Annual Report for Fiscal Year Ending 12-31, 2025 (Form 10-K)

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

The following discussion and analysis should be read in conjunction with our accompanying financial statements and the notes to those financial statements included elsewhere in this Annual Report. The following discussion includes forward-looking statements that reflect our plans, estimates, and beliefs, and our actual results could differ materially from those discussed in these forward-looking statements as a result of many factors, including those discussed under Item 1A Risk Factors and elsewhere in this Annual Report.

Overview

Circle was incorporated on December 7, 2021, as a Nevada company for the purpose of acting as an independent exploration and production company to engage in oil and natural gas development, production, acquisition, and exploration activities currently focused in Texas. We have acquired a 75% working interest in an 80-acre oil and gas lease located in Andrews County, Texas, and have entered into a joint venture agreement to explore the area of mutual interest surrounding the current lease for further acquisitions and development.

Results of Operations and Known Trends or Future Events

We are in our startup phase of operations and have not generated any revenues to date. Activities since inception include corporate organizational activities, our completed private offering, those activities necessary to prepare for the registration of shares for the Selling Stockholders, acquisition of our first oil and gas lease interest, and arrangements to expand operations in the current area of interest through a joint venture with a third party. We have incurred operating expenses related to legal and accounting services, and oil and gas lease acquisition costs. We expect to incur expenses to develop the oil and gas lease and anticipate increased expenses as a result of being a public company (for legal, financial reporting, accounting, and auditing compliance), as well as for due diligence expenses related to future oil and gas business growth. We expect our expenses to increase substantially as a result.

Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024

Sales, production costs and production taxes. The Company does not currently have any producing wells and thus has no production, sales, production costs or production taxes nor has it ever had any to date.

Depreciation, depletion and amortization. We have no production and our current oil and gas properties thus are not yet subject to amortization. Further, we have no depreciable assets.

General and administrative expenses. General and administrative expenses were $73,663 for year ended 2025, as compared to $63,936 for the year ended December 31, 2024. The increase is primarily related to an increase in legal costs related to evaluation of acquisition targets in 2025 as compared to 2024.

Net loss. The Company had net loss of $73,663 for year ended 2025, as compared to $63,936 for the year ended December 31, 2024. This increase in loss was the result of increased general and administrative costs.

Known Trends and Uncertainties

Our future results are dependent on our ability to obtain additional capital to drill exploratory wells and to retain our leasehold interests. We are also subject to commodity price volatility, inflation in drilling and service costs, and capital market conditions affecting small public oil and gas companies. Increases in drilling costs due to labor shortages, equipment availability, or inflationary pressures could materially increase the capital required to develop our properties.

In addition to pursuing development of our existing oil and natural gas leasehold interests, we periodically evaluate strategic opportunities that may complement or enhance stockholder value. Such opportunities may include asset acquisitions, joint ventures, financing transactions, or other strategic arrangements. No definitive agreement has been entered into with respect to any such transaction as of the date of this report.

Liquidity and Capital Resources

Financing of Operations. We used cash on hand from previous equity offerings, along with the funds from the issuance of the founder's shares, to fund our operations during 2024 and 2025. Those operations consisted of maintaining the listing of the common stock of the Company on OTC Markets.

Cash Flows. There were no cash inflows during 2024 and 2025. We used cash in operating activity of $75,823 during the year ended December 31, 2025 and $69,314 for the year ended December 31, 2024. During 2025 we used cash in investing activities in the amount of $5,000 during the year ended December 31, 2025 with no similar cost expended in 2024.

As of December 31, 2025, we had cash on hand of $111,201 and working capital of $125,263, as compared to cash on hand of $192,024 and working capital of $203,926 as of December 31, 2024.

In addition to cash resources, the Company holds leasehold oil and gas interests carried at $39,500, representing acquisition costs of real property interests with development potential. These interests are not passive financial assets but constitute operating oil and gas property rights.

Contractual Obligations. The Company has a short-term lease for executive office-sharing space in Tulsa, Oklahoma, at nominal cost to the Company.

Subsequent Events

Not applicable.

Effects of Inflation and Pricing

Because we are not currently producing oil or natural gas, inflation has primarily affected our general and administrative expenses, including professional fees and public company compliance costs. If we commence drilling operations, inflationary pressures in labor, drilling services, and equipment could materially increase development costs.

Off-Balance Sheet Financing Arrangements

As of December 31, 2025, we had no off-balance sheet financing arrangements.

Critical Accounting Policies and Estimates

Although we currently have no producing wells or proved reserves, we have adopted accounting policies applicable to oil and natural gas exploration and development companies.

Our discussion of financial condition and results of operations is based upon the information reported in our financial statements. The preparation of these statements requires us to make assumptions and estimates that affect the reported amounts of assets, liabilities, revenues and expenses as well as the disclosure of contingent assets and liabilities at the date of our financial statements. We base our assumptions and estimates on historical experience and other sources that we believe to be reasonable at the time. Actual results may vary from our estimates due to changes in circumstances, weather, politics, global economics, mechanical problems, general business conditions, and other factors. Our significant accounting policies are detailed in Note 1 to our financial statements included in this Annual Report. We have outlined below certain of these policies as being of particular importance to the portrayal of our financial position and results of operations and which require the application of significant judgment by our management.

Revenue Recognition. We have not generated any revenues to date. If and when production commences, we intend to account for revenues in accordance with Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606). Under this standard, revenue would be recognized when control of produced crude oil or natural gas is transferred to the customer.

Full Cost Method of Accounting. We account for our oil and natural gas operations using the full cost method of accounting. Under this method, all costs (internal or external) associated with property acquisition, exploration, and development of oil and gas reserves are capitalized. Costs capitalized include acquisition costs, geological and geophysical expenditures, lease rentals on undeveloped properties and cost of drilling and equipping productive and non-productive wells. Drilling costs include directly related overhead costs. All of our properties are located within the continental United States. As of December 31, 2025, we have not capitalized any drilling costs and have no proved reserves subject to depletion.

Write-down of Oil and Natural Gas Properties. Companies that use the full cost method of accounting for oil and natural gas exploration and development activities are required to perform a ceiling test calculation each quarter. The full cost ceiling test is an impairment test prescribed by SEC Regulation S-X Rule 4-10. The ceiling test is performed quarterly utilizing the average of prices in effect on the first day of the month for the preceding twelve-month period in accordance with SEC Release No. 33-8995. The ceiling limits such pooled costs to the aggregate of the present value of future net revenues attributable to proved crude oil and natural gas reserves discounted at 10%, plus the lower of cost or market value of unproved properties, less any associated tax effects. If such capitalized costs exceed the ceiling, the Company will record a write-down to the extent of such excess as a non-cash charge to earnings. Any such write-down will reduce earnings in the period of occurrence and results in a lower depletion, depreciation, and amortization rate in future periods. A write-down may not be reversed in future periods even though higher oil and natural gas prices may subsequently increase the ceiling.

Oil and Natural Gas Reserve Quantities. Reserve quantities and the related estimates of future net cash flows affect our periodic calculations of depletion and impairment of our oil and natural gas properties. Proved oil and natural gas reserves are the estimated quantities of crude oil, natural gas and natural gas liquids which geological and engineering data demonstrate with reasonable certainty to be recoverable in future periods from known reservoirs under existing economic and operating conditions. As of December 31, 2025, we have not established any proved reserves.

Income Taxes. Deferred income taxes are provided for the difference between the tax basis of assets and liabilities and the carrying amount in our financial statements. This difference will result in taxable income or deductions in future years when the reported

amount of the asset or liability is settled. Since our tax returns are filed after the financial statements are prepared, estimates are required in valuing tax assets and liabilities. We record adjustments to the actual values in the period we file our tax returns. As the Company currently has no revenues, there is reasonable doubt as to the realizability of any deferred tax assets. For the years ended December 31, 2025 and 2024, we recorded a valuation allowance against our deferred tax asset of $15,469 and $13,427, respectively.