Treaty Energy Corp. (fka TECO)

[tdbowieknife]

g. All five individuals who had made deposits to the Treaty Petroleum, Inc Regions Bank account in paragraphs a. and b. above received shares of stock in Treaty Energy Corporation at an average price of $0.039 per share based on what they paid and what they received. Blackburn lied about those deposits being loans.

h. Had all the missing shares been sold for the above value, more than $3.8 million would have been realized. Even half that amount would have been more than enough to satisfy the needs of the Crockett County, Texas oil, gas and mineral leasehold, the only asset owned by Treaty Energy Corporation at the time.

f. No formal/written notice was provided by the majority stockholder, Tri Koon Holdings represented by Ronald L. Blackburn, or Michael A. Mulshine, a holder of 3.6% of Treaty Energy Corporation common stock through his company, Osprey Partners [beneficiary of the Definitive Agreement], plus shares held in Michael A. Mulshine’s personal account. The reasons stated in a conference call July 8, 2009, at which all board members, Blackburn and Mulshine were parties, was the board’s refusal to immediately approve the addition of Randall Newton to the board of directors of Treaty Energy and to approve Newton’s compensation plan, which was forwarded to the board by Michael A. Mulshine via Email 22 minutes prior to the meeting. The board had also opposed making Randall Newton’s firm the accounting firm for Treaty Energy. The board had also opposed news releases that were not approved by Ronda Hyatt. Earlier proposals for news releases contained inaccurate, exaggerated or untrue information.

c. The release was made without the consent of the Treaty Energy Corporation board of directors or its officers. Quotes by the president, Ronda Hyatt, were not uttered, read or known to her prior to her reading the news release.

d. We believe Michael A. Mulshine was attempting to create an image of Treaty Energy that exaggerates its capabilities in order to create demand for Treaty Energy common stock. This is part of the effort to “pump” stock demand to increase stock price when there is no substance or justification for the claim. Mr. Mulshine knew at the time that the wells were shut-in and not producing and that there was a real possibility that the conditions required for the continuation of the lease may not be met if this continued. Mr. Mulshine knew of these conditions because the board told him via telephone conference call that funds were urgently needed to satisfy vendor invoices before production operations could continue. It should be noted that no additional news releases were promulgated until July 8, 2009, when, at 15:44 ET, a news release [ABILENE, TX (Marketwire – July 8, 2009)] announcing the appointment of Randall Newton as Chief Executive Officer and Chairman of the Board of Directors, an referring to other changes at board level. Other news releases that were known to be false include:


a. News release, ABILENE, TX (Marketwire – July 9, 2009)

b. Michael A. Mulshine, Osprey Partners, 868 Riverview Drive, Brielle, NJ
08730

c. There was no Letter of Intent (LOI) for the acquisition of 360 acres with three existing wells in Taylor County, TX that was known to or approved by the board of directors. The Gray Oil Company [the subject property] proposal had earlier been rejected by Ronda Hyatt. There may have been an LOI and an agreement with Gray, but it had been done without board of directors’ knowledge and would have been approved only by the new CEO / Chairman without the knowledge of the officers of Treaty Energy Corporation and against their recommendation. Any signatures of related documents by Hyatt, Hallin or Dunham would be forgeries.

d. We believe Michael A. Mulshine in coordination with Ronald L. Blackburn was attempting to create the appearance that new leaseholds were being acquired in order to create demand for Treaty Energy common stock. This is part of the effort to “pump” stock demand to increase stock price when in reality there is no substance or justification for the claim. Mr. Mulshine, Mr. Blackburn and Mr. Newton knew or should have known that there was no letter of intent regarding this property/leasehold, nor was there an executed subsequent agreement, as they stated in a subsequent news release. Other instances of misrepresentation took place after the removal of Hyatt / Hallin / Dunham from the Treaty Energy Board of Directors and the appointment of Randall Newton. That activity has continued to the present.


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