Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Dec. 31, 2018 | Feb. 13, 2019 | |
Proceeds to be received under farm out agreement | ||
Entity Registrant Name | GULFSLOPE ENERGY, INC. | |
Entity Central Index Key | 1,341,726 | |
Document Type | 10-Q | |
Trading Symbol | GSPE | |
Document Period End Date | Dec. 31, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-30 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Common Stock, Shares Outstanding | 851,338,272 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,019 |
Condensed Balance Sheets (Unaud
Condensed Balance Sheets (Unaudited) - USD ($) | Dec. 31, 2018 | Sep. 30, 2018 |
Current Assets | ||
Cash | $ 3,796,786 | $ 5,621,814 |
Accounts Receivable - Joint Interest Owners | 12,994,430 | 6,286,796 |
Prepaid Expenses and Other Current Assets | 139,468 | 32,042 |
Total Current Assets | 16,930,684 | 11,940,652 |
Property and Equipment, Net of Depreciation | 13,477 | 14,786 |
Oil and Natural Gas Properties, Full Cost Method of Accounting Unproved Properties | 11,203,790 | 8,112,784 |
Other Non-Current Assets | 24,785 | 24,785 |
Total Non-Current Assets | 11,242,052 | 8,152,355 |
Total Assets | 28,172,736 | 20,093,007 |
Current Liabilities | ||
Accounts Payable | 17,841,835 | 7,591,236 |
Deposit from Joint Interest Owners | 1,456,786 | 4,078,786 |
Related Party Payable | 321,264 | 306,386 |
Accrued Interest Payable | 1,852,044 | 1,732,239 |
Accrued Expenses and Other Payables | 268,862 | 268,862 |
Loans from Related Parties | 8,725,500 | 9,084,500 |
Notes Payable | 387,275 | |
Convertible Promissory Notes Payable | 227,000 | 135,000 |
Derivative Financial Instrument | 467,976 | 271,710 |
Funds Received from Capital Raise | 965,800 | |
Other | 75,040 | 44,723 |
Total Current Liabilities | 31,623,582 | 24,479,242 |
Total Liabilities | 31,623,582 | 24,479,242 |
Stockholders' Deficit | ||
Preferred Stock; par value ($0.001); Authorized 50,000,000 shares none issued or outstanding | ||
Common Stock; par value ($0.001); Authorized 1,500,000,000 shares; issued and outstanding 851,338,272 and 832,013,272 as of December 31, 2018 and September 30, 2018,, respectively | 851,337 | 832,013 |
Additional Paid-in-Capital | 37,979,934 | 36,640,009 |
Accumulated Deficit | (42,282,117) | (41,858,257) |
Total Stockholders' Deficit | (3,450,846) | (4,386,235) |
Total Liabilities and Stockholders' Deficit | $ 28,172,736 | $ 20,093,007 |
Condensed Balance Sheets (Una_2
Condensed Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Dec. 31, 2018 | Sep. 30, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 50,000,000 | 50,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized | 1,500,000,000 | 1,500,000,000 |
Common stock, issued | 851,338,272 | 832,013,272 |
Common stock, outstanding | 851,338,272 | 832,013,272 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | ||
Revenues | ||
General & Administrative Expenses | 129,438 | $ 289,327 |
Net Loss from Operations | (129,438) | (289,327) |
Other Income/(Expenses): | ||
Interest Expense, net | (98,157) | (225,077) |
Loss on Derivative Financial Instrument | (196,266) | |
Net Loss Before Income Taxes | (423,861) | (514,404) |
Provision for Income Taxes | ||
Net Loss | $ (423,861) | $ (514,404) |
Loss Per Share - Basic and Diluted (in dollars per share) | $ 0 | $ 0 |
Weighted Average Shares Outstanding - Basic and Diluted (in shares) | 832,013,373 | 696,744,886 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
OPERATING ACTIVITIES | ||
Net Loss | $ (423,861) | $ (514,404) |
Adjustments to Reconcile Net Loss to Net Cash Used In Operating Activities: | ||
Depreciation | 1,309 | 2,174 |
Stock Based Compensation | 74,342 | 65,506 |
Debt Discount Amortization | 78,864 | |
Loss on Derivative Financial Instrument | 196,266 | |
Changes in Operating Assets and Liabilities: | ||
(Increase)/Decrease in Accounts Receivable - Joint Interest Owners | (6,707,634) | |
(Increase)/Decrease in Prepaid Expenses and Other Current Assets | 38,883 | 38,798 |
Increase/(Decrease) in Deposits from Joint Interest Owners | (2,622,000) | |
Increase/(Decrease) in Accounts Payable | 8,890,616 | 3,067 |
Increase/(Decrease) in Related Party Payable | 14,878 | 5,916 |
Increase/(Decrease) in Other | 30,317 | |
Increase/(Decrease) in Accrued Interest | 119,805 | 144,205 |
Net Cash Used In Operating Activities | (387,079) | (175,874) |
INVESTING ACTIVITIES | ||
Leases Purchased / Lease Rentals Paid | (21,000) | |
Investments in Oil and Natural Gas Properties | (1,390,914) | (183,185) |
Proceeds From Sale of Working Interest | 290,589 | |
Net Cash (Used In)/Provided By Investing Activities | (1,411,914) | 107,404 |
FINANCING ACTIVITIES | ||
Proceeds from Convertible Promissory Notes and Warrants | 200,000 | |
Payments on Note Payable | (26,035) | (29,473) |
Net Cash (Used In)/Provided By Financing Activities | (26,035) | 170,527 |
Net Increase/(Decrease) in Cash | (1,825,028) | 102,057 |
Beginning Cash Balance | 5,621,814 | 6,426 |
Ending Cash Balance | 3,796,786 | 108,483 |
Supplemental Schedule of Cash Flow Activities: | ||
Cash Paid for Interest | 1,335 | 2,008 |
Non-Cash Financing and Investing Activities: | ||
Prepaid Insurance Financed by Note Payable | 146,310 | 156,718 |
Capital Expenditures Included in Accounts Payable | 1,360,433 | 9,238 |
Stock-Based Compensation Capitalized to Unproved Properties | 318,658 | $ 27,875 |
Funds Received from Capital Raise Transferred to Equity | $ 965,800 |
ORGANIZATION AND NATURE OF BUSI
ORGANIZATION AND NATURE OF BUSINESS | 3 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND NATURE OF BUSINESS | NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS GulfSlope Energy, Inc. (the “Company” or “GulfSlope”), a Delaware corporation, is an independent crude oil and natural gas exploration and production company whose interests are concentrated in the United States Gulf of Mexico (“GOM”) federal waters offshore Louisiana. The Company currently has under lease fourteen federal Outer Continental Shelf blocks (referred to as “prospect,” “portfolio” or “leases” in this Report). As of December 31, 2018, we have no production or proved reserves. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES The condensed financial statements included herein are unaudited. However, these condensed financial statements include all adjustments (consisting of normal recurring adjustments), which, in the opinion of management are necessary for a fair presentation of financial position, results of operations and cash flows for the interim periods. The results of operations for interim periods are not necessarily indicative of the results to be expected for an entire year. The preparation of financial statements in accordance with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the Company’s condensed financial statements and accompanying notes. Actual results could differ materially from those estimates. Certain information, accounting policies, and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted in this Form 10-Q pursuant to certain rules and regulations of the Securities and Exchange Commission (“SEC”). The condensed financial statements should be read in conjunction with the audited financial statements for the year ended September 30, 2018, which were included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2018 and filed with the Securities and Exchange Commission on December 31, 2018. Cash GulfSlope considers highly liquid investments with insignificant interest rate risk and original maturities to the Company of three months or less to be cash equivalents. There were no cash equivalents at December 31, 2018 and September 30, 2018. Liquidity/Going Concern The Company has incurred accumulated losses as of December 31, 2018 of $42.3 million, and has a net capital deficiency. Further losses are anticipated in developing its business, and there exists substantial doubt about the Company’s ability to continue as a going concern. As of December 31, 2018, the Company had $3.8 million of unrestricted cash on hand, $3.4 million of this amount is for the payment of joint payables from drilling operations. The Company estimates that it will need to raise a minimum of $15 million to meet its obligations and planned expenditures through February 2020. The Company plans to finance operations and planned expenditures through equity and/or debt financings and/or farm-out agreements. The Company also plans to extend the agreements associated with all loans, the accrued interest payable on these loans, as well as the Company’s accrued liabilities. There are no assurances that financing will be available with acceptable terms, if at all. If the Company is not successful in obtaining financing, operations would need to be curtailed or ceased or the Company would need to sell assets or consider alternative plans up to and including restructuring. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Full Cost Method The Company uses the full cost method of accounting for its oil and natural gas exploration and development activities as defined by the SEC. Under the full cost method of accounting, all costs associated with successful and unsuccessful exploration and development activities are capitalized on a country-by-country basis into a single cost center (“full cost pool”). Such costs include property acquisition costs, geological and geophysical (“G&G”) costs, carrying charges on non-producing properties, costs of drilling both productive and non-productive wells and overhead charges directly related to acquisition, exploration and development activities. Proceeds from property sales will generally be credited to the full cost pool, with no gain or loss recognized, unless such a sale would significantly alter the relationship between capitalized costs and the proved reserves attributable to these costs. A significant alteration would typically involve a sale of 25% or more of the proved reserves related to a single full cost pool. Proved properties are amortized on a country-by-country basis using the units of production method (“UOP”), whereby capitalized costs are amortized over total proved reserves. The amortization base in the UOP calculation includes the sum of proved property, net of accumulated depreciation, depletion and amortization (“DD&A”), estimated future development costs (future costs to access and develop proved reserves), and asset retirement costs, less related salvage value. The costs of unproved properties and related capitalized costs (such as G&G costs) are withheld from the amortization calculation until such time as they are either developed or abandoned. Unproved properties and properties under development are reviewed for impairment at least quarterly and are determined through an evaluation considering, among other factors, seismic data, requirements to relinquish acreage, drilling results, remaining time in the commitment period, remaining capital plan, and political, economic, and market conditions. In countries where proved reserves exist, exploratory drilling costs associated with dry holes are transferred to proved properties immediately upon determination that a well is dry and amortized accordingly. In countries where a reserve base has not yet been established, impairments are charged to earnings. Companies that use the full cost method of accounting for oil and natural gas exploration and development activities are required to perform a ceiling test calculation each quarter. The full cost ceiling test is an impairment test prescribed by SEC Regulation S-X Rule 4-10. The ceiling test is performed quarterly, on a country-by-country basis, utilizing the average of prices in effect on the first day of the month for the preceding twelve-month period. The cost center ceiling is defined as the sum of (a) estimated future net revenues, discounted at 10% per annum, from proved reserves, (b) the cost of properties not being amortized, if any, and (c) the lower of cost or market value of unproved properties included in the cost being amortized. If such capitalized costs exceed the ceiling, the Company will record a write-down to the extent of such excess as a non-cash charge to earnings. Any such write-down will reduce earnings in the period of occurrence and results in a lower depreciation, depletion and amortization rate in future periods. A write-down may not be reversed in future periods even though higher oil and natural gas prices may subsequently increase the ceiling. As of December 31, 2018, the Company’s oil and natural gas properties consisted of wells in process, capitalized exploration and acquisition costs for unproved properties and no proved reserves. Basic and Dilutive Earnings Per Share Basic income/(loss) per share (“EPS”) is computed by dividing net income/(loss) (the numerator) by the weighted average number of common shares outstanding for the period (denominator). Diluted EPS is computed by dividing net income/(loss) by the weighted average number of common shares and potential common shares outstanding (if dilutive) during each period. Potential common shares include stock options, warrants, convertible notes and restricted stock. The number of potential common shares outstanding relating to stock options, warrants, convertible notes and restricted stock is computed using the treasury stock or if-converted method. As the Company has incurred losses for the three months ended December 31, 2018 and 2017, the potentially dilutive shares are anti-dilutive and are thus not added into the loss per share calculations. As of December 31, 2018 and 2017, there were 223,537,733 and 163,805,888 potentially dilutive shares, respectively. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606). On February 25, 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) The Company has evaluated all other recent accounting pronouncements and believes that none of them will have a significant effect on the Company’s financial statements. |
OIL AND NATURAL GAS PROPERTIES
OIL AND NATURAL GAS PROPERTIES | 3 Months Ended |
Dec. 31, 2018 | |
Oil and Gas Exploration and Production Industries Disclosures [Abstract] | |
OIL AND NATURAL GAS PROPERTIES | NOTE 3 – OIL AND NATURAL GAS PROPERTIES The Company currently has under lease fourteen federal Outer Continental Shelf blocks and has licensed 2.2 million acres of three-dimensional (3-D) seismic data in its area of concentration. Two of the fourteen lease blocks were awarded in the quarter ended December 31, 2018. In January 2018, the Company entered into a strategic partnership with Delek Group Ltd. (“Delek”), and Texas South Energy, Inc. (“Texas South”) (collectively, the “Parties”) and executed a participation agreement for a multi-phase exploration program. Under the terms of the Agreement, the Parties have committed to drill the Company’s “Canoe” and “Tau” prospects (the “Initial Phase”) with Delek having the option to participate in two additional two-well drilling phases and a final, three-well drilling phase (collectively, the “Phases”). In each Phase, Delek will earn a 75% working interest upon paying 90% of the exploratory costs associated with drilling each exploratory well. The Company will retain a 20% working interest while paying 8% of the exploratory costs associated with drilling each well. In addition, Delek will pay the Company approximately $1.1 million in cash for each Prospect when the respective exploration plan is filed with BOEM. Also, each Party will be responsible for their pro rata share (based on working interest) of delay rentals associated with the Prospects. The Company will be the Operator during exploratory drilling of the Prospect, however, subsequent to a commercial discovery, Delek will have the right to become the Operator. Delek will have the right to terminate this Agreement at the conclusion of any drilling Phase. Delek will also have the option to purchase up to 5% of the Company’s common stock, par value $0.001 per share (the “Common Stock”), upon fulfilling its obligation for each Phase (maximum of 20% in the aggregate) at a price per share equal to a 10% discount to the 30-day weighted average closing price for the Common Stock preceding the acquisition. Phase One of the Agreement has not yet been reached; thus, the option to purchase the Common Stock is not yet available. This option will expire January 8, 2020. The Company, as the operator of two wells being drilled in the Gulf of Mexico, has incurred tangible and intangible drilling costs for the wells in process and has billed its working interest partners for their respective shares of the drilling costs to date. GulfSlope drilled the first well, Canoe, to a total depth of 5,765 feet (5,670 feet TVD). Multiple open hole plugs were set across several intervals and the well is equipped with a mud-line suspension system for possible future re-entry. Calibration of seismic amplitudes, petrophysical analysis, reservoir engineering and scoping of development is currently underway to determine the commerciality of these sands and that work is expected to be completed in the first calendar quarter of 2019. The second well, Tau, was spud in September 2018 and is currently being drilled. The well is expected to be drilling in the targeted prospective section in February 2019. As of December 31, 2018, the Company’s oil and natural gas properties consisted of unproved properties, wells in process and no proved reserves. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 4 – RELATED PARTY TRANSACTIONS During April 2013 through September 2017, the Company entered into convertible promissory notes whereby it borrowed a total of $8,675,500 from John Seitz, its current chief executive officer. The notes are due on demand, bear interest at the rate of 5% per annum, and $5,300,000 of the notes are convertible into shares of common stock at a conversion price equal to $0.12 per share of common stock (the then offering price of shares of common stock to unaffiliated investors). As of December 31, 2018, the total amount owed to John Seitz, our CEO, is $8,675,500. There is a total of $1,751,939 of unpaid interest associated with these loans included in accrued interest within our balance sheet as of December 31, 2018. On November 15, 2016, a family member of the CEO, a related party, entered into a $50,000 convertible promissory note with associated warrants under the same terms received by other investors (see Note 5). Domenica Seitz CPA, related to John Seitz, has provided accounting consulting services to the Company. During the three month periods ended December 31, 2018 and 2017, the services provided were valued at $14,880 and $5,915, respectively. The Company has accrued these amounts, and they have been reflected in the December 31, 2018 financial statements. John Seitz has not received a salary since May 31, 2013, the date he commenced serving as CEO and accordingly, no amount has been accrued on the financial statements. |
NOTES PAYABLE
NOTES PAYABLE | 3 Months Ended |
Dec. 31, 2018 | |
Notes Payable [Abstract] | |
NOTES PAYABLE | NOTE 5 – NOTES PAYABLE Between June and November 2016, the Company issued eleven convertible promissory notes (“Bridge Financing Notes”) with associated warrants in a private placement to accredited investors for total gross proceeds of $837,000. Three of the notes were to related parties for proceeds totaling $222,000, including the extinguishment of $70,000 worth of related party payables. The convertible notes had a maturity of one year (prior to extension), bear an annual interest rate of 8% and can be converted at the option of the holder at a conversion price of $0.025 per share. In addition, the convertible notes will automatically convert if a qualified equity financing of at least $3 million occurs before maturity and such mandatory conversion price will equal the effective price per share paid in the qualified equity financing. In addition to the convertible notes, the investors received 27.9 million warrants (7.4 million to the above mentioned related parties) with an exercise price of $0.03 and a term of the earlier of three years or upon a change of control. The Company evaluated the various financial instruments under ASC 480 and ASC 815 and determined no instruments or features represented embedded derivatives. Therefore, in accordance with ASC 470-20-25-2, the Company allocated the proceeds between the convertible notes and warrants based on their relative fair values. This resulted in an allocation of approximately $452,000 to the warrants and approximately $385,000 to the convertible notes. After such allocation, the Company evaluated the conversion option to discern whether a beneficial conversion feature existed based upon comparing the effective exercise price of the convertible notes to the fair value of the shares they are convertible into. The Company concluded a beneficial conversion feature existed and measured such beneficial conversion feature at approximately $385,000. Accordingly, the debt discount associated with these notes was approximately $837,000. Such discount was amortized using the effective interest rate method over the term (one year) of the convertible notes. Upon maturity of eight of the eleven promissory notes in June 2017, the Company issued 3,225,000 extension warrants with an exercise price of $0.03 per share (equal to 25% of the original warrant amount) to the holders of the notes to extend the terms to January 15, 2018. The Company evaluated this modification including considering the fair value of the warrants issued and concluded that extinguishment accounting was required as the present value of future cash flows from the new note, including the fair value of the warrants issued to extend, exceeded the present value of future cash flows of the old note by more than 10%. The fair value of the warrants was deemed to be approximately $51,000 and such amount was recognized immediately as a loss on extinguishment of debt. The fair value of the warrants was determined using the Black-Scholes option pricing model. In July and August 2017, the three remaining promissory notes issued in July, August and November 2016 were extended until January 15, 2018 and issued 3,750,000 extension warrants (equal to 25% of the original warrant amount). The Company evaluated this transaction including considering the fair value of the warrants issued and concluded that modification accounting was required as the present value of future cash flows from the new note, including the fair value of the warrants issued to extend, was less than 10% of the present value of future cash flows of the old note. When an instrument is modified, any incremental increase in value (in this case the warrants) should be added to the discount of the notes and such discount should be amortized to interest expense using the effective interest rate method over the new remaining life of the note. The fair value of the warrants, approximately $39,000, was determined using the Black-Scholes option pricing model. Upon revised maturity of the eleven promissory notes on January 15, 2018, the Company issued 2,790,000 extension warrants with an exercise price of $0.10 per share (equal to 10% of the original warrant amount) to the holders of the notes to extend the term to April 16, 2018. The Company evaluated this transaction including considering the fair value of the warrants issued and concluded that extinguishment accounting was required as the present value of future cash flows from the new note, including the fair value of the warrants issued to extend, exceeded the present value of future cash flows of the old note by more than 10%. The fair value of the warrants was deemed to be approximately $217,000 and such amount was recognized immediately as a loss on extinguishment of debt. The fair value of the warrants was determined using the Black-Scholes option pricing model. In June 2018, the maturity date of all of the notes was extended to January 15, 2019. The Company is working on the extension of the remaining notes. Six of the Bridge Financing Notes with a principal balance of $560,000 plus accrued interest of approximately $87,000 were converted during the year ended September 30, 2018. The remaining note balance at December 31, 2018 is $277,000. Accrued interest for the quarter ended December 31, 2018 was approximately $6,000 and cumulative accrued interest was approximately $55,000. |
FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT | 3 Months Ended |
Dec. 31, 2018 | |
Fair Value Measurement | |
FAIR VALUE MEASUREMENT | NOTE 6 – FAIR VALUE MEASUREMENT Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are classified and disclosed in one of the following categories: Level:1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. GulfSlope considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level:2 Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes those derivative instruments that GulfSlope values using observable market data. Substantially all of these inputs are observable in the marketplace throughout the term of the derivative instrument, can be derived from observable data, or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category include non-exchange traded derivative financial instruments as well as long-term incentive plan liabilities calculated using the Black-Scholes model to estimate the fair value as of the measurement date. Level:3 Measured based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources (i.e. supported by little or no market activity). As required by ASC 820-10, financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. Fair Value on a Recurring Basis The following table sets forth by level within the fair value hierarchy the Company’s derivative financial instruments that were accounted for at fair value on a recurring basis as of December 31, 2018: Description Quoted Prices in ActiveMarkets for Identical Assets Significant Other Observable Inputs Significant Other Unobservable Inputs Total Carrying Value as of Derivative Financial Instrument at September 30, 2018 — (271,710 ) — (271,710 ) Changes in Fair Value — (196,266 ) — (196,266 ) Derivative Financial Instrument at December 31, 2018 — (467,976 ) — (467,976 ) During the year ended September 30, 2018, the Company did not have any assets or liabilities measured at fair value on a non-recurring basis. |
COMMON STOCK_PAID IN CAPITAL
COMMON STOCK/PAID IN CAPITAL | 3 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
COMMON STOCK/PAID IN CAPITAL | NOTE 7 – COMMON STOCK/PAID IN CAPITAL At the annual shareholder meeting in May of 2018, our shareholders approved increasing the number of authorized shares of common stock from 975,000,000 to 1,500,000,000. The number of authorized shares of preferred stock was not changed and is 50,000,000. As discussed in Note 5, between June and November 2016, the Company issued 27.9 million warrants in conjunction with convertible notes payable. The warrants have an exercise price of $0.03 and a term of the earlier of three years or upon a change of control. Based upon the allocation of proceeds between the convertible notes payable and the warrants, approximately $452,422 was allocated to the warrants. During June through August 2017, the maturity date of all of the Bridge Financing Notes was extended to January 15, 2018 in exchange for the issuance of 25% additional warrants. The warrants have an exercise price of $0.03 and the same expiration date (three years from original transaction) as the original warrants. On January 15, 2018 the maturity date of the Bridge Financing Notes was extended to April 16, 2018 in exchange for the issuance of 10% additional warrants (see Note 5 for status of notes). The warrants have an exercise price of $0.10 per share and the same expiration date (three years from original transaction) as the original warrants. The fair value of the warrants were determined using the Black Scholes valuation model with the following key assumptions: June 2016 July 2016 August 2016 November 2016 June 2017 July 2017 August 2017 January 2018 Warrants Issued 12.9 million 10.0 million 3.3 million 1.7 million 3.2 million 2.5 million 1.25 million 2.8 million Stock Price (1) $ 0.054 $ 0.040 $ 0.032 $ 0.029 $ 0.025 $ 0.019 $ 0.016 $ 0.11 Exercise Price $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.10 Term (2) 3 years 3 years 3 years 3 years 2 years 2 years 2 years 1.5 years Risk Free Rate .87 % .80 % .88 % 1.28 % 1.35 % 1.35 % 1.33 % 1.89 % Volatility 135 % 138 % 137 % 131 % 135 % 136 % 135 % 163 % (1) Fair market value on the date of agreement. (2) Average term. Below is a summary of warrants issued in conjunction with convertible notes which were paid in full as of September 30, 2018. The warrants are outstanding at December 31, 2018. Warrants Outstanding Warrants Exercisable Exercise Price Number Outstanding Remaining Contractual Life (Yrs) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $ 0.10 550,000 3.00 $ 0.10 550,000 $ 0.10 $ 0.10 1,100,000 3.21 $ 0.10 1,100,000 $ 0.10 $ 0.10 1,100,000 3.79 $ 0.10 1,100,000 $ 0.10 $ 0.10 1,100,000 3.96 $ 0.10 1,100,000 $ 0.10 During the three months ended December 31, 2018, the Company issued approximately 19.3 million shares of common stock and approximately 9.7 million warrants to accredited investors in a private placement. The funds were received in the prior quarter and moved to equity during the current quarter. Based upon the allocation of proceeds between the common stock and the warrants, approximately $259,000 was allocated to the warrants. The fair value of the warrants were determined using the Black Scholes valuation model with the following key assumptions: Effective Date December 2018 Number of Warrants Issued 9,662,500 Stock Price $ 0.044 Exercise Price $ 0.09 Term 3 years Risk Free Rate 2.46% Volatility 149% |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 8 – STOCK-BASED COMPENSATION On January 1, 2017, 33.5 million stock options were granted to 6 employees and 2 directors of the Company. The CEO was not included in the award. The stock options vested 50% on January 1, 2017 and 50% on January 1, 2018. The stock options are exercisable for seven years from the original grant date of January 1, 2017, until January 1, 2024. On May 1, 2018, 500,000 stock options, with an exercise price of $0.065 per share were granted to an employee. The stock options vested on May 1, 2018. The stock options are exercisable for approximately 7.5 years from the date of grant of May 1, 2018 to December 31, 2025. These stock options were awarded from the Company’s 2014 Omnibus Incentive Plan. On June 1, 2018, 67.5 million stock options, with an exercise price of $0.075 per share were granted to employees, directors and contractors. 18.5 million of the stock options vested on June 1, 2018, 24 million will vest on June 1, 2019 and 25 million will vest on June 1, 2020 provided the holder continues to serve as an employee or a director on the vesting date. The stock options are exercisable for approximately 7.5 years from the grant date of June 1, 2018 to December 31, 2025. 49 million of these stock options were awarded from the Company’s 2018 Omnibus Incentive Plan and 18.5 million stock options were inducement awards. The fair value of the stock-options granted during 2018 were determined using the Black Scholes valuation model with the following key assumptions: Date of Grant May 1, 2018 June 1, 2018 Number of Stock Options Granted 500,000 67,500,000 Stock Price $ 0.065 $ 0.075 Exercise Price $ 0.065 $ 0.075 Expected Life of Options 4.25 years 4.25 years Risk Free Rate 2.74 % 2.675 % Volatility 145.21 % 145.21 % The Company used the historical volatility of its stock for the period June 2014 through June 1, 2018 for the Black Scholes computation. The Company has no historical data regarding the expected life of the options and therefore used the simplified method of calculating the expected life. The risk free rate was calculated using the U.S. Treasury constant maturity rates similar to the expected life of the options, as published by the Federal Reserve. The Company has no plans to declare any future dividends. The following table summarizes the Company’s stock option activity during the three months ended December 31, 2018: Number Weighted Weighted Average Average Intrinsic Outstanding at September 30, 2018 103,500,000 0.0605 Granted — — Exercised — — Cancelled — — Outstanding at December 31, 2018 103,500,000 $ 0.0605 3.07 $0.5 million Vested and expected to vest 103,500,000 $ 0.0605 3.07 $0.5 million Exercisable at December 31, 2018 54,500,000 $ 0.0475 3.07 $0.5 million There was approximately $0.5 million of intrinsic value for the options outstanding as of December 31, 2018. As of December 31, 2018, there was $2.3 million of unrecognized stock-based compensation to be recognized over a weighted average period of 3.07 years. Stock-based compensation cost is measured at the grant date, using the estimated fair value of the award, and is recognized over the required vesting period. The Company recognized $393,000 and $93,381 in stock based compensation during the three months ended December 31, 2018 and December 31, 2017, respectively. A portion of these costs, $318,658 and $27,875 were capitalized to unproved properties for the three months ended December 31, 2018 and December 31, 2017, respectively, with the remainder recorded as general and administrative expenses for each respective period. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 9 – COMMITMENTS AND CONTINGENCIES In July 2018 the Company entered into a 39 month lease for approximately 5,000 square feet of office space in 4 Houston Center in downtown Houston. Annual base rent is approximately $94 thousand for the first 18 months, increasing to approximately $97 thousand and $99 thousand, respectively during the remaining term of the lease. The Company reached an agreement with a vendor in August 2018 for the settlement of approximately $1 million in debt. The vendor was paid approximately $0.16 million in cash and 10 million shares of GulfSlope common stock. The agreement contains a provision that upon the sale of the common stock if the original debt is not fully satisfied, full payment will be made under a mutually agreed payment plan. If the stock is sold for a gain any surplus in excess of $1.3 million shall be a credit against future purchases from the vendor. The agreement was determined to meet the definition of a derivative in accordance with ASC 815. At December 31, 2018 there is a derivative financial instrument liability of approximately $0.5 million. In October 2018, the Company purchased a directors and officers’ insurance policy for $159,995 and financed $146,310 of the premium by executing a note payable. The balance of the note payable at December 31, 2018 is $120,275. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 10 – SUBSEQUENT EVENTS On February 11, 2019, the Company executed a letter agreement (the “Agreement”) whereby the Company agreed to a new term loan facility (the “Term Loan Facility”) to be provided by Delek GOM Investments LLC (“Delek GOM"), a wholly owned subsidiary of Delek Group Ltd. Delek GOM is a working interest partner in the Company’s Canoe and Tau prospects. The Term Loan Facility provides the Company with up to $11 million to be drawn in amounts at the Company’s discretion with proceeds to be used for capital expenditures associated with the Company’s drilling program. Borrowings under the Term Loan Facility mature in six months and bear interest at the rate of 5.0% and are secured by the assets of the Company. The Agreement requires the Company to pay down the Term Loan with proceeds from the sale of any equity securities and any refunds related to joint drilling operations. For a period of twelve months, Delek GOM will have the right, but not the obligation, to purchase shares of the Company up to the outstanding Term Loan Amount at a price per share of $4.2 cents a share (the “Option”). Any purchase of shares pursuant to the Option will be in a transaction exempt under 4(a)(2) of the Securities Act of 1933, as amended. The Company anticipates executing detailed agreements associated with the Term Loan Facility and the Option in February 2019. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Dec. 31, 2018 | |
Summary Of Significant Accounting Policies | |
Cash | Cash GulfSlope considers highly liquid investments with insignificant interest rate risk and original maturities to the Company of three months or less to be cash equivalents. There were no cash equivalents at December 31, 2018 and September 30, 2018. |
Liquidity/Going Concern | Liquidity/Going Concern The Company has incurred accumulated losses as of December 31, 2018 of $42.3 million, and has a net capital deficiency. Further losses are anticipated in developing its business, and there exists substantial doubt about the Company’s ability to continue as a going concern. As of December 31, 2018, the Company had $3.8 million of unrestricted cash on hand, $3.4 million of this amount is for the payment of joint payables from drilling operations. The Company estimates that it will need to raise a minimum of $15 million to meet its obligations and planned expenditures through February 2020. The Company plans to finance operations and planned expenditures through equity and/or debt financings and/or farm-out agreements. The Company also plans to extend the agreements associated with all loans, the accrued interest payable on these loans, as well as the Company’s accrued liabilities. There are no assurances that financing will be available with acceptable terms, if at all. If the Company is not successful in obtaining financing, operations would need to be curtailed or ceased or the Company would need to sell assets or consider alternative plans up to and including restructuring. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
Full Cost Method | Full Cost Method The Company uses the full cost method of accounting for its oil and natural gas exploration and development activities as defined by the SEC. Under the full cost method of accounting, all costs associated with successful and unsuccessful exploration and development activities are capitalized on a country-by-country basis into a single cost center (“full cost pool”). Such costs include property acquisition costs, geological and geophysical (“G&G”) costs, carrying charges on non-producing properties, costs of drilling both productive and non-productive wells and overhead charges directly related to acquisition, exploration and development activities. Proceeds from property sales will generally be credited to the full cost pool, with no gain or loss recognized, unless such a sale would significantly alter the relationship between capitalized costs and the proved reserves attributable to these costs. A significant alteration would typically involve a sale of 25% or more of the proved reserves related to a single full cost pool. Proved properties are amortized on a country-by-country basis using the units of production method (“UOP”), whereby capitalized costs are amortized over total proved reserves. The amortization base in the UOP calculation includes the sum of proved property, net of accumulated depreciation, depletion and amortization (“DD&A”), estimated future development costs (future costs to access and develop proved reserves), and asset retirement costs, less related salvage value. The costs of unproved properties and related capitalized costs (such as G&G costs) are withheld from the amortization calculation until such time as they are either developed or abandoned. Unproved properties and properties under development are reviewed for impairment at least quarterly and are determined through an evaluation considering, among other factors, seismic data, requirements to relinquish acreage, drilling results, remaining time in the commitment period, remaining capital plan, and political, economic, and market conditions. In countries where proved reserves exist, exploratory drilling costs associated with dry holes are transferred to proved properties immediately upon determination that a well is dry and amortized accordingly. In countries where a reserve base has not yet been established, impairments are charged to earnings. Companies that use the full cost method of accounting for oil and natural gas exploration and development activities are required to perform a ceiling test calculation each quarter. The full cost ceiling test is an impairment test prescribed by SEC Regulation S-X Rule 4-10. The ceiling test is performed quarterly, on a country-by-country basis, utilizing the average of prices in effect on the first day of the month for the preceding twelve-month period. The cost center ceiling is defined as the sum of (a) estimated future net revenues, discounted at 10% per annum, from proved reserves, (b) the cost of properties not being amortized, if any, and (c) the lower of cost or market value of unproved properties included in the cost being amortized. If such capitalized costs exceed the ceiling, the Company will record a write-down to the extent of such excess as a non-cash charge to earnings. Any such write-down will reduce earnings in the period of occurrence and results in a lower depreciation, depletion and amortization rate in future periods. A write-down may not be reversed in future periods even though higher oil and natural gas prices may subsequently increase the ceiling. As of December 31, 2018, the Company’s oil and natural gas properties consisted of wells in process, capitalized exploration and acquisition costs for unproved properties and no proved reserves. |
Basic and Dilutive Earnings Per Share | Basic and Dilutive Earnings Per Share Basic income/(loss) per share (“EPS”) is computed by dividing net income/(loss) (the numerator) by the weighted average number of common shares outstanding for the period (denominator). Diluted EPS is computed by dividing net income/(loss) by the weighted average number of common shares and potential common shares outstanding (if dilutive) during each period. Potential common shares include stock options, warrants, convertible notes and restricted stock. The number of potential common shares outstanding relating to stock options, warrants, convertible notes and restricted stock is computed using the treasury stock or if-converted method. As the Company has incurred losses for the three months ended December 31, 2018 and 2017, the potentially dilutive shares are anti-dilutive and are thus not added into the loss per share calculations. As of December 31, 2018 and 2017, there were 223,537,733 and 163,805,888 potentially dilutive shares, respectively. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606). On February 25, 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) The Company has evaluated all other recent accounting pronouncements and believes that none of them will have a significant effect on the Company’s financial statements. |
FAIR VALUE MEASUREMENT (Tables)
FAIR VALUE MEASUREMENT (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Fair Value Measurement Tables Usd Abstract | |
Schedule of fair value on recurring basis | The following table sets forth by level within the fair value hierarchy the Company’s derivative financial instruments that were accounted for at fair value on a recurring basis as of December 31, 2018: Description Quoted Prices in ActiveMarkets for Identical Assets Significant Other Observable Inputs Significant Other Unobservable Inputs Total Carrying Value as of Derivative Financial Instrument at September 30, 2018 — (271,710 ) — (271,710 ) Changes in Fair Value — (196,266 ) — (196,266 ) Derivative Financial Instrument at December 31, 2018 — (467,976 ) — (467,976 ) |
COMMON STOCK_PAID IN CAPITAL (T
COMMON STOCK/PAID IN CAPITAL (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Common Stockpaid In Capital | |
Schedule of fair value assumptions for warrants | The fair value of the warrants were determined using the Black Scholes valuation model with the following key assumptions: June 2016 July 2016 August 2016 November 2016 June 2017 July 2017 August 2017 January 2018 Warrants Issued 12.9 million 10.0 million 3.3 million 1.7 million 3.2 million 2.5 million 1.25 million 2.8 million Stock Price (1) $ 0.054 $ 0.040 $ 0.032 $ 0.029 $ 0.025 $ 0.019 $ 0.016 $ 0.11 Exercise Price $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.10 Term (2) 3 years 3 years 3 years 3 years 2 years 2 years 2 years 1.5 years Risk Free Rate .87 % .80 % .88 % 1.28 % 1.35 % 1.35 % 1.33 % 1.89 % Volatility 135 % 138 % 137 % 131 % 135 % 136 % 135 % 163 % (1) Fair market value on the date of agreement. (2) Average term. Effective Date December 2018 Number of Warrants Issued 9,662,500 Stock Price $ 0.044 Exercise Price $ 0.09 Term 3 years Risk Free Rate 2.46% Volatility 149% |
Schedule of warrants issued in conjunction with Financing Notes | Below is a summary of warrants issued in conjunction with convertible notes which were paid in full as of September 30, 2018. The warrants are outstanding at December 31, 2018. Warrants Outstanding Warrants Exercisable Exercise Price Number Outstanding Remaining Contractual Life (Yrs) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $ 0.10 550,000 3.00 $ 0.10 550,000 $ 0.10 $ 0.10 1,100,000 3.21 $ 0.10 1,100,000 $ 0.10 $ 0.10 1,100,000 3.79 $ 0.10 1,100,000 $ 0.10 $ 0.10 1,100,000 3.96 $ 0.10 1,100,000 $ 0.10 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Stock-based Compensation | |
Schedule of fair value assumptions for stock-options | The fair value of the stock-options granted during 2018 were determined using the Black Scholes valuation model with the following key assumptions: Date of Grant May 1, 2018 June 1, 2018 Number of Stock Options Granted 500,000 67,500,000 Stock Price $ 0.065 $ 0.075 Exercise Price $ 0.065 $ 0.075 Expected Life of Options 4.25 years 4.25 years Risk Free Rate 2.74 % 2.675 % Volatility 145.21 % 145.21 % |
Summary of stock options activity | The following table summarizes the Company’s stock option activity during the three months ended December 31, 2018: Number Weighted Weighted Average Average Intrinsic Outstanding at September 30, 2018 103,500,000 0.0605 Granted — — Exercised — — Cancelled — — Outstanding at December 31, 2018 103,500,000 $ 0.0605 3.07 $0.5 million Vested and expected to vest 103,500,000 $ 0.0605 3.07 $0.5 million Exercisable at December 31, 2018 54,500,000 $ 0.0475 3.07 $0.5 million |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Accounting Policies [Abstract] | ||||
Unrestricted cash | $ 3,796,786 | $ 108,483 | $ 5,621,814 | $ 6,426 |
Accumulated losses | $ (42,282,117) | $ (41,858,257) | ||
Antidilutive securities excluded from EPS calculation | 223,537,733 | 163,805,888 | ||
Payment of joint payables from drilling operations | $ 3,400,000 | |||
Minimum capital which company estimated to raise to meet its obligations and planned expenditures | $ 15,000,000 |
OIL AND NATURAL GAS PROPERTIES
OIL AND NATURAL GAS PROPERTIES (Details Narrative) | Jan. 08, 2018USD ($)$ / shares | Dec. 31, 2018Number$ / shares | Sep. 30, 2018$ / shares |
Number of licensed three-dimensional (3-D) seismic data | Number | 3 | ||
Number of licensed three-dimensional (3-D) seismic data | Number | 14 | ||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | |
Participation agreement [Member] | |||
Percent of working interest | 20.00% | ||
Percent of exploratory costs | 8.00% | ||
Participation agreement [Member] | Delek GOM Investments, LLC [Member] | |||
Percent of working interest | 75.00% | ||
Percent of exploratory costs | 90.00% | ||
Cash for each prospect exploration plan | $ | $ 1,100,000 | ||
Percentage of option to purchase | 5.00% | ||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | ||
Percent of obligation for each Phase | 20.00% | ||
Percent of common stock preceding under acquisition | 10.00% |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Nov. 15, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 |
John Seitz, CEO [Member] | Convertible Promissory Notes [Member] | ||||
Debt face amount | $ 8,675,500 | |||
Interest rate | 5.00% | |||
Debt conversion, price per share | $ 0.12 | |||
Debt maturity date | due on demand | |||
Amount owed to related party | $ 8,675,500 | |||
Value of stock issued in conversion of notes payable | $ 5,300,000 | |||
Accrued interest payable | 1,751,939 | |||
Related party [Member] | Promissory Notes [Member] | ||||
Proceeds from issuance of convertible notes and warrants | $ 50,000 | |||
Accounting Consulting Service [Member] | ||||
Accounting consulting services, included in related party payables | $ 14,880 | $ 5,915 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) | Jan. 15, 2018USD ($)shares | Nov. 15, 2016USD ($) | Jun. 30, 2017USD ($)shares | Aug. 31, 2017USD ($)shares | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Nov. 30, 2016USD ($)Number$ / sharesshares | Sep. 30, 2018$ / shares |
Warrant exercise price | $ / shares | $ 0.15 | |||||||
Amortization of debt discount | $ 78,864 | |||||||
Interest expense | $ 98,157 | $ 225,077 | ||||||
Fair value of warrants | 196,266 | |||||||
Convertible Promissory Notes [Member] | ||||||||
Amortization of debt discount | 30,000 | |||||||
Debt amount converted | 560,000 | |||||||
Accrued interest amount converted | 87,000 | |||||||
Outstanding debt amount | 277,000 | |||||||
Accrued interest paid | 6,000 | |||||||
Cumulative accrued interest | $ 55,000 | |||||||
June - Nov 2016 Promissory Notes [Member] | ||||||||
Proceeds from issuance of convertible notes | $ 837,000 | |||||||
Number of convertible promissory notes issued | Number | 11 | |||||||
Maturity term | 1 year | |||||||
Interest rate | 8.00% | |||||||
Conversion price | $ / shares | $ 0.025 | |||||||
Qualified equity financing amount | $ 3,000,000 | |||||||
Amount allocated to debt | 385,000 | |||||||
Amount allocated to warrants | 452,000 | |||||||
Beneficial conversion feature | 385,000 | |||||||
Debt discount | 837,000 | |||||||
June - Nov 2016 Promissory Notes [Member] | Related Parties [Member] | ||||||||
Proceeds from issuance of convertible notes | $ 222,000 | |||||||
Number of convertible promissory notes issued | Number | 3 | |||||||
Extinguishment of related party payables | $ 70,000 | |||||||
June - Nov 2016 Promissory Notes [Member] | Warrants [Member] | ||||||||
Number of warrants issued | shares | 2,790,000 | 27,900,000 | ||||||
Warrant exercise price | $ / shares | $ 0.03 | |||||||
Warrant term | 3 years | |||||||
Percentage of original warrants issued | 10.00% | |||||||
Fair value of warrants | $ 217,000 | |||||||
June - Nov 2016 Promissory Notes [Member] | Warrants [Member] | Related Parties [Member] | ||||||||
Number of warrants issued | shares | 7,400,000 | |||||||
June - Nov 2016 Promissory Notes [Member] | June 2017 Warrants [Member] | ||||||||
Number of warrants issued | shares | 3,225,000 | |||||||
Loss on Debt Extinguishment | $ 51,000 | |||||||
Percentage of original warrants issued | 25.00% | |||||||
Promissory Notes [Member] | Related party [Member] | ||||||||
Proceeds from issuance of convertible notes | $ 50,000 | |||||||
Dec 2016 Promissory Notes [Member] | January 2018 Warrants [Member] | ||||||||
Number of warrants issued | shares | 3,750,000 | |||||||
Loss on Debt Extinguishment | $ 39,000 | |||||||
Percentage of original warrants issued | 25.00% | |||||||
Fair value of warrants | $ 51,000 |
FAIR VALUE MEASUREMENT (Details
FAIR VALUE MEASUREMENT (Details) | Dec. 31, 2018USD ($) |
Derivative Financial Instrument | $ (271,710) |
Changes in Fair Value | (196,266) |
Total as of Total as of December 31, 2018 | (467,976) |
Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | |
Derivative Financial Instrument | (271,710) |
Changes in Fair Value | (196,266) |
Total as of Total as of December 31, 2018 | $ (467,976) |
COMMON STOCK_PAID IN CAPITAL (D
COMMON STOCK/PAID IN CAPITAL (Details) | Sep. 30, 2018Numbershares | |
June 2016 Warrants [Member] | ||
Warrants issued | shares | 12,900,000 | |
June 2016 Warrants [Member] | Share Price [Member] | ||
Measurement Input | 0.054 | [1] |
June 2016 Warrants [Member] | Exercise Price [Member] | ||
Measurement Input | .03 | |
June 2016 Warrants [Member] | Risk Free Interest Rate [Member] | ||
Measurement Input | .0087 | |
June 2016 Warrants [Member] | Expected Term [Member] | ||
Measurement Input | 3 | [2] |
June 2016 Warrants [Member] | Volatility [Member] | ||
Measurement Input | 1.35 | |
July 2016 Warrants [Member] | ||
Warrants issued | shares | 10,000,000 | |
July 2016 Warrants [Member] | Share Price [Member] | ||
Measurement Input | 0.040 | [1] |
July 2016 Warrants [Member] | Exercise Price [Member] | ||
Measurement Input | .03 | |
July 2016 Warrants [Member] | Risk Free Interest Rate [Member] | ||
Measurement Input | .0080 | |
July 2016 Warrants [Member] | Expected Term [Member] | ||
Measurement Input | 3 | [2] |
July 2016 Warrants [Member] | Volatility [Member] | ||
Measurement Input | 1.38 | |
August 2016 Warrants [Member] | ||
Warrants issued | shares | 3,300,000 | |
August 2016 Warrants [Member] | Share Price [Member] | ||
Measurement Input | 0.032 | [1] |
August 2016 Warrants [Member] | Exercise Price [Member] | ||
Measurement Input | 0.03 | |
August 2016 Warrants [Member] | Risk Free Interest Rate [Member] | ||
Measurement Input | .0088 | |
August 2016 Warrants [Member] | Expected Term [Member] | ||
Measurement Input | 3 | [2] |
August 2016 Warrants [Member] | Volatility [Member] | ||
Measurement Input | 1.37 | |
November 2016 Warrants [Member] | ||
Warrants issued | shares | 1,700,000 | |
November 2016 Warrants [Member] | Share Price [Member] | ||
Measurement Input | 0.029 | [1] |
November 2016 Warrants [Member] | Exercise Price [Member] | ||
Measurement Input | .03 | |
November 2016 Warrants [Member] | Risk Free Interest Rate [Member] | ||
Measurement Input | .0128 | |
November 2016 Warrants [Member] | Expected Term [Member] | ||
Measurement Input | 3 | [2] |
November 2016 Warrants [Member] | Volatility [Member] | ||
Measurement Input | 1.31 | |
June 2017 Warrants [Member] | ||
Warrants issued | shares | 3,200,000 | |
June 2017 Warrants [Member] | Share Price [Member] | ||
Measurement Input | 0.025 | [1] |
June 2017 Warrants [Member] | Exercise Price [Member] | ||
Measurement Input | .03 | |
June 2017 Warrants [Member] | Risk Free Interest Rate [Member] | ||
Measurement Input | .0135 | |
June 2017 Warrants [Member] | Expected Term [Member] | ||
Measurement Input | 2 | [2] |
June 2017 Warrants [Member] | Volatility [Member] | ||
Measurement Input | 1.35 | |
July 2017 Warrants [Member] | ||
Warrants issued | shares | 2,500,000 | |
July 2017 Warrants [Member] | Share Price [Member] | ||
Measurement Input | 0.019 | [1] |
July 2017 Warrants [Member] | Exercise Price [Member] | ||
Measurement Input | .03 | |
July 2017 Warrants [Member] | Risk Free Interest Rate [Member] | ||
Measurement Input | .0135 | |
July 2017 Warrants [Member] | Expected Term [Member] | ||
Measurement Input | 2 | [2] |
July 2017 Warrants [Member] | Volatility [Member] | ||
Measurement Input | 1.36 | |
August 2017 Warrants [Member] | ||
Warrants issued | shares | 1,250,000 | |
August 2017 Warrants [Member] | Share Price [Member] | ||
Measurement Input | 0.016 | [1] |
August 2017 Warrants [Member] | Exercise Price [Member] | ||
Measurement Input | .03 | |
August 2017 Warrants [Member] | Risk Free Interest Rate [Member] | ||
Measurement Input | .0133 | |
August 2017 Warrants [Member] | Expected Term [Member] | ||
Measurement Input | 2 | [2] |
August 2017 Warrants [Member] | Volatility [Member] | ||
Measurement Input | 1.35 | |
January 2018 Warrants [Member] | ||
Warrants issued | shares | 2,800,000 | |
January 2018 Warrants [Member] | Share Price [Member] | ||
Measurement Input | 0.11 | [1] |
January 2018 Warrants [Member] | Exercise Price [Member] | ||
Measurement Input | .10 | |
January 2018 Warrants [Member] | Risk Free Interest Rate [Member] | ||
Measurement Input | .0189 | |
January 2018 Warrants [Member] | Expected Term [Member] | ||
Measurement Input | 2 | [2] |
January 2018 Warrants [Member] | Volatility [Member] | ||
Measurement Input | 1.63 | |
[1] | Fair market value on the date of agreement. | |
[2] | Average term. |
COMMON STOCK_PAID IN CAPITAL _2
COMMON STOCK/PAID IN CAPITAL (Details 1) | 3 Months Ended |
Dec. 31, 2018USD ($)$ / sharesshares | |
Financing Note Warrants #1 [Member] | |
Number of warrants - outstanding | $ | $ 550,000 |
Weighted Average Remaining Contractual Life (Yrs) | 3 years |
Weighted Average Exercise Price - outstanding | $ 0.10 |
Number of warrants - exercisable | shares | 550,000 |
Weighted Average Exercise Price- exercisable | $ 0.10 |
Financing Note Warrants #2 [Member] | |
Number of warrants - outstanding | $ | $ 1,100,000 |
Weighted Average Remaining Contractual Life (Yrs) | 3 years 2 months 16 days |
Weighted Average Exercise Price - outstanding | $ 0.10 |
Number of warrants - exercisable | shares | 1,100,000 |
Weighted Average Exercise Price- exercisable | $ 0.10 |
Financing Note Warrants #3 [Member] | |
Number of warrants - outstanding | $ | $ 1,100,000 |
Weighted Average Remaining Contractual Life (Yrs) | 3 years 9 months 15 days |
Weighted Average Exercise Price - outstanding | $ 0.10 |
Number of warrants - exercisable | shares | 1,100,000 |
Weighted Average Exercise Price- exercisable | $ 0.10 |
Financing Note Warrants #4 [Member] | |
Number of warrants - outstanding | $ | $ 1,100,000 |
Weighted Average Remaining Contractual Life (Yrs) | 3 years 11 months 17 days |
Weighted Average Exercise Price - outstanding | $ 0.10 |
Number of warrants - exercisable | shares | 1,100,000 |
Weighted Average Exercise Price- exercisable | $ 0.10 |
COMMON STOCK_PAID IN CAPITAL _3
COMMON STOCK/PAID IN CAPITAL (Details 2) - Warrants [Member] | Dec. 31, 2018$ / sharesYearshares |
Warrants issued | shares | 9,662,500 |
Share Price [Member] | |
Measurement Input | 0.044 |
Exercise Price [Member] | |
Measurement Input | 0.09 |
Risk Free Interest Rate [Member] | |
Measurement Input | Year | 3 |
Expected Term [Member] | |
Measurement Input | 2.46 |
Volatility [Member] | |
Measurement Input | 149 |
COMMON STOCK_PAID IN CAPITAL _4
COMMON STOCK/PAID IN CAPITAL (Details Narrative) - USD ($) | Jun. 01, 2018 | May 01, 2018 | Sep. 30, 2018 | Aug. 31, 2018 | Dec. 31, 2017 | Oct. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Nov. 30, 2016 | Dec. 31, 2018 | May 31, 2018 |
Stock issued | 4,000,000 | ||||||||||
Number of warrants issued | 2,000,000 | ||||||||||
Term | 4 years 3 months | 4 years 3 months | |||||||||
Warrant exercise price | $ 0.15 | ||||||||||
Common stock, authorized | 1,500,000,000 | 1,500,000,000 | 975,000,000 | ||||||||
Preferred stock, authorized | 50,000,000 | 50,000,000 | |||||||||
Proceeds from issuance of common shares and warrants | $ 970,000 | ||||||||||
Peoceeds from share issue | $ 231,000 | ||||||||||
Proceeds from warrants issue | $ 80,000 | ||||||||||
March 2017 Promissory Notes [Member] | Private Placement [Member] | |||||||||||
Number of warrants issued | 1,100,000 | ||||||||||
Term | 5 years | ||||||||||
Warrant exercise price | $ 0.10 | ||||||||||
Common stock issued for cash, shares | 1,000,000 | ||||||||||
Dec 2016 Promissory Notes [Member] | Private Placement [Member] | |||||||||||
Number of warrants issued | 550,000 | ||||||||||
Term | 5 years | ||||||||||
Warrant exercise price | $ 0.10 | ||||||||||
Common stock issued for cash, shares | 500,000 | ||||||||||
Dec 2017 Promissory Notes [Member] | Private Placement [Member] | |||||||||||
Number of warrants issued | 1,100,000 | ||||||||||
Term | 5 years | ||||||||||
Warrant exercise price | $ 0.10 | ||||||||||
Common stock issued for cash, shares | 1,000,000 | ||||||||||
Oct 2017 Promissory Notes [Member] | Private Placement [Member] | |||||||||||
Number of warrants issued | 1,100,000 | ||||||||||
Term | 5 years | ||||||||||
Warrant exercise price | $ 0.10 | ||||||||||
Common stock issued for cash, shares | 1,000,000 | ||||||||||
Warrants [Member] | |||||||||||
Number of warrants issued | 27,900,000 | ||||||||||
Term | 3 years | ||||||||||
Warrant exercise price | $ 0.03 | ||||||||||
Fair value of warrants | $ 452,422 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - USD ($) | Jun. 01, 2018 | May 01, 2018 | Dec. 31, 2018 |
Number of Options | |||
Outstanding at beginning of period | 103,500,000 | ||
Granted | 67,500,000 | 500,000 | |
Outstanding at end of period | 103,500,000 | ||
Vested and expected to vest | 103,500,000 | ||
Exercisable at end of period | 54,500,000 | ||
Weighted Average Exercise Price | |||
Outstanding at beginning of period | $ 0.0605 | ||
Outstanding at end of period | 0.0605 | ||
Vested and expected to vest | 0.0605 | ||
Exercisable at end of period | $ 0.0475 | ||
Weighted Average Remaining Contractual Term | |||
Outstanding at end of period | 3 years 1 month 26 days | ||
Vested and expected to vest | 3 years 1 month 26 days | ||
Exercisable at end of period | 3 years 1 month 26 days | ||
Average Intrinsic Value | |||
Outstanding at end of period | $ 500,000 | ||
Vested and expected to vest | 500,000 | ||
Exercisable at end of period | $ 500,000 |
STOCK-BASED COMPENSATION (Det_2
STOCK-BASED COMPENSATION (Details 1) - $ / shares | Jun. 01, 2018 | May 01, 2018 |
Stockbased Compensation Details 1Abstract | ||
Number of Stock Options Granted | 67,500,000 | 500,000 |
Stock Price | $ 0.075 | $ 0.065 |
Exercise Price | $ 0.075 | $ 0.065 |
Expected Life of Options | 4 years 3 months | 4 years 3 months |
Risk Free Rate | 2.675% | 2.74% |
Volatility | 145.21% | 145.21% |
STOCK-BASED COMPENSATION (Det_3
STOCK-BASED COMPENSATION (Details Narrative) - USD ($) | Jun. 01, 2020 | Jun. 01, 2019 | Jun. 01, 2018 | Jun. 01, 2018 | May 01, 2018 | Jan. 01, 2017 | Jun. 01, 2018 | May 01, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2025 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Stock-based compensation expense | $ 393,000 | $ 93,381 | |||||||||
Stock-based compensation capitalized to unproved properties | 318,658 | $ 27,875 | |||||||||
Unrecognized compensation expense related to stock options | $ 2,300,000 | ||||||||||
Number of stock options granted | 67,500,000 | 500,000 | |||||||||
Expected life of options | 3 years 1 month 26 days | ||||||||||
Exercise price (in dollars per share) | $ 0.075 | $ 0.075 | $ 0.065 | $ 0.075 | $ 0.065 | ||||||
Exercisable year | 4 years 3 months | 4 years 3 months | |||||||||
Share-based Compensation Award, Tranche January 1, 2017 [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Stock option of vested | 50.00% | ||||||||||
Share-based Compensation Award, Tranche January 1, 2018 [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Stock option of vested | 50.00% | ||||||||||
Share-based Compensation Award, Tranche June 1, 2018 [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Stock option of vested | 33.00% | ||||||||||
Share-based Compensation Award, Tranche June 1, 2019 [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Stock option of vested | 33.00% | ||||||||||
Share-based Compensation Award, Tranche June 1, 2020 [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Stock option of vested | 33.00% | ||||||||||
Employee Stock Option [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Number of stock options granted | 33,500,000 | 33,500,000 | 500,000 | ||||||||
Employee Stock Option [Member] | Subsequent Event [Member] | 2018 Omnibus Incentive Plan [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Number of stock options granted | 49,000,000 | ||||||||||
Employee Stock Option [Member] | Subsequent Event [Member] | Inducement Awards [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Number of stock options granted | 18,500,000 | ||||||||||
Employee Stock Option [Member] | Employees, Directors and Contractors [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Number of stock options granted | 67,500,000 | ||||||||||
Stock option of vested | 1850000000.00% | ||||||||||
Exercise price (in dollars per share) | $ 0.075 | $ 0.075 | $ 0.075 | ||||||||
Employee Stock Option [Member] | Employees, Directors and Contractors [Member] | Subsequent Event [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Stock option of vested | 2500000000.00% | 2400000000.00% | |||||||||
Exercisable year | 7 years 5 months |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) | Oct. 31, 2018USD ($) | Aug. 31, 2018USD ($) | Jul. 31, 2018USD ($)ft² | Dec. 31, 2018USD ($) |
Lease term | 39 months | |||
Office space | ft² | 5,000 | |||
Annual base rent for the first 18 months | $ 94,000 | |||
Annual base rent - Year two | $ 97,000 | |||
Annual base rent - Year two | 99,000 | |||
Fair value liability | 500,000 | |||
Directors and Officers [Member] | Note Payable [Member] | ||||
Principal amount | 120,275 | |||
Insurance policy | $ 159,995 | |||
Insurance policy premium | $ 146,310 | |||
Balance amount of debt | $ 120,275 | |||
Vendor [Member] | ||||
Principal amount | $ 1,000,000 | |||
Repayment of debt | 160,000 | |||
Common stock issued to vendor for settlement of debt | 10,000,000 | |||
Balance amount of debt | 1,000,000 | |||
Vendor [Member] | Minimum [Member] | ||||
Gain on sale of stock by vendor in excess of | $ 1,300,000 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | Feb. 13, 2019 | Feb. 11, 2019 | Sep. 30, 2018 |
Exercise price | $ 0.15 | ||
Subsequent Event [Member] | Term Loan Facility [Member] | |||
Term loan facility amount available | $ 11,000,000 | ||
Maturity term | 6 months | ||
Interest rate | 5.00% | ||
Exercise price | $ 0.042 |