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 March 31, 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)

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 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 ☐     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 April 8, 2021 there were 299,569,984 shares of common stock outstanding.

TABLE OF CONTENTS

	PART I – FINANCIAL INFORMATION
Item 1:	Financial Statements	4
	Balance Sheets as of March 31, 2020,(Unaudited) and September 30, 2019	4
	Statements of Operations and Comprehensive loss for the Three and Six Months Ended March 31, 2020 and 2019 – (Unaudited)	5
	Statement of Shareholders Deficit for the Three and Six Months Ended March 31, 2020 and 2019 (Unaudited)	6
	Statements of Cash Flows for the Six Months Ended March 31, 2020 and 2019 (Unaudited)	7
	Notes to Financial Statements (Unaudited)	8
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3:	Quantitative and Qualitative Disclosures about Market Risk	19
Item 4T:	Controls and Procedures	19
	PART II – OTHER INFORMATION
		20
Item 1:	Legal Proceedings	20
Item 1A:	Risk Factors	20
Item 2:	Unregistered Sales of Securities and Use of Proceeds	20
Item 3:	Default upon Senior Securities	20
Item 4:	Mine Safety Information	20
Item 5:	Other information	20
Item 6:	Exhibits	21
Signatures		22

2

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.

3

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 March 31, 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 six months ended March 31, 2020 are not necessarily indicative of results to be expected for any subsequent period. Our year end is September 30.

BARREL ENERGY INC

BALANCE SHEETS

	March 31, 2020			September 30, 2019
	Unaudited
ASSETS
Current assets:
Cash and cash equivalents	$	313		$	--
					--
Total current assets		313			--
Right of use lease		3,889,928			--
Total assets	$	3,890,241		$	--
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Bank overdraft	$	--		$	182
Accounts payable and accrued expenses		617,952			315,775
Consulting payable- related parties		317,264			121,425
Advances from shareholder		28,202			48,702
Convertible notes payable- net of discount		263,242			175,494
Notes payable		--			100,000
Lease liability		301,720			--
Derivative liability		697,069			434,999
Total current liabilities		2,225,448			1,196,577
Note payable		30,625			--
Lease liability		3,588,208			--
Total liabilities		5,844,281			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, 66,486,618 issued and outstanding as of March 31, 2020 and 41,093,618 as of September 30, 2019		66,486			41,093
Additional paid in capital		17,556,462			870,515
Accumulated other comprehensive loss		--			(5,361	)
Accumulated deficit		(19,576,989	)		(2,102,824	)
Total stockholders’ deficit		1,954,041	)		(1,196,577	)
Total liabilities and stockholders ‘deficit	$	3,890,241		$	--

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

4

BARREL ENERGY INC

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

FOR THE THREE AND SIX MONTHS ENDED MARCH 31,

(Unaudited)

	Three Months						Six Months
	2020			2019			2020			2019
Operating expenses:
Consulting – related parties	$	96,000		$	74,193		$	192,000		$	177,526
Consulting		--			67,697			--			97,197
Rent expense		149,955			--			300,920			--
General and administrative expense		31,946			97,405			47,878			152,141
Loss from operations		(277,901	)		(237,295	)		(540,798	)		(426,864	)
Other income (expense)
Gain on debt forgiveness		--			--			(20,600	)		--
Gain (loss) on currency		(27,798	)		-			(14,039	)		(24	)
Change in fair value		(580,724	)		185,796			(375,647	)		27,774
Debt discount		(48,347	)		--			(117,084	)		--
Financing cost		(31,500	)		--			(31,500	)		(153,704	)
Interest expense		(9,229	)		(10,220	)		(16,688	)		(16,538	)
Total other income ( expense)		(697,598	)		177,576			(575,558	)		(142,492	)
Net loss		(975,499	)		(61,719	)		(1,116,356	)		(569,356	)
Foreign currency translation adjustment		--			(1,341	)		--			2,080
Comprehensive loss	$	(975,499	)	$	(63,060	)	$	(1,116,356	)	$	(567,276	)
Net loss per common share, Basic and Diluted	$	(0.02	)	$	(0.00	)	$	(0,02	)	$	(0.04	)
Weighted average number of common shares outstanding, basic and diluted		58,345,409			37,478,332			53,727,854			14,122,761

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

5

BARREL ENGERGY INC

STATEMENTS OF SHAREHOLDERS DEFICIT

(Unaudited)

	Common Stock					Additional Paid-In		Accumulated			Stock			Comprehensive			Total Stockholders’
	Shares		Amount			Capital		Deficit			Receivable			Gain (Loss)			Deficit
Balance at September 31, 2018		12,301,332	$	23,801		$	272,638	$	(354,510	)	$	(11,500	)	$	(6,857	)	$	(76,428	)
Common stock issued for cash		13,502,000		13,502			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 gain (loss)		--		--			--		--			--			3,240			3,240
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 gain (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	)
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 convertible debt		9,393,000		9,393			147,115		--			---			--			156,508
Deemed dividend on warrants		--		--			16,363,000		(16,363,000	)		--			--			--
Comprehensive gain (loss)		--		---			--		--			--			(7,409	)		(7,049	)
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 on APIC upon conversion of debt							113,577											113,577
Comprehensive gain (loss)		--		--			--		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	)

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

6

BARREL ENGERGY INC

STATEMENTS OF CASH FLOWS

FOR THE THREE AND SIX MONTHS ENDED MARCH 31,

(Unaudited)

	2020			2019
Cash flows from operating activities:
Net loss	$	(1,116,356	)	$	(569,356	)
Adjustments to reconcile net loss to net cash used in operating activities:
Derivative change in fair value		375,647			(27,774	)
Amortization of debt discount		117,084			13,333
Loss on debt settlement		31,500			--
Financing cost		--			153,704
Right to use lease		80,060			--
Changes in operating assets and liabilities:
Bank overdraft		(182	)		--
Accounts payable and accrued expense		335,504			4,524
Lease liability		(80,060	)		--
Prepaid		--			26,533
Due to related party		195,839			32,461
Net cash used in operating activities		(60,964	)		(366,575	)
Cash flows from financing activities:
Cash received for the sale of common stock		40,000			246,143
Proceeds from notes payable		30,625			100,000
Proceeds from convertible notes payable		--			30,000
Repayment of related party advances and convertible note payable		(20,500	)		(9,590	)
Net cash provided by (used in) financing activities		50,125			366,553
Effects of currency translation		11,152			371
Net increase (decrease) in cash		313			349
Cash – beginning of period		--			3,458
Cash – end of period		313			3,808
SUPPLEMENT DISCLOSURES:
Interest paid	$	--		$	--
Income taxes paid	$	--		$	--
NON CASH INVESTING AND FINANCING ACTIVITIES
Common stock issued for conversion of convertible debt	$	68,563		$	--
Discount recorded on inception of derivatives	$	--		$	36,000
Common stock issued for notes payable	$	100,000		$	--
Effect on APIC upon conversion of debt	$	113,577		$	--

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

7

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 has engaged historically in the oil and gas sector of the energy industry. In January 2019, the Company terminated the agreement. It still maintains its interest in capped oil and gas properties in Alberta Canada. 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 is also exploring the lithium battery market including manufacturing and disposal of batteries.

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.

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 March 31, 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 March 31, 2020 the potential shares at conversion standing was 586,653,953.

Recent Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, "Leases (Topic 842)". The amendments in this ASU revise the accounting related to lessee accounting. Under the new guidance, lessees is required to recognize a lease liability and a right-of-use asset for all leases. The new lease guidance also simplifies the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. The amendments in this ASU are effective for public companies for fiscal years beginning after December 15, 2018 and are to be applied through a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Early adoption is permitted. The Company has adopted the new accounting pronouncement on October 1, 2019 and is recording a right of use lease asset and lease liability as of December 31, 2019.

8

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.

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 19,576,989 as of March 31, 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. The unaudited interim financial statements do not include any adjustments that might result from the outcome of this uncertainty. 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.

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 note is in default. 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. During the period ended March 31, 2020 the Note was 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 of March 30, 2020 the outstanding balance  of the note was $48,614.

9

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.

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 $12,553 has been accrued as of March 31, 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. (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 $7,152 has been accrued as of March 31, 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. (See Note 6: Warrants)

During the six months ended March 31, 2020 the Company issued 23,343,000 shares of common stock with a value of $168,563 for the reduction of the notes plus $25,600 in debt settlement.

NOTE 4 – RELATED PARTY

During the period from October 1, 2018 through December 31, 2018 the Company paid the officers consulting fees of $57,000 of which Harp Sangha was paid $42,000 and Craig Alford was paid $15,000. Under the terms of their consulting agreements Mr. Alford is entitled to $21,000 for the period and Mr. Sangha $45,000. As of December 31, 2018 the Company owed the two related parties $9,000 in accrued consulting. In addition the Company paid five individuals consulting fees of $35,500 during the same period. The aggregate due the non-related party consultants per their agreements for the period is $31,500 and one related party $4,000. The terms of the consulting agreements all terminated on or before December 31, 2018 with no future commitments after that date.

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.

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.

During the six months ended March 31, 2020 the Company accrued $186,648 in consulting fees for three officers for a total of $317,264 due the related parties.

10

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.

On December 10 2019, the Company issued 2,000,000 shares of common stock to a related party with a value of 40,000 for cash.

During the six months period ending March 31, 2020 the Company issued 2,000,000 share of common stock with a value of $40,000 for cash

During the six months ended March 31, 2020 the Company issued 23,393,000 shares of common stock with a value of $168,563 for debt reduction and $25,600 in debt settlement.

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 1,153,800 warrants to 3 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 between $0.28 - $3.00 per share, conversion price of $0.20-0.50, volatility of 272.63% and discount rate of 2.40%. Based on the fair value of the common stock of $221,000 and value of the warrants of $535,293 the fair value of the warrants was calculated to be 38 % of the total value or $288,411. During the period ended September 30, 2019 the valuation resulted in a deemed dividend from the down round calculation of the 1,125,000 warrants of $30,938.

11

The 1,155,899 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.

As of March 31, 2020 the Company evaluated the conversion prices and it resulted in no change in the deemed dividend.

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		--		--		--		--
Granted		1,602,286		0.29		4.32		--
Expired		--		--		--		--
Exercised		--		--		--		--
Outstanding at March 31, 2020		1,602,286	$	0.29		3.82	$	--

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 for the last period. During the six month period ended March 31, 2020, the Company issued 800,000 shares of common stock with a value of $100,000 for the payment of the note and implied interest. The transaction resulted in a loss on settlement of debt of $25,600.

During the period ending March 31, 2020 the Company issued 3 notes totaling $30,625. 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.

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 and as of March 31, 2020, using the following key inputs: market price of the Company’s common stock $0.0041 per share, volatility of 309% and discount rate of 1.80%. The fair value of the derivative liability was determined to $101,487 as of March 31, 2020.

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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 and as of March 31, 2020, using the following key inputs: market price of the Company’s common stock $0.0041 per share, volatility of 309% and discount rate of 1.80%. The fair value of the derivative liability was determined to $313,959 as of March 31, 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 and as of March 31, 2020, using the following key inputs: market price of the Company’s common stock $0.0041 per share, volatility of 309% and discount rate of 1.80%. The fair value of the derivative liability was determined to $281,623 as of March 31, 2020.

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.

Financial assets and liabilities measured at fair value on a recurring basis are summarized below as of September 30, 2019 and March 31, 2020:

	Level 1		Level 2		Level 3		Total
As of September 30, 2019:
Assets
None	$	-	$	-	$	-	$	-
Liabilities
Derivative liability	$	-	$	-	$	434,499	$	434,499
As of March 31, 2020:
Assets
None	$	-	$	-	$	-	$	-
Liabilities
Derivative liability	$	-	$	-	$	697,069	$	697,069

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The following table summarizes the change in the fair value of the derivative liability during the six months ended March 31, 2020:

Fair value as of September 30, 2019	$	434,999
Discount at conversion		(113,577	)
Change in fair value		375,647
Fair value as of March 31, 2020	$	697,069

NOTE 9 – COMMITMENTS AND CONTINGENCIES

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 March 31, 2020 the Company has accrued $526,670 of unpaid lease payments as accounts payable with the outstanding obligation as noted below

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

Fiscal Year
2020	$	301,000
2021	$	602,000
2022	$	602,000
2023	$	602,000
2024 and years thereafter		3,386,000
Total	$	5,493,000

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 considered the standard rate at which the Company can borrow funds.

NOTE 10 – SUBSEQUENT EVENTS

On March 11, 2020, the Company amended a note through Amendment #2 to extend the maturity date to December 31, 2021. As part of the agreement the Company agreed to commence interest payments on the balance to 18% per annum plus issue 10,000,000 shares of common stock effective April 1, 2020.

During the period from April 1, 2020 to June 30, 2020, the Company issued 116,165,878 shares of common stock to three note convertible debt holders with a value of $ 142,075 for the conversion of debt.

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

On June 26, 2020 the Company issued a convertible note to Harp Sangha for $21,500 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 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.

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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$0.01 per share or 70% of the lowest trade five days prior to conversion.

On December 31, 2020, the Company issued a convertible note to 1232963 BC 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$0.01 per share or 70% of the lowest trade five days prior to conversion.

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 $0.01 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 1232963 BC 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$0.01 per share or 70% of the lowest trade five days prior to conversion.

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 $0.01 per share or 70% of the lowest trade five days prior to conversion.

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.

On March 3, 2021, the Company issued a convertible note to Optimum Trading 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$0.01 per share or 70% of the lowest trade five days prior to conversion.

On March 4, 202,1 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.

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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.

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.

The Company has evaluated subsequent events to determine events occurring after March 31, 2020 through April 8, 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.

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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.

The mineral rights the Company was acquiring is subject to an option agreement dated October 3, 2017 between True Grit and two individuals with beneficial ownership of the mining Permit issued by the State of Arizona in accordance with ARS 27-234. The Company at the date of this filing is unable to confirm that the either the beneficial owners and or True Grit’s claims are current and active. If the Claims cannot be confirmed the earn in agreement may not be valid and may be void. Prior to any payments per the agreement, the Company is requiring from True Grit a statement from the Bureau of Land Management confirming the claims and permits on the property are current and in effect

On November 5, 2018, the Company received an extension for the initial payments of $400,000 of which the initial $100,000 is required to be paid by February 28, 2019.

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.

Under the proposed transaction, the Company will acquire 100% of the assets of ZB, and ZB will acquire 40% of the fully diluted shares of common stock of the Company. The Company’s board of directors will be expanded to 7 members, with three of the directors to be nominees of ZB.

Completion of the transaction is subject to the execution of a definitive agreement which will contain standard representations, warranties and closing conditions. The transaction is also subject to completion of the audit of ZB’s 2018 and 2019 financial statements as well as renegotiation or repayment of the Company’s existing convertible debt. In addition, a financing of $1,000,000 is required, of which $320,000 is to be advanced to ZB in three tranches over the next 70 days. The transaction may be terminated prior to closing by either party if not completed by March 31, 2020. The letter of intent was terminated and the Company did not advance any funds to ZB awaiting the completion of a definitive agreement.

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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. If we are unable to obtain financing, then we will likely delay further development of our unimproved property which is an oil lease in Canada.

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 March 31, 2020, we had an accumulated deficit of $19,576,989. We recorded a net loss of $975,499 and $1,116,356 for the three and six month periods ended March 31, 2020 and net losses of $61,719 and $569,356 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 was negative $2,225,135 of March 31, 2020, compared to negative working capital of $1,196,577 as of September 30, 2019.

Cash used in operations totaled $60,964 during the six months ended March 31, 2020, compared to cash used in operations of $366,575 during the same period in 2019.

Funds provided by financing activities was $50,125 with common stock sold for cash of $40,000 plus notes of 30,625 offset by repayment of debt related party of $20,500 for the six months period ended March 31, 2020, compared to cash provided by financing activities of $366,553 consisting of stock sold for cash of $246,143, note payable of $100,000 Convertible debt of $30,000 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 11,152 for the six months period ended March 31, 2020, compared to a positive of $371 in the same period in 2019.

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.

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Results of Operations

The Company recorded no revenue during the three months periods ended March 31, 2020 and 2019.

General and administrative expenses for the three and six months periods ended March 31, 2020 totaled $277,901 and $540,798 compared to $237,295 and $426,864 for the same periods in 2019. The increase loss from operations for the three and six months in 2020 compared to 2019 was due to the consulting costs paid and accrued of $192,000 along with rent expense of 300,920 and general administrative costs of $47,878 in 2019.

The Company incurred a net loss of $975,499 and $1,116,356 in the three and six months periods ended March 31, 2020, compared to net loss of $61,719 and $569,356 for the same periods in 2019. The higher net loss was due to higher general and administrative cost and other expenses in the three and six months period ended March 31, 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.

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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 ended March 31, 2020 the Company issued 23,393,000 shares of common stock with a value of $168,563 for debt reduction and $25,600 in debt settlement.

On December 10 2019, the Company issued 2,000,000 shares of common stock to a related party with a value of 40,000 for cash

ITEM 3: DEFAULTS UPON SENIOR SECURITIES.

None

ITEM 4: MINE SAFETY INFORMATION

None

ITEM 5: OTHER INFORMATION.

None

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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
101	Interactive data files pursuant to Rule 405 of Regulation S-T.

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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: April 8, 2021	By:	/s/ Craig Alford
		Craig Alford
		President
		Chief Executive Officer

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