BRLL 10-Q
Barrel Energy Inc. (BRLL)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
From transition period from _______to______
Commission File No.:
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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.
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☐
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 | ☐ |
☒ | Smaller reporting company | ||
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| 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).
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act,) Yes ☐ No ☒
The number of shares outstanding of the Company’s $.001 Par Value Common Stock as of July 12, 2026 was
TABLE OF CONTENTS
Reference in this report to “BARREL ENERGY” “we,” “us,” and “our” refer to BARREL ENERGY, Inc.
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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.
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PART I – FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
The financial information set forth below with respect to our financial statements for the three and six months period ended June 30, 2026 and 2025 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 six months ended June 30, 2026 are not necessarily indicative of results to be expected for any subsequent period. Our year end is December 31.
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BARREL ENERGY INC
BALANCE SHEETS
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| June 30, 2026 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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Accounts receivable- net of allowance |
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Advance - employee |
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Total current assets |
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Fixed assets – |
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Total assets |
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LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) |
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Current liabilities: |
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Accounts payable and accrued expenses |
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Advance- related party |
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Total current liabilities |
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Total liabilities |
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Commitment and Contingencies |
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Stockholders’ deficit: |
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Preferred stock, $ |
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Common stock, $ |
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Additional paid in capital |
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Accumulated deficit |
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Total stockholders’ deficit |
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Total liabilities and stockholders’ deficit |
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The accompanying notes are an integral part of these unaudited interim financial statements.
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BARREL ENERGY INC
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30,
(Unaudited)
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Revenue |
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Cost of service |
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Gross profit |
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Operating expenses: |
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Insurance |
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Bad debt expense |
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General and administrative expense |
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Total expense |
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Net income(loss) before taxes |
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Income tax |
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Net income (loss) |
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Net loss per common share, Basic and Diluted |
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Weighted average number of common shares outstanding, basic and diluted |
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The accompanying notes are an integral part of these unaudited interim financial statements.
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BARREL ENGERGY INC
STATEMENTS OF SHAREHOLDERS DEFICIT
(Unaudited)
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Balance at December 31, 2024 |
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Net income (loss) |
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Balance at March 31, 2025 |
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Net Income (loss) |
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Balance at June 30, 2025 |
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Balance at December 31, 2025 |
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Net income (loss) |
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Balance at March 31, 2026 |
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Common stock issued |
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Net Income (loss) |
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Balance at June 30, 2026 |
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The accompanying notes are an integral part of these unaudited interim financial statements
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BARREL ENERGY, INC
CONSOLIDATED STATEMENTS OF CASH FLOWS
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Cash Flows from Operating Activities: |
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Net income(loss) |
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Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||
Changes in operating assets and liabilities: |
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Accounts receivable |
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Bad debt expense |
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Accounts payable and accrued expense |
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Net cash provided by (used in) operating activities |
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Cash Flows used in Investing Activities |
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Acquisition of vehicle |
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Net cash used in investing activities |
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Cash Flows from Financing Activates |
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Note receivable – Related parity |
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Net cash provided by financing activities |
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Net change in cash |
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Cash at beginning of period |
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Cash at end of period |
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SUPPLEMENT DISCLOSURE |
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Interest paid |
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Income taxes paid |
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NON-CASH TRANSACTIONS |
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The accompanying notes are an integral part of these unaudited interim financial statements.
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BARREL ENERGY INC
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 – NATURE OF BUSINESS
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 terminated the past businesses.
On April 11, 2019, the Company amended its articles of incorporation to increase its number of authorized shares of common stock from
On March 21, 2025 the Company amended its articles of incorporation to increase the number of authorized shares from
On March 28, 2025 the Company acquired Happy Traps, LLC. The Company issued
Happy Traps, LLC was formed on February 16, 2016 limited liability company in the State of Maine. In November 2019, the partnership was increased from one to six members. The partners sold all their interest on December 31, 2021 to Maine Bio-Fuel, Inc., leaving it as the sole member of the partnership.
Prior to the merger, the Company had
On May 30, 2025 the Company effected a reverse split the common stock resulting in a
On June 22, 2026 the Company filed a certificate of amendment to designation relating to the
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 six months ended June 30, 2026 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2025. 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 December 31, 2025 financial statements and related notes included in the Company’s form 10-K filed with the SEC.
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Principles of Consolidation
The consolidated financial statements of the Company include the Company and the consolidation through a reverse merger of the entity Happy Traps, LLC. Because this transaction represents a reverse acquisition, the accompanying financial statements reflect the historical financial statements of the target, the accounting acquirer, for all periods prior to the merger. The Company’s financial statements for periods after the merger reflect the combined operations of Target and the Company.
The consolidated financial statements include:
| · | Audited or reviewed balance sheets of the accounting acquirer |
| · | Audited or reviewed statements of operations, cash flows, and stockholders’ equity |
| · | Pro forma adjustments reflecting the merger transaction |
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the balance sheet. Actual results could differ from those estimates.
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, 2026 the potential shares at conversion standing was
Recent Accounting Pronouncements
Effective January 1, 2026, the Company adopted ASU 2025-06, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires the use of the Current Expected Credit Loss (CECL) model for estimating credit losses on accounts receivable and other financial assets. Previously, the Company recognized allowance for doubtful accounts (ADA) based on incurred loss methodology, considering historical experience and current conditions. Under CECL, the Company now estimates lifetime expected credit losses, incorporating:
Historical loss experience,
| · | Current economic conditions, |
| · | Reasonable and supportable forecasts. |
Presentation and Disclosure Changes:
| · | Accounts receivable continue to be presented net of allowance for credit losses. |
| · | The allowance roll-forward now includes expected credit loss adjustments. |
| · | Additional qualitative disclosures describe the methodology, assumptions, and factors considered in estimating expected losses. |
Management evaluated significant judgments in applying the probable-to-complete threshold and determined there are no material uncertainties requiring additional disclosure.
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Accounts Receivable
Account receivable consists of amounts due to the Company from customers as a result of the Company’s normal business activities. Account receivable is reported on the balance sheets net of an estimated allowance for doubtful accounts. The Company establishes an allowance for doubtful accounts for estimated uncollectible receivables based on historical experience, assessment of specific risk, review of outstanding invoices, and various assumptions and estimates that are believed to be reasonable under the circumstances, and recognizes the provision as a component of selling, general and administrative expenses. Uncollectible accounts are written off against the allowance after appropriate collection efforts have been exhausted and when it is deemed that a balance is uncollectible. The company records the allowance based on past history and if there are doubts on the recoverability.
During the six months ended June 30, 2026 and 2025, the Company recorded bad debt of $
NOTE 2 – GOING CONCERN
The Company’s unaudited interim 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 and an accumulated deficit of $
NOTE 3 – REVENUE RECOGNITION
In April 2016, the FASB issued ASU 2016–10 Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. The amendments in this Update do not change the core principle of the guidance in Topic 606. Rather, the amendments in this Update clarify the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. Topic 606 includes implementation guidance on (a) contracts with customers to transfer goods and services in exchange for consideration and (b) determining whether an entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property (which is satisfied at a point in time) or a right to access the entity’s intellectual property (which is satisfied over time). The amendments are intended to render more detailed implementation guidance with the expectation to reduce the degree of judgement necessary to comply with Topic 606.
ASC Topic 606 prescribes a new five-step model entities should follow in order to recognize revenue in accordance with the core principle. These five steps are:
| 1. | Identify the contract(s) with a customer. |
| 2. | Identify the performance obligations in the contract. |
| 3. | Determine the transaction price. |
| 4. | Allocate the transaction price to the performance obligations in the contract. |
| 5. | Recognize revenue when (or as) the entity satisfied the performance obligations. |
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The Company has four revenue streams, each of which the revenue is recognized in accordance to the five steps included in Topic 606. The revenue streams are:
| 1. | Grease trap cleaning and maintenances service |
| 2. | Cleaning product line. |
| 3. | Pressure washing service |
| 4. | Used cooking oil recycling |
| 5. | Tech fees |
Revenue for the serves of grease trap cleaning and maintenance and pressure washing services is recognized upon the competition of the service.
Revenue for the sale of the cleaning product line is recognized upon the shipment of the product to the Customer.
Revenue for the recycling products is recognized upon delivery to the Company receiving the product for processing.
The Company had revenue of $
NOTE 4 – RELATED PARTY
On December 31, 2021, the original partners sold their interest to Maine Biofuel for $
During the six months ended June 30, 2026 and 2025, the Company notes receivable due from related parties of $
NOTE 5 – EQUITY
The Company was organized as a limited liability company. Ownership interests are represented by membership units, which confer both economic and governance rights as outlined in the Company’s operating agreement.
On April 11, 2019, the Company amended its articles of incorporation to increase its number of authorized shares of common stock from
On March 21, 2025 the Company amended its articles of incorporation to increase the number of authorized shares from
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On March 28, 2025 the Company acquired Happy Traps, LLC., the Company issued
On May 30, 2025 the Company effected a reverse split the common stock resulting in a
During the six months period ended June 30, 2026, the Company issued
NOTE 6 – NOTES
During the six months ended June 30, 2026 and 2025, the Company notes receivable due from related parties of $
During the six months period ended June 30, 2026 a related party advanced the Company $
NOTE 7 – FIXED ASSETS
During the six months period ended June 30, 2026 , the Company purchased a service truck for $
NOTE 8 – SUBSEQUENT EVENTS
On July 2, 2026, the converted
The Company has evaluated subsequent events to determine events occurring after June 30, 2026 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. Funding has been reported on 8-K.
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ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Executive Overview
Barrel Energy, Inc. (the “Company,” “Barrel Energy,” “we,” “us,” or “our”) is a Nevada corporation whose common stock is publicly traded under the symbol BRLL on the OTCIQ Market maintained by OTC Markets Group. The Company operates in the environmental services, renewable energy, and waste-to-value sectors.
In March 2025, the Company completed a reverse merger transaction pursuant to which Happy Traps, LLC became a wholly owned operating subsidiary of Barrel Energy Inc. As a result of this transaction, Happy Traps represents the Company’s primary operating business.
Operating Subsidiary – Happy Traps, LLC
Happy Traps, LLC (“Happy Traps”) is an environmentally focused grease trap service and waste management company headquartered at 51 Ingersoll Drive, Portland, Maine 04103. The Company provides grease trap pumping, cleaning, maintenance, and related services to restaurants and food service establishments, primarily in the greater Portland, Maine metropolitan area.
In addition to grease trap services, Happy Traps offers a proprietary line of eco-friendly cleaning products marketed under the Happy Traps Cleaners brand and provides used cooking oil collection and recycling services through a strategic partnership with Maine Standard Biofuels, Inc.
History of Happy Traps
Happy Traps was founded in 2016 by JarmiKaltsas, who has over 20 years of experience in the biodiesel, waste-to-energy and environmental services industries. The Company initially focused on grease trap pumping and maintenance services for restaurants and food service establishments in southern Maine.
Over time, Happy Traps expanded its operations to include proprietary eco-friendly cleaning products and used cooking oil recycling services. This evolution was driven by customer demand for bundled services and the Company’s commitment to sustainability and environmental responsibility.
In 2020, Kayla Tilton was appointed President, bringing regulatory and operational expertise gained from her prior work with the Maine Department of Environmental Protection and her leadership role at Maine Standard Biofuels. Under current leadership, Happy Traps has refined its operational efficiency, strengthened compliance capabilities and established the foundation for regional expansion.
In March 2025, Happy Traps completed a reverse merger with Barrel Energy, pursuant to which Barrel Energy acquired the Company. The transaction was structured to provide Happy Traps with access to additional capital, infrastructure and strategic resources to support regional expansion and integration into a broader renewable energy and waste-to-value platform. Following the transaction, Happy Traps continues to operate its business with existing management while aligning its growth strategy with Barrel Energy’s long-term objectives.
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.
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Liquidity and Capital Resources
At June 30, 2026, we had an accumulated deficit of $310,073. We recorded net income of $7,230 and $1,046for the three and six months periods ended June 30, 2026 and net income of $33,868 and $50,727 for the same period in 2025, 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 was $28,690 as of June 30, 2026, compared to working capital of 50,818 as of December 31, 2025.
Cash used in operations totaled $7,544 during the six months ended June 30, 2026, compared to cash used in operations of $39,443 during the same period in 2025.
Cash used in investing activities was $25,500 for the six months period ended June 30, 2026 compared to zero for the same period in 2025. The Company purchased a service truck which is being depreciated over 60 months.
Cash received from financing activities was $3,085 from a note payable related party.
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.
Results of Operations
The Company recorded revenue of $54,843 and $97,238 during the three and six months periods ended June 30, 2026 and $62,654 and $107,798 for the same periods in 2025. Cost of service recorded during the three and six months ended June 30, 2026 was $25,175 and $47,993 compared to $18,534 and $33,705 for the same periods in 2025, respectively.
Total expenses for the three and six months periods ended June 30, 2026 $22,438 and $48,199 compared to $10,252 and $23,366 for the same periods in 2025. The increased expenses incurred during the three and six months ended June 30, 2026 due mostly to the increase in general and administrative expenses along with increased bad debt expense.
The Company incurred net income of $7,230 and $1,046 in the three and six months periods ended June 30, 2026, compared to net income of $33,868 and $50,727 for the same periods in 2025. The higher net income in 2025 was due to lower cost of services plus higher sales versus the same period in 2026.
Revenue decreased for the three and six months ended June 30, 2026 compared to the same periods in 2025 primarily due to timing of jobs and the Company’s decision to stop servicing larger traps as a result of capacity constraints.
Off-Balance Sheet Arrangements
None
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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.
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| Table of Contents |
PART II – OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS.
None
ITEM 1A: RISK FACTORS
None
ITEM 2: SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
During the six months period ending June 30, 2026 the Company issued 1,137,500 shares of common stock for cash.
ITEM 3: DEFAULTS UPON SENIOR SECURITIES.
None
ITEM 4: MINE SAFETY INFORMATION
None
ITEM 5: OTHER INFORMATION.
None
ITEM 6. EXHIBITS
No. |
| Description |
| ||
| ||
| ||
|
101.INS |
| Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL 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 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 (formatted as inline XBRL and contained in Exhibit 101) |
| 17 |
| 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: August 14, 2026 | By: | /s/ Jarmin Kaltsas | |
|
| Jarmin Koltsas President | |
| Chief Executive Officer | |||
| 18 |