Employment Contracts and Termination of Employment and Change-In-Control Arrangements

We have no employment agreements or similar contracts with Stanton E. Ross, or Daniel F. Hutchins.Hutchins or John Loeffelbein.

Stock OptionCertain Relationships and Restricted Stock Grants to Directors

PROPOSAL TWORelated Transactions and Director Independence.

The charter for the Company’s Audit Committee includes a requirement for the Audit Committee to review and approve any transaction involving the Company and a related party at least once a year or upon any significant change in the transaction or relationship. For these purposes, a “related party transaction” includes any transaction required to be disclosed pursuant to Item 404 of Regulation S-K.

John L. Loeffelbein, the Company’s Chief Operating Officer is a non-controlling member of Core Energy Resources, LLC (“Core”) .. The Company acquired an Option from Core to purchase the production and mineral rights/leasehold for the Properties. The Company paid a non-refundable deposit of $50,000 in 2019 to bind the original Option, which gave it the right to acquire the Properties for $2.5 million prior to December 31, 2019. The Company was not able to exercise the Option prior to December 31, 2019. On September 2, 2020, the Company acquired a new Option from Core under similar terms as the previous Option, however the newly acquired Option permitted the Company to purchase the Properties at a reduced price of $900,000 at any time prior to November 1, 2020 and the Company agreed to immediately conduct a capital raise of between approximately $2-10 million to fund its acquisition and development of the Properties. On December 14, 2020 the parties executed an asset purchase and sale agreement which extended the new Option to January 11, 2021, which expired. The parties entered into a Side Letter agreement on March 31, 2021, pursuant to which we and Core agreed to set the closing date on which the Properties would be purchased to April 1, 2021. Pursuant to the Side Letter, the Company is responsible for reimbursing Core for certain prorated revenues and expenses from January 1, 2021 through the April 1, 2021 closing date. On April 1, 2021 we completed the acquisition of the Properties, under the same terms of the asset purchase agreement executed on December 14, 2020 which provided a purchase price of $900,000. The Company raised approximately $2.05 million on March 26, 2021 through the issuance of convertible preferred stock with detachable common stock purchase warrants. The funds raised pursuant to the Series A Convertible Preferred Stock issuance were used to complete the acquisition of the Properties on April 1, 2021 and to retire the outstanding convertible note payable.

The Company does not have any employees other than its Chief Executive Officer, Chief Operating Officer and Chief Financial Officer. In previous years, certain general and administrative services (for which payment is deferred) had been provided by the Company’s Chief Financial Officer’s accounting firm at its standard billing rates plus out-of-pocket expenses consisting primarily of accounting, tax and other administrative fees. The Company no longer utilizes its Chief Financial Officer’s accounting firm for such support services and was not billed for any such services during the three months ended March 31, 2021 and 2020. On March 31, 2021 the parties entered into a Debt Settlement Agreement whereby all amounts due to such firm for services totaling $762,407 were extinguished upon the issuance of $7,624 principal balance of 3% Note and the issuance of warrants to purchase 1,524,814 shares of Common Stock. Total amounts due to the related party was $-0- and $762,407 as of March 31, 2021 and December 31, 2020, respectively.

The Company has accrued compensation to its officers and directors in previous years. The Board authorized the Company to cease the accrual of compensation for its officers and directors, effective January 1, 2018. On March 31, 2021 the parties entered into Debt Settlement Agreements whereby all accrued amounts due for such services totaling $1,789,208 were extinguished upon the issuance of $17,892 principal balance of 3% Convertible Promissory Note and the issuance of warrants to purchase 3,578,416 shares of Common Stock as further described in Notes 2, 8 & 11. Total amounts due to the officers and directors related to accrued compensation was $-0- and $1,789,208 as of March 31, 2021 and December 31, 2020, respectively.

Offshore Finance, LLC was owed financing costs in connection with a subordinated loan to the Company which was converted to common shares in 2014. The managing partner of Offshore and the Company’s CFO are partners in the accounting firm which the Company used for general corporate purposes in the past. On March 31, 2021 the parties entered into a Debt Settlement Agreement whereby all amounts due for such services totaling $26,113 were extinguished upon the issuance of $261 principal balance of 3% Convertible Promissory Note and the issuance of warrants to purchase 52,226 shares of common stock. Total amounts due to this related party was $-0- and $26,113 as of March 31, 2021 and December 31, 2020, respectively.

On May 13, 2020, the Company borrowed $41,000 from its Chairman, CEO & President in the form of an unsecured promissory note bearing 6% interest and due on demand. The proceeds were used for general working capital purposes. The entire $41,000 principal balance and $654 of accrued interest related to the note was retired on August 19, 2020 and there is no remaining balance as of March 31, 2021 and December 31, 2020.

Stanton E. Ross, Leroy C. Richie and Daniel F. Hutchins are the directors of the Company. Messrs. Ross and Hutchins are not considered “independent” in accordance with Rule 5605(a)(2) of the NASDAQ Marketplace Rules. The Board has determined that Mr. Richie is independent in accordance with the NASDAQ and SEC rules. We are currently traded on the OTC QB, which does not require that a majority of the board be independent. If we ever become an issuer whose securities are listed on a national securities exchange or on an automated inter-dealer quotation system of a national securities association, which has independent director requirements, we intend to comply with all applicable requirements relating to director independence.

PROPOSAL TWO:NO. 2 APPROVAL OF AN AMENDMENT TO OURTHE COMPANY’S CERTIFICATE OF INCORPORATION, TO EFFECTAS AMENDED, REMOVING THE PROVISION PROVIDING THAT ANY ACTION TAKEN BY THE STOCKHOLDERS BY WRITTEN CONSENT IN LIEU OF A REVERSE SPLIT OF OUR OUTSTANDING COMMON STOCK AT THE DISCRETIONMEETING REQUIRES THAT ALL OF THE BOARD OF DIRECTORSCOMPANY’S STOCKHOLDERS ENTITLED TO VOTE ON SUCH ACTION CONSENT IN WRITING THERETO

Our stockholders are being asked to approve an amendment to our Certificate of Incorporation, as amended, to remove a provision requiring that any action taken by the stockholders by written consent, in lieu of a meeting, requires the consent of the holders of all shares entitled to vote with respect to such action. On August 14, 2021, the Board approved a proposal to amend the Certificate of Incorporation, as amended, to remove Section 7.2 of the Company’s Certificate of Incorporation, as amended, which currently provides as follows:

“7.2 Action by Written Consent. Action required or permitted to be taken at any annual or special meeting of stockholders may be taken without a meeting, by written consent, only if all the stockholders entitled to vote on such action consent in writing to the action.”

The above provision permits the Company to obtain the approval of stockholders, with respect to any matter required to be submitted for a vote of the stockholders entitled to vote thereon, by the unanimous written consent of all of such stockholders entitled to vote thereon in lieu of holding a meeting of stockholders for such purpose. This requirement of unanimity is inconsistent with §228 of the Delaware General Corporation Law (“DGCL”) which provides as follows:

Summary§ 228. Consent of stockholders or members in lieu of meeting

Our Board of Directors has unanimously approved a proposal to effect a reverse split of all of our outstanding shares of Common Stock by a ratio(a) Unless otherwise provided in the range of 1-for-8 and 1-for-11. The proposal provides that our Board of Directors shall have sole discretion pursuant to Section 242(c) of the Delaware General Corporation Law to set the exact ratio at a whole number within the above range as determined by our Board of Directors, in its sole discretion. Our Board of Directors believes that the availability of alternative reverse stock split ratios will provide it with the flexibility to implement the reverse stock split in a manner designed to maximize the anticipated benefits for us and our stockholders. In determining whether to implement the reverse split following the receipt of stockholder approval, our Board of Directors may consider, among other things, factors such as:

If our Board determines that effecting the reverse stock split is in our best interest, the reverse stock split will become effective upon filing of an amendment to our Certificate of Incorporation with the Secretary of State of the State of Delaware. The amendment will set forth the number of shares to be combined into one share of our Common Stock within the limits set forth in this proposal. Except for adjustments that may result from the treatment of fractional shares as described below, each stockholder will hold the same percentage of our outstanding Common Stock immediately following the reverse stock split as such stockholder holds immediately prior to the reverse split.

Certain of our officers and directors have an interest in the reverse stock split as a result of their ownership of Common Stock, as set forth in the section entitled “Security Ownership of Certain Beneficial Owners and Management.”

The text of the form of amendment to the Certificate of Incorporation, which would be filed with the Secretary of State of the State of Delaware to effect the reverse stock split, is set forth in Appendix A to this proxy statement. The text of the form of amendment accompanying this proxy statement is, however, subject to amendment to reflect the exact ratio for the reverse stock split and any changes that may be required by the office of the Secretary of State of the State of Delaware or that the Board of Directors may determine to be necessary or advisable ultimately to comply with applicable law and to effect the reverse stock split.

Our Board of Directors believes that approval of the amendment to the Certificate of Incorporation to effect the reverse stock split is in best interests of us and our stockholders and has unanimously recommended that the proposed amendment be presented to our stockholders for approval.

Effective Date

If the proposed amendment to the Certificate of Incorporation to give effect to the reverse stock split is approved at the Meeting and the Board of Directors determines to effect the reverse stock split, the reverse stock split will become effective on the effective date of the certificate of amendment to our Certificate of Incorporation with the office of the Secretary of State of the State of Delaware, which we would expectincorporation, any action required by this chapter to be the date of filing. We refer to this time and date as the “Effective Date.” As set forth below with respect to fractional shares, each issued share of Common Stock immediately prior to the Effective Date will automatically be changed, as of the Effective Date, into a fraction of a share of Common Stock based on the exchange ratio within the approved range determined by the Board of Directors.

Purpose of the Reverse Stock Split

The Board of Directors believes that a reverse stock split is advisable for two reasons. First, we are required under the terms of our May 2015 Private Placement, as defined below, to have a sufficient number of authorized shares of Common Stock reserved to satisfy our obligations to the investor in such Placement. Second, the Board of Directors believes that a reverse stock split could improve the marketability and liquidity of the Common Stock.

1. May 2015 Private Placement of Senior Secured Convertible Note and Warrants

On May 7, 2015, we completed a private placement (the “May 2015 Private Placement”) of a $12.0 million principal amount Senior Secured Convertible Note (the “Note”) and warrant (the “Warrant”) to purchase 18,000,000 shares of our common stock, $0.0001 par value, with Hudson Bay Master Fund, Ltd. (the “Investor”).

The Note and Warrant were issued pursuant to a Securities Purchase Agreement, dated May 7, 2015, by and between us and the investor, who is an “accredited investor” within the meaning of the Securities Act of 1933, as amended (the “Purchase Agreement”). The May 2015 Private Placement was made pursuant to an exemption from registration under such Act. At the closing, the Investor acquired the Note by paying $450,000 in cash and issuing a secured promissory note, secured by cash, with an aggregate initial principal amount of $9,550,000 (the “Investor Note”). Assuming all amounts payable to us under the Investor Note are paid without any offset or default, the May 2015 Private Placement will result in gross proceeds of $10.0 million before Placement Agent fees and other expenses associated with the transaction, subject to the satisfaction of certain conditions. We used the proceeds from the private placement to retire certain outstanding obligations, including the 2015 area and training fees relating to our Nicaraguan Concessions, and to provide working capital.

We will receive the remaining cash proceeds upon each voluntary or mandatory prepayment of the Investor Note. The Investor may, at its option andtaken at any time, voluntarily prepay the Investor Note, in wholeannual or in part. The Investor Note is also subject to mandatory prepayment, in whole or in part, upon the occurrence of one or more of the following mandatory prepayment events:

(i)Mandatory Prepayment upon Conversion – At any time the Investor has converted more than $2.0 million principal amount of the Note, representing the original issue discount of the Note, the Investor will be required to prepay the Investor Note, on a dollar-for-dollar basis, for each subsequent conversion of the Note.

(ii)Mandatory Prepayment upon Mandatory Prepayment Notices – We may require the Investor to prepay the Investor Note by delivering a mandatory prepayment notice to the Investor, subject to (a) the satisfaction of certain equity conditions, (b) our receipt of all Governmental Authorizations, as defined in the Purchase Agreement, necessary to commence drilling on at least five Properties, also as defined in the Purchase Agreement, within the Nicaraguan Concessions, and (c) our obtaining forbearance agreements from certain third parties to whom we owe obligations. Notwithstanding the foregoing, we may not request a mandatory prepayment if after giving effect to such proposed mandatory prepayment, we and our subsidiaries, on a consolidated basis, would hold more than $4.0 million in cash or if prepayment under the Investor Note for the preceding sixty calendar day period would exceed $2.0 million.

The Investor Note is a full recourse note against the Investor issuing it. The cash collateral securing the Investor Note has a fair market value equal to outstanding principal balance of the Investor Note as of the date of its issuance. The portion of the principal balance of the Convertible Note related to the corresponding portion of the principal balance of the Investor Note cannot be converted into common stock until such corresponding portion of principal amount of the Investor Note has been prepaid. The Investor Note also contains certain offset rights, which if executed, would reduce the amount outstanding under the Convertible Note and the Investor Note and the cash proceeds we receive.

Covenant Requiring the Company to Use its efforts to solicit its Stockholder’s Approval of an Increase in the number of Common Shares authorized in order to be able to reserve a Sufficient Number of Shares for the Investor in the May 2015 Private Placement.We are required to seek shareholder approval for an increase in the number of authorized common shares to allow for the reservation of 200% of the shares issuable upon conversion of the Note and exercise of the Warrant in accordance with the covenants included in the Securities Purchase Agreement, Note and Warrant. We are required to provide each stockholder entitled to vote at a special or annual meeting of our stockholders a proxy statement soliciting each such stockholder’s affirmative vote at the Stockholder Meeting for approval of resolutions providing for the increase of the authorized shares of our Common Stock available for conversion of the Note and exercise of the Warrant. We have determined to accomplish this through the reverse split rather than increasing the absolute number of our authorized shares. By effecting the reverse split of the issued and outstanding shares of our Common Stock, we will, in effect, be creating additional authorized but unissued shares of Common Stock to satisfy our obligations to reserve an appropriate number of shares for future issuance to the Investor under the Note and Warrant.

Furthermore, we must use our reasonable best efforts to solicit our stockholders’ approval of such resolutions and to cause our Board of Directors to recommend to the stockholders that they approve such resolutions. If, despite our reasonable best efforts the stockholder approval is not obtained on or prior to September 25, 2015, we shall cause an additional Stockholder Meeting to be held on or prior to December 31, 2015. If, despite the Company’s reasonable best efforts the stockholder approval is not obtained after such subsequent stockholder meetings, we shall cause an additional Stockholder Meeting to be held semi-annually thereafter until such stockholder approval is obtained.

If the stockholders approve this Proposal No. Two and we effect the reverse stock split, we will have fulfilled this covenant under the Note and Warrant.

Further Background to the May 2015 Private Placement

Description of the Convertible Note.The Note ranks senior to our existing and future indebtedness and is secured by all of our assets, excluding the Nicaraguan Concessions, and to the extent and as provided in the security documents attached hereto as Exhibits.

The Note is convertible at any time at the option of the holder into shares of our common stock at $0.50 per share (the “Conversion Price”). The Note matures on the three-year anniversary of the issuance date thereof. If we issue or sell shares of our common stock, rights to purchase shares of our common stock, or securities convertible into shares of our common stock for a price per share that is less than the Conversion Price then in effect, the then current Conversion Price will be decreased to equal such lower price. The foregoing adjustments to the Conversion Price for future stock issues will not apply to certain exempt issuances, including issuances pursuant to certain employee benefit plans. In addition, the Conversion Price is subject to adjustment upon stock splits, reverse stock splits, and similar capital changes.

On the first business day of each month beginning on the earlier of the (i) effectiveness of a registration statement we file to register the shares of common stock issuable upon conversion of the Note or exercise of the Warrant, as defined below, or (ii) sixth month following the date of the Note through and including the maturity date (the “Installment Dates”), we will pay to the Investor an amount equal to (i) one-thirtieth (1/30th) of the original principal amount of the Note (or the principal outstanding on the Installment Date, if less) plus (ii) the accrued and unpaid interest with respect to such principal plus (iii) the accrued and unpaid late charges (if any) with respect to such principal and interest. The Investor has the ability to defer or accelerate such monthly payments in its sole discretion.

Prior to the maturity date, the Note will bear interest at 8% per annum (or 18% per annum during an event of default) with interest payable in cash or in shares of common stock monthly on the first trading day of each month following the issuance date.

Each monthly payment may be made in cash, in shares of our common stock, or in a combination of cash and shares of our common stock. Our ability to make such payments with shares of our common stock will be subject to various equity conditions, including the existence of an effective registration statement covering the resale of the shares issued in payment (or, in the alternative, the eligibility of the shares issuable pursuant to the Note and the Warrant for sale without restriction under Rule 144 and without the need for us to remain current with our public filing obligations) and certain minimum trading price and trading volume. Such shares will be valued, as of the date on which notice is given by us that payment will be made in shares, at the lower of (1) the then applicable Conversion Price and (2) a price that is 80.0% of the arithmetic average of the three lowest weighted average prices of our common stock during the twenty-trading day period ending two trading days before the applicable determination date (the “Measurement Period”). If we elect to pay such monthly payment in shares of our common stock we are required to pre-deliver shares of our common stock and are required to deliver additional shares, if any, to a true-up such number of shares to the number of shares required to be delivered on the applicable Installment Date pursuant to the calculation above.

At any time after the issuance date, we will have the right to redeem all or any portion of the outstanding principal balance of the Note plus all accrued but unpaid interest and any other charges at a price equal to 125% of such amount provided that (i) the arithmetic average of the closing sale price of the common stock for any twenty (20) consecutive Trading Days equals or exceeds 200% of the Conversion Price and (ii) among other conditions, there is an effective registration statement covering the resale of the shares issued in payment or, in the alternative, the eligibility of the shares issuable pursuant to the Note and the Warrant for sale without restriction under Rule 144 and without the need for us to remain current with our public filing obligations. The Investor has the right to convert any or all of the amount to be redeemed into common stock prior to redemption.

Upon the occurrence of an event of default under the Note, the Investor, so long as the event of default is continuing, require us to redeem all or a portion of our Note. Each portion of the Note subject to such redemption must be redeemed by us, in cash, at a price equal to the greater of (1) 125% of the amount being redeemed, including principal, accrued and unpaid interest, and accrued and unpaid late charges, and (2) the product of (I) the amount being redeemed and (II) the quotient determined by dividing (A) the greatest closing sale price of the shares of common stock during the period beginning on the date immediately preceding the event of default and ending on the date the holder delivers a redemption notice to us, by (B) the lowest Conversion Price in effect during such period.

Subject to certain conditions, the Investor may also require us to redeem all or a portion of our Note in connection with a transaction that results in a Change of Control, as defined in the Note. We must redeem each portion of the Note subject to such redemption in cash at a price equal to the greater of (1) 125% of the amount being redeemed (including principal, accrued and unpaid interest, and accrued and unpaid late charges), and (2) the product of (I) the amount being redeemed and (II) the quotient determined by dividing (A) the greatest closing sale price of the shares of common stock during the period beginning on the date immediately preceding the earlier to occur of (i) the consummation of the Change of Control and (ii) the public announcement of such Change of Control and ending on the date the holder delivers a redemption notice to the Company, by (B) the lowest Conversion Price in effect during such period.

Description of the Warrants. As a part of the May 2015 Private Placement, we issued a Warrant to the Investor giving it the right to purchase up to an aggregate of 18,000,000 shares of our common stock at an exercise price of $0.50 per share. The Warrant is exercisable commencing six months from the date of issuance and the exercise prices for the Warrant is subject to adjustment for certain events, such as stock splits and stock dividends. We also issued a Warrant to the Placement Agent of the May 2015 Private Placement exercisable to purchase 2,400,000 shares on the same terms, except it is exercisable upon issuance. If we issue or sell shares of our common stock, rights to purchase shares of our common stock, or securities convertible into shares of our common stock for a price per share that is less than the exercise price then in effect, the exercise price of the Warrants will be decreased to equal such lesser price. Upon each such adjustment, the number of the shares of our common stock issuable upon exercise of the Warrants will increase proportionately. The foregoing adjustments to the exercise price for future stock issues will not apply to certain exempt issuances, including issuances pursuant to certain employee benefit plans. In addition, the Conversion Price is subject to adjustment upon stock splits, reverse stock splits, and similar capital changes. The Warrants will expire on the seventh (7th) anniversary of their date of issuance.

9.99% Restriction on Conversion of Note and Exercise of Warrants.The Investor has no right to convert the Note or exercise the Warrants to the extent that such conversion or exercise would result in the Investor being the beneficial owner in excess of 9.99% of our common stock. We are required to hold a meeting of its shareholders to approve increase the number of our authorized shares to meet our obligations under the Purchase Agreement to have reserved 200% of the shares issuable upon conversion of the Note and exercise of the Warrants not later than July 30, 2015.

Registration Rights Agreement.In connection with the May 2015 Private Placement, we and the Investor entered into a Registration Rights Agreement under which we are required, on or before 45 days after the closing of the Private Placement, to file a registration statement with the Securities and Exchange Commission (the “SEC”) covering the resale of 130% of the shares of our common stock issuable pursuant to the Note and Warrants and to use its best efforts to have the registration declared effective as soon as practicable. We will be subject to certain monetary penalties, as set forth in the Registration Rights Agreement, if the registration statement is not filed or does not remain available for the resale (subject to certain allowable grace periods) of the Registrable Securities, as such term is defined in the Registration Rights Agreement.

Participation Rights.If, during the period beginning on the closing date and ending on the four (4) year anniversary of the closing date, we offer, sell, grant any option to purchase, or otherwise dispose of any of our or our subsidiaries’ equity or equity equivalent securities (a “Subsequent Placement”), the Investor will have the right to participate for 50% of any such future Subsequent Placement.

Approval by stockholders of this Proposal No. Two may result in an increase in the number of shares (i) that may be issued pursuant to the terms of the Note under the terms of the Note, (ii) that may be issued pursuant to the terms of the Warrant or (iii) through a Dilutive Issuance under the Purchase Agreement (which otherwise would not be possible because such issuances may exceed the current number of authorized shares of common stock).

The failure to obtain stockholder approval of this Proposal No. Two, which will increase the number of authorized shares of common stock, has the potential for future significant adverse consequences to the Company. If we fail to obtain stockholder approval of this Proposal, we are required to hold a second special meeting of stockholders by December 31, 2015 to once again seek approval. If we fail to obtain stockholder approvalof a corporation, or any action which may be taken at such secondany annual or special meeting of such stockholders, we are required to seek approvalmay be taken without a meeting, without prior notice and without a vote, if a consent or consents, setting forth the action so taken, shall be signed by the holders of this Proposal at subsequent meetings on a semi-annual basis until we obtain such approval.

Our failure to obtain stockholder approval for this Proposal has significant adverse consequences for us regarding certain provisions inoutstanding stock having not less than the Note, Warrant and Purchase Agreement. As described above, we are permitted to make payments of principal and interest due under the Note in shares of our common stock provided we satisfy certain conditions. Under the currentminimum number of authorized shares of common stock, we may be unable to make use of this provision and would have to pay the amounts due in cash, which may, at any point, have a significant adverse impact on our business, financial condition and results of operation.

In addition, if the Investor sends an exercise notice for us to issue shares of common stock under the Warrant (the “Warrant Shares”) and we are unable to comply because the issuance of shares would exceed the number of authorized common shares, then unless the Investor elects to void such exercise, the Investor may require us to pay cash within three trading days of the attempted exercise. Depending on our circumstances at such point, the requirement to pay the foregoing amount in cash may have a significant adverse impact on our business, financial condition and results of operation.

Finally, because we cannot make a “Dilutive Issuance” under the Purchase Agreement until we have stockholder approval of this Proposal, we would be unable to issue or commit to issue any shares of common stock for a consideration below the Conversion Price. Our inability to raise capital due to this restriction could, at a given point, have a significant adverse impact on our business, financial condition and results of operation.

2. Improve the marketability and liquidity of the Common Stock.The second reason to pursue the reverse split is because we believe that the increased market price of our Common Stock expected as a result of implementing the reverse stock split will improve the marketability and liquidity of our Common Stock and will encourage interest and trading in our Common Stock. A reverse stock split could allow a broader range of institutions to invest in our stock (namely, funds that are prohibited from buying stocks whose price is below a certain threshold), potentially increasing the liquidity of our Common Stock. A reverse stock split could help increase analyst and broker interest in our stock as their policies can discourage them from following or recommending companies with low stock prices. Because of the trading volatility often associated with low-priced stocks, many brokerage firms and institutional investors have internal policies and practices that either prohibit them from investing in low-priced stocks or tend to discourage individual brokers from recommending low-priced stocks to their customers. Some of those policies and practices may function to make the processing of trades in low-priced stocks economically unattractive to brokers. Additionally, because brokers’ commissions on low-priced stocks generally represent a higher percentage of the stock price than commissions on higher-priced stocks, the current average price per share of our Common Stock can result in individual stockholders paying transaction costs representing a higher percentage of their total share value than would be the case if the share price were substantially higher. However, that the liquidity of our Common Stock may in fact be adversely affected by the proposed reverse stock split given the reduced number of sharesvotes that would be outstanding after the reverse stock split.

For the foregoing reasons, we believe that providing the Board of Directors with the abilitynecessary to effect the reverse stock split will help us satisfy the covenantsauthorize or take such action at a meeting at which all shares entitled to have a sufficient number of our shares of Common Stock reserved for future issuancevote thereon were present and voted and shall be delivered to the holder of the Note and the Warrant and could improve the marketability and liquidity of our Common Stock, and is thereforecorporation in the best interests of us and our stockholders. However, the Board of Directors reserves its right to abandon the reverse stock split if it determines, in its sole discretion, that it would no longer be in our and our stockholders’ best interests.

manner required by this section.

Risks of the Proposed Reverse Stock Split

We cannot assure you that(b) Unless otherwise provided in the proposed reverse stock split will increase our stock price.The Boardcertificate of Directors expects thatincorporation, any action required by this chapter to be taken at a reverse stock splitmeeting of our Common Stock will increase the market price of our Common Stock. However, we cannot predict the effectmembers of a reverse stock split upon the market price of our Common Stock withnonstock corporation, or any certainty, and the history of similar reverse stock splits for companies in like circumstances is varied.

It is possible that the per share price of our Common Stock after the reverse stock split will not rise in proportion to the reduction in the number of shares of our Common Stock outstanding resulting from the reverse stock split, and the reverse stock split may not result in a per share price that would attract brokers and investors who do not trade in lower priced stocks. Even if we effect a reverse stock split, the market price of our Common Stock may decrease due to factors unrelated to the stock split. Further, the market price of our Common Stock may also be based on other factorsaction which may be unrelated totaken at any meeting of the members of a nonstock corporation, may be taken without a meeting, without prior notice and without a vote, if a consent or consents, setting forth the action so taken, shall be signed by members having not less than the minimum number of shares outstanding, including our future performance. If the reverse stock split is consummated and the trading price of the Common Stock declines, the percentage decline as an absolute number and as a percentage of our overall market capitalization may be greater than would occur in the absence of the reverse stock split.

The proposed reverse stock split may decrease the liquidity of our stock.The liquidity of our Common Stock may be harmed by the proposed reverse stock split given the reduced number of sharesvotes that would be outstanding afternecessary to authorize or take such action at a meeting at which all members having a right to vote thereon were present and voted and shall be delivered to the reverse stock split, particularly ifcorporation in the stock price does not increase as a result of the reverse stock split. Additionally, investors might consider the increased proportion of unissued authorized shares to issued shares to have an anti-takeover effect under certain circumstances, because the proportion allows for dilutive issuances that could prevent certain stockholders from changing the composition of the Board of Directors or render tender offers for a combination with another entity more difficult to successfully complete. The Board of Directors does not intend for the reverse stock split to have any anti-takeover effects.

manner required by this section.

Principal Effects of the Reverse Stock Split

Common Stock.If this proposal is approved(c) A consent must be set forth in writing or in an electronic transmission. No consent shall be effective to take the corporate action referred to therein unless consents signed by the stockholders at the Annual Meeting and the Boarda sufficient number of Directors determinesholders or members to effect the reverse stock split and thus amend the Certificate of Incorporation, the Company will file a certificate of amendmenttake action are delivered to the Certificate of Incorporation withcorporation in the Secretary of Statemanner required by this section within 60 days of the Statefirst date on which a consent is so delivered to the corporation. Any person executing a consent may provide, whether through instruction to an agent or otherwise, that such a consent will be effective at a future time (including a time determined upon the happening of Delaware. Each issued sharean event), no later than 60 days after such instruction is given or such provision is made, if evidence of Common Stock immediatelysuch instruction or provision is provided to the corporation. Unless otherwise provided, any such consent shall be revocable prior to the Effective Date will automatically be changed, as of the Effective Date, intoits becoming effective. All references to a fraction of“consent” in this section means a share of Common Stock based on the exchange ratio within the approved range determinedconsent permitted by the Board of Directors. In addition, proportional adjustments will be made to the maximum number of shares issuable under, and other terms of, our stock plans, as well as to the number of shares issuable under, and the exercise price of, our outstanding options and warrants.this section.

Because the reverse stock split would apply to all issued shares of our Common Stock, the proposed reverse stock split would not alter the relative rights and preferences of existing stockholders nor affect any stockholder’s proportionate equity interest in the Company (except for the effect of eliminating fractional shares). For example, a holder of 2% of the voting power of the outstanding shares of our Common Stock immediately prior to the effectiveness of the reverse stock split will generally continue to hold 2% of the voting power of the outstanding shares of our Common Stock immediately after the reverse stock split. Moreover, the number of stockholders of record will not be affected by the reverse stock split.

The number of shares of Common Stock issuable upon conversion of the Note and exercise of the Warrant would likewise be reduced from their current levels to the extent of the reverse split.

Effect on Employee Plans, Options, Restricted Stock Awards and Convertible or Exchangeable Securities.Under(d) (1) A consent permitted by this section shall be delivered: (i) to the termsprincipal place of business of the proposed 2015 Stock Option and Restricted Stock Plan (the 2015 Plan”) and our 2005 Equity Incentive Plan and 2006 Equity Incentive Plan, together, “the Plans,”corporation; (ii) to an officer or agent of the Boardcorporation having custody of Directorsthe book in which proceedings of meetings of stockholders or a committee thereof, as applicable, will adjustmembers are recorded; (iii) to the numberregistered office of shares availablethe corporation in this State by hand or by certified or registered mail, return receipt requested; or (iv) subject to the next sentence, in accordance with § 116 of this title to an information processing system, if any, designated by the corporation for future grant underreceiving such consents. In the Plans, the numbercase of shares underlying outstanding awards, the exercise price per share of outstanding stock options, and other terms of outstanding awards issueddelivery pursuant to the Plansforegoing clause (iv), such consent must set forth or be delivered with information that enables the corporation to equitably reflectdetermine the effectsdate of delivery of such consent and the identity of the reverse stock split. Based uponperson giving such consent, and, if such consent is given by a person authorized to act for a stockholder or member as proxy, such consent must comply with the reverse stock split ratio determined byapplicable provisions of § 212(c)(2) and (3) of this title.

(2) Any copy, facsimile or other reliable reproduction of a consent in writing may be substituted or used in lieu of the Board, proportionate adjustments are also generally requiredoriginal writing for any and all purposes for which the original writing could be used, provided that such copy, facsimile or other reproduction shall be a complete reproduction of the entire original writing. A consent may be documented and signed in accordance with § 116 of this title, and when so documented or signed shall be deemed to be made to the per share exercise price and the numberin writing for purposes of shares issuable upon the exercise or conversion of outstanding options, and any convertible or exchangeable securities entitling the holders to purchase, exchange for, or convert into, shares of Common Stock. This would result in approximately the same aggregate price being required to be paid underthis title; provided that if such options, and convertible or exchangeable securities upon exercise, and approximately the same value of shares of Common Stock beingconsent is delivered upon such exercise, exchange or conversion, immediately following the reverse stock split as was the case immediately preceding the reverse stock split. The number of shares subject to restricted stock awards and restricted stock units will be similarly adjusted, subject to our treatment of fractional shares. The number of shares reserved for issuance pursuant to these securitiesclause (i), (ii) or (iii) of paragraph (d)(1) of this section, such consent must be reproduced and our Plans will be adjusted proportionately based upon the reverse stock split ratio determined by the Board, subject to our treatment of fractional shares.delivered in paper form.

Listing.(e) Prompt notice of the taking of the corporate action without a meeting by less than unanimous consent shall be given to those stockholders or members who have not consented and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for notice of such meeting had been the date that consents signed by a sufficient number of holders or members to take the action were delivered to the corporation as provided in this section. In the event that the action which is consented to is such as would have required the filing of a certificate under any other section of this title, if such action had been voted on by stockholders or by members at a meeting thereof, the certificate filed under such other section shall state, in lieu of any statement required by such section concerning any vote of stockholders or members, that consent has been given in accordance with this section.

In summary, pursuant to the provisions of §228 of the DGCL, any action which may be taken at an annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, by the written consent of stockholders holding the requisite number of shares which would be required to approve the action at such meeting, if all shares were present and voted at such meeting. In most cases this would require that holders of at least a majority of the outstanding shares of capital stock of the Company entitled to vote on such action execute such written consent, or, in some cases, as otherwise set forth in the Certificate of Incorporation, as amended, the holders of 66-2/3% of the outstanding shares of capital stock entitled to vote thereon. The provisions of §228 of the DGCL also require that the stockholders entitled to vote who do not execute the written consent be provided with prompt notice of the actions approved by written consent. In the case of a corporation subject to the reporting requirements of the Exchange Act, such as the Company, this would normally be satisfied by the Company’s delivering a Schedule 14C Information Statement to all stockholders, promptly after such written consent has been executed, setting forth, in detail, all actions approved by written consent.

Holding a special meeting of the Company’s stockholders to solicit the approval of our stockholders, with respect to actions requiring their approval, requires a substantial amount of time and effort, as well as a substantially greater expense to the Company than would be incurred if the Company were able to obtain such approval by written consent of the stockholders. The Company must prepare proxy materials to be mailed to stockholders, wait the requisite time periods required for notice of the meeting and mailing of the proxy materials to stockholders and then hold a special meeting. Although the Company’s Certificate of Incorporation, as amended, currently permits the approval of such actions by written consent, in lieu of a meeting, the written consent must be executed by all of our holders of Common Stock and Series A Preferred Stock, on an as-converted to Common Stock basis, as applicable, which, because of the number of public holders of our shares of Common Stock would be virtually impossible. By removing the requirement from our Certificate of Incorporation, as amended, that such written consent of stockholders be unanimous, the requirement would default to the provisions of §228 of the DGCL, allowing us to obtain stockholder approval by the written consent of holders of the requisite number of shares required for any such approval, thereby resulting in a more efficient procedure for the approval of actions submitted to our stockholders, as well as save the Company the substantially greater expense incurred in conducting a proxy solicitation and holding a special meeting of stockholders. Ultimately, the results obtained by written consent, in lieu of a meeting, will be the same as if such actions had been submitted to the stockholders entitled to vote thereon at a meeting, since the holders of the requisite number of shares of capital stock required to approve such actions at the meeting, who execute any such written consent, will have the ability, without the votes of any other of the Company’s stockholders, to approve such actions at the applicable meeting. As a result, the rights of the Company’s stockholders will, in no way, be adversely affected by this amendment removing the requirement that a written consent of stockholders, in lieu of an annual or special meeting, be executed by all stockholders entitled to vote.

The summary above is wholly qualified by the complete text of the Second Certificate of Amendment of Certificate of Incorporation, in the form attached here as Appendix A and incorporated herein by reference.

Vote Required and Recommendation of Board

Our Bylaws provide that all matters (other than the election of directors and except to the extent otherwise required by applicable Delaware law) shall be determined by a majority of the votes cast affirmatively or negatively. Accordingly, the affirmative vote of a majority of the shares of the shares of Common Stock and shares of Common Stock into which the Series A Preferred Stock are convertible, on an as converted basis, voting together present at the Annual Meeting, in person or by proxy, and voting on the matter, will be required to approve the Stockholder Written Consent Amendment Proposal.

THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE STOCKHOLDER WRITTEN CONSENT AMENDMENT PROPOSAL APPROVING THE AMENDMENT TO THE COMPANY’S CERTIFICATE OF INCORPORATION, AS AMENDED, REMOVING THE PROVISION PROVIDING THAT ANY ACTION TAKEN BY THE STOCKHOLDERS BY WRITTEN CONSENT IN LIEU OF A MEETING REQUIRES THAT ALL OF THE COMPANY’S STOCKHOLDERS ENTITLED TO VOTE ON SUCH ACTION CONSENT IN WRITING THERETO.

PROPOSAL NO. 3 APPROVAL OF AN AMENDMENT TO THE COMPANY’S CERTIFICATE OF INCORPORATION, AS AMENDED, INCREASING THE COMPANY’S AUTHORIZED SHARES OF COMMON STOCK FROM 75,000,000 SHARES TO 500,000,000 SHARES

Our stockholders are being asked to approve an amendment to our Certificate of Incorporation, as amended, to increase the number of authorized shares of Common Stock. On August 14, 2021, the Board approved a proposal to amend the Certificate of Incorporation, as amended, to increase the number of authorized shares of Common Stock from 75,000,000 shares to 500,000,000 (the “Share Increase”). As of the close of business on the Record Date, there were 18,793,265 shares of Common Stock issued and outstanding, and 21,741,214 shares of Common Stock were reserved for issuance under long-term equity incentive plans, upon the conversion of convertible notes, upon the exercise of warrants and upon the conversion of shares of Series A Preferred Stock. Accordingly, of the total number of shares of Common Stock currently quoted for trading on the OTCQB. The reverse stock split will not directly affect the listingauthorized under our Certificate of our Common Stock on the OTCQB, although we believe that a reverse stock split could potentially increase our stock price, our Common Stock will continue to be listed on the OTCQB under the symbol “IFNY,” although our Common Stock would have a new committee on uniform securities identification procedures (“CUSIP”) number, a number used to identify our Common Stock.

“Public Company” Status.Our Common Stock is registered under Section 12(b) and 12(g) of the Securities Exchange Act of 1934,Incorporation, as amended, (the “Exchange Act”), and we are subject to the “public company” periodic reporting and other requirements of the Exchange Act. The proposed reverse stock split will not affect our status as a public company or this registration under the Exchange Act. The reverse stock split is not intended as, and will not have the effect of, a “going private transaction” covered by Rule 13e-3 under the Securities Exchange Act of 1934.

Odd Lot Transactions.It is likely that some of our stockholders will own “odd-lots” of less than 100 shares following a reverse stock split. A purchase or sale of less than 100 shares (an “odd lot” transaction) may result in incrementally higher trading costs through certain brokers, particularly “full service” brokers, and generally may be more difficult than a “round lot” sale. Therefore, those stockholders who own less than 100 shares following a reverse stock split may be required to pay somewhat higher transaction costs and may experience some difficulties or delays should they then determine to sell their34,465,521 shares of Common Stock.Stock remain available for issuance or may be reserved for issuance.

Form of the Share Increase Amendment

The proposed amendment (the “Share Increase Amendment”) would amend Paragraph (a) of Article 4, Section 4.1 of our Certificate of Incorporation, as amended, to read in its entirety as follows:

“(a) The total number of shares of common stock, par value $0.0001 per share, the Company is authorized to issue is 500,000,000 shares.”

Background and Reasons for the Share Increase

Authorized but Unissued Shares; Potential Anti-Takeover Effects.OurThe Certificate of Incorporation, presentlyas amended, currently authorizes the issuance of up to 75,000,000 shares of Common Stock and 10,000,000 shares of preferred stock. As of the close of business on the Record Date, there were 18,793,265 shares of Common Stock issued and outstanding, and 21,741,214 shares of Common Stock were reserved for issuance under long-term equity incentive plans, upon the conversion of convertible notes, upon the exercise of warrants and upon the conversion of shares of Series A Preferred Stock. Accordingly, of the total number of shares of Common Stock currently authorized under our Certificate of Incorporation, as amended, 34,465,521 shares of Common Stock remain available for issuance or may be reserved for issuance.

If the Share Increase Amendment is approved by stockholders, upon its effectiveness we will have a total of 500,000,000 authorized shares of Common Stock, with 18,793,265 shares of Common Stock issued and outstanding (as of the Record Date), and 21,741,214 shares of Common Stock were reserved for issuance under long-term equity incentive plans, upon the conversion of convertible notes, upon the exercise of warrants and upon the conversion of shares of Series A Preferred Stock, leaving available 459,465,521 shares of Common Stock authorized and unissued and not reserved for any specific purpose.

Purpose of the Share Increase Amendment

The reverse stock split would not changeBoard believes it is in the best interest of the Company to increase the number of authorized shares of the Common Stock or preferredin order to give the Company greater flexibility in considering and planning for future general corporate needs, including, but not limited to, grants under equity compensation plans, stock splits, financings, potential strategic transactions, as designated. Therefore, because the number of issued and outstandingwell as other general corporate transactions. The Board believes that additional authorized shares of Common Stock would decrease,will enable the numberCompany to take timely advantage of market conditions and favorable financing and acquisition opportunities that become available to the Company by allowing the issuance of such shares remaining available for issuance by us inwithout the future would increase.expense and delay of another stockholder meeting.

These additional shares would be available for issuance fromAt this time, to time for corporate purposes such as issuances of Common Stockthe increase in connection with capital-raising transactions and acquisitions of companies or other assets, as well as for issuance upon conversion or exercise of securities such as the Note, Warrant, convertible preferred stock, convertible debt, warrants or options convertible into or exercisable for Common Stock. We believe that the availability of the additional shares will provide us with the flexibility to meet business needs as they arise, to take advantage of favorable opportunities and to respond effectively in a changing corporate environment. For example, we may elect to issueauthorized shares of Common Stock is not in any way related to raise equity capital, to make acquisitions through the use of stock, to establish strategic relationships with other companies, to adopt additional employee benefitany plans or reserve additionalintentions to enter into a merger, consolidation, acquisition or similar business transaction.

Rights of Additional Authorized Shares

Any newly authorized shares for issuance underof Common Stock will be identical to the shares of Common Stock now authorized and outstanding. The Amendment will not alter the voting powers or relative rights of the Common Stock. In accordance with the Certificate of Incorporation and the Delaware General Corporation Law, any of our authorized but unissued shares of preferred stock are “blank check” preferred stock which shall have such plans, wherevoting rights, dividend rights, liquidation preferences, conversion rights and perceptive rights as may be designated by the Board pursuant to a certificate of Directors determines it advisable to do so, withoutdesignation.

Potential Adverse Effects of the necessity of soliciting further stockholder approval, subject to applicable stockholder vote requirements under Delaware Corporation Law. If we issue additional shares for any of these purposes, the aggregate ownership interest of our current stockholders, and the interest of each such existing stockholder, would be diluted, possibly substantially.Share Increase Amendment

Adoption of the Share Increase Amendment will have no immediate dilutive effect on the proportionate voting power or other rights of

the Company’s existing stockholders. The Board has no current plan to issue shares from the additional authorized shares provided by the Share Increase Amendment. However, any future issuance of additional authorized shares of our Common Stock that would become available for issuance upon an effective reverse stock split could also be used by us to opposemay, among other things, dilute the earnings per share of Common Stock and the equity and voting rights of those holding Common Stock at the time the additional shares are issued. Additionally, this potential dilutive effect may cause a hostile takeover attempt or delay or prevent a change of control or changesreduction in or removalthe market price of our management, including any transaction that may be favored by a majority of our stockholders or in which our stockholders might otherwise receive a premium for their shares over then-current market prices or benefit in some other manner. AlthoughCommon Stock.

Potential Anti-Takeover Effects

By increasing the increased proportionnumber of authorized but unissued shares of Common Stock, our ability to issuedissue additional shares of Common Stock could, under certain circumstances, have an anti-takeover effect, the reverse stock splitalthough this is not being proposedthe intent of the Board. For example, our ability to issued additional shares of Common Stock could adversely affect the ability of third parties to take over the Company or effect a change of control of the Company by, for example, permitting issuances that would dilute the stock ownership of a person seeking to effect a change in orderthe composition of the Board or contemplating a tender offer or other transaction for the combination of us with another company that the Board determines is not in the Company’s best interests or in the best interests of our stockholders. The ability of the Board to respondcause the Company to a hostile takeover attemptissue substantial amounts of Common Stock or preferred stock without the need for stockholder approval, except as may be required by law or regulation, upon such terms and conditions as the Board may determine from time to an attempttime in the exercise of its business judgment may, among other things, result in practical impediments with respect to changes in control of the Company or have the effect of diluting the stock ownership of holders of Common Stock seeking to obtain control of the Company. The issuance of Common Stock or preferred stock, while providing desirable flexibility in connection with potential financings and other corporate transactions, may have the effect of discouraging, delaying or preventing a change in control of the Company. The Board, however, does not intend or view the Share Increase Amendment to effect the Share Increase as an anti-takeover measure, nor does the Board contemplate using the Share Increase in this manner at any time in the foreseeable future.

Board Discretion to ImplementAppraisal or Abandon Reverse Stock SplitDissenters’ Rights

The reverse stock split will be effected, if at all, only upon a determination by our Board of Directors that the reverse stock split, with an exchange ratio determined by our Board as described above, is in our best interest. Such determination shall be based upon certain factors, including, but not limitedPursuant to the historical trading price and trading volumeDelaware General Corporation Law, stockholders are not entitled to appraisal rights or dissenter’s rights with respect to the Share Increase Amendment or the Share Increase.

Effectiveness of our Common Stock, the then prevailing trading price and trading volume of our Common Stock and the anticipated impact of the reverse split on the trading market for our Common Stock, the anticipated impact of the reverse split on our ability to raise additional financing; and prevailing general market and economic conditions. No further action on the part of stockholders would be required to either implement or abandon the reverse stock split.Share Increase Amendment

If the stockholders approve the proposal, and the Board of Directors determines to effect the reverse stock split, we would communicate to the public, prior to the Effective Date, additional details regarding the reverse split, including the specific ratio selectedShare Increase Amendment is approved by the Boardstockholders at the Annual Meeting, it will become effective upon the filing of Directors. If the Boarda certificate of Directors does not implement the reverse stock split prioramendment to November 1, 2015, the authority granted in this proposal to implement the reverse stock split will terminate. The Boardour Certificate of Directors reserves its right to elect not to proceedIncorporation with the reverse stock split if it determines, in its sole discretion, that this proposal is no longer in our best interests.Delaware Secretary of State.

Fractional SharesExecutive Officer and Director Interest

Stockholders willOur directors and executive officers do not receive fractional post-reverse stock split shareshave an interest in connection withthis Proposal No. 4.

The summary above is wholly qualified by the reverse stock split. If, as a resultcomplete text of the reverse stock split, a stockholder would otherwise hold a fractional share, the numberSecond Certificate of shares to be received by such shareholder will be rounded up to the next whole number.

If you believe that you may not hold sufficient sharesAmendment of our Common Stock at the Effective DateCertificate of the reverse stock split to receive at least one shareIncorporation, in the reverse stock splitform attached here as Appendix A and you want to continue to hold our Common Stock after the split, you may do soincorporated herein by either:reference.

so that in each case you hold a number of shares of our Common Stock in your account prior to the reverse stock split that would entitle you to receive at least one share of our Common Stock on a post-reverse stock split basis. Shares of Common Stock held in registered form (that is, stock held by you in your own name in our stock register records maintained by our transfer agent) and stock held in “street name” (that is, stock held by you through a brokerage firm, bank, broker-dealer, or other similar organization) for the same investor will be considered held in separate accounts and will not be aggregated when effecting the reverse stock split.

No Dissenters’ Rights

Under Delaware law, our stockholders would not be entitled to dissenters’ rights or rightsVote Required and Recommendation of appraisal in connection with the implementation of the reverse stock split, and we will not independently provide our stockholders with any such rights.

Certain United States Federal Income Tax ConsequencesBoard

The following is a summaryOur Bylaws provide that all matters (other than the election of certain United States federal income tax consequences of the reverse stock split. It does not address any state, local or foreign income or other tax consequences, which, depending upon the jurisdictiondirectors and the status of the stockholder/taxpayer, may vary from the United States federal income tax consequences. It applies to you only if you held pre-reverse stock split Common Stock as capital assets for United States federal income tax purposes. This discussion does not apply to you if you are a member of a class of holders subject to special rules, such as (a) a dealer in securities or currencies, (b) a trader in securities that elects to use a mark-to-market method of accounting for your securities holdings, (c) a bank, (d) a life insurance company, (e) a tax-exempt organization, (f) a person that owns shares of Common Stock that are a hedge, or that are hedged, against interest rate risks, (g) a person who owns shares of Common Stock as part of a straddle or conversion transaction for tax purposes or (h) a person whose functional currency for tax purposes is not the U.S. dollar. The discussion is based on the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), its legislative history, existing, temporary and proposed regulations under the Internal Revenue Code, published rulings and court decisions, all as of the date hereof. These laws, regulations and other guidance are subject to change, possibly on a retroactive basis. We have not sought and will not seek an opinion of counsel or a ruling from the Internal Revenue Service regarding the United States federal income tax consequences of a reverse stock split.

PLEASE CONSULT YOUR OWN TAX ADVISOR CONCERNING THE CONSEQUENCES OF THE REVERSE STOCK SPLIT IN YOUR PARTICULAR CIRCUMSTANCES UNDER THE INTERNAL REVENUE CODE AND THE LAWS OF ANY OTHER TAXING JURISDICTION.

Tax Consequences to United States Holders of Common Stock. A United States holder, as used herein, is a stockholder who or that is, for United States federal income tax purposes: (a) a citizen or individual resident of the United States, (b) a domestic corporation, (c) an estate whose income is subject to United States federal income tax regardless of its source, or (d) a trust, if a United States court can exercise primary supervision over the trust’s administration and one or more United States persons are authorized to control all substantial decisions of the trust. This discussion applies only to United States holders.

No gain or loss should be recognized by a stockholder upon such stockholder’s exchange of pre-reverse stock split shares for post-reverse stock split shares pursuant to the reverse stock split, except to the extent of cash received in lieu ofotherwise required by applicable Delaware law) shall be determined by a fractional share. The aggregate adjusted basismajority of the post-reverse stock split shares of Common Stock received will be the same as the aggregate adjusted basis of the Common Stock exchanged for such new shares, increased by any gain realized as a result of the cash received in lieu of a fractional share, as discussed below, and reduced by the amount of cash received. The stockholder’s holding period for the post-reverse stock split shares will include the period during which the stockholder held the pre-reverse stock split shares surrendered.

Accounting Consequences

Following the Effective Date of the reverse stock split, if any, the net incomevotes cast affirmatively or loss and net book value per share of Common Stock will be increased because there will be fewer shares of the Common Stock outstanding. We do not anticipate that any other accounting consequences would arise as a result of the reverse stock split.

As of the Effective Date, each certificate representing shares of our Common Stock outstanding before the reverse stock split will be deemed, for all corporate purposes, to evidence ownership of the reduced number of shares of our Common Stock resulting from the reverse stock split. All shares underlying options, warrants and other securities exchangeable or exercisable for or convertible into Common Stock also automatically will be adjusted on the Effective Date.

Our transfer agent, Action Stock Transfer Corporation, will act as the exchange agent for purposes of exchanging stock certificates subsequent to the reverse stock split. Shortly after the Effective Date, stockholders of record will receive written instructions requesting them to complete and return a letter of transmittal and surrender their old stock certificates for new stock certificates reflecting the adjusted number of shares as a result of the reverse stock split. Certificates representing shares of Common Stock issued in connection with the reverse stock split will continue to bear the same restrictive legends, if any, that were borne by the surrendered certificates representing the shares of Common Stock outstanding prior to the reverse stock split. No new certificates will be issued until such stockholder has surrendered any outstanding certificates, together with the properly completed and executed letter of transmittal, to the exchange agent. Until surrendered, each certificate representing shares of Common Stock outstanding before the reverse stock split would continue to be valid and would represent the adjusted number of shares, based on the ratio of the reverse stock split.

Any stockholder whose stock certificates are lost, destroyed or stolen will be entitled to a new certificate or certificates representing post-reverse stock split shares upon compliance with the requirements that we and our transfer agent customarily apply in connection with lost, destroyed or stolen certificates. Instructions as to lost, destroyed or stolen certificates will be included in the letter of instructions from the exchange agent.

Upon the reverse stock split, we intend to treat stockholders holding our Common Stock in “street name,” through a bank, broker or other nominee, in the same manner as registered stockholders whose shares are registered in their names. Banks, brokers and other nominees will be instructed to effect the reverse stock split for their beneficial holders holding our Common Stock in “street name.” However, such banks, brokers and other nominees may have different procedures than registered stockholders for processing the reverse stock split. If you hold your shares in “street name” with a bank, broker or other nominee, and if you have any questions in this regard, we encourage you to contact your bank, broker or nominee.

YOU SHOULD NOT DESTROY YOUR STOCK CERTIFICATES AND YOU SHOULD NOT SEND THEM NOW. YOU SHOULD SEND YOUR STOCK CERTIFICATES ONLY AFTER YOU HAVE RECEIVED INSTRUCTIONS FROM THE EXCHANGE AGENT AND IN ACCORDANCE WITH THOSE INSTRUCTIONS.

If any certificates for shares of Common Stock are to be issued in a name other than that in which the certificates for shares of Common Stock surrendered are registered, the stockholder requesting the reissuance will be required to pay to us any transfer taxes or establish to our satisfaction that such taxes have been paid or are not payable and, in addition, (a) the transfer must comply with all applicable federal and state securities laws, and (b) the surrendered certificate must be properly endorsed and otherwise be in proper form for transfer.

Book-Entry

The Company’s registered stockholders may hold some or all of their shares electronically in book-entry form with our transfer agent. These stockholders do not have stock certificates evidencing their ownership of our Common Stock. They are, however, provided with a statement reflecting the number of shares of our Common Stock registered in their accounts.

Vote Required and Recommendation

The Delaware General Corporation Law and our Certificate of Incorporation require that, in order for us to amend the Certificate of Incorporation to give effect to the reverse stock split, such amendment must be approved by our Board of Directors and approved bynegatively. Accordingly, the affirmative vote of a majority of the shares of the shares of Common Stock and shares of Common Stock into which the Series A Preferred Stock are convertible, on an as converted basis, voting together present at the Annual Meeting, in person or by proxy, and voting on the matter, will be required to approve the Share Increase Amendment Proposal.

The Board recommends that stockholders approve the Share Increase Amendment. Under applicable Delaware law, the affirmative vote of the stockholders holding a majority of the outstanding shares of stock entitled toCommon Stock is required for approval of the Share Increase Amendment. Abstentions from voting on this proposal will have the same effect as a vote against this Proposal No. 3. There will be no broker non-votes on such an amendment.this Proposal No. 3.

THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE SHARE INCREASE AMENDMENT PROPOSAL APPROVONG THE AMENDMENT TO THE COMPANY’S CERTIFICATE OF INCORPORATION, AS AMENDED, INCREASING THE COMPANY’S AUTHORIZED SHARES OF COMMON STOCK FROM 75,000,000 SHARES TO 500,000,000 SHARES

PROPOSAL NO. 4 APPROVAL OF AN AMENDMENT TO THE COMPANY’S CERTIFICATE OF INCORPORATION CHANGING THE COMPANY’S NAME TO AMERICAN NOBLE GAS, INC.

Our Board of Directors adopted resolutions on July 14, 2015, approving the reverse stock split and thestockholders are being asked to approve an amendment to our Certificate of Incorporation and declaring thatto change the amendmentname of the Company from Infinity Resources, Inc. to American Noble Gas, Inc. (the “Name Change”). On August 14, 2021, the Board approved a proposal to amend the Certificate of Incorporation to effectchange the reverse stock split is advisable and in the best interestsname of the Company and its stockholders.from Infinity Resources, Inc. to American Noble Gas, Inc.

Form of the Name Change Amendment

The proposed amendment (the “Name Change Amendment”) would amend Article 1 of our Certificate of Incorporation, as amended, to read in its entirety as follows:

“The name of the corporation is American Noble Gas, Inc.”

Reason for Name Change Amendment

The Company believes that the Name Change is necessary to more accurately reflect the Company’s current business activities. On April 1, 2021, we acquired the mineral rights and equipment to approximately 11,000 acres of oil and gas producing properties in the Kansas Central Uplift region of Kansas (the “Kansas Properties”). The Company believes that the Kansas Properties may contain commercial quantities of noble gas reserves in addition to its traditional oil and natural gas reserves. Based on preliminary testing, the Company is evaluating the cash flows associated with developing the noble gas reserves on the Kansas Properties to the extent that noble gases may generate the majority of the underlying cash flows within a one to two-year time frame. The Board of Directors recommendsbelieves that the Kansas Properties may provide our platform to transform the Company into a vote “FOR”global leader in the authorizationexploration, development and production of noble gases, although there can be no assurance that this will be achieved by the Company. The Board believes that it is in the Company’s and our stockholders’ best interests to make the name change to “American Noble Gas, Inc.” to better communicate to the public the current and future nature of the BoardCompany’s business operations and enable the Company to integrate its exploration, development and production of Directors to implement a reverse splitnoble gases into one corporate identity.

Effectiveness of our Common Stock, includingName Change Amendment

If the authorization to filestockholders approve the proposed amendment to our Certificate of Incorporation, prioras amended, the amendment will become effective upon the filing of a Second Certificate of Amendment to November 1, 2015.our Certificate of Incorporation with the Delaware Secretary of State, which would be filed shortly after the Annual Meeting. While the Name Change will cause us to incur certain modest costs, the Board believes that any potential confusion and costs associated with the Name Change will be minimal and will be outweighed by the benefits of the Name Change. The Name Change will not have any effect on the rights of our existing stockholders. Changing our name will not affect the validity or transferability of stock certificates presently outstanding, and the Company’s stockholders will not be required to exchange any certificates presently held by them. In the future, new stock certificates will be issued reflecting the new name.

Executive Officer and Director Interest

Our directors and executive officers do not have an interest in this Proposal No. 4.

The summary above is wholly qualified by the complete text of the Second Certificate of Amendment of Certificate of Incorporation, in the form attached here as Appendix A and incorporated herein by reference.

PROPOSAL THREEVote Required and Recommendation of Board

Our Bylaws provide that all matters (other than the election of directors and except to the extent otherwise required by applicable Delaware law) shall be determined by a majority of the votes cast affirmatively or negatively. Accordingly, the affirmative vote of a majority of the shares of the shares of Common Stock and shares of Common Stock into which the Series A Preferred Stock are convertible, on an as converted basis, voting together present at the Annual Meeting, in person or by proxy, and voting on the matter, will be required to approve the Name Change Amendment Proposal.

The Board recommends that stockholders approve the Name Change Amendment. Under applicable Delaware law, the affirmative vote of the stockholders holding a majority of the outstanding shares of Common Stock is required for approval of the Name Change Amendment. Abstentions from voting on this proposal will have the same effect as a vote against this Proposal No. 4. There will be no broker non-votes on this Proposal No. 4.

THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE NAME CHANGE AMENDMENT PROPOSAL APPROVING THE AMENDMENT TO THE COMPANY’S CERTIFICATE OF INCORPORATION, AS AMENDED, CHANGING THE COMPANY’S NAME TO AMERICAN NOBLE GAS, INC.

TO APPROVEPROPOSAL NO. 5 APPROVAL OF THE 2015 INFINITY ENERGY RESOURCES, INC.ADOPTION OF THE COMPANY’S 2021 STOCK OPTION AND RESTRICTED STOCK PLAN AND TO RESERVE 5,000,000 SHARES FOR ISSUANCE UNDER THE PLAN.

Overview

The Company is seeking stockholder approval for the 2015its 2021 Stock Option and Restricted Stock Plan (the “2015“2021 Plan”) including the reservation of 5,000,000 shares of Common Stock issuable under the 20152021 Plan. The 20152021 Plan was adopted by the Board of Directors on JulyAugust 14, 2015,2021, subject to stockholder approval at the annual meeting. Accordingly,Annual Meeting. To date, no grants of optionsawards have been madegranted under the 2015 Plan to date. If our stockholders approve the 2015 Plan, 5,000,000 shares will be available for future grants. Such number will be reduced if the stockholders adopt the Proposal Two in the ratio of the reverse split of our Common Stock.2021 Plan.

The purpose of the 20152021 Plan is to offer all of our employees, directors, and key consultants an opportunity to acquire a proprietary interest in our success and remain in service to the Company and to attract new employees, directors and consultants. The 20152021 Plan provides both for the direct award of shares,restricted stock and for the grant of options to purchase shares, as well as for the grant of Stock Appreciation Rights (SARs).shares. Options granted under the 20152021 Plan may include non-statutory options as well as incentive stock options intended to qualify under Section 422 of the Internal Revenue Code.

The Company has a policy of issuing new shares upon the exercise of stock options, awarding significant amounts of stock options or restricted stock grants to new employees and regularly awarding such to employees on an annual basis. Stock options are generally granted at the market price on the date of grant. Stock options and restricted stock grants have generally vested over one or more years for officers and employees, and one year for directors. Stock options generally can be exercised within seven to ten years.

The Board of Directors believes that it is in the best interests of the Company and our stockholders for the Company to approveexistence of the 20152021 Plan. There are relatively few shares compared to the Company’s total authorized and outstanding shares which are available for grant under Company’s 2015 Stock Option and Restricted Stock Plan, which was the existinglast equity plan adopted by the Company. The last stock option plansplan of the Company.Company was adopted in 2015 and provided for 500,000 shares to be reserved for grant, however none have been granted since its original approval. The Board believes that equity awards assist in retaining, motivating and rewarding employees, executives and consultants by giving them an opportunity to obtain long-term equity participation in the Company. In addition, equity awards are an important contributor to aligning the incentives of the Company’s employees with the interests of our stockholders. The Board also believes equity awards are essential to attracting new employees and retaining current employees. Further, the granting of options to new and existing employees frequently permits the Company to pay lower salaries than otherwise might be the case. The Board of Directors believes that to remain competitive with other technology companies involved in our long-term incentive plans,the exploration for and development of reserves of oil, natural gas and especially noble gases, the Company must continue to provide employees with the opportunity to obtain equity in the Company and that an inability to offer equity incentives to new and current employees would put the Company at a competitive disadvantage in attracting and retaining qualified personnel. Our named executive officers and directors have an interest in this proposalProposal No. 5 because they are expected to receive awards under the 2015 Plan if it is approved at the annual meeting.

Vote Required and Recommendation

The affirmative vote of a majority of the votes cast will be required to approve the 20152021 Plan.

Our Board of Directors unanimously recommends that stockholders vote

FOR the approval of the 2015 Infinity Energy Resources, Inc. Stock Option and Restricted Stock Plan.

Plan Summary of the 2015 Stock Option and Restricted Stock Plan

Our Board of Directors adopted the 20152021 Plan on JulyAugust 14, 2015.2021. At the annual meeting,Annual Meeting, we are asking stockholders to approve the 20152021 Plan and the reservation of 5,000,000 shares of Common Stock issuable under the 20152021 Plan. The 20152021 Plan authorizes us to issue 5,000,000 shares of common stockCommon Stock upon the exercise of options and the grant of restricted stock awards.awards (collectively, the “Awards”). No optionsAwards have been granted under the 20152021 Plan to date. The 20152021 Plan authorizes us to grant (i) to the key employees incentive stock options to purchase shares of common stock andCommon Stock, non-qualified stock options to purchase shares of common stockCommon Stock, and restricted stock awards andawards; (ii) to non-employee directors attorneysnon-qualified stock options and restricted stock awards; and (iii) to consultants non-qualified stock options and restricted stock.stock awards. As of July 15, 2015, the Company had only two employees both of which areAugust 24, 2021, approximately three executive officers, andofficers/employees, one non-employee director, whoand three non-employee consultants were eligible to participate in the 20152021 Plan. The Company expects that it will begin hiring new employees and consultants as exploration and development of the Nicaraguan Concessions progress.

The following paragraphs provide a summary of the principal features of the 20152021 Plan and its operation. The following summary is qualified in its entirety by reference to the 20152021 Plan as set forth inAppendix B.

Administration

Objectives.The objective of the 2015 Plan is to provide incentives to our key employees, directors and consultants to achieve financial results aimed at increasing shareholder value and attracting talented individuals to us. Persons eligible to be granted stock options or restricted stock under the 20152021 Plan will be those persons whose performance, inadministered by the judgment ofBoard or the Compensation Committee of ourthe Board of Directors, can(the “Compensation Committee”), after the Company has established a Compensation Committee. The Board or Compensation Committee will have significant impact on our success.

Oversight. Our Board will administerfull authority, subject to the 2015 Plan by making determinations regarding the persons to whom options or restricted stock should be granted and the amount, terms conditions and restrictions of the awards. The Board also has the authority2021 Plan, to interpret the provisions2021 Plan and establish rules and regulations for the proper administration of the 20152021 Plan. The validity, construction and effect of the 2021 Plan and to establishany rules and amend rules for its administration subjectregulations relating to the 2015 Plan’s limitations.2021 Plan shall be determined in accordance with the laws of the State of Delaware.

Number of Shares of Common Stock Available UnderSubject to the 20152021 Plan and Award Limit

.If our stockholders approve

The aggregate maximum number of shares of Common Stock (including shares of Common Stock underlying options) that may be issued under the 20152021 Plan a total ofwill be limited to 5,000,000 shares of our common stock will be reserved for issuanceCommon Stock.

In the event that, prior to the date on which the 2021 Plan shall terminate, any award granted under the 20152021 Plan expires unexercised or unvested or is terminated, surrendered or cancelled without the delivery of shares of Common Stock, or any awards are forfeited back to the Company, then the shares of Common Stock subject to such award may be made available for subsequent awards under the terms of the 2021 Plan.

Eligibility

All employees (including executive officers) and directors of the Company or any of its affiliates, as well as consultants, professionals and service providers who provide services to the Company are eligible to participate in the 2021 Plan. The selection of those eligible employees, directors and consultants who will receive the Awards is within the discretion of the Board or the Compensation Committee, as applicable. As of August 24, 2021, approximately three executive officers/employees, one non-employee director, and three non-employee consultants were eligible to participate in the 2021 Plan.

Term of 2021 Plan

The 2021 Plan becomes effective as of the date on which it is approved by the stockholders and it shall automatically terminate one day before the tenth (10th) anniversary of such date. No Awards may be granted before the effective date and no further Awards may be granted under the 2021 Plan after such date of termination. In addition, in the event that the stockholders of the Company do approve the 2021 Plan within twelve (12) months of such effective date, the 2021 Plan shall become void and of no force or effect. The Board may terminate, suspend or amend the Plan at any time without stockholder approval except to the extent that stockholder approval is required to satisfy applicable requirements imposed by (a) Rule 16b-3 under the Exchange or any successor rule or regulation; or (b) the rules of any exchange on or through which the shares of Common Stock are then listed or traded. If the 2021 Plan is terminated, whether by automatic termination on the day before the tenth (10^th) anniversary, or for any other reason provided under the 2021 Plan, notwithstanding such termination, all Awards granted prior to such termination shall continue until they are terminated by their respective terms.

OutstandingAdjustments and Changes in Shares

In the event that there is a merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, stock split, liquidating dividend, combination of stock, exchange of stock, change in corporate structure or other similar corporate change affecting the shares of Common Stock, Options Held by Directorsthe Board shall appropriately adjust the aggregate number of shares of Common Stock (including shares of Common Stock underlying stock options) available for Awards under the 2021 Plan or subject to outstanding Awards, and Officers.any other factors, limits or terms affecting any outstanding or subsequently issuable Awards as may be appropriate.

Types of Awards

The following table presents information concerningUnder the outstanding equity awards for2021 Plan, the DirectorsBoard or Compensation Committee, as applicable, is authorized to grant incentive stock options, non-qualified options and Officers asshares of December 31, 2014:restricted Common Stock.

Outstanding Equity Awards at Fiscal Year-End

(As of December 31, 2014)