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 75,000,000 to 450,000,000.

On March 21, 2025 the Company amended its articles of incorporation to increase the number of authorized shares from 450,000,000 to 2,000,000,000.

On March 21, 2025 the Company amended its articles of incorporation to increase the number of authorized shares from 450,000,000 to 2,000,000,000.

On March 28, 2025 the Company acquired Happy Traps, LLC. The Company issued 600,000 shares of common stock with a value of $300,000 for the acquisition.  The acquisition was treated as a reverse merger with Happy Traps being the surviving entity keeping the name Barrel Energy Inc.

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 382,837,825 shares of common stock outstanding.

On March 23, 2026 the Company effected a reverse split the common stock resulting in a 1:400 reverse of the shares outstanding.

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 months ended March 31, 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.

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:

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 March 31, 2026 the potential shares at conversion standing was 22,197,802

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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,

Presentation and Disclosure Changes:

Management evaluated significant judgments in applying the probable-to-complete threshold and determined there are no material uncertainties requiring additional disclosure.

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 three months ended March 31, 2026 and 2025, the Company recorded bad debt of $7,213 and $1,600, respectively.