ended September 30, 2024, from $344,318 during the nine months ended September 30, 2023. The increase in lease operating expenses was attributable to additional severance tax expense from prior periods and an increase in production expenses during the nine months ended September 30, 2024.
Lease operating expenses are entirely attributable to our U.S. properties and exclude lease operating expenses of Hupecol Meta.
Depreciation and Depletion Expense. Depreciation and depletion expense was $39,994 and $23,749 for the three months ended September 30, 2024 and 2023, respectively, and $103,079 and $115,645 for the nine months ended September 30, 2024 and 2023, respectively. The change in depreciation and depletion was principally due to the decline in oil production during the nine months ended September 30, 2024.
General and Administrative Expenses (excluding stock-based compensation). General and administrative expense decreased by 10% to $280,260 during the three months ended September 30, 2024 from $312,344 during the three months ended September 30, 2023, and decreased 22% to $930,401 during the nine months ended September 30, 2024, from $1,196,463 during the nine months ended September 30, 2023. The decrease in general and administrative expense was primarily attributable to a bonus of $200,000 paid to our CEO in the second quarter of 2023, which was not repeated this year.
Stock-Based Compensation. Stock-based compensation decreased to $19,048 during the three months ended September 30, 2024 and $82,461 during nine months ended September 30, 2024 from $95,205 during the three months ended September 30, 2023 and $212,982 during the nine months ended September 30, 2023.
Other Income (Expense). Other income/expense, net, totaled $293,505 of income during the three months ended September 30, 2024, compared to $626,052 of income during the three months ended September 30, 2023, and totaled $1,007,102 during the nine months ended September 30, 2024, compared to $1,349,162 during the nine months ended September 30, 2023. Other income consisted of equity investment distributions totaling $922,959 and $1,235,101, respectively, from Hupecol Meta, representing our share of distributable net income for the nine months ended September 30, 2024 and 2023, respectively, and interest income on cash balances during the nine months ended September 30, 2024 and 2023. In mid-October 2024 the Company received a notification for a cash call from Hupecol Meta, LLC for the amount of $859,246 for anticipated costs related to the Jupiter #1 well.
Financial Condition
Liquidity and Capital Resources. At September 30, 2024, we had a cash balance of $2,847,296 and working capital of $2,772,692, compared to a cash balance of $4,059,182 and working capital of $3,917,231 at December 31, 2023.
Cash Flows. Operating activities used $139,522 of cash during the nine months ended September 30, 2024, compared to cash outflows of $211,463 during the nine months ended September 30, 2023. The change in operating cash flow was primarily attributable to a bonus of $200,000 paid to our CEO in the second quarter of 2023, which was not repeated this year.
Investing activities used cash of $1,072,364 during the nine months ended September 30, 2024, compared to $1,954,515 used during the nine months ended September 30, 2023. Cash used in investing activities for both periods was attributable to investments in Hupecol Meta to support our share of costs in Colombia.
Financing activities provided $0 during the nine months ended September 30, 2024, compared to $1,652,000 provided during the nine months ended September 30, 2023. Cash provided by financing activities during the nine months ended September 30, 2023 was attributable to funds received from the sale of common stock in the company’s 2022 ATM offering.
Long-Term Liabilities. At September 30, 2024, we had long-term liabilities of $71,620, compared to $152,904 at December 31, 2023. Long-term liabilities at September 30, 2024 and December 31, 2023, consisted of a reserve for plugging costs and the long-term lease liability.
Capital and Exploration Expenditures and Commitments. Our principal capital and exploration expenditures relate to ongoing efforts to acquire, drill and complete prospects. During 2023, capital expenditures relating to Hupecol Meta increased with our investments in Hupecol Meta to fund our share of costs associated with the initial wells drilled on the CPO-11 block. Based on discussions with Hupecol Meta, we anticipate that one additional vertical well will be drilled on the CPO-11 block by the end of 2024 pending efforts by Hupecol Meta to monetize its interest in the CPO-11 block. Our costs relating to the drilling of such well is estimated at approximately $550,000. There are no present plans to conduct additional drilling operations on our U.S. properties. The actual timing and number of well operations undertaken, if any, will be principally controlled by the operators of our acreage based on a number of factors, including but not limited to availability of financing, performance of existing wells on the subject acreage, energy prices and industry condition and outlook, costs of drilling and completion services and equipment and other factors beyond our control or that of our operators.
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In addition to possible operations on our existing acreage holdings, we continue to evaluate drilling prospects in which may acquire an interest and participate.
During the three months ended September 30, 2024, we invested $1,072,364 for the acquisition and development of oil and gas properties, consisting of capital contributions to Hupecol Meta. The $1,072,364 invested in Hupecol Meta was capitalized to our equity investment in Hupecol Meta.
As our allocable share of well costs will vary depending on the timing and number of wells drilled as well as our working interest in each such well and the level of participation of other interest owners, we have not established a drilling budget but will budget on a well-by-well basis as our operators propose wells. We believe that we have the ability, through our cash on-hand, to fund operations and our cost for all planned wells expected to be drilled during 2024.
In the event that we pursue additional acreage acquisitions or expand our drilling plans, we may be required to secure additional funding beyond our resources on hand. While we may, among other efforts, seek additional funding from “at-the-market” sales of common stock, and private sales of equity and debt securities, we presently have limited authorized shares of common stock available for issuance to support equity capital raises and we have no commitments to provide additional funding, and there can be no assurance that we can secure the necessary capital to fund our share of drilling, acquisition or other costs on acceptable terms or at all. If, for any reason, we are unable to fund our share of drilling and completion costs and fail to satisfy commitments relative to our interest in our acreage, we may be subject to penalties or to the possible loss of some of our rights and interests in prospects with respect to which we fail to satisfy funding commitments and we may be required to curtail operations and forego opportunities.
Off-Balance Sheet Arrangements
We had no off-balance sheet arrangements or guarantees of third party obligations at September 30, 2024.
| ITEM 3 | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
Commodity Price Risk
The price we receive for our oil and gas production heavily influences our revenue, profitability, access to capital and future rate of growth. Crude oil and natural gas are commodities and, therefore, their prices are subject to wide fluctuations in response to relatively minor changes in supply and demand. Historically, the markets for oil and gas have been volatile, and these markets will likely continue to be volatile in the future. The price we receive for production depends on numerous factors beyond our control.
We have not historically entered into any hedges or other transactions designed to manage, or limit, exposure to oil and gas price volatility.
| ITEM 4 | CONTROLS AND PROCEDURES |
Evaluation of Disclosure Controls and Procedures
Under the supervision and the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation as of September 30, 2024 of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended. Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were not effective as of September 30, 2024. Such conclusion reflects the 2013 departure of our chief financial officer and assumption of duties of principal financial officer by our chief executive officer and the resulting lack of an appropriate level of accounting knowledge and experience commensurate with the financial reporting requirements for a public company, in particular with respect to technical accounting knowledge regarding accounting for certain transactions, and a related lack of segregation of duties. Until we are able to remedy these material weaknesses, we are relying on third party consultants to assist with financial reporting.
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Changes in Internal Control over Financial Reporting
No change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) occurred during the quarter ended September 30, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II
| ITEM 6 | EXHIBITS |
| Exhibit | Number | Description | |
| 31.1 | Certification of CEO and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||
| 32.1 | Certification of CEO and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||
| 101.INS | Inline XBRL Instance Document | ||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | ||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | ||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | ||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | ||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | ||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on behalf by the undersigned thereunto duly authorized.
| HOUSTON AMERICAN ENERGY CORP. | ||
| Date: November 14, 2024 | ||
| By: | /s/ Steve Hartzell | |
| Steve Hartzell | ||
| Chairman of the Board and Principle Financial Officer | ||
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