UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2020

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

From transition period from _________ to _________

Commission File No.: 333-201740

BARREL ENERGY, INC.
(Exact name of registrant as specified in its charter)

Nevada		47-1963189
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

8275 S. Eastern Ave Suite 200 Las Vegas, NV		89123
(Address of principal executive offices)		(Zip Code)

(702) 595-2247

(Registrant’s telephone number, including area code)

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

Title of each class		Trading Symbol		Name of each exchange on which registered
Common		BRLL		OTC Pink

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

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer 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	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging Growth Company	☒

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

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

As of September 3, 2021 the Company had 312,694,984 shares of common stock outstanding.

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

Item 1:	Financial Statements	3
	Condensed Balance Sheets as of June 30, 2020, (Unaudited) and September 30, 2019	3
	Condensed Statements of Operations and Comprehensive loss for the Three and Nine Months Ended June 30, 2020 and 2019 (Unaudited)	4
	Condensed Statements of Stockholders’ Deficit for the Three and Nine Months Ended June 30, 2020 and 2019 (Unaudited)	5
	Condensed Statements of Cash Flows for the Nine Months Ended June 30, 2020 and 2019 (Unaudited)	6
	Notes to Condensed Financial Statements (Unaudited)	7
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3:	Quantitative and Qualitative Disclosures about Market Risk	20
Item 4:	Controls and Procedures	20

PART II – OTHER INFORMATION

Item 1:	Legal Proceedings	21
Item 1A:	Risk Factors	21
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	21
Item 3:	Default upon Senior Securities	21
Item 4:	Mine Safety Disclosures	21
Item 5:	Other information	21
Item 6:	Exhibits	22
Signatures		23

Reference in this report to “BARREL ENERGY” “we,” “us,” and “our” refer to BARREL ENERGY, Inc.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

The Securities and Exchange Commission (“SEC”) encourages companies to disclose forward-looking information so that investors can better understand future prospects and make informed investment decisions. This report contains these types of statements. Words such as “may,” “expect,” “believe,” “anticipate,” “estimate,” “project,” or “continue” or comparable terminology used in connection with any discussion of future operating results or financial performance identify forward-looking statements. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report. All forward-looking statements reflect our present expectation of future events and are subject to a number of important factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.

PART I – FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

The financial information set forth below with respect to our condensed financial statements for the three and nine months period ended June 30, 2020 and 2019 is unaudited. This financial information, in the opinion of management, includes all adjustments consisting of normal recurring entries necessary for the fair presentation of such data. The results of operations for the three and nine months ended June 30, 2020 are not necessarily indicative of results to be expected for any subsequent period. Our year end is September 30.

BARREL ENERGY INC

CONDENSED BALANCE SHEETS

	June 30, 2020			September 30, 2019
	Unaudited
ASSETS
Current assets:
Cash	$	7		$	--
					--
Total current assets		7			--
Right of use asset, operating lease, net of amortization- related party		3,877,385			--

Total assets	$	3,877,392		$	--

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Bank overdraft	$	--		$	182
Accounts payable and accrued expenses		770,266			315,775
Accrued expense- related parties		411,905			121,425
Advances from shareholder		13,202			48,702
Convertible notes payable- net of unamortized debt discount		230,696			175,494
Notes payable		--			100,000
Operating lease liability, current portion- related party		301,720			--
Derivative liability		485,529			434,999
Total current liabilities		2,213,318			1,196,577

Notes payable		33,125			--
Operating lease liability-related party		3,650,915			--
Total liabilities		5,897,358			1,196,577

Commitment and Contingencies		--			--

Stockholders’ deficit:
Preferred stock, $0.001 par value, 5,000,000 authorized, zero issued and outstanding
Common stock, $0.001 par value, 450,000,000 authorized, 172,652,495 issued and outstanding as of June 30, 2020 and 41,093,618 as of September 30, 2019		172,652			41,093
Additional paid in capital		18,547,075			870,515
Accumulated other comprehensive loss		--			(5,361	)
Accumulated deficit		(20,739,693	)		(2,102,824	)
Total stockholders’ deficit		(2,019,966	)		(1,196,577	)

Total liabilities and stockholders ‘deficit	$	3,877,392		$	--

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

Table of Contents

BARREL ENERGY INC

CONDENSED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE LOSS

FOR THE THREE AND NINE MONTHS ENDED JUNE 30,

(Unaudited)

	Three Months						Nine Months
	2020			2019			2020			2019
Operating expenses:
Consulting – related parties	$	96,000		$	87,155		$	288,000		$	264,681
Consulting		--			77,627			--			174,824
Lease expense-related party		150,580			--			451,500			--
General and administrative expense		78,524			154,647			126,404			306,788
Total operating expense		325,104			319,429			865,904			746,293

Loss from operations		(325,104	)		(319,429	)		(865,904	)		(746,293	)

Other income (expense)
Loss on debt settlement		(7,327	)		--			(27,927	)		--
Gain (loss) on foreign currency translation		--			--			(14,039	)		(24	)
Change in fair value of derivative liability		(786,534	)		(45,570	)		(1,164,683	)		(16,796	)
Amortization of debt discount		(15,709	)		--			(132,793	)		--
Financing cost		(47,500	)		(117,394	)		(79,000	)		(271,098	)
Gain on extinguishment of debt		28,418			--			30,922			--
Interest expense		(8,948	)		(117,233	)		(25,636	)		(133,771	)
Total other income ( expense)		(837,600	)		(280,197	)		(1,413,156	)		(421,689	)

Net loss		(1,162,704	)		(599,626	)		(2,279,060	)		(1,167,982	)

Deemed dividend from down round		--			--			(16,363,600	)		--

Net loss attributable to common stockholders	$	(1,162,704	)	$	(599,626	)	$	(18,642,660	)	$	(1,167,982	)

Foreign currency translation adjustment		--			(349	)		--			1,731

Comprehensive loss	$	(1,162,704	)	$	(599,975	)	$	(18,642,660	)	$	(1,166,251	)

Net loss per common share attributable to common stockholders, Basic and Diluted	$	(0.01	)	$	(0.02	)	$	(0.27	)	$	(0.03	)

Weighted average number of common shares outstanding, basic and diluted		99,923,247			38,371,853			69,488,265			35,320,524

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

Table of Contents

BARREL ENGERGY INC

CONDENSED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(Unaudited)

	Common Stock						Additional Paid-In			Accumulated			Stock			Accumulated Other Comprehensive			Total Stockholders’
	Shares			Amount			Capital			Deficit			Receivable			Income (Loss)			Deficit
Balance at September 30, 2018		12,301,332		$	23,801		$	272,638		$	(354,510	)	$	(11,500	)	$	(6,857	)	$	(76,428	)
Common stock issued for cash		13,502,000			25,002			998			--			--			--			26,000
Common stock issued for stock receivable		11,500,000			(11,500	)		--			--			11,500			--			--
Common stock issue for service		175,000			175			131,075			--			--			--			131,250
Comprehensive income (loss)		--			--			--			--			--			3,420			3,420

Net loss		--			--			--			(507,637	)		--			--			(507,637	)

Balance at December 31, 2018		37,478,332			37,478			404,711			(862,147	)					(3,437	)		(423,395	)
Stock issued for cash		440,286			440			219,703			--						--			220,143
Comprehensive income (loss)		--			--			--			--			--			(1,340	)		(1,340	)

Net loss		--			--			--			(61,719	)		--			--			(61,719	)

Balance at March 31, 2019		37,918,618			37,918			624,414			(923,866	)		--			(4,777	)		(266,311	)
Common stock issued for cash		3,035,000			3,035			75,465			--						--			78,500
Common stock issued for convertible debt		140,000			140			4,760			--			--			--			4,900
Finance charges of notes		--			---			134,938			--			--			--			134,938
Deemed dividend of warrants		--			--			30,938			(30,938	)		--			--			--
Comprehensive income (loss)		--			--			--			--			--			(349	)		(349	)

Net loss		--			--			--			(598,626	)		--			--			(598,626	)

Balance at June 30, 2019		41,093,618		$	41,093		$	870,515		$	(1,553,430	)	$	--		$	(5,126	)	$	(646,948	)

Balance at September 30, 2019		41,093,618		$	41,093		$	870,515		$	(2,102,824	)		--		$	(5,361	)	$	(1,196,577	)
Common stock issued for cash		2,000,000			2,000			38,000			--			--			--			40,000
Common stock issued for debt		9,393,000			9,393			147,115			--			---			--			156,508
Deemed dividend on warrants		--			--			16,363,600			(16,363,600	)		--			--			--
Foreign currency translation adjustment		--			---			--			--			--			(7,409	)		(7,409	)

Net loss		--			--			--			(140,857	)		--			--			(140,857	)

Balance at December 31, 2019		52,486,618			52,486			17,419,230			(18,607,281	)		--			(12,770	)		(1,148,335	)
Common stock issued for debt		14,000,000			14,000			23,655			--			--			--			37,655
Effect of conversion of debt on APICs		--			--			113,577			--			--			--			113,577
Foreign currency translation adjustment		--			--			--			5,791			--			12,770			18,561

Net loss		--			--			--			(975,499	)		--			--			(975,499	)

Balance at March 31, 2020		66,486,618			66,486			17,556,462			(19,576,989	)		--			--			(1,954,041	)
Common stock issued for debt		106,165,878			106,166			(5,994	)		--			--			--			100,172
Common stock returned to treasury		(10,000,000	)		(10,000	)		10,000			--			---			--			--
Common stock for inducement of debt		10,000,000			10,000			30,000			--			--			--			40,000
Effect of conversion of debt on APIC		--			--			956,607			--			--			--			956,607

Net loss		---			--			--			(1,162,704	)		--			--			(1,162,704	)

Balance at June 30, 2020		172,652,496		$	172,652		$	18,547,075		$	(20,739,693	)	$	--		$	--		$	(2,019,966	)

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

Table of Contents

BARREL ENGERGY INC

CONDENSED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED JUNE 30,

(Unaudited)

	2020			2019
Cash flows from operating activities:
Net loss	$	(2,279,060	)	$	(1,167,982	)
Adjustments to reconcile net loss to net cash used in operating activities:
Derivative change in fair value		1,164,683			16,769
Amortization of debt discount		132,793			134,938
(Gain) on debt conversion		(30,922	)		--
Loss on debt settlement		27,927			--
Financing cost		79,000			253,583
Right to use lease		227,599			--
Changes in operating assets and liabilities:
Accounts payable and accrued expense		625,808			11,644
Lease liability		(378,100	)		--
Prepaid		--			33,333
Accrued expense- related party		290,480			64,361
Net cash used in operating activities		(139,792	)		(653,354	)

Cash flows from financing activities:
Bank overdraft		(182	)		-
Cash received for the sale of common stock		40,000			323,643
Proceeds from notes payable		33,125			100,000
Proceeds from convertible notes payable		89,000			255,000
Repayment of related party advances and convertible note payable		(35,500	)		(9,590	)
Net cash provided by financing activities		126,443			669,053

Effects of exchange rate on cash		13,356			(6,632	)

Net increase in cash		7			9,067
Cash – beginning of year		--			3,458
Cash – end of period	$	7		$	12,525

SUPPLEMENT DISCLOSURES:
Interest paid	$	-		$	-
Income taxes paid	$	-		$	-

NON CASH INVESTING AND FINANCING ACTIVITIES
Common stock issued for conversion of debt	$	194,335		$	--
Discount recorded on inception of derivatives	$	--		$	36,000
Common stock issued for notes payable	$	100,000		$	--
Transfer out of derivative liability upon conversion of debt	$	1,070.181		$	--
Deemed dividend from down round	$	16,363,600		$	--
Right to use lease	$	4,104,984		$	--

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

Table of Contents

BARREL ENERGY INC

NOTES TO CONDENSED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 – NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

BARREL ENERGY INC. is a Nevada corporation, incorporated January 17, 2014, which was engaged historically in the oil and gas sector of the energy industry. In January 2019, the Company terminated the agreement. The Company entered into an agreement in the lithium exploration business but terminated the contract. The Company has leased land in central California to grow hemp for extracting CBD and the use of fiber in clothing and other materials. The Company has reengaged in the lithium battery business under new agreement subsequent to the filing of this report.

On April 11, 2019, the Company amended its articles of incorporation to increase its number of authorized shares of common stock from 75,000,000 to 450,000,000.

CORRECTION OF ERRORS IN PREVIOUSLY REPORTED UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS

The Company has identified errors in financial statements issued for the interim periods December 31, 2019 and March 31, 2020. We are in the process of assessing the materiality of these errors in accordance with the U.S. Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin (“SAB”) No. 99, Materiality and SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements (“SAB 108”), using both the rollover method and the iron curtain method, as defined in SAB 108. When the assessment is completed, we will take any necessary steps as soon as practicable.

The occurrence of an uncontrollable event such as the COVID-19 pandemic may negatively affect our operations. A pandemic typically results in social distancing, travel bans, and quarantine. This may limit access to our, suppliers, management, support staff and professional advisors. Although the Company’s operations are virtual, we depend on numerous third party consultants and contract suppliers so we cannot measure the impact on our operations or financial condition at this point in time.

BASIS OF PRESENTATION

The accompanying unaudited interim financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information required to be included in a complete set of financial statements in accordance with accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended June 30, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2020. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal period, as reported in the Form 10-K, have been omitted. The accompanying unaudited financial statements should be read in conjunction with the audited September 30, 2019 financial statements and related notes included in the Company’s form 10-K filed with the SEC.

Basic and diluted net income per share

Basic loss per share is calculated as net loss to common stockholders divided by the weighted average number of common shares outstanding during the period. Diluted loss per share for the period equals basic loss per share as the effect of any stock based compensation awards or stock warrants would be antidilutive. As of June 30, 2020 the potential shares at conversion outstanding was 91,892,145 consisting of conversion of debt to common stock of approximately 90,289,859 and conversion warrants to common stock of 1,602,286 compared to a total of 4,795,199 for the nine months ended June 30, 2019.

Estimates and Assumptions

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 disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. The Company’s significant estimates include the fair value of common stock issued for services, fair value of derivative liability, deemed dividend down round, the valuation of right to use asset and lease liability and valuation allowance for deferred tax assets. Actual results could differ from those estimates.

Table of Contents

Gain (Loss) on Modification/Extinguishment of Debt

In accordance with ASC 470, a modification or an exchange of debt instruments that adds or eliminates a conversion option that was substantive at the date of the modification or exchange is considered a substantive change and is measured and accounted for as extinguishment of the original instrument along with the recognition of a gain or loss. Additionally, under ASC 470, a substantive modification of a debt instrument is deemed to have been accomplished with debt instruments that are substantially different if the present value of the cash flows under the terms of the new debt instrument is at least 10 percent different from the present value of the remaining cash flows under the terms of the original instrument. A substantive modification is accounted for as an extinguishment of the original instrument along with the recognition of a gain or loss.

Recent Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02 Leases which requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases with terms greater than 12 months. In July 2018, the FASB issued ASU 2018-10 Leases, Codification Improvements and ASU 2018-11 Leases, Targeted Improvements, to provide additional guidance for the adoption of ASU 2016-02. ASU 2018-10 clarifies certain provisions and corrects unintended applications of the guidance such as the application of implicit rate, lessee reassessment of lease classification, and certain transition adjustments that should be recognized to earnings rather than to stockholders’ (deficit) equity. ASU 2018-11 provides an alternative transition method and practical expedient for separating contract components for the adoption of ASU 2016-02. ASU 2016-02, ASU 2018-10, ASU 2018-11, (collectively, “Topic 842”) are effective for fiscal years beginning after December 15, 2018, with early adoption permitted. In December 2019, the Company adopted Topic 842 and made the following elections:

	·	The Company did not elect the hindsight practical expedient, for all leases.
	·	The Company elected the package of practical expedients to not reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs for all leases.
	·	In March 2018, the FASB approved an optional transition method that allows companies to use the effective date as the date of initial application on transition. The Company elected this transition method, and as a result, will not adjust its comparative period financial information or make the newly required lease disclosures for periods before the effective date.
	·	The Company elected to not separate lease and non-lease components, for all leases.

On October 1, 2019, the Company recorded a Right of Use Asset of $4,104,985, a corresponding Lease Liability of $4,330,735 in accordance with Topic 842.

The FASB recently issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470- 20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, to reduce complexity in applying GAAP to certain financial instruments with characteristics of liabilities and equity. The guidance in ASU 2020-06 simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470-20, Debt: Debt with Conversion and Other Options, that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock. The guidance in ASC 470-20 applies to convertible instruments for which the embedded conversion features are not required to be bifurcated from the host contract and accounted for as derivatives. These amendments are expected to result in more freestanding financial instruments qualifying for equity classification (and, therefore, not accounted for as derivatives), as well as fewer embedded features requiring separate accounting from the host contract. The amendments in ASU 2020-06 further revise the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares. The amendments in ASU 2020-06 are effective for public entities for fiscal years beginning after December 15, 2021 with early adoption permitted (for “emerging growth company” beginning after December 15, 2023). The Company will be evaluating the impact this standard will have on the Company’s consolidated financial statements.

Table of Contents

Derivative Instruments

Derivative financial instruments are recorded in the accompanying consolidated balance sheets at fair value in accordance with ASC 815. When the Company enters into a financial instrument such as a debt or equity agreement (the “host contract”), the Company assesses whether the economic characteristics of any embedded features are clearly and closely related to the primary economic characteristics of the remainder of the host contract. When it is determined that (i) an embedded feature possesses economic characteristics that are not clearly and closely related to the primary economic characteristics of the host contract, and (ii) a separate, stand-alone instrument with the same terms would meet the definition of a financial derivative instrument, then the embedded feature is bifurcated from the host contract and accounted for as a derivative instrument. The estimated fair value of the derivative feature is recorded in the accompanying balance sheets separately from the carrying value of the host contract. Subsequent changes in the estimated fair value of derivatives are recorded as a gain or loss in the Company’s statements of operations.

Fair Value of Financial Instruments

The Company’s financial instruments consist of cash and cash equivalents, accounts payable and accrued expenses and shareholder loans. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.

Financial assets and liabilities recorded at fair value in our condensed consolidated balance sheets are categorized based upon a fair value hierarchy established by GAAP, which prioritizes the inputs used to measure fair value into the following levels:

Level 1— Quoted market prices in active markets for identical assets or liabilities at the measurement date.

Level 2— quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable and can be corroborated by observable market data.

Level 3— Inputs reflecting management’s best estimates and assumptions of what market participants would use in pricing assets or liabilities at the measurement date. The inputs are unobservable in the market and significant to the valuation of the instruments.

A financial instrument's categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Table of Contents

Deemed Dividend

The Company issues instruments which contain a provision for the change in conversion price should a new instrument issued hold a conversion price lower than the conversion price of the instrument issued earlier. The provision lowers the conversion price to the new instrument triggering the down round feature and creates a deemed dividend. The deemed dividend is added to the net income or loss for the period and used in calculating the earnings per share for the period.

NOTE 2 - GOING CONCERN

The Company’s unaudited condensed financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern that contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company, as shown in the accompanying balance sheets, has negative working capital of $2,213,311 and an accumulated deficit of $20,739,693 as of June 30, 2020. The Company has not established any source of revenue to cover its operating costs. These factors raise substantial doubt about the company’s ability to continue as a going concern for at least one year from the issuance of these unaudited condensed financial statements. The Company will engage in very limited activities that must be satisfied in cash until a source of funding is secured. The Company will offer noncash consideration and seek equity lines as a means of financing its operations. If the Company is unable to obtain revenue producing contracts or financing or if the revenue or financing it does obtain is insufficient to cover any operating losses it may incur, it may substantially curtail or terminate its operations or seek other business opportunities through strategic alliances, acquisitions or other arrangements that may dilute the interests of existing stockholders. There can be no assurance however that the Company will be able to raise additional capital when needed, or at terms deemed acceptable, if at all. The unaudited condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.

NOTE 3 – CONVERTIBLE NOTE

On July 1, 2014, the Company issued a USD $67,215 (CAD $75,000) convertible note for cash. The note bears an interest rate of 9.5% and matured on December 31, 2015. The note, plus accrued interest, is convertible by the holder, as, in part or whole, until the date of maturity into common stock of the Company at CAD $0.00275 per share. The Company by resolution has elected to allow conversion of any and all the notes outstanding principal and interest until the note is fully paid. On September 30, 2017, the Company issued 700,000 shares of common stock with a value of $5,612 (CDN $7,000) for partial conversion of the convertible note. The note was amended through amendment #1 to establish the note’s principal and interest in US dollars from Canadian dollars at $82,496. The change from Canadian to US dollars on the rewritten note effectively eliminated the currency adjustments going forward. The note was further amended extending the closing date to June 30, 2020 and the conversion price to $0.00275, The Note was further amended with Amendment #2 adding $30,000 of principal to the note and extending the note till December 31, 2021. Various parts of the note were assigned to other individuals for partial payment of the note and their portions converted to common stock. As part of the amendments, the note holder receiving 10,000,000 shares of the Company’s stock with a value of $40,000. As of June 30, 2020, the principal balance was USD $33,764 plus accrued interest of USD $29,378 for a total liability of USD $63,142.

On November 12, 2018, the Company issued a $36,000 convertible note to Crown Partners, LLC. The note bears an original discount of $10,000, matures in 12 months from the origination date and bears interest at 5% per annuum. The note is convertible at any time, in part or whole, at $0.50 per share until the 180^th date of the note at which time it is convertible at 55% of the market price which is defined as the lowest trading price 25 days prior to conversion. An interest amount of $2,184 has been accrued along with a principal balance of $4,922 as of June 30, 2020. As of June 30, 2020 the note is in default and no litigation pending.

Table of Contents

On May 15, 2019, the Company issued a $100,000 convertible note plus 500,000 warrants to Auctus Funding, LLC. The note bears an original discount of $3,500, matures February 17, 2020 and bears interest at 12% per annuum. The note is convertible at any time, at 55% of the market price which is defined as the lowest trading price 25 days prior to conversion. Interest of $15,151 has been accrued along with principal of $82,703 as of June 30, 2020. The warrants are convertible at $0.20 per share or if the price of the company’s common stock is greater than the exercise price of the warrant, the warrant may be converted by the holder as a cashless warrant in lieu of a cash warrant. As of June 30, 2020 the note is in default and no litigation pending. (See Note 6: Warrants)

On May 16, 2019, the Company issued a $125,000 convertible note and 625,000 warrants to Firstfire Global Opportunity Fund, LLC. The note bears an original discount of $12,500, matures in 12 months from the origination date and bears interest at 7% per annuum. The note is convertible in part or whole, at $0.25 per share for the first 180 days or 60% of the market price which is defined as the lowest trading price 20 days prior to conversion. Interest of $9,861 has been accrued along with a principal balance of $90,307 as of June 30, 2020. The warrants are convertible at $0.20 per share or if the price of the company’s common stock is greater than the exercise price of the warrant, the warrant may be converted by the holder as a cashless warrant in lieu of a cash warrant. As of June 30, 2020 the note is in default and no litigation pending. (See Note 6: Warrants)

On June 26, 2020 the Company issued a convertible note to Harp Sangha, Chairman and CFO of the Company for $19,000 which matures one year from date of issuance. The note bears interest of 8% per annum and is convertible into common stock of the Company at $0.10 per share. As of June 30, 2020 the outstanding balances included principal of $19,000 plus interest of $19.

As of June 30, 2020 the Company calculated the derivative liability of $485,529 using a closing price of $0.007 volatility of 310%, conversion prices of $0.00175 to $0.10, dividend of 0.00 and discount rate of 1.8% and expensed $64,056 in debt discount. (See Note 8 Derivative)

During the nine months ended June 30, 2020 the Company issued 129,558,878 shares of common stock with a value of $294,335 for the reduction of convertible notes. The Company further determined the difference between the value of the issuance at date of issuance and the conversion price of the shares.

NOTE 4 – RELATED PARTY

During the period ended December 31, 2018 Harpreet Sangha, the Company’s Chairman and Chief Financial Officer, entered into an agreement and purchased 10,000,000 shares of the Company’s common stock for $10,000 and Craig Alford, the Company’s President, who entered into an agreement and purchased 4,000,000 shares of the Company’s common stock for $4,000. On June 24, 2020 Harpreet Sangha returned the 10,000,000 shares to the Company.

During the year ended September 30, 2019, the Company signed a land lease agreement for the production of hemp. The lease is a 10 year lease with annual payments of $602,000 and was modified for the initial payments of $301,000 each in May and June 2020. A director of the Company is related to the owner of the land leased. (See Note 7: Operating Lease)

Table of Contents

During the nine months ended June 30, 2020 the Company accrued $333,000 and paid $42,521 in consulting fees for three officers resulting in a balance of $411,905 due the related parties.

From time to time during the duration of the Company, related parties have advanced the Company funds to continue operations. As of June 30, 2020 $13,202 was owed to a former officer and director of the Company.

NOTE 5 – EQUITY

During the period from September 30, 2018 to March 31, 2019, the Company entered into separate Subscription Agreements with 17 persons under which 25,000,000 shares of the Company’s common stock were sold for $0.001 per share. In addition, twenty individuals were sold 442,286 units, consisting of one share of common stock at $0.50 per share one warrant to purchase one share of common stock shares at $0.50 per share within three years. This included Harpreet Sangha, the Company’s Chairman, who entered into an agreement to purchase 10,000,000 shares of the Company’s common stock and Craig Alford, the Company’s President, who entered into an agreement to purchase 4,000,000 shares of the Company’s common stock. Three individuals purchasing a total of 3,250,000 shares of common stock with a value $3,250 are relatives of the company Chairman and CFO. The subscription agreements dated September 30, 2018 for 11,500,000 shares of common stock with a value of $11,500 were treated as stock subscriptions receivable and funds were received in the period ending March 31, 2019. Subscription Agreements were approved by the Company’s Board of Directors. The sales were made in reliance on the exemption provided by Section 4(a)(2) of the Securities Act of 1933 and, with respect to a majority of the purchasers, Regulation S.

On November 13, 2018, the Company entered into a $3,000,000 equity purchase agreement with Crown Bridge Partners. Under the terms of the agreement, the Company may put to the investor shares of the Company common stock in minimums of $10,000 to maximums of either $100,000 or 200% of the average trading volume, whichever is less. The agreement may be terminated at any time by the Company or when the total commitment of shares are sold by the Company to the investor. As part of the agreement, the Company issued 175,000 shares of its common stock at $0.75 per share as a commitment fee. The value of the transaction of $131,250 was expensed as a financing cost.

During the year ended September 30, 2019 the Company with the note holder agreed to convert a note in Canadian dollars to US dollars. Based on the conversion during the year ended September 30, 2019, the Company did not incur a foreign currency translation adjustment during the period ended June 30, 2020.

During the nine months ended June 30, 2020 the Company issued 10,000,000 shares of common stock with a value of $40,000 to a note holder to induce the amendment of the note.

During the nine months ended June 30, 2020 the Company issued 129,558,878 shares of common stock with a value of $294,335 for the reduction of the convertible notes. The conversion created an increase to paid in capital of $1,070,184 offset by reduction in derivative liability. The Company further determined the difference between the value of the issuance at date of issuance and the conversion price of the shares which reduced the paid in capital by $30,922 with offset to debt extinguishment and interest.

During the nine months period ended June 30, 2020, the Company issued 2,000,000 shares of common stock to a related party with a value of $40,000 for cash.

On June 24, 2020, a related party returned 10,000,000 shares to the Company treasury at par value.

Table of Contents

NOTE 6 – WARRANTS

During the year ended September 30, 2019 the Company issued 477,286 warrants to twenty individuals as part of their purchase of 477,286 shares of common stock. The warrants mature in three years and are convertible into one share of common stock for each warrant at $0.50 per share.

During the year ended September 30, 2019 the Company issued 1,125,000 warrants to 2 convertible debt entities as part of the note issued. The warrants were issued as an inducement of the issuance of the two notes for an aggregate of $225,000. The warrants are convertible at $0.20 per share or if the price of the company’s common stock is greater than the exercise price of the warrant, the warrant may be converted by the holder as a cashless warrant in lieu of a cash warrant. The warrants also contain an antidilution clause allowing the holder to adjust the number of warrants and or price should the Company issue any convertible instrument at a lower value or conversion price than the warrants issue.

The Company used the Black Scholes Pricing model to estimate the fair value of the warrants as of grant date, using the following key inputs: market prices of the Company’s common stock at dates of grant of $0.11 - $0.50 per share, exercise price of $0.20 per share, volatility of 272.63% and discount rate of 2.40%. The fair value of the warrants was determined to be $314,365 as of September 30, 2019.

The 1,125,000 warrants provided a provision that adjusted the conversion price if any other convertible instrument provides for a lower conversion price. As the Company agreed to the conversion price on a convertible note at $0.00275 during the quarter ended December 31, 2019, the warrants became eligible for that conversion price and triggered a down round and deemed dividend of $16,363,600.

The outstanding warrants are set out as follow:

	Warrants		Weighted Average Exercise Price		Weighted Average Remaining Contract Life		Intrinsic Value
Outstanding at September 30, 2019		1,602,286	$	0.29		3.32	$	--
Granted								--
Expired		--		--		--		--
Exercised		--		--		--		--
Outstanding at June 30, 2020		1,602,286	$	0.29		2.57	$	--

NOTE 7 – NOTES PAYABLE

On November 15, 2018, the Company received an advance from one non-related party for $65,000. On December 3, 2018, the Company received an additional advance of $35,000 from the same individual for a total of $100,000. Both advances are unsecured, on demand and bear no interest. The Company has calculated an imputed interest of $2,500 as of September 30, 2019. During the quarter ended December 31, 2019 the Company issued 800,000 shares of common stock with a value of $100,000 for the payment of the note and implied interest.

During the nine months period ending June 30, 2020 the Company issued 3 notes totaling $33,125. The notes all mature in two years of issuance with one note for $10,000 bearing 20% interest and the balance bearing 10% interest per annum.

Table of Contents

NOTE 8- DERIVATIVE LIABILITIES

On November 12, 2018, the Company issued a $36,000 convertible note to Crown Partners, LLC. The note bears an original discount of $3,500, matures in 12 months from the origination date and bears interest at 5% per annuum. The note is convertible at any time, in part or whole, at $0.50 per share until the 180^th date of the note at which time it is convertible at 55% of the market price which is defined as the lowest trading price 25 days prior to conversion. The Company used the Black Scholes model to estimate the fair value of the derivative liability as of the date of issuance. As of June 30, 2020, using the following key inputs: market price of the Company’s common stock $0.007 per share, conversion rate of 0.00195, volatility of 310% and discount rate of 1.80%. The fair value of the derivative liability was determined to be $18,197 as of June 30, 2020.

On May 15, 2019, the Company issued a $100,000 convertible note to Auctus Funding, LLC. The note bears an original discount of $3,500, matures February 17, 2020 and bears interest at 5% per annuum. The note is convertible at any time, at 5% of the market price which is defined as the lowest trading price 25 days prior to conversion. The Company used the Black Scholes model to estimate the fair value of the derivative liability as of the date of issuance. As of June 30, 2020, using the following key inputs: market price of the Company’s common stock $0.007 per share, conversion rate of 0.00175, volatility of 310% and discount rate of 1.80%. The fair value of the derivative liability was determined to $223,518 as of June 30, 2020.

On May 16, 2019, the Company issued a $125,000 convertible note to FirstFire Global Opportunity Fund, LLC. The note bears an original discount of $12,500, matures in 12 months from the origination date and bears interest at 7% per annuum. The note is convertible at any time, in part or whole, at $0.25 per share or 60% of the market price which is defined as the lowest trading price 20 days prior to conversion. The Company used the Black Scholes model to estimate the fair value of the derivative liability as of the date of issuance. As of June 30, 2020, using the following key inputs: market price of the Company’s common stock $0.0071 per share, conversion price of 0.00216 volatility of 310% and discount rate of 1.80%. The fair value of the derivative liability was determined to $243,814 as of June 30, 2020.

Fair Value of Financial Instruments

Level 1— Quoted market prices in active markets for identical assets or liabilities at the measurement date.

A financial instrument's categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Table of Contents

Financial assets and liabilities measured at fair value on a recurring basis are summarized below as of September 30, 2019 and June 30, 2020:

	Level 1		Level 2		Level 3		Total
As of September 30, 2019:
Assets
None	$	-	$	-	$	-	$	-
Liabilities
Derivative liability	$	-	$	-	$	434,999	$	434,999

As of June 30, 2020:
Assets
None	$	-	$	-	$	-	$	-
Liabilities
Derivative liability	$	-	$	-	$	485,529	$	485,529

The following table summarizes the change in the fair value of the derivative liability during the nine months ended June 30, 2020:

Fair value as of September 30, 2019	$	434,999
Loss on debt at conversion		(43,969	)
Conversion of debt		(1,070,184	)
Change in fair value		1,164,683
Fair value as of June 30, 2020	$	485,529

NOTE 9 – OPERATING LEASE

On May 14, 2019, the Company signed a land lease in central California for 602 acres at $1,000 per acre to grow hemp for fiber usage. The lease is for 10 years with annual costs of $602,000 with the initial payment of $301,000 on March 30, 2020 and second payment of $301,000 on June 30, 2020 with the balance of the annual payments being made on April 1 of each subsequent year. The lease holder is a related party to one of the directors of the Company. As of June 30, 2020 the Company has accrued $667,170 of unpaid lease payments as accounts payable. The lease terminates in May 2029. As of June 30, 2020 the Company recorded a right of use asset of $3,877,385 and operating lease liability of $3,952,635 with a lease expense for the three and nine months of $150,580 and $451,500, respectively.

The yearly rental obligations including the lease agreements are as follows:

Fiscal Year ended September 30,
2020	$	602,000
2021	$	602,000
2022	$	602,000
2023	$	602,000
2024 and years thereafter	$	3,612,000
Total lease payments	$	6,020,000
Less present value discount	$	(2,067,365	)
	$	3,952,635
Less operating lease short term	$	(301,720	)
Operating lease liability, long term	$	3,650,915

Table of Contents

As noted in the recent accounting pronouncements the Company adapted ASC 842 on October 1, 2019 using the modified retrospective approach and has elected the practical expedient package by allowing for historical lease classification for this lease as the date of transition. The present value calculation discount rate used is the rate of 7% at which the Company can borrow funds.

NOTE 10 – SUBSEQUENT EVENTS

On July 17, 2020, the Company issued a convertible note to Harp Sangha for $25,000 which matures one year from date of issuance. The note bears interest of 8% per annum and is convertible into common stock of the Company at $0.10 per share.

On September 11, 2020, the Company issued a convertible note to Harp Sangha for $45,000 which matures one year from date of issuance. The note bears interest of 8% per annum and is convertible into common stock of the Company at $0.10 per share.

During the period from July 1, 2020 to September 30, 2020 the Company issued 126,917,488 shares of common stock to one convertible debt holder with a value of $112,314 for the conversion of debt.

On December 23, 2020, the Company issued a convertible note to EROP Capital for $25,000 which matures one year from date of issuance. The note bears interest of 8% per annum and is convertible into common stock of the Company at $0.10 per share or 70% of the lowest trade five days prior to conversion.

On December 31, 2020, the Company issued a convertible note to Harp Sangha for $30,000 which matures one year from date of issuance. The note bears interest of 8% per annum and is convertible into common stock of the Company at $0.10 per share.

On February 5, 2021, the Company issued a convertible note to EROP Capital for $115,000 which matures one year from date of issuance. The note bears interest of 8% per annum and is convertible into common stock of the Company at $0.10 per share or 70% of the lowest trade five days prior to conversion.

On February 9, 2021, the Company entered into a Memorandum of Understanding with Rosh Energy Technology Pvt, Inc. Under the terms of the agreement the Company will provide the capital for the manufacturing of lithium batteries in India.

On February 10, 2021, the Company issued a convertible note to Harp Sangha for $324,000 which matures one year from date of issuance. The note bears interest of 8% per annum and is convertible into common stock of the Company at $0.10 per share.

On February 17, 2021, the Company issued a convertible note to EROP Capital for $300,000 which matures one year from date of issuance. The note bears interest of 8% per annum and is convertible into common stock of the Company at $0.10 per share.

On February 22, 2021, the Company signed a Stock Purchase and Sales Agreement with Flote App, Inc. Under the terms of the agreement the Company will sell to Flote up to 45% of the equity interest in the Company for an aggregate of $8,500,000 consisting in two tranches of $2,500,000 and $6,000,000, respectively. Closing of the first tranche is schedule for April 30, 2021 and the second tranche on or before December 30, 2021.

Table of Contents

On March 3, 2021, the Company issued a convertible note to Harp Sangha for $250,000 which matures one year from date of issuance. The note bears interest of 8% per annum and is convertible into common stock of the Company at $0.10 per share.

On March 4, 2021, the Company signed a memorandum of Understanding with American Lithium Minerals, Inc. Under the terms of the agreement, AMLM will assist in the development of lithium battery technology in the US and India including the manufacturing, assembly, distribution and recycling of Lithium batteries.

On March 12, 2021, the Company entered into an agreement with Crown Bridge Partners, LLC whereby the remaining balance of the note dated November 12, 2018 and any remaining warrants of 28,800 issued to Crown Bridge are extinguished. In addition Crown Bridge will instruct the Company transfer agent to cancel 8,330,420 shares held by Crown Bridge by March 17, 2021,

On March 12, 2021, the Company entered into an agreement with First Fire Global Opportunities Fund, LLC whereby the remaining balance of the note dated May 28, 2019 with principal of $125,000 and a remaining warrants of 625,000 issued to First Fire are extinguished. The Company issued 2,000,000 shares with a value of $145,000 for final settlement and payment of all principal, interest and penalties, plus the cancellation of any reserve shares held by First Fire with the Company’s Transfer Agent.

During the period from February 2, 2021 to March 31, 2021 the Company issued 24,520,420 shares of common stock to three convertible debt holders for the conversion of debt.

On March 29, 2021, the Company issued a convertible note to EROP Capital for $25,000 which matures one year from date of issuance. The note bears interest of 8% per annum and is convertible into common stock of the Company at $0.01 per share or 70% of the lowest trade five days prior to conversion.

On April 1 2021, the Company issued a convertible note to EROP Capital for $50,000 which matures one year from date of issuance. The note bears interest of 8% per annum and is convertible into common stock of the Company at $0.01 per share or 70% of the lowest trade five days prior to conversion.

On June 30, 2021 the Company issued a convertible note to EROP Capital for $50,000 which matures one year from date of issuance. The note bears interest of 8% per annum and is convertible into common stock of the Company at $0.01 per share or 70% of the lowest trade five days prior to conversion.

On July 12, 2021, the Company issued a convertible note to EROP Capital for $50,000 which matures one year from date of issuance. The note bears interest of 8% per annum and is convertible into common stock of the Company at $0.01 per share or 70% of the lowest trade five days prior to conversion.

On July 28, 2021, the Company issued a convertible note to EROP Capital for $50,000 which matures one year from date of issuance. The note bears interest of 8% per annum and is convertible into common stock of the Company at $0.01 per share or 70% of the lowest trade five days prior to conversion.

On August 2, 2021 the Company issued 9,400,000 shares of common stock for the conversion of debt of $9,000 and accrued interest of $16,850 for a total value of $25,850.

The Company has evaluated subsequent events to determine events occurring after June 30, 2020 through September 3, 2021 that would have a material impact on the Company’s financial results or require disclosure and have determined none exist other than those noted above in this footnote.

Table of Contents

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

Executive Overview

Barrel Energy Inc (Barrel) was incorporated on January 27, 2014 under the laws of the State of Nevada. The Company was formed to invest in producing oil and gas properties. On September 26, 2014, the Company leased an unproven oil and gas property in the province of Alberta, Canada.

On October 11, 2018, Barrel Energy Inc. (the “Company”) entered into an Earn-In Agreement (the “Agreement”) with True Grit Resources, a British Columbia corporation (“TGR”), an unrelated third party. In exchange for the payment by the Company of certain consideration, the Company may earn of to 100% participation interest in certain mineral rights leases that TGR has in Arizona. The first payment for $100,000 was due within ten (10) days of the execution of the Agreement and another payment of $300,000 or expenditure to the property was due within 30 days of the first payment. Upon receipt of $400,000, the Company will have a 49% participation interest in the Arizona property mineral lease rights .The Company may require a 70% earn-in interest by expending a cumulative $1,400,000 on the property. In order to secure the 100% participation interest, the Company is required to expend a cumulative amount of payments and property expenditures of $2,400,000. On January 17, 2019, the Company terminated the Earn-In agreement with True Grit Resources.

On April 11, 2019, the Company amended its articles of incorporation to increase its number of authorized shares of common stock to 450,000,000.

On May 14, 2019, the Company signed a 10 year land lease to grow hemp fiber.

On November 26, 2019, the Company entered into a non-binding Letter of Intent with ZB Holdings, Inc. (“ZB”) to acquire the assets of ZB pursuant to a definitive agreement to be formalized. ZB, , is a consumer products company in the business of producing and marketing sporting goods apparel and safety apparel through a proprietary and trademarked design and production technique. As of June 30, 2020 the agreement has been terminated by the Company.

On March 4, 2021 the Company signed a memorandum of Understanding with American Lithium Minerals, Inc. Under the terms of the agreement, AMLM will assist in the development of lithium battery technology in the US and India including the manufacturing, assembly, distribution and recycling of Lithium batteries.

Table of Contents

As of the date of this filing no revenues have been recorded for the past two years. Our focus for the next twelve months will be to obtain additional funding to develop and expand our operations and new projects. Our success will depend on our ability to obtain funding through equity and/or debt transactions. However, with the downturn of the United States and world economies, we will encounter substantial competition for the limited financing that will be available in the marketplace.

In summary, management continues to position the company in a way to best benefit from worldwide economic conditions, trends, events, and demand for new technologies.

Liquidity and Capital Resources

At June 30, 2020, we had an accumulated deficit of $20,739,693. We recorded a net loss of $1,162,704 and $2,279,060 for the three and nine month periods ended June 30, 2020 and net loss of $599,262 and $1,167,982 for the same periods in 2019, respectively. Based on these numbers there is substantial doubt that we can continue as a going concern unless we obtain external funding. Management plans to continue limited operations until we obtain additional funding to expand our operations.

Working capital deficit was $2,213,311 as of June 30, 2020, compared to working capital deficit of $1,196,577 as of September 30, 2019.

Cash used in operations totaled $139,792 during the nine months ended June 30, 2020, compared to cash used in operations of $653,354 during the same period in 2019.

Funds provided by financing activities was $126,443 with common stock sold for cash of $40,000, proceeds from notes of $139,000, offset by repayment of debt related party of $35,500 for the nine months period ended June 30, 2020, compared to cash provided by financing activities of $669,053 consisting of stock sold for cash of $323,643, note payable of $100,000, Convertible debt of $255,000 offset by repayment of advances from related party of $9,590 during the same period in 2019.

The effect of foreign currency translation on cash flows was a positive $13,356 for the nine months period ended June 30, 2020, compared to a negative $6,632 in the same period in 2019. The effect of currency was largely due to conversion of a note from Canadian to US dollars in 2020.

Management expects to continue to issue common stock to pay for the future development and needs. The purchasers and manner of issuance will be determined according to our financial needs and the available exemptions. We also note that if we issue more shares of our common stock our shareholders may experience dilution in the value per share of their common stock.

We intend to rely on debt and equity financing, capital contributions from management and sales of our common stock to pay for costs, services, operating leases, litigation expense and future development of our business opportunities. Accordingly, our focus for the next twelve months will be to obtain additional funding through debt or equity financing. Our success in obtaining funding will depend upon our ability to sell our common stock or borrow on terms that are financially advantageous to us. If we are unable to obtain financing, then expansion of our operations will be delayed.

Table of Contents

Results of Operations

The Company recorded no revenue during the three and nine months periods ended June 30, 2020 and 2019.

Operating expenses for the three and nine months periods ended June 30, 2020 totaled $325,104 and $865,904 compared to $319,429 and $746,293 for the same periods in 2019. The increase loss from operations for the three and nine months in 2020 compared to 2019 was due to the rent expense of $150,580 and $451,500 during the three and nine months period ended June 30, 2020.

Other expense for the three and nine months ended June 30, 2020 was $837,600 and $1,413,156 compared to $599,626 and $1,167,982. Changes between the periods were due mostly to changes in fair value of derivative liabilities, financing costs and interest expense.

The Company incurred a net loss of $1,162,704 and $2,279,060 the three and nine months periods ended June 30, 2020, compared to net loss of $599,626 and $1,167,982 for the same periods in 2019. The higher nine months net loss was due to rent expenses incurred in the three and nine months period ended June 30, 2020 compared to the same period in 2019.

Off-Balance Sheet Arrangements

None

ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4: CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Based on their evaluation of our disclosure controls and procedures(as defined in Rule 13a-15e under the Securities Exchange Act of 1934 the "Exchange Act"), our principal executive officer and principal financial officer have concluded that as of the end of the period covered by this quarterly report on Form 10-Q such disclosure controls and procedures were not effective due to the lack of segregation of duties and lack of a formal review process that includes multiple levels of review to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms because of the identification of a material weakness in our internal control over financial reporting which we view as an integral part of our disclosure controls and procedures. The material weakness relates to the lack of segregation of duties in financial reporting, as our financial reporting and all accounting functions are performed by an external consultant with no oversight by a professional with accounting expertise. Our CEO /CFO do not possess accounting expertise and our company does not have an audit committee. This weakness is due to the Company’s lack of working capital to hire additional staff. To remedy this material weakness, we intend to engage another accountant to assist with financial reporting as soon as our finances will allow.

Changes in Internal Control over Financial Reporting

Except as noted above, there have been no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during our first nine months that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Table of Contents

PART II – OTHER INFORMATION

ITEM 1: LEGAL PROCEEDINGS.

None

ITEM 1A: RISK FACTORS

A smaller reporting company is not required to provide the information required by this Item.

ITEM 2: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

During the nine months ended June 30, 2020 the Company issued 10,000,000 shares of common stock with a value of $40,000 to a note holder to induce the amendment of the note.

During the nine months ended June 30, 2020 the Company issued 129,558,878 shares of common stock with a value of $294,335 for the reduction of the notes.

During the nine months period ended June 30, 2020, the Company issued 2,000,000 shares of common stock to a related party with a value of 40,000 for cash.

On June 24, 2020, a related party returned 10,000,000 shares to the Company treasury at par value.

ITEM 3: DEFAULTS UPON SENIOR SECURITIES.

None

ITEM 4: MINE SAFETY DISCLOSURES

None

ITEM 5: OTHER INFORMATION.

None

Table of Contents

ITEM 6. EXHIBITS

No.		Description
31.1		Chief Executive Officer Certification
31.2		Chief Financial Officers Certification
32.1		Section 1350 Certification
32.2		Section 1350 Certification

Table of Contents

SIGNATURES

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

	BARREL ENERGY, INC.

Date: September 3, 2021	By:	/s/ Craig Alford
		Craig Alford
		President
		Chief Executive Officer

Barrel Energy Inc. 10-Q