Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 06, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2020 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2020 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-36247 | |
Entity Registrant Name | TORCHLIGHT ENERGY RESOURCES, INC. | |
Entity Central Index Key | 0001431959 | |
Entity Tax Identification Number | 74-3237581 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | 5700 West Plano Pkwy | |
Entity Address, Address Line Two | Suite 3600 | |
Entity Address, City or Town | Plano | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75093 | |
City Area Code | (214) | |
Local Phone Number | 432-8002 | |
Title of 12(b) Security | Common Stock, $0.001 par value | |
Trading Symbol | TRCH | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 98,278,127 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash | $ 281,576 | $ 89,730 |
Accounts receivable | 227,020 | 199,462 |
Production revenue receivable | 36,613 | 100,546 |
Subscription receivable | 250,000 | |
Prepayments - development costs | 750,000 | |
Prepaid expenses | 202,451 | 96,006 |
Total current assets | 1,497,660 | 735,744 |
Oil and gas properties, net | 32,743,529 | 40,182,043 |
Office equipment, net | 5,386 | 6,348 |
TOTAL ASSETS | 34,246,575 | 40,924,135 |
Current liabilities: | ||
Accounts payable | 674,650 | 1,444,002 |
PPP note payable | 77,477 | |
Accrued payroll | 1,086,176 | 996,176 |
Related party payables | 45,000 | 45,000 |
Due to working interest owners | 54,320 | 54,320 |
Accrued interest payable | 356,863 | 445,861 |
Total current liabilities | 16,246,609 | 13,962,486 |
Convertible notes payable and accrued interest | 7,157,260 | |
Asset retirement obligations | 23,603 | 23,319 |
Total liabilities | 18,193,106 | 25,812,739 |
Stockholders equity: | ||
Preferred stock, par value $0.001, 10,000,000 shares authorized; -0- issued and outstanding at June 30, 2020 and December 31, 2019 | ||
Common stock, par value $0.001; 150,000,000 shares authorized; 94,468,304 issued and outstanding at June 30, 2020; 76,222,042 issued and outstanding at December 31, 2019 | 94,471 | 76,225 |
Additional paid-in capital | 122,060,814 | 114,143,872 |
Accumulated deficit | (106,146,816) | (99,153,701) |
Total stockholders equity | 16,008,469 | 15,066,396 |
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY | 34,246,575 | 40,924,135 |
Secured Promissory Notes [Member] | ||
Current liabilities: | ||
Convertible Promissory Notes Payable | 12,369,091 | |
Unsecured Promissory Notes [Member] | ||
Current liabilities: | ||
Convertible Promissory Notes Payable | 8,437,127 | |
Convertible Notes Payable | 3,940,703 | |
8% Convertible Promissory Notes Payable [Member] | ||
Current liabilities: | ||
Convertible Promissory Notes Payable | 1,043,032 | |
Convertible Notes Payable | 773,971 | |
10% Convertible Promissory Notes Payable [Member] | ||
Current liabilities: | ||
Convertible Promissory Notes Payable | 540,000 | 540,000 |
14% Convertible Promissory Notes Payable [Member] | ||
Current liabilities: | ||
Convertible Promissory Notes Payable | 2,000,000 | |
Convertible Notes Payable | $ 1,967,894 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Transfer of Financial Assets Accounted for as Sales [Line Items] | ||
Preferred Stock, Par Value Per Share | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, Par Value Per Share | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 150,000,000 | 150,000,000 |
Common Stock, Shares, Issued | 94,468,304 | 76,222,042 |
Common Stock, Shares, Outstanding | 94,468,304 | 76,222,042 |
Secured Promissory Notes [Member] | ||
Transfer of Financial Assets Accounted for as Sales [Line Items] | ||
Promissory Notes, Discount and Financing Cost Current | $ 195,206 | $ 0 |
Unsecured Promissory Notes [Member] | ||
Transfer of Financial Assets Accounted for as Sales [Line Items] | ||
Promissory Notes, Discount and Financing Cost Current | 0 | 127,170 |
Promissory Notes, Discount and Financing Cost Non-Current | 0 | 59,297 |
8% Convertible Promissory Notes Payable [Member] | ||
Transfer of Financial Assets Accounted for as Sales [Line Items] | ||
Promissory Notes, Discount and Financing Cost Current | 916,968 | |
Promissory Notes, Discount and Financing Cost Non-Current | $ 1,186,029 | |
14% Convertible Promissory Notes Payable [Member] | ||
Transfer of Financial Assets Accounted for as Sales [Line Items] | ||
Promissory Notes, Discount and Financing Cost Non-Current | $ 32,106 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | ||||
Oil and gas sales | $ 45,477 | $ 237,075 | $ 130,097 | $ 547,912 |
Cost of revenues | (80,162) | (113,698) | (148,020) | (241,320) |
Gross profit | (34,685) | 123,377 | (17,923) | 306,592 |
Operating expenses: | ||||
General and administrative | 606,811 | 665,160 | 1,654,435 | 1,707,918 |
Depreciation, depletion and amortization | 277,793 | 142,269 | 725,198 | 327,695 |
Loss on extinguishment of debt | 1,829,651 | |||
Impairment loss | 2,108,301 | 2,108,301 | 474,357 | |
Total operating expenses | 2,992,905 | 807,429 | 6,317,585 | 2,509,970 |
Other income (expense) | ||||
Interest expense and accretion of note discounts | (271,662) | (206,582) | (657,607) | (365,182) |
Interest income | 52 | |||
Total (expense), net | (271,662) | (206,582) | (657,607) | (365,130) |
Loss before income taxes | (3,299,252) | (890,634) | (6,993,115) | (2,568,508) |
Provision for income taxes | ||||
Net loss | $ (3,299,252) | $ (890,634) | $ (6,993,115) | $ (2,568,508) |
Basic and Diluted | $ (0.04) | $ (0.01) | $ (0.08) | $ (0.04) |
Basic and Diluted | 84,860,937 | 72,313,297 | 82,682,465 | 71,546,728 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash Flows From Operating Activities | ||
Net loss | $ (6,993,115) | $ (2,568,508) |
Adjustments to reconcile net loss to net cash from operations: | ||
Stock based compensation | 310,150 | 658,250 |
Stock issued for interest payments on notes payable | 379,275 | |
Amortization of debt issuance costs | 162,550 | 143,292 |
Accretion of note discounts | 82,605 | 114,583 |
Amortization of beneficial conversion on convertible notes | 269,061 | |
Accrued interest payable in stock | 60,801 | 254,377 |
Depreciation, depletion and amortization | 725,198 | 327,695 |
Loss on extinguishment of debt | 1,829,651 | |
Impairment loss | 2,108,301 | 474,357 |
Change in: | ||
Accounts receivable | (27,558) | (14,242) |
Production revenue receivable | 63,933 | 188,478 |
Prepayments - development costs | 144,641 | |
Prepaid expenses | (106,445) | (76,158) |
Accounts payable and accrued expenses | 213,131 | 157,707 |
Accrued interest payable | 337,897 | 92,646 |
Net cash from operating activities | (963,840) | 276,393 |
Cash Flows From Investing Activities | ||
Investment in oil and gas properties | (4,949,222) | (4,552,930) |
Purchase of property, plant, and equipment | (6,564) | |
Net cash from investing activities | (4,949,222) | (4,559,494) |
Cash Flows From Financing Activities | ||
Issuance of common stock, net of offering costs | 6,027,431 | 1,674,080 |
Proceeds from stock subscription receivable | 250,000 | |
Proceeds from notes payable | 77,477 | 2,000,000 |
Payment for extension of debt maturity | (250,000) | |
Proceeds from exercise of warrants into common stock | 184,843 | |
Net cash from financing activities | 6,104,908 | 3,858,923 |
Net increase (decrease) in cash | 191,846 | (424,178) |
Cash - beginning of period | 89,730 | 840,163 |
Cash - end of period | 281,576 | 415,985 |
Supplemental disclosure of cash flow information: | ||
Increase (Decrease) in accounts payable for property development costs | 714,983 | (111,798) |
Supplemental disclosure of non-cash investing and financing activities: | ||
Debt converted by transfer of working interest | 7,330,849 | |
Common stock issued for prepayment of development costs | 750,000 | |
Common stock issued for payment in kind on notes payable | 314,107 | 314,108 |
Common stock issued for note extension | 16,000 | |
Common stock issued in payment of accounts payable | 135,000 | |
Common stock issued for lease interests | 125,000 | |
Subscription receivable for sale of common stock | 156,000 | |
Cash paid for interest | 896,415 | 751,792 |
Cash paid for state franchise tax |
CONSOLIDATED STATEMENT OF STOCK
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning Balance, Shares at Dec. 31, 2018 | 70,112,376 | |||
Beginning Balance at Dec. 31, 2018 | $ 70,116 | $ 107,266,965 | $ (89,314,305) | $ 18,022,776 |
Issuance of common stock for services | $ 92 | 99,908 | 100,000 | |
Issuance of common stock for services, Shares | 92,593 | |||
Issuance of common stock for cash | $ 1,593 | 1,272,487 | 1,274,080 | |
Issuance of common stock for cash, Shares | 1,592,600 | |||
Warrants issued for services | 186,000 | 186,000 | ||
Stock options issued for services | 111,250 | 111,250 | ||
Net loss | (1,677,874) | (1,677,874) | ||
Ending Balance, Shares at Mar. 31, 2019 | 71,911,115 | |||
Ending Balance at Mar. 31, 2019 | $ 71,914 | 109,028,125 | (90,992,179) | 18,107,860 |
Issuance of common stock for interest | $ 13 | 14,615 | 14,628 | |
Issuance of common stock for interest, Shares | 13,546 | |||
Issuance of common stock for option/warrant exercise | $ 100 | 76,900 | 77,000 | |
Issuance of common stock for warrant exercise, Shares | 100,000 | |||
Beginning Balance, Shares at Dec. 31, 2018 | 70,112,376 | |||
Beginning Balance at Dec. 31, 2018 | $ 70,116 | 107,266,965 | (89,314,305) | 18,022,776 |
Net loss | (2,568,508) | |||
Ending Balance, Shares at Jun. 30, 2019 | 73,123,917 | |||
Ending Balance at Jun. 30, 2019 | $ 73,127 | 110,441,403 | (91,882,813) | 18,631,717 |
Issuance of common stock for promissory note extension | ||||
Common stock issued in payment of accounts payable | ||||
Issuance of common stock for Note PIK | 314,108 | |||
Issuance of common stock for prepayment of development costs | ||||
Issuance of common stock for oil and gas lease extension | 125,000 | |||
Beginning Balance, Shares at Mar. 31, 2019 | 71,911,115 | |||
Beginning Balance at Mar. 31, 2019 | $ 71,914 | 109,028,125 | (90,992,179) | 18,107,860 |
Issuance of common stock for services | $ 100 | 148,900 | 149,000 | |
Issuance of common stock for services, Shares | 100,000 | |||
Issuance of common stock for cash | $ 695 | 555,305 | 556,000 | |
Issuance of common stock for cash, Shares | 695,000 | |||
Warrants issued for services | 87,000 | 87,000 | ||
Stock options issued for services | 25,000 | 25,000 | ||
Net loss | (890,634) | (890,634) | ||
Ending Balance, Shares at Jun. 30, 2019 | 73,123,917 | |||
Ending Balance at Jun. 30, 2019 | $ 73,127 | 110,441,403 | (91,882,813) | 18,631,717 |
Issuance of common stock for Note PIK | $ 202 | 313,906 | 314,108 | |
Issuance of common stock for payment in kind on notes payable, Shares | 202,316 | |||
Issuance of common stock for interest | $ 48 | 50,492 | 50,540 | |
Issuance of common stock for interest, Shares | 46,796 | |||
Issuance of common stock for option/warrant exercise | $ 68 | 107,775 | 107,843 | |
Issuance of common stock for warrant exercise, Shares | 68,690 | |||
Issuance of common stock for oil and gas lease extension | $ 100 | 124,900 | 125,000 | |
Issuance of common stock for oil and gas lease extension, Shares | 100,000 | |||
Beginning Balance, Shares at Dec. 31, 2019 | 76,222,042 | |||
Beginning Balance at Dec. 31, 2019 | $ 76,225 | 114,143,872 | (99,153,701) | 15,066,396 |
Issuance of common stock for services | $ 125 | 86,125 | 86,250 | |
Issuance of common stock for services, Shares | 125,000 | |||
Issuance of common stock to a vendor for delay in payment | $ 40 | 25,960 | 26,000 | |
Issuance of common stock to a vendor for delay in payment, Shares | 40,000 | |||
Issuance of common stock for cash | $ 3,886 | 2,353,232 | 2,357,118 | |
Issuance of common stock for cash, Shares | 3,885,715 | |||
Warrants issued in conversion of notes payable | 382,500 | 382,500 | ||
Warrants issued for services | 98,900 | 98,900 | ||
Stock options issued for services | 19,500 | 19,500 | ||
Net loss | (3,693,863) | (3,693,863) | ||
Ending Balance, Shares at Mar. 31, 2020 | 80,272,757 | |||
Ending Balance at Mar. 31, 2020 | $ 80,276 | 117,110,089 | (102,847,564) | 14,342,801 |
Beginning Balance, Shares at Dec. 31, 2019 | 76,222,042 | |||
Beginning Balance at Dec. 31, 2019 | $ 76,225 | 114,143,872 | (99,153,701) | 15,066,396 |
Issuance of common stock for services | $ 146,250 | |||
Issuance of common stock for services, Shares | 267,857 | |||
Issuance of common stock to a vendor for delay in payment | $ 26,000 | |||
Issuance of common stock to a vendor for delay in payment, Shares | 40,000 | |||
Warrants issued in conversion of notes payable | $ 382,500 | |||
Warrants issued for services | 98,900 | |||
Stock options issued for services | 39,000 | |||
Net loss | (6,993,115) | |||
Ending Balance, Shares at Jun. 30, 2020 | 94,468,304 | |||
Ending Balance at Jun. 30, 2020 | $ 94,471 | 122,060,814 | (106,146,816) | 16,008,469 |
Issuance of common stock for promissory note extension | $ 16,000 | |||
Issuance of common stock for promissory note extension, Shares | 40,000 | |||
Common stock issued in payment of accounts payable | $ 135,000 | |||
Issuance of common stock for Note PIK | 314,107 | |||
Issuance of common stock for prepayment of development costs | 750,000 | |||
Issuance of common stock for oil and gas lease extension | ||||
Beginning Balance, Shares at Mar. 31, 2020 | 80,272,757 | |||
Beginning Balance at Mar. 31, 2020 | $ 80,276 | 117,110,089 | (102,847,564) | 14,342,801 |
Issuance of common stock for services | $ 143 | 59,857 | 60,000 | |
Issuance of common stock for services, Shares | 142,857 | |||
Issuance of common stock for cash | $ 11,345 | 2,767,856 | 2,779,201 | |
Issuance of common stock for cash, Shares | 11,344,737 | |||
Stock options issued for services | 19,500 | 19,500 | ||
Net loss | (3,299,252) | (3,299,252) | ||
Ending Balance, Shares at Jun. 30, 2020 | 94,468,304 | |||
Ending Balance at Jun. 30, 2020 | $ 94,471 | 122,060,814 | (106,146,816) | 16,008,469 |
Warrants issued in connection with common stock offerings | 891,112 | 891,112 | ||
Issuance of common stock for promissory note extension | $ 40 | 15,960 | 16,000 | |
Issuance of common stock for promissory note extension, Shares | 40,000 | |||
Common stock issued in payment of accounts payable | $ 357 | 134,643 | 135,000 | |
Common stock issued in payment of accounts payable, Shares | 357,143 | |||
Issuance of common stock for Note PIK | $ 680 | 313,427 | 314,107 | |
Issuance of common stock for payment in kind on notes payable, Shares | 680,376 | |||
Issuance of common stock for prepayment of development costs | $ 1,630 | $ 748,370 | $ 750,000 | |
Issuance of common stock for prepayment of development costs, Shares | 1,630,434 |
NATURE OF BUSINESS
NATURE OF BUSINESS | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF BUSINESS | 1. NATURE OF BUSINESS Torchlight Energy Resources, Inc. was incorporated in October 2007 under the laws of the State of Nevada as Pole Perfect Studios, Inc. (PPS). From its incorporation to November 2010, the company was primarily engaged in business start-up activities. We are engaged in the acquisition, exploitation and/or development of oil and natural gas properties in the United States. We operate our business through our subsidiaries Torchlight Energy Inc., Torchlight Energy Operating, LLC, Hudspeth Oil Corporation, Torchlight Hazel LLC, and Warwink Properties LLC. |
GOING CONCERN
GOING CONCERN | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GOING CONCERN | 2. GOING CONCERN At June 30, 2020, the Company had not yet achieved profitable operations. We had a net loss of $ 6,993,115 106,146,816 14,748,949 The Companys ability to continue as a going concern is dependent on its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Managements plan to address the Companys ability to continue as a going concern includes: (1) obtaining debt or equity funding from private placement, institutional, or public sources; (2) obtain loans from financial institutions, where possible, or (3) participating in joint venture transactions with third parties. Although management believes that it will be able to obtain the necessary funding to allow the Company to remain a going concern through the methods discussed above, there can be no assurances that such methods will prove successful. These consolidated financial statements have been prepared assuming that the Company will continue as a going concern and therefore, the financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amount and classifications of liabilities that may result from the outcome of this uncertainty. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | 3. SIGNIFICANT ACCOUNTING POLICIES The Company maintains its accounts on the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America. Accounting principles followed and the methods of applying those principles, which materially affect the determination of financial position, results of operations and cash flows are summarized below: Use of estimates Basis of presentation These interim financial statements are unaudited and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) regarding interim financial reporting. Certain disclosures have been condensed or omitted from these financial statements. Accordingly, they do not include all the information and notes required by accounting principles generally accepted in the United States of America (GAAP) for complete consolidated financial statements, and should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2019. In the opinion of management, the accompanying unaudited financial condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary to fairly present the financial position as of, and the results of operations for, all periods presented. In preparing the accompanying financial statements, management has made certain estimates and assumptions that affect reported amounts in the condensed financial statements and disclosures of contingencies. Actual results may differ from those estimates. The results for interim periods are not necessarily indicative of annual results. Certain reclassifications have been made to the prior periods consolidated financial statements and related footnotes to conform them to the current period presentation. TORCHLIGHT ENERGY RESOURCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 3. SIGNIFICANT ACCOUNTING POLICIES - continued Risks and uncertainties Concentration of risks Fair value of financial instruments For assets and liabilities that require re-measurement to fair value the Company categorizes them in a three-level fair value hierarchy as follows: ● Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. ● Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration. ● Level 3 inputs are unobservable inputs based on managements own assumptions used to measure assets and liabilities at fair value. A financial asset or liabilitys classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. Cash and cash equivalents Accounts receivable Oil and gas properties Oil and gas properties include costs that are excluded from costs being depleted or amortized. Oil and natural gas property costs excluded represent investments in unevaluated properties and include non-producing leasehold, geological, and geophysical costs associated with leasehold or drilling interests and exploration drilling costs. The Company allocates a portion of its acquisition costs to unevaluated properties based on relative value. Costs are transferred to the full cost pool as the properties are evaluated over the life of the reservoir. Unevaluated properties 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. Gains and losses on the sale of oil and gas properties are not generally reflected in income unless the gain or loss would significantly alter the relationship between capitalized costs and proved reserves. Sales of less than 100% of the Companys interest in the oil and gas property are treated as a reduction of the capital cost of the field, with no gain or loss recognized, as long as doing so does not significantly affect the unit-of-production depletion rate. Costs of retired equipment, net of salvage value, are usually charged to accumulated depreciation. TORCHLIGHT ENERGY RESOURCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 3. SIGNIFICANT ACCOUNTING POLICIES - continued Capitalized interest 1,182,445 1,362,244 Depreciation, depletion, and amortization Ceiling test 2,108,301 474,357 The ceiling test calculation uses a commodity price assumption which is based on the unweighted arithmetic average of the price on the first day of each month for each month within the prior 12 month period and excludes future cash outflows related to estimated abandonment costs. The determination of oil and gas reserves is a subjective process, and the accuracy of any reserve estimate depends on the quality of available data and the application of engineering and geological interpretation and judgment. Estimates of economically recoverable reserves and future net cash flows depend on a number of variable factors and assumptions that are difficult to predict and may vary considerably from actual results. In particular, reserve estimates for wells with limited or no production history are less reliable than those based on actual production. Subsequent re-evaluation of reserves and cost estimates related to future development of proved oil and gas reserves could result in significant revisions to proved reserves. Other issues, such as changes in regulatory requirements, technological advances, and other factors which are difficult to predict could also affect estimates of proved reserves in the future. Asset retirement obligations Inherent in the fair value calculation of an ARO are numerous assumptions and judgments including the ultimate settlement amounts, inflation factors, credit adjusted discount rates, timing of settlement, and changes in the legal, regulatory, environmental, and political environments. To the extent future revisions to these assumptions impact the fair value of the existing ARO liability, a corresponding adjustment is made to the oil and gas property balance. Settlements greater than or less than amounts accrued as ARO are recorded as a gain or loss upon settlement. Income taxes Authoritative guidance for uncertainty in income taxes requires that the Company recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an examination. Management has reviewed the Companys tax positions and determined there were no uncertain tax positions requiring recognition in the consolidated financial statements. Company tax returns remain subject to Federal and State tax examinations. Generally, the applicable statutes of limitation are three to four years from their respective filings. TORCHLIGHT ENERGY RESOURCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 3. SIGNIFICANT ACCOUNTING POLICIES - continued Estimated interest and penalties related to potential underpayment on any unrecognized tax benefits are classified as a component of tax expense in the statements of operation. The Company has not recorded any interest or penalties associated with unrecognized tax benefits for any periods covered by these financial statements. Share-based compensation The Company accounts for stock option awards using the calculated value method. The expected term was derived using the simplified method provided in Securities and Exchange Commission release Staff Accounting Bulletin No. 110, which averages an awards weighted average vesting period and contractual term for plain vanilla share options. The Company accounts for any forfeitures of options when they occur. Previously recognized compensation cost for an award is reversed in the period that the award is forfeited. The Company also issues equity awards to non-employees. The fair value of these option awards is estimated when the award recipient completes the contracted professional services. The Company recognizes expense for the estimated total value of the awards during the period from their issuance until performance completion. The Company values warrant and option awards using the Black-Scholes option pricing model. Revenue recognition The Companys revenue is typically generated from contracts to sell natural gas, crude oil or NGLs produced from interests in oil and gas properties owned by the Company. Contracts for the sale of natural gas and crude oil are evidenced by (1) base contracts for the sale and purchase of natural gas or crude oil, which document the general terms and conditions for the sale, and (2) transaction confirmations, which document the terms of each specific sale. The transaction confirmations specify a delivery point which represents the point at which control of the product is transferred to the customer. These contracts frequently meet the definition of a derivative under ASC 815, and are accounted for as derivatives unless the Company elects to treat them as normal sales as permitted under that guidance. The Company elects to treat contracts to sell oil and gas production as normal sales, which are then accounted for as contracts with customers. The Company has determined that these contracts represent multiple performance obligations which are satisfied when control of the commodity transfers to the customer, typically through the delivery of the specified commodity to a designated delivery point. Revenues from oil and gas sales are detailed as follows: Three Months Three Months Six Months Six Months Ended Ended Ended Ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Revenues Oil sales $ 44,997 $ 223,038 $ 127,110 $ 525,183 Gas sales 480 14,037 2,987 22,729 Total $ 45,477 $ 237,075 $ 130,097 $ 547,912 Revenue is measured based on consideration specified in the contract with the customer, and excludes any amounts collected on behalf of third parties. The Company recognizes revenue in the amount that reflects the consideration it expects to be entitled to in exchange for transferring control of those goods to the customer. Amounts allocated in the Companys price contracts are based on the standalone selling price of those products in the context of long-term contracts. Payment is generally received one or two months after the sale has occurred. TORCHLIGHT ENERGY RESOURCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 3. SIGNIFICANT ACCOUNTING POLICIES - continued Gain or loss on derivative instruments is outside the scope of ASC 606 and is not considered revenue from contracts with customers subject to ASC 606. The Company may in the future use financial or physical contracts accounted for as derivatives as economic hedges to manage price risk associated with normal sales, or in limited cases may use them for contracts the Company intends to physically settle but do not meet all of the criteria to be treated as normal sales. Producer Gas Imbalances. Basic and diluted earnings (loss) per share – 11,025,186 Environmental laws and regulations Recent adopted accounting pronouncements Other recently issued or adopted accounting pronouncements are not expected to have, or did not have, a material impact on the Companys financial position or results from operations. Subsequent events |
OIL & GAS PROPERTIES
OIL & GAS PROPERTIES | 6 Months Ended |
Jun. 30, 2020 | |
Extractive Industries [Abstract] | |
OIL & GAS PROPERTIES | 4. OIL & GAS PROPERTIES The following table presents the capitalized costs for oil & gas properties of the Company as of June 30, 2020 and December 31, 2019: June 30, 2020 December 31, 2019 Evaluated costs subject to amortization $ 16,076,076 $ 13,243,541 Unevaluated costs 32,229,226 39,667,740 Total capitalized costs 48,305,302 52,911,281 Less accumulated depreciation, depletion and amortization (15,561,773 ) (12,729,238 ) Total oil and gas properties $ 32,743,529 $ 40,182,043 Unevaluated costs as of June 30, 2020 include cumulative costs on developing projects including the Orogrande, Hazel, and Winkler projects in West Texas. The Company periodically adjusts for the separation of evaluated versus unevaluated costs within its full cost pool to recognize the value impairment related to the expiration of, or changes in market value, of unevaluated leases. The impact of reclassifications as they become necessary is to increase the basis for calculation of future periods depletion, depreciation and amortization which effectively recognizes the impairment on the consolidated statement of operations over future periods. Reclassified costs also become evaluated costs for purposes of ceiling tests and which may cause recognition of increased impairment expense in future periods. The cumulative unevaluated costs which have been reclassified within our full cost pool totals $ 5,881,635 TORCHLIGHT ENERGY RESOURCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 4. OIL & GAS PROPERTIES - continued Due to the volatility of commodity prices, should oil and natural gas prices decline in the future, it is possible that a further write-down could occur. Proved reserves are estimated quantities of crude oil, natural gas, and natural gas liquids, which geological and engineering data demonstrate with reasonable certainty to be recoverable from known reservoirs under existing economic and operating conditions. The independent engineering estimates include only those amounts considered to be proved reserves and do not include additional amounts which may result from new discoveries in the future, or from application of secondary and tertiary recovery processes where facilities are not in place or for which transportation and/or marketing contracts are not in place. Estimated reserves to be developed through secondary or tertiary recovery processes are classified as unevaluated properties. Current Projects We are an energy company engaged in the acquisition, exploration, exploitation and/or development of oil and natural gas properties in the United States. We are primarily focused on the acquisition of early stage projects, the development and delineation of these projects, and then the monetization of those assets once these activities are completed. Since 2010, our primary focus has been the development of interests in oil and gas projects we hold in the Permian Basin in West Texas. We also hold minor interests in certain other oil and gas projects in Central Oklahoma that we are in the process of divesting. As of June 30, 2020, we had interests in four oil and gas projects: the Orogrande Project in Hudspeth County, Texas, the Hazel Project in Sterling, Tom Green, and Irion Counties, Texas, the Winkler Project in Winkler County, Texas and the wells in Central Oklahoma. Orogrande Project, West Texas On August 7, 2014, we entered into a Purchase Agreement with Hudspeth Oil Corporation (Hudspeth), McCabe Petroleum Corporation (MPC), and Gregory McCabe, our Chairman. Mr. McCabe was the sole owner of both Hudspeth and MPC. Under the terms and conditions of the Purchase Agreement, we purchased 100% 172,000 134,000 We believe all drilling obligations through June 30, 2020 have been met. On September 23, 2015, Hudspeth entered into a Farmout Agreement with Pandora Energy, LP (Pandora), Founders Oil & Gas, LLC (Founders), and for the limited purposes set forth therein, MPC and Mr. McCabe, for the entire Orogrande Project in Hudspeth County, Texas. The Farmout Agreement provided that Hudspeth and Pandora (collectively referred to as Farmor) would assign to Founders an undivided 50% of the leasehold interest and a 37.5% net revenue interest in the oil and gas leases and mineral interests in the Orogrande Project, which interests, except for any interests retained by Founders, would be reassigned to Farmor by Founders if Founders did not spend a minimum of $45.0 million on actual drilling operations on the Orogrande Project by September 23, 2017. Under a joint operating agreement also entered into on September 23, 2015, Founders was designated as operator of the leases. Effective March 27, 2017 the property became subject to a DDU Agreement which allows for all 192 existing leases covering approximately 134,000 net acres leased from University Lands to be combined into one drilling and development unit for development purposes. The term of the DDU Agreement expires on December 31, 2023, and the time to drill on the drilling and development unit continues through December 2023. The DDU Agreement also grants the right to extend the DDU Agreement through December 2028 if compliance with the DDU Agreement is met and the extension fee associated with the additional time is paid. Our drilling obligations include four five During 2017, we assumed operational control from Founders Oil and Gas Operating LLC on the Orogrande Project. We were joined by Wolfbone Investments, LLC, (Wolfbone), a company owned by Mr. McCabe. We, along with Hudspeth, Wolfbone and, for the limited purposes set forth therein, Pandora, entered into an Assignment of Farmout Agreement with Founders, (the Assignment of Farmout Agreement), pursuant to which we and Wolfbone will share the remaining commitments under the Farmout Agreement. All original provisions of our carried interest were to remain in place including reimbursement to us on each wellbore. Founders was to remain a 9.5% working interest owner in the Orogrande Project for the $9.5 million it had spent as of the date of the Assignment of Farmout Agreement, and such interests were to be carried until $40.5 million is spent by Wolfbone and us, with each contributing 50% of such capital spend, under the existing agreement. TORCHLIGHT ENERGY RESOURCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 4. OIL & GAS PROPERTIES - continued Our working interest in the Orogrande Project thereby increased by 20.25% to a total of 67.75% and Wolfbone then owned 20.25%. On July 25, 2018, we and Hudspeth entered into a Settlement & Purchase Agreement (the Settlement Agreement) with Founders (and Founders Oil & Gas Operating, LLC), Wolfbone and MPC, which agreement provides for Founders assigning all of its working interest in the oil and gas leases of the Orogrande Project to Hudspeth and Wolfbone equally. Future well capital spending obligations remained the same 50% contribution from Hudspeth and 50% from Wolfbone until such time as the $40.5 million to be spent on the project. The Company estimates that there is still approximately $9.0 million remaining to be spent on the project until such time as the capital expenditures revert back to the percentages of the working interest owners. After the assignment by Founders, Hudspeths working interest increased to 72.5%. The Company has drilled eight test wells in the Orogrande in order to stay in compliance with University Lands D&D Unit Agreement, as well as, to test for potential shallow pay zones and deeper pay zones that may be present on structural plays. Development of the wells continued into the six months ended June 30, 2020 to further capture and document the scientific base in support of demonstrating the production potential of the property. The Company is currently marketing the project for an outright sale or farm in partner. This marketing process has been long and arduous as the overall market is quite soft. Due to the size and scope of the project, we are dealing with very large companies that have multitudes of people reviewing our material, which in itself is extensive. During the marketing process, the Company and Wolfbone will endeavor to complete the University Maverick A24 #1 as a potential producer in the Atoka formation. Should a farm out partner or sale not occur, the Company and Wolfbone will continue to drill additional wells in the play in order to fulfill the obligations under the DDU Agreement Rich Masterson, our consulting geologist, is credited with originating the Orogrande Project in Hudspeth County in the Orogrande Basin. With Mr. Mastersons assistance and based on all the science we have gathered to date, we have identified multiple unconventional and conventional target pay zones with depths between 3,000 and 8,000 with primary pay, described as the Penn formation, located at depths of 5,300 to 5,900. Based on our geologic analysis to date, this basin has stacked pay with zones including the Wolfcamp, Penn, Barnett, Woodford, Atoka and more. These potential zones are prospective for oil and gas with a GOR of 1100 expected based on our gathered scientific information and analysis from independent third parties. On March 9, 2020, holders of notes payable by the Company entered into a Conversion Agreement under which the noteholders elected to convert principal of $6,000,000 and approximately $1,331,000 of accrued interest on the notes, in accordance with their terms, into an aggregate 6% working interest (of all such holders) in the Orogrande Project. The Orogrande Project ownership as of June 30, 2020 is detailed as follows: Revenue Working Interest Interest University Lands - Mineral Owner 20.000 % n/a ORRI - Magdalena Royalties, LLC, an entity controlled by Gregory McCabe, Chairman 4.500 % n/a ORRI - Unrelated Party 0.500 % n/a Hudspeth Oil Corporation, a subsidiary of Torchlight Energy Resources Inc. 49.875 % 66.500 % Wolfbone Investments LLC, an entity controlled controlled by Gregory McCabe, Chairman 18.750 % 25.000 % Conversion by Note Holders in March, 2020 4.500 % 6.000 % Unrelated Party 1.875 % 2.500 % 100.000 % 100.000 % TORCHLIGHT ENERGY RESOURCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 4. OIL & GAS PROPERTIES - continued Hazel Project in the Midland Basin in West Texas Effective April 4, 2016, TEI acquired from MPC a 66.66% working interest in approximately 12,000 acres in the Midland Basin. A back-in after payout of a 25% working interest was retained by MPC and another unrelated working interest owner. In October 2016, the holders of all of our then-outstanding shares of Series C Preferred Stock (which were issued in July 2016) elected to convert into a total 33.33% working interest in our Hazel Project, reducing our ownership from 66.66% to a 33.33% working interest. The Company has drilled six test wells on the Hazel Project to capture and document the scientific base in support of demonstrating the production potential of the property. Acquisition of Additional Interests in Hazel Project On January 30, 2017, we entered into and closed an Agreement and Plan of Reorganization and a Plan of Merger with an entity which was wholly-owned by Mr. McCabe, which resulted in the acquisition of approximately 40.66% working interest in the 12,000 gross acres, 9,600 net acres, in the Hazel Project. Also on January 30, 2017, TEI entered into and closed a Purchase and Sale Agreement with Wolfbone. Under the agreement, TEI acquired certain of Wolfbones Hazel Project assets, including its interest in the Flying B Ranch #1 well and the 40 acre unit surrounding the well. Upon the closing of the transactions, our working interest in the Hazel Project increased by 40.66% to a total ownership of 74%. Effective June 1, 2017, we acquired an additional 6% working interest from unrelated working interest owners increasing our working interest in the Hazel project to 80%, and an overall net revenue interest of 74-75%. Mr. Masterson, who assisted with development in our Orogrande project, is also credited with originating the Hazel Project in the Midland Basin. We were required to drill one well every six months to hold the entire 12,000 acre block for eighteen months until to November 22, 2018, and thereafter two wells every six months. During 2019 and the six months ended June 30, 2020 modifications were completed to mineral owner leases as described below. Lease Modifications In May 2019 we entered into agreements with two of the three mineral owners on the northern section of the leases to keep the entire acreage block as one lease with a one year extension. We issued each of them 50,000 shares of our common stock as consideration for this extension. As of June 30, 2020 we have structured the extension agreement retroactively with the third mineral owner for cash consideration. Due to this extension, our obligation for 2019 reduced to one obligation well. We finished that obligation well targeting a shallow zone that showed oil potential. For the remainder of 2020 the Company must drill one well in June and two wells by the December 31, 2020. Development of the June well was initiated during June, 2020. In April 2018, we announced that we have commenced a process that could result in the monetization of the Hazel Project. We believe the development activity at the Hazel Project, coupled with nearby activities of other oil and gas operators, suggests that this project has achieved a level of value worth monetizing. We anticipate that the liquidity that would be provided from selling the Hazel Project could be redeployed into the Orogrande Project. While this process is underway, we will take all necessary steps to maintain the leasehold as required. As of this filing, we continue to maintain the leases in good standing and continue to market the acreage in an effort to focus on the Orogrande Project. The marketing process is ongoing for the Hazel project. We continue to encounter, as does the entire industry, a soft market for acquisitions and divestitures transactions. We will continue to look to sell the property or joint venture the property via farm in or a drillco transaction. TORCHLIGHT ENERGY RESOURCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 4. OIL & GAS PROPERTIES - continued Winkler Project, Winkler County, Texas On December 1, 2017, an Agreement and Plan of Reorganization was entered into with MPC and Warwink Properties, LLC (Warwink Properties) to acquire certain assets, including a 10.71875% working interest in approximately 640 acres in Winkler County, Texas. Also on December 1, 2017, MPC closed its transaction with MECO IV, LLC ( MECO), for the purchase and sale of certain assets. Warwink Properties received a carry from MECO (through the tanks) of up to $1,179,076 in the next well drilled on the Winkler County leases. Also on December 1, 2017, the transactions contemplated by the Purchase Agreement that TEI entered into with MPC closed. Under the Purchase Agreement TEI acquired beneficial ownership of certain of MPCs assets, including acreage and wellbores located in Ward County, Texas (the Ward County Assets). Addition to the Winkler Project As of May 7, 2018 our Winkler project in the Delaware Basin had begun the drilling phase of the first Winkler Project well, the UL 21 War-Wink 47 #2H. Additional acreage was leased by our operating partner under the Area of Mutual Interest Agreement (AMI) and we exercised its right to participate for its 12.5% in the additional 1,080 gross acres. Our carried interest in the first well was applied to this new well and allowed MECO to drill and produce potential revenues sooner than originally planned. The primary leasehold is a 320-acre block and allows for 5,000-foot lateral wells to be drilled. The first well was completed and began production in October, 2018 and is producing currently. The operator has informed us that there will be no planned additional wells in the acreage in 2020. All acreage is presently held by production. In December 2018, the Company began to take measures on its own to market the Winkler Project in an effort to focus on the Orogrande. This process is ongoing. Hunton Play, Central Oklahoma Presently, we are producing from one well in the Viking Area of Mutual Interest and one well in Prairie Grove. Assessment for Assets Held for Sale Classification With respect to marketing oil and natural gas properties, the Company has evaluated the properties being marketed to determine whether any should be reclassified as held-for-sale at June 30, 2020. The held-for-sale criteria include: management commits to a plan to sell; the asset is available for immediate sale; an active program to locate a buyer exists; the sale of the asset is probable and expected to be completed within one year; the asset is being actively marketed for sale; and it is unlikely that significant changes to the plan will be made. If each of these criteria is met, the property would be reclassified as held-for-sale on the Companys consolidated balance sheets and measured at the lower of their carrying amount or estimated fair value less costs to sell. Fair values are estimated using accepted valuation techniques, such as a discounted cash flow model, valuations performed by third parties, earnings multiples, or indicative bids, when available. Management considers historical experience and all available information at the time the estimates are made; however, the fair value that is ultimately realized upon the sale of the assets to be divested may differ from the estimated fair values reflected in the consolidated financial statements. If each of these criteria is met, DD&A expense would not be recorded on assets to be divested once they are classified as held for sale. Based on managements assessment, certain criteria have not been met and no assets are classified as held for sale as of June 30, 2020. |
RELATED PARTY PAYABLES
RELATED PARTY PAYABLES | 6 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY PAYABLES | 5. RELATED PARTY PAYABLES As of June 30, 2020 and December 31, 2019, related party payables of $ 45,000 1,086,176 $996,176 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 6. COMMITMENTS AND CONTINGENCIES Leases The Company is a subtenant on a month to month basis for the occupancy of its office premises. TORCHLIGHT ENERGY RESOURCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 6. COMMITMENTS AND CONTINGENCIES - continued Legal Matters On January 31, 2020, Torchlight Energy Resources, Inc. and its wholly owned subsidiaries Torchlight Energy, Inc. and Torchlight Energy Operating, LLC were served with a lawsuit brought by Goldstone Holding Company, LLC ( Goldstone Holding Company, LLC v. Torchlight Energy, Inc., et al. On April 30, 2020, our wholly owned subsidiary, Hudspeth Oil Corporation, filed suit against Datalog LWT, Inc. d/b/a Cordax Evaluation Technologies. The suit seeks the recovery of approximately $1.4 million in costs incurred as a result of a tool failure during drilling activities on the University Founders A25 #2 well that is located in the Orogrande Field. Working interest owner Wolfbone Investments, LLC, a company owned by our Chairman Gregory Mccabe, is a co-plaintiff in that action. After the suit was filed, Cordax filed a mineral lien in the amount of $104,500.01 against the Orogrande Field and has sued the operator and counterclaimed against Hudpspeth for breach of contract, seeking the same amount as the lien. We are contesting the lien in good faith. The suit, Hudspeth Oil Corporation and Wolfbone Investments, LLC v. Datalog LWT, Inc. d/b/a Cordax Evaluation Technologies th Environmental Matters The Company is subject to contingencies as a result of environmental laws and regulations. Present and future environmental laws and regulations applicable to the Companys operations could require substantial capital expenditures or could adversely affect its operations in other ways that cannot be predicted at this time. As of June 30, 2020 and December 31, 2019, no amounts had been recorded because no specific liability has been identified that is reasonably probable of requiring the Company to fund any future material amounts. |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | 7. STOCKHOLDERS EQUITY Common Stock On January 10, 2020, the Company sold 600,000 0.60 360,000 On January 16, 2020, the Company announced the closing of its underwritten public offering of 3,285,715 0.70 1,997,118 In May 2020, the Company issued 680,376 314,107 In May 2020, we issued 1,630,434 750,000 On May 20, 2020, the Company announced the closing of its underwritten public offering of 3,450,000 0.34 886,622 TORCHLIGHT ENERGY RESOURCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 7. STOCKHOLDERS EQUITY - continued On June 16, 2020, the Company announced the closing of its registered direct offering of 7,894,737 0.38 2,783,691 During the six months ended June 30, 2020, the Company issued 267,857 146,250 During the six months ended June 30, 2020, the Company issued 40,000 26,000 During the six months ended June 30, 2020, the Company issued 40,000 16,000 During the six months ended June 30, 2020, the Company issued 257,143 90,000 During the six months ended June 30, 2020, the Company issued 100,000 45,000 Warrants and Options During the six months ended June 30, 2020, the Company issued 215,000 warrants with total fair value of $ 98,900 39,000 During the six months ended June 30, 2020, the Company issued 750,000 warrants valued at $ 382,500 During the six months ended June 30, 2020, the Company issued 600,000 warrants in connection with the sale of 600,000 shares of common stock valued at $360,000 in a private placement. During the six months ended June 30, 2020, the Company issued 172,500 warrants valued at $36,225 in connection with the offering of common stock on May 20, 2020 as referred to above. In connection with the registered direct offering closed June 16, 2020, as referred above, the Company issued 3,157,895 warrants. The warrants were exercised on July 9, 2020 under the cashless provisions in the agreement resulting in the Company issuing 3,157,895 shares of common stock for which no cash was received. Of the total consideration received from the offering of $854,887 was allocated to the warrants using the pro rata percentage of the number of warrants to the total shares ultimately issued under the offering terms. TORCHLIGHT ENERGY RESOURCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 7. STOCKHOLDERS EQUITY - continued A summary of warrants outstanding Exercise Expiration Date in Price 2020 2021 2022 2023 2024 2025 Total $ - - - - - - 3,157,895 3,157,895 $ 0.425 - - - - - 172,500 172,500 $ 0.70 - - - - - 965,000 965,000 $ 0.80 - - - - - 2,266,667 2,266,667 $ 1.03 - 120,000 - - - - 120,000 $ 1.14 - - - 600,000 - - 600,000 $ 1.21 - - - 120,000 - - 120,000 $ 1.35 - - 365,455 - - - 365,455 $ 1.63 - - - - 100,000 - 100,000 $ 1.64 - 200,000 - - - - 200,000 $ 2.00 - 200,000 - - - - 200,000 $ 2.23 339,901 - - - - - 339,901 339,901 520,000 365,455 720,000 100,000 6,562,062 8,607,418 On June 11, 2020, 4,500,000 stock options previously granted to officers of the Company in 2015 expired. Reference subsequent events in Note 11 regarding the issuance of stock options at July 15, 2020, the date of the renewal of Employment Agreements which had also expired in June, 2020. A summary of stock options outstanding Exercise Expiration Date in Price 2021 2022 2023 2024 Total $ 0.85 - - - 600,000 600,000 $ 0.97 259,742 - - - 259,742 $ 1.10 - 800,000 - - 800,000 $ 1.19 - - 700,000 - 700,000 $ 1.57 - - - - - $ 1.63 - 58,026 - - 58,026 259,742 858,026 700,000 600,000 2,417,768 At June 30, 2020, the Company had reserved 11,025,186 TORCHLIGHT ENERGY RESOURCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 7. STOCKHOLDERS EQUITY - continued Warrants and options granted were valued using the Black-Scholes Option Pricing Model. The assumptions used in calculating the fair value of the warrants and options issued 2020 Risk-free interest rate .38% 1.21% Expected volatility of common stock 102% 205% Dividend yield 0.00% Discount due to lack of marketability 20% Expected life of option/warrant Five Years 2019 Risk-free interest rate 2.40% 2.46% Expected volatility of common stock 105% 107% Dividend yield 0.00% Discount due to lack of marketability 20% Expected life of option/warrant Five Years |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 8. INCOME TAXES The Company recorded no income tax provision at June 30, 2020 and December 31, 2019 because of losses incurred. The Company estimates its annual effective income tax rate in recording its quarterly provision for income taxes in the various jurisdictions in which it operates. Statutory tax rate changes and other significant or unusual items are recognized as discrete items in the quarter in which they occur. The Company recorded no income tax expense for the six months ended June 30, 2020 because the Company expects to incur a tax loss in the current year. Similarly, no income tax expense was recognized for the six months ended June 30, 2019. The Company had a net deferred tax asset related to federal net operating loss carryforwards of $ 70,899,608 66,984,025 |
PROMISSORY NOTES
PROMISSORY NOTES | 6 Months Ended |
Jun. 30, 2020 | |
Promissory Notes | |
PROMISSORY NOTES | 9. PROMISSORY NOTES Promissory Notes Issued in 2017 On April 10, 2017, we sold two 12% unsecured promissory notes with a total of $ 8,000,000 12% April 10, 2020 7,540,000 These 12% promissory notes allow for early redemption. The notes also contain certain covenants under which we have agreed that, except for financing arrangements with established commercial banking or financial institutions and other debts and liabilities incurred in the normal course of business, we will not issue any other notes or debt offerings which have a maturity date prior to the payment in full of the 12% notes, unless consented to by the holders. TORCHLIGHT ENERGY RESOURCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 9. PROMISSORY NOTES - continued The effective interest rate is 16.15% On April 24, 2017, we used $ 2,509,500 1,007,890 64,297 On February 20, 2020, the Company extended the maturity on $4 million of the 12% unsecured promissory notes previously due in April, 2020. The maturity date of the subject promissory note has been extended for one year, from April 10, 2020 to April 10, 2021 As part of the terms of this extension agreement, the Company paid the noteholder a fee of $ 80,000 Promissory Notes Issued in 2018 On February 6, 2018, we sold to the Straz Trust in a private transaction a 12% unsecured promissory note with a principal amount of $ 4,500,000 April 10, 2020 4,332,150 This 12% promissory note allows for early redemption, provided that if we redeem before February 6, 2019, we must pay the holder all unpaid interest and common stock payments on the portion of the note redeemed that would have been earned through February 6, 2019. The note also contains certain covenants under which we have agreed that, except for financing arrangements with established commercial banking or financial institutions and other debts and liabilities incurred in the normal course of business, we will not issue any other notes or debt offerings which have a maturity date prior to the payment in full of the 12% note, unless consented to by the holder. The effective interest rate is 15.88% Extension of Promissory Notes On April 24, 2020, the Company entered into a Note Amendment Agreement with each of the Straz Foundation, as a lender , the Straz Trust , as a lender and collateral agent , and The Northern Trust Company and Christopher M. Straz, as co-trustees of the Straz Trust. Under the Note Amendment Agreement, the parties agreed to amend and restate the two promissory notes issued to the Straz Trust on April 10, 2017 and February 6, 2018 that have total principal outstanding of $8,500,000, along with the promissory note issued to the Straz Foundation on April 10, 2017 which had an outstanding principal amount of $ 4,000,000 April 10, 2021 Under the Note Amendment Agreements, we and our subsidiaries provided a first priority lien on certain collateral in favor of the collateral agent for the benefit of the lenders. The collateral includes all assets and property held by Hudspeth Oil Corporation and Torchlight Hazel, LLC, which includes without limitation our working interest in certain oil and gas leases in Hudspeth County, Texas, known as the Orogrande Project and our working interest in certain oil and gas leases in the Midland Basin in West Texas, known as the Hazel Project. Further, these subsidiaries, along with Torchlight Energy, Inc., provided guaranty with respect to payment of the three promissory notes. The Note Amendment Agreements also provide that (a) upon any disposition of less than 100% of Borrowers right, title and interest in and to the Orogrande Project or the Hazel Project, we must prepay an amount equal to 75% of the proceeds thereof (up to the outstanding amount due under the notes), unless such disposition results in us owning less than a 45% working interest (on an 8/8ths basis) in the Orogrande Project or the Hazel Project, in which case the prepayment amount is to be equal to 100% of such proceeds (up to the outstanding amount due under the notes); and (b) upon any disposition of 100% of our right, title and interest in and to the Orogrande Project or the Hazel Project, we must prepay an amount equal to 100% of the proceeds thereof (up to the outstanding amount due under the notes). Additionally, the promissory notes, as amended, now provide conversion rights whereby the lenders will have the right, at each such lenders option, to convert any portion of principal and interest into shares of common stock of Torchlight Energy Resources, Inc. at a conversion price of $1.50 per share. TORCHLIGHT ENERGY RESOURCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 9. PROMISSORY NOTES - continued The Note Amendment Agreements (as further amended) provided that no later than May 25, 2020, we were obligated to pay: (a) to the lenders all past due interest that has accrued on the existing promissory notes, and (b) to the Straz Trust a fee of $170,000, which payments were made. Further, the agreements have certain negative covenants regarding related party transactions, dividends, stock repurchases, grants of liens on other assets, and payment of accrued executive compensation. There are also typical affirmative covenants regarding legal compliance and payment of taxes. The agreements also provide certain notice and disclosure requirements, including notice of material events, such as defaults under other obligations and litigation. The $170,000 extension fee was paid on May 22 and the interest payments were made on June 17, 2020 within the terms of a forbearance agreement which provided an extension of the due date of the interest payments. All other terms and conditions of the three original promissory notes remain substantially unchanged, including without limitation, monthly payments of interest only at the rate of 12% per annum, with a balloon payment of the outstanding principal due and payable at maturity, and annual payments of common stock at the rate of 2.5% of the principal amount outstanding, based on a volume-weighted average price. In May 2020 and April 2019, respectively, the holders of the notes described above received 680,376 202,316 The 12% promissory note transactions 12% 2020 Unsecured promissory note balance - December 31, 2019 $ 12,377,830 Accretion of discount and amortization of debt issuance costs 241,261 Debt extension fee paid (250,000 ) 12% 2021 Secured promissory note balance - June 30, 2020 $ 12,369,091 The 12% unsecured notes payable at December 31, 2019 included $64,297 due to a holder unrelated to the Straz entities. As of June 30, 2020 the amount payable to that holder remains unsecured. The note was due on April 10, 2020. The holder agreed to convert the note and accrued interest into common stock. On July 14, 2020 198,926 shares were issued valued at $65,646. Convertible Notes Issued in October, 2018 On October 17, 2018, we sold to certain investors in a private transaction 16% Series C Unsecured Convertible Promissory Notes with a total principal amount of $ 6,000,000 April 17, 2020 The notes allow us to redeem them early only upon the event of a fundamental transaction, such as a merger or sale of substantially all our assets. The notes provide that the noteholders may accelerate and declare any and all of the obligations under the notes to be immediately due and payable in the event of default, such as nonpayment, failure to perform required conversions, failure to perform any covenant or agreement under the notes, an insolvency event, or certain defaults or judgments. As part of the sale of the of the notes, the noteholders required that McCabe Petroleum Corporation, a Texas corporation owned by our Chairman Gregory McCabe (MPC), provide them a put option whereby they have the right to have MPC purchase from them any unpaid principal amount due on the notes. Additionally, if there is a fundamental transaction, Mr. McCabe will be required to pay a fee to each noteholder that elects not to convert or require MPC to purchase the principal amount under the note, which fee will be equal to such noteholders pro-rata share of a total fee amount of $1,500,000. TORCHLIGHT ENERGY RESOURCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 9. PROMISSORY NOTES - continued We received total proceeds of $6,000,000 from the sale of the notes, of which $3,000,000 was used to pay back the promissory note issued to MPC on December 1, 2017, which note was due on December 31, 2020. We used the remaining proceeds for working capital and general corporate purposes, which includes, without limitation, drilling and lease acquisition capital. Prior to entering into the above transactions, our Board of Directors formed a special committee composed of independent directors to analyze and authorize the transactions on behalf of Torchlight Energy Resources, Inc. and determine whether the transactions are fair to the company. In this role, the special committee engaged an independent financial consulting firm which rendered a fairness opinion deeming that the transactions were fair to the company, from a financial point of view, and contained terms no less favorable to the company than those that could be obtained in arms length transactions. On March 9, 2020, each of the noteholders entered into a Conversion Agreement with us and our subsidiary Hudspeth Oil Corporation (Hudspeth), under which the noteholders elected to convert the notes, in accordance with their terms, into an aggregate 6% working interest (of all such holders) in certain oil and gas leases in Hudspeth County, Texas, known as our Orogrande Project. Principal of $6,000,000 and approximately $1,331,000 of accrued interest were converted at March 9, 2020. The Conversion Agreements also provided additional consideration to the noteholders including a limited carry, a top-off obligation of us and Hudspeth, and warrants to purchase a total of 750,000 restricted shares of our common stock, which warrants will have a term of five years and an exercise price of $0.70 per share. The limited carry provides that for the remainder of the 2020 calendar year, Hudspeth will pay all costs and expenses attributable to the assigned working interests, except where prohibited by law or regulation. The top-off obligation provides that, subject to the terms and conditions of the Conversion Agreements, if (a) we sell our entire working interest in the Orogrande Project, (b) as part of such sale, the holders entire working interests are sold, and (c) the gross proceeds received by all the holders in such transaction are equal to less than $9,000,000; then we must pay the holders an amount equal to $9,000,000, (i) less gross proceeds the holders received in the transaction, (ii) less the amount of the carry the holders received under the Conversion Agreements, and (iii) less any gross proceeds the holders received in any farmouts occurring prior to the transaction. The transaction was treated as an extinguishment of debt. The fair value of the working interest transferred in the conversion of the debt was $ 8,778,000 382,500 1,829,651 Convertible Notes Issued in First Quarter 2019 On February 11, 2019 the Company raised a total of $ 2,000,000 May 11, 2020 14% 1.08 On April 21, 2020, Torchlight Energy Resources, Inc. entered into agreements to amend the two 14% Series D Unsecured Convertible Promissory Notes that were originally issued on February 11, 2019. Under the amendment agreements, (a) the maturity dates were extended from May 11, 2020 to November 11, 2021 0.43 Under the note amendments, the noteholders agreed to forebear demand or collection on all interest payments due and payable under the Note, including any past due interest payments, for 20 days after the execution of the Note Amendment Agreement. Further, we agreed to (a) issue each holder 20,000 restricted shares of common stock immediately and (b) pay each holder a fee of $10,000, at the same time as the payment of past due interest is paid. The past due interest and fee was paid. These two promissory notes will continue to provide for monthly payments of interest only at the rate of 14% per annum, with a balloon payment of the outstanding principal due and payable at maturity. Since the extension of the notes was completed before the date of filing this report, the debt is presented on the balance sheet as noncurrent debt. TORCHLIGHT ENERGY RESOURCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 9. PROMISSORY NOTES - continued Convertible Notes Issued in Third Quarter 2019 In July 2019, the Company issued 8% Unsecured Convertible Promissory notes in the amount of $ 2,010,000 8% May 21, 2021 1.10 1.35 Warrants issued along with the notes meet the requirements of the scope exemptions in ASC 815-10-15-74 and are thus classified as equity upon issuance. The Company determined the fair value of the warrants using the Black Scholes pricing formula and is recognized as a discount on the carrying amount of the notes and is credited to additional paid in capital. The fair value of the warrants at the issuance date was determined to be $ 240,455 A beneficial conversion feature (BCF) of a convertible note is normally characterized as the convertible portion feature that provides a rate of conversion that is below market value or in the money when issued. The BCF related to the issuance of the notes was recorded at the issuance date. The BCF was measured using the intrinsic value method and is shown as a discount to the carrying amount of the convertible note and is credited to additional paid in capital. The intrinsic value of the BCF at the issuance date of the notes was determined to be $ 1,145,546 The allocated fair values of the BCF and the warrants was recorded as a debt discount from the face amount of the notes and such discount is being accreted over the expected term of the notes and is charged to interest expense. The Company recognized interest expense of $ 269,061 The Company evaluated the July 2019 notes for derivative accounting criteria and concluded that derivative accounting treatment was not applicable. Convertible Notes Issued in Fourth Quarter 2019 Effective October 31, 2019, the Company issued 10% Unsecured Convertible Promissory notes in the amount of $ 540,000. December 3, 2020 0.75 The Company evaluated the October 2019 notes for BCF and derivative accounting criteria and concluded that there was no BCF or derivative accounting treatment applicable. Paycheck Protection Program Loan In response to the COVID-19 pandemic, the U.S. Small Business Administration (the SBA) made available low-interest rate loans to qualified small businesses, including under its Paycheck Protection Program (the PPP). On April 10, 2020, in order to supplement its cash balance, the Company submitted an application for a loan (SBA loan) in the amount of $ 77,477 0.98% Section 1106 of the CARES Act provides for forgiveness of up to the full principal amount of qualifying loans guaranteed under the PPP. The PPP and loan forgiveness are intended to provide economic relief to small businesses, such as the Company, that are adversely impacted under the COVID-19 Emergency Declaration issued by President Trump on March 13, 2020. The Company will apply for loan forgiveness when the SBA site for that purpose is available. |
ASSET RETIREMENT OBLIGATIONS
ASSET RETIREMENT OBLIGATIONS | 6 Months Ended |
Jun. 30, 2020 | |
Asset Retirement Obligation Disclosure [Abstract] | |
ASSET RETIREMENT OBLIGATIONS | 10. ASSET RETIREMENT OBLIGATIONS The following is a reconciliation of the asset retirement obligations liability through June 30, 2020: Asset retirement obligations – December 31, 2019 $ 23,319 Accretion expense 142 Estimated liabilities recorded - Asset retirement obligations – March 31, 2020 $ 23,461 Accretion expense 142 Estimated liabilities recorded - Asset retirement obligations – June 30, 2020 $ 23,603 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 11. SUBSEQUENT EVENTS At-the-Market Equity Offering Program On July 20, 2020, Torchlight Energy Resources, Inc. (the Company) entered into a Sales Agreement (the Sales Agreement) with Roth Capital Partners, LLC (the Agent) to conduct an at-the-market equity offering program pursuant to which the Company may issue and sell, from time to time at its sole discretion, shares of its common stock, par value $0.001 per share, having an aggregate offering price of up to $7,000,000 (the Shares), through or to the Agent, as the Companys sales agent. Subject to the terms and conditions of the Sales Agreement, the Agent will use its commercially reasonable efforts to sell the Shares from time to time, based upon the Companys instructions. The Company has no obligation to sell any of the Shares, and may, at any time, suspend the sale of the Shares under the Sales Agreement upon proper notice to the other party. The Sales Agreement will terminate upon the issuance and sale of all of the Shares through or to the Agent, unless earlier terminated in accordance with its terms. The Company has provided the Agent with customary indemnification rights, and the Agent will be entitled to an aggregate fixed commission of 3.0% of the gross proceeds from Shares sold through the Agent under the Sales Agreement. Sales of the Shares under the Sales Agreement will be made in transactions that are deemed to be at-the-market offerings as defined in Rule 415 under the Securities Act of 1933, as amended, including sales made by means of ordinary brokers transactions, including on The Nasdaq Capital Market, at market prices or as otherwise agreed to with the Agent. The Shares have been registered under the Securities Act of 1933, as amended, pursuant to the Registration Statement on Form S-3 (No. 333 220181) filed by the Company with the Securities and Exchange Commission (the SEC) on August 25, 2017, and declared effective on September 28, 2017 (the Registration Statement). A base prospectus relating to certain securities of the Company, including the Shares, was included with the Registration Statement. On July 20, 2020, the Company filed a prospectus supplement with the SEC relating to the offering of the Shares pursuant to the Sales Agreement. Since July 20, 2020 and through August 6, 2020, the Company sold a total of 453,002 155,081 Executive Employment Agreements and Stock Options On July 15, 2020, we entered into new one-year employment agreements with John Brda, our President and Chief Executive Officer, and Roger Wurtele, our Chief Financial Officer. Their previous employment agreements expired in June 2020. Under the new agreements, Messrs. Brda and Wurtele will continue to receive their same annual salaries of $ 375,000 225,000, TORCHLIGHT ENERGY RESOURCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 11. SUBSEQUENT EVENTS - continued Additionally, as part of their employment compensation, the Compensation Committee granted Mr. Brda an option to purchase a total of up to 2,250,000 375,000 1,875,000 750,000 375,000 375,000 Other Equity Transactions In July 2020, as referenced in Notes 7 and 9 above, 198,926 3,157,895 |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Use of estimates | Use of estimates |
Basis of presentation | Basis of presentation These interim financial statements are unaudited and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) regarding interim financial reporting. Certain disclosures have been condensed or omitted from these financial statements. Accordingly, they do not include all the information and notes required by accounting principles generally accepted in the United States of America (GAAP) for complete consolidated financial statements, and should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2019. In the opinion of management, the accompanying unaudited financial condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary to fairly present the financial position as of, and the results of operations for, all periods presented. In preparing the accompanying financial statements, management has made certain estimates and assumptions that affect reported amounts in the condensed financial statements and disclosures of contingencies. Actual results may differ from those estimates. The results for interim periods are not necessarily indicative of annual results. Certain reclassifications have been made to the prior periods consolidated financial statements and related footnotes to conform them to the current period presentation. |
Risks and uncertainties | Risks and uncertainties |
Concentration of risks | Concentration of risks |
Fair value of financial instruments | Fair value of financial instruments For assets and liabilities that require re-measurement to fair value the Company categorizes them in a three-level fair value hierarchy as follows: ● Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. ● Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration. ● Level 3 inputs are unobservable inputs based on managements own assumptions used to measure assets and liabilities at fair value. A financial asset or liabilitys classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. |
Cash and cash equivalents | Cash and cash equivalents |
Accounts receivable | Accounts receivable |
Oil and gas properties | Oil and gas properties Oil and gas properties include costs that are excluded from costs being depleted or amortized. Oil and natural gas property costs excluded represent investments in unevaluated properties and include non-producing leasehold, geological, and geophysical costs associated with leasehold or drilling interests and exploration drilling costs. The Company allocates a portion of its acquisition costs to unevaluated properties based on relative value. Costs are transferred to the full cost pool as the properties are evaluated over the life of the reservoir. Unevaluated properties 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. Gains and losses on the sale of oil and gas properties are not generally reflected in income unless the gain or loss would significantly alter the relationship between capitalized costs and proved reserves. Sales of less than 100% of the Companys interest in the oil and gas property are treated as a reduction of the capital cost of the field, with no gain or loss recognized, as long as doing so does not significantly affect the unit-of-production depletion rate. Costs of retired equipment, net of salvage value, are usually charged to accumulated depreciation. |
Capitalized interest | Capitalized interest 1,182,445 1,362,244 |
Depreciation, depletion, and amortization | Depreciation, depletion, and amortization |
Ceiling test | Ceiling test 2,108,301 474,357 The ceiling test calculation uses a commodity price assumption which is based on the unweighted arithmetic average of the price on the first day of each month for each month within the prior 12 month period and excludes future cash outflows related to estimated abandonment costs. The determination of oil and gas reserves is a subjective process, and the accuracy of any reserve estimate depends on the quality of available data and the application of engineering and geological interpretation and judgment. Estimates of economically recoverable reserves and future net cash flows depend on a number of variable factors and assumptions that are difficult to predict and may vary considerably from actual results. In particular, reserve estimates for wells with limited or no production history are less reliable than those based on actual production. Subsequent re-evaluation of reserves and cost estimates related to future development of proved oil and gas reserves could result in significant revisions to proved reserves. Other issues, such as changes in regulatory requirements, technological advances, and other factors which are difficult to predict could also affect estimates of proved reserves in the future. |
Asset retirement obligations | Asset retirement obligations Inherent in the fair value calculation of an ARO are numerous assumptions and judgments including the ultimate settlement amounts, inflation factors, credit adjusted discount rates, timing of settlement, and changes in the legal, regulatory, environmental, and political environments. To the extent future revisions to these assumptions impact the fair value of the existing ARO liability, a corresponding adjustment is made to the oil and gas property balance. Settlements greater than or less than amounts accrued as ARO are recorded as a gain or loss upon settlement. |
Income taxes | Income taxes Authoritative guidance for uncertainty in income taxes requires that the Company recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an examination. Management has reviewed the Companys tax positions and determined there were no uncertain tax positions requiring recognition in the consolidated financial statements. Company tax returns remain subject to Federal and State tax examinations. Generally, the applicable statutes of limitation are three to four years from their respective filings. TORCHLIGHT ENERGY RESOURCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 3. SIGNIFICANT ACCOUNTING POLICIES - continued Estimated interest and penalties related to potential underpayment on any unrecognized tax benefits are classified as a component of tax expense in the statements of operation. The Company has not recorded any interest or penalties associated with unrecognized tax benefits for any periods covered by these financial statements. |
Share-based compensation | Share-based compensation The Company accounts for stock option awards using the calculated value method. The expected term was derived using the simplified method provided in Securities and Exchange Commission release Staff Accounting Bulletin No. 110, which averages an awards weighted average vesting period and contractual term for plain vanilla share options. The Company accounts for any forfeitures of options when they occur. Previously recognized compensation cost for an award is reversed in the period that the award is forfeited. The Company also issues equity awards to non-employees. The fair value of these option awards is estimated when the award recipient completes the contracted professional services. The Company recognizes expense for the estimated total value of the awards during the period from their issuance until performance completion. The Company values warrant and option awards using the Black-Scholes option pricing model. |
Revenue recognition | Revenue recognition The Companys revenue is typically generated from contracts to sell natural gas, crude oil or NGLs produced from interests in oil and gas properties owned by the Company. Contracts for the sale of natural gas and crude oil are evidenced by (1) base contracts for the sale and purchase of natural gas or crude oil, which document the general terms and conditions for the sale, and (2) transaction confirmations, which document the terms of each specific sale. The transaction confirmations specify a delivery point which represents the point at which control of the product is transferred to the customer. These contracts frequently meet the definition of a derivative under ASC 815, and are accounted for as derivatives unless the Company elects to treat them as normal sales as permitted under that guidance. The Company elects to treat contracts to sell oil and gas production as normal sales, which are then accounted for as contracts with customers. The Company has determined that these contracts represent multiple performance obligations which are satisfied when control of the commodity transfers to the customer, typically through the delivery of the specified commodity to a designated delivery point. Revenues from oil and gas sales are detailed as follows: Three Months Three Months Six Months Six Months Ended Ended Ended Ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Revenues Oil sales $ 44,997 $ 223,038 $ 127,110 $ 525,183 Gas sales 480 14,037 2,987 22,729 Total $ 45,477 $ 237,075 $ 130,097 $ 547,912 Revenue is measured based on consideration specified in the contract with the customer, and excludes any amounts collected on behalf of third parties. The Company recognizes revenue in the amount that reflects the consideration it expects to be entitled to in exchange for transferring control of those goods to the customer. Amounts allocated in the Companys price contracts are based on the standalone selling price of those products in the context of long-term contracts. Payment is generally received one or two months after the sale has occurred. TORCHLIGHT ENERGY RESOURCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 3. SIGNIFICANT ACCOUNTING POLICIES - continued Gain or loss on derivative instruments is outside the scope of ASC 606 and is not considered revenue from contracts with customers subject to ASC 606. The Company may in the future use financial or physical contracts accounted for as derivatives as economic hedges to manage price risk associated with normal sales, or in limited cases may use them for contracts the Company intends to physically settle but do not meet all of the criteria to be treated as normal sales. Producer Gas Imbalances. |
Basic and diluted earnings (loss) per share | Basic and diluted earnings (loss) per share – 11,025,186 |
Environmental laws and regulations | Environmental laws and regulations |
Recent adopted accounting pronouncements | Recent adopted accounting pronouncements Other recently issued or adopted accounting pronouncements are not expected to have, or did not have, a material impact on the Companys financial position or results from operations. |
Subsequent events | Subsequent events |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Revenues from oil and gas sales are detailed as follows: | Revenues from oil and gas sales are detailed as follows: |
SIGNIFICANT ACCOUNTING POLICIES | Three Months Three Months Six Months Six Months Ended Ended Ended Ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Revenues Oil sales $ 44,997 $ 223,038 $ 127,110 $ 525,183 Gas sales 480 14,037 2,987 22,729 Total $ 45,477 $ 237,075 $ 130,097 $ 547,912 |
OIL & GAS PROPERTIES (Tables)
OIL & GAS PROPERTIES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Extractive Industries [Abstract] | |
The following table presents the capitalized costs for oil & gas properties of the Company as of June 30, 2020 and December 31, 2019: | The following table presents the capitalized costs for oil & gas properties of the Company as of June 30, 2020 and December 31, 2019: |
OIL & GAS PROPERTIES | June 30, 2020 December 31, 2019 Evaluated costs subject to amortization $ 16,076,076 $ 13,243,541 Unevaluated costs 32,229,226 39,667,740 Total capitalized costs 48,305,302 52,911,281 Less accumulated depreciation, depletion and amortization (15,561,773 ) (12,729,238 ) Total oil and gas properties $ 32,743,529 $ 40,182,043 |
The Orogrande Project ownership as of June 30, 2020 is detailed as follows: | The Orogrande Project ownership as of June 30, 2020 is detailed as follows: |
OIL & GAS PROPERTIES (Details 2) | Revenue Working Interest Interest University Lands - Mineral Owner 20.000 % n/a ORRI - Magdalena Royalties, LLC, an entity controlled by Gregory McCabe, Chairman 4.500 % n/a ORRI - Unrelated Party 0.500 % n/a Hudspeth Oil Corporation, a subsidiary of Torchlight Energy Resources Inc. 49.875 % 66.500 % Wolfbone Investments LLC, an entity controlled controlled by Gregory McCabe, Chairman 18.750 % 25.000 % Conversion by Note Holders in March, 2020 4.500 % 6.000 % Unrelated Party 1.875 % 2.500 % 100.000 % 100.000 % |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
summary of warrants outstanding | A summary of warrants outstanding |
STOCKHOLDERS' EQUITY | Exercise Expiration Date in Price 2020 2021 2022 2023 2024 2025 Total $ - - - - - - 3,157,895 3,157,895 $ 0.425 - - - - - 172,500 172,500 $ 0.70 - - - - - 965,000 965,000 $ 0.80 - - - - - 2,266,667 2,266,667 $ 1.03 - 120,000 - - - - 120,000 $ 1.14 - - - 600,000 - - 600,000 $ 1.21 - - - 120,000 - - 120,000 $ 1.35 - - 365,455 - - - 365,455 $ 1.63 - - - - 100,000 - 100,000 $ 1.64 - 200,000 - - - - 200,000 $ 2.00 - 200,000 - - - - 200,000 $ 2.23 339,901 - - - - - 339,901 339,901 520,000 365,455 720,000 100,000 6,562,062 8,607,418 |
summary of stock options outstanding | A summary of stock options outstanding |
STOCKHOLDERS' EQUITY (Details 2) | Exercise Expiration Date in Price 2021 2022 2023 2024 Total $ 0.85 - - - 600,000 600,000 $ 0.97 259,742 - - - 259,742 $ 1.10 - 800,000 - - 800,000 $ 1.19 - - 700,000 - 700,000 $ 1.57 - - - - - $ 1.63 - 58,026 - - 58,026 259,742 858,026 700,000 600,000 2,417,768 |
assumptions used in calculating the fair value of the warrants and options issued | Warrants and options granted were valued using the Black-Scholes Option Pricing Model. The assumptions used in calculating the fair value of the warrants and options issued |
STOCKHOLDERS' EQUITY (Details 3) | 2020 Risk-free interest rate .38% 1.21% Expected volatility of common stock 102% 205% Dividend yield 0.00% Discount due to lack of marketability 20% Expected life of option/warrant Five Years 2019 Risk-free interest rate 2.40% 2.46% Expected volatility of common stock 105% 107% Dividend yield 0.00% Discount due to lack of marketability 20% Expected life of option/warrant Five Years |
PROMISSORY NOTES (Tables)
PROMISSORY NOTES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Promissory Notes | |
The 12% promissory note transactions | The 12% promissory note transactions |
PROMISSORY NOTES | 12% 2020 Unsecured promissory note balance - December 31, 2019 $ 12,377,830 Accretion of discount and amortization of debt issuance costs 241,261 Debt extension fee paid (250,000 ) 12% 2021 Secured promissory note balance - June 30, 2020 $ 12,369,091 |
ASSET RETIREMENT OBLIGATIONS (T
ASSET RETIREMENT OBLIGATIONS (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Asset Retirement Obligation Disclosure [Abstract] | |
The following is a reconciliation of the asset retirement obligations liability through June 30, 2020: | The following is a reconciliation of the asset retirement obligations liability through June 30, 2020: |
ASSET RETIREMENT OBLIGATIONS | Asset retirement obligations – December 31, 2019 $ 23,319 Accretion expense 142 Estimated liabilities recorded - Asset retirement obligations – March 31, 2020 $ 23,461 Accretion expense 142 Estimated liabilities recorded - Asset retirement obligations – June 30, 2020 $ 23,603 |
GOING CONCERN (Details Narrativ
GOING CONCERN (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||
Net Loss | $ 3,299,252 | $ 3,693,863 | $ 890,634 | $ 1,677,874 | $ 6,993,115 | $ 2,568,508 | |
Accumulated Losses | 106,146,816 | 106,146,816 | $ 99,153,701 | ||||
Working capital deficit | $ 14,748,949 | $ 14,748,949 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Accounting Policies [Abstract] | ||||
Oil sales | $ 44,997 | $ 223,038 | $ 127,110 | $ 525,183 |
Gas sales | 480 | 14,037 | 2,987 | 22,729 |
Total | $ 45,477 | $ 237,075 | $ 130,097 | $ 547,912 |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Accounting Policies [Abstract] | ||||
Interest Costs Capitalized | $ 1,182,445 | $ 1,362,244 | ||
Asset Impairment Expense | $ 2,108,301 | $ 2,108,301 | $ 474,357 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share, In shares | 11,025,186 |
OIL & GAS PROPERTIES (Details)
OIL & GAS PROPERTIES (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Extractive Industries [Abstract] | ||
Evaluated costs subject to amortization | $ 16,076,076 | $ 13,243,541 |
Unevaluated costs | 32,229,226 | 39,667,740 |
Total capitalized costs | 48,305,302 | 52,911,281 |
Less accumulated depreciation, depletion and amortization | (15,561,773) | (12,729,238) |
Total oil and gas properties | $ 32,743,529 | $ 40,182,043 |
OIL & GAS PROPERTIES (Details 2
OIL & GAS PROPERTIES (Details 2) | Jun. 30, 2020 |
Schedule of Equity Method Investments [Line Items] | |
Equity Method Investment, Ownership Percentage | 100.00% |
[custom:WorkingCapitalMethodInvestmentPercentage-0] | 100.00% |
University Lands - Mineral Owner | |
Schedule of Equity Method Investments [Line Items] | |
Equity Method Investment, Ownership Percentage | 20.00% |
ORRI - Magdalena Royalties, LLC, an entity controlled by Gregory McCabe, Chairman | |
Schedule of Equity Method Investments [Line Items] | |
Equity Method Investment, Ownership Percentage | 4.50% |
ORRI - Unrelated Party | |
Schedule of Equity Method Investments [Line Items] | |
Equity Method Investment, Ownership Percentage | 0.50% |
Hudspeth Oil Corporation, a subsidiary of Torchlight Energy Resources Inc. | |
Schedule of Equity Method Investments [Line Items] | |
Equity Method Investment, Ownership Percentage | 49.875% |
[custom:WorkingCapitalMethodInvestmentPercentage-0] | 66.50% |
Wolfbone Investments LLC, an entity controlled controlled by Gregory McCabe, Chairman | |
Schedule of Equity Method Investments [Line Items] | |
Equity Method Investment, Ownership Percentage | 18.75% |
[custom:WorkingCapitalMethodInvestmentPercentage-0] | 25.00% |
Conversion by Note Holders in March, 2020 | |
Schedule of Equity Method Investments [Line Items] | |
Equity Method Investment, Ownership Percentage | 4.50% |
[custom:WorkingCapitalMethodInvestmentPercentage-0] | 6.00% |
Unrelated Party | |
Schedule of Equity Method Investments [Line Items] | |
Equity Method Investment, Ownership Percentage | 1.875% |
[custom:WorkingCapitalMethodInvestmentPercentage-0] | 2.50% |
OIL & GAS PROPERTIES (Details N
OIL & GAS PROPERTIES (Details Narrative) | 6 Months Ended | |
Jun. 30, 2020USD ($)aNumber | Aug. 07, 2014a | |
Reserve Quantities [Line Items] | ||
Impairment Charge on Reclassified Assets | $ | $ 5,881,635 | |
Equity Method Investment, Ownership Percentage | 100.00% | |
Drilling Obligation | 4 | |
Drilling Obligation Year 2021 | 5 | |
Drilling Obligation Year 2022 | 5 | |
Drilling Obligation Year 2023 | 5 | |
Board of Directors Chairman [Member] | ||
Reserve Quantities [Line Items] | ||
Equity Method Investment, Ownership Percentage | 100.00% | |
Oil and Gas, Developed Acreage, Gross | a | 134,000 | 172,000 |
RELATED PARTY PAYABLES (Details
RELATED PARTY PAYABLES (Details Narrative) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Related Party Transactions [Abstract] | ||
Due to Related Parties, Noncurrent | $ 45,000 | $ 45,000 |
Accrued Payroll Taxes | $ 1,086,176 | $ 996,176 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) | Jun. 30, 2020$ / sharesshares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | 11,025,186 |
Equity Option [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | 8,607,418 |
Equity Option [Member] | 2020 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | 339,901 |
Equity Option [Member] | 2021 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | 520,000 |
Equity Option [Member] | 2022 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | 365,455 |
Equity Option [Member] | 2023 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | 720,000 |
Equity Option [Member] | 2024 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | 100,000 |
Equity Option [Member] | 2025 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | 6,562,062 |
Equity Option [Member] | No Exercise Price [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise Price | $ / shares | |
Class of Warrant or Right, Outstanding | 3,157,895 |
Equity Option [Member] | No Exercise Price [Member] | 2020 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | No Exercise Price [Member] | 2021 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | No Exercise Price [Member] | 2022 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | No Exercise Price [Member] | 2023 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | No Exercise Price [Member] | 2024 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | No Exercise Price [Member] | 2025 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | 3,157,895 |
Equity Option [Member] | Exercise Price 0.425 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise Price | $ / shares | $ 0.425 |
Class of Warrant or Right, Outstanding | 172,500 |
Equity Option [Member] | Exercise Price 0.425 [Member] | 2020 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 0.425 [Member] | 2021 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 0.425 [Member] | 2022 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 0.425 [Member] | 2023 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 0.425 [Member] | 2024 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 0.425 [Member] | 2025 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | 172,500 |
Equity Option [Member] | Exercise Price 0.70 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise Price | $ / shares | $ 0.70 |
Class of Warrant or Right, Outstanding | 965,000 |
Equity Option [Member] | Exercise Price 0.70 [Member] | 2020 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 0.70 [Member] | 2021 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 0.70 [Member] | 2022 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 0.70 [Member] | 2023 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 0.70 [Member] | 2024 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 0.70 [Member] | 2025 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | 965,000 |
Equity Option [Member] | Exercise Price 0.80 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise Price | $ / shares | $ 0.80 |
Class of Warrant or Right, Outstanding | 2,266,667 |
Equity Option [Member] | Exercise Price 0.80 [Member] | 2020 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 0.80 [Member] | 2021 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 0.80 [Member] | 2022 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 0.80 [Member] | 2023 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 0.80 [Member] | 2024 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 0.80 [Member] | 2025 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | 2,266,667 |
Equity Option [Member] | Exercise Price 1.03 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise Price | $ / shares | $ 1.03 |
Class of Warrant or Right, Outstanding | 120,000 |
Equity Option [Member] | Exercise Price 1.03 [Member] | 2020 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 1.03 [Member] | 2021 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | 120,000 |
Equity Option [Member] | Exercise Price 1.03 [Member] | 2022 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 1.03 [Member] | 2023 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 1.03 [Member] | 2024 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 1.03 [Member] | 2025 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 1.14 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise Price | $ / shares | $ 1.14 |
Class of Warrant or Right, Outstanding | 600,000 |
Equity Option [Member] | Exercise Price 1.14 [Member] | 2020 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 1.14 [Member] | 2021 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 1.14 [Member] | 2022 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 1.14 [Member] | 2023 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | 600,000 |
Equity Option [Member] | Exercise Price 1.14 [Member] | 2024 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 1.14 [Member] | 2025 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 1.21 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise Price | $ / shares | $ 1.21 |
Class of Warrant or Right, Outstanding | 120,000 |
Equity Option [Member] | Exercise Price 1.21 [Member] | 2020 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 1.21 [Member] | 2021 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 1.21 [Member] | 2022 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 1.21 [Member] | 2023 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | 120,000 |
Equity Option [Member] | Exercise Price 1.21 [Member] | 2024 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 1.21 [Member] | 2025 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 1.35 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise Price | $ / shares | $ 1.35 |
Class of Warrant or Right, Outstanding | 365,455 |
Equity Option [Member] | Exercise Price 1.35 [Member] | 2020 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 1.35 [Member] | 2021 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 1.35 [Member] | 2022 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | 365,455 |
Equity Option [Member] | Exercise Price 1.35 [Member] | 2023 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 1.35 [Member] | 2024 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 1.35 [Member] | 2025 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 1.63 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise Price | $ / shares | $ 1.63 |
Class of Warrant or Right, Outstanding | 100,000 |
Equity Option [Member] | Exercise Price 1.63 [Member] | 2020 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 1.63 [Member] | 2021 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 1.63 [Member] | 2022 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 1.63 [Member] | 2023 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 1.63 [Member] | 2024 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | 100,000 |
Equity Option [Member] | Exercise Price 1.63 [Member] | 2025 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 1.64 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise Price | $ / shares | $ 1.64 |
Class of Warrant or Right, Outstanding | 200,000 |
Equity Option [Member] | Exercise Price 1.64 [Member] | 2020 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 1.64 [Member] | 2021 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | 200,000 |
Equity Option [Member] | Exercise Price 1.64 [Member] | 2022 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 1.64 [Member] | 2023 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 1.64 [Member] | 2024 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 1.64 [Member] | 2025 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 2.00 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise Price | $ / shares | $ 2 |
Class of Warrant or Right, Outstanding | 200,000 |
Equity Option [Member] | Exercise Price 2.00 [Member] | 2020 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 2.00 [Member] | 2021 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | 200,000 |
Equity Option [Member] | Exercise Price 2.00 [Member] | 2022 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 2.00 [Member] | 2023 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 2.00 [Member] | 2024 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 2.00 [Member] | 2025 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 2.23 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise Price | $ / shares | $ 2.23 |
Class of Warrant or Right, Outstanding | 339,901 |
Equity Option [Member] | Exercise Price 2.23 [Member] | 2020 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | 339,901 |
Equity Option [Member] | Exercise Price 2.23 [Member] | 2021 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 2.23 [Member] | 2022 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 2.23 [Member] | 2023 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 2.23 [Member] | 2024 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Equity Option [Member] | Exercise Price 2.23 [Member] | 2025 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding |
STOCKHOLDERS' EQUITY (Details 2
STOCKHOLDERS' EQUITY (Details 2) | Jun. 30, 2020$ / sharesshares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | 11,025,186 |
Warrant [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | 2,417,768 |
Warrant [Member] | 2021 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | 259,742 |
Warrant [Member] | 2022 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | 858,026 |
Warrant [Member] | 2023 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | 700,000 |
Warrant [Member] | 2024 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | 600,000 |
Warrant [Member] | Exercise Price 0.85 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 0.85 |
Class of Warrant or Right, Outstanding | 600,000 |
Warrant [Member] | Exercise Price 0.85 [Member] | 2021 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Warrant [Member] | Exercise Price 0.85 [Member] | 2022 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Warrant [Member] | Exercise Price 0.85 [Member] | 2023 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Warrant [Member] | Exercise Price 0.85 [Member] | 2024 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | 600,000 |
Warrant [Member] | Exercise Price 0.97 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 0.97 |
Class of Warrant or Right, Outstanding | 259,742 |
Warrant [Member] | Exercise Price 0.97 [Member] | 2021 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | 259,742 |
Warrant [Member] | Exercise Price 0.97 [Member] | 2022 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Warrant [Member] | Exercise Price 0.97 [Member] | 2023 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Warrant [Member] | Exercise Price 0.97 [Member] | 2024 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Warrant [Member] | Exercise Price 1.10 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 1.10 |
Class of Warrant or Right, Outstanding | 800,000 |
Warrant [Member] | Exercise Price 1.10 [Member] | 2021 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Warrant [Member] | Exercise Price 1.10 [Member] | 2022 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | 800,000 |
Warrant [Member] | Exercise Price 1.10 [Member] | 2023 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Warrant [Member] | Exercise Price 1.10 [Member] | 2024 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Warrant [Member] | Exercise Price 1.19 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 1.19 |
Class of Warrant or Right, Outstanding | 700,000 |
Warrant [Member] | Exercise Price 1.19 [Member] | 2021 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Warrant [Member] | Exercise Price 1.19 [Member] | 2022 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Warrant [Member] | Exercise Price 1.19 [Member] | 2023 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | 700,000 |
Warrant [Member] | Exercise Price 1.19 [Member] | 2024 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Warrant [Member] | Exercise Price 1.57 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 1.57 |
Class of Warrant or Right, Outstanding | |
Warrant [Member] | Exercise Price 1.57 [Member] | 2021 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Warrant [Member] | Exercise Price 1.57 [Member] | 2022 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Warrant [Member] | Exercise Price 1.57 [Member] | 2023 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Warrant [Member] | Exercise Price 1.57 [Member] | 2024 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Warrant [Member] | Exercise Price 1.63 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 1.63 |
Class of Warrant or Right, Outstanding | 58,026 |
Warrant [Member] | Exercise Price 1.63 [Member] | 2021 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Warrant [Member] | Exercise Price 1.63 [Member] | 2022 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | 58,026 |
Warrant [Member] | Exercise Price 1.63 [Member] | 2023 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding | |
Warrant [Member] | Exercise Price 1.63 [Member] | 2024 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Class of Warrant or Right, Outstanding |
STOCKHOLDERS' EQUITY (Details 3
STOCKHOLDERS' EQUITY (Details 3) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Equity [Abstract] | ||
Risk Free Interest Rate, Minimum | 0.38% | 2.40% |
Risk Free Interest Rate, Maximum | 1.21% | 2.46% |
Expected Volatility Rate, Minimum | 102.00% | 105.00% |
Expected Volatility Rate, Maximum | 205.00% | 107.00% |
Dividend Yield | $ 0 | $ 0 |
Discount Due to Lack of Marketability | 20.00% | 20.00% |
Fair Value Assumptions, Expected Term | 5 years | 5 years |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||||
May 31, 2020 | Apr. 30, 2019 | Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 16, 2020 | May 20, 2020 | Jan. 16, 2020 | Jan. 10, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Common Stock, Shares | 94,468,304 | 94,468,304 | 7,894,737 | 3,450,000 | 3,285,715 | 600,000 | 76,222,042 | ||||||
Common Stock, per Share | $ 0.001 | $ 0.001 | $ 0.38 | $ 0.34 | $ 0.70 | $ 0.60 | $ 0.001 | ||||||
Common Stock, Value | $ 94,471 | $ 94,471 | $ 2,783,691 | $ 886,622 | $ 1,997,118 | $ 360,000 | $ 76,225 | ||||||
[custom:IssuanceOfCommonStockForPaymentInKindOnNotesPayableShares] | 680,376 | 202,316 | |||||||||||
[custom:IssuanceOfCommonStockForPaymentInKindOnNotesPayable] | $ 314,107 | 314,107 | $ 314,108 | $ 314,107 | $ 314,108 | ||||||||
Stock Issued During Period, Shares, Issued for Services | 267,857 | ||||||||||||
Stock Issued During Period, Value, Issued for Services | 60,000 | $ 86,250 | 149,000 | $ 100,000 | $ 146,250 | ||||||||
[custom:IssuanceOfCommonStockToVendorForDelayInPaymentShares] | 40,000 | ||||||||||||
[custom:IssuanceOfCommonStockToVendorForDelayInPayment] | 26,000 | $ 26,000 | |||||||||||
[custom:IssuanceOfCommonStockForPromissoryNoteExtensionShares] | 40,000 | ||||||||||||
[custom:CommonStockIssuedForNoteExtension] | 16,000 | $ 16,000 | |||||||||||
[custom:CommonStockIssuedInPaymentOfAccountsPayable] | 135,000 | 135,000 | |||||||||||
[custom:IssuanceOfWarrantsForServicesOrClaims] | 98,900 | 87,000 | 186,000 | 98,900 | |||||||||
Issuance of Stock and Warrants for Services or Claims | $ 19,500 | 19,500 | $ 25,000 | $ 111,250 | 39,000 | ||||||||
Stock Issued During Period, Value, Conversion of Convertible Securities | $ 382,500 | $ 382,500 | |||||||||||
Class of Warrant or Right, Outstanding | 11,025,186 | 11,025,186 | |||||||||||
Vendor [Member] | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
[custom:CommonStockIssuedInPaymentOfAccountsPayableShares] | 257,143 | ||||||||||||
[custom:CommonStockIssuedInPaymentOfAccountsPayable] | $ 90,000 | ||||||||||||
Former CEO [Member] | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
[custom:CommonStockIssuedInPaymentOfAccountsPayableShares] | 100,000 | ||||||||||||
[custom:CommonStockIssuedInPaymentOfAccountsPayable] | $ 45,000 | ||||||||||||
Restricted Stock [Member] | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Common Stock, Shares | 1,630,434 | ||||||||||||
Common Stock, Value | $ 750,000 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
Deferred Tax Assets, Operating Loss Carryforwards | $ 70,899,608 | $ 66,984,025 |
PROMISSORY NOTES (Details)
PROMISSORY NOTES (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Promissory Notes | ||
12% 2020 Unsecured promissory note balance - December 31, 2019 | $ 12,377,830 | |
Accretion of discount and amortization of debt issuance costs | 241,261 | |
Debt extension fee paid | (250,000) | |
12% 2021 Secured promissory note balance - June 30, 2020 | $ 12,369,091 |
PROMISSORY NOTES (Details Narra
PROMISSORY NOTES (Details Narrative) - USD ($) | Apr. 21, 2020 | Feb. 20, 2020 | Oct. 31, 2019 | Feb. 11, 2019 | Oct. 17, 2018 | Feb. 06, 2018 | Apr. 24, 2017 | Apr. 10, 2017 | May 31, 2020 | Jul. 31, 2019 | Apr. 30, 2019 | Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | May 01, 2020 | Dec. 31, 2019 |
Transfer of Financial Assets Accounted for as Sales [Line Items] | ||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 0.98% | |||||||||||||||||
New Debt Financing | $ 7,330,849 | |||||||||||||||||
Fees Paid to Noteholder | (250,000) | |||||||||||||||||
[custom:IssuanceOfCommonStockForPaymentInKindOnNotesPayableShares] | 680,376 | 202,316 | ||||||||||||||||
Stock Issued During Period, Value, Conversion of Convertible Securities | $ 382,500 | 382,500 | ||||||||||||||||
Gain (Loss) on Extinguishment of Debt | (1,829,651) | |||||||||||||||||
Interest Expense | 271,662 | $ 206,582 | 657,607 | $ 365,182 | ||||||||||||||
Notes Payable, Current | 77,477 | 77,477 | $ 77,477 | |||||||||||||||
Unsecured Promissory Notes [Member] | ||||||||||||||||||
Transfer of Financial Assets Accounted for as Sales [Line Items] | ||||||||||||||||||
Convertible Notes Payable, Current | $ 4,500,000 | $ 8,000,000 | 8,437,127 | |||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 12.00% | |||||||||||||||||
Debt Instrument, Maturity Date | Apr. 10, 2021 | Apr. 10, 2020 | Apr. 10, 2020 | |||||||||||||||
Proceeds from Unsecured Notes | $ 4,332,150 | $ 2,509,500 | $ 7,540,000 | |||||||||||||||
Effective Interest Rate | 15.88% | 16.15% | ||||||||||||||||
Principal Amount and Accred Interest converted into Common Stock | 1,007,890 | |||||||||||||||||
New Debt Financing | $ 64,297 | |||||||||||||||||
Fees Paid to Noteholder | $ 80,000 | |||||||||||||||||
8% Convertible Promissory Notes Payable [Member] | ||||||||||||||||||
Transfer of Financial Assets Accounted for as Sales [Line Items] | ||||||||||||||||||
Convertible Notes Payable, Current | $ 4,000,000 | $ 2,010,000 | 1,043,032 | 1,043,032 | ||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 8.00% | |||||||||||||||||
Debt Instrument, Maturity Date | May 21, 2021 | |||||||||||||||||
Notes Coversion Price | $ 1.10 | |||||||||||||||||
Warrant, Exercise Price | $ 1.35 | |||||||||||||||||
Fair Value of Warrant | $ 240,455 | |||||||||||||||||
Intrinsic Value of BCF at issuance date | $ 1,145,546 | |||||||||||||||||
Interest Expense | 269,061 | |||||||||||||||||
16% Series C Unsecured Convertible Promissory Notes [Member] | ||||||||||||||||||
Transfer of Financial Assets Accounted for as Sales [Line Items] | ||||||||||||||||||
Convertible Notes Payable, Current | $ 6,000,000 | |||||||||||||||||
Debt Instrument, Maturity Date | Apr. 17, 2020 | |||||||||||||||||
New Debt Financing | 8,778,000 | |||||||||||||||||
Stock Issued During Period, Value, Conversion of Convertible Securities | 382,500 | |||||||||||||||||
Gain (Loss) on Extinguishment of Debt | 1,829,651 | |||||||||||||||||
14% Convertible Promissory Notes Payable [Member] | ||||||||||||||||||
Transfer of Financial Assets Accounted for as Sales [Line Items] | ||||||||||||||||||
Convertible Notes Payable, Current | $ 2,000,000 | 2,000,000 | ||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 14.00% | |||||||||||||||||
Debt Instrument, Maturity Date | Nov. 11, 2021 | May 11, 2020 | ||||||||||||||||
Notes Coversion Price | $ 0.43 | $ 1.08 | ||||||||||||||||
10% Convertible Promissory Notes Payable [Member] | ||||||||||||||||||
Transfer of Financial Assets Accounted for as Sales [Line Items] | ||||||||||||||||||
Convertible Notes Payable, Current | $ 540,000 | $ 540,000 | $ 540,000 | $ 540,000 | ||||||||||||||
Debt Instrument, Maturity Date | Dec. 3, 2020 | |||||||||||||||||
Notes Coversion Price | $ 0.75 |
ASSET RETIREMENT OBLIGATIONS (D
ASSET RETIREMENT OBLIGATIONS (Details) - USD ($) | 3 Months Ended | |
Jun. 30, 2020 | Mar. 31, 2020 | |
Asset Retirement Obligation Disclosure [Abstract] | ||
Beginning Balance | $ 23,461 | $ 23,319 |
Accretion Expense | 142 | 142 |
Ending Balance | $ 23,603 | $ 23,461 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
Aug. 06, 2020 | Jul. 31, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2021 | Jul. 15, 2020 | Dec. 31, 2019 | |
Subsequent Event [Line Items] | |||||||||
Stock Issued During Period, Value, New Issues | $ 2,779,201 | $ 2,357,118 | $ 556,000 | $ 1,274,080 | |||||
Common Stock, Shares Authorized | 150,000,000 | 150,000,000 | |||||||
Class of Warrant or Right, Outstanding | 11,025,186 | ||||||||
Warrant [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Class of Warrant or Right, Outstanding | 2,417,768 | ||||||||
Common Stock [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Shares Issued, Shares | 11,344,737 | 3,885,715 | 695,000 | 1,592,600 | |||||
Stock Issued During Period, Value, New Issues | $ 11,345 | $ 3,886 | $ 695 | $ 1,593 | |||||
Subsequent Event [Member] | No Exercise Price [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Shares Issued, Shares | 198,926 | ||||||||
Subsequent Event [Member] | No Exercise Price [Member] | Warrant [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Class of Warrant or Right, Outstanding | 3,157,895 | ||||||||
Subsequent Event [Member] | President and Chief Executive Officer [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Annual Salary | $ 375,000 | ||||||||
Subsequent Event [Member] | Chief Financial Officer [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Annual Salary | $ 225,000 | ||||||||
Subsequent Event [Member] | Common Stock [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Shares Issued, Shares | 453,002 | ||||||||
Stock Issued During Period, Value, New Issues | $ 155,081 | ||||||||
Subsequent Event [Member] | Common Stock [Member] | President and Chief Executive Officer [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Common Stock, Shares Authorized | 2,250,000 | ||||||||
Subsequent Event [Member] | Common Stock [Member] | President and Chief Executive Officer [Member] | Exercise Price 0.50 [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Common Stock, Shares Authorized | 375,000 | ||||||||
Subsequent Event [Member] | Common Stock [Member] | President and Chief Executive Officer [Member] | Exercise Price 1.00 [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Common Stock, Shares Authorized | 1,875,000 | ||||||||
Subsequent Event [Member] | Common Stock [Member] | Chief Financial Officer [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Common Stock, Shares Authorized | 750,000 | ||||||||
Subsequent Event [Member] | Common Stock [Member] | Chief Financial Officer [Member] | Exercise Price 0.50 [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Common Stock, Shares Authorized | 375,000 | ||||||||
Subsequent Event [Member] | Common Stock [Member] | Chief Financial Officer [Member] | Exercise Price 1.00 [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Common Stock, Shares Authorized | 375,000 |