Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Jun. 30, 2018 | Aug. 13, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | CAMBER ENERGY, INC. | |
Entity Central Index Key | 1,309,082 | |
Document Type | 10-Q | |
Trading Symbol | CEI | |
Document Period End Date | Jun. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --03-31 | |
Entity a Well-known Seasoned Issuer | No | |
Entity a Voluntary Filer | No | |
Entity's Reporting Status Current | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 40,046,922 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,019 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Jun. 30, 2018 | Mar. 31, 2018 |
Current Assets | ||
Cash | $ 420,655 | $ 760,317 |
Restricted Cash | 217,914 | 26,834 |
Accounts Receivable | 682,982 | 646,891 |
Other Current Assets | 228,733 | |
Total Current Assets | 1,321,551 | 1,664,775 |
Property and Equipment | ||
Oil and Gas Properties - Subject to Amortization | 62,598,160 | 61,082,526 |
Oil and Gas Properties - Not Subject to Amortization | 28,013,365 | 28,016,989 |
Other Property and Equipment | 1,570 | 1,570 |
Total Property and Equipment | 90,613,095 | 89,101,085 |
Accumulated Depletion, Depreciation and Amortization | (77,412,088) | (76,555,506) |
Total Property and Equipment, Net | 13,201,007 | 12,545,579 |
Other Assets | 198,519 | 57,510 |
Total Assets | 14,721,077 | 14,267,864 |
Current Liabilities | ||
Accounts Payable | 3,895,994 | 2,972,261 |
Common Stock Payable | 200,000 | 200,000 |
Accrued Expenses | 1,579,762 | 1,140,730 |
Convertible Debt, Net of Discount | 271,153 | 247,403 |
Current Portion of Long-Term Notes Payable, Net of Discount | 35,920,526 | 35,691,567 |
Total Current Liabilities | 41,867,435 | 40,251,961 |
Asset Retirement Obligations | 985,365 | 979,159 |
Derivative Liability | 5 | 5 |
Total Liabilities | 42,852,805 | 41,231,125 |
Commitments and Contingencies (see Note 8) | ||
Stockholders' Deficit | ||
Common Stock, 500,000,000 Shares Authorized of $0.001 Par, 16,352,839 and 5,758,970 Shares Issued and Outstanding, respectively | 16,353 | 5,759 |
Additional Paid-in Capital | 143,059,669 | 141,424,282 |
Stock Dividends Distributable | 3,165,559 | 2,467,910 |
Accumulated Deficit | (174,373,719) | (170,861,622) |
Total Stockholders' Deficit | (28,131,728) | (26,963,361) |
Total Liabilities and Stockholders' Deficit | 14,721,077 | 14,267,864 |
Series B Preferred Stock [Member] | ||
Stockholders' Deficit | ||
Preferred stock | 409 | 409 |
Series C Preferred Stock [Member] | ||
Stockholders' Deficit | ||
Preferred stock | $ 1 | $ 1 |
CONSOLIDATED BALANCE SHEETS (U3
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) | Jun. 30, 2018 | Mar. 31, 2018 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized | 500,000,000 | 500,000,000 |
Common stock, issued | 16,352,839 | 5,758,970 |
Common stock, outstanding | 16,352,839 | 5,758,970 |
Series A Preferred Stock [Member] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 2,000 | 2,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Series B Preferred Stock [Member] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 600,000 | 600,000 |
Preferred stock, issued | 408,508 | 408,508 |
Preferred stock, outstanding | 408,508 | 408,508 |
Preferred stock, liquidation preference | $ 10,212,700 | |
Series C Preferred Stock [Member] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 500,000 | 500,000 |
Preferred stock, issued | 1,091 | 1,132 |
Preferred stock, outstanding | 1,091 | 1,132 |
Preferred stock, liquidation preference | $ 10,910,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Operating Revenues | ||
Crude Oil | $ 200,069 | $ 458,039 |
Natural Gas | 473,513 | 623,016 |
Natural Gas Liquids | 1,021,114 | 821,750 |
Total Operating Revenues | 1,694,696 | 1,902,805 |
Operating Expenses | ||
Lease Operating Expenses | 1,411,667 | 1,102,895 |
Severance and Property Taxes | 82,760 | 84,864 |
Depreciation, Depletion, Amortization, and Accretion | 327,200 | 572,041 |
Impairment of Oil and Gas Properties | 531,657 | 775,374 |
Gain on Sale of Oil and Gas Properties | (1,195) | |
General and Administrative | 1,883,049 | 1,448,938 |
Total Operating Expenses | 4,236,333 | 3,982,917 |
Operating Loss | (2,541,637) | (2,080,112) |
Other Expense (Income) | ||
Interest Expense | 965,296 | 931,563 |
Other Expense (Income), Net | 5,164 | 37,303 |
Total Other Expense | 970,460 | 968,866 |
Net Loss | $ (3,512,097) | $ (3,048,978) |
Net Loss Per Common Share | ||
Basic and Diluted (in dollars per share) | $ (.44) | $ (2.80) |
Basic and Diluted (in shares) | 9,501,394 | 1,217,043 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Cash Flows from Operating Activities | ||
Net Loss | $ (3,512,097) | $ (3,048,978) |
Adjustments to Reconcile Net Losses to Net Cash Used in Operating Activities: | ||
Depreciation, Depletion, Amortization and Accretion | 327,200 | 572,041 |
Impairment of Oil and Gas Properties | 531,657 | 775,374 |
Gain on Sale of Oil and Gas Properties | (1,195) | |
Share-Based Compensation | 343,629 | 4,816 |
Amortization of Discount on Notes | 252,709 | 275,935 |
Change in Fair Value of Derivative Liability | (15,171) | |
Changes in Components of Working Capital and Other Assets: | ||
Accounts Receivable | (36,091) | 114,370 |
Other Current Assets | 228,733 | 52,451 |
Accounts Payable and Accrued Expenses | 617,963 | 855,561 |
Net Cash Used in Operating Activities | (1,246,307) | (414,796) |
Investing Cash Flows | ||
Cash paid for Oil and Gas Property Development Costs | (763,266) | (647,154) |
Cash paid for deposits | (141,009) | |
Proceeds from Sale of Oil and Gas Properties | 400,000 | |
Net Cash Used in Investing Activities | (904,275) | (247,154) |
Financing Cash Flows | ||
Proceeds from issuance of Preferred C Shares | 2,000,000 | |
Principal Repayments of Notes Payable | (707,854) | |
Net Cash Provided By (Used In) Financing Activities | 2,000,000 | (707,854) |
Decrease in Cash, Cash Equivalents, and Restricted Cash | (150,582) | (1,369,804) |
Cash, Cash Equivalents, and Restricted Cash at Beginning of the Period | 789,151 | 2,389,761 |
Cash, Cash Equivalents, and Restricted Cash at End of the Period | $ 638,659 | $ 1,019,957 |
GENERAL
GENERAL | 3 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GENERAL | NOTE 1 – GENERAL Camber Energy Inc. (“Camber” or the “Company”) is an independent oil and gas company engaged in the development and acquisition of onshore properties in Texas and Oklahoma. The Company’s main operations are primarily located in the Hunton formation in Lincoln, Logan and Payne and Okfuskee Counties, in central Oklahoma, the Cline shale and upper Wolfberry shale in Glasscock County, Texas; and Hutchinson County, Texas. The accompanying unaudited interim consolidated financial statements of Camber Energy, Inc. (“Camber” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in Camber’s annual report filed with the SEC on Form 10-K for the year ended March 31, 2018. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the consolidated financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal year 2018 as reported in the Form 10-K have been omitted. Effective on January 10, 2018, the Company filed with the Secretary of State of Nevada, a Certificate of Amendment to the Company’s Articles of Incorporation to increase the number of the Company’s authorized shares of common stock, $0.001 per value per share, from 200,000,000 shares to 500,000,000 shares (the “Amendment”). The Amendment was previously approved by the Company’s stockholders at the 2018 annual meeting of stockholders held on January 9, 2018. On March 1, 2018, the Company filed a Certificate of Amendment to its Articles of Incorporation with the Secretary of State of Nevada to effect a 1-for-25 reverse stock split of all outstanding common stock shares of the Company. The reverse stock split was effective on March 5, 2018. The effect of the reverse stock split was to combine each 25 shares of outstanding common stock into one new share, with no change in authorized shares or par value per share, and to reduce the number of common stock shares outstanding from approximately 103.5 million shares to approximately 4.1 million shares (prior to rounding). Proportional adjustments were made to the conversion and exercise prices of the Company’s outstanding convertible preferred stock, warrants and stock options, and to the number of shares issued and issuable under the Company’s stock incentive plans. The reverse stock split did not affect any shareholder’s ownership percentage of the Company’s common stock, except to the limited extent that the reverse stock split resulted in any shareholder owning a fractional share. Fractional shares of common stock were rounded up to the nearest whole share based on each holder’s aggregate ownership of the Company. All issued and outstanding shares of common stock, conversion terms of preferred stock, options and warrants to purchase common stock and per share amounts contained in the financial statements, in accordance with Staff Accounting Bulletin (SAB) TOPIC 4C, have been retroactively adjusted to reflect the reverse split for all periods presented. |
LIQUIDITY AND GOING CONCERN CON
LIQUIDITY AND GOING CONCERN CONSIDERATIONS | 3 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
LIQUIDITY AND GOING CONCERN CONSIDERATIONS | NOTE 2 – LIQUIDITY AND GOING CONCERN CONSIDERATIONS At June 30, 2018, the Company’s total current liabilities of $41.9 million exceeded its total current assets of $1.3 million, resulting in a working capital deficit of $40.6 million, while at March 31, 2018, the Company’s total current liabilities of $40.0 million exceeded its total current assets of $1.7 million, resulting in a working capital deficit of $38.6 million. The $2.0 million increase in the working capital deficit is primarily due to its loss from operations. The Company has entered into the following transactions to address liquidity and going concern issues: On December 30, 2015, the Company entered into an Asset Purchase Agreement (as amended from time to time, the “Asset Purchase Agreement”) to acquire, from twenty-three different entities and individuals (the “Sellers”), working interests in producing properties and undeveloped acreage (the “Acquisition”), which acquisition transaction was completed on August 25, 2016. The assets acquired include varied interests in two largely contiguous acreage blocks in the liquids-rich Mid-Continent region. In connection with the closing of the acquisition, the Company assumed approximately $30.6 million of commercial bank debt, issued 520,387 shares of common stock to certain of the Sellers, issued 552,000 shares of Series B Preferred Stock to one of the Sellers and its affiliate, and paid $4,975,000 in cash to certain of the Sellers. The effective date of the Acquisition was April 1, 2016. Pursuant to a Letter Agreement the Company entered into, at the closing of the Acquisition, with RAD2 Minerals, Ltd. (“RAD2”), one of the Sellers, which is owned and controlled by Richard N. Azar II, the Company’s former Chief Executive Officer and former director. RAD2 agreed to accept full financial liability for any and all deficiencies between the “Agreed Assets Value” set forth in the Asset Purchase Agreement of $80,697,710, and the mutually agreed upon value of the assets delivered by the Sellers at the closing of the Acquisition, up to an aggregate of $1,030,941 (as applicable, the “Deficiency”). The Company accepted additional oil and gas producing properties and two salt water disposal facilities from the Sellers with an approximate value of $1.0 million to resolve this Deficiency. The Asset Purchase Agreement between the Sellers and the Company relating to the Acquisition included the requirement that, following the closing, the parties undertake an accounting/true-up of expenses attributable to the assets acquired by the Company and revenue generated from such assets. A dispute arose between the Sellers and the Company as to the time period which the Company was to be responsible for the payment of expenses and was to receive the revenue from such assets prior to the closing of the transaction. Specifically, the Company believed that the agreements provided for it to be responsible for all expenses associated with the assets, and to receive all revenue generated from the assets, from April 1, 2016, the effective date of the Asset Purchase Agreement, through the closing date, August 25, 2016. The Sellers on the other hand, which include entities owned by Richard N. Azar, II, the Company’s then interim Chief Executive Officer, argued that the Company was only responsible for expenses, and was only due to receive revenue from the assets, beginning on the closing date, August 25, 2016. The difference in the amounts claimed due to the Company from the parties varied from a high of $1,121,718, which the Company alleged was due, to a low of $342,298, which the Sellers alleged was due. On July 12, 2018, The Company entered into a Compromise Settlement Agreement and Mutual Release with Segundo (the “Segundo Settlement”), in partial consideration for N&B Energy agreeing to enter into the Sale Agreement (discussed below). Pursuant to the Segundo Settlement, Segundo agreed to surrender 15,237 shares of common stock valued at $76.25 per share as of the effective date of the closing of the acquisition contemplated by the December 31, 2015 Asset Purchase Agreement (which closing effective date was April 1, 2016), and to release the Company from any and all claims which Segundo previously alleged was owed under the terms of the December 31, 2015 Asset Purchase Agreement. The Company and Segundo also provided each other full releases in connection with the December 31, 2015 Asset Purchase Agreement and Segundo agreed to indemnify the Company and hold it harmless against any claims made by the other sellers under the December 31, 2015 Asset Purchase Agreement. The shares have not been cancelled as of the date of this Report. As discussed in “Note 6 – Notes Payable and Debenture”, the Company borrowed $40 million from International Bank of Commerce (“IBC” or “IBC Bank”) effective August 25, 2016. The proceeds of the loan were used to repay and refinance approximately $30.6 million of indebtedness owed by certain of the Sellers to IBC as part of the closing of the Acquisition. As of June 30, 2018 and March 31, 2018, the Company was not in compliance with certain covenants of the loan agreement, including requiring the Company to maintain a net worth of $30 million, the Company is in default of the terms of the loan, and the balance of the loan due to IBC of $36.9 million (less unamortized debt issuance costs of approximately $1.3 million), was recognized as a short-term liability on the Company’s balance sheet as of June 30, 2018 and March 31, 2018. The Company also recognized approximately $460,000 and $39,000 in accrued interest as of June 30, 2018 and March 31, 2018, respectively related to this note. On April 6, 2016, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with an accredited institutional investor (the “Investor”), pursuant to which the Company sold and issued a redeemable convertible subordinated debenture, with a face amount of $530,000, initially convertible into 6,523 shares of common stock (subject to certain conversion premiums) at a conversion price equal to $81.25 per share and a warrant to initially purchase 55,385 shares of common stock (subject to adjustment thereunder) at an exercise price equal to $81.25 per share (the “First Warrant”). The Investor purchased the debenture at a 5.0% original issue discount in the amount of $500,000 and has exercised the First Warrant in full as described below for the sum of $4.5 million. Also on April 6, 2016, the Company entered into a Stock Purchase Agreement with the Investor, pursuant to which the Company agreed, subject to certain conditions, to issue up to 527 shares of Series C redeemable convertible preferred stock (the “Series C Preferred Stock”) at a 5% original issue discount, convertible into 64,738 shares of common stock (subject to certain conversion premiums) at a conversion price of $81.25 per share, and a warrant to initially purchase 44,444 shares of common stock at an exercise price of $112.50 per share (the “Second Warrant”). Under the terms of the Stock Purchase Agreement, the Second Warrant and 53 shares of Series C Preferred Stock were sold and issued for $500,000 on September 2, 2016, and the remaining 474 shares of Series C Preferred Stock were sold and issued for $4.5 million on November 17, 2016. In July and August 2016, RAD2 advanced the Company an aggregate of $350,000. Also, in August 2016, two other Sellers advanced the Company an aggregate of $200,000 ($100,000 each). These advances did not accrue interest and had no stated maturity date. Additionally, in August 2016, RAD2 loaned the Company $1.5 million pursuant to a promissory note. The promissory note did not accrue interest for the first month it was outstanding and accrued interest at the rate of 5% per annum thereafter until paid in full. The Company repaid the promissory note in full and all amounts advanced by RAD2 and the two other Sellers in October 2016. On October 7, 2016, the Investor exercised the First Warrant in full and was due 55,385 shares of common stock upon exercise thereof and an additional 101,709 shares of common stock in consideration for the conversion premium due thereon. A total of 32,400 shares were issued to the Investor on October 7, 2016, with the remaining shares being held in abeyance until such time as it would not result in the Investor exceeding its beneficial ownership limitation (4.99% of the Company’s outstanding common stock). The Company received gross proceeds of $4,500,000 from the exercise of the First Warrant and paid placement agent fees of $427,500 for services rendered in connection with the First Warrant. Pursuant to the terms of the First Warrant, the number of shares due in consideration for the conversion premium increases as the annual rate of return under the First Warrant increases, including by 10% upon the occurrence of certain triggering events (which had occurred by the October 7, 2016 date of exercise), to 17% per annum upon the exercise of the First Warrant. An aggregate of 4,417,911 shares of common stock were issued to the Investor in connection with the exercise of the Warrant during fiscal 2017 (200,000), 2018 (3,909,500), and 308,411 shares were issued in April 2018. The First Warrant has been fully-exercised and extinguished to date. On August 13, 2013, the Company entered into a $7.5 million Letter Loan Agreement with Louise H. Rogers (“Rogers” and such loan, as amended from time to time, the “Rogers Loan”). As a result of various extensions and amendments thereto the Rogers Loan was due and payable on July 31, 2017. The loan was not paid when due and the cure period on the Rogers Loan expired on September 11, 2017. On such date, all principal, interest and unpaid costs thereunder were immediately due and payable (which totaled approximately $9.4 million as of the date of acceleration which amount included $2.1 million of default interest). Prior to the default, CATI Operating, LLC (“CATI”), the Company’s wholly-owned subsidiary and obligor under the loan, had not recorded interest due on the note based on its earlier agreements. As a result of the default, demand and acceleration, CATI recorded the default interest demand of $2.1 million in the three month period ended December 31, 2017. In September 2017, Rogers foreclosed on the assets of CATI which secured the note. On October 3, 2017, the trustee of those assets, for the benefit of the lender, sold these assets in public auction foreclosure sales which took place in Gonzales County and Karnes County, Texas. The proceeds from the foreclosure sales of approximately $3.5 million were applied against the outstanding indebtedness. On December 15, 2017, CATI entered into a Release of Mortgage, Deed of Trust, Assignment, Security Agreement, Financing Statement and Fixture Filing (the “Release”) with Rogers. Pursuant to the Release, the Company completed a transaction in which CATI provided Rogers, pursuant to an Assignment of Overriding Royalty Interest (the “Royalty Assignment”), with an overriding royalty (equal to 0.01 of 8/8ths of all oil and gas) on CATI’s remaining leasehold and Rogers released CATI from all remaining indebtedness owed. The Release, which was filed in various counties in Texas on January 22, 2018 and January 23, 2018, discharged approximately $5.8 million in principal and interest outstanding and owed to Rogers, according to Rogers. The effective date of the Release was December 15, 2017. Additionally, the remaining leasehold and ownership of CATI was assigned to Arkose Lease Partners, LLC, a third party (“Arkose”), pursuant to an Assignment of Membership Interest (the “Assignment”), dated November 1, 2017, in exchange for Arkose’s assumption of all plugging and abandonment liabilities of CATI of approximately $1.8 million. Effective January 31, 2017, the Company borrowed $1,000,000 from Alan Dreeben, then one of the Company’s directors, pursuant to a short-term promissory note. The short-term promissory note had a principal balance of $1,050,000 (the $1,000,000 principal amount borrowed plus a $50,000 original issue discount), accrues interest at 6% per annum and a maturity date of January 31, 2018, with standard and customary events of default. As additional consideration for Mr. Dreeben agreeing to make the loan, the Company agreed to issue Mr. Dreeben 1,600 shares of restricted common stock. On November 9, 2017, in connection with the sale of oil and gas properties totaling approximately 2,452 acres in Gaines County, Texas (part of the Company’s the Jackrabbit Acreage), the Company repaid Mr. Dreeben the full amount due on the short-term promissory note of $1,050,000. See Note 4 “Property and Equipment” for further details. On March 9, 2017, the Company borrowed $250,000 from a non-related individual pursuant to a short-term promissory note. The short-term promissory note had a principal balance of $263,158 (the $250,000 principal amount borrowed plus a $13,158 original issue discount), accrued interest at 6% per annum, had a maturity date of March 9, 2018 and contained standard and customary events of default. As additional consideration for agreeing to make the loan, the Company agreed to issue the lender 400 restricted shares of common stock. On November 9, 2017, in connection with the sale of the Jackrabbit Acreage, the Company paid the non-related individual the full amount due on the short-term promissory note of $263,158. See Note 4 “Property and Equipment” for further details. On August 2, 2017, and effective June 13, 2017, the Company entered into an agreement with Vantage Fund, LLC (“Vantage” and the “Vantage Agreement”), pursuant to which Vantage agreed to provide up to $6 million of funding to the Company, in the sole discretion of Vantage, with $400,000 provided in the initial tranche (the “Initial Tranche”). The consideration for the Initial Tranche of funding was the assignment to Vantage of all of the Company’s rights and ownership in its then wholly-owned subsidiary Camber Permian II, LLC (“Camber Permian”), which included leaseholds and potential participation rights in undeveloped oil and gas property known as Arrowhead. The Vantage Agreement contained customary indemnification requirements. On July 17, 2017, Vantage provided $120,000 to the Company under the Vantage Note and on July 20, 2017, Vantage provided $30,000 to the Company under the Vantage Note. Vantage was granted a second lien on the Jackrabbit property in connection with the financing. On November 9, 2017, in connection with the sale of the Jackrabbit Acreage, the Company paid Vantage the full amount due on the Vantage Note of $150,000. N&B Energy Asset Disposition Agreement On July 12, 2018, the Company entered into an Asset Purchase Agreement (the “Sale Agreement”), as seller, with N&B Energy LLC, as purchaser, which entity is affiliated with Richard N. Azar II, the Company’s former Chief Executive Officer and former director, and Donnie B. Seay, the Company’s former director (“N&B Energy”). Pursuant to the Sale Agreement, the Company agreed to sell to N&B Energy a substantial portion of its assets, including all of the assets acquired pursuant to the terms of the December 31, 2015 Asset Purchase Agreement with Segundo Resources, LLC (“Segundo”), which is owned and controlled by Mr. Azar, and other sellers, and certain other more recent acquisitions, other than the production payment and overriding royalty interests discussed below (the “Assets”). In consideration for the Assets, N&B Energy agreed to pay the Company $100 in cash, to assume all of the Company’s obligations and debt owed under its outstanding loan agreement with IBC Bank, which has an outstanding principal balance of approximately $36.9 million as of the filing of these financial statements and Segundo agreed to enter into the Segundo Settlement, described below. Per the agreement terms, the Company will retain its assets in Glasscock County and Hutchinson Counties, Texas, and will also retain a 12.5% production payment (effective until a total of $2.5 million has been received); a 3% overriding royalty interest in its existing Okfuskee County, Oklahoma asset; and will retain an overriding royalty interest on certain other undeveloped leasehold interests The parties currently anticipate the closing of the acquisition, which is subject to various closing conditions, including those described below, to occur in September 2018, and to be effective as of the first day of the month preceding the month of closing. The Assets will be assigned “as is” with all faults. The Board of Directors of the Company has (i) adopted and declared advisable the Sale Agreement and the transactions contemplated by the Sale Agreement, upon the terms and subject to the conditions set forth in the Sale Agreement; and (ii) determined that the Sale Agreement and the transactions contemplated by the Sale Agreement are fair to, and in the best interests of, the Company and its stockholders. The sale is subject to customary closing conditions, including (1) the approval of IBC and entry into assumption agreements between IBC, the Company, N&B Energy and the guarantors of the Company’s IBC debt to provide for among other things, the release of the Company from any and all obligations owed under such debt and related releases; (2) receipt of required regulatory approvals; (3) the absence of any law or order prohibiting the consummation of the acquisition; and (4) satisfaction of due diligence by N&B Energy. Each party’s obligation to complete the acquisition is also subject to certain additional customary conditions, including (a) subject to certain exceptions, the accuracy of the representations and warranties of the other parties, and (b) performance in all material respects by the other parties of its obligations under the Sale Agreement. Segundo Settlement Agreement On July 12, 2018, the Company entered into a Compromise Settlement Agreement and Mutual Release with Segundo (the “Segundo Settlement”), in partial consideration for N&B Energy agreeing to enter into the Sale Agreement. Pursuant to the Segundo Settlement, Segundo agreed to surrender to he Company 15,237 shares of common stock valued at $76.25 per share as of the effective date of the closing of the acquisition contemplated by the December 31, 2015 Asset Purchase Agreement (which closing effective date was April 1, 2016), and to release he Company from any and all claims which Segundo previously alleged were owed under the terms of the December 31, 2015 Asset Purchase Agreement. he Company and Segundo also provided each other full releases in connection with the December 31, 2015 Asset Purchase Agreement, and Segundo agreed to indemnify he Company and hold it harmless against any claims made by the other sellers under the December 31, 2015 Asset Purchase Agreement. The shares have not been cancelled as of the filing of these financial statements. IBC Bank Standstill Agreement On August 3, 2018, the Company entered into an agreement in connection with the loan (the “Standstill Agreement”) with IBC Bank, which was effective August 1, 2018. The Company is a party to the loan from IBC Bank (the “Loan”) as evidenced by a Real Estate Lien Note dated August 25, 2016 (the “Note”) in the original principal amount of $40,000,000 (which has an outstanding principal balance of approximately $36.9 million as of the filing of these financial statements), entered into pursuant to the Loan Agreement dated August 25, 2016 (the “Loan Agreement” and together with the Note, and the other documents entered into evidencing, documenting and securing the Loan, the “Loan Documents”), by and among IBC Bank and the Company. Among other terms, described below, the Standstill Agreement was entered into to provide the Company sufficient time to close the transactions contemplated by the Sale Agreement. Pursuant to the Standstill Agreement: (a) The Company confirmed that certain defaults had occurred under the terms of the Loan Documents; (b) The Company, on behalf of it and its representatives, provided IBC Bank a release of all claims which it and such parties may have had as of the date of the Standstill Agreement; (c) The Company agreed to certain venue requirements in connection with any bankruptcy proceeding the Company may file or have filed against it in the future, agreed to waive certain automatic stays provided under applicable bankruptcy law and confirmed IBC Bank’s security interests; (d) IBC Bank agreed to stand still and not take any action to collect the indebtedness evidenced by the Loan Documents, prior to the earlier of (i) September 30, 2018, unless the closing date of the Sale Agreement is required to be extended due to no fault of the Company, due to the regulatory requirements of the Securities and Exchange Commission and/or NYSE American, in which case such date shall be automatically extended to no later than October 31, 2018, unless extended by both parties; or (ii) a default of the conditions of the stand still as set forth in the Standstill Agreement (collectively, the “Standstill Date”); (e) The Company agreed to certain conditions to the standstill (all of which have been completed as of the date of this filing), including: (i) Depositing all funds in excess of $5,000 with IBC Bank by 5:00 p.m. on Tuesday, August 7, 2018 (the “Deadline”); (ii) The Company pledging to IBC Bank prior to the Deadline, 87.5% of all of the Company’s right, title and interest to its assets located in Okfuskee County, Oklahoma and all wells, leasehold, mineral and surface interest, personal property, and all other property or assets located on or associated with said field owned by the Company that were recently purchased from Orion Energy (with the remaining 12.5% to be pledged to IBC Bank prior to the closing date of the Sale Agreement); (iii) Paying all of IBC Bank’s expenses and reasonable attorney fees in connection with the Note prior to the Deadline; (iv) Paying the June 2018 interest on the Note prior to the Deadline; (v) Paying the July 2018 interest on the Note prior to the Deadline; (vi) Agreeing to certain covenants and restrictions regarding the assets securing the Loan Documents during the stand still period; and (vii) Confirming that during the stand still period, the per annum interest rate of the Note will be 3% above the New York Prime Rate, subject to a floor of 5.5% per annum, with a beginning interest rate of 8% per annum. (f) IBC Bank agreed to allow the Company to undertake the transactions contemplated by the Sale Agreement, subject to the terms of the Standstill Agreement; (g) IBC Bank agreed, that if the Company is ready, willing and able to close the transactions contemplated by the Sale Agreement, but N&B Energy is not ready to close such transaction, on or before the Standstill Date (as extended), that it could surrender the assets planned to be sold pursuant to the Sale Agreement to IBC Bank (which may be undertaken pursuant to a foreclosure of such assets); and (h) That upon the closing of the transactions contemplated by the Sale Agreement or the surrender of such assets proposed to be sold pursuant to such Sale Agreement to IBC Bank (as discussed in (g) above), IBC Bank would pursue only the assets sold/surrendered, N&B Energy (if applicable) and the guarantors of the debt; enter into a novation and release in favor of the Company; and not pursue the Company for any deficiency in the amounts due under the Loan Documents, in each case subject to the terms and conditions of the Standstill Agreement. Pursuant to both the Sale Agreement and the Standstill Agreement, upon the closing of the sale (as to the Sale Agreement) or assignment (pursuant to the Standstill Agreement), the Company will retain its assets in Glasscock and Hutchinson Counties, Texas, and will also retain a 12.5% production payment (effective until a total of $2.5 million has been received); a 3% overriding royalty interest in its existing Okfuskee County, Oklahoma asset; and will retain an overriding royalty interest on certain other undeveloped leasehold interests First Amendment to Sale Agreement Also on August 3, 2018, the Company and N&B Energy entered into a First Amendment to Asset Purchase Agreement (the “First Amendment”), which amended the terms of the Sale Agreement to (a) modify, clarify and replace certain of the exhibits to the original Sale Agreement, including the terms of the overriding royalty interests and production payment agreed to be granted to the Company as part of such Sale Agreement; (b) amend the Sale Agreement to remove the requirement that the Company obtain shareholder approval prior to the closing of such Sale Agreement; and (c) include a deadline of August 31, 2018 for N&B Energy’s due diligence under the Sale Agreement. In order to avoid the significant time required to file a proxy statement with the Securities and Exchange Commission, clear comments with the Securities and Exchange Commission, hold a meeting and obtain shareholder approval, and because such shareholder approval is not required pursuant to applicable law or the rules of the NYSE American, the Company’s management has determined to not seek shareholder approval, but to instead seek a third-party opinion as to the fairness of the transaction to the Company’s shareholders, which has not been obtained as of the filing of this report. In addition to the transactions noted above, the Company is currently discussing potential financing transactions in order to fulfill its current capital requirements as well as its planned asset disposition, which the Company believe, if finalized and completed, will ensure the future viability of the Company. However, due to its current capital structure and the nature of oil and gas interests, i.e., that rates of production generally decline over time as oil and gas reserves are depleted, if the Company is unable to obtain the necessary financing to develop its proved undeveloped reserves (“PUDs”); and acquire additional assets; the Company believes that its revenues will continue to decline over time. Therefore, the Company may be forced to scale back its business plan, sell assets to satisfy outstanding debts or take other remedial steps which may include seeking bankruptcy protection. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for the next twelve months following the issuance of these financial statements. The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Accordingly, the financial statements do not include any adjustments relating to the recoverability of assets and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Company has provided a discussion of significant accounting policies, estimates and judgments in its March 31, 2018 Annual Report on Form 10-K. There have been no changes to the Company’s significant accounting policies since March 31, 2018 which are expected to have a material impact on the Company’s financial position, operations or cash flows. Reclassifications Certain reclassifications have been made to the prior year financial statements to conform with the current year presentation. Recently Adopted Accounting Pronouncements ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”, In November 2016, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) amending the presentation of restricted cash within the consolidated statements of cash flows. The new guidance requires that restricted cash be added to cash and cash equivalents on the consolidated statements of cash flows. The Company adopted this ASU on April 1, 2018 on a retrospective basis with the following impacts to our consolidated statements of cash flows for the three months ended June 30, 2017: Previously Reported Adjustment As Revised Net cash provided by (used in) financing activities $ (17,266 ) $ (690,588 ) $ (707,854 ) As of June 30, 2018 and March 31, 2018, the Company had restricted cash of $217,914 and $26,834 related to the loan agreement with IBC bank. Following is a summary of cash and cash equivalent and restricted cash at June 30, 2018 and March 31, 2018: June 30, March 31, Cash $ 420,665 $ 760,317 Restricted cash – current 217,914 26,834 Cash, cash equivalents and restricted cash $ 638,579 $ 787,151 In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230). ASU 2016-15 seeks to reduce the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This update is effective for fiscal years beginning after December 15, 2017. The Company adopted this ASU on April 1, 2018 and the adoption did not have a significant impact to the Company’s consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations: Clarifying the Definition of a Business Revenue from Contracts with Customers In May 2017, the FASB issued ASU 2017-09, “Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting”, which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. ASU 2017-09 is effective for annual periods beginning after December 15, 2017, with early adoption permitted, including adoption in any interim period for which financial statements have not yet been issued. The Company adopted this ASU on April 1, 2018 and the adoption did not have a significant impact to the Company’s consolidated financial statements. Recently Issued Accounting Pronouncements The Company does not believe that any other recently issued effective pronouncements, or pronouncements issued but not yet effective, if adopted, would have a material effect on the accompanying consolidated financial statements. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 3 Months Ended |
Jun. 30, 2018 | |
Property and Equipment | |
PROPERTY AND EQUIPMENT | NOTE 4 – PROPERTY AND EQUIPMENT Oil and Gas Properties Camber uses the full cost method of accounting for oil and natural gas producing activities. Costs to acquire mineral interests in oil and natural gas properties, to drill and equip exploratory wells used to find proved reserves, and to drill and equip development wells including directly related overhead costs and related asset retirement costs are capitalized. Under this method, all costs, including internal costs directly related to acquisition, exploration and development activities are capitalized as oil and natural gas property costs on a country-by-country basis. Costs not subject to amortization consist of unproved properties that are evaluated on a property-by-property basis. Amortization of these unproved property costs begins when the properties become proved or their values become impaired. Camber assesses overall values of unproved properties, if any, on at least an annual basis or when there has been an indication that impairment in value may have occurred. Impairment of unproved properties is assessed based on management’s intention with regard to future development of individually significant properties and the ability of Camber to obtain funds to finance their programs. If the results of an assessment indicate that the properties are impaired, the amount of the impairment is added to the capitalized costs to be amortized. Sales of oil and natural gas properties are accounted for as adjustments to the net full cost pool with no gain or loss recognized, unless the adjustment would significantly alter the relationship between capitalized costs and proved reserves. If it is determined that the relationship is significantly altered, the corresponding gain or loss will be recognized in the statements of operations. Costs of oil and natural gas properties are amortized using the units of production method. Amortization expense calculated per equivalent physical unit of production amounted to $4.36 and $5.74 per barrel of oil equivalent for the three months ended June 30, 2018 and 2017, respectively. All of Camber’s oil and gas properties are located in the United States. Below are the components of Camber’s oil and gas properties recorded at: June 30, March 31, Oil and gas properties subject to amortization $ 62,271,748 $ 60,760,056 Oil and gas properties not subject to amortization 28,013,365 28,016,989 Capitalized asset retirement costs 326,412 322,470 Total oil and gas properties 90,611,525 89.099,515 Accumulated depreciation, depletion and amortization (77,411,683 ) (76,555,320 ) Net capitalized costs $ 13,199,842 $ 12,544,195 Impairment For the three months ended June 30, 2018, the Company recorded impairments totaling $531,657 which were due to lease expirations. For the three months ended June 30, 2017, the Company recorded impairments totaling $775,374, which represented $675,000 due to lease expirations and $100,374 related to an impairment of proved properties based on the quarterly ceiling test. Disposition of Oil and Natural Gas Properties On August 2, 2017, the Company entered into an agreement with Vantage (as discussed above), pursuant to which among other things, the Company assigned its interest in the undeveloped Arrowhead oil and gas property, with a book value of $114,500, to Vantage (see further discussion of these warrants in Note 11). In September 2017, Rogers foreclosed on the assets of CATI which secured the Rogers Loan. On October 3, 2017, the trustee of those assets, for the benefit of the lender, sold these assets in public auction foreclosure sales which took place in Gonzales County and Karnes County, Texas. The proceeds from the foreclosure sales of approximately $3.5 million were applied against the outstanding indebtedness. The Company recorded an approximate loss on sale of property of approximately $4.1 million in conjunction with the settlement of the approximate $9.4 million of debt and accrued interest and the removal of approximately $1.3 million of remaining asset retirement obligation (“ARO”). On December 15, 2017, CATI provided Rogers with an overriding royalty (equal to 0.01 of 8/8ths of all oil and gas) on CATI’s remaining leasehold and Rogers released CATI from all remaining indebtedness owed. The release discharged approximately $5.8 million in principal and interest outstanding and owed to Rogers. Additionally, the remaining leasehold and ownership of CATI was assigned to Arkose Lease Partners, LLC, a third party (“Arkose”), pursuant to an Assignment of Membership Interest (the “Assignment”), dated November 1, 2017, in exchange for Arkose’s assumption of all plugging and abandonment liabilities of CATI. See Note 6 “Notes Payable and Debenture” for further details. Effective November 1, 2017, the Company and NFP Energy LLC (“NFP”) its joint venture partner, sold its 90% ownership position in oil and gas properties totaling approximately 2,452 acres in Gaines County, Texas, to Fortuna Resources Permian (“Fortuna”), for $1,000 per acre or an aggregate of $2,206,718 payable to the Company. The Company paid NFP $662,072 to terminate the joint venture agreement and the property sold had a net book value of $817,110. The transaction resulted in a $727,732 gain which was included in Loss on Sale of Property and Equipment on the statement of operations. This acreage, part of the Company’s “Jackrabbit” acreage, targeted the San Andres formation in the Permian Basin. Additionally, the Company and NFP jointly terminated their venture. With the proceeds from the sale, the Company paid the first lien holders including Alan Dreeben (a former director of the Company) and second lien holder Vantage. The Company maintains a 90% ownership position in the remaining approximately 1,200 acres in the area. Acquisition of Oil and Natural Gas Properties On August 25, 2016, the Company completed the Acquisition and acquired working interests in producing properties and undeveloped acreage from the Sellers (see “Note 2 – Liquidity and Going Concern Considerations”). The assets acquired include varied interests in two largely contiguous acreage blocks in the liquids-rich Mid-Continent region. As consideration for the Acquisition of the acquired assets, the Company assumed approximately $30.6 million of commercial bank debt, issued 520,387 shares of common stock to certain of the Sellers valued at the grant date fair value, issued 552,000 shares of Series B Preferred Stock to one of the Sellers and its affiliate (see “Note 11 – Stockholders’ Equity”) valued at the grant date fair value, and paid $4,975,000 in cash to certain of the Sellers. The effective date of the Acquisition was April 1, 2016. The following tables summarize the purchase price and allocation of the purchase price to the net assets acquired in connection with the Acquisition: Purchase Price on August 25, 2016: Consideration Given Fair value of common stock issued $ 49,176,530 Fair value of Series B Preferred Stock issued 14,898,038 Assumption of debt 30,595,256 Cash at Closing 4,975,000 Total purchase price $ 99,644,824 Net Assets Acquired Accounts receivable $ 635,482 Total current assets acquired 635,482 Oil and gas properties 50,774,684 Total assets acquired 51,410,166 Asset retirement obligations (755,862 ) Total liabilities acquired (755,862 ) Net assets acquired 50,654,304 Impairment of oil and gas properties 48,990,520 Total Purchase Price $ 99,644,824 The proceeds from the $40 million loan from IBC were as follows: Use of Proceeds Assumption of debt $ 30,595,256 Cash funding (paid at closing) 4,975,000 Loan Commitment fee (paid at closing) 200,000 Lien Payoff (paid at closing) 72,657 Restricted cash (received at closing) 3,360,000 Cash (received at closing) 797,087 Debt payable after closing $ 40,000,000 In January 2018, the Company acquired approximately 3,000 leasehold acres in Okfuskee County, Oklahoma, including two producing wells and 7 non-producing well bores, in consideration for cash paid of $210,000. The acquisition included three salt water disposal wells, to support existing and potential future hydrocarbon production. In March 2018, the Company completed an acquisition of working interests in certain leases, wells and equipment located in the Texas panhandle, for a purchase price of $250,000, payable in three tranches. A payment of $85,000 was due at closing; $85,000 was due thirty days after closing and $80,000 was due sixty days after closing, the last two payments have been accrued as of March 31, 2018 and are included in accrued expenses on the balance sheet. Camber earned 25% of the working interest at the closing and earned an additional 25% of the working interest at each of the two subsequent closings. The seller retained a 25% carried working interest in the assets. The acquisition includes 49 non-producing well bores, 5 saltwater disposal wells and the required infrastructure and equipment necessary to support future hydrocarbon production, as well as approximately 500 net leasehold acres in Hutchinson County, Texas. N&B Energy Asset Disposition Agreement On July 12, 2018, the Company entered into an Asset Purchase Agreement described in greater detail above under “Note 2 – Liquidity and Going Concern Considerations” – “N&B Energy Asset Disposition Agreement”. Segundo Settlement Agreement Also on July 12, 2018, the Company entered into a Compromise Settlement Agreement and Mutual Release with Segundo described in greater detail above under “Note 2 – Liquidity and Going Concern Considerations” – “Segundo Settlement Agreement”. Capital Leases During March and April 2018, the Company purchased certain equipment pursuant to capital leases. The effective value of the equipment was approximately $575,000, and such amount is included in oil and gas properties and the corresponding current liability of approximately $387,000 is included in accrued expenses as of June 30, 2018. The effective borrowing rate is approximately 35%, and all obligations are due by December 2018. Other Property and Equipment In February 2014, the Company purchased a field office for approximately $50,000 which is used to provide local operational support for its properties in the Eagleford and Austin Chalk areas. The land upon which the field office resides was initially leased by the Company over a three-year term beginning in January 2014 through December 2016, for yearly lease amounts of $7,200 and $7,800, and $8,400 over the three-year term, respectively. In January 2017, the Company renewed the lease on a year-to-year basis for $7,200. The field office was transferred as a part of the Release with Rogers. See Note 6 “Notes Payable and Debenture” for further details. Office Lease On April 1, 2016, the Company entered into a lease agreement pursuant to which the Company agreed to lease 4,439 square feet of office space at 450 Gears Road, Houston, Harris County, Texas 77067 (Suite 860, versus Suite 780 as was leased previously). The lease had a 65-month term (through August 2021), and commenced on April 1, 2016. The monthly rental cost under the lease was -$0- for the month of April 2016, and $7,676 for the months of May 2016 through April 2017, plus as applicable, its pro rata share of operating expenses and taxes which exceed the total operating expenses and taxes of the property for the first year of the lease. On March 31, 2017, the Company amended its lease at 450 Gears Road to expand to a total of 6,839 square feet, commencing on May 1, 2017. The amendment extended the lease period to November 2021. In August 2017, the Company ceased its use of this office space and moved its headquarters to San Antonio, Texas. The Company is committed to the remaining lease payments for the Houston office space for approximately $346,000 assuming an early termination of the lease on July 31, 2019. The Company recorded monthly rent expense associated with the Houston lease through August 2017. In accordance with the accounting guidance in ASC 420-10-25-13 regarding exit or disposal cost obligations, as of August 2017, the Company recorded rent expense, within general and administrative expense, and accrued a liability of $302,289, which represents the fair value of costs that will continue to be incurred during the remaining term of the Houston lease without economic benefit to the Company. As of June 30, 2018 and March 31, 2018, the remaining carrying amount of the liability of $214,862 and $226,972, respectively, was included in accrued expenses on the Company’s balance sheet. In addition, the Company wrote-off $189,533 of mostly fully depreciated property and equipment that was not re-located to the San Antonio headquarters, resulting in a loss of $3,368 which was recognized as a loss during the fiscal year ended March 31, 2018. Effective October 1, 2017, the Company entered into an agreement to sublease space on a month-to-month basis in San Antonio, Texas at 4040 Broadway, Suite 425, |
ASSET RETIREMENT OBLIGATIONS
ASSET RETIREMENT OBLIGATIONS | 3 Months Ended |
Jun. 30, 2018 | |
Asset Retirement Obligation Disclosure [Abstract] | |
ASSET RETIREMENT OBLIGATIONS | NOTE 5 – ASSET RETIREMENT OBLIGATIONS The following table presents the reconciliation of the beginning and ending aggregate carrying amounts of long-term legal obligations associated with the retirement of oil and gas property and equipment for the three-month periods ended June 30, 2018 and 2017, respectively. 2018 2017 Carrying amount at beginning of period $ 979,159 $ 2.045,847 Accretion 2,264 35,100 Change in estimate 3,942 (9,945 ) Carrying amount at end of period $ 985,365 $ 2,071,002 Camber does not have any short-term asset retirement obligations as of June 30, 2018 and March 31, 2018. |
NOTES PAYABLE AND DEBENTURE
NOTES PAYABLE AND DEBENTURE | 3 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE AND DEBENTURE | NOTE 6 – NOTES PAYABLE AND DEBENTURE The Company’s notes payable and debenture consisted of the following: June 30, March 31, Debenture $ 495,000 $ 495,000 Note Payable - IBC 36,943,617 36,943,617 37,438,617 37,438,617 Unamortized debt discount (1,246,938 ) (1,499,647 ) Total Notes Payable and Debenture 36,191,679 35,938,970 Less current portion (36,191,679 ) (35,938,970 ) Long-term portion $ — $ — Debenture On April 6, 2016, the Company entered into a Securities Purchase Agreement with the Investor, pursuant to which the Company issued a redeemable convertible subordinated debenture, with a face value of $530,000, initially convertible into 6,523 shares of common stock at a conversion price equal to $81.25 per share and warrants to initially purchase 55,385 shares of common stock (subject to adjustment thereunder) at an exercise price equal to $81.25 per share (the “First Warrant”). The Investor purchased the debenture at a $30,000 original issue discount for the sum of $500,000 and agreed that it would exercise the First Warrant, upon satisfaction of certain conditions, for the sum of $4.5 million, which warrant was exercised in October 2016. The debenture matures in seven years and accrues interest at a rate of 6.0% per annum. Due to the decline in the price of the Company’s common stock and that a trigger event occurred on June 30, 2016 as a result of the delay in filing of its Annual Report on Form 10-K for the year ended March 31, 2016, the premium rate on the debenture increased from 6% to 34% and the conversion discount became 85% of the lowest daily volume weighted average price during the measuring period (60 days prior to and 60 days after the last date that the Investor receives the last of the shares due), less $0.10 per share of common stock not to exceed 85% of the lowest sales price on the last day of such period less $0.10 per share. As the fair value of the warrants issued in connection with the debenture exceeded the $530,000 value of the debenture, the Company fully discounted the entire debenture and will amortize the discount over the term of the debenture. The discount is being amortized through interest expense using the effective interest method over the term of the debenture. On August 23, 2017, the Investor converted $35,000 of the principal amount of the Debenture into an aggregate of 70,189 shares of common stock, which included 431 shares for conversion of principal (at $81.25 per share) and 69,758 shares for premiums. On April 20, 2018, the Investor was issued 141,982 as a result of true-ups in connection with the August 23, 2017 conversion of the Debenture. As of June 30, 2018 and March 31, 2018, the Company had a convertible subordinated debenture with a balance of $271,153 and $247,403, respectively (net of unamortized discount of $223,847 and $247,597, respectively), which is recognized as a short-term liability on the Company’s balance sheets as of June 30, 2018 and March 31, 2018, respectively. The Company also recognized $380,143 and $388,183 in accrued interest as of June 30, 2018 and March 31, 2018, respectively. Loan Agreement with International Bank of Commerce (“IBC” or “IBC Bank”) On August 25, 2016, the Company, as borrower, and Richard N. Azar II, our former Chief Executive Officer and former director, and who also received the largest number of securities and cash in connection with the closing of the Acquisition (“Azar”), Donnie B. Seay, our former director, Richard E. Menchaca, RAD2, DBS Investments, Ltd. (“DBS”, controlled by Mr. Seay) and Saxum Energy, LLC (“Saxum”, which is controlled by Mr. Menchaca), as guarantors (collectively, the “Guarantors”, all of which were directly or indirectly Sellers), and IBC, as Lender (“Lender”), entered into a Loan Agreement. Pursuant to the Loan Agreement, the Lender loaned the Company $40 million, evidenced by a Real Estate Lien Note in the amount of $40 million. The Company is required to make monthly payments under the note equal to the greater of (i) $425,000; and (ii) fifty percent (50%) of the Company’s monthly net income. The note accrues annual interest at 2% above the prime rate then in effect, subject to a minimum interest rate of 5.5% per annum. The note is due and payable on August 25, 2019. Payments under the note are subject to change as the interest rate changes in order to sufficiently amortize the note in 120 monthly installments. The Company has the right, from time to time and without penalty to prepay the note in whole or in part, subject to the terms thereof. The proceeds of the loan were used to repay and refinance approximately $30.6 million of indebtedness owed by certain of the Sellers, to the Lender (including an aggregate of $18.3 million owed by RAD2 and another entity controlled by Mr. Azar, $9.8 million owed by DBS, and $2.1 million owed by Mr. Menchaca), as well as to pay the $4.975 million due to the Sellers at closing. Another $3.36 million was used to fund a sinking fund required by the Lender, as discussed below, to pay principal on the note. The amount owed under the note is secured by a Security Interest in substantially all of the Company’s assets and properties, pursuant to three Security Agreements. Also, each of the Guarantors guaranteed the repayment of a portion of the Loan Agreement pursuant to a Limited Guaranty Agreement. Additionally, in connection with the parties’ entry into the Loan Agreement and to further secure amounts due thereunder, certain of the Guarantors pledged shares of common stock which they received at the closing to the Lender, with RAD2 pledging 124,824 shares of common stock; DBS pledging 37,437 shares of common stock; and Saxum pledging 26,936 shares of common stock. The Company agreed to pay the Lender a loan finance charge of $400,000 in connection with its entry into the Loan Agreement, with half due on the date the Company entered into the Loan Agreement and half due on or before the 180th day following the date of the Loan Agreement. As further consideration for agreeing to the terms of the Loan, the Company agreed to issue the Lender 15,612 shares of common stock. The Company recognized a $2.8 million note discount related to these transactions and other debt issuance costs and will amortize the discount and debt issuance costs over the term of the note. On September 8, 2017, the Company received a Notice of Default and Opportunity to Cure (the “Notice”) from IBC, stating that the Company was in default under its loan due to failing to make a required $425,000 loan payment on August 25, 2017 (the “Payment Default”). The Notice was also sent to the guarantors under the Loan Agreement. The Notice also cited the Company for several covenant defaults including exceeding a cap on monthly general and administrative expenses; falling below $30 million of net worth; failing to comply with certain post-closing covenants regarding the assignment of certain oil and gas interests, the execution of certain supplemental mortgages and the completion of certain curative title requirements; failing to pay costs and expenses required pursuant to the terms of the Loan Agreement; failing to meet the requirements of a cash flow test as described in greater detail in the Loan Agreement; and exceeding the loan to value determination provided for in the Loan Agreement. In order to cure the Payment Default described in the Notice, the Company was required to pay $425,000, as well as any attorney’s fees and/or late fees as determined by IBC, on or before September 18, 2017, which amount was not paid and to cure the covenant defaults, which covenant defaults were not cured. Pursuant to extension agreements entered into with IBC, in or around December 2017 and January 2018, (a) IBC agreed to waive the Company’s obligation to make the August 30, 2017, $425,000 monthly principal payment originally due under the IBC loan; (b) the Company confirmed the amount outstanding under the IBC loan ($37,443,308 as of each extension); (c) IBC agreed that interest only payments would be due on September 30, 2017, October 30, 2017, November 30, 2017 and December 31, 2017, with principal payments of $425,000 per month to begin thereafter, which principal payments were not made; (d) the parties agreed that the amounts owed to IBC were payable on demand, provided that if no demand was made, such amounts would be payable by way of monthly payments of $425,000 of principal, plus accrued interest, with the remaining amount owed to IBC due at maturity (August 25, 2019); (e) that the amount owed to IBC will accrue interest at the rate of 2% per annum above the prime rate, subject to a floor of 5.5% (currently 6.25% per annum); (f) if the Company fails to make any payment due to IBC within 10 days of its due date, IBC is due a late payment of 5% of the amount past due (subject to a minimum of $10 and a maximum of $1,500 per late payment); and (g) the Company and the guarantors of the IBC loan released IBC from any claims against IBC as of the date of each of such extensions. The IBC loan is secured by substantially all of the Company’s assets and if IBC were to foreclose on the Company’s assets it would have a material adverse effect on its operations and may force the Company to seek bankruptcy protection. As of June 30, 2018, the Company was not in compliance with certain covenants of the loan agreement, including requiring the Company to maintain a net worth of $30 million, the Company is in default of the terms of the loan, and the balance of the loan due to IBC of $36.9 million (less unamortized debt issuance costs of approximately $1.0 million and $1.3 million at June 30, 2018 and March 31, 2018, respectively), was recognized as a short-term liability on the Company’s balance sheets as of June 30, 2018 and March 31, 2018. The Company also recognized approximately $460,000 and $39,000 in accrued interest as of June 30, 2018 and March 31, 2018, respectively, related to this note. |
DERIVATIVES
DERIVATIVES | 3 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES | NOTE 7 – DERIVATIVES The Company has determined that certain warrants the Company has granted contain provisions that protect holders from future issuances of the Company’s common stock at prices below such warrants’ respective exercise prices and these provisions could result in modification of the warrants’ exercise price based on a variable that is not an input to the fair value of a “fixed-for-fixed” option as defined under FASB ASC Topic No. 815 - 40. The warrants granted in April 2014 contain anti-dilution provisions that provide for a reduction in the exercise price of such warrants in the event that future common stock (or securities convertible into or exercisable for common stock) is issued (or becomes contractually issuable) at a price per share (a “Lower Price”) that is less than the exercise price of such warrant at the time. The amount of any such adjustment is determined in accordance with the provisions of the warrant agreement and depends upon the number of shares of common stock issued (or deemed issued) at the Lower Price and the extent to which the Lower Price is less than the exercise price of the warrant at the time. Activities for derivative warrant instruments during the three months ended June 30, 2018 and 2017 were as follows: 2018 2017 Carrying amount at beginning of period $ 5 $ 21,662 Change in fair value — (15,171 ) Carrying amount at end of period $ 5 $ 6,491 The fair value of the derivative warrants was calculated using the Black-Scholes pricing model. Variables used in the Black Scholes pricing model as of June 30, 2018 include (1) discount rate of 1.91%, (2) expected term of .81 years, (3) expected volatility of 145.70%, and (4) zero expected dividends. Variables used in the Black-Scholes pricing model as of June 30, 2017 include (1) discount rate of 1.24%, (2) expected term of 2 years, (3) expected volatility of 179.15%, and (4) zero expected dividends. As of June 30, 2018, the significant inputs to the Company’s derivative liability calculation were Level 3 inputs. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 8 – COMMITMENTS AND CONTINGENCIES The Company entered into multiple office lease agreements, see detail under “Note 4 - Property and Equipment” - “Office Leases”. The Company’s oil and gas lease acreage is subject to expiration if the Company does not drill and hold such acreage by production or exercise options to extend such leases. At March 31, 2018, the Company had 423 acres of unproved lease acreage that is set to expire during fiscal year 2019 unless drilled or otherwise extended by the Company. During the quarter ended June 30, 2018, leases for 191 unproved acres expired and a resulting impairment of approximately $532,000 was recognized, leaving 251 acres remaining. Legal Proceedings. Maranatha Oil Matter In November 2015, Randy L. Robinson, d/b/a Maranatha Oil Co. sued the Company in Gonzales County, Texas (Cause No. 26160). The plaintiff alleged that it assigned oil and gas leases to the Company in April 2010, retaining a 4% overriding royalty interest and 50% working interest and that the Company failed to pay such overriding royalty interest or royalty interest. The interests relate to certain oil and gas properties which the Company subsequently sold to Nordic Oil USA in April 2013. The petition alleges causes of actions for breach of contract, failure to pay royalties, non-payment of working interest, fraud, fraud in the inducement of contract, money had and received, constructive trust, violation of theft liability act, continuing tort and fraudulent concealment. The suit seeks approximately $100,000 in amounts alleged owed, plus pre-and post-judgment interest. The Company has filed a denial to the claims. Rubenstein Matter On September 28, 2017, Aaron Rubenstein, a purported shareholder of the Company’s common stock, filed a lawsuit against the Company (as nominal defendant) and Richard N. Azar II, it’s then Chief Executive Officer and director (who has since resigned from both positions), RAD2 Management, LLC, RAD2 Minerals, Ltd. and Segundo Resources, LLC, each an entity owned and controlled by Mr. Azar, in the United States District Court, Western District of Texas (Case No. 5:17-cv-962-FB). The suit seeks the recovery (for the benefit of the Company) of alleged short-swing profits from Mr. Azar and his related entities under Section 16(b) of the Exchange Act relating to various transactions involving Series B Preferred Stock of the Company in November 2016 and January 2017. Mr. Azar denies the existence of any short-swing profits and filed a denial with the court. The Company also filed a denial with the court. Petroflow Matter In October 2017, the Company agreed to pay directly and reimburse entities owned in part by Alan Dreeben, a former director of the Company, for legal fees and settlement payments expended in connection with the defense of Petroflow Energy Corporation v. Sezar Energy, L.P. and Brittany Energy, LLC Employment Agreement. The Employment Agreement was terminated in connection with Mr. Schnur’s resignation as Chief Executive Officer and director of the Company effective on June 2, 2017. In connection with the departure of Mr. Anthony C. Schnur as Chief Executive Officer and director of the Company effective June 2, 2017, the Company entered into a Severance Agreement and Release with Mr. Schnur (the “Release”), whereby (i) his employment agreement with the Company was terminated, (ii) he entered into a mutual release with the Company; (iii) the Company agreed to issue him 4,800 shares of unregistered common stock (to be issued in installments of 400 per month) (the “Settlement Shares”) and a monthly cash payment of $14,000 for twelve months; and (iv) he was granted reimbursement of the payment of his COBRA premiums through (a) the one year anniversary of the termination or (b) until he is eligible to participate in the health insurance plan of another employer, whichever is sooner, and provided that the amount of such health benefits shall reduce his monthly cash payment. On January 11, 2018, and effective as of the original date of the Release, the Company and Mr. Schnur entered into the First Amendment to the Severance Agreement and Release (the “Release Amendment”), whereby the terms of the Release were changed to provide for among other things, the payment of $49,000 on or before January 12, 2018; $15,000 on or before the 15th of each month from February 2018 to July 2018; and $19,000 on or before August 15, 2018, and further provided for the issuance of the entire amount of the Settlement Shares within five days of the later of the date the Company’s stockholders approved the issuance of the Settlement Shares and the date the NYSE American approved the issuance of such shares. The payments owed as of June 30, 2018 and March 31, 2018 of $34,025 and $79,025, respectively, have been accrued and included in accrued expenses on the balance sheet. The Settlement Shares were issued in February 2018. Severance Agreement Effective on May 25, 2018, Richard N. Azar II resigned as Chief Executive Officer of the Company. Effective on the same date, the Company entered into a Separation and Release Agreement (the “Separation Agreement”) with Mr. Azar, the Company’s former Chief Executive Officer. Pursuant to the Separation Agreement, Mr. Azar agreed to resign from the Company as Chief Executive Officer effective May 25, 2018, and to release the Company from claims in connection with various employment related statutes and laws and the Company agreed to pay him a severance payment of $150,000, payable in three installments of $50,000 for a period of five years each, on June 1, 2018, July 2, 2018 and August 1, 2018, and to grant him warrants to purchase 1,000,000 shares of the Company’s common stock, at an exercise price of $0.39 per share, equal to the closing stock price of the Company’s common stock on the date the Severance Agreement was agreed to by the parties, the exercise of which warrants are subject to approval by the NYSE American of the additional listing of the shares of common stock issuable upon exercise thereof, and to the extent required by the rules of the NYSE American, the approval of the shareholders of the Company of the issuance of the shares of common stock issuable upon exercise thereof. Segundo Settlement Agreement Also on July 12, 2018, the Company entered into a Compromise Settlement Agreement and Mutual Release with Segundo described in greater detail above under “Note 2 - Liquidity and Going Concern Considerations” - “Segundo Settlement Agreement”. |
REVENUE FROM CONTRACTS WITH CUS
REVENUE FROM CONTRACTS WITH CUSTOMERS | 3 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | NOTE 9 – REVENUE FROM CONTRACTS WITH CUSTOMERS Change in Accounting for Revenue from Oil and Gas Operations The Company adopted ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” Exploration and Production There were no significant changes to the timing or valuation of revenue recognized for sales of production from exploration and production activities. Disaggregation of Revenue from Contracts with Customers The following table disaggregates revenue by significant product type for the three months ended June 30, 2018: Oil sales $ 200,069 Natural gas sales 473,513 Natural gas liquids sales 1,021,114 Total revenue from customers $ 1,694,696 There were no significant contract liabilities or transaction price allocations to any remaining performance obligations as of June 30, 2018 or March 31, 2018. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 10 – INCOME TAXES The Company has estimated that its effective tax rate for U.S. purposes will be zero for the 2019 and 2018 fiscal years as a result of net losses and a full valuation allowance against the net deferred tax assets. Consequently, the Company has recorded no provision or benefit for income taxes for the three months ended June 30, 2018 and 2017. |
STOCKHOLDERS' DEFICIT
STOCKHOLDERS' DEFICIT | 3 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
STOCKHOLDERS' DEFICIT | NOTE 11 – STOCKHOLDERS’ DEFICIT Common Stock On January 10, 2018, the Company amended its Articles of Incorporation to increase the number of authorized shares of common stock from 200,000,000 shares to 500,000,000 shares. On April 4, 2017, the Company paid the required quarterly dividend on the Series B Preferred Stock by way of the issuance of 2,366 shares of the Company’s common stock to the preferred shareholders at a fair market value of $34,896, based on the closing price of the Company’s common stock ($14.75 per share) on March 31, 2017. The beneficial owners of the Series B Preferred Stock were Richard N. Azar, II, the Company’s former Interim Chief Executive Officer and director, and Alan Dreeben, the Company’s former director. On June 19, 2017, a holder of the Company’s Series B Convertible Preferred Stock converted 143,492 shares of Series B Convertible Preferred Stock into 40,998 shares of common stock of the Company. On August 23, 2017, the Investor converted $35,000 of the principal amount of the Debenture into an aggregate of 70,189 shares of common stock, which included 431 shares for conversion of principal (at $81.25 per share) and 69,758 shares for premiums. On April 20, 2018, the Investor was issued 141,982 as a result of true-ups in connection with the August 23, 2017 conversion of the Debenture. On October 4, 2017, the Company entered into an agreement with a digital marketing advisor pursuant to which the advisor agreed to create original content with the goal of increasing public awareness about the Company and the Company agreed to pay the advisor (a) $20,000 per month beginning in October 2017 and ending on February 28, 2018, (b) $50,000 per month thereafter through October 4, 2018, the end of the term of the agreement, and (c) 150,000 shares of restricted common stock, with 100,000 shares payable within 15 days of the parties’ entry into the agreement and the remainder due on May 1, 2018. As of June 30, 2018, the remaining shares have not been issued and an accrual of $200,000 has been accrued based on the May 2018 due date. On October 4, 2017, the Company entered into a consulting agreement with a third party consultant which consultant agreed to provide investor relations and public relations services to the Company. As consideration pursuant to the agreement, the Company agreed to issue the consultant 40,000 shares of restricted common stock, with piggy-back registration rights. In October 2017, the Company agreed to reimburse entities owned in part by Alan Dreeben, a former director of the Company, for legal fees expended by such entities in connection with the defense of Petroflow Energy Corporation v. Sezar Energy, L.P. and Brittany Energy, LLC As of March 31, 2018, the 408,508 outstanding shares of Series B Preferred Stock had accrued an aggregate of $606,764 in dividends. The beneficial owners of the Series B Preferred Stock are Richard N. Azar, II, the Company’s former Chief Executive Officer and former director, and Alan Dreeben, the Company’s former director. As of June 30, 2018, the 408,508 outstanding shares of Series B Preferred Stock had accrued $877 in dividends. The Company plans to pay the dividends by way of the issuance of an aggregate of 1,753 shares of its common stock to the preferred shareholders pursuant to the terms of the designation (which provides that the Shares shall be based on a value of $87.50 per share). The beneficial owners of the Series B Preferred Stock are Richard N. Azar, II, the Company’s former Chief Executive Officer and former director, and Alan Dreeben, the Company’s former director. To date the accrued dividend outstanding as of June 30, 2018 has not been paid. In connection with the departure of Mr. Anthony C. Schnur as Chief Executive Officer and director of the Company effective June 2, 2017, the Company entered into a Severance Agreement and Release with Mr. Schnur, whereby (i) his employment agreement with the Company was terminated, (ii) he entered into a mutual release with the Company; (iii) the Company agreed to issue him 4,800 shares of unregistered common stock (to be issued in installments of 480 per month) and a monthly cash payment of $14,000 for twelve months; and (iv) he was granted reimbursement of the payment of his COBRA premiums through (a) the one year anniversary of the termination or (b) until he is eligible to participate in the health insurance plan of another employer, whichever is sooner, and provided that the amount of such health benefits shall reduce his monthly cash payment. On January 11, 2018, and effective as of the original date of the Release, the Company and Mr. Schnur entered into the First Amendment to the Severance Agreement and Release, whereby the terms of the Release were changed to provide for among other things, the payment of $49,000 on or before January 12, 2018; $15,000 on or before the 15th of each month from February 2018 to July 2018; and $19,000 on or before August 15, 2018, and further provided for the issuance of the entire amount of the Settlement Shares within five days of the later of the date the Company’s stockholders approved the issuance of the Settlement Shares and the date the NYSE American approved the issuance of such shares. The Settlement Shares were issued in February 2018. On October 7, 2016, the Investor exercised the First Warrant in full and was due 55,385 shares of common stock upon exercise thereof and an additional 101,710 shares of common stock in consideration for the conversion premium due thereon. A total of 32,400 shares were issued to the Investor on October 7, 2016, with the remaining shares being held in abeyance until such time as it would not result in the Investor exceeding its beneficial ownership limitation (4.99% of the Company’s outstanding common stock). The Company received gross proceeds of $4,500,000 from the exercise of the First Warrant and paid placement agent fees of $427,500 for services rendered in connection with the First Warrant. Pursuant to the terms of the First Warrant, the number of shares due in consideration for the conversion premium increases as the annual rate of return under the First Warrant increases, including by 10% upon the occurrence of certain triggering events (which had occurred by the October 7, 2016 date of exercise), to 17% per annum upon the exercise of the First Warrant. Additionally, as the conversion rate for the conversion premium is currently 85% of the lowest daily volume weighted average price during the measuring period, less $0.10 per share of common stock not to exceed 85% of the lowest sales prices on the last day of such period less $0.10 per share, the number of shares issuable in connection with the conversion premium increases as the trading price of the Company’s common stock decreases, and the trading price of the Company’s common stock has decreased since the date the First Warrant was exercised, triggering a further reduction in the conversion price of the conversion premium and an increase in the number of shares due to the Investor in connection with the conversion of the amount owed in connection with the conversion premium. An aggregate of 4,417,911 shares of common stock were issued to the Investor in connection with the exercise of the Warrant during fiscal 2017 (200,000), 2018 (3,909,500), and 308,411 shares were issued in April 2018. The First Warrant has been fully-exercised and extinguished to date. The following summarizes the Company’s common stock activity during the three-month period ended June 30, 2018: Common Shares Amount (a) Per Share Issued and Outstanding Shares Balance at March 31, 2018 5,758,970 Preferred Stock Series C Conversion (b) — — 10,141,725 Preferred Stock Series B Dividends 1,350 0.77 1,751 Warrants – Abeyance (b) — — 308,411 Issuance of Common Stock of Prior Conversion of Convertible Notes — — 141,982 Balance at June 30, 2018 16,352,839 (a) Net proceeds or fair value on grant date, as applicable. (b) Shares previously held in abeyance until such time as it would not result in the investor exceeding its beneficial ownership limitation (4.99% of the Company’s outstanding common stock). Series A Convertible Preferred Stock On April 19, 2016, the holder of the Company’s Series A Convertible Preferred Stock, agreed to convert all 500 shares of their outstanding Series A Convertible Preferred Stock into 800 shares of the Company’s common stock (a conversion ratio of 1.6:1 as provided in the original designation of the Series A Convertible Preferred Stock adjusted for the Company’s 1:25 reverse stock split effective on July 25, 2015 and the Company’s 1:25 reverse stock split effective March 5, 2018), which conversion was completed on April 25, 2016. The Company paid the holder $20,000 in connection with such conversion in order to comply with the terms of the Asset Purchase Agreement that required that no shares of Series A Convertible Preferred Stock be outstanding at the closing. As of June 30, 2018 and March 31, 2018, respectively, the Company had no Series A Convertible Preferred Stock issued or outstanding. Series B Redeemable Convertible Preferred Stock On September 1, 2016, as consideration for the closing of the Acquisition, the Company issued an aggregate of 552,000 shares of Redeemable Convertible Preferred Stock, which had a total value of $13,800,000 based on the $25 per Series B Preferred Stock share par value. The preferred shares were issued to RAD2 (200,000 shares) and Segundo Resources, LLC (an affiliate of RAD2) (352,000 shares) on behalf of and for the benefit of RAD2. The Company’s Series B Preferred Stock has a liquidation preference of $25 per share. The Series B Preferred Stock is convertible, at the option of the holder at any time following the original issuance date, into common stock at a rate of approximately 0.2857:1 (originally issuable into an aggregate of 157,714 shares of common stock if fully converted), at the option of the holder thereof, or automatically as to 25% of the Series B Preferred Stock shares if the Company’s common stock trades above $153.13 per share for at least 20 consecutive trading days, and trades with at least 3,000 shares of average volume per day during such period; an additional 50% of the Series B Preferred Stock shares if the Company’s common stock trades above $175.00 per share for at least 20 consecutive trading days, and trades with at least 3,000 shares of average volume per day during such period; and as to the remaining Series B Preferred Stock shares, if the Company’s common stock trades above $196.88 per share for at least 20 consecutive trading days, and trades with at least 3,000 shares of average volume per day during such period. Each outstanding share of Series B Preferred Stock will be entitled to one vote per share on all stockholder matters. The Series B Preferred Stock is redeemable at any time by the Company upon the payment by the Company of the face amount of the Series B Preferred Stock ($25 per share) plus any and all accrued and unpaid dividends thereon. The Company has the option, exercisable from time to time after the original issue date, to redeem all or any portion of the outstanding shares of Series B Preferred Stock by paying each applicable holder, an amount equal to the original issue price multiplied by the number of Series B Preferred shares held by each applicable holder plus the accrued dividends. As of June 30, 2018, there were 408,508 shares of Series B Preferred Stock outstanding, which have the following features: ● a liquidation preference senior to all of the Company’s common stock; ● a dividend, payable quarterly, at an annual rate of six percent (6%) of the original issue price until such Series B Preferred Stock is no longer outstanding either due to conversion, redemption or otherwise; and ● voting rights on all matters, with each share having 1/25 th As the Series B Preferred Stock is convertible at any time following the original issuance date into common stock at a rate of approximately 0.2857:1, the Company recognized a fair value measurement of $14,898,038 for the Series B Preferred Stock, which is based on the 552,000 preferred shares originally issued times the conversion rate of approximately 0.2857, times the price of the Company’s common stock of $94.50 per share at the date of the closing of the Acquisition on August 25, 2016. During the quarter ended June 30, 2018, the Company issued a stock dividend on the Series B Preferred Stock consisting of 1,753 shares (with fair value $877 based on a share price of $0.50 per share at June 30, 2018) of the Company’s common stock. Due to the fact that the Company is in a retained deficit position, the Company recognized a charge to additional paid in-capital of $877 and stock dividends distributable but not issued based on the par value of the common stock issued. During the quarter ended June 30, 2018, the Company issued 1,751 shares to settle a stock dividend accrued on Series B Preferred Stock. Series C Redeemable Convertible Preferred Stock On April 6, 2016, the Company entered into a Stock Purchase Agreement with the Investor, pursuant to which it agreed, subject to certain conditions, to sell 527 shares of Series C redeemable convertible preferred stock (with a face value of $5.26 million) at a 5% original issue discount of $263,000, convertible into 64,738 shares of common stock at a conversion price of $81.25 per share, and a warrant to purchase 44,444 shares of common stock at an exercise price of $112.50 per share (the “Second Warrant”). On September 2, 2016, the Second Warrant and 53 shares of Series C Preferred Stock were issued for $526,450 ($500,000, net cash proceeds to Camber) after the Acquisition (as defined and described in “Note 2 – Liquidity and Going Concern Considerations”) closed. The prorated share of the $263,000 discount ($26,450) was recorded as reduction to additional paid in capital. On November 17, 2016, the remaining 474 shares of Series C Preferred Stock were issued for $4,736,550 ($4,500,000, net cash proceeds to Camber) and the Company paid placement agent and legal fees of $514,000 for services rendered in connection with the issuance. The Company also recognized $236,550 of the remaining 5% original issue discount, which was recorded as reduction to additional paid in capital. On October 5, 2017, the Company and the Investor entered into the October 2017 Purchase Agreement, pursuant to which (1) the Investor purchased 212 shares of Series C Preferred Stock on the closing date of the agreement, October 4, 2017 (the “Initial Closing”), for $2 million, and agreed, subject to certain closing conditions set forth in the agreement, agreed to purchase (2) 106 shares of Series C Preferred Stock for $1,000,000, 10 days after the Initial Closing (which closing occurred on November 21, 2017); (3) 105 shares of Series C Preferred Stock for $1,000,000, 10 days after the second closing (which closing occurred on December 27, 2017); (4) 105 shares of Series C Preferred Stock for $1,000,000, 10 days after the third closing (which closing occurred on January 30, 2018); (5) 105 shares of Series C Preferred Stock for $1,000,000, 10 days after the fourth closing; (6) 525 shares of Series C Preferred Stock for $5,000,000, 30 days after the fifth closing; and (7) 525 shares of Series C Preferred Stock for $5,000,000, 30 days after the sixth Closing. On October 5, 2017, in connection with the entry into the October 2017 Purchase Agreement, the Investor purchased 212 shares of Series C Preferred Stock for $2 million; on November 21, 2017, pursuant to the terms of the October 2017 Purchase Agreement, we sold the Investor an additional 106 shares of Series C Preferred Stock for $1 million (the “Second Closing”); on December 27, 2017, pursuant to the terms of the October 2017 Purchase Agreement, we sold the Investor an additional 105 shares of Series C Preferred Stock for $1 million (the “Third Closing”); on January 31, 2018, pursuant to the terms of the October 2017 Purchase Agreement, we sold the Investor an additional 105 shares of Series C Preferred Stock for $1 million (the “Fourth Closing”); on February 22, 2018, pursuant to the terms of the October 2017 Purchase Agreement, we sold the Investor an additional 105 shares of Series C Preferred Stock for $1 million (the “Fifth Closing”); on March 9, 2018, the Company sold the Investor an additional 105 shares of Series C Preferred Stock for $1 million (the “Sixth Closing”); on April 10, 2018, the Company sold the Investor an additional 105 shares of Series C Preferred Stock for $1 million (the “Seventh Closing”); on May 22, 2018, the Company sold the Investor an additional 105 shares of Series C Preferred Stock for $1 million (the “Eighth Closing”); and on July 9, 2018, the Company sold the Investor an additional 210 shares of Series C Preferred Stock for $2 million (the “Ninth Closing”). The Sixth Closing, Seventh Closing, Eighth Closing, and Ninth Closing occurred notwithstanding the terms of the October 2017 Purchase Agreement which required the sixth closing to be for a total of $5 million (the “$5 Million Closing”), as the parties mutually agreed to the sales of only $1 million of Series C Preferred Stock to be sold pursuant to the $5 Million Closing, at the Sixth Closing, Seventh Closing and Eighth Closing, and for $2 million of Series C Preferred Stock to be sold at the Ninth Closing. On March 2, 2018, the Company and the Investor entered into an amendment to the October 2017 Purchase Agreement (the “Amendment”), pursuant to which the Investor (a) waived any and all Trigger Events (as defined in the certificate of designation of the Series C Preferred Stock (the “Designation”)) that had occurred prior to March 2, 2018, (b) agreed that all calculations provided for in the Designation would be made as if no such Trigger Event had occurred, and (c) waived any right to receive any additional shares of common stock based upon any such Trigger Event, with respect to all shares of Series C Preferred Stock, other than any which have already been converted. The Investor also agreed, pursuant to the amendment, that the conversion rate of conversion premiums pursuant to the Designation would remain 95% of the average of the lowest 5 individual daily volume weighted average prices during the applicable Measuring Period (as defined in the Designation), not to exceed 100% of the lowest sales prices on the last day of the Measuring Period, less $0.05 per share of common stock, unless a triggering event has occurred, and that such $0.05 per share discount would not be adjusted in connection with the Company’s previously reported 1-for-25 reverse stock split affected on March 5, 2018. The holder of the Series C Preferred Stock is entitled to cumulative dividends through maturity, which initially totaled 6% per annum, and are adjustable to up to 34.95% per annum, based on certain triggering events and the trading price of the Company’s common stock, and which currently total 34.95% per annum, payable in full through maturity upon redemption, conversion, or maturity, and when, as and if declared by the Company’s Board of Directors in its discretion. The Series C Preferred Stock ranks senior to the common stock and pari passu with respect to the Company’s Series B Redeemable Convertible Preferred Stock. The Series C Preferred Stock may be converted into shares of common stock at any time at the option of the holder, or at the Company’s option if certain equity conditions (as defined in the Certificate of Designation) are met. Upon conversion, we will pay the holder of the Series C Preferred Stock being converted an amount, in cash or stock at the Company’s sole discretion, equal to the dividends that such shares would have otherwise earned if they had been held through the maturity date (7 years), and issue to the holder such number of shares of common stock equal to $10,000 per share of Series C Preferred Stock (the “Face Value”) multiplied by the number of such shares of Series C Preferred Stock divided by the conversion rate ($81.25 per share). The conversion premium under the Series C Preferred Stock is payable and the dividend rate under the Series C Preferred Stock is adjustable on the same terms and conditions as accrued interest is payable and adjustable under the Debenture. The Series C Preferred Stock has a maturity date that is seven years after the date of issuance and, if the Series C Preferred Stock has not been wholly converted into shares of common stock prior to such date, we may redeem the Series C Preferred Stock on such date by repaying to the holder in cash 100% of the Face Value plus an amount equal to any accrued but unpaid dividends thereon. 100% of the Face Value, plus an amount equal to any accrued but unpaid dividends thereon, automatically becomes payable in the event of a liquidation, dissolution or winding up by us. During the three-month period ended June 30, 2018, the Company issued 210 shares of Series C Preferred Stock pursuant to the terms of the October 2017 Purchaser Agreement, for total consideration of $2 million. As of June 30, 2018 and March 31, 2018, there were 1,091 and 1,132 shares of Series C Preferred Stock outstanding, respectively. During the three-month period ended June 30, 2018, the Investor converted 251 shares of the Series C Preferred stock with a face value of $2.51 million and issued 772,323 shares of common stock and additional shares of common stock in dividend premium shares of 9,369,402 for an aggregate of a total of 10,141,725 shares issued. As of June 30 2018 and March 31, 2018, the Company accrued common stock dividends on the Series C Preferred Stock based on the then 34.95% and 24.95% premium dividend rate per the 2016 and 2017 Stock Purchase Agreement, respectively, as described above. The Company recognized a total charge to additional paid-in capital and stock dividends distributable but not issued of $698,122 and $1,928,084 related to the stock dividend declared but not issued for the three month period ended June 30, 2018 and the year ended March 31, 2018, respectively. On October 5, 2017, the Company and the Investor entered into a Stock Purchase Agreement (the “October 2017 Purchase Agreement”), pursuant to which the Company may receive aggregate consideration of $16 million, subject to certain conditions set forth therein. See “Note 2 – Liquidity and Going Concern Considerations – “Stock and Securities Purchase Agreements with Institutional Investor” for a description of the Series C Preferred Stock purchased or to be purchased by the Investor. See discussion of the October 2017 Purchase Agreement with the Investor in Note 2. Warrants On August 2, 2017, and effective June 13, 2017, the Company entered into an agreement with Vantage pursuant to which Vantage agreed to provide up to $6 million of funding to the Company, at the sole discretion of Vantage. The initial tranche consisted of $400,000 received on June 12, 2017, in exchange for the assignment to Vantage of all of the Company’s rights and ownership in its wholly-owned subsidiary Camber Permian II, LLC (“Camber Permian”) which included leaseholds and potential participation rights and warrants to purchase 64,000 shares of the Company’s common stock. The fair value of the warrants was determined to be $284,305 as of the grant date using the Black-Scholes Option Pricing model. Variables used in the Black Scholes model as of June 12, 2017 include (1) discount rate of 1.78% (2) expected term of 5 years, (3) expected volatility of 135.42%, and (4) zero expected dividends. In June 2017, the Company granted warrants to purchase 64,000 shares of the Company’s common stock which were valued at the grant date under the Black-Scholes Option pricing model at $288,592. The exercise price of the warrants is $6.25 per share of common stock. The warrants expire five years from the grant date. The volatility utilized in the model was 135.42%. The discount rate was 1.78%. On October 7, 2016, the Investor exercised the First Warrant in full and was due 55,385 shares of common stock upon exercise thereof and an additional 101,709 shares of common stock in consideration for the conversion premium due thereon. A total of 32,400 shares were issued to the Investor on October 7, 2016, with the remaining shares being held in abeyance until such time as it would not result in the Investor exceeding its beneficial ownership limitation (4.99% of the Company’s outstanding common stock). The Company received gross proceeds of $4,500,000 from the exercise of the First Warrant and paid placement agent fees of $427,500 for services rendered in connection with the First Warrant. Pursuant to the terms of the First Warrant, the number of shares due in consideration for the conversion premium increases as the annual rate of return under the First Warrant increases, including by 10% upon the occurrence of certain triggering events (which had occurred by the October 7, 2016 date of exercise), to 17% per annum upon the exercise of the First Warrant. Additionally, as the conversion rate for the conversion premium is currently 85% of the lowest daily volume weighted average price during the measuring period, less $0.10 per share of common stock not to exceed 85% of the lowest sales prices on the last day of such period less $0.10 per share, the number of shares issuable in connection with the conversion premium increases as the trading price of the Company’s common stock decreases, and the trading price of the Company’s common stock has decreased since the date the First Warrant was exercised, triggering a further reduction in the conversion price of the conversion premium and an increase in the number of shares due to the Investor in connection with the conversion of the amount owed in connection with the conversion premium. Additionally, pursuant to the interpretation of the Investor, the measurement period for the calculation of the lowest daily volume weighted average price currently continues indefinitely. An aggregate of 4,417,911 shares of common stock were issued to the Investor in connection with the exercise of the Warrant during fiscal 2017 (200,000), 2018 (3,909,500), and 308,411 shares were issued in April 2018. The First Warrant has been fully-exercised and extinguished to date. Additionally, warrants to purchase 2,667 shares of common stock granted in connection with an equity raise completed in April 2014 contained a weighted average anti-dilutive provision in which the exercise price of the warrants are adjusted downward based on any subsequent issuance or deemed issuance of common stock or convertible securities by the Company for consideration less than the then exercise price of such warrants. As a result of the anti-dilution rights, the exercise price of the warrants was adjusted to $69.82 per share, in connection with an automatic adjustment to the exercise price due to the Acquisition. As of June 30, 2017 and March 31, 2017, the fair value of the derivative liability associated with the 2,667 warrants was $5. Therefore, there was no change in the derivative liability fair value for the three months ended June 30, 2018. At June 30, 2018 and March 31, 2018, outstanding warrants had an intrinsic value of $114,014 and $232, respectively. The intrinsic value is based upon the difference between the market price of Camber’s common stock on the date of exercise and the grant price of the stock options. The following is a summary of the Company’s outstanding warrants at June 30, 2018: Warrants Exercise Expiration Intrinsic Value at Outstanding Price ($) Date June 30, 2018 448 (1) 0.25 August 13, 2018 114 2,667 (2) 69.82 April 21, 2019 — 4,972 (3) 37.50 April 21, 2021 — 64,000 (4) 6.25 June 12, 2022 — 1,000,000 (5) 0.39 May 24, 2023 113,900 1,072,088 $ 114,014 (1) Warrants issued in connection with the Rogers Loan. The warrants were exercisable on the grant date (August 13, 2013) and remain exercisable until August 13, 2018. The exercise price was lowered to $0.01 per share on August 12, 2015. (2) Warrants issued in connection with the sale of units in the Company’s unit offering in April 2014. The Warrants became exercisable on April 21, 2014 and will remain exercisable thereafter until April 21, 2019. (3) Warrants issued in connection with the sale of convertible notes. The warrants were exercisable on the grant date (April 26, 2016) and remain exercisable until April 26, 2021. (4) Warrants issued in connection with the Initial Tranche of the funding from Vantage. The warrants were exercisable on the grant date (June 12, 2017) and remain exercisable until June 12, 2022. (5) Warrants issued in connection with the Severance Agreement with Richard Azar. The warrants were exercisable on the grant date (May 25, 2018) and remain exercisable until May 24, 2023. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 3 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
SHARE-BASED COMPENSATION | NOTE 12 – SHARE-BASED COMPENSATION Camber measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award over the vesting period. Stock Options As of June 30, 2018 and 2017, the Company had 78 and 798 stock options outstanding with a weighted average exercise price of $1,294 and $885, respectively. Of the Company’s outstanding options, no options were exercised or forfeited during the three months ended June 30, 2018. Additionally, no stock options were granted during the three months ended June 30, 2018. Compensation expense related to stock options during the three-month period ended June 30, 2018 and 2017 was $0 and $4,816, respectively. Options outstanding and exercisable at June 30, 2018 and 2017 had no intrinsic value, respectively. The intrinsic value is based upon the difference between the market price of Camber’s common stock on the date of exercise and the grant price of the stock options. As of June 30, 2018, there was no remaining unrecognized share-based compensation expense related to all non-vested stock options. The following tabulation summarizes the remaining terms of the options outstanding: Exercise Remaining Options Options Price ($) Life (Yrs.) Outstanding Exercisable 1,294 2.3 78 78 Total 78 78 |
LOSS PER COMMON SHARE
LOSS PER COMMON SHARE | 3 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
LOSS PER COMMON SHARE | NOTE 13 – LOSS PER COMMON SHARE For the periods ended June 30, 2018 and 2017, all stock options and warrants are considered antidilutive. Supplemental disclosures for loss per share are as follows: Three Months Ended June 30, 2018 2017 Net loss $ (3,512,097 ) $ (3,048,978 ) Less preferred dividends (700,344 ) (359,294 ) Net loss attributable to common stockholders $ (4,212,441 ) $ (3,408,272 ) Weighted average number of common shares - basic and diluted 9,501,394 1,217,043 Loss per common share - basic and diluted $ (0.44 ) $ (2.80 ) |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 3 Months Ended |
Jun. 30, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | NOTE 14 – SUPPLEMENTAL CASH FLOW INFORMATION Net cash paid for interest and income taxes was as follows: Three Months Ended June 30, 2018 2017 Interest $ 220,881 $ 584,472 Income taxes $ — $ — Non-cash investing and financing activities included the following: Three Months Ended June 30, 2018 2017 Increase in Accounts Payable for Accrued Capital Expenditures $ 744,803 $ 4,395 Issuance of Common Stock of Prior Conversion of Convertible Notes $ 142 $ — Change in Estimate for Asset Retirement Obligations $ 3,942 $ 9,945 Debt Discounts on Notes Payable $ — $ 36,712 Issuance of Common Stock for Common Stock Payable $ — $ 23,573 Stock Dividends Distributable but not Issued $ 698,996 $ 359,235 Issuance of Stock Dividends $ 1,348 $ 59 Conversion of Preferred Stock B to Common Stock $ — $ 1,025 Conversion of Preferred Stock C to Common Stock $ 10,142 $ 1,275 Warrants Issued in Abeyance $ 308 $ — |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 15 – SUBSEQUENT EVENTS Amendment to Series C Redeemable Convertible Preferred Stock On July 25, 2018, the Board of Directors of the Company and the sole holder of its Series C Redeemable Convertible Preferred Stock (“Series C Preferred Stock”) approved an amendment to the Certificate of Designations of its Series C Preferred Stock. The amendment modified the beneficial ownership limitation, which previously prevented the holder of the Series C Preferred Stock from converting such Series C Preferred Stock into common stock, if upon such conversion, the holder would beneficially own greater than 4.99% of the Company’s outstanding common stock, to increase such ownership limitation to 9.99% of the Company’s outstanding common stock. On July 25, 2018, the Company filed the amendment to the Certificate of Designations with the Secretary of State of Nevada, which became effective on the same date. From July 1, 2018 to August 13, 2018, the Investor converted 143 shares of Series C Preferred Stock into 9,091,083 shares of common stock; was issued an aggregate of an additional 14,603,000 shares of common stock in connection with true ups associated with prior conversions of Series C Preferred Stock; and as of August 13, 2018, was due an additional 15,335,524 shares in connection with true ups associated with prior conversions of Series C Preferred Stock, which shares were held in abeyance as of such date. On July 9, 2018, the Company sold the Investor 210 shares of Series C Preferred Stock for $2 million. N&B Energy Asset Disposition Agreement On July 12, 2018, the Company entered into an Asset Purchase Agreement described in greater detail above under “Note 2 - Liquidity and Going Concern Considerations” - “N&B Energy Asset Disposition Agreement”. Segundo Settlement Agreement Also on July 12, 2018, the Company entered into a Compromise Settlement Agreement and Mutual Release with Segundo described in greater detail above under “Note 2 - Liquidity and Going Concern Considerations” - “Segundo Settlement Agreement”. IBC Bank Standstill Agreement On August 3, 2018, the Company entered into the Standstill Agreement with IBC Bank described in greater detail above under “Note 2 - Liquidity and Going Concern Considerations” - “IBC Bank Standstill Agreement”. First Amendment to Sale Agreement Also on August 3, 2018, the Company entered into the First Amendment to the Sale Agreement described in greater detail above under “Note 2 - Liquidity and Going Concern Considerations” - “First Amendment to Sale Agreement”. |
SUMMARY OF SIGNIFICANT ACCOUN21
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Reclassifications | Reclassifications Certain reclassifications have been made to the prior year financial statements to conform with the current year presentation. |
Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”, In November 2016, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) amending the presentation of restricted cash within the consolidated statements of cash flows. The new guidance requires that restricted cash be added to cash and cash equivalents on the consolidated statements of cash flows. The Company adopted this ASU on April 1, 2018 on a retrospective basis with the following impacts to our consolidated statements of cash flows for the three months ended June 30, 2017: Previously Reported Adjustment As Revised Net cash provided by (used in) financing activities $ (17,266 ) $ (690,588 ) $ (707,854 ) As of June 30, 2018 and March 31, 2018, the Company had restricted cash of $217,914 and $26,834 related to the loan agreement with IBC bank. Following is a summary of cash and cash equivalent and restricted cash at June 30, 2018 and March 31, 2018: June 30, March 31, Cash $ 420,665 $ 760,317 Restricted cash – current 217,914 26,834 Cash, cash equivalents and restricted cash $ 638,579 $ 787,151 In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230). ASU 2016-15 seeks to reduce the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This update is effective for fiscal years beginning after December 15, 2017. The Company adopted this ASU on April 1, 2018 and the adoption did not have a significant impact to the Company’s consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations: Clarifying the Definition of a Business Revenue from Contracts with Customers In May 2017, the FASB issued ASU 2017-09, “Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting”, which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. ASU 2017-09 is effective for annual periods beginning after December 15, 2017, with early adoption permitted, including adoption in any interim period for which financial statements have not yet been issued. The Company adopted this ASU on April 1, 2018 and the adoption did not have a significant impact to the Company’s consolidated financial statements. Recently Issued Accounting Pronouncements The Company does not believe that any other recently issued effective pronouncements, or pronouncements issued but not yet effective, if adopted, would have a material effect on the accompanying consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN22
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Schedule of consolidated statements of cash flows | The Company adopted this ASU on April 1, 2018 on a retrospective basis with the following impacts to our consolidated statements of cash flows for the three months ended June 30, 2017: Previously Reported Adjustment As Revised Net cash provided by (used in) financing activities $ (17,266 ) $ (690,588 ) $ (707,854 ) |
Schedule of cash and cash equivalent and restricted cash | Following is a summary of cash and cash equivalent and restricted cash at June 30, 2018 and March 31, 2018: June 30, March 31, Cash $ 420,665 $ 760,317 Restricted cash – current 217,914 26,834 Cash, cash equivalents and restricted cash $ 638,579 $ 787,151 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 3 Months Ended |
Jun. 30, 2018 | |
Property and Equipment | |
Schedule of oil and natural gas properties | Below are the components of Camber’s oil and gas properties recorded at: June 30, March 31, Oil and gas properties subject to amortization $ 62,271,748 $ 60,760,056 Oil and gas properties not subject to amortization 28,013,365 28,016,989 Capitalized asset retirement costs 326,412 322,470 Total oil and gas properties 90,611,525 89.099,515 Accumulated depreciation, depletion and amortization (77,411,683 ) (76,555,320 ) Net capitalized costs $ 13,199,842 $ 12,544,195 |
Schedule of purchase price net assets acquired in connection with acquisition | The following tables summarize the purchase price and allocation of the purchase price to the net assets acquired in connection with the Acquisition: Purchase Price on August 25, 2016: Consideration Given Fair value of common stock issued $ 49,176,530 Fair value of Series B Preferred Stock issued 14,898,038 Assumption of debt 30,595,256 Cash at Closing 4,975,000 Total purchase price $ 99,644,824 Net Assets Acquired Accounts receivable $ 635,482 Total current assets acquired 635,482 Oil and gas properties 50,774,684 Total assets acquired 51,410,166 Asset retirement obligations (755,862 ) Total liabilities acquired (755,862 ) Net assets acquired 50,654,304 Impairment of oil and gas properties 48,990,520 Total Purchase Price $ 99,644,824 The proceeds from the $40 million loan from IBC were as follows: Use of Proceeds Assumption of debt $ 30,595,256 Cash funding (paid at closing) 4,975,000 Loan Commitment fee (paid at closing) 200,000 Lien Payoff (paid at closing) 72,657 Restricted cash (received at closing) 3,360,000 Cash (received at closing) 797,087 Debt payable after closing $ 40,000,000 |
ASSET RETIREMENT OBLIGATIONS (T
ASSET RETIREMENT OBLIGATIONS (Tables) | 3 Months Ended |
Jun. 30, 2018 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Schedule of reconciliation of long-term legal obligations | The following table presents the reconciliation of the beginning and ending aggregate carrying amounts of long-term legal obligations associated with the retirement of oil and gas property and equipment for the three-month periods ended June 30, 2018 and 2017, respectively. 2018 2017 Carrying amount at beginning of period $ 979,159 $ 2.045,847 Accretion 2,264 35,100 Change in estimate 3,942 (9,945 ) Carrying amount at end of period $ 985,365 $ 2,071,002 |
NOTES PAYABLE AND DEBENTURE (Ta
NOTES PAYABLE AND DEBENTURE (Tables) | 3 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of notes payable and debenture | The Company’s notes payable and debenture consisted of the following: June 30, March 31, Debenture $ 495,000 $ 495,000 Note Payable - IBC 36,943,617 36,943,617 37,438,617 37,438,617 Unamortized debt discount (1,246,938 ) (1,499,647 ) Total Notes Payable and Debenture 36,191,679 35,938,970 Less current portion (36,191,679 ) (35,938,970 ) Long-term portion $ — $ — |
DERIVATIVES (Tables)
DERIVATIVES (Tables) | 3 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of activity for derivative warrant instruments | Activities for derivative warrant instruments during the three months ended June 30, 2018 and 2017 were as follows: 2018 2017 Carrying amount at beginning of period $ 5 $ 21,662 Change in fair value — (15,171 ) Carrying amount at end of period $ 5 $ 6,491 |
REVENUE FROM CONTRACTS WITH C27
REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) | 3 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregates revenue by significant product | The following table disaggregates revenue by significant product type for the three months ended June 30, 2018: Oil sales $ 200,069 Natural gas sales 473,513 Natural gas liquids sales 1,021,114 Total revenue from customers $ 1,694,696 |
STOCKHOLDERS' DEFICIT (Tables)
STOCKHOLDERS' DEFICIT (Tables) | 3 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Schedule of common stock activity | The following summarizes the Company’s common stock activity during the three-month period ended June 30, 2018: Common Shares Amount (a) Per Share Issued and Outstanding Shares Balance at March 31, 2018 5,758,970 Preferred Stock Series C Conversion (b) — — 10,141,725 Preferred Stock Series B Dividends 1,350 0.77 1,751 Warrants – Abeyance (b) — — 308,411 Issuance of Common Stock of Prior Conversion of Convertible Notes — — 141,982 Balance at June 30, 2018 16,352,839 |
Schedule of outstanding warrants | The following is a summary of the Company’s outstanding warrants at June 30, 2018: Warrants Exercise Expiration Intrinsic Value at Outstanding Price ($) Date June 30, 2018 448 (1) 0.25 August 13, 2018 114 2,667 (2) 69.82 April 21, 2019 — 4,972 (3) 37.50 April 21, 2021 — 64,000 (4) 6.25 June 12, 2022 — 1,000,000 (5) 0.39 May 24, 2023 113,900 1,072,088 $ 114,014 (1) Warrants issued in connection with the Rogers Loan. The warrants were exercisable on the grant date (August 13, 2013) and remain exercisable until August 13, 2018. The exercise price was lowered to $0.01 per share on August 12, 2015. (2) Warrants issued in connection with the sale of units in the Company’s unit offering in April 2014. The Warrants became exercisable on April 21, 2014 and will remain exercisable thereafter until April 21, 2019. (3) Warrants issued in connection with the sale of convertible notes. The warrants were exercisable on the grant date (April 26, 2016) and remain exercisable until April 26, 2021. (4) Warrants issued in connection with the Initial Tranche of the funding from Vantage. The warrants were exercisable on the grant date (June 12, 2017) and remain exercisable until June 12, 2022. (5) Warrants issued in connection with the Severance Agreement with Richard Azar. The warrants were exercisable on the grant date (May 25, 2018) and remain exercisable until May 24, 2023. |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 3 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of remaining terms of stock options outstanding | The following tabulation summarizes the remaining terms of the options outstanding: Exercise Remaining Options Options Price ($) Life (Yrs.) Outstanding Exercisable 1,294 2.3 78 78 Total 78 78 |
LOSS PER COMMON SHARE (Tables)
LOSS PER COMMON SHARE (Tables) | 3 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of loss per share | Supplemental disclosures for loss per share are as follows: Three Months Ended June 30, 2018 2017 Net loss $ (3,512,097 ) $ (3,048,978 ) Less preferred dividends (700,344 ) (359,294 ) Net loss attributable to common stockholders $ (4,212,441 ) $ (3,408,272 ) Weighted average number of common shares - basic and diluted 9,501,394 1,217,043 Loss per common share - basic and diluted $ (0.44 ) $ (2.80 ) |
SUPPLEMENTAL CASH FLOW INFORM31
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 3 Months Ended |
Jun. 30, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of supplemental cash flow information | Net cash paid for interest and income taxes was as follows: Three Months Ended June 30, 2018 2017 Interest $ 220,881 $ 584,472 Income taxes $ — $ — Non-cash investing and financing activities included the following: Three Months Ended June 30, 2018 2017 Increase in Accounts Payable for Accrued Capital Expenditures $ 744,803 $ 4,395 Issuance of Common Stock of Prior Conversion of Convertible Notes $ 142 $ — Change in Estimate for Asset Retirement Obligations $ 3,942 $ 9,945 Debt Discounts on Notes Payable $ — $ 36,712 Issuance of Common Stock for Common Stock Payable $ — $ 23,573 Stock Dividends Distributable but not Issued $ 698,996 $ 359,235 Issuance of Stock Dividends $ 1,348 $ 59 Conversion of Preferred Stock B to Common Stock $ — $ 1,025 Conversion of Preferred Stock C to Common Stock $ 10,142 $ 1,275 Warrants Issued in Abeyance $ 308 $ — |
GENERAL (Details Narrative)
GENERAL (Details Narrative) | Mar. 05, 2018shares | Apr. 19, 2016 | Jun. 30, 2018shares | Mar. 31, 2018shares | Mar. 01, 2018shares | Jan. 10, 2018shares | Jan. 09, 2018shares |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||
Description of reverse stock split | 1-for-25 reverse stock split of all outstanding common stock shares of the Company (the “Amendment”). The reverse stock split was effective on March 5, 2018. | ||||||
Reverse stock split ratio | 0.04 | 0.04 | |||||
Shares outstanding | 4,100,000 | 103,500,000 | |||||
Common stock, authorized | 500,000,000 | 500,000,000 | 500,000,000 | 200,000,000 |
LIQUIDITY AND GOING CONCERN C33
LIQUIDITY AND GOING CONCERN CONSIDERATIONS (Details Narrative) - USD ($) | Nov. 09, 2017 | Oct. 05, 2017 | Aug. 23, 2017 | Aug. 02, 2017 | Jul. 20, 2017 | Jul. 17, 2017 | Dec. 23, 2016 | Nov. 17, 2016 | Oct. 07, 2016 | Sep. 02, 2016 | Aug. 25, 2016 | Apr. 06, 2016 | Dec. 30, 2015 | Jun. 30, 2018 | Jun. 30, 2017 | Mar. 31, 2018 | Feb. 12, 2018 | Feb. 08, 2018 | Dec. 30, 2016 | Sep. 01, 2016 |
Current liabilities | $ 41,867,435 | $ 40,251,961 | ||||||||||||||||||
Current assets | 1,321,551 | 1,664,775 | ||||||||||||||||||
Working capital deficit | (44,600,000) | $ (38,600,000) | ||||||||||||||||||
Change in working capital deficit | $ 2,000,000 | |||||||||||||||||||
Repayment of note payable | $ 707,854 | |||||||||||||||||||
Warrant exercise price | $ 321.01 | $ 12.94 | ||||||||||||||||||
Number of shares issued | 1,067,600 | |||||||||||||||||||
Proceeds from purchase of shares | $ 2,000,000 | |||||||||||||||||||
Net receivable | 682,982 | $ 646,891 | ||||||||||||||||||
Principal balance of short-term promissory note | 37,438,617 | $ 37,438,617 | ||||||||||||||||||
Debt discount | $ 384,305 | |||||||||||||||||||
Series C Preferred Stock [Member] | ||||||||||||||||||||
Stock conversion price (in dollars per share) | $ 3.25 | |||||||||||||||||||
Series B Preferred Stock [Member] | ||||||||||||||||||||
Number of shares issued | 1,751 | |||||||||||||||||||
Share price | $ 0.50 | $ 25 | ||||||||||||||||||
Redeemable Convertible Subordinated Debenture [Member] | ||||||||||||||||||||
Unamortized debt issuance costs | $ 223,847 | $ 247,597 | ||||||||||||||||||
Accrued interest | $ 380,143 | $ 388,183 | ||||||||||||||||||
Share price | $ 81.25 | |||||||||||||||||||
Debt instrument face amount | $ 35,000 | |||||||||||||||||||
Shares of common stock issued for debt | 431 | |||||||||||||||||||
Institutional Investors [Member] | ||||||||||||||||||||
Shares called by warrant | 58,052,599 | |||||||||||||||||||
Institutional Investors [Member] | First Warrant [Member] | ||||||||||||||||||||
Shares called by warrant | 110,447,753 | |||||||||||||||||||
Number of shares issued | 32,400 | |||||||||||||||||||
Number of common stock issued upon warrant exercise | 55,385 | |||||||||||||||||||
Number of additional common stock issued upon warrant exercise | 101,710 | |||||||||||||||||||
Description of beneficial ownership limitation | Beneficial ownership limitation (4.99% of the Company’s outstanding common stock). | |||||||||||||||||||
Proceeds from warrant exercises | $ 4,500,000 | |||||||||||||||||||
Placement agent fees | $ 427,500 | |||||||||||||||||||
Institutional Investors [Member] | First Warrant [Member] | Redeemable Convertible Subordinated Debenture [Member] | ||||||||||||||||||||
Shares called by warrant | 55,385 | |||||||||||||||||||
Warrant exercise price | $ 3.25 | |||||||||||||||||||
Funding Agreement [Member] | Vantage Fund [Member] | ||||||||||||||||||||
Vantage funding agreement amount | $ 6,000,000 | |||||||||||||||||||
Intitial tranche funding | $ 400,000 | |||||||||||||||||||
Proceeds from note payable | $ 30,000 | $ 120,000 | ||||||||||||||||||
Repayment of note payable | $ 150,000 | |||||||||||||||||||
Funding Agreement [Member] | Vantage Fund [Member] | Warrants [Member] | ||||||||||||||||||||
Warrant term | 3 years | |||||||||||||||||||
Shares called by warrant | 1,600,000 | |||||||||||||||||||
Warrant exercise price | $ 0.25 | |||||||||||||||||||
Loan Agreement [Member] | Vantage Fund [Member] | ||||||||||||||||||||
Proceeds from issuance of debt | $ 30,000 | $ 120,000 | ||||||||||||||||||
Repayment of debt | $ 150,000 | |||||||||||||||||||
Securities Purchase Agreement [Member] | Institutional Investors [Member] | ||||||||||||||||||||
Share purchase agreement value | $ 16,000,000 | |||||||||||||||||||
Securities Purchase Agreement [Member] | Institutional Investors [Member] | 6% Series C Redeemable Convertible Preferred Stock [Member] | ||||||||||||||||||||
Shares of common stock issued on conversion | 64,738 | |||||||||||||||||||
Stock conversion price (in dollars per share) | $ 81.25 | |||||||||||||||||||
Original issue discount | 5.00% | |||||||||||||||||||
Number of shares issued | 474 | 53 | 527 | |||||||||||||||||
Proceeds from sale of shares | $ 4,500,000 | $ 500,000 | ||||||||||||||||||
Securities Purchase Agreement [Member] | Institutional Investors [Member] | Series C Preferred Stock [Member] | ||||||||||||||||||||
Shares of common stock issued on conversion | (123) | |||||||||||||||||||
Securities Purchase Agreement [Member] | Institutional Investors [Member] | Series C Preferred Stock [Member] | First Closing [Member] | ||||||||||||||||||||
Number of shares issued | 212 | |||||||||||||||||||
Proceeds from purchase of shares | $ 2,000,000 | |||||||||||||||||||
Securities Purchase Agreement [Member] | Institutional Investors [Member] | Series C Preferred Stock [Member] | Second Closing [Member] | ||||||||||||||||||||
Number of shares issued | 106 | |||||||||||||||||||
Proceeds from purchase of shares | $ 1,000,000 | |||||||||||||||||||
Securities Purchase Agreement [Member] | Institutional Investors [Member] | Series C Preferred Stock [Member] | Third Closing [Member] | ||||||||||||||||||||
Number of shares issued | 105 | |||||||||||||||||||
Proceeds from purchase of shares | $ 1,000,000 | |||||||||||||||||||
Securities Purchase Agreement [Member] | Institutional Investors [Member] | Series C Preferred Stock [Member] | Fourth Closing [Member] | ||||||||||||||||||||
Number of shares issued | 105 | |||||||||||||||||||
Proceeds from purchase of shares | $ 1,000,000 | |||||||||||||||||||
Securities Purchase Agreement [Member] | Institutional Investors [Member] | Series C Preferred Stock [Member] | Fifth Closing [Member] | ||||||||||||||||||||
Number of shares issued | 105 | |||||||||||||||||||
Proceeds from purchase of shares | $ 1,000,000 | |||||||||||||||||||
Securities Purchase Agreement [Member] | Institutional Investors [Member] | Series C Preferred Stock [Member] | Sixth Closing [Member] | ||||||||||||||||||||
Number of shares issued | 525 | |||||||||||||||||||
Proceeds from purchase of shares | $ 5,000,000 | |||||||||||||||||||
Securities Purchase Agreement [Member] | Institutional Investors [Member] | Series C Preferred Stock [Member] | Seventh Closing [Member] | ||||||||||||||||||||
Number of shares issued | 525 | |||||||||||||||||||
Proceeds from purchase of shares | $ 5,000,000 | |||||||||||||||||||
Securities Purchase Agreement [Member] | Institutional Investors [Member] | Redeemable Convertible Subordinated Debenture [Member] | ||||||||||||||||||||
Notes payable | $ 530,000 | |||||||||||||||||||
Interest rate | 6.00% | |||||||||||||||||||
Proceeds from issuance of debt | $ 500,000 | |||||||||||||||||||
Shares of common stock issued on conversion | 6,523 | |||||||||||||||||||
Stock conversion price (in dollars per share) | $ 3.25 | |||||||||||||||||||
Original issue discount | 5.00% | |||||||||||||||||||
Debt discount | $ 30,000 | |||||||||||||||||||
Securities Purchase Agreement [Member] | Institutional Investors [Member] | First Warrant [Member] | Redeemable Convertible Subordinated Debenture [Member] | ||||||||||||||||||||
Number of common stock issued upon warrant exercise | 55,385 | |||||||||||||||||||
Securities Purchase Agreement [Member] | Institutional Investors [Member] | Second Warrant [Member] | 6% Series C Redeemable Convertible Preferred Stock [Member] | ||||||||||||||||||||
Shares called by warrant | 44,444 | |||||||||||||||||||
Warrant exercise price | $ 112.50 | |||||||||||||||||||
Asset Purchase Agreement [Member] | 23 Different Entities & Individuals [Member] | Mid-Continent Region [Member] | ||||||||||||||||||||
Cash paid for acquisition | $ 4,975,000 | |||||||||||||||||||
Asset Purchase Agreement [Member] | 23 Different Entities & Individuals [Member] | Mid-Continent Region [Member] | Common Stock [Member] | ||||||||||||||||||||
Number of shares issued in acquisition | 520,387 | 520,387 | ||||||||||||||||||
Asset Purchase Agreement [Member] | Series B Preferred Stock [Member] | 23 Different Entities & Individuals [Member] | Mid-Continent Region [Member] | ||||||||||||||||||||
Number of shares issued in acquisition | 552,000 | |||||||||||||||||||
Asset Purchase Agreement [Member] | Seller 2 [Member] | ||||||||||||||||||||
Agreed assets value | $ 80,697,710 | |||||||||||||||||||
Deficiency for agreed assets value | 1,030,941 | |||||||||||||||||||
Value of assets acquired in clearing of deficiency | $ 1,000,000 | |||||||||||||||||||
Purchase Agreement [Member] | 23 Different Entities & Individuals [Member] | Mid-Continent Region [Member] | ||||||||||||||||||||
Repayment of debt | $ 30,600,000 | |||||||||||||||||||
Cash paid for acquisition | $ 4,975,000 | |||||||||||||||||||
Commercial bank debt assumed in acquisition | $ 30,600,000 |
LIQUIDITY AND GOING CONCERN C34
LIQUIDITY AND GOING CONCERN CONSIDERATIONS (Details Narrative 1) | Jul. 12, 2018USD ($)$ / shares | Nov. 09, 2017USD ($)ft²a | Oct. 03, 2017USD ($) | Aug. 25, 2017USD ($) | Mar. 09, 2017USD ($)shares | Dec. 23, 2016shares | Mar. 31, 2018USD ($) | Aug. 03, 2018USD ($) | Jun. 30, 2018USD ($)shares | Apr. 30, 2018shares | Jan. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 15, 2017USD ($) | Sep. 30, 2017USD ($) | Aug. 25, 2016USD ($) | Aug. 13, 2013USD ($) |
Number of shares issued | shares | 1,067,600 | |||||||||||||||
Net receivable | $ 646,891 | $ 682,982 | ||||||||||||||
Principal balance of short-term promissory note | 37,438,617 | 37,438,617 | ||||||||||||||
Debt discount | 384,305 | |||||||||||||||
Net book value of oil and gas properties | 12,544,195 | $ 13,199,842 | $ 210,000 | |||||||||||||
NFP Energy LLC [Member] | Gaines County, Texas [Member] | ||||||||||||||||
Remaining area of land | ft² | 1,200 | |||||||||||||||
Investor [Member] | ||||||||||||||||
Number of common stock issued upon warrant exercise | shares | 4,417,911 | |||||||||||||||
Investor [Member] | Warrants [Member] | ||||||||||||||||
Number of common stock issued upon warrant exercise | shares | 308,411 | |||||||||||||||
Number of warrant exercise | $ 3,909,500 | $ 200,000 | ||||||||||||||
Security Agreement - Rogers [Member] | ||||||||||||||||
Notes payable | $ 5,800,000 | |||||||||||||||
Additional discount recognized | $ 1,800,000 | |||||||||||||||
Non Related Individual Note [Member] | ||||||||||||||||
Notes payable | $ 263,158 | |||||||||||||||
Interest rate | 6.00% | |||||||||||||||
Repayment of debt | $ 263,158 | |||||||||||||||
Principal balance of short-term promissory note | $ 263,158 | |||||||||||||||
Maturity date | Mar. 9, 2018 | |||||||||||||||
Debt discount | $ 13,158 | |||||||||||||||
Principal amount | $ 250,000 | |||||||||||||||
Shares of common stock issued for debt | shares | 10,000 | |||||||||||||||
Fair value of shares issued for debt | $ 5,900 | |||||||||||||||
Letter Loan - Ms. Rogers [Member] | ||||||||||||||||
Notes payable | $ 7,500,000 | |||||||||||||||
Principal balance of short-term promissory note | 9,400,000 | |||||||||||||||
Letter Loan - Ms. Rogers [Member] | CATI Subsidiary [Member] | ||||||||||||||||
Notes payable | $ 9,400,000 | |||||||||||||||
Default interest payable | 2,100,000 | |||||||||||||||
Proceeds from foreclosure sales applied to outstanding debt | $ 3,500,000 | 3,500,000 | ||||||||||||||
Mr. Alan Dreeben [Member] | 6% Promissory Note [Member] | ||||||||||||||||
Notes payable | 1,050,000 | |||||||||||||||
Repayment of debt | $ 1,050,000 | |||||||||||||||
Mr. Alan Dreeben [Member] | 6% Promissory Note [Member] | Texas [Member] | ||||||||||||||||
Area of sale of oil and gas properties | a | 2,452 | |||||||||||||||
Fortuna Resources Permian [Member] | NFP Energy LLC [Member] | Gaines County, Texas [Member] | ||||||||||||||||
Payment to joint venture entity for sale of oil and gas properties | $ 662,072 | |||||||||||||||
Net book value of oil and gas properties | $ 817,110 | |||||||||||||||
Loan Agreement [Member] | International Bank of Commerce [Member] | ||||||||||||||||
Notes payable | 37,400,000 | |||||||||||||||
Commercial bank debt assumed in acquisition | 36,900,000 | 36,900,000 | ||||||||||||||
Net worth to be retained | 30,000,000 | 30,000,000 | ||||||||||||||
Unamortized debt issuance costs | 1,300,000 | 1,300,000 | ||||||||||||||
Accured interest | 39,000 | 460,000 | ||||||||||||||
Missed loan payment, leading to default action | $ 425,000 | |||||||||||||||
Debt discount | 1,300,000 | $ 1,000,000 | ||||||||||||||
Principal amount | $ 30,000,000 | |||||||||||||||
Loan Agreement [Member] | N&B Energy LLC [Member] | International Bank of Commerce [Member] | ||||||||||||||||
Principal amount | $ 40,000,000 | |||||||||||||||
Proceeds from divestiture of businesses | $ 36,900,000 | |||||||||||||||
Asset Purchase Agreement [Member] | Mr. Schnur [Member] | ||||||||||||||||
Gross receivable | $ 1,121,718 | |||||||||||||||
Net receivable | $ 342,298 | |||||||||||||||
Asset Purchase Agreement [Member] | N&B Energy LLC [Member] | Segundo Resources, LLC (Affiliate of RAD2) [Member] | ||||||||||||||||
Proceeds from divestiture of businesses | 100 | |||||||||||||||
Compromise Settlement Agreement [Member] | Segundo Resources, LLC (Affiliate of RAD2) [Member] | ||||||||||||||||
Surrender value | $ 15,237 | |||||||||||||||
Share price (in dollars per share) | $ / shares | $ 76.25 |
SUMMARY OF SIGNIFICANT ACCOUN35
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 3 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Net cash provided by (used in) financing activities | $ 2,000,000 | $ (707,854) |
Previously Reported [Member] | ||
Net cash provided by (used in) financing activities | (17,266) | |
Restatement Adjustment [Member] | ||
Net cash provided by (used in) financing activities | (690,588) | |
As Revised [Member] | ||
Net cash provided by (used in) financing activities | $ (707,854) |
SUMMARY OF SIGNIFICANT ACCOUN36
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) | Jun. 30, 2018 | Mar. 31, 2018 |
Accounting Policies [Abstract] | ||
Cash | $ 420,665 | $ 760,317 |
Restricted cash current | 217,914 | 26,834 |
Cash, cash equivalents and restricted cash | $ 638,579 | $ 787,151 |
SUMMARY OF SIGNIFICANT ACCOUN37
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | Jun. 30, 2018 | Mar. 31, 2018 |
Accounting Policies [Abstract] | ||
Restricted cash current | $ 217,914 | $ 26,834 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | Jun. 30, 2018 | Mar. 31, 2018 | Jan. 31, 2018 |
Components of oil and gas properties recorded at cost | |||
Oil and gas properties subject to amortization | $ 62,271,748 | $ 60,760,056 | |
Oil and gas properties not subject to amortization | 28,013,365 | 28,016,989 | |
Capitalized asset retirement costs | 326,412 | 322,470 | |
Total oil & gas properties | 90,611,525 | 89,099,515 | |
Accumulated depreciation, depletion and amortization | (77,411,683) | (76,555,320) | |
Net Capitalized Costs | $ 13,199,842 | $ 12,544,195 | $ 210,000 |
PROPERTY AND EQUIPMENT (Detai39
PROPERTY AND EQUIPMENT (Details 1) - USD ($) | Aug. 25, 2016 | Jun. 30, 2018 | Jun. 30, 2017 |
Fair value of net assets at August 25, 2016: | |||
Impairment of oil and gas properties | $ 531,657 | $ 775,374 | |
Purchase Agreement [Member] | 23 Different Entities & Individuals [Member] | Mid-Continent Region [Member] | |||
Purchase Price on August 25, 2016: | |||
Fair value of common stock issued | $ 49,176,530 | ||
Fair value of Series B Preferred Stock issued | 14,898,038 | ||
Assumption of debt | 30,595,256 | ||
Cash paid at closing | 4,975,000 | ||
Total purchase price | 99,644,824 | ||
Fair value of net assets at August 25, 2016: | |||
Accounts receivable | 635,482 | ||
Total current assets acquired | 635,482 | ||
Oil and gas properties | 50,774,684 | ||
Total assets acquired | 51,410,166 | ||
Asset retirement obligations | (755,862) | ||
Total liabilities acquired | (755,862) | ||
Net assets acquired | 50,654,304 | ||
Impairment of oil and gas properties | 48,990,520 | ||
Total Purchase Price | 99,644,824 | ||
Assumption of debt | 30,595,256 | ||
Cash funding (due at closing) | 4,975,000 | ||
Loan Commitment fee (due at closing) | 200,000 | ||
Lien Payoff (due at closing) | 72,657 | ||
Restricted cash (received at closing) | 3,360,000 | ||
Cash (received at closing) | 797,087 | ||
Debt payable after closing | $ 40,000,000 |
PROPERTY AND EQUIPMENT (Detai40
PROPERTY AND EQUIPMENT (Details Narrative) | Nov. 09, 2017USD ($)ft² | Oct. 03, 2017USD ($) | Aug. 25, 2016USD ($)shares | Apr. 02, 2016ft² | Dec. 30, 2015USD ($)shares | Mar. 31, 2018USD ($) | Apr. 30, 2016USD ($) | Feb. 28, 2014USD ($) | Jun. 30, 2018USD ($)$ / Boe | Mar. 31, 2018USD ($) | Jun. 30, 2017USD ($)$ / Boe | Dec. 31, 2017USD ($) | Mar. 31, 2017USD ($)ft² | Sep. 30, 2018USD ($) | Apr. 30, 2018USD ($) | Jan. 31, 2018USD ($)ft² | Sep. 30, 2017USD ($) | Aug. 02, 2017USD ($) | Jan. 31, 2017USD ($) | Aug. 13, 2013USD ($) |
Amortization expense per barrel of oil equivalent | $ / Boe | 4 | 5.74 | ||||||||||||||||||
Impairment of oil and gas | $ 531,657 | $ 775,374 | ||||||||||||||||||
Impairment of oil and gas related to proved properties | 100,374 | |||||||||||||||||||
Impairment of oil and gas related to lease expiration | 675,000 | |||||||||||||||||||
Book value of Permian Rights | $ 114,500 | |||||||||||||||||||
Payment to purchase of property | $ 250,000 | |||||||||||||||||||
Monthly stated rent | $ 5,000 | |||||||||||||||||||
Area of land | ft² | 3,000 | |||||||||||||||||||
Committed lease payments | 346,000 | |||||||||||||||||||
Accrued rent expense | 226,972 | 214,862 | $ 226,972 | |||||||||||||||||
Write-off on depreciated property and equipment | 189,533 | |||||||||||||||||||
Loss on re-locating of property | $ 3,368 | |||||||||||||||||||
Proceeds from sale of oil and gas properties | 400,000 | |||||||||||||||||||
Net book value of oil and gas properties | 12,544,195 | $ 13,199,842 | 12,544,195 | $ 210,000 | ||||||||||||||||
Loss on sale of property | $ 1,195 | |||||||||||||||||||
Equipment under capital leases | 575,000 | 575,000 | $ 575,000 | |||||||||||||||||
Obligation under capital leases | $ 387,000 | $ 387,000 | $ 387,000 | |||||||||||||||||
Borrowing rate capital leases | 35.00% | 35.00% | 35.00% | |||||||||||||||||
450 Gears Road, Suite 780, Houston [Member] | ||||||||||||||||||||
Lease term | 65 months | |||||||||||||||||||
Sublease monthly rent | $ 0 | $ 7,676 | ||||||||||||||||||
Area of land | ft² | 4,439 | 6,839 | ||||||||||||||||||
Eagleford and Austin Chalk [Member] | ||||||||||||||||||||
Rent receivable Year 1 | $ 7,200 | $ 7,200 | ||||||||||||||||||
Rent receivable Year 2 | 7,800 | 7,200 | ||||||||||||||||||
Rent receivable Year 3 | 8,400 | $ 7,200 | ||||||||||||||||||
Payment to purchase of property | $ 50,000 | |||||||||||||||||||
Lease term | 3 years | |||||||||||||||||||
NFP Energy LLC [Member] | Gaines County, Texas [Member] | ||||||||||||||||||||
Area of land | ft² | 2,452 | |||||||||||||||||||
Letter Loan - Ms. Rogers [Member] | ||||||||||||||||||||
Notes payable | $ 7,500,000 | |||||||||||||||||||
CATI Subsidiary [Member] | Letter Loan - Ms. Rogers [Member] | ||||||||||||||||||||
Notes payable | $ 9,400,000 | |||||||||||||||||||
Proceeds from foreclosure sales applied to outstanding debt | $ 3,500,000 | $ 3,500,000 | ||||||||||||||||||
Loss on sale of property | $ 4,100,000 | |||||||||||||||||||
23 Different Entities & Individuals [Member] | Mid-Continent Region [Member] | Asset Purchase Agreement [Member] | ||||||||||||||||||||
Cash paid for acquisition | $ 4,975,000 | |||||||||||||||||||
23 Different Entities & Individuals [Member] | Mid-Continent Region [Member] | Purchase Agreement [Member] | ||||||||||||||||||||
Impairment of oil and gas | $ 48,990,520 | |||||||||||||||||||
Commercial bank debt assumed in acquisition | 30,600,000 | |||||||||||||||||||
Cash paid for acquisition | $ 4,975,000 | |||||||||||||||||||
23 Different Entities & Individuals [Member] | Common Stock [Member] | Mid-Continent Region [Member] | Asset Purchase Agreement [Member] | ||||||||||||||||||||
Number of shares issued in acquisition | shares | 520,387 | 520,387 | ||||||||||||||||||
Effective date of acquisition | Apr. 1, 2016 | |||||||||||||||||||
23 Different Entities & Individuals [Member] | Series B Preferred Stock [Member] | Mid-Continent Region [Member] | Asset Purchase Agreement [Member] | ||||||||||||||||||||
Number of shares issued in acquisition | shares | 552,000 | |||||||||||||||||||
Fortuna Resources Permian [Member] | NFP Energy LLC [Member] | Gaines County, Texas [Member] | ||||||||||||||||||||
Area of land | ft² | 1,000 | |||||||||||||||||||
Proceeds from sale of oil and gas properties | $ 2,206,718 | |||||||||||||||||||
Payment to joint venture entity for sale of oil and gas properties | 662,072 | |||||||||||||||||||
Net book value of oil and gas properties | 817,110 | |||||||||||||||||||
Gain on sale of oil and gas properties | $ 727,732 |
ASSET RETIREMENT OBLIGATIONS (D
ASSET RETIREMENT OBLIGATIONS (Details) - USD ($) | 3 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Reconciliation of carrying amounts of asset retirement obligations | ||
Carrying amount at beginning of period | $ 979,159 | $ 2,045,847 |
Accretion | 2,264 | 35,100 |
Change in estimate | 3,942 | (9,945) |
Carrying amount at end of period | $ 985,365 | $ 2,071,002 |
NOTES PAYABLE AND DEBENTURE (De
NOTES PAYABLE AND DEBENTURE (Details) - USD ($) | Jun. 30, 2018 | Mar. 31, 2018 |
Gross Notes Payable and Debenture | $ 37,438,617 | $ 37,438,617 |
Unamortized debt discount | (1,246,938) | (1,499,647) |
Total Notes Payable and Debenture | 36,191,679 | 35,938,970 |
Less current portion | (36,191,679) | (35,938,970) |
Debenture [Member] | ||
Gross Notes Payable and Debenture | 495,000 | 495,000 |
5% Promissory Note [Member] | Loan Agreement [Member] | International Bank of Commerce [Member] | Mr. Richard N. Azar II [Member] | ||
Gross Notes Payable and Debenture | $ 36,943,617 | $ 36,943,617 |
NOTES PAYABLE AND DEBENTURE (43
NOTES PAYABLE AND DEBENTURE (Details Narrative) | Aug. 23, 2018shares | Aug. 25, 2017USD ($) | Aug. 23, 2017USD ($)shares$ / shares | Aug. 26, 2016USD ($)shares | Apr. 06, 2016USD ($)$ / sharesshares | Jun. 30, 2017USD ($)shares | Jun. 30, 2018USD ($)shares | Mar. 31, 2018USD ($) | Oct. 07, 2016shares |
Debt discount | $ 384,305 | ||||||||
Investor [Member] | |||||||||
Number of common stock issued upon warrant exercise | shares | 4,417,911 | ||||||||
Redeemable Convertible Subordinated Debenture [Member] | |||||||||
Debt instrument face amount | $ 35,000 | ||||||||
Accrued interest | $ 380,143 | $ 388,183 | |||||||
Shares of common stock issued for debt | shares | 431 | ||||||||
Share price (in dollars per share) | $ / shares | $ 81.25 | ||||||||
Principal payment of promissory note | 271,153 | 247,403 | |||||||
Number of common shares issued from conversion | shares | 70,189 | ||||||||
Unamortized debt issuance costs | 223,847 | 247,597 | |||||||
Redeemable Convertible Subordinated Debenture [Member] | Investor [Member] | |||||||||
Number of common shares issued from conversion | shares | 141,982 | ||||||||
Certain Sellers [Member] | Promissory Note [Member] | |||||||||
Proceeds from notes payable | $ 30,600,000 | ||||||||
Institutional Investors [Member] | First Warrant [Member] | |||||||||
Number of common stock issued upon warrant exercise | shares | 55,385 | ||||||||
Loan Agreement [Member] | International Bank of Commerce [Member] | |||||||||
Notes payable | 37,400,000 | ||||||||
Missed loan payment, leading to default action | $ 425,000 | ||||||||
Debt instrument face amount | 30,000,000 | ||||||||
Debt discount | 1,000,000 | 1,300,000 | |||||||
Accrued interest | 460,000 | 39,000 | |||||||
Description of notes interest rates | Accrue interest at the rate of 2% per annum above the prime rate, subject to a floor of 5.5% (currently 6.25% per annum) | ||||||||
Description of late payment charges | If the Company fails to make any payment due to IBC within 10 days of its due date, IBC is due a late payment of 5% of the amount past due (subject to a minimum of $10 and a maximum of $1,500 per late payment | ||||||||
Unamortized debt issuance costs | 1,300,000 | $ 1,300,000 | |||||||
Loan Agreement [Member] | International Bank of Commerce [Member] | 5% Promissory Note [Member] | |||||||||
Debt maturity date | Aug. 25, 2019 | ||||||||
Debt instrument face amount | $ 40,000,000 | ||||||||
Debt discount | $ 2,800,000 | ||||||||
Notes interest rate | 5.50% | ||||||||
Shares of common stock issued for debt | shares | 15,612 | ||||||||
Loan origination fee | $ 400,000 | ||||||||
Description of notes repayment terms | Monthly payments under the note equal to the greater of (i) $425,000; and (ii) fifty percent (50%) of our monthly net income. | ||||||||
Description of notes interest rates | The note accrues annual interest at 2% above the prime rate then in effect, subject to a minimum interest rate of 5.5% per annum. | ||||||||
Sinking fund payment | $ 3,360,000 | ||||||||
Description of notes collateral | Secured by a Security Interest in substantially all of our assets and properties, pursuant to three Security Agreements. Also, each of the Guarantors guaranteed the repayment of a portion of the Loan Agreement pursuant to a Limited Guaranty Agreement. | ||||||||
Loan Agreement [Member] | International Bank of Commerce [Member] | 5% Promissory Note [Member] | Mr. Richard N. Azar II [Member] | |||||||||
Notes payable | 30,000,000 | ||||||||
Accrued interest | $ 30,000 | ||||||||
Loan Agreement [Member] | RAD2 Minerals [Member] | 5% Promissory Note [Member] | Mr. Richard N. Azar II [Member] | |||||||||
Proceeds from notes payable | $ 18,300,000 | ||||||||
Number of shares pledging | shares | 124,824 | ||||||||
Loan Agreement [Member] | DBS Investments, Ltd. [Member] | 5% Promissory Note [Member] | Mr. Richard N. Azar II [Member] | |||||||||
Proceeds from notes payable | $ 9,800,000 | ||||||||
Number of shares pledging | shares | 37,437 | ||||||||
Loan Agreement [Member] | Saxum Energy, LLC [Member] | 5% Promissory Note [Member] | Mr. Richard N. Azar II [Member] | |||||||||
Proceeds from notes payable | $ 4,975,000 | ||||||||
Number of shares pledging | shares | 26,936 | ||||||||
Securities Purchase Agreement [Member] | Institutional Investors [Member] | Redeemable Convertible Subordinated Debenture [Member] | |||||||||
Notes payable | $ 530,000 | ||||||||
Conversion price (in dollars per share) | $ / shares | $ 81.25 | ||||||||
Shares of common stock issued on conversion | shares | 6,523 | ||||||||
Debt discount | $ 30,000 | ||||||||
Notes interest rate | 6.00% | ||||||||
Securities Purchase Agreement [Member] | Institutional Investors [Member] | Redeemable Convertible Subordinated Debenture [Member] | First Warrant [Member] | |||||||||
Number of common stock issued upon warrant exercise | shares | 55,385 | ||||||||
Conversion price (in dollars per share) | $ / shares | $ 81.25 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | Jan. 12, 2018 | Jun. 30, 2018 | Aug. 15, 2018 | Feb. 15, 2018 | Mar. 31, 2018 |
Lease Impairment | $ 532,000 | ||||
Petroflow Matter [Member] | |||||
Date lawsuit filed | October 2,017 | ||||
Settlement payments | $ 475,000 | ||||
Total legal fees | 392,043 | ||||
Legal fees paid by company | 567,633 | ||||
Total expense | $ 959,676 | ||||
Stock issued for services (shares) | 78,409 | ||||
Stock price of shares issued | $ 0.20 | ||||
Short-Swing Profits [Member] | |||||
Date lawsuit filed | September 28, 2017 | ||||
Name of defendants | Aaron Rubenstein, a purported shareholder | ||||
Lawsuit allegations | Alleged short-swing profits from Mr. Azar and his related entities under Section 16(b) of the Exchange Act relating to various transactions involving Series B Preferred Stock of the Company in November 2016 and January 2017. | ||||
Mr. Schnur [Member] | Amended Employment Agreement [Member] | |||||
Severance payment | $ 49,000 | $ 19,000 | $ 15,000 | ||
Mr. Schnur [Member] | Employment Agreement [Member] | |||||
Employment agreement terms | 2 years | ||||
Base annual salary | $ 310,000 | ||||
Base salary payable in cash | 290,000 | ||||
Base salary payable in stock | $ 20,000 | ||||
Change of control period - number of months in computing compensation | 12 months | ||||
Change in control - period after occurrence | 24 months | ||||
Change in control - percentage of lump sum due officer | 200.00% | ||||
Shares granted | $ 4,800 | ||||
Amount of montly cash payment | 14,000 | ||||
Accrued severance costs | 34,025 | $ 79,025 | |||
Mr. Schnur [Member] | Severance Agreement [Member] | |||||
Severance payment | 150,000 | ||||
Amount of installments | 50,000 | ||||
Purchase of warrant | $ 1,000,000 | ||||
Common stock, exercise price | 0.39 |
DERIVATIVES (Details)
DERIVATIVES (Details) - USD ($) | 3 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Carrying amount at beginning of period | $ 5 | $ 21,662 |
Change in fair value | (15,171) | |
Carrying amount at end of period | $ 5 | $ 6,491 |
DERIVATIVES (Details Narrative)
DERIVATIVES (Details Narrative) - Derivative Warrant [Member] | 1 Months Ended | 3 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Volatility factor | 135.42% | 145.70% | 179.15% |
Dividend yield | 0.00% | 0.00% | |
Expected life | 5 years | 81 years | 2 years |
Risk free interest rate | 1.78% | 1.91% | 1.24% |
REVENUE FROM CONTRACTS WITH C47
REVENUE FROM CONTRACTS WITH CUSTOMERS (Details) | 3 Months Ended |
Jun. 30, 2018USD ($) | |
Total revenue from customers | $ 1,694,696 |
Crude Oil (Bbls) [Member] | |
Total revenue from customers | 200,069 |
Natural Gas (Mcf) [Member] | |
Total revenue from customers | 473,513 |
Natural Gas Liquids [Member] | |
Total revenue from customers | $ 1,021,114 |
STOCKHOLDERS' DEFICIT (Details)
STOCKHOLDERS' DEFICIT (Details) | 3 Months Ended | |
Jun. 30, 2018USD ($)$ / sharesshares | ||
Common stock activity | ||
Beginning balance, issued | 5,758,970 | |
Beginning balance, outstanding | 5,758,970 | |
Preferred Stock Series C Conversion, shares | 10,141,725 | [1] |
Preferred Stock Series B Dividends, shares | 1,751 | |
Preferred Stock Series B Dividends, value | $ | $ 1,350 | |
Preferred Stock Series B Dividends, per share | $ / shares | $ 0.77 | |
Warrants - Abeyance, Shares | 308,411 | [2] |
Issuance of Common Stock of Prior Conversion of Convertible Notes, Shares | 141,982 | |
Ending balance, issued | 16,352,839 | |
Ending balance, outstanding | 16,352,839 | |
[1] | Net proceeds or fair value on grant date, as applicable. | |
[2] | Shares previously held in abeyance until such time as it would not result in the investor exceeding its beneficial ownership limitation (4.99% of the Company's outstanding common stock). |
STOCKHOLDERS' DEFICIT (Details
STOCKHOLDERS' DEFICIT (Details 1) - USD ($) | 3 Months Ended | ||
Jun. 30, 2018 | Mar. 31, 2018 | ||
Warrants outstanding | 10,261 | 256,448 | |
Warrant exercise price | $ 321.01 | $ 12.94 | |
Warrants - Exercise Price 0.25 [Member] | |||
Warrants outstanding | [1] | 448 | |
Warrant exercise price | [1] | $ 0.25 | |
Warrant Expiration date | [1] | Aug. 13, 2018 | |
Warrant intrinsic value | [1] | $ 114 | |
Warrants - Exercise Price 69.82 [Member] | |||
Warrants outstanding | [2] | 2,667 | |
Warrant exercise price | [2] | $ 69.82 | |
Warrant Expiration date | [2] | Apr. 21, 2019 | |
Warrants - Exercise Price 37.50 [Member] | |||
Warrants outstanding | [3] | 4,972 | |
Warrant exercise price | [3] | $ 37.50 | |
Warrant Expiration date | [3] | Apr. 21, 2021 | |
Warrants - Exercise Price 6.25 [Member] | |||
Warrants outstanding | [4] | 64,000 | |
Warrant exercise price | [4] | $ 6.25 | |
Warrant Expiration date | [4] | Jun. 12, 2022 | |
Warrants - Exercise Price 0.39 [Member] | |||
Warrants outstanding | [5] | 1,000,000 | |
Warrant exercise price | [5] | $ 0.39 | |
Warrant Expiration date | [5] | May 24, 2023 | |
Warrant intrinsic value | [5] | $ 113,900 | |
Warrants [Member] | |||
Warrants outstanding | 1,072,088 | ||
Warrant intrinsic value | $ 114,014 | ||
[1] | Warrants issued in connection with the Rogers Loan. The warrants were exercisable on the grant date (August 13, 2013) and remain exercisable until August 13, 2018. The exercise price was lowered to $0.01 per share on August 12, 2015. | ||
[2] | Warrants issued in connection with the sale of units in the Company's unit offering in April 2014. The Warrants became exercisable on April 21, 2014 and will remain exercisable thereafter until April 21, 2019. | ||
[3] | Warrants issued in connection with the sale of convertible notes. The warrants were exercisable on the grant date (April 26, 2016) and remain exercisable until April 26, 2021. | ||
[4] | Warrants issued in connection with the Initial Tranche of the funding from Vantage. The warrants were exercisable on the grant date (June 12, 2017) and remain exercisable until June 12, 2022. | ||
[5] | Warrants issued in connection with the Severance Agreement with Richard Azar. The warrants were exercisable on the grant date (May 25, 2018) and remain exercisable until May 24, 2023. |
STOCKHOLDERS' DEFICIT (Detail50
STOCKHOLDERS' DEFICIT (Details Narrative) | Jul. 25, 2018 | Jul. 09, 2018USD ($)shares | Apr. 20, 2018shares | Mar. 05, 2018 | Feb. 12, 2018shares | Oct. 05, 2017USD ($)shares | Oct. 04, 2017USD ($)shares | Aug. 23, 2017USD ($)$ / sharesshares | Aug. 02, 2017USD ($)$ / sharesshares | Jul. 10, 2017USD ($)shares | Jun. 19, 2017shares | Apr. 04, 2017USD ($)shares | Mar. 31, 2017USD ($)shares | Dec. 23, 2016shares | Nov. 17, 2016USD ($)shares | Oct. 07, 2016USD ($)shares | Sep. 02, 2016USD ($)shares | Sep. 01, 2016USD ($)$ / sharesshares | Apr. 19, 2016USD ($)shares | Apr. 06, 2016USD ($)$ / sharesshares | Aug. 13, 2018shares | Jun. 30, 2017USD ($)$ / sharesshares | Jun. 30, 2018USD ($)$ / sharesshares | Jun. 30, 2017USD ($)$ / sharesshares | Mar. 31, 2018USD ($)$ / sharesshares | Apr. 30, 2018shares | Feb. 08, 2018shares | Dec. 31, 2017USD ($) | Aug. 25, 2016$ / shares | Apr. 26, 2016shares | |
Reverse stock split ratio | 0.04 | 0.04 | |||||||||||||||||||||||||||||
Conversion inducement | $ | $ 20,000 | ||||||||||||||||||||||||||||||
Stock dividend recognized | 1,751 | ||||||||||||||||||||||||||||||
Number of shares issued | 1,067,600 | ||||||||||||||||||||||||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 321.01 | $ 12.94 | |||||||||||||||||||||||||||||
Interest expense | $ | $ 965,296 | $ 931,563 | |||||||||||||||||||||||||||||
Shares issued under share-based compensation plans | 19,010 | ||||||||||||||||||||||||||||||
Value of shares issued under share-based compensation plans | $ | $ 23,573 | ||||||||||||||||||||||||||||||
Fair value of derivative liability | $ | 21,662 | $ 6,491 | $ 5 | 6,491 | $ 5 | ||||||||||||||||||||||||||
Change in Fair Value of Derivative Liability | $ | (15,171) | ||||||||||||||||||||||||||||||
Warrants Outstanding | 10,261 | 256,448 | |||||||||||||||||||||||||||||
Proceeds from purchase of shares | $ | $ 2,000,000 | ||||||||||||||||||||||||||||||
Warrant Conversion, Shares | [1] | 308,411 | |||||||||||||||||||||||||||||
Derivative liability | $ | $ 21,662 | $ 6,491 | $ 5 | $ 6,491 | $ 5 | ||||||||||||||||||||||||||
Intrinsic value of warrants | $ | 114,014 | $ 232 | |||||||||||||||||||||||||||||
Conversion of debt amount | $ | $ 142 | ||||||||||||||||||||||||||||||
Derivative Warrant [Member] | |||||||||||||||||||||||||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 6.25 | $ 6.25 | |||||||||||||||||||||||||||||
Warrants issued during the period (shares) | 64,000 | ||||||||||||||||||||||||||||||
Shares fair value on grant date | $ | $ 288,592 | ||||||||||||||||||||||||||||||
Risk free interest rate | 1.78% | 1.91% | 1.24% | ||||||||||||||||||||||||||||
Expected life | 5 years | 81 years | 2 years | ||||||||||||||||||||||||||||
Expected volatility | 135.42% | 145.70% | 179.15% | ||||||||||||||||||||||||||||
Divident yield | 0.00% | 0.00% | |||||||||||||||||||||||||||||
Warrants [Member] | |||||||||||||||||||||||||||||||
Warrants Outstanding | 1,072,088 | ||||||||||||||||||||||||||||||
Warrants - Exercise Price 69.82 [Member] | |||||||||||||||||||||||||||||||
Warrant exercise price (in dollars per share) | $ / shares | [2] | $ 69.82 | |||||||||||||||||||||||||||||
Warrants Outstanding | [2] | 2,667 | |||||||||||||||||||||||||||||
Redeemable Convertible Subordinated Debenture [Member] | |||||||||||||||||||||||||||||||
Share price (in dollars per share) | $ / shares | $ 81.25 | ||||||||||||||||||||||||||||||
Investor [Member] | |||||||||||||||||||||||||||||||
Number of common stock issued upon warrant exercise | 4,417,911 | ||||||||||||||||||||||||||||||
Investor [Member] | Warrants [Member] | |||||||||||||||||||||||||||||||
Warrant fair value | $ | $ 3,909,500 | $ 200,000 | |||||||||||||||||||||||||||||
Number of common stock issued upon warrant exercise | 308,411 | ||||||||||||||||||||||||||||||
Investor [Member] | Debenture [Member] | |||||||||||||||||||||||||||||||
Shares of stock issued on conversion | 141,982 | ||||||||||||||||||||||||||||||
Common Stock [Member] | |||||||||||||||||||||||||||||||
Shares of stock issued on conversion | 800 | ||||||||||||||||||||||||||||||
Preferred stock conversion ratio | 1.6 | ||||||||||||||||||||||||||||||
Share price (in dollars per share) | $ / shares | $ 94.50 | ||||||||||||||||||||||||||||||
Shares of stock to be issued for unpaid dividends | 131,313 | ||||||||||||||||||||||||||||||
Payment of preferred stock dividend with common stock | $ | $ 34,986 | ||||||||||||||||||||||||||||||
Payment of preferred stock dividend with common stock (shares) | 2,366 | ||||||||||||||||||||||||||||||
Common Stock [Member] | Subsequent Event [Member] | |||||||||||||||||||||||||||||||
Shares of stock issued on conversion | 9,091,083 | ||||||||||||||||||||||||||||||
Conversion of shares (shares) | 143 | ||||||||||||||||||||||||||||||
Series C Preferred Stock [Member] | |||||||||||||||||||||||||||||||
Preferred stock, shares outstanding | 1,091 | 1,132 | |||||||||||||||||||||||||||||
Stock conversion price (in dollars per share) | $ / shares | $ 3.25 | ||||||||||||||||||||||||||||||
Charge to additional paid in capital for stock dividend | $ | $ 698,122 | $ 1,928,084 | |||||||||||||||||||||||||||||
Series C Preferred Stock [Member] | Subsequent Event [Member] | |||||||||||||||||||||||||||||||
Number of shares issued | 210 | ||||||||||||||||||||||||||||||
Number of shares issued, value | $ | $ 2,000,000 | ||||||||||||||||||||||||||||||
Series C Preferred Stock [Member] | Subsequent Event [Member] | Minimum [Member] | |||||||||||||||||||||||||||||||
Preferred stock dividend rate | 24.95% | ||||||||||||||||||||||||||||||
Dividend rate | 24.95% | ||||||||||||||||||||||||||||||
Series C Preferred Stock [Member] | Subsequent Event [Member] | Maximum [Member] | |||||||||||||||||||||||||||||||
Preferred stock dividend rate | 34.95% | ||||||||||||||||||||||||||||||
Dividend rate | 34.95% | ||||||||||||||||||||||||||||||
Series B Preferred Stock [Member] | |||||||||||||||||||||||||||||||
Preferred stock conversion shares | 157,714 | ||||||||||||||||||||||||||||||
Preferred stock conversion ratio | 25 | 0.2857 | |||||||||||||||||||||||||||||
Shares issued in acquisition | 552,000 | ||||||||||||||||||||||||||||||
Share price (in dollars per share) | $ / shares | $ 25 | $ 0.50 | |||||||||||||||||||||||||||||
Value of shares issued in acquisition | $ | $ 13,800,000 | ||||||||||||||||||||||||||||||
Liquidation preference (in dollars per share) | $ / shares | $ 25 | ||||||||||||||||||||||||||||||
Stock dividend recognized | 1,753 | ||||||||||||||||||||||||||||||
Charge to additional paid in-capital | $ | $ 877 | ||||||||||||||||||||||||||||||
Preferred stock, shares outstanding | 408,508 | 408,508 | 408,508 | 408,508 | |||||||||||||||||||||||||||
Dividends payable | $ | $ 877 | $ 877 | $ 606,764 | ||||||||||||||||||||||||||||
Preferred stock dividend rate | 6.00% | ||||||||||||||||||||||||||||||
Fair value of preferred shares | $ | $ 1,753 | $ 1,753 | $ 14,898,038 | ||||||||||||||||||||||||||||
Number of shares issued | 1,751 | ||||||||||||||||||||||||||||||
Conversion of shares (shares) | 143,942 | ||||||||||||||||||||||||||||||
Issuance on shares upon conversion preferred shares | 40,998 | ||||||||||||||||||||||||||||||
Dividend rate | 6.00% | ||||||||||||||||||||||||||||||
Fair value of stock | $ | $ 14,898,038 | ||||||||||||||||||||||||||||||
Issuance price of common stock | $ / shares | $ 87.50 | $ 87.50 | |||||||||||||||||||||||||||||
Series A Convertible Preferred Stock [Member] | |||||||||||||||||||||||||||||||
Shares of stock issued on conversion | (500) | ||||||||||||||||||||||||||||||
Preferred stock, shares outstanding | 0 | 0 | |||||||||||||||||||||||||||||
Institutional Investors [Member] | |||||||||||||||||||||||||||||||
Shares of common stock called by warrants | 58,052,599 | ||||||||||||||||||||||||||||||
Institutional Investors [Member] | First Warrant [Member] | |||||||||||||||||||||||||||||||
Number of shares issued | 32,400 | ||||||||||||||||||||||||||||||
Shares of common stock called by warrants | 110,447,753 | ||||||||||||||||||||||||||||||
Number of common stock issued upon warrant exercise | 55,385 | ||||||||||||||||||||||||||||||
Number of additional common stock issued upon warrant exercise | 101,710 | ||||||||||||||||||||||||||||||
Placement agent fees | $ | $ 427,500 | ||||||||||||||||||||||||||||||
Conversion of shares (shares) | 52,395,154 | ||||||||||||||||||||||||||||||
Warrant Conversion, Shares | 15,580,000 | 31,545,154 | |||||||||||||||||||||||||||||
Proceeds from warrant exercises | $ | $ 4,500,000 | ||||||||||||||||||||||||||||||
Institutional Investors [Member] | Warrants Issued in 2014 [Member] | |||||||||||||||||||||||||||||||
Shares of common stock called by warrants | 2,667 | ||||||||||||||||||||||||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 69.82 | $ 69.82 | |||||||||||||||||||||||||||||
Fair value of derivative liability | $ | $ 5 | $ 771 | |||||||||||||||||||||||||||||
Change in Fair Value of Derivative Liability | $ | 20,891 | ||||||||||||||||||||||||||||||
Derivative liability | $ | 5 | $ 771 | |||||||||||||||||||||||||||||
Institutional Investors [Member] | Redeemable Convertible Subordinated Debenture [Member] | First Warrant [Member] | |||||||||||||||||||||||||||||||
Shares of common stock called by warrants | 55,385 | ||||||||||||||||||||||||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 3.25 | ||||||||||||||||||||||||||||||
Institutional Investors [Member] | Common Stock [Member] | |||||||||||||||||||||||||||||||
Issuance price of common stock | $ / shares | $ 81.25 | ||||||||||||||||||||||||||||||
Conversion of debt amount | $ | $ 35,000 | ||||||||||||||||||||||||||||||
Number of shares issued upon conversion of debt (shares) | 70,189 | ||||||||||||||||||||||||||||||
Number of shares issued upon conversion of principal debt (shares) | 431 | ||||||||||||||||||||||||||||||
Number of shares issued upon conversion of premiums of debt (shares) | 69,758 | ||||||||||||||||||||||||||||||
RAD2 [Member] | Series B Preferred Stock [Member] | |||||||||||||||||||||||||||||||
Shares issued in acquisition | 200,000 | ||||||||||||||||||||||||||||||
Segundo Resources, LLC (Affiliate of RAD2) [Member] | Series B Preferred Stock [Member] | |||||||||||||||||||||||||||||||
Shares issued in acquisition | 352,000 | ||||||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Institutional Investors [Member] | Redeemable Convertible Subordinated Debenture [Member] | |||||||||||||||||||||||||||||||
Shares of stock issued on conversion | 6,523 | ||||||||||||||||||||||||||||||
Stock conversion price (in dollars per share) | $ / shares | $ 3.25 | ||||||||||||||||||||||||||||||
Original issue discount | 5.00% | ||||||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Institutional Investors [Member] | Redeemable Convertible Subordinated Debenture [Member] | First Warrant [Member] | |||||||||||||||||||||||||||||||
Number of common stock issued upon warrant exercise | 55,385 | ||||||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Institutional Investors [Member] | Series C Preferred Stock [Member] | |||||||||||||||||||||||||||||||
Shares of stock issued on conversion | (123) | ||||||||||||||||||||||||||||||
Value of shares issued on conversion | $ | $ (1,200,000) | ||||||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Institutional Investors [Member] | Series C Preferred Stock [Member] | Ninth Closing [Member] | |||||||||||||||||||||||||||||||
Number of shares issued | 2,000,000 | ||||||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Institutional Investors [Member] | Series C Preferred Stock [Member] | Ninth Closing [Member] | Investor [Member] | |||||||||||||||||||||||||||||||
Number of shares issued | 210 | ||||||||||||||||||||||||||||||
Number of shares issued, value | $ | $ 2,000,000 | ||||||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Institutional Investors [Member] | Series C Preferred Stock [Member] | First Closing [Member] | |||||||||||||||||||||||||||||||
Number of shares issued | 212 | ||||||||||||||||||||||||||||||
Proceeds from purchase of shares | $ | $ 2,000,000 | ||||||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Institutional Investors [Member] | Series C Preferred Stock [Member] | Second Closing [Member] | |||||||||||||||||||||||||||||||
Number of shares issued | 106 | ||||||||||||||||||||||||||||||
Proceeds from purchase of shares | $ | $ 1,000,000 | ||||||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Institutional Investors [Member] | Series C Preferred Stock [Member] | Third Closing [Member] | |||||||||||||||||||||||||||||||
Number of shares issued | 105 | ||||||||||||||||||||||||||||||
Proceeds from purchase of shares | $ | $ 1,000,000 | ||||||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Institutional Investors [Member] | Series C Preferred Stock [Member] | Fourth Closing [Member] | |||||||||||||||||||||||||||||||
Number of shares issued | 105 | ||||||||||||||||||||||||||||||
Proceeds from purchase of shares | $ | $ 1,000,000 | ||||||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Institutional Investors [Member] | Series C Preferred Stock [Member] | Fifth Closing [Member] | |||||||||||||||||||||||||||||||
Number of shares issued | 105 | ||||||||||||||||||||||||||||||
Proceeds from purchase of shares | $ | $ 1,000,000 | ||||||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Institutional Investors [Member] | Series C Preferred Stock [Member] | Sixth Closing [Member] | |||||||||||||||||||||||||||||||
Number of shares issued | 525 | ||||||||||||||||||||||||||||||
Proceeds from purchase of shares | $ | $ 5,000,000 | ||||||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Institutional Investors [Member] | Series C Preferred Stock [Member] | Seventh Closing [Member] | |||||||||||||||||||||||||||||||
Number of shares issued | 525 | ||||||||||||||||||||||||||||||
Proceeds from purchase of shares | $ | $ 5,000,000 | ||||||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Institutional Investors [Member] | 6% Series C Redeemable Convertible Preferred Stock [Member] | |||||||||||||||||||||||||||||||
Shares of stock issued on conversion | 64,738 | ||||||||||||||||||||||||||||||
Preferred stock dividend rate | 6.00% | ||||||||||||||||||||||||||||||
Fair value of preferred shares | $ | $ 5,260,000 | ||||||||||||||||||||||||||||||
Number of shares issued | 474 | 53 | 527 | ||||||||||||||||||||||||||||
Stock conversion price (in dollars per share) | $ / shares | $ 81.25 | ||||||||||||||||||||||||||||||
Original issue discount | 5.00% | ||||||||||||||||||||||||||||||
Number of shares issued, value | $ | $ 4,736,550 | $ 526,450 | |||||||||||||||||||||||||||||
Proceeds from sale of shares | $ | 4,500,000 | 500,000 | |||||||||||||||||||||||||||||
Stock original issue discount | $ | 236,550 | 263,000 | |||||||||||||||||||||||||||||
Interest expense | $ | $ 26,450 | ||||||||||||||||||||||||||||||
Legal fees | $ | $ 514,000 | ||||||||||||||||||||||||||||||
Dividend rate | 6.00% | ||||||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Institutional Investors [Member] | Common Stock [Member] | |||||||||||||||||||||||||||||||
Shares of stock issued on conversion | 378,464 | ||||||||||||||||||||||||||||||
Stock dividend recognized | 5,605,393 | ||||||||||||||||||||||||||||||
Funding Agreement [Member] | Vantage Fund [Member] | |||||||||||||||||||||||||||||||
Vantage funding agreement amount | $ | $ 6,000,000 | ||||||||||||||||||||||||||||||
Intitial tranche funding | $ | $ 400,000 | ||||||||||||||||||||||||||||||
Funding Agreement [Member] | Vantage Fund [Member] | Warrants [Member] | |||||||||||||||||||||||||||||||
Shares of common stock called by warrants | 1,600,000 | ||||||||||||||||||||||||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 0.25 | ||||||||||||||||||||||||||||||
Warrant fair value | $ | $ 284,305 | ||||||||||||||||||||||||||||||
Risk free interest rate | 1.78% | ||||||||||||||||||||||||||||||
Expected life | 5 years | ||||||||||||||||||||||||||||||
Expected volatility | 135.42% | ||||||||||||||||||||||||||||||
Divident yield | 0.00% | ||||||||||||||||||||||||||||||
Warrants expired during period | 41,300 | ||||||||||||||||||||||||||||||
Convertible Promissory Note Purchase Agreement [Member] | 6% Convertible Promissory Notes [Member] | |||||||||||||||||||||||||||||||
Shares of common stock called by warrants | 4,971 | ||||||||||||||||||||||||||||||
Digital Marketing Advisor [Member] | |||||||||||||||||||||||||||||||
Amount payable under agreement | $ | $ 20,000 | ||||||||||||||||||||||||||||||
Amount payable under agreement term | $ | $ 50,000 | $ 200,000 | |||||||||||||||||||||||||||||
Issuance of restricted stock award | 150,000 | ||||||||||||||||||||||||||||||
Number of shares issuable under agreement | 100,000,000 | ||||||||||||||||||||||||||||||
[1] | Shares previously held in abeyance until such time as it would not result in the investor exceeding its beneficial ownership limitation (4.99% of the Company's outstanding common stock). | ||||||||||||||||||||||||||||||
[2] | Warrants issued in connection with the sale of units in the Company's unit offering in April 2014. The Warrants became exercisable on April 21, 2014 and will remain exercisable thereafter until April 21, 2019. |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) | 3 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Options outstanding | |
Exercise price | $ / shares | $ 1,294 |
Remaining Life | 2 years 3 months 18 days |
Options Outstanding | 78 |
Options Exercisable | 78 |
SHARE-BASED COMPENSATION (Det52
SHARE-BASED COMPENSATION (Details Narrative) - USD ($) | 3 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Stock options outstanding (in shares) | 78 | 798 |
Stock options outstanding | $ 1,294 | $ 885 |
Stock option compensation expense | $ 0 | $ 4,816 |
LOSS PER COMMON SHARE (Details)
LOSS PER COMMON SHARE (Details) - USD ($) | 3 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Earnings Per Share [Abstract] | ||
Net loss | $ (3,512,097) | $ (3,048,978) |
Less preferred dividends | (700,344) | (359,294) |
Net loss attributable to common stockholders | $ (4,212,441) | $ (3,408,272) |
Weighted average number of common shares - basic and diluted | 9,501,394 | 1,217,043 |
Loss per common share - basic and diluted | $ (.44) | $ (2.80) |
SUPPLEMENTAL CASH FLOW INFORM54
SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) | 3 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Supplemental cash flow information | ||
Interest | $ 220,881 | $ 584,472 |
Income taxes | $ 0 | $ 0 |
SUPPLEMENTAL CASH FLOW INFORM55
SUPPLEMENTAL CASH FLOW INFORMATION (Details 1) - USD ($) | 3 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Supplemental Cash Flow Elements [Abstract] | ||
Reduction in Accounts Payable for Payments Previously Accrued Capital Expenditures | $ 744,803 | $ 4,395 |
Issuance of Common Stock of Prior Conversion of Convertible Notes | 142 | |
Change in Estimate for Asset Retirement Obligations | 3,942 | 9,945 |
Debt Discounts on Notes Payable | 36,712 | |
Issuance of Common Stock for Common Stock Payable | 23,573 | |
Stock Dividends Distributable but not Issued | 698,996 | 359,235 |
Issuance of Stock Dividends | 1,348 | 59 |
Conversion of Preferred Stock B to Common Stock | 1,025 | |
Conversion of Preferred Stock C to Common Stock | 10,142 | $ 1,275 |
Warrants Issued in Abeyance | $ 308 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | Jul. 25, 2018 | Jul. 09, 2018 | Dec. 23, 2016 | Apr. 19, 2016 | Aug. 13, 2018 |
Subsequent Event [Line Items] | |||||
Issuance of Series Preferred Stock (in shares) | 1,067,600 | ||||
Common Stock [Member] | |||||
Subsequent Event [Line Items] | |||||
Shares issued upon conversion of Series C Preferred Stock (in shares) | 800 | ||||
Subsequent Event [Member] | Common Stock [Member] | |||||
Subsequent Event [Line Items] | |||||
Shares issued upon conversion of Series C Preferred Stock (in shares) | 9,091,083 | ||||
Number of converted shares | 143 | ||||
Number of additional shares issued with true-ups associated with prior conversions of Series C preferred stock | 14,603,000 | ||||
Number of shares issueable for true-ups associated with prior conversions of Series C preferred stock | 15,335,524 | ||||
Subsequent Event [Member] | Series C Preferred Stock [Member] | |||||
Subsequent Event [Line Items] | |||||
Issuance of Series Preferred Stock | $ 2,000,000 | ||||
Issuance of Series Preferred Stock (in shares) | 210 | ||||
Subsequent Event [Member] | Series C Preferred Stock [Member] | Minimum [Member] | |||||
Subsequent Event [Line Items] | |||||
Percentage of Ownership after transaction | 4.99% | ||||
Subsequent Event [Member] | Series C Preferred Stock [Member] | Maximum [Member] | |||||
Subsequent Event [Line Items] | |||||
Percentage of Ownership after transaction | 9.99% |