CoJax Oil & Gas Restates 2024 Financials, Citing Segment Reporting Error

TL;DR

**CJAX's 10-K/A is a red flag, indicating unreliable past financials and potential internal control issues; proceed with extreme caution.**

AI Summary

CoJax Oil & Gas Corp (CJAX) filed a 10-K/A on September 10, 2025, to restate its consolidated financial statements for the fiscal year ended December 31, 2024. The restatement primarily addresses the disclosure of segment information, specifically updating it to state that net income (loss) is the key measure used by the Chief Operating Decision Maker (CODM) for performance evaluation, capital allocation, and budget monitoring, in accordance with FASB ASC 280-10-50-28C. The Board of Directors determined on August 28, 2025, that the previously issued financial statements from March 31, 2025, should not be relied upon. This amendment also includes an updated audit opinion covering both the 2024 and 2023 fiscal periods, and new certifications (31.1 and 31.2) under Sections 302 and 906 of the Sarbanes-Oxley Act. The company, an early-stage development oil and gas firm, reported an aggregate market value of voting and non-voting common equity held by non-affiliates of $3,468,087 as of the most recent fiscal quarter, with 14,003,639 shares outstanding on March 31, 2025. The company continues to face challenges with very limited crude oil production from its acquisitions, insufficient to fund new growth without additional capital.

Why It Matters

This restatement signals potential weaknesses in CoJax's internal financial reporting controls, which can erode investor confidence and lead to increased scrutiny from regulators. For investors, the unreliability of previous financial statements means past investment decisions may have been based on inaccurate data, necessitating a re-evaluation of the company's true financial health and operational performance. Employees and customers might perceive instability, while competitors could leverage this as a sign of operational vulnerability in the competitive Gulf States Drill Region. The need for a restatement, particularly concerning how management evaluates segment performance, suggests a fundamental issue in how the company tracks and allocates resources, impacting its ability to execute its strategy effectively.

Risk Assessment

Risk Level: high — The determination by the Board of Directors on August 28, 2025, that previously issued financial statements for December 31, 2024, 'should not be relied upon' is a significant indicator of high risk. This fundamental flaw in financial reporting, coupled with the company's admission of 'very limited crude oil production' insufficient to fund new acquisitions or drilling without 'additional funding or equity transactions,' points to severe operational and financial instability.

Analyst Insight

Investors should exercise extreme caution and thoroughly review the restated financial statements to understand the full impact of the corrections. Given the 'should not be relied upon' statement, consider this a strong signal to re-evaluate any investment thesis and potentially reduce exposure until the company demonstrates consistent, reliable financial reporting and improved operational performance.

Key Numbers

• $3,468,087 — Aggregate market value of common equity held by non-affiliates (As of the last business day of the most recently completed fiscal quarter, indicating market perception of value.)
• 14,003,639 — Outstanding shares of common stock (As of March 31, 2025, providing context for market capitalization.)
• 2024 — Fiscal year ended (The period for which financial statements were restated.)
• 2025-08-28 — Date Board determined financials unreliable (Signifies the critical date of the decision to restate.)
• 2025-09-10 — Filing date of 10-K/A (The date the amended report was submitted to the SEC.)
• 3,650,000 — Shares issued for Barrister Acquisition (Part of the consideration for acquiring Barrister Energy.)
• $2,700,000 — Principal amount of debt assumed from Barrister (Debt owed to Central Operating, LLC, later discharged.)
• 1,350,000 — Shares issued to Central Operating, LLC (In exchange for discharging the $2,700,000 debt.)

Key Players & Entities

• CoJax Oil & Gas Corp (company) — Registrant filing the 10-K/A
• SEC (regulator) — Recipient of the 10-K/A filing
• Board of Directors (company) — Determined financial statements should not be relied upon
• Barrister Energy, L.L.C. (company) — Wholly-owned subsidiary of CoJax
• Taxodium Energy, LLC (company) — Seller of NONOP Assets and Buckley Assets to Barrister
• Liberty Operating Company, LLC (company) — Seller of mineral and oil and gas properties to Barrister
• FASB ASC 280-10-50-28C (regulator) — Accounting guidance for segment information
• Sarbanes-Oxley Act of 2002 (regulator) — Legislation requiring certifications (Sections 302 and 906)
• Central Operating, LLC (company) — Creditor whose debt was assumed and exchanged for shares

FAQ

Risk Factors

• Limited Production and Dependence on External Capital [high — operational]: CoJax faces significant challenges due to very limited crude oil production from its acquisitions. This insufficient production capacity necessitates continuous reliance on external capital to fund new growth initiatives, exposing the company to financing risks and dilutive equity issuances.
• Restatement of Financial Statements [high — financial]: The company restated its 2024 financial statements due to issues with segment information disclosure, specifically the key measure used by the CODM. This restatement, announced on September 10, 2025, and determined by the Board on August 28, 2025, raises concerns about the reliability of past financial reporting and internal controls.
• Volatile Oil and Gas Prices [medium — market]: As an oil and gas producer, CoJax is inherently exposed to fluctuations in crude oil and natural gas prices. These price volatilities can significantly impact revenue, profitability, and the company's ability to secure financing and execute its growth strategy.
• Compliance with SEC and SOX Requirements [medium — regulatory]: The filing of a 10-K/A, along with updated SOX 302 and 906 certifications, indicates ongoing scrutiny and the need for robust compliance with financial reporting and disclosure regulations. Failures in these areas can lead to penalties and reputational damage.
• Low Market Capitalization [medium — financial]: The aggregate market value of common equity held by non-affiliates was $3,468,087 as of the most recent fiscal quarter. This low valuation suggests limited investor confidence and may hinder the company's ability to raise capital through equity markets.

Industry Context

CoJax operates in the early-stage development oil and gas sector, a highly competitive and capital-intensive industry. The sector is characterized by volatile commodity prices, significant exploration and production risks, and a constant need for capital investment. Companies in this space often struggle with scaling production and achieving profitability without substantial external funding.

Regulatory Implications

The restatement of financial statements and the filing of an amended 10-K/A highlight potential weaknesses in internal controls over financial reporting and disclosure processes. This could lead to increased scrutiny from the SEC and investors, potentially impacting future capital raising efforts and compliance costs.

What Investors Should Do

1. Review the specific details of the segment reporting changes in the 10-K/A to understand how performance is now being measured and reported.
2. Assess the company's ongoing need for external capital and the potential for dilution given its limited production and low market capitalization.
3. Monitor future SEC filings closely for any further disclosures or restatements that could indicate persistent accounting or operational issues.

Key Dates

• 2024-12-31: Fiscal year ended — The period for which financial statements were restated, highlighting the scope of the accounting adjustments.
• 2025-03-31: Outstanding shares of common stock reported — Provides a baseline for calculating market capitalization and understanding share structure as of a specific date.
• 2025-08-28: Board of Directors determined previously issued financial statements should not be relied upon — The critical decision point that triggered the restatement process, indicating significant accounting or disclosure issues.
• 2025-09-10: Filing date of 10-K/A — The date the amended financial statements and disclosures were officially submitted to the SEC, making the restatement public.

Glossary

10-K/A

An amended annual report filed with the SEC to correct or supplement information previously filed in a Form 10-K. (Indicates that CoJax has revised its previously filed annual financial statements and disclosures.)

Chief Operating Decision Maker (CODM)

The individual or group responsible for allocating resources to and assessing the performance of operating segments. (The restatement clarifies that net income (loss) is the key measure used by CoJax's CODM, impacting how segment performance is evaluated.)

FASB ASC 280-10-50-28C

A specific accounting standard update from the Financial Accounting Standards Board related to segment reporting disclosures. (This standard dictates the required disclosures about operating segments, which CoJax has amended.)

Sarbanes-Oxley Act (SOX)

A federal law that mandates certain practices in financial record keeping and reporting for public companies. (The filing includes updated certifications under Sections 302 and 906 of SOX, demonstrating compliance with corporate governance and financial reporting integrity rules.)

Aggregate market value of common equity held by non-affiliates

The total market value of a company's shares held by investors who are not company insiders or major shareholders. (This metric, reported at $3,468,087, indicates the market's current valuation of the company's public float.)

Year-Over-Year Comparison

The primary difference from the previous filing is the restatement of the 2024 financial statements, specifically addressing segment reporting disclosures. This indicates a significant change in how the company reports and evaluates its performance, with net income now explicitly identified as the key measure for the CODM. No comparative financial metrics like revenue growth or margin changes are available from this filing alone, but the restatement itself suggests a material correction to prior disclosures.

Key Financial Figures

• $0.01 — Section 12(g) of the Act: Common Stock, $0.01 par value per share Indicate by check
• $2,700,000 — ing, LLC ("COP") in principal amount of $2,700,000, which was discharged on November 16, 2

Filing Documents

• g084944_10ka.htm (10-K/A) — 1217KB
• g084944_ex31-1.htm (EX-31.1) — 8KB
• g084944_ex31-2.htm (EX-31.2) — 8KB
• g084944_ex32-1.htm (EX-32.1) — 4KB
• g084944_ex32-2.htm (EX-32.2) — 4KB
• img001.jpg (GRAPHIC) — 19KB
• 0001753926-25-001452.txt ( ) — 4772KB
• cjax-20241231.xsd (EX-101.SCH) — 33KB
• cjax-20241231_cal.xml (EX-101.CAL) — 42KB
• cjax-20241231_def.xml (EX-101.DEF) — 92KB
• cjax-20241231_lab.xml (EX-101.LAB) — 294KB
• cjax-20241231_pre.xml (EX-101.PRE) — 231KB
• g084944_10ka_htm.xml (XML) — 559KB

Business

Business 8 Item 1A.

Risk Factors

Risk Factors 18 Item 1B. Unresolved Staff Comments 30 Item 1C. Cybersecurity 30 Item 2.

Properties

Properties 31 Item 3.

Legal Proceedings

Legal Proceedings 31 Item 4. Mine Safety Disclosures 31 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 32 Item 6. [Reserved] 32 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 32 Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 40 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data F 41 - F 62 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 63 Item 9A.

Controls and Procedures

Controls and Procedures 63 Item 9B. Other Information 65 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 65 PART III Item 10. Directors, Executive Officers, and Corporate Governance 66 Item 11.

Executive Compensation

Executive Compensation 68 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 74 Item 13. Certain Relationships and Related Transactions, and Director Independence 75 Item 14. Principal Accountant Fees and Services 76 PART IV Item 15. Exhibits, Financial Statement Schedules 77 Item 16. 10-K/A Summary 78

SIGNATURES

SIGNATURES 79 2 FORWARD-LOOKING This Annual Report contains forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause changes in our actual results and reflect the current view about future events and are based on our current expectations and assumptions regarding our business, potential target businesses, the economy, and other future conditions. Such statements are generally accompanied by words such as "may," "should," "expect," "believe," "plan," "anticipate," "could," "intend," "target," "goal," "project," "contemplate," "believe," "estimate," "predict," "potential," "will," or "continue" or the negative of these terms or other similar expressions. Any forward-looking based upon our historical performance and on current plans, estimates, and expectations. Forward-looking statements contained or incorporated by reference herein include or may include, but are not limited to, statements about: our business strategy; our plans, objectives, expectations, and intentions; our future operating results and future operating results of Barrister as a wholly-owned subsidiary of CoJax; the competitive nature of the industry in which we will conduct our business; crude oil and natural gas commodity prices; demand for oil; the impact of adverse weather conditions and unexpected events like the COVID-19 pandemic and other pandemics or epidemics; the effects of government regulation and changes in that regulation; legal proceedings, liability claims, and effect of external investigations; the effect of a loss of, or the financial distress of, one or more key customers of our future, proposed oil production; our ability to obtain or renew customer or supply contracts; the effect of a loss of, or interruption in operations of, one or mo

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View this 10-K/A filing on SEC EDGAR