Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 13, 2017 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | PetroShare Corp. | |
Entity Central Index Key | 1,568,079 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 27,718,802 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,017 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash | $ 719,091 | $ 2,449,412 |
Accounts receivable - joint interest billing | 603,772 | 240,450 |
Accounts receivable - joint interest billing - related party | 389,885 | 286,226 |
Accounts receivable - crude oil, natural gas and NGL sales | 1,618,105 | 179,236 |
Accounts receivable - other | 27,876 | |
Deferred equity issuance costs | 186,312 | |
Prepaid expenses and other assets | 49,751 | 1,178,081 |
Deferred financing fee, net | 379,167 | |
Total current assets | 3,946,083 | 4,361,281 |
Crude oil and natural gas properties - using successful efforts method: | ||
Proved crude oil and natural gas properties | 16,289,847 | 8,132,881 |
Unproved crude oil and natural gas properties | 7,942,890 | 4,092,550 |
Wells in progress | 8,384,391 | 2,168,092 |
Less: accumulated depletion, depreciation and amortization | (3,918,935) | (783,320) |
Crude oil and natural gas properties, net | 28,698,193 | 13,610,203 |
Property, plant and equipment, net of accumulated depreciation of $41,512 and $8,329, respectively | 170,703 | 39,542 |
Other assets | 103,707 | 15,758 |
TOTAL ASSETS | 32,918,686 | 18,026,784 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 10,281,688 | 3,009,106 |
Accounts payable - related party | 11,672 | |
Working interest and royalty owners distributions payable | 236,493 | 144,526 |
Drilling advances - related party | 1,141,539 | 234,452 |
Line of credit - related party | 5,000,000 | |
Supplemental line of credit | 3,552,500 | 7,088,698 |
Convertibles notes payable, net | 1,821,062 | |
Total current liabilities | 22,044,954 | 10,476,782 |
Long-term liabilities | ||
Line of credit - related party | 5,000,000 | |
Convertible notes payable, net | 3,288,251 | 5,308 |
Other long-term liabilities | 127,527 | 23,128 |
Asset retirement obligation | 1,114,874 | 945,419 |
Total liabilities | 26,575,606 | 16,450,637 |
Commitments and Contingencies—Notes 4, 6 and 12 | ||
Shareholders' equity: | ||
Preferred stock, $0.01 par value, 10,000,000 shares authorized, none issued or outstanding | ||
Common stock, $0.001 par value, 100,000,000 shares authorized, 22,904,537 and 21,964,282 shares issued and outstanding, respectively | 22,905 | 21,964 |
Additional paid-in capital | 21,074,897 | 11,405,225 |
Accumulated deficit | (14,754,722) | (9,851,042) |
Total Shareholders’ Equity | 6,343,080 | 1,576,147 |
TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY | $ 32,918,686 | $ 18,026,784 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Condensed Consolidated Balance Sheets | ||
Accumulated depreciation | $ 41,512 | $ 8,329 |
Preferred stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
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 (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock shares authorized | 100,000,000 | 100,000,000 |
Common stock shares issued | 22,904,537 | 21,964,282 |
Common stock shares outstanding | 22,904,537 | 21,964,282 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
REVENUE: | ||||
Crude oil sales | $ 2,094,056 | $ 41,839 | $ 7,124,456 | $ 41,839 |
Natural gas sales | 486,197 | 33,328 | 1,061,849 | 33,328 |
NGL sales | 257,939 | 11,990 | 570,774 | 11,990 |
Total revenue | 2,838,192 | 87,157 | 8,757,079 | 87,157 |
COSTS AND EXPENSES: | ||||
Lease operating expense | 191,204 | 34,923 | 619,884 | 34,844 |
Production taxes, gathering and marketing | 268,550 | 29,793 | 753,190 | 35,465 |
Exploration costs | 708 | 14,740 | 67,382 | 17,440 |
Depletion, depreciation and amortization | 1,166,030 | 39,064 | 3,168,797 | 43,425 |
Accretion expense | 25,860 | 72,772 | ||
Plugging expense | 33,847 | 23,123 | 33,847 | |
Loss on impairment of proved crude oil and natural gas properties | 9,841 | 26,880 | ||
General and administrative expense | 1,514,007 | 980,870 | 4,380,676 | 2,535,789 |
Total costs and expenses | 3,166,359 | 1,143,078 | 9,085,824 | 2,727,690 |
Operating income (loss) | (328,167) | (1,055,921) | (328,745) | (2,640,533) |
OTHER INCOME (EXPENSE): | ||||
Other income | 28,948 | 33 | 29,194 | 534 |
Interest expense | (1,731,853) | (96,157) | (4,604,129) | (153,053) |
Total other (expense) | (1,702,905) | (96,124) | (4,574,935) | (152,519) |
Net (loss) | $ (2,031,072) | $ (1,152,045) | $ (4,903,680) | $ (2,793,052) |
Net (loss) per share: | ||||
Basic and diluted (in dollars per share) | $ (0.09) | $ (0.05) | $ (0.22) | $ (0.13) |
Weighted average number of shares outstanding: | ||||
Basic and diluted (in shares) | 22,577,417 | 21,878,553 | 22,270,291 | 21,798,185 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | ||
Net (loss) | $ (4,903,680) | $ (2,793,052) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depletion, depreciation and amortization | 3,168,797 | 27,687 |
Deferred rent liability | 11,593 | |
Accretion of asset retirement obligation | 72,772 | 15,738 |
Accretion of debt discounts | 3,528,788 | |
Stock-based compensation | 1,127,950 | 1,093,854 |
Plugging and abandonment | 23,123 | |
Impairment of proved crude oil and natural gas properties | 26,880 | |
Changes in operating assets and liabilities: | ||
Accounts receivable - joint interest billing | (363,322) | 348,475 |
Accounts receivable - joint interest billing - related party | (103,659) | |
Accounts receivable - crude oil, natural gas and NGL sales | (1,438,869) | (13,860) |
Accounts receivable - other | (138,788) | |
Deferred equity issuance costs | (186,312) | (243,726) |
Prepaid expenses and other assets | 1,068,256 | (784,735) |
Accounts payable and accrued liabilities | 1,080,439 | 1,648,138 |
Accounts payable - related party | 11,672 | 290,078 |
Accounts payable - working interest partners and royalty owners | 91,968 | 119,742 |
Drilling advances, net - related party | 907,087 | |
Net cash provided by (used in) operating activities | 4,096,603 | (403,569) |
Cash flows from investing activities: | ||
Additions of property, plant and equipment | (79,886) | (16,417) |
Development of crude oil and natural gas properties | (8,082,911) | (2,127,869) |
Acquisitions of crude oil and natural gas properties - business combinations | (2,260,890) | |
Acquisitions of crude oil and natural gas properties | (3,003,339) | (1,138,893) |
Net cash (used in) investing activities | (11,166,136) | (5,544,069) |
Cash flows from financing activities: | ||
Long-term debt - advances on initial line of credit | 3,937,815 | |
Repayment under supplemental line of credit | (3,552,500) | |
Convertible notes issued for cash | 8,891,712 | |
Common stock issued for cash (net of offering costs) | 95,000 | |
Net cash provided by financing activities | 5,339,212 | 4,032,815 |
Cash: | ||
Net (decrease) in cash | (1,730,321) | (1,914,823) |
Cash, beginning of period | 2,449,412 | 3,011,291 |
Cash, end of period | 719,091 | 1,096,468 |
Supplemental cash flow disclosure: | ||
Cash paid for interest, net of capitalized interest | 431,606 | |
Non-cash investing and financing activities: | ||
Acquisition of crude oil and natural gas properties – business combinations | $ 635,836 | |
Accrued development costs of crude oil and natural gas properties | 6,290,351 | |
Addition of property, plant and equipment through tenant improvement allowance | 84,460 | |
Beneficial conversion feature in connection with private placements | 4,329,365 | |
Issuance of common stock warrants in connection with private placement | 2,978,787 | |
Issuance of common stock in connection with letter agreement | 387,500 | |
Issuance of common stock in connection with lease acquisitions | $ 847,001 |
ORGANIZATION AND NATURE OF BUSI
ORGANIZATION AND NATURE OF BUSINESS | 9 Months Ended |
Sep. 30, 2017 | |
ORGANIZATION AND NATURE OF BUSINESS | |
ORGANIZATION AND NATURE OF BUSINESS | NOTE 1—ORGANIZATION AND NATURE OF BUSINESS PetroShare Corp. (“PetroShare” or the “Company”) is a corporation organized under the laws of the State of Colorado on September 4, 2012 to investigate, acquire and develop crude oil and natural gas properties in the Rocky Mountain or mid-continent portion of the United States. Since inception, the Company has focused on financing activities and the acquisition, exploration and development of crude oil and natural gas prospects in the Denver-Julesburg Basin, or DJ Basin, in northeast Colorado and other parts of the State. The Company’s current operating focus is within the Wattenberg Field of the DJ Basin, which is located primarily in Adams and Weld Counties, Colorado. |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2017 | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2—BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The interim condensed consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures included are adequate to make the information presented not misleading. In management’s opinion, the Condensed Consolidated Balance Sheets as of September 30, 2017 (unaudited) and December 31, 2016 (see Note 3), the unaudited Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2017 and 2016, and the unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2017 and 2016, contained herein, reflect all adjustments, consisting solely of normal recurring items, which are necessary for the fair presentation of the Company’s financial position, results of operations and cash flows on a basis consistent with that of the Company’s prior audited financial statements. However, the results of operations for the interim periods may not be indicative of results to be expected for the full fiscal year. Therefore, these condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto and summary of significant accounting policies included in the Company’s annual report on Form 10-K for the year ended December 31, 2016. Except as noted below, there have been no changes to the footnotes from those accompanying the audited financial statements contained in the Company’s Form 10‑K for the year ended December 31, 2016. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary CFW Resources, LLC, formed on August 1, 2017. Loss Per Share Basic and diluted loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the period. The Company excluded potentially dilutive securities as the effect of their inclusion would be anti-dilutive. Capitalized Interest Costs The Company has capitalized certain interest costs related to unproved properties that are currently undergoing activities necessary to prepare them for their intended use. These costs have been capitalized to oil and gas properties. Deferred Equity Issuance Costs The Company defers as other current assets the direct incremental costs of raising capital through equity offerings until such time as the offering is completed. At the time of the completion of an offering, the costs are offset against the proceeds received. Should an offering be terminated, deferred equity issuance costs are charged to operations during the period in which an offering is terminated. As of September 30, 2017 and December 31, 2016, the Company’s deferred equity issuance costs totaled $186,312 and $nil, respectively ( Note 9) . Debt Discount Costs On January 30, 2017, the Company completed the third and final closing of a private placement of units consisting of common stock purchase warrants and convertible promissory notes with a total aggregate face value of $10,000,000 (Note 6). On September 25, 2017, the Company completed the first of three closings of a private placement of Series B convertible promissory notes. The notes issued in the first closing of the Series B offering had a total aggregate face value of $1,695,000 (Note 6). Both the original convertible notes and the Series B Notes contain an embedded beneficial conversion feature. The proceeds from the sale of the securities were allocated between the convertible notes and, where applicable, the warrants based on the relative fair values of the debt instrument, without the warrants, and of the warrants themselves at the time of issuance. The fair value of the beneficial conversion feature, limited to the gross proceeds, has been recorded as a reduction of the carrying value of the convertible notes and is being amortized to interest expense using the effective interest method over the term of the notes. The fair value of warrants issued has been recorded as a reduction to the carrying value of the convertible notes, limited to the gross proceeds, and is being amortized over the term of the notes using the effective interest method. Origination fees paid in cash have been recorded as a reduction in the carrying value of the convertible notes and are being amortized over the term of the notes using the effective interest method. The fair value of warrants issued to the placement agent in connection with the offering have been recorded as a charge to additional paid-in capital. Recently Issued Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, “Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”), which is intended to improve the accounting for share-based payment transactions. ASU 2016-09 changes several aspects of the accounting for share-based payment award transactions, including: (1) Accounting and Cash Flow Classification for Excess Tax Benefits and Deficiencies, (2) Forfeitures, and (3) Tax Withholding Requirements and Cash Flow Classification. ASU 2016-09 is effective for public businesses for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016, with early adoption permitted. The Company adopted this pronouncement effective January 1, 2017. Upon adoption of this standard, the Company no longer estimates the total number of awards for which the requisite service period will not be rendered, and effective January 1, 2017, began accounting for forfeitures as they occur. The adoption of these provisions did not materially impact the condensed consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”), which establishes a comprehensive new revenue recognition standard designed to depict the transfer of goods or services to a customer in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. In doing so, companies may need to use more judgment and make more estimates than under current revenue recognition guidance. In March 2016, the FASB released certain implementation guidance through ASU 2016‑08 (collectively with ASU 2014-09, the "Revenue ASUs") to clarify principal versus agent considerations. The Revenue ASUs allow for the use of either the full or modified retrospective transition method, and the standard will be effective for annual reporting periods beginning after December 15, 2017 including interim periods within that period, with early adoption permitted for annual reporting periods beginning after December 15, 2016. Currently, the Company has not identified any contracts that would require a change from the entitlements method, historically used for certain domestic crude oil and natural gas sales, to the sales method of accounting. The Company plans to adopt the guidance using the modified retrospective method on the effective date of January 1, 2018. In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)" ("ASU 2016-02"), which establishes a comprehensive new lease standard designed to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply. An entity that elects to apply the practical expedients will, in effect, continue to account for leases that commence before the effective date of ASU 2016-02 in accordance with previous standards. ASU 2016-02 is effective for public businesses for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this standard on its condensed consolidated financial statements. There were various updates recently issued by the FASB, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company’s reported financial position, results of operations, or cash flows. |
REVISION OF PRIOR PERIOD FINANC
REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS | 9 Months Ended |
Sep. 30, 2017 | |
REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS | |
REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS | NOTE 3—REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS In connection with the preparation of its condensed financial statements for the quarter ended March 31, 2017, the Company identified an error related to the manner in which it accounted for the fair value of convertible notes and warrants issued in the Company’s private placement during December 2016 (Note 6). Specifically, the Company was required to apply the guidance of Accounting Standards Codification (“ASC”) 470, and more specifically, ASC 470-20-25-2 and ASC 470-20-25-3. On the balance sheet at December 31, 2016, the Company recorded the face value of convertible notes payable under liabilities, discounted by (i) the value of the original issue discount and (ii) the value of the warrants issued to the placement agent. The Company did not, however, discount the value of the convertible notes payable by the fair value of the warrants issued to individual investors. In accordance with Staff Accounting Bulletin (“SAB”) No. 99, Materiality, and SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, the Company evaluated the error and determined that the related impact was not material to the Company’s results of operations or financial position for any prior annual or interim period. Accordingly, the Company has corrected these errors as of and for the year ended December 31, 2016 by revising the condensed financial statements. Periods not presented herein will be revised, as applicable, in future filings. The following tables present the revisions to the balance sheet as of, and the statement of operations for the year ended, December 31, 2016: Balance Sheet As of December 31, 2016 As Reported Adjustments As Revised Convertible notes payable, net $ 814,989 $ (809,681) $ 5,308 Total Liabilities $ 17,260,318 $ (809,681) $ 16,450,637 Shareholders’ Equity Additional paid-in capital $ 10,593,324 $ 811,901 $ 11,405,225 Accumulated deficit (9,848,822) (2,220) (9,851,042) Total Shareholders’ Equity $ 766,466 $ 809,681 $ 1,576,147 Total Liabilities and Shareholders’ Equity $ 18,026,784 $ — $ 18,026,784 Statement of Operations Year Ended December 31, 2016 Net (loss), as reported $ (4,479,052) Adjustments : Previously reported accretion of debt discount (conversion feature and warrants) (interest expense) 2,529 Corrected accretion of debt discount (interest expense) 4,749 Total adjustment (2,220) Net (loss), as revised $ (4,481,272) Net (loss) per share, as reported $ Net (loss) per share, as revised $ |
GOING CONCERN
GOING CONCERN | 9 Months Ended |
Sep. 30, 2017 | |
GOING CONCERN | |
GOING CONCERN | NOTE 4—GOING CONCERN Pursuant to ASU 2014-15, the Company has assessed its ability to continue as a going concern for a period of one year from the date of the issuance of these condensed consolidated financial statements. Substantial doubt about an entity’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year from the financial statement issuance date. As shown in the accompanying condensed consolidated financial statements, the Company incurred a net loss of $4.9 million during the nine months ended September 30, 2017, and as of that date, the Company’s current liabilities exceeded its current assets by $18.1 million. At September 30, 2017, the Company had a cash balance of $0.7 million and other current assets of $3.2 million. As of September 30, 2017, the Company has insufficient working capital and revenues from operations to meet its maturing debt obligations and other liabilities incurred in connection with the Company’s development activities. The Company will also need to generate sufficient cash flow from operations and sell equity or debt to fund further drilling and acquisition activity. If sufficient cash flow and additional financing is not available, the Company may be compelled to reduce the scope of its business activities and/or sell a portion of the Company’s interests in its oil and gas properties. This, in turn, may have an adverse effect on the Company’s ability to realize the value of its assets. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s condensed consolidated financial statements do not include any adjustments related to the realization of the carrying value of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence. However, management believes that it can be successful in obtaining equity and/or debt financing which will enable the Company to continue as a going concern. |
CRUDE OIL AND NATURAL GAS PROPE
CRUDE OIL AND NATURAL GAS PROPERTIES | 9 Months Ended |
Sep. 30, 2017 | |
CRUDE OIL AND NATURAL GAS PROPERTIES | |
CRUDE OIL AND NATURAL GAS PROPERTIES | NOTE 5—CRUDE OIL AND NATURAL GAS PROPERTIES The Company’s oil and gas properties are located entirely within the United States. The net capitalized costs related to the Company’s oil and gas producing activities were as follows: September 30, December 31, 2017 2016 Proved oil and gas properties $ 16,289,847 $ 8,132,881 Unproved oil and gas properties (1) 7,942,890 4,092,550 Wells in progress (2) 8,384,391 2,168,092 Total capitalized costs 32,617,128 14,393,523 Accumulated depletion, depreciation and amortization (3,918,935) (783,320) Net capitalized costs $ 28,698,193 $ 13,610,203 (1) Unproved oil and gas properties represent unevaluated costs the Company excludes from the amortization base until proved reserves are established or impairment is determined. (2) Costs from wells in progress are excluded from the amortization base until production commences. Furthermore, wells in progress include approximately $260,000 of capitalized interest costs associated with the drilling and completion activities during 2017. Costs Incurred in Crude Oil and Natural Gas Activities . Costs incurred in connection with the Company's crude oil and natural gas acquisition, exploration and development activities for each of the nine-month periods are shown below: September 30, 2017 2016 Exploration costs $ 67,382 $ 17,440 Development costs 14,373,262 2,127,869 Acquisition of properties Proved — 2,811,546 Unproved 3,850,340 633,264 Total $ 18,290,984 $ 5,590,119 During the three months ended September 30, 2017 and 2016, depletion expense, which is included as part of the depletion, depreciation and amortization in the condensed consolidated statement of operations, was $1,153,273 and $23,525, respectively, and $3,135,614 and $23,525 for the nine months ended September 30, 2017 and 2016, respectively. |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2017 | |
DEBT | |
DEBT | NOTE 6—DEBT Line of credit On May 13, 2015, the Company entered into a Revolving Line of Credit Facility Agreement (“initial line of credit”) with Providence Energy Operators, LLC (“PEO”), which provides to the Company a revolving line of credit of up to $5.0 million, maturing June 30, 2018. Effective September 1, 2017, interest on the initial line of credit was increased from 8% to 10% per annum. As of September 30, 2017 and December 31, 2016, the outstanding balance on the initial line of credit was $5,000,000 plus accrued interest of $609,875 and $302,477, respectively. During the three and nine months ended September 30, 2017, the Company recorded interest expense of $117,375 and $305,290, respectively, which excluded $10,441 of interest that was capitalized to wells in progress during the year. During the three and nine months ended September 30, 2016, the Company recorded interest expense of $96,157 and $153,053, respectively, related to the initial line of credit. On September 23, 2017, the Company entered into a letter agreement with PEO and PEP III in connection with the issuance of the Series B Notes discussed below pursuant to which the Company agreed to (i) issue 250,000 shares of its common stock to PEO (Note 9), (ii) increase the interest rate on the initial line of credit from 8% per year to 10% per year effective September 1, 2017, (iii) begin making interest payments on the initial line of credit beginning in the fourth quarter of 2017; and (iv) meet with representatives of PEO not less frequently than semi-monthly beginning November 1, 2017 to discuss and review the Company's working capital. The Company issued 250,000 shares to PEO valued at $1.55 per share. The value of the shares has been recorded as a deferred financing fee and is being amortized over the remaining life of the initial line of credit which matures on June 30, 2018. As of September 30, 2017, the balance of the unamortized portion of the deferred financing fee amounted to $379,167. Supplemental line of credit On October 13, 2016, the Company entered into a revolving line of credit facility agreement (the “supplemental line of credit”) with Providence Energy Partners III, LP (“PEP III”). PEP III is an affiliate of PEO by virtue of having some common management personnel. The supplemental line of credit permitted the Company to borrow up to $10.0 million to pay costs associated with its acquisition and development of oil and gas properties in the Wattenberg Field. Interest on the supplemental line initially accrued at the rate of 8% per year. The supplemental line of credit was amended on March 30, 2017, pursuant to which the Company agreed not to borrow additional amounts against the supplemental line of credit and to repay $3,552,500 in outstanding principal not later than April 13, 2017, in exchange for PEP III extending the maturity date of the supplemental line of credit until June 13, 2017. On April 12, 2017, the Company paid $3,552,500 in accordance with the amendment. On June 8, 2017, the Company entered into a letter agreement (“PEP III Agreement”) with PEP III and PEO, pursuant to which PEP III agreed to modify the Company’s supplemental line of credit. The PEP III Agreement extended the maturity date of the supplemental line of credit, including approximately $3.8 million in outstanding principal and accrued interest, from June 13, 2017 until December 27, 2017, and increased the interest rate on the supplemental line from 8% to 10%, effective June 8, 2017. The Company and PEO also agreed to amend the participation agreement between the Company and PEO, dated May 13, 2015 (“Participation Agreement”), in order to expand the area of mutual interest (“AMI”) established, and to grant PEP III an option to participate under the Participation Agreement. As amended, the Participation Agreement grants PEO the option to acquire up to a 45% interest and, so long as the supplemental line of credit remains outstanding, PEP III the option to acquire up to a 10% interest in and participate in any oil and gas development on acreage acquired by the Company within the expanded AMI. The expanded AMI covers a total of four and one-half townships in Adams and Weld Counties, Colorado. As of September 30, 2017 and December 31, 2016, the outstanding balance on the supplemental line of credit was $3,552,500 and $7,088,698, plus accrued interest of $364,599 and $50,422, respectively. During the three and nine months ended September 30, 2017, the Company recorded interest expense of $89,542 and $314,177, respectively, related to the supplemental line of credit. No interest expense was recorded in the prior nine-month period. Convertible Notes On December 30, 2016, January 20, 2017 and January 30, 2017, the Company completed the private placement of units consisting of convertible promissory notes (“Convertible Notes’) with an aggregate face value of $10.0 million and common stock purchase warrants. The Company received net proceeds of approximately $9.0 million from the private placement, after placement agent fees and other associated expenses. Debt issuance costs related to origination fees paid in cash have been recorded as a discount to the Convertible Notes and are being amortized to interest expense utilizing the effective interest method over the term of the Convertible Notes. As of September 30, 2017 and December 31, 2016, the unamortized portion of debt issuance costs amounted to $745,046 and $204,703, respectively. The Company recorded interest expense of $102,949 and $336,050 related to the accretion of the discount for the three and nine months ended September 30, 2017, respectively. No interest expense was recorded in the prior nine-month period. In accordance with ASC 470, the proceeds from the sale of the Convertible Notes was allocated between the conversion feature and the warrants based on the fair values of the debt instrument without the warrants and of the warrants themselves at the time of issuance. The fair value of the beneficial conversion feature of $5,306,199 has been recorded as a reduction of the carrying value of the Convertible Notes and is being amortized to interest expense using the effective interest method over the term of the Convertible Notes. The fair value of the warrants of $3,682,801 has been recorded as a reduction to the carrying value of the Convertible Notes and is being amortized to interest expense using the effective interest method over the term of the Convertible Notes. The fair value of the warrants issued to the placement agent in connection with the offering of $1,001,471 has been recorded as a charge to additional paid-in capital. As of September 30, 2017, the Company recorded accrued interest of $252,055 and recognized interest expense of $256,234 and $447,903 for the three and nine months ended September 30, 2017, respectively, related to the Convertible Notes. Interest on the Convertible Notes during 2017 of $249,315 was capitalized to oil and gas properties. Series B Convertible Notes On September 25, 2017, the Company sold Series B Unsecured Convertible Promissory Notes (the "Series B Notes") in the principal amount of $1,695,000 to 27 accredited investors, which includes five of the Company's officers and directors who collectively purchased Series B Notes in the principal amount of $380,000. The Series B Notes are unsecured, bear interest at 15% per year and are due and payable on December 31, 2018. At the option of the holders of the Series B Notes, the principal amount of the Series B Notes, and any accrued but unpaid interest, are convertible into shares of the Company's common stock at a conversion price of $1.50 per share. The Company paid sales commissions of $53,950 and associated expenses of $1,000 in connection with the sale of the Series B Notes. Debt issuance costs related to origination fees paid in cash have been recorded as a discount to the Series B Notes and are being amortized to interest expense utilizing the effective interest method over the term of the Series B Notes. As of September 30, 2017, the unamortized portion of debt issuance costs amounted to $54,351. The Company recorded interest expense of $599 related to the accretion of the discount for the three and nine months ended September 30, 2017, respectively. In accordance with ASC 470, the fair value of the beneficial conversion feature of $56,500, has been recorded as a reduction of the carrying value of the Series B Notes and is being amortized to interest expense using the effective interest method over the term of the Series B Notes. As of September 30, 2017, the unamortized portion of the discount related to the beneficial conversion feature amounted to $55,890. The Company recorded interest expense of $610 related to the accretion of the discount for the three and nine months ended September 30, 2017. As of September 30, 2017, the Company recorded accrued interest of $4,179 and recognized interest expense of $4,179 for the three and nine months ended September 30, 2017, respectively, related to the Series B Notes. On October 17, 2017, the Company sold additional Series B Notes in the principal amount of $2,624,900 to 53 accredited investors, which includes four of the Company's officers and directors who collectively purchased Series B Notes in the principal amount of $140,000. The Company paid sales commissions of $94,145 in connection with the sale of these Series B Notes. On October 26, 2017, the Company sold additional Series B Notes in the principal amount of $405,000 to six accredited investors, which included one of the Company's directors who purchased a Series B Note in the principal amount of $50,000. The Company paid sales commissions of $8,250, in connection with the sale of these Series B Notes. The October 26, 2017 closing was the final closing pursuant to the Series B Notes offering. The total Series B Notes sold amounted to $4,724,900 in principal. Ten of the Company's officers and directors collectively purchased Series B Notes in the principal amount of $570,000. The Company paid total commissions in the amount of $156,345 and associated expenses of $1,000 in connection with the sale of the Series B Notes. For every Series B Note purchased, the holders of an original Convertible Note was given the right, but not the obligation, on or prior to October 16, 2017, to convert twice the corresponding amount of their original Convertible Note into shares of the Company's common stock at a conversion price of $1.10 per share. On October 16, 2017, investors converted $5,166,800 in principal and $128,892 of accrued interest of Convertible Notes into shares of the Company’s common stock. The market value of the Company’s common stock was $1.38 at the date of the conversion. The Company is obligated to issue 4,697,090 shares and 117,175 shares, respectively, in connection with the conversion of the Convertible Notes payable and accrued interest. The Company paid $47,858 to the placement agent in connection with these conversions. The following table reflects the net amounts recorded as debt at September 30, 2017 and December 31, 2016: September 30, December 31, 2017 2016 (see Note 3) Current portion: Line of credit $ 5,000,000 $ — Supplemental line of credit 3,552,500 7,105,000 Unamortized debt discount — (16,302) Total line of credit 8,552,500 7,088,698 Convertible notes payable: Face amount convertible notes 5,166,800 — Unamortized original issuance costs (356,868) — Unamortized discount related to beneficial conversion feature (1,764,311) — Unamortized discount related to warrants issued (1,224,559) — Net convertible notes payable 1,821,062 — Total current portion $ 10,373,562 $ 7,088,698 Long-term portion: Line of credit $ — $ 5,000,000 Convertible notes payable: Face amount of convertible notes 6,528,200 1,942,600 Unamortized original issuance costs (388,178) (204,703) Unamortized discount related to beneficial conversion feature (1,706,275) (1,030,755) Unamortized discount related to warrants issued (1,145,496) (701,834) Net convertible notes payable $ 3,288,251 $ 5,308 Total long-term portion $ 3,288,251 $ 5,005,308 Total debt, net $ 13,661,813 $ 12,094,006 |
ASSET RETIREMENT OBLIGATION
ASSET RETIREMENT OBLIGATION | 9 Months Ended |
Sep. 30, 2017 | |
ASSET RETIREMENT OBLIGATION | |
ASSET RETIREMENT OBLIGATION | NOTE 7—ASSET RETIREMENT OBLIGATION For the purpose of determining the fair value of the asset retirement obligation incurred during the nine months ended September 30, 2017, the Company assumed an inflation rate of 2.0%, an estimated average asset life of between 27.0 and 40.0 years, and a credit-adjusted risk-free interest rate between 11.26% and 11.86%. The following reconciles the activity of the asset retirement obligation for the periods presented: Nine months ended September 30, Year ended December 31, 2017 2016 Asset retirement obligation, beginning of period $ 945,419 $ 34,776 Liabilities settled (9,475) 1,990 Liabilities incurred 106,158 878,170 Revisions in estimated liabilities — — Accretion 72,772 30,483 Asset retirement obligation, end of period $ 1,114,874 $ 945,419 Accretion expense recorded for the three months ended September 30, 2017 and 2016 was $25,860 and $13,931, respectively, and for the nine months ended September 30, 2017 and 2016 was $72,772 and $15,738, respectively. |
ACCOUNTS PAYABLE AND ACCRUED LI
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | 9 Months Ended |
Sep. 30, 2017 | |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | NOTE 8—ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Accounts payable and accrued liability balances were comprised of the following: September 30, December 31, 2017 2016 Trade payables and accrued liabilities $ 9,050,981 $ 2,366,429 Accrued interest payable 1,230,707 352,599 Liabilities incurred in connection with acquisition of crude oil and natural gas properties — 290,078 Total $ 10,281,688 $ 3,009,106 |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2017 | |
SHAREHOLDERS' EQUITY | |
SHAREHOLDERS' EQUITY | NOTE 9—SHAREHOLDERS’ EQUITY Public Offering On May 19, 2017, the Company filed a registration statement on Form S-1 (File No. 333-218096), pursuant to which the Company seeks to raise up to $50.0 million in a public offering of its common stock. Closing of the offering is subject to a number of conditions, including an effective date for its registration statement from the SEC and execution of a definitive underwriting agreement with the underwriters. Activity for the nine months ended September 30, 2017 included the following: On September 23, 2017, the Company entered into a letter agreement with PEO pursuant to which PEO consented to the Company issuing the Series B Notes as described more fully in (Note 6). In connection with the execution of the letter agreement, the Company issued 250,000 shares to PEO valued at $1.55 per share. On September 25, 2017, the Company sold Series B Notes in the principal amount of $1,695,000. The Series B Notes are convertible into shares of common stock at $1.50 per share. Immediately following the closing, the Convertible Notes were convertible into 1,130,000 shares of common stock. In connection with the completion of a private placement, the Company received $7,251,662 in net proceeds from the sale of 161.15 units consisting of Convertible Notes and warrants during the first quarter of 2017. The Convertible Notes were convertible into shares of common stock at $1.50 per share. Immediately following the closing, and including units sold during 2016, the Convertible Notes were convertible into 6,666,666 shares of common stock. Subsequent to September 30, 2017, in connection with the conversion of Convertible Notes, the Company is obligated to issue 4,814,265,shares of common stock valued at $1.10 per share in connection with the conversion of $5,166,800 in principal and $128,892 of accrued interest of these Convertible Notes (Note 6). On various dates, in connection with the execution of four employment agreements (Note 12) and the employment of additional employees, the Company issued 219,700 shares of restricted stock. The shares are subject to certain vesting restrictions, but all 219,700 shares have full voting rights and are eligible to receive dividends during the vesting period. For the three and nine months ended September 30, 2017, the Company recorded stock-based compensation of $51,370 and $103,769, respectively, related to the grant and vesting of the restricted shares. As of September 30, 2017, unvested stock-based compensation amounted to $304,977 related to the restricted shares. On April 3, 2017, the Company issued 470,555 shares valued at $1.80 per share in connection with the acquisitions of oil and gas assets. Activity for the nine months ended September 30, 2016 included the following: In January 2016, the Company sold 95,000 shares of common stock at $1.00 per share to one accredited investor pursuant to a private placement. On April 8, 2016, the Company issued 50,000 shares of common stock valued at $0.73 per share to an investor relations company in connection with the certain services to be provided pursuant to an investor relations agreement. On May 4, 2016, the Company issued an aggregate 50,000 shares of common stock valued at $1.01 per share to two of the Company's Directors in connection with their appointment to the Board. Warrants The table below summarizes warrants outstanding as of September 30, 2017: Shares Underlying Exercise Price Outstanding Warrants Per Share Expiration Date Underwriter warrants $ 1.25 11/12/2020 Investor warrants $ 3.00 12/31/2019 Placement agent warrants $ 1.50 12/31/2021 Total warrants outstanding Activity for the nine months ended September 30, 2017 included the following: On January 20, 2017 and January 30, 2017, in connection with the same private placement, the Company issued 2,216,978 and 3,154,601 warrants, respectively, to the purchasers of Convertible Notes. The warrants are exercisable at $3.00 per share and expire on December 31, 2019 (Note 6). On January 20, 2017 and January 30, 2017, in connection with the closings of a private placement, the Company issued 221,744 and 315,526 warrants, respectively, to the placement agent. The warrants are exercisable at $1.50 per share and expire on December 31, 2021 (Note 6). |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2017 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | NOTE 10—STOCK-BASED COMPENSATION On August 18, 2016, the Company’s Board of Directors adopted the Amended and Restated PetroShare Corp. Equity Incentive Plan (the “Plan”), which replaced and restated the Company’s original equity incentive plan. The Plan terminates by its terms on August 17, 2026. Among other things, the Plan increased the number of shares of common stock reserved for issuance thereunder from 5,000,000 to 10,000,000. The Company’s shareholders approved the Plan at the Company’s annual meeting of shareholders on September 8, 2016. Activity for the nine months ended September 30, 2017 included the following: On April 1, 2017, the Company accelerated and changed the vesting terms related to an option to purchase 700,000 shares of the Company’s stock that was initially issued on August 19, 2016. As amended, the option as to 100,000 shares was immediately exercisable and the vesting terms of the option as to the remaining 600,000 shares were accelerated. As amended, the entire option is exercisable at $1.83 per share. On April 3, 2017, the Company issued an option to purchase 200,000 shares of the Company’s common stock, which option is exercisable at $1.83 per share. The option was issued in connection with the execution of an employment agreement (Note 12). On May 22, 2017, the Company issued an option to purchase 22,000 shares of the Company’s common stock, which option is exercisable at $1.92 per share. The option was issued in connection with the hiring of a new employee. On June 1, 2017 the Company issued an option to purchase 200,000 shares of the Company's common stock, which option is exercisable at $1.89 per share. The option was issued in connection with the execution of an employment agreement (Note 12). All of the options are subject to the terms and conditions of the Plan and a stock option agreement. Activity for the nine months ended September 30, 2016 included the following: On January 1, 2016, the Company issued an option to purchase 250,000 shares of its common stock in connection with the appointment of its Chief Financial Officer. The option is exercisable at a price of $1.00 per share and expires on November 23, 2018. The option vested one-half on January 1, 2016 and the remainder on January 1, 2017. On January 28, 2016, the Company issued an option to purchase 875,000 shares of its common stock in connection with the appointment of its Chief Operating Officer. The option is exercisable at a price of $1.00 per share and expires on December 31, 2022. The option vested as follows: (i) 125,000 on January 28, 2016, the date of grant, and (ii) 750,000 on January 1, 2017. On April 12, 2016, the Company issued an option to purchase 250,000 shares of its common stock in connection with the hiring of the Company's Vice President of Land. The option vests as follows: (i) 50,000 on the date of grant; (ii) 100,000 on April 15, 2017; and (iii) 100,000 on April 15, 2018, provided that the optionee has been continuously employed by the Company up to each vesting date. The option is exercisable at a price of $0.80 per share and expires on April 15, 2021. On May 4, 2016, the Company issued an option to purchase 50,000 shares of its common stock in connection with the addition and appointment of two members of the Company's Board of Directors. The options vested on the date of grant. The options are exercisable at a price of $1.10 per share and expire on December 31, 2022. All of the options are subject to the terms and conditions of the Plan and a stock option agreement. A summary of activity under the Plan for the nine months ended September 30, 2017 is as follows: Weighted Remaining Average Contractual Number of Exercise Term Shares Price (Years) Outstanding, December 31, 2016 4,675,000 $ 0.76 5.39 Exercisable, December 31, 2016 3,010,000 $ 0.54 5.97 Granted 422,000 $ 1.86 5.69 Exercised — — — Forfeited — — — Outstanding, September 30, 2017 5,097,000 $ 0.85 4.88 Exercisable, September 30, 2017 3,840,000 $ 0.66 4.87 The fair value of each stock-based award was estimated on the date of the grant using the Black-Scholes pricing model that incorporates key assumptions including volatility of the Company’s stock, dividend yield and risk-free interest rates. As the Company’s common stock has limited historical trading data, the expected stock price volatility is based primarily on the historical volatility of a group of publicly-traded companies that share similar operating metrics and histories. The expected term of the awards represents the period of time that management anticipates awards will be outstanding. As there was insufficient historical data available to ascertain a forfeiture rate, the plain vanilla method was applied in calculating the expected term of the options. The risk-free rates for the periods within the contractual life of the options are based on the US Treasury bond rate in effect at the time of the grant for bonds with maturity dates at the expected term of the options. The Company has never paid dividends on its common stock and currently does not intend to do so, and as such, the expected dividend yield is zero. Compensation expense related to stock options was recorded net of estimated forfeitures, which for options remaining at September 30, 2017, was $nil. The table below summarizes assumptions utilized in the Black-Scholes pricing model for the nine months ended September 30, 2017: September 30, 2017 Expected option term—years 2.5 - 3.25 Risk-free interest rate 1.75% - 1.93% Expected dividend yield 0% Volatility 162% - 169% Forfeited 0% During the three and nine months ended September 30, 2017, the Company recorded stock-based compensation of $345,835 and $1,024,182, respectively, related to options issued through the Plan. During the three and nine months ended September 30, 2016, the Company recorded stock-based compensation of $378,870 and $1,093,854 respectively, related to options issued through the Plan. Unvested stock-based compensation related to the options at September 30, 2017 and December 31, 2016 amounted to $856,778 and $1,025,391, respectively. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2017 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 11—RELATED PARTY TRANSACTIONS At September 30, 2017, the Company had drawn $5,000,000 on the initial line of credit with PEO and recorded related accrued interest of $609,875. PEO currently beneficially owns 13.2% of the Company’s common stock. Interest expense related to the initial line of credit for the three and nine months ended September 30, 2017 amounted to $117,375 and $305,290, respectively, and for the three and nine months ended September 30, 2016 was $96,157 and $153,053, respectively. At September 30, 2017, the Company has recorded $389,885 in Accounts receivable – joint interest billing – related party. This amount relates to amounts billed to PEO related to its participation in the Company’s operated Shook drilling program and PEO’s ownership interest in the vertical wells that the Company operates. At September 30, 2017, the Company has recorded $1,141,539 in Drilling advances – related party. This amount relates to unapplied cash advances received from PEO in connection with the Company’s operated Shook drilling program, and has recorded $11,672 in Accounts payable – related party, payable to PEO. During the three months ended September 30, 2017 the Company issued 250,000 common shares to PEO in connection with the execution of a letter agreement (Notes 6 and 9). On September 25, 2017 the Company sold Series B Notes to five of the Company’s officers and directors who collectively purchased Series B Notes in the principal amount of $380,000 (Note 6). Subsequent to the end of the period, five of the Company’s officers and directors purchased Series B Notes in the aggregate principal amount of $190,000 on the same terms and conditions as the other purchasers, with the exception that the Company did not pay commissions on these sales. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2017 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 12—COMMITMENTS AND CONTINGENCIES Operating leases and agreements The Company leases its office facility under a four-year non-cancelable operating lease expiring in March 2021. The following is a schedule by year of future minimum rental payments required under the lease agreement: Year ending December 31, Amount 2017 $ 31,692 2018 129,738 2019 133,698 2020 137,658 2021 34,662 Total $ 467,448 Lease expense totaled $42,245 and $92,354 for the three and nine months ended September 30, 2017, respectively, and $55 and $22,089 for the three and nine months ended September 30, 2016, respectively. Employment agreements On April 1, 2017, the Company entered an employment agreement with its Manager of Production and Completion Operations. The agreement provides for a base salary of $130,000 per year, an initial term expiring on March 31, 2018 with an automatic renewal for successive one-year periods unless terminated in accordance with its terms, and provisions for termination and payment of severance under various circumstances. In connection with the execution of the agreement, the employee was granted 50,000 shares of restricted stock and an option to purchase up to 200,000 shares of common stock at an exercise price of $1.83 per share. On April 1, 2017, the Company entered into an employment agreement with its Executive Vice President for Capital Markets and Investor Relations. The agreement provides for a base salary of $156,000 per year, an initial term expiring on December 31, 2018 with an automatic renewal for successive one-year periods unless terminated in accordance with its terms, and provisions for termination and payment of severance under various circumstances. In connection with the execution of the agreement, the employee was granted 66,700 shares of restricted stock and the vesting of 200,000 previously issued stock options were accelerated. On June 1, 2017, the Company entered into an employment agreement with its Senior Landman. The agreement provides for a base salary of $130,000 per year, an initial term expiring on May 31, 2018 with an automatic renewal for successive one-month periods unless terminated in accordance with its terms, and provisions for termination. In connection with the execution of the agreement, the employee was granted 50,000 shares of restricted stock and an option to purchase 200,000 shares of common stock at $1.89 per share. On June 1, 2017, the Company entered into an employment agreement with its Chief Financial Officer. The agreement provides for a base salary of $150,000 per year, an initial term expiring on December 31, 2018 with an automatic renewal for successive one-year periods unless terminated in accordance with its terms, and provisions for termination and payment of severance under various circumstances. In connection with the execution of the agreement, the employee was granted 50,000 shares of restricted stock. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2017 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 13—SUBSEQUENT EVENTS On October 16, 2017, the Company converted $5,166,800 in Convertible Notes and $128,892 in corresponding accrued interest into 4,697,090 and 117,175 shares of common stock respectively (Note 6). |
BASIS OF PRESENTATION AND SUM19
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | Basis of Presentation The interim condensed consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures included are adequate to make the information presented not misleading. In management’s opinion, the Condensed Consolidated Balance Sheets as of September 30, 2017 (unaudited) and December 31, 2016 (see Note 3), the unaudited Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2017 and 2016, and the unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2017 and 2016, contained herein, reflect all adjustments, consisting solely of normal recurring items, which are necessary for the fair presentation of the Company’s financial position, results of operations and cash flows on a basis consistent with that of the Company’s prior audited financial statements. However, the results of operations for the interim periods may not be indicative of results to be expected for the full fiscal year. Therefore, these condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto and summary of significant accounting policies included in the Company’s annual report on Form 10-K for the year ended December 31, 2016. Except as noted below, there have been no changes to the footnotes from those accompanying the audited financial statements contained in the Company’s Form 10‑K for the year ended December 31, 2016. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary CFW Resources, LLC, formed on August 1, 2017. |
Loss Per Share | Loss Per Share Basic and diluted loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the period. The Company excluded potentially dilutive securities as the effect of their inclusion would be anti-dilutive. |
Capitalized Interest Costs | Capitalized Interest Costs The Company has capitalized certain interest costs related to unproved properties that are currently undergoing activities necessary to prepare them for their intended use. These costs have been capitalized to oil and gas properties. |
Deferred Equity Issuance Costs | Deferred Equity Issuance Costs The Company defers as other current assets the direct incremental costs of raising capital through equity offerings until such time as the offering is completed. At the time of the completion of an offering, the costs are offset against the proceeds received. Should an offering be terminated, deferred equity issuance costs are charged to operations during the period in which an offering is terminated. As of September 30, 2017 and December 31, 2016, the Company’s deferred equity issuance costs totaled $186,312 and $nil, respectively ( Note 9) . |
Debt Discount Costs | Debt Discount Costs On January 30, 2017, the Company completed the third and final closing of a private placement of units consisting of common stock purchase warrants and convertible promissory notes with a total aggregate face value of $10,000,000 (Note 6). On September 25, 2017, the Company completed the first of three closings of a private placement of Series B convertible promissory notes. The notes issued in the first closing of the Series B offering had a total aggregate face value of $1,695,000 (Note 6). Both the original convertible notes and the Series B Notes contain an embedded beneficial conversion feature. The proceeds from the sale of the securities were allocated between the convertible notes and, where applicable, the warrants based on the relative fair values of the debt instrument, without the warrants, and of the warrants themselves at the time of issuance. The fair value of the beneficial conversion feature, limited to the gross proceeds, has been recorded as a reduction of the carrying value of the convertible notes and is being amortized to interest expense using the effective interest method over the term of the notes. The fair value of warrants issued has been recorded as a reduction to the carrying value of the convertible notes, limited to the gross proceeds, and is being amortized over the term of the notes using the effective interest method. Origination fees paid in cash have been recorded as a reduction in the carrying value of the convertible notes and are being amortized over the term of the notes using the effective interest method. The fair value of warrants issued to the placement agent in connection with the offering have been recorded as a charge to additional paid-in capital. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, “Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”), which is intended to improve the accounting for share-based payment transactions. ASU 2016-09 changes several aspects of the accounting for share-based payment award transactions, including: (1) Accounting and Cash Flow Classification for Excess Tax Benefits and Deficiencies, (2) Forfeitures, and (3) Tax Withholding Requirements and Cash Flow Classification. ASU 2016-09 is effective for public businesses for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016, with early adoption permitted. The Company adopted this pronouncement effective January 1, 2017. Upon adoption of this standard, the Company no longer estimates the total number of awards for which the requisite service period will not be rendered, and effective January 1, 2017, began accounting for forfeitures as they occur. The adoption of these provisions did not materially impact the condensed consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”), which establishes a comprehensive new revenue recognition standard designed to depict the transfer of goods or services to a customer in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. In doing so, companies may need to use more judgment and make more estimates than under current revenue recognition guidance. In March 2016, the FASB released certain implementation guidance through ASU 2016‑08 (collectively with ASU 2014-09, the "Revenue ASUs") to clarify principal versus agent considerations. The Revenue ASUs allow for the use of either the full or modified retrospective transition method, and the standard will be effective for annual reporting periods beginning after December 15, 2017 including interim periods within that period, with early adoption permitted for annual reporting periods beginning after December 15, 2016. Currently, the Company has not identified any contracts that would require a change from the entitlements method, historically used for certain domestic crude oil and natural gas sales, to the sales method of accounting. The Company plans to adopt the guidance using the modified retrospective method on the effective date of January 1, 2018. In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)" ("ASU 2016-02"), which establishes a comprehensive new lease standard designed to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply. An entity that elects to apply the practical expedients will, in effect, continue to account for leases that commence before the effective date of ASU 2016-02 in accordance with previous standards. ASU 2016-02 is effective for public businesses for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this standard on its condensed consolidated financial statements. There were various updates recently issued by the FASB, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company’s reported financial position, results of operations, or cash flows. |
REVISION OF PRIOR PERIOD FINA20
REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS | |
Schedule of revisions to the balance sheet and the statement of operations | Balance Sheet As of December 31, 2016 As Reported Adjustments As Revised Convertible notes payable, net $ 814,989 $ (809,681) $ 5,308 Total Liabilities $ 17,260,318 $ (809,681) $ 16,450,637 Shareholders’ Equity Additional paid-in capital $ 10,593,324 $ 811,901 $ 11,405,225 Accumulated deficit (9,848,822) (2,220) (9,851,042) Total Shareholders’ Equity $ 766,466 $ 809,681 $ 1,576,147 Total Liabilities and Shareholders’ Equity $ 18,026,784 $ — $ 18,026,784 Statement of Operations Year Ended December 31, 2016 Net (loss), as reported $ (4,479,052) Adjustments : Previously reported accretion of debt discount (conversion feature and warrants) (interest expense) 2,529 Corrected accretion of debt discount (interest expense) 4,749 Total adjustment (2,220) Net (loss), as revised $ (4,481,272) Net (loss) per share, as reported $ Net (loss) per share, as revised $ |
CRUDE OIL AND NATURAL GAS PRO21
CRUDE OIL AND NATURAL GAS PROPERTIES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
CRUDE OIL AND NATURAL GAS PROPERTIES | |
Components of Aggregate Capitalized Costs | September 30, December 31, 2017 2016 Proved oil and gas properties $ 16,289,847 $ 8,132,881 Unproved oil and gas properties (1) 7,942,890 4,092,550 Wells in progress (2) 8,384,391 2,168,092 Total capitalized costs 32,617,128 14,393,523 Accumulated depletion, depreciation and amortization (3,918,935) (783,320) Net capitalized costs $ 28,698,193 $ 13,610,203 (1) Unproved oil and gas properties represent unevaluated costs the Company excludes from the amortization base until proved reserves are established or impairment is determined. (2) Costs from wells in progress are excluded from the amortization base until production commences. Furthermore, wells in progress include approximately $260,000 of capitalized interest costs associated with the drilling and completion activities during 2017. |
Components of Costs Incurred in Crude Oil and Natural Gas Activities | September 30, 2017 2016 Exploration costs $ 67,382 $ 17,440 Development costs 14,373,262 2,127,869 Acquisition of properties Proved — 2,811,546 Unproved 3,850,340 633,264 Total $ 18,290,984 $ 5,590,119 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
DEBT | |
Schedule of Convertible Notes | September 30, December 31, 2017 2016 (see Note 3) Current portion: Line of credit $ 5,000,000 $ — Supplemental line of credit 3,552,500 7,105,000 Unamortized debt discount — (16,302) Total line of credit 8,552,500 7,088,698 Convertible notes payable: Face amount convertible notes 5,166,800 — Unamortized original issuance costs (356,868) — Unamortized discount related to beneficial conversion feature (1,764,311) — Unamortized discount related to warrants issued (1,224,559) — Net convertible notes payable 1,821,062 — Total current portion $ 10,373,562 $ 7,088,698 Long-term portion: Line of credit $ — $ 5,000,000 Convertible notes payable: Face amount of convertible notes 6,528,200 1,942,600 Unamortized original issuance costs (388,178) (204,703) Unamortized discount related to beneficial conversion feature (1,706,275) (1,030,755) Unamortized discount related to warrants issued (1,145,496) (701,834) Net convertible notes payable $ 3,288,251 $ 5,308 Total long-term portion $ 3,288,251 $ 5,005,308 Total debt, net $ 13,661,813 $ 12,094,006 |
ASSET RETIREMENT OBLIGATION (Ta
ASSET RETIREMENT OBLIGATION (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
ASSET RETIREMENT OBLIGATION | |
Reconciliation of the Asset Retirement Obligation | Nine months ended September 30, Year ended December 31, 2017 2016 Asset retirement obligation, beginning of period $ 945,419 $ 34,776 Liabilities settled (9,475) 1,990 Liabilities incurred 106,158 878,170 Revisions in estimated liabilities — — Accretion 72,772 30,483 Asset retirement obligation, end of period $ 1,114,874 $ 945,419 |
ACCOUNTS PAYABLE AND ACCRUED 24
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | |
Components of Accounts Payable and Accrued Liabilities | September 30, December 31, 2017 2016 Trade payables and accrued liabilities $ 9,050,981 $ 2,366,429 Accrued interest payable 1,230,707 352,599 Liabilities incurred in connection with acquisition of crude oil and natural gas properties — 290,078 Total $ 10,281,688 $ 3,009,106 |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
SHAREHOLDERS' EQUITY | |
Summary of Warrants Outstanding | Shares Underlying Exercise Price Outstanding Warrants Per Share Expiration Date Underwriter warrants $ 1.25 11/12/2020 Investor warrants $ 3.00 12/31/2019 Placement agent warrants $ 1.50 12/31/2021 Total warrants outstanding |
STOCK BASED COMPENSATION (Table
STOCK BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
STOCK-BASED COMPENSATION | |
Summary of Stock Option Activity | Weighted Remaining Average Contractual Number of Exercise Term Shares Price (Years) Outstanding, December 31, 2016 4,675,000 $ 0.76 5.39 Exercisable, December 31, 2016 3,010,000 $ 0.54 5.97 Granted 422,000 $ 1.86 5.69 Exercised — — — Forfeited — — — Outstanding, September 30, 2017 5,097,000 $ 0.85 4.88 Exercisable, September 30, 2017 3,840,000 $ 0.66 4.87 |
Summary of Fair Value Assumptions | September 30, 2017 Expected option term—years 2.5 - 3.25 Risk-free interest rate 1.75% - 1.93% Expected dividend yield 0% Volatility 162% - 169% Forfeited 0% |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
COMMITMENTS AND CONTINGENCIES | |
Operating Lease Agreement Schedule | Year ending December 31, Amount 2017 $ 31,692 2018 129,738 2019 133,698 2020 137,658 2021 34,662 Total $ 467,448 |
BASIS OF PRESENTATION AND SUM28
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Deferred Costs and Debt Discount Costs (Details) | Oct. 26, 2017USD ($) | Oct. 17, 2017USD ($) | Sep. 25, 2017USD ($)item | Oct. 26, 2017USD ($) | Jan. 30, 2017USD ($) | Sep. 30, 2017USD ($) |
Deferred Equity Issuance Costs | ||||||
Deferred equity issuance costs | $ 186,312 | |||||
Debt Discount Costs | ||||||
Face value | $ 10,000,000 | |||||
Series B Notes | ||||||
Debt Discount Costs | ||||||
Face value | $ 405,000 | $ 2,624,900 | $ 1,695,000 | $ 4,724,900 | ||
Number of private placement closings | item | 3 |
REVISION OF PRIOR PERIOD FINA29
REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Balance Sheet | |||||
Convertible notes payable, net | $ 3,288,251 | $ 3,288,251 | $ 5,308 | ||
Liabilities | 26,575,606 | 26,575,606 | 16,450,637 | ||
Shareholders' Equity | |||||
Additional paid-in capital | 21,074,897 | 21,074,897 | 11,405,225 | ||
Accumulated deficit | (14,754,722) | (14,754,722) | (9,851,042) | ||
Total Shareholders’ Equity | 6,343,080 | 6,343,080 | 1,576,147 | ||
Total Liabilities and Shareholder's Equity | 32,918,686 | 32,918,686 | 18,026,784 | ||
Statement of Operations | |||||
Net (loss) | $ (2,031,072) | $ (1,152,045) | (4,903,680) | $ (2,793,052) | (4,481,272) |
Adjustments | |||||
Accretion of debt discounts (interest expense) | $ 3,528,788 | $ 4,749 | |||
Net (loss) per share | $ (0.09) | $ (0.05) | $ (0.22) | $ (0.13) | $ (0.21) |
Accounting for the fair value of the convertible promissory notes and warrants issued in the Company's private placement | As Reported | |||||
Balance Sheet | |||||
Convertible notes payable, net | $ 814,989 | ||||
Liabilities | 17,260,318 | ||||
Shareholders' Equity | |||||
Additional paid-in capital | 10,593,324 | ||||
Accumulated deficit | (9,848,822) | ||||
Total Shareholders’ Equity | 766,466 | ||||
Total Liabilities and Shareholder's Equity | 18,026,784 | ||||
Statement of Operations | |||||
Net (loss) | (4,479,052) | ||||
Adjustments | |||||
Accretion of debt discounts (interest expense) | $ 2,529 | ||||
Net (loss) per share | $ (0.21) | ||||
Accounting for the fair value of the convertible promissory notes and warrants issued in the Company's private placement | Adjustments | |||||
Balance Sheet | |||||
Convertible notes payable, net | $ (809,681) | ||||
Liabilities | (809,681) | ||||
Shareholders' Equity | |||||
Additional paid-in capital | 811,901 | ||||
Accumulated deficit | (2,220) | ||||
Total Shareholders’ Equity | 809,681 | ||||
Adjustments | |||||
Accretion of debt discounts (interest expense) | $ (2,220) |
GOING CONCERN (Details)
GOING CONCERN (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
GOING CONCERN | ||||||
Net loss | $ 2,031,072 | $ 1,152,045 | $ 4,903,680 | $ 2,793,052 | $ 4,481,272 | |
Amount by which current liabilities exceed current assets | 18,100,000 | 18,100,000 | ||||
Cash | 719,091 | $ 1,096,468 | 719,091 | $ 1,096,468 | $ 2,449,412 | $ 3,011,291 |
Other current assets | $ 3,200,000 | $ 3,200,000 | ||||
Substantial doubt about the Company’s ability to continue as a going concern | true |
CRUDE OIL AND NATURAL GAS PRO31
CRUDE OIL AND NATURAL GAS PROPERTIES - Capitalized Costs (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
CRUDE OIL AND NATURAL GAS PROPERTIES | ||
Proved oil and gas properties | $ 16,289,847 | $ 8,132,881 |
Unproved oil and gas properties | 7,942,890 | 4,092,550 |
Wells in progress | 8,384,391 | 2,168,092 |
Total capitalized costs | 32,617,128 | 14,393,523 |
Accumulated depletion, depreciation and amortization | (3,918,935) | (783,320) |
Net capitalized costs | 28,698,193 | $ 13,610,203 |
Capitalized interest costs | $ 260,000 |
CRUDE OIL AND NATURAL GAS PRO32
CRUDE OIL AND NATURAL GAS PROPERTIES - Costs Incurred in Crude Oil and Natural Gas Activities (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
CRUDE OIL AND NATURAL GAS PROPERTIES | ||||
Exploration costs | $ 67,382 | $ 17,440 | ||
Development costs | 14,373,262 | 2,127,869 | ||
Acquisition of properties: | ||||
Proved | 2,811,546 | |||
Unproved | 3,850,340 | 633,264 | ||
Total | 18,290,984 | 5,590,119 | ||
Depletion expense | $ 1,153,273 | $ 23,525 | $ 3,135,614 | $ 23,525 |
DEBT - Line of Credit (Details)
DEBT - Line of Credit (Details) - USD ($) | Sep. 23, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 01, 2017 | Aug. 31, 2017 | Dec. 31, 2016 | May 13, 2015 |
Line of credit | |||||||||
Line of credit - related party | $ 5,000,000 | $ 5,000,000 | |||||||
Accrued interest | 1,230,707 | 1,230,707 | $ 352,599 | ||||||
Deferred financing fee, net | 379,167 | 379,167 | |||||||
Providence Energy Operators, LLC (PEO) | Line Of credit | |||||||||
Line of credit | |||||||||
Borrowing capacity | $ 5,000,000 | ||||||||
Interest rate (as a percent) | 10.00% | 8.00% | |||||||
Line of credit - related party | 5,000,000 | 5,000,000 | 5,000,000 | ||||||
Accrued interest | 609,875 | 609,875 | $ 302,477 | ||||||
Interest expense, related party | 117,375 | $ 96,157 | 305,290 | $ 153,053 | |||||
Wells in progress interest capitalized | 10,441 | ||||||||
Deferred financing fee, net | $ 379,167 | $ 379,167 | |||||||
Letter Agreement, Series B Notes | Providence Energy Operators, LLC (PEO) | |||||||||
Line of credit | |||||||||
Shares issued | 250,000 | 250,000 | |||||||
Price of shares issued (in dollars per share) | $ 1.55 |
DEBT - Supplemental lines of cr
DEBT - Supplemental lines of credit (Details) | Apr. 12, 2017USD ($) | May 13, 2015item | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Jun. 08, 2017USD ($) | Jun. 07, 2017 | Dec. 31, 2016USD ($) | Oct. 13, 2016USD ($) |
Supplemental line of credit | ||||||||||
Repayment of line of credit | $ 3,552,500 | |||||||||
Supplemental line of credit | $ 3,552,500 | 3,552,500 | $ 7,088,698 | |||||||
Accrued interest | 1,230,707 | 1,230,707 | 352,599 | |||||||
Interest expense | 1,731,853 | $ 96,157 | 4,604,129 | $ 153,053 | ||||||
Supplemental line of credit | ||||||||||
Supplemental line of credit | ||||||||||
Borrowing capacity | $ 10,000,000 | |||||||||
Interest rate (as a percent) | 10.00% | 8.00% | 8.00% | |||||||
Repayment of line of credit | $ 3,552,500 | |||||||||
Outstanding principal and interest | $ 3,800,000 | |||||||||
Supplemental line of credit | 3,552,500 | 3,552,500 | 7,088,698 | |||||||
Accrued interest | 364,599 | 364,599 | $ 50,422 | |||||||
Interest expense | $ 89,542 | $ 0 | $ 314,177 | $ 0 | ||||||
Participation Agreement | Providence Energy Partners III, LP (PEP III) | ||||||||||
Supplemental line of credit | ||||||||||
Participation Agreement acquisition interest in any oil and gas development acres in area of mutual interest (as a percent) | 10.00% | |||||||||
Participation Agreement | Adams and Weld Counties, Colorado, Oil and gas Lease | ||||||||||
Supplemental line of credit | ||||||||||
Number of townships included in AMI | item | 4.5 | |||||||||
Participation Agreement | Providence Energy Operators, LLC (PEO) | ||||||||||
Supplemental line of credit | ||||||||||
Participation Agreement acquisition interest in any oil and gas development acres in area of mutual interest (as a percent) | 45.00% |
DEBT - Convertible notes (Detai
DEBT - Convertible notes (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jan. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Convertible notes | ||||||
Face value | $ 10,000,000 | |||||
Convertible notes issued for cash | $ 8,891,712 | |||||
Accretion of debt discounts | 3,528,788 | $ 4,749 | ||||
Accrued interest | $ 1,230,707 | 1,230,707 | 352,599 | |||
Interest expense | 1,731,853 | $ 96,157 | 4,604,129 | $ 153,053 | ||
Original Convertible Notes | ||||||
Convertible notes | ||||||
Face value | 10,000,000 | |||||
Convertible notes issued for cash | $ 9,000,000 | |||||
Unamortized debt issuance costs | 745,046 | 745,046 | $ 204,703 | |||
Accretion of debt discounts | 102,949 | $ 0 | 336,050 | $ 0 | ||
Fair value of the beneficial conversion feature | 5,306,199 | |||||
Accrued interest | 252,055 | 252,055 | ||||
Interest expense | 256,234 | 447,903 | ||||
Oil and gas properties capitalized interest costs | 249,315 | |||||
Original Convertible Notes | Common stock purchase warrants issued with convertible notes | ||||||
Convertible notes | ||||||
Fair value of warrants issued | 3,682,801 | 3,682,801 | ||||
Original Convertible Notes | Placement agent warrants | ||||||
Convertible notes | ||||||
Fair value of warrants issued | $ 1,001,471 | $ 1,001,471 |
DEBT - Series B convertible not
DEBT - Series B convertible notes (Details) | Oct. 26, 2017USD ($)director | Oct. 26, 2017USD ($)item | Oct. 17, 2017USD ($)item | Oct. 16, 2017USD ($)$ / sharesshares | Sep. 25, 2017USD ($)item$ / shares | Oct. 26, 2017USD ($)item | Jan. 30, 2017USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) |
Series B Convertible Notes | ||||||||||||
Principal amount | $ 10,000,000 | |||||||||||
Accretion of debt discounts | $ 3,528,788 | $ 4,749 | ||||||||||
Accrued interest | $ 1,230,707 | 1,230,707 | $ 352,599 | |||||||||
Interest expense | 1,731,853 | $ 96,157 | 4,604,129 | $ 153,053 | ||||||||
Original Convertible Notes | ||||||||||||
Series B Convertible Notes | ||||||||||||
Principal amount | $ 10,000,000 | |||||||||||
Accretion of debt discounts | 102,949 | $ 0 | 336,050 | $ 0 | ||||||||
Fair value of the beneficial conversion feature | 5,306,199 | |||||||||||
Accrued interest | 252,055 | 252,055 | ||||||||||
Interest expense | 256,234 | 447,903 | ||||||||||
Conversion price on or prior to October 15, 2017 (in dollars per share) | $ / shares | $ 1.10 | |||||||||||
Series B Notes | ||||||||||||
Series B Convertible Notes | ||||||||||||
Principal amount | $ 405,000 | $ 2,624,900 | $ 1,695,000 | $ 4,724,900 | ||||||||
Number of accredited investors | item | 6 | 53 | 27 | |||||||||
Interest rate (as a percent) | 15.00% | |||||||||||
Conversion price (in dollars per share) | $ / shares | $ 1.50 | |||||||||||
Sales commissions | $ 8,250 | $ 94,145 | $ 53,950 | 156,345 | ||||||||
Associated expenses | 1,000 | 1,000 | ||||||||||
Unamortized portion of debt issuance costs | 54,351 | 54,351 | ||||||||||
Accretion of debt discounts | 599 | 599 | ||||||||||
Fair value of the beneficial conversion feature | 56,500 | |||||||||||
Unamortized portion of debt issuance costs related to the beneficial conversion feature | 55,890 | 55,890 | ||||||||||
Interest expense related to the accretion of the discount related to the beneficial conversion feature | 610 | 610 | ||||||||||
Accrued interest | 4,179 | 4,179 | ||||||||||
Interest expense | $ 4,179 | $ 4,179 | ||||||||||
Officers and directors | Series B Notes | ||||||||||||
Series B Convertible Notes | ||||||||||||
Principal amount | $ 190,000 | $ 50,000 | $ 140,000 | $ 380,000 | $ 570,000 | |||||||
Number of accredited investors | 5 | 1 | 4 | 5 | 10 | |||||||
Subsequent Event | ||||||||||||
Series B Convertible Notes | ||||||||||||
Market value of stock (in dollars per share) | $ / shares | $ 1.38 | |||||||||||
Subsequent Event | Convertible Notes | ||||||||||||
Series B Convertible Notes | ||||||||||||
Principal converted | $ 5,166,800 | |||||||||||
Debt conversion, accrued interest amount | $ 128,892 | |||||||||||
Debt conversion, shares issued | shares | 4,697,090 | |||||||||||
Accrued interest conversion, shares issued | shares | 117,175 | |||||||||||
Payment to placement agent | $ 47,858 |
DEBT - Debt components (Details
DEBT - Debt components (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Current portion: | ||
Line of credit | $ 5,000,000 | |
Supplemental line of credit | 3,552,500 | $ 7,105,000 |
Unamortized debt discount | (16,302) | |
Total line of credit | 8,552,500 | 7,088,698 |
Convertible notes | ||
Net convertible notes payable | 1,821,062 | |
Total current portion | 10,373,562 | 7,088,698 |
Long-term portion: | ||
Line of credit | 5,000,000 | |
Convertible notes | ||
Net convertible notes payable | 3,288,251 | 5,308 |
Total long term portion | 3,288,251 | 5,005,308 |
Total debt, net | 13,661,813 | 12,094,006 |
Convertible Notes | ||
Convertible notes | ||
Face amount of convertible notes | 5,166,800 | |
Unamortized original issue discount | (356,868) | |
Unamortized discount related to beneficial conversion feature | (1,764,311) | |
Unamortized discount related to warrants issued | (1,224,559) | |
Net convertible notes payable | 1,821,062 | |
Convertible notes | ||
Face amount of convertible notes | 6,528,200 | 1,942,600 |
Unamortized original issuance costs | (388,178) | (204,703) |
Unamortized discount related to beneficial conversion feature | (1,706,275) | (1,030,755) |
Unamortized discount related to warrants issued | (1,145,496) | (701,834) |
Net convertible notes payable | $ 3,288,251 | $ 5,308 |
ASSET RETIREMENT OBLIGATION (De
ASSET RETIREMENT OBLIGATION (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Assumptions used to determine the fair value of the asset retirement obligation | |||||
Assumed inflation rate (as a percent) | 2.00% | ||||
Activity of asset retirement obligation | |||||
Asset retirement obligation, beginning of year | $ 945,419 | $ 34,776 | $ 34,776 | ||
Liabilities settled | (9,475) | ||||
Liabilities settled, Net increase in obligation | 1,990 | ||||
Liabilities incurred | 106,158 | 878,170 | |||
Accretion | $ 25,860 | $ 13,931 | 72,772 | $ 15,738 | 30,483 |
Asset retirement obligation, end of period | $ 1,114,874 | $ 1,114,874 | $ 945,419 | ||
Minimum | |||||
Assumptions used to determine the fair value of the asset retirement obligation | |||||
Average estimated asset life | 27 years | ||||
Credit adjusted risk free interest rate (as a percent) | 11.26% | ||||
Maximum | |||||
Assumptions used to determine the fair value of the asset retirement obligation | |||||
Average estimated asset life | 40 years | ||||
Credit adjusted risk free interest rate (as a percent) | 11.86% |
ACCOUNTS PAYABLE AND ACCRUED 39
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | ||
Trade payables and accrued liabilities | $ 9,050,981 | $ 2,366,429 |
Accrued interest payable | 1,230,707 | 352,599 |
Liabilities incurred in connection with acquisition of crude oil and natural gas properties | 290,078 | |
Total | $ 10,281,688 | $ 3,009,106 |
SHAREHOLDERS' EQUITY - Common S
SHAREHOLDERS' EQUITY - Common Stock (Details) | Oct. 26, 2017USD ($) | Oct. 17, 2017USD ($) | Oct. 01, 2017USD ($)$ / sharesshares | Sep. 25, 2017USD ($)$ / sharesshares | Sep. 23, 2017$ / sharesshares | May 19, 2017USD ($) | May 04, 2016director$ / sharesshares | Apr. 08, 2016$ / sharesshares | Oct. 26, 2017USD ($) | Apr. 21, 2017$ / sharesshares | Jan. 30, 2017USD ($) | Jan. 31, 2016USD ($)item$ / shares | Jun. 01, 2017agreementshares | Sep. 30, 2017USD ($)shares | Mar. 31, 2017USD ($)$ / sharesshares | Sep. 30, 2017USD ($)shares | Jan. 31, 2017shares |
Common Stock | |||||||||||||||||
Principal amount | $ 10,000,000 | ||||||||||||||||
Convertible notes issued for cash | $ 8,891,712 | ||||||||||||||||
Warrants to purchase common stock (in shares) | shares | 7,588,800 | 7,588,800 | |||||||||||||||
Directors | |||||||||||||||||
Common Stock | |||||||||||||||||
Number of directors appointed | director | 2 | ||||||||||||||||
Restricted Stock | |||||||||||||||||
Common Stock | |||||||||||||||||
Number of employment agreements | agreement | 4 | ||||||||||||||||
Restricted stock granted (in shares) | shares | 219,700 | ||||||||||||||||
Stock-based compensation expense | $ 51,370 | $ 103,769 | |||||||||||||||
Unvested share based compensation | $ 304,977 | $ 304,977 | |||||||||||||||
Public offering | |||||||||||||||||
Common Stock | |||||||||||||||||
Maximum aggregate share amount issuable | $ 50,000,000 | ||||||||||||||||
Private placement | |||||||||||||||||
Common Stock | |||||||||||||||||
Number of accredited investors in the transaction | item | 1 | ||||||||||||||||
Common Stock | |||||||||||||||||
Common Stock | |||||||||||||||||
Share price (in dollars per share) | $ / shares | $ 1.80 | ||||||||||||||||
Shares issued in acquisition (in shares) | shares | 470,555 | ||||||||||||||||
Common Stock | Consultants | |||||||||||||||||
Common Stock | |||||||||||||||||
Share price (in dollars per share) | $ / shares | $ 0.73 | ||||||||||||||||
Shares issued for services (in shares) | shares | 50,000 | ||||||||||||||||
Common Stock | Directors | |||||||||||||||||
Common Stock | |||||||||||||||||
Share price (in dollars per share) | $ / shares | $ 1.01 | ||||||||||||||||
Shares issued for services (in shares) | shares | 50,000 | ||||||||||||||||
Common Stock | Private placement | |||||||||||||||||
Common Stock | |||||||||||||||||
Share price (in dollars per share) | $ / shares | $ 1 | ||||||||||||||||
Shares issued in sale of stock (in shares) | $ 95,000 | ||||||||||||||||
Letter Agreement, Series B Notes | Providence Energy Operators, LLC (PEO) | |||||||||||||||||
Common Stock | |||||||||||||||||
Shares issued | shares | 250,000 | 250,000 | |||||||||||||||
Share price (in dollars per share) | $ / shares | $ 1.55 | ||||||||||||||||
Original Convertible Notes | |||||||||||||||||
Common Stock | |||||||||||||||||
Principal amount | 10,000,000 | ||||||||||||||||
Convertible notes issued for cash | $ 9,000,000 | ||||||||||||||||
Original Convertible Notes | Private placement | |||||||||||||||||
Common Stock | |||||||||||||||||
Notes conversion price (in dollars per share) | $ / shares | $ 1.50 | ||||||||||||||||
Convertible notes issued for cash | $ 7,251,662 | ||||||||||||||||
Units sold in private placement offering | shares | 161.15 | ||||||||||||||||
Warrants to purchase common stock (in shares) | shares | 6,666,666 | ||||||||||||||||
Series B Notes | |||||||||||||||||
Common Stock | |||||||||||||||||
Principal amount | $ 405,000 | $ 2,624,900 | $ 1,695,000 | $ 4,724,900 | |||||||||||||
Notes conversion price (in dollars per share) | $ / shares | $ 1.50 | ||||||||||||||||
Number of shares into which notes are convertible | shares | 1,130,000 | ||||||||||||||||
Series B Notes | Plan | |||||||||||||||||
Common Stock | |||||||||||||||||
Notes conversion price (in dollars per share) | $ / shares | $ 1.10 | ||||||||||||||||
Debt conversion, shares issued | shares | 4,814,265 | ||||||||||||||||
Principal converted | $ 5,166,800 | ||||||||||||||||
Debt conversion, accrued interest amount | $ 128,892 |
SHAREHOLDERS' EQUITY - Warrants
SHAREHOLDERS' EQUITY - Warrants (Details) - $ / shares | Jan. 30, 2017 | Jan. 20, 2017 | Sep. 30, 2017 |
Warrants | |||
Warrants to purchase common stock (in shares) | 7,588,800 | ||
Underwriter warrants | |||
Warrants | |||
Warrants to purchase common stock (in shares) | 255,600 | ||
Warrants exercise price (in dollars per share) | $ 1.25 | ||
Investor warrants | |||
Warrants | |||
Warrants to purchase common stock (in shares) | 6,666,600 | ||
Warrants exercise price (in dollars per share) | $ 3 | $ 3 | $ 3 |
Warrants issued during the period (in shares) | 3,154,601 | 2,216,978 | |
Placement agent warrants | |||
Warrants | |||
Warrants to purchase common stock (in shares) | 666,600 | ||
Warrants exercise price (in dollars per share) | $ 1.50 | $ 1.50 | $ 1.50 |
Warrants issued during the period (in shares) | 315,526 | 221,744 |
STOCK-BASED COMPENSATION - Acti
STOCK-BASED COMPENSATION - Activity Detail (Details) | Apr. 15, 2018shares | Jun. 01, 2017$ / sharesshares | May 22, 2017$ / sharesshares | Apr. 15, 2017shares | Apr. 01, 2017$ / sharesshares | Jan. 01, 2017shares | May 04, 2016director$ / sharesshares | Apr. 12, 2016$ / sharesshares | Jan. 28, 2016$ / sharesshares | Jan. 01, 2016$ / sharesshares | Sep. 30, 2017$ / sharesshares | Aug. 18, 2016shares | Aug. 17, 2016shares |
STOCK-BASED COMPENSATION | |||||||||||||
Shares reserved for issuance | 10,000,000 | 5,000,000 | |||||||||||
Options Granted (in shares) | 22,000 | 422,000 | |||||||||||
Exercise price (in dollars per share) | $ / shares | $ 1.92 | $ 1.86 | |||||||||||
Award Date August, 19 2016 | |||||||||||||
STOCK-BASED COMPENSATION | |||||||||||||
Total number of options with accelerated vesting (in shares) | 700,000 | ||||||||||||
Options vested (in shares) | 100,000 | ||||||||||||
Number of options with accelerated vesting (in shares) | 600,000 | ||||||||||||
Exercise price (in dollars per share) | $ / shares | $ 1.83 | ||||||||||||
Manager of Production and Completion Operations | |||||||||||||
STOCK-BASED COMPENSATION | |||||||||||||
Options Granted (in shares) | 200,000 | ||||||||||||
Exercise price (in dollars per share) | $ / shares | $ 1.83 | ||||||||||||
Senior Landman | |||||||||||||
STOCK-BASED COMPENSATION | |||||||||||||
Options Granted (in shares) | 200,000 | ||||||||||||
Exercise price (in dollars per share) | $ / shares | $ 1.89 | ||||||||||||
Chief Financial Officer | |||||||||||||
STOCK-BASED COMPENSATION | |||||||||||||
Options Granted (in shares) | 250,000 | ||||||||||||
Exercise price (in dollars per share) | $ / shares | $ 1 | ||||||||||||
Vesting percentage | 50.00% | 50.00% | |||||||||||
Chief Operating Officer | |||||||||||||
STOCK-BASED COMPENSATION | |||||||||||||
Options vested (in shares) | 750,000 | 125,000 | |||||||||||
Options Granted (in shares) | 875,000 | ||||||||||||
Exercise price (in dollars per share) | $ / shares | $ 1 | ||||||||||||
Vice President | |||||||||||||
STOCK-BASED COMPENSATION | |||||||||||||
Options vested (in shares) | 100,000 | 50,000 | |||||||||||
Options Granted (in shares) | 250,000 | ||||||||||||
Exercise price (in dollars per share) | $ / shares | $ 0.80 | ||||||||||||
Vice President | Plan | |||||||||||||
STOCK-BASED COMPENSATION | |||||||||||||
Options vested (in shares) | 100,000 | ||||||||||||
Directors | |||||||||||||
STOCK-BASED COMPENSATION | |||||||||||||
Options Granted (in shares) | 50,000 | ||||||||||||
Exercise price (in dollars per share) | $ / shares | $ 1.10 | ||||||||||||
Number of directors appointed | director | 2 |
STOCK-BASED COMPENSATION - Ac43
STOCK-BASED COMPENSATION - Activity Summary (Details) - $ / shares | May 22, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Number of Shares | |||
Outstanding Options, Beginning of period (in shares) | 4,675,000 | ||
Exercisable Options (in shares) | 3,840,000 | 3,010,000 | |
Options Granted (in shares) | 22,000 | 422,000 | |
Outstanding Options, End of period (in shares) | 5,097,000 | 4,675,000 | |
Weighted Average Exercise Price | |||
Outstanding (in dollars per share) | $ 0.85 | $ 0.76 | |
Exercisable (in dollars per share) | 0.66 | $ 0.54 | |
Granted (in dollars per share) | $ 1.92 | $ 1.86 | |
Remaining Contractual Term (Years) | |||
Outstanding | 4 years 10 months 17 days | 5 years 4 months 21 days | |
Exercisable | 4 years 10 months 13 days | 5 years 11 months 19 days | |
Granted | 5 years 8 months 9 days |
STOCK-BASED COMPENSATION - Assu
STOCK-BASED COMPENSATION - Assumptions (Details) - Stock Options | 9 Months Ended |
Sep. 30, 2017 | |
Pricing model assumptions | |
Weighted-average risk-free interest rate, minimum | 1.75% |
Weighted-average risk-free interest rate, maximum | 1.93% |
Expected dividend yield (as a percent) | 0.00% |
Weighted-average volatility, minimum (as a percent) | 162.00% |
Weighted-average volatility, maximum (as a percent) | 169.00% |
Forfeiture rate (as a percent) | 0.00% |
Minimum | |
Pricing model assumptions | |
Expected option term | 2 years 6 months |
Maximum | |
Pricing model assumptions | |
Expected option term | 3 years 3 months |
STOCK-BASED COMPENSATION - Expe
STOCK-BASED COMPENSATION - Expense and Unvested (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2016 | Dec. 31, 2016 | |
Unvested share based compensation | $ 856,778 | $ 1,025,391 | ||
Stock Options | ||||
Stock-based compensation expense | $ 345,835 | $ 378,870 | $ 1,093,854 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) | Oct. 26, 2017USD ($)director | Oct. 26, 2017USD ($)item | Oct. 17, 2017USD ($)item | Sep. 25, 2017USD ($)item | Sep. 23, 2017shares | Oct. 26, 2017USD ($)item | Jan. 30, 2017USD ($) | Sep. 30, 2017USD ($)shares | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) |
Related Party Transactions | ||||||||||||
Line of credit - related party | $ 5,000,000 | $ 5,000,000 | ||||||||||
Accrued interest | 1,230,707 | 1,230,707 | $ 352,599 | |||||||||
Accounts receivable - joint interest billing - related party | 389,885 | 389,885 | 286,226 | |||||||||
Drilling advances | 1,141,539 | 1,141,539 | 234,452 | |||||||||
Accounts payable - related party | 11,672 | 11,672 | ||||||||||
Principal amount | $ 10,000,000 | |||||||||||
Series B Notes | ||||||||||||
Related Party Transactions | ||||||||||||
Accrued interest | $ 4,179 | $ 4,179 | ||||||||||
Number of accredited investors | item | 6 | 53 | 27 | |||||||||
Principal amount | $ 405,000 | $ 2,624,900 | $ 1,695,000 | $ 4,724,900 | ||||||||
Officers and directors | Series B Notes | ||||||||||||
Related Party Transactions | ||||||||||||
Number of accredited investors | 5 | 1 | 4 | 5 | 10 | |||||||
Principal amount | $ 190,000 | $ 50,000 | $ 140,000 | $ 380,000 | $ 570,000 | |||||||
Providence Energy Operators, LLC (PEO) | ||||||||||||
Related Party Transactions | ||||||||||||
Related party, ownership percentage | 13.20% | 13.20% | ||||||||||
Accounts receivable - joint interest billing - related party | $ 389,885 | $ 389,885 | ||||||||||
Drilling advances | 1,141,539 | 1,141,539 | ||||||||||
Accounts payable - related party | 11,672 | 11,672 | ||||||||||
Providence Energy Operators, LLC (PEO) | Line Of credit | ||||||||||||
Related Party Transactions | ||||||||||||
Line of credit - related party | 5,000,000 | 5,000,000 | 5,000,000 | |||||||||
Accrued interest | 609,875 | 609,875 | $ 302,477 | |||||||||
Interest expense, related party | $ 117,375 | $ 96,157 | $ 305,290 | $ 153,053 | ||||||||
Providence Energy Operators, LLC (PEO) | Letter Agreement, Series B Notes | ||||||||||||
Related Party Transactions | ||||||||||||
Shares issued | shares | 250,000 | 250,000 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Operating leases (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Operating leases and agreements | ||||
Lease term | 4 years | |||
Future minimum rental payments required under operating lease agreement | ||||
2,017 | $ 31,692 | $ 31,692 | ||
2,018 | 129,738 | 129,738 | ||
2,019 | 133,698 | 133,698 | ||
2,020 | 137,658 | 137,658 | ||
2,021 | 34,662 | 34,662 | ||
Total | 467,448 | 467,448 | ||
Lease expense | $ 42,245 | $ 55 | $ 92,354 | $ 22,089 |
COMMITMENTS AND CONTINGENCIES48
COMMITMENTS AND CONTINGENCIES - Employment agreements (Details) - USD ($) | Jun. 01, 2017 | May 22, 2017 | Apr. 01, 2017 | Jan. 01, 2016 | Jun. 01, 2017 | Sep. 30, 2017 |
Employment agreements | ||||||
Exercise price (in dollars per share) | $ 1.92 | $ 1.86 | ||||
Restricted Stock | ||||||
Employment agreements | ||||||
Restricted stock granted (in shares) | 219,700 | |||||
Manager of Production and Completion Operations | ||||||
Employment agreements | ||||||
Annual salary | $ 130,000 | |||||
Renewal period of the employment agreement | 1 year | |||||
Options granted (in shares) | 200,000 | |||||
Exercise price (in dollars per share) | $ 1.83 | |||||
Manager of Production and Completion Operations | Restricted Stock | ||||||
Employment agreements | ||||||
Restricted stock granted (in shares) | 50,000 | |||||
Executive Vice President | ||||||
Employment agreements | ||||||
Annual salary | $ 156,000 | |||||
Renewal period of the employment agreement | 1 year | |||||
Options vested (in shares) | 200,000 | |||||
Executive Vice President | Restricted Stock | ||||||
Employment agreements | ||||||
Restricted stock granted (in shares) | 66,700 | |||||
Senior Landman | ||||||
Employment agreements | ||||||
Annual salary | $ 130,000 | |||||
Renewal period of the employment agreement | 1 month | |||||
Options granted (in shares) | 200,000 | |||||
Exercise price (in dollars per share) | $ 1.89 | |||||
Senior Landman | Restricted Stock | ||||||
Employment agreements | ||||||
Restricted stock granted (in shares) | 50,000 | |||||
Chief Financial Officer | ||||||
Employment agreements | ||||||
Annual salary | $ 150,000 | |||||
Renewal period of the employment agreement | 1 year | |||||
Exercise price (in dollars per share) | $ 1 | |||||
Chief Financial Officer | Restricted Stock | ||||||
Employment agreements | ||||||
Restricted stock granted (in shares) | 50,000 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Convertible Notes - Subsequent Event | Oct. 16, 2017USD ($)shares |
Convertible notes | |
Principal converted | $ | $ 5,166,800 |
Debt conversion, accrued interest amount | $ | $ 128,892 |
Debt conversion, shares issued | shares | 4,697,090 |
Accrued interest conversion, shares issued | shares | 117,175 |