Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 05, 2013 | |
Document And Entity Information | ' | ' |
Entity Registrant Name | 'INFINITY ENERGY RESOURCES, INC | ' |
Entity Central Index Key | '0000822746 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-13 | ' |
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 | ' | 21,447,980 |
Document Fiscal Period Focus | 'Q3 | ' |
Document Fiscal Year Focus | '2013 | ' |
Consolidated_Balance_Sheets_Un
Consolidated Balance Sheets (Unaudited) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Current assets | ' | ' |
Cash and cash equivalents | $143 | $32,721 |
Prepaid expenses | 28,916 | 3,131 |
Total current assets | 29,059 | 35,852 |
Oil and gas properties, using full cost accounting, net of accumulated depreciation, depletion, amortization and ceiling write-down: Unproved | 4,739,011 | 4,425,803 |
Other asset - deposit | ' | 5,000 |
Total assets | 4,768,070 | 4,466,655 |
Current liabilities | ' | ' |
Accounts payable | 947,497 | 1,109,915 |
Accrued liabilities (including $762,407 and $767,407 due to related party at September 30, 2013 and December 31, 2012) | 2,657,560 | 3,361,583 |
Income tax liability | 150,000 | 150,000 |
Accrued interest and fees - bank and other | 184,163 | 167,457 |
Officer indemnification | 734,897 | 734,897 |
Derivative liabilities | ' | 42,508 |
Current portion of asset retirement obligations | 432,027 | 432,027 |
Line-of-credit with related party | 21,025 | ' |
Note payable to related party, net of discount of $15,686 at December 31, 2012 | ' | 234,314 |
Total current liabilities | 5,127,169 | 6,232,701 |
Long-term liabilities | ' | ' |
Note payable, net of discount of $36,109 at December 31, 2012 | ' | 176,291 |
Asset retirement obligations, less current portion | 616,802 | 549,079 |
Total long-term liabilities | 616,802 | 725,370 |
Total liabilities | 5,743,971 | 6,958,071 |
Commitments and contingencies (Note 6) | ' | ' |
Stockholders' deficit | ' | ' |
Common stock, par value $.0001, authorized 75,000,000 shares, 21,401,459 and 20,668,575 shares issued and outstanding at September 30, 2013 and December 31, 2012 | 2,140 | 2,066 |
Additional paid-in capital | 90,070,102 | 88,843,628 |
Accumulated deficit | -106,223,081 | -104,197,332 |
Total stockholders' deficit | -16,150,839 | -15,351,638 |
Total liabilities and stockholders' deficit | 4,768,070 | 4,466,655 |
Series A Redeemable Convertible Preferred Stock [Member] | ' | ' |
Long-term liabilities | ' | ' |
Redeemable, convertible preferred stock | 13,606,792 | 11,539,734 |
Series B Redeemable Convertible Preferred Stock [Member] | ' | ' |
Long-term liabilities | ' | ' |
Redeemable, convertible preferred stock | $1,568,146 | $1,320,488 |
Consolidated_Balance_Sheets_Un1
Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Due to related party | $767,407 | $767,407 |
Note payable to related party, discount | ' | 15,686 |
Note payable, net of discount | ' | 36,109 |
Redeemable, convertible preferred stock, par value | $0.00 | $0.00 |
Redeemable, convertible preferred stock, authorized | 10,000,000 | 10,000,000 |
Redeemable, convertible Preferred stock, issued | ' | ' |
Redeemable, convertible Preferred stock, outstanding | ' | ' |
Common stock, par value | $0.00 | $0.00 |
Common stock, authorized | 75,000,000 | 75,000,000 |
Common stock, issued | 21,401,459 | 20,668,575 |
Common stock, outstanding | 21,401,459 | 20,668,575 |
Series A Redeemable Convertible Preferred Stock [Member] | ' | ' |
Cumulative dividends | 6.00% | 6.00% |
Redeemable, convertible Preferred stock, issued | 130,000 | 130,000 |
Redeemable, convertible Preferred stock, outstanding | 130,000 | 130,000 |
Redeemable, convertible Preferred stock, liquidation preference value | 13,000,000 | 13,000,000 |
Undeclared dividends | 1,144,000 | 559,000 |
Series B Redeemable Convertible Preferred Stock [Member] | ' | ' |
Cumulative dividends | 6.00% | 6.00% |
Redeemable, convertible Preferred stock, issued | 15,016 | 15,016 |
Redeemable, convertible Preferred stock, outstanding | 15,016 | 15,016 |
Redeemable, convertible Preferred stock, liquidation preference value | 1,501,600 | 1,501,600 |
Undeclared dividends | $132,141 | $64,569 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Operating expenses | ' | ' | ' | ' |
General and administrative expenses | $456,963 | $152,523 | $1,796,270 | $593,714 |
Accretion expense | 23,078 | 21,113 | 67,723 | 61,958 |
Total operating expenses | 480,041 | 173,636 | 1,863,993 | 655,672 |
Operating loss | -480,041 | -173,636 | -1,863,993 | -655,672 |
Other income (expense) | ' | ' | ' | ' |
Interest expense, net of capitalized interest | -17,175 | -18,542 | -779,261 | -364,758 |
Change in derivative fair value | ' | -19,129 | -24,410 | 99,556 |
Loss on conversion of note payable | ' | ' | -11,085 | ' |
Other income | ' | 33,058 | ' | 33,058 |
Total other income (expense) | -17,175 | -4,613 | -814,756 | -232,144 |
Loss from continuing operations before income taxes | -497,216 | -178,249 | -2,678,749 | -887,816 |
Income tax benefit | 653,000 | ' | 653,000 | ' |
Income (loss) from continuing operations | 155,784 | -178,249 | -2,025,749 | -887,816 |
Loss of discontinued operation | ' | -6,776 | ' | -62,289 |
Gain on sale of discontinued operation | ' | 4,372,111 | ' | 4,372,111 |
Net income (loss) | 155,784 | 4,187,086 | -2,025,749 | 3,422,006 |
Accrual of 6% dividend payable on Series A and B redeemable, convertible preferred stock | -217,524 | -217,524 | -652,572 | -406,045 |
Accretion of Series A and B redeemable, convertible preferred stock | -577,737 | -487,479 | -1,662,144 | -878,192 |
Income (loss) applicable to common shareholders | ($639,477) | $3,482,083 | ($4,340,465) | $2,137,769 |
Basic and diluted net loss per share: | ' | ' | ' | ' |
Loss from continuing operations | ($0.03) | ($0.04) | ($0.21) | ($0.11) |
Loss from discontinued operation | ' | $0 | ' | $0 |
Gain on sale of discontinued operation | ' | $0.21 | ' | $0.22 |
Basic and diluted net loss per share | ($0.03) | $0.17 | ($0.21) | $0.11 |
Weighted average shares outstanding - basic and diluted | 21,334,591 | 20,668,575 | 21,057,729 | 19,913,996 |
Consolidated_Statements_of_Ope1
Consolidated Statements of Operations (Unaudited) (Parenthetical) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Income Statement [Abstract] | ' | ' |
Percentage of convertible preferred stock dividends payable | 6.00% | 6.00% |
Consolidated_Statement_of_Chan
Consolidated Statement of Changes in Stockholders' Deficit (Unaudited) (USD $) | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2012 | $2,066 | $88,843,628 | ($104,197,332) | ($15,351,638) |
Balance, shares at Dec. 31, 2012 | 20,668,575 | ' | ' | ' |
Stock based compensation | ' | 1,476,383 | ' | 1,476,383 |
Issuance of common stock purchase warrants | ' | 32,734 | ' | 32,734 |
Transition of derivative liability to equity | ' | 764,982 | ' | 764,982 |
Private placement of common stock and warrants | 56 | 889,944 | ' | 890,000 |
Private placement of common stock and warrants, shares | 556,250 | ' | ' | 556,250 |
Issuance of common stock for services rendered | 3 | 39,747 | ' | 39,750 |
Issuance of common stock for services rendered, shares | 25,000 | ' | ' | 25,000 |
Issuance of common stock on conversion of note | 15 | 337,400 | ' | 337,415 |
Issuance of common stock on conversion of note, shares | 151,634 | ' | ' | ' |
Accretion of Series A and B redeemable, convertible preferred stock | ' | -1,662,144 | ' | -1,662,144 |
Accrual of 6% dividend payable on Series A and B redeemable, convertible preferred stock | ' | -652,572 | ' | -652,572 |
Net loss | ' | ' | -2,025,749 | -2,025,749 |
Balance at Sep. 30, 2013 | $2,140 | $90,070,102 | ($106,223,081) | ($16,150,839) |
Balance, shares at Sep. 30, 2013 | 21,401,459 | ' | ' | ' |
Consolidated_Statement_of_Chan1
Consolidated Statement of Changes in Stockholders' Deficit (Unaudited) (Parenthetical) | 9 Months Ended |
Sep. 30, 2013 | |
Statement of Stockholders' Equity [Abstract] | ' |
Percentage of dividend payable on redeemable convertible preferred stock | 6.00% |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (Unaudited) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Cash flows from operating activities | ' | ' |
Net income (loss) | ($2,025,749) | $3,422,006 |
Adjustments to reconcile net (loss) to net cash used in operating activities | ' | ' |
Income tax benefit | -653,000 | ' |
Gain on sale of discontinued operation | ' | -4,372,111 |
Accretion of asset retirement obligation - continuing operations | 67,723 | 61,958 |
Accretion of asset retirement obligation - discontinued operations | ' | 17,736 |
Stock-based compensation | 1,476,383 | ' |
Common stock issued for services rendered | 39,750 | ' |
Change in fair value of derivative liability | 24,410 | -99,556 |
Loss on conversion of note | 11,085 | ' |
Amortization of debt discount and debt issuance cost, net of capitalized amounts of $77,616 in 2012 | 735,942 | 29,280 |
Change in operating assets and liabilities | ' | ' |
Decrease in prepaid expenses and other assets | 8,131 | 2,500 |
Increase (decrease) in accounts payable and accrued liabilities | -190,070 | 847,677 |
Increase in current liabilities of discontinued operations | ' | 44,553 |
Net cash used in operating activities | -505,395 | -45,957 |
Cash flows from investing activities | ' | ' |
Investment in oil and gas properties | -313,208 | -381,219 |
Net cash used in investing activities | -313,208 | -381,219 |
Cash flows from financing activities | ' | ' |
Proceeds from private placement of common stock and warrants | 890,000 | ' |
Proceeds from line-of-credit, net | 21,025 | ' |
Repayment of note payable to related party | -250,000 | ' |
Proceeds from debt and subordinated note payable | 825,000 | 522,070 |
Repayment of notes payable | -700,000 | ' |
Net cash provided by financing activities | 786,025 | 522,070 |
Net increase (decrease) in cash and cash equivalents | -32,578 | 94,894 |
Cash and cash equivalents | ' | ' |
Beginning | 32,721 | 217 |
Ending | 143 | 95,111 |
Supplemental cash flow information | ' | ' |
Cash paid for interest | 19,937 | ' |
Cash paid for taxes | ' | ' |
Supplemental noncash disclosures | ' | ' |
Noncash capitalized overhead and interest | 12,500 | 115,116 |
Noncash transaction; debt, subordinated note payable and related accrued interest and other fees satisfied by issuance of common and Series A and B Preferred shares | ' | 21,883,393 |
Conversion of note and accrued interest to common stock | 326,330 | ' |
Discount from warrant derivative | 698,064 | ' |
Transition of derivative liability to equity | 764,982 | ' |
Accretion in fair value of redeemable preferred stock | 1,662,144 | ' |
Preferred dividends accrued | 652,572 | ' |
Common stock purchase warrants issued for debt issuance costs | $32,734 | ' |
Consolidated_Statements_of_Cas1
Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) (USD $) | 9 Months Ended |
Sep. 30, 2012 | |
Statement of Cash Flows [Abstract] | ' |
Capitalization of debt discount | $77,616 |
Nature_of_Operations_Basis_of_
Nature of Operations, Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | ||||||||
Nature of Operations, Basis of Presentation and Summary of Significant Accounting Policies | ' | ||||||||
Note 1 — Nature of Operations, Basis of Presentation and Summary of Significant Accounting Policies | |||||||||
Unaudited Interim Financial Information | |||||||||
Infinity Energy Resources, Inc. and its subsidiaries (collectively, “we,” “ours,” “us,” “Infinity” or the “Company”) has prepared the accompanying consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting. These consolidated financial statements are unaudited and, in our opinion, include all adjustments consisting of normal recurring adjustments and accruals necessary for a fair presentation of our consolidated balance sheets, statements of operations, and cash flows for the periods presented. Operating results for the periods presented are not necessarily indicative of the results that may be expected for 2013 due to various factors. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been omitted in accordance with the rules and regulations of the SEC. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes in Item 8, “Financial Statements and Supplementary Data,” of our Annual Report on Form 10-K, filed with the SEC. | |||||||||
Nature of Operations | |||||||||
We are engaged in the exploration of potential oil and gas resources in the Perlas and Tyra concession blocks offshore Nicaragua in the Caribbean Sea (the “Nicaraguan Concessions”). The Company sold its wholly-owned subsidiary, Infinity Oil and Gas of Texas, Inc. in 2012 and continues to hold its wholly-owned subsidiary, Infinity Oil and Gas of Wyoming, Inc., which has been inactive in recent years. | |||||||||
Going Concern | |||||||||
As reflected in the accompanying Consolidated Statements of Operations, the Company has a history of losses. In addition, the Company has a significant working capital deficit and is currently experiencing substantial liquidity issues. | |||||||||
On February 28, 2012, we signed definitive agreements with Amegy Bank (“Amegy”) and Off-Shore, LLC (“Off-Shore”) relating to outstanding debt and other obligations we owed to them (see Note 3). Although the cash outflow necessary to pay Amegy has been eliminated under terms of the Stock Purchase Agreement, we are still in need of additional capital to meet our obligations under the Nicaraguan Concessions, and are seeking sources of additional equity or debt financing. There can be no assurance that we will be able to obtain such capital or obtain it on favorable terms. | |||||||||
The Company conducted an environmental study and developed geological information from the reprocessing and additional evaluation of existing 2-D seismic data acquired over its Nicaraguan Concessions. It issued letters of credit totaling $851,550 for this and additional work on the leases as required by the Nicaraguan Concessions. The Company has completed certain activity under the initial work plan to date, but there remain significant additional activities to comply with certain requirements of the Nicaraguan Concessions. The Company intends to seek joint venture or working interest partners prior to the commencement of any significant exploration or drilling operations on the Nicaraguan Concessions. The Company’s commitment to acquire, process and interpret additional 2-D seismic data must be completed by January 2014 or the Nicaragua Concessions will be at risk of forfeiture. The Company must successfully contract with a company that has the capabilities to perform, process and interpret the 2-D seismic activities required by the work plan and consequently the Company must raise the necessary funding to negotiate, close and pay for the contract necessary to fulfill such requirements. These are substantial operational and financial requirements that the Company must satisfy prior to January 2014 in order to maintain its Nicaragua Concessions and there can be no assurance that it will be able to do so. | |||||||||
Due to the uncertainties related to these matters, there exists substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern | |||||||||
Fair Value of Financial Instruments | |||||||||
As defined in ASC 820, fair value is the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based upon observability of those inputs. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement), pricing inputs are other than quoted prices in active markets, but are either directly or indirectly observable and are valued using models or other valuation methodologies (level 2 measurement), and the lowest priority to unobservable inputs (level 3 measurement). There were no changes in valuation techniques or reclassifications of fair value measurements between levels 1, 2 or 3 during the nine months ended September 30, 2013. | |||||||||
The carrying values of the Company’s accounts receivable, accounts payable and accrued liabilities represent the estimated fair value due to the short-term nature of the accounts. | |||||||||
The estimated fair value of the Company’s non-current derivative liabilities, all of which are related to detachable warrants issued in connection with notes payable, were estimated using a closed-ended option pricing model utilizing assumptions related to the contractual term of the instruments, estimated volatility of the price of the Company’s common stock, interest rates, the probability of both the downward adjustment of the exercise price and the upward adjustment to the number of warrants as provided by the warrant agreement terms (Note 2) and non-performance risk factors, among other items (ASC 820, Fair Value Measurements (“ASC 820”) fair value hierarchy Level 3). All notes payable have been paid off as of September 30, 2013, therefore the derivative liability was adjusted as of the extinguishment date of the notes and the resulting derivative liability was transitioned from a liability to equity as of such date. A comparison of the assumptions used in calculating estimated fair value of derivative liabilities at the issue date and as of the date of the transition from liability to equity is as follows: | |||||||||
Upon Issuance | As of date of transition to equity | ||||||||
Volatility – range | 89.75% - 94.5% | 90.13% - 90.71% | |||||||
Contractual term | 2 years | 2 years | |||||||
Exercise price | $2.50 | $2.50 | |||||||
Number of warrants in aggregate | 825,000 | 825,000 | |||||||
The following table provides a summary of the changes in fair value, including net transfers in and/or out, of the derivative financial instruments, measured at fair value on a recurring basis using significant unobservable inputs: | |||||||||
Balance at December 31, 2012 | $ | 42,508 | |||||||
Fair value of warrant derivative liabilities at issuance | 698,064 | ||||||||
Unrealized derivative losses included in other expense | 24,410 | ||||||||
Transition of derivative liability to equity | (764,982 | ) | |||||||
Balance at September 30, 2013 | $ | - | |||||||
The estimated initial fair value of the Company’s Series A and B redeemable convertible preferred stock was determined based upon estimates of the expected occurrence and timing of certain future events, such as the date such shares might be redeemed or converted (assumed to be December 31, 2013); an estimate of discount rates to be utilized in determining net present value of the preferred stock, based upon rates observed in similar or analogous, but not identical, market transactions, upon past Company-specific effective borrowing rates, and the assessment of each instrument’s specific rights and obligations. (ASC 820, Fair Value Measurements (“ASC 820”) fair value hierarchy Level 3. | |||||||||
Reclassifications | |||||||||
Certain amounts in the prior period were reclassified to conform to the current period’s financial statement presentation. These reclassifications had no effect on previously reported net loss or accumulated deficit. |
Debt
Debt | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
Debt | ' | ||||||||
Note 2 — Debt | |||||||||
Debt consists of the following at September 30, 2013 and December 31, 2012: | |||||||||
30-Sep-13 | 31-Dec-12 | ||||||||
Line-of-credit with related party | $ | 21,025 | $ | - | |||||
Note payable to related party, net of discount, short-term | $ | - | $ | 234,314 | |||||
Notes payable, net of discount, long-term | $ | - | $ | 176,291 | |||||
Line-of-Credit with Related Party | |||||||||
The Company entered into a line of credit facility on September 23, 2013 which provides for borrowings on a revolving basis up to a maximum of $50,000. The entity providing the credit facility is owned by an officer of another corporation for which Infinity’s CEO serves as CEO and chairman of the board. The facility is unsecured, bears interest at 8% and expires on November 23, 2013. The Company granted the holder a common stock purchase warrant exercisable to purchase 15,000 shares of common stock at a price of $3.50 per share. The warrant is immediately exercisable and expires on September 23, 2015. The Company estimated the fair value of this warrant at $32,734 as of the grant date, which has been recorded as debt issuance costs and classified in prepaid expenses in the accompanying consolidated balance sheets. The weighted average grant date fair value for these warrants was $2.18 per share which was calculated using the Black-Scholes option model with the following assumptions: (i) stock market price of 3.38; (ii) expected volatility of 132%; (iii) discount rate of 0.35%, and (iv) expected term of two years. | |||||||||
Such costs are amortized ratably over the term of the credit facility which totaled $3,818 for the three and nine months ended September 30, 2013 and the remaining unamortized balance was $28,916 as of September 30, 2013. | |||||||||
Notes Payable – Short-term | |||||||||
In November 2012 the Company entered into an agreement with its law firm to issue the firm a 3% note payable in satisfaction of $212,400 in fees. The note was due with all accrued interest on March 14, 2014. The note and accrued interest are convertible to shares of the Company’s common stock at $3.00 per share at any time prior to and including maturity date. The note was discounted to its estimated fair value and the amount of the discount at issue date, $40,435, was recorded as a reduction in legal expense in 2012. Interest expense for the three and nine months ended September 30, 2013 aggregated $5,071 and $22,304, respectively, which includes interest at the stated rate of 3% and amortization of discount. On August 23, 2013, the holder exercised its right to convert the note payable to common stock at the contractual conversion price of $3.00 per share and was issued 72,464 common shares in full satisfaction of the promissory note and accrued interest which totaled $217,392. The unamortized discount at the date of conversion of $17,735 was charged to additional paid in capital. | |||||||||
During the nine months ended September 30, 2013, the Company borrowed an aggregate of $825,000 from six entities or individuals. The term of each note was for a period of 60 days and bore interest at 8% per annum. At the date of borrowing, each entity or individual was also issued a warrant for the purchase of common shares of stock at $2.50 per share, in aggregate, for 825,000 shares, valid for a period of two years from the date of the note. The warrants provided that if the related notes and interest were not paid in full by their respective maturity dates (ranging from April 13 to June 15, 2013) the warrants’ exercise prices would be reduced to $0.10 per share and the number of shares under the warrants would be increased to an aggregate of 8,250,000 shares. The ratchet provision in the warrant’s exercise price required that these be accounted as derivative liabilities. The Company recorded the estimated fair value of the warrants as discounts on note payable and as a derivative liability in the same amount, each as of the date of the respective note. | |||||||||
The Company paid all of notes or their holders converted them to equity on or prior to their maturity dates, causing the ratchet provisions on the warrants to terminate. The discounts were amortized on a straight line basis (substantially equivalent to the effective-interest basis) over the terms of the notes. Interest expense for the three and nine months ended September 30, 2013 includes discount amortization in the amount of $381,327 and $698,064, respectively. | |||||||||
Note Payable to Related Party | |||||||||
On August 28, 2012, the Company borrowed $250,000 from an entity that is 49% owned by a board member of another corporation for which Infinity’s CEO serves as CEO and chairman of the board. The Company issued a short-term note payable to the entity in this amount, bearing interest at 8% per annum, maturing February 28, 2013. At the same time, the Company issued the same entity a warrant exercisable to purchase 120,000 shares of the Company’s common stock at a price of $2.50 per share, expiring August 2017. The Company has recorded the estimated fair value of the warrant as of August 28, 2012 as a discount on note payable in the amount of $48,654 and a derivative liability in the same amount at that date. The discount of $48,654 was amortized on a straight line basis over the expected term of the note (August 28, 2012 through February 28, 2013) and interest expense for the three and nine months ended September 30, 2013 includes discount amortization of $15,686. The estimated current value of the warrant derivative liability was increased to $192,604 as of the date the note was repaid, February 28, 2013, and at that date the derivative liability was terminated and the balance was recorded as an addition to additional paid-in capital as a transition back to equity. | |||||||||
Interest Bearing Liabilities to Vendors | |||||||||
At September 30, 2013 and December 31, 2012, the Company had agreed to pay interest of 8% per annum on certain accrued liabilities aggregating $410,500. The total amount of interest accrued relating to these liabilities for the three and nine months ended September 30, 2013 was $8,277 and $24,652, respectively and $8,277 and $24,652 for the three and nine months ended September 30, 2012. |
Cancellation_of_Debt_and_Relat
Cancellation of Debt and Related Obligations and Issuance of Securities in Exchange for Debt | 9 Months Ended |
Sep. 30, 2013 | |
Cancellation Of Debt And Related Obligations And Issuance Of Securities In Exchange For Debt | ' |
Cancellation of Debt and Related Obligations and Issuance of Securities in Exchange for Debt | ' |
Note 3 - Cancellation of Debt and Related Obligations and Issuance of Securities in Exchange for Debt | |
On February 28, 2012, the Company signed definitive agreements with Amegy and Off-Shore relating to outstanding debt and other obligations owed them. In accordance with these agreements, on April 13, 2012, the Company issued Amegy 2,000,000 shares of common stock and 130,000 shares of Series A redeemable convertible preferred stock, and issued Off-Shore 15,016 shares of Series B redeemable convertible preferred stock. Amegy also agreed to cancel the Amegy Warrant that had originally been issued in February 2011, exercisable to purchase 931,561 shares of common stock. In aggregate, the Company cancelled debt, accrued interest and fees and the derivative liability that had been recorded relative to the Amegy Warrant in the aggregate amount of $21,883,393. | |
The Series A and Series B redeemable convertible preferred stock have a 6% annual dividend and are convertible into common stock at a price of $6.50 per share. Both series of preferred stock automatically convert into common stock if the average of the closing prices of the common stock for 30 consecutive trading days equals at least $7.50 per share. The Company has the right to redeem both series of preferred stock at any point for an amount equal to their issue price of $100 per share plus all accrued and unpaid dividends; however the Series A preferred stock has a higher liquidation preference and must be redeemed prior to any redemption of Series B preferred stock. Commencing January 1, 2013, the Series A preferred stock will vote with the common stock on all matters presented to the holders of the common stock. Beginning January 1, 2014, the Series A preferred shareholders will have a majority vote on all such matters and the right to elect a majority of the Board of Directors if the Series A preferred stock has not been redeemed or converted into common stock. Series B preferred stock has no voting privileges. Neither series of preferred stock is transferrable for 180 days after issuance. | |
The common stock issued to Amegy has been recorded at a value equal to the closing price of the shares of the Company’s common stock on April 13, 2012, the date the agreement was effective, for a total of $2,980,000. Taking into consideration the rights and preferences accruing to the preferred stock issued, as summarized above, the Company has classified both Series A and B preferred stock as temporary equity on the accompanying consolidated balance sheet at September 30, 2013 and accordingly has recorded such stock at their estimated fair values. That estimated fair value was $9,743,210 for Series A preferred and $1,106,625 for Series B preferred at the date of issuance, April 13, 2012. The recorded fair value of Series A and B preferred stock increased in calculated present value to $12,462,792 and $1,436,005, respectively, as of September 30, 2013 ($577,737 and $1,662,144 was accreted in the three and nine months ended September 30, 2013, respectively). Both Series A and B preferred stock are being accreted to their face values over a period commencing April 14, 2012 through December 31, 2013. Accrued dividends payable on the Series A and B preferred stock in the amount of $1,276,141 have been recorded as of September 30, 2013 ($217,524 and $652,572 was accrued in the three and nine months ended September 30, 2013, respectively). |
Common_Stock
Common Stock | 9 Months Ended |
Sep. 30, 2013 | |
Equity [Abstract] | ' |
Common Stock | ' |
Note 4 – Common Stock | |
During the nine months ended September 30, 2013, the Company conducted a private placement of its common stock in which it sold 556,250 units, each consisting of one share of common stock and one half of a common stock purchase warrant, at $1.60 per unit, for total proceeds of $890,000. One holder of a promissory note issued by the Company in February 2013 participated in the private placement and converted the principal amount $125,000 plus accrued interest to 79,170 units. As a result of the conversion, the Company recognized a loss on conversion of $11,085 during the nine months ended September 30, 2013. The common stock purchase warrants provide for an exercise price of $2.50 per share, are immediately exercisable and have a term of five years. | |
During the nine months ended September 30, 2013, the Company issued 25,000 shares to a consultant for services rendered which were valued at $39,750 based on the Company’s share price at the grant date. |
Stock_Options
Stock Options | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||||||||
Stock Options | ' | ||||||||||||||||
Note 5 — Stock Options | |||||||||||||||||
The Company applies ASC 718, Stock Compensation, which requires companies to recognize compensation expense for share-based payments based on the estimated fair value of the awards. ASC 718 also requires tax benefits relating to the deductibility of increases in the value of equity instruments issued under share-based compensation arrangements to be presented as financing cash inflows in the statement of cash flows. Compensation cost is recognized based on the grant-date fair value for all share-based payments granted, and is estimated in accordance with the provisions of ASC 718. | |||||||||||||||||
The following table summarizes stock option activity for the nine months ended September 30, 2013: | |||||||||||||||||
Number of | Weighted | Weighted | Aggregate | ||||||||||||||
Options | Average | Average | Intrinsic | ||||||||||||||
Exercise | Remaining | Value | |||||||||||||||
Price Per | Contractual | ||||||||||||||||
Share | Term | ||||||||||||||||
Outstanding at December 31, 2012 | 3,303,500 | $ | 4.17 | 7.3 years | $ | - | |||||||||||
Granted | 96,000 | 3 | 5.8 years | - | |||||||||||||
Exercised | - | - | - | - | |||||||||||||
Forfeited | - | - | - | - | |||||||||||||
Outstanding at September 30, 2013 | 3,399,500 | $ | 4.14 | 6.6 years | $ | - | |||||||||||
Outstanding and exercisable at September 30, 2013 | 2,526,167 | $ | 4.53 | 6.2 years | $ | - | |||||||||||
During the nine months ended September 30, 2013, the Company granted 96,000 options which have an exercise price of $3.00 per share and original terms ranging from five to ten years. A total of 36,000 options vested immediately while the remaining 60,000 options vest at a rate of 30,000 for each of the two years thereafter. The weighted average grant date fair value for these options was $1.93 per share which was calculated using the Black-Scholes option model with the following assumptions: (i) stock market price of $2.14 - $2.75; (ii) expected volatility of 131% - 132%; (iii) discount rate of 0.13% - 0.60% and (iv) expected terms ranging from 2.5 to 10 years. | |||||||||||||||||
The Company recognized compensation and legal expense in connection with the vesting of options granted above and in 2012 in the amount of $353,730 and $1,476,383 during the three and nine months ended September 30, 2013, respectively. The intrinsic value of all outstanding stock options aggregated $1,625,885 and the intrinsic value of all vested options totaled $1,337,685 as of September 30, 2013. |
Warrants
Warrants | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Warrants and Rights Note Disclosure [Abstract] | ' | ||||||||||||
Warrants | ' | ||||||||||||
Note 6 —Warrants | |||||||||||||
The following table summarizes warrant option activity for the nine months ended September 30, 2013: | |||||||||||||
Number of | Weighted | Weighted | |||||||||||
Warrants | Average | Average | |||||||||||
Exercise | Remaining | ||||||||||||
Price Per | Contractual | ||||||||||||
Share | Term | ||||||||||||
Outstanding and exercisable at December 31, 2012 | 120,000 | $ | 2.5 | 4.7 years | |||||||||
Issued in conjunction with notes payable (Note 2) | 825,000 | 2.5 | 1.5 years | ||||||||||
Issued in private placement of common stock (Note 4) | 317,710 | 2.5 | 4.7 years | ||||||||||
Issued in conjunction with line-of-credit (Note 2) | 15,000 | 3 | 2.0 years | ||||||||||
Outstanding and exercisable at September 30, 2013 | 1,277,710 | $ | 2.5 | 2.5 years | |||||||||
The intrinsic value of all outstanding common stock purchase warrants and the intrinsic value of all vested common stock purchase warrants totaled $1,048,049 as of September 30, 2013. |
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||||||||
Commitments and Contingencies | ' | ||||||||||
Note 7 — Commitments and Contingencies | |||||||||||
The Company has no insurance coverage on its U.S domestic oil and gas properties. The Company is not in compliance with Federal and State laws regarding the U.S. domestic oil and gas properties. The Company’s known compliance issues relate to the Texas Railroad Commission regarding administrative filings and renewal permits. The ultimate resolution of these compliance issues could have a material adverse impact on the Company’s financial statements. | |||||||||||
Nicaraguan Concessions | |||||||||||
The significant terms and work commitments associated with the Nicaraguan Concessions by area (Perlas and Tyra blocks) are summarized below. Within 15 days of entering an exploration sub-period, the Company is required to provide an irrevocable guarantee (“Irrevocable Guarantee”) in favor of the Nicaraguan Ministry of Energy, payable in Nicaragua, in an amount equal to the estimated cost of such exploration sub-period, subject to an accumulated credit carry forward for the excess of work performed in the preceding exploration sub-period, as provided in the agreements relating to the Nicaraguan Concessions. | |||||||||||
As of December 31, 2012 and September 30, 2013, the Company was in Sub-Period 1 for both Perlas and Tyra. On April 11, 2013, the Company received its Environmental Permit, permitting it to proceed to Phase II of Sub-Period 1. In accordance with the Nicaraguan Concession agreements, the Company has provided the Ministry of Energy with the required letters of credit in the amounts of $443,100 for Perlas (expiring March 2014) and $408,450 for Tyra (expiring September 2014). The Company has also made all required expenditures related to the Nicaraguan Concessions for training programs and as “area fees,” for each respective year for 2010 through 2013. The Company considers it is fully in compliance with the terms of the Nicaraguan Concession agreements and is in year four of the 30 year concessions. | |||||||||||
Minimum Work Program – Perlas | |||||||||||
Block Perlas – Exploration Minimum Work Commitment and Relinquishments | |||||||||||
Exploration Period | Duration | Work Commitment | Relinquishment | Irrevocable | |||||||
(6 Years) | (Years) | Guarantee | |||||||||
Sub-Period 1 | 2 | - Environmental Impact Study | 26km2 | $ | 443,100 | ||||||
- Acquisition & interpretation of | |||||||||||
333km of new 2D seismic | |||||||||||
- Acquisition, processing & interpretation of | |||||||||||
333km of new 2D seismic (or equivalent in 3D) | |||||||||||
Sub-Period 2 | 1 | - Acquisition, processing & interpretation of | 53km2 | $ | 1,356,227 | ||||||
Optional | 200km of new 2D seismic (or equivalent in 3D) | ||||||||||
Sub-Period 3 | 1 | - Drilling of one exploration well to the | 80km2 | $ | 10,220,168 | ||||||
Optional | Cretaceous or 3,500m, whichever is shallower | ||||||||||
Sub-Period 4 | 2 | - Drilling of one exploration well to the | All acreage except | $ | 10,397,335 | ||||||
Optional | Cretaceous or 3,500m, whichever is shallower | areas with discoveries | |||||||||
- Geochemical analysis | |||||||||||
Minimum Work Program - Tyra | |||||||||||
Block Tyra – Exploration Minimum Work Commitment and Relinquishments | |||||||||||
Exploration Period | Duration | Work Commitment | Relinquishment | Irrevocable | |||||||
(6 Years) | (Years) | Guarantee | |||||||||
Sub-Period 1 | 1.5 | - Environmental Impact Study | 26km2 | $ | 408,450 | ||||||
- Acquisition & interpretation of | |||||||||||
667km of existing 2D seismic | |||||||||||
- Acquisition of 667km of new 2D seismic (or | |||||||||||
equivalent in 3D) | |||||||||||
Sub-Period 2 | 0.5 | - Processing & interpretation of the 667km 2D | 40km2 | $ | 278,450 | ||||||
Optional | seismic (or equivalent in 3D) acquired in the | ||||||||||
previous sub-period | |||||||||||
Sub-Period 3 | 2 | - Acquisition, processing & interpretation of | 160km2 | $ | 1,818,667 | ||||||
Optional | 250km2 of new 3D seismic | ||||||||||
Sub-Period 4 | 2 | - Drilling of one exploration well to the | All acreage except | $ | 10,418,667 | ||||||
Optional | Cretaceous or 3,500m, whichever is shallower | areas with discoveries | |||||||||
- Geochemical analysis | |||||||||||
Contractual and Fiscal Terms | |||||||||||
Training Program | US $50,000 per year, per block | ||||||||||
Area Fee | Yr 1-3 | $0.05/hectare | |||||||||
Yr 4-7 | $0.10/hectare | ||||||||||
Yr 8 fwd | $0.15/hectare | ||||||||||
Royalties | Recovery Factor | Percentage | |||||||||
0 – 1.5 | 5% | ||||||||||
1.5 – 3.0 | 10% | ||||||||||
>3.0 | 15% | ||||||||||
Natural Gas Royalties | Market value at production | 5% | |||||||||
Corporate Tax | Rate no higher than 30% | ||||||||||
Social Contribution | 3% of the net profit (1.5% for each autonomous region) | ||||||||||
Investment Protection | ICSID arbitration | ||||||||||
OPIC insurance | |||||||||||
Phase II of Sub Period 1 started April 13, 2013, when the Nicaraguan Government approved the environmental impact study. The minimum cash requirements for the next twelve month period will be $1,968,000 of which $1,635,000 is related to seismic and $333,000 is related to the training fees, area fees and other direct costs under the Nicaraguan Concessions. The Company estimates that the actual cost of seismic activities for the acreage will range between $4 million and $8 million depending upon the amount and combination of 2D and 3D seismic performed over the next approximate 12 month period. The Company estimates that its minimum working capital requirements for the next twelve-month period will be $600,000 to maintain corporate operations, exclusive of the Nicaraguan Concessions and payment of existing third party obligations. See Note 1 for discussion of Going Concern. | |||||||||||
Revenue Sharing Commitments | |||||||||||
On March 23, 2009, the Company entered into a Securities Purchase Agreement, dated effective as of March 23, 2009, with Off-Shore, an accredited investor, to issue a subordinated secured promissory note in the aggregate principal amount of up to $1,275,000 and a one percent (1%) revenue sharing interest in the Nicaraguan Concessions. As of December 31, 2009, Off-Shore had funded $1,275,000 (the “Funding Amount”). | |||||||||||
Under the Revenue Sharing Agreement (the “Revenue Agreement”), Infinity assigned to Off-Shore a monthly payment (the “RSP”) equal to the revenue derived from one percent (1%) of Infinity’s share of the hydrocarbons produced at the wellhead from the Nicaraguan Concessions. The RSP will bear its proportionate share of all costs incurred to deliver the hydrocarbons to the point of sale to an unaffiliated purchaser, including its share of production, severance and similar taxes, and certain additional costs. The RSP will be paid to Off-Shore by the last day of each month based on the revenue received by Infinity from the purchaser of the production during the previous month from the Nicaraguan Concessions. The Revenue Agreement does not create any obligation for Infinity to maintain or develop the Nicaraguan Concessions, and does not create any rights in the Nicaraguan Concessions for Off-Shore. Off-Shore has assigned its RSP to its members in connection with its dissolution. | |||||||||||
On June 6, 2009 the Company entered into a Revenue Sharing Agreement with the officers and directors for services provided. Infinity assigned to officers and directors a monthly payment (the “RSP”) equal to the revenue derived from one percent (1%) of Infinity’s share of the hydrocarbons produced at the wellhead from the Nicaraguan Concessions. The RSP will bear its proportionate share of all costs incurred to deliver the hydrocarbons to the point of sale to an unaffiliated purchaser, including its share of production, severance and similar taxes, and certain additional costs. The RSP will be paid by the last day of each month based on the revenue received by Infinity from the purchaser of the production during the previous month from the Nicaraguan Concessions. The Revenue Agreement does not create any obligation for Infinity to maintain or develop the Nicaraguan Concessions, and does not create any rights in the Nicaraguan Concessions for officers and directors. | |||||||||||
The Company intends to seek joint venture or working interest partners (the “Farmout”) prior to the commencement of any exploratory drilling operations on these Nicaraguan Concessions. On September 8, 2009 the Company entered into a Revenue Sharing Agreement with Jeff Roberts to assist the Company with its technical studies of gas and oil holdings in Nicaragua and managing and assisting in the Farmout. Infinity assigned to Jeff Roberts a monthly payment (the “RSP”) equal to the revenue derived from one percent (1%) of Infinity’s share of the hydrocarbons produced at the wellhead from the Nicaraguan Concessions. The RSP will bear its proportionate share of all costs incurred to deliver the hydrocarbons to the point of sale to an unaffiliated purchaser, including its share of production, severance and similar taxes, and certain additional costs. The RSP will be paid to Jeff Roberts by the last day of each month based on the revenue received by Infinity from the purchaser of the production during the previous month from the Nicaraguan Concessions. The Revenue Agreement does not create any obligation for Infinity to maintain or develop the Nicaraguan Concessions, and does not create any rights in the Nicaraguan Concessions for Jeff Roberts. | |||||||||||
On September 8, 2009 the Company entered into a Revenue Sharing Agreement with Thompson Knight Global Energy Services (“Thompson Knight”) to assist the Company with its technical studies of gas and oil holdings in Nicaragua and managing and assisting in the Farmout. Infinity assigned to Thompson Knight a monthly payment (the “RSP”) equal to the revenue derived from one percent (1%) of Infinity’s share of the hydrocarbons produced at the wellhead from the Nicaraguan Concessions. The RSP will bear its proportionate share of all costs incurred to deliver the hydrocarbons to the point of sale to an unaffiliated purchaser, including its share of production, severance and similar taxes, and certain additional costs. The RSP will be paid to Thompson Knight by the last day of each month based on the revenue received by Infinity from the purchaser of the production during the previous month from the Nicaraguan Concessions. The Revenue Agreement does not create any obligation for Infinity to maintain or develop the Nicaraguan Concessions, and does not create any rights in the Nicaraguan Concessions for Thompson Knight. | |||||||||||
Lack of Compliance with Law Regarding Domestic Properties | |||||||||||
Infinity is not in compliance with existing federal, state and local laws, rules and regulations for its domestic properties and this could have a material or significantly adverse effect upon the liquidity, capital expenditures, earnings or competitive position of Infinity. For the year ended December 31, 2008 the remaining values of Infinity-Texas and Infinity-Wyoming were written down to zero as the Company focused solely on the development of the Nicaraguan Concessions. Management believes the estimate of the Company’s asset retirement obligations consisting of costs related to the plugging of wells, the removal of facilities and equipment, and site restoration on oil and gas properties is sufficient to cover any noncompliance liabilities. The Company no longer carries insurance on the domestic properties. | |||||||||||
Contingent Fees | |||||||||||
In addition to the Revenue Sharing Agreement with Thompson Knight to assist the Company with its technical studies of gas and oil holdings in Nicaragua and managing and assisting in the Farmout, the Company agreed to compensate Thompson Knight a success fee of 5% of the upfront cash fee paid to Infinity by a third party earning an interest in the Nicaragua asset up to $20 million and 10% of any amount exceeding the $20 million. A 2% success fee would be paid to Thompson Knight of the remaining cash investment in subsequent years. | |||||||||||
Litigation | |||||||||||
The Company is subject to numerous claims and legal actions in which vendors are claiming breach of contract due to the Company’s failure to pay amounts due. The Company believes that it has made adequate provision for these claims in the accompanying financial statements. | |||||||||||
The Company is currently involved in litigation as follows: | |||||||||||
● | Exterran Energy Solutions, L.P., f/k/a Hanover Compression Limited Partnership, who filed an action in the District Court of Erath County, Texas, number CV30512, on March 31, 2010 against Infinity Oil and Gas of Texas, Inc., Infinity Energy Resources, Inc., Longhorn Properties, LLC, and Forest Oil Corporation. Exterran Energy Solutions, L.P. provided certain gas compressor and related equipment pursuant to a Gas Compressor/Production Equipment Master Rental & Servicing Agreement with Infinity dated January 3, 2005 in Erath County, Texas and is claiming breach of contract for failure to pay amounts due. The Company has included the impact of this litigation as liabilities in its accounts payable because it does not dispute the amount owed. In 2009 the Company recorded the amount claimed. The Company will seek to settle the lawsuit when it has the financial resources to do so. The suit is in the discovery stage. | ||||||||||
● | In October 2012 the State of Texas filed a lawsuit naming Infinity-Texas, the Company and the corporate officers of Infinity-Texas, seeking $30,000 of reclamation costs associated with a single well, in addition to administrative expenses and penalties. The Company has engaged in negotiations with the State of Texas in late 2012 and early 2013 and has reached a settlement agreement that would reduce the aggregate liability, in this action and any extension of this to other Texas wells, to $45,103, which amount has been paid. Certain performance obligations remain which must be satisfied in 2013 in order to finally settle and dismiss the matter. | ||||||||||
Pending satisfactory performance of the performance obligations and their acceptance by the State of Texas, the officers retain potential liability on the above matter, and the Company has indemnified the officers for this potential liability. Therefore these liabilities, to the extent they might become actual, are the obligations of the Company. Management estimates that the liabilities associated with this matter will not exceed $780,000, calculated as $30,000 for each of the 26 Infinity-Texas operated wells. This related liability, less the payment made to the State of Texas in 2012 in the amount of $45,103, is classified as officer indemnification liability on the consolidated balance sheets. | |||||||||||
● | Tim Berge, who filed an action in the District Court, City and County of Denver Colorado number 09CV9566, was granted a default judgment on November 8, 2010 against Infinity Energy Resources, Inc. in the amount of $304,921 plus costs. Mr. Berge provided certain geological services to Infinity Oil and Gas of Texas, Inc. and claimed breach of contract for failure to pay amounts he alleged were due. The Company was unable to defend itself in this matter due to limited financial resources even though it believes that it had meritorious defenses. The Company has included the impact of this litigation as an accrued liability in the accompanying balance sheet. On October 17, 2013, the Company filed a motion in the District Court of Johnson County, Kansas seeking to set aside the default judgment. |
Income_Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2013 | |
Income Tax Disclosure [Abstract] | ' |
Income Taxes | ' |
Note 8 — Income Taxes | |
The Company appealed an assessment of Kansas corporate income tax that had been issued by the Department of Revenue for the tax year ended December 31, 2006 in the amount of approximately $653,000, which was accrued for and was reported under accrued liabilities in the consolidated balance sheet at December 31, 2012. On July 30, 2013, the Kansas Department of Revenue issued a letter to the Company advising it that it no longer owed any corporate income tax to the State of Kansas and has released the Company from the payment of such taxes. Consequently, the related accrual was reversed and an income tax benefit of $653,000 was recorded for the three and nine months ended September 30, 2013. | |
For income tax purposes, the Company has net operating loss carry-forwards of approximately $82,285,000 as of January 1, 2013, which are expected to expire from 2025 through 2028. The Company has provided for a valuation allowance due to the uncertainty of realizing the tax benefits from its net deferred tax asset. |
Sale_of_InfinityTexas_Related_
Sale of Infinity-Texas, Related Potential Litigation, and Discontinued Operations Reporting | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Discontinued Operations and Disposal Groups [Abstract] | ' | ||||
Sale of Infinity-Texas, Related Potential Litigation, and Discontinued Operations Reporting | ' | ||||
Note 9 — Sale of Infinity-Texas, Related Potential Litigation, and Discontinued Operations Reporting | |||||
On July 31, 2012, the Company sold 100% of the stock of its wholly-owned subsidiary, Infinity Oil and Gas of Texas (Infinity-Texas) to an individual, the single member of a limited liability company which purchased the oil and gas properties of Infinity-Texas in 2011. The terms of the Stock Purchase Agreement with the purchaser are that purchaser would acquire 100% of the stock of Infinity-Texas for $1.00 and thereby assume all of it liabilities. At the date of the sale, Infinity-Texas had net liabilities of $5,152,111. Management believes that there are certain contingent liabilities related to Texas properties for which the Company, the parent entity, may retain financial responsibility. The liabilities are related to the reclamation of oil and gas properties and include the cost of plugging inactive wells and removal and recovery of any remaining production equipment. Infinity-Texas, as an independent entity following its sale, is primarily responsible for such obligations, but the officers of Infinity-Texas at the time such wells were in production, in their capacities as signatories of certain regulatory filings, could be personally responsible. | |||||
The assets, liabilities and operations of Infinity-Texas are reported on the accompanying consolidated financial statements as those of a discontinued operation for the current and prior periods and dates presented. Because Infinity-Texas was not actively operating during any of the periods presented, no overhead costs have been allocated to the discontinued operations during such periods. | |||||
The analysis below sets forth the total assets and liabilities of Infinity-Texas as of the date of sale (July 31, 2012) and the determination of the gain recognized on sale of discontinued operation of Infinity-Texas: | |||||
Total liabilities of Infinity-Texas | $ | 5,155,103 | |||
Total assets of Infinity-Texas | 2,992 | ||||
Net liabilities of Infinity-Texas | 5,152,111 | ||||
Potential liabilities related to indemnification of officers by the Company | (780,000 | ) | |||
Gain on sale of discontinued operation, during the three and nine months ended September 30, 2012 | $ | $4,372,111 | |||
The operating expenses of Infinity-Texas for the nine months ended September 30, 2012: | |||||
General and administrative expenses | $ | - | |||
Accretion expense | 17,736 | ||||
Interest expense | 44,553 | ||||
Total expenses | $ | 62,289 |
Related_Party_Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2013 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions | ' |
Note 10 — Related Party Transactions | |
The corporate office was located in Denver, Colorado until November 2008 when the Denver office was closed. The corporate office moved to the business office of the CFO of the Company in Overland Park, Kansas. The Company currently does not have any employees and the staff of the CFO provided the office services until May 2013. These services were billed at the CFO firm’s standard billing rate plus out-of-pocket expenses. For the quarters ended September 30, 2013 and 2012, the Company was billed $0 and $59,745, respectively and $0 and $203,328 for the nine months ended September 30, 2013 and 2012, respectively. The amount due to the CFO’s firm for services provided was $767,407 at September 30, 2013 and $767,407 at December 31, 2012, is included in accrued liabilities at both dates. | |
The Company entered into a subordinated loan with Off-Shore in the aggregate amount of $1,275,000 for funds for the Nicaraguan Concessions. This note was satisfied by the Company’s issuance of shares of Series B redeemable convertible preferred stock effective April 13, 2012 to Off-Shore (see Note 3). The managing partner of Off-Shore and the CFO are partners in the accounting firm which the Company uses for its corporate office. Off-Shore has assigned all of its shares of the Series B preferred stock to its members in connection with its dissolution. | |
As of September 30, 2013 and December 31, 2012, the Company had accrued compensation to its officers and directors of $770,208 and $705,208, respectively. | |
As discussed in Note 2, on August 28, 2012, the Company borrowed $250,000 from an entity that is 49% owned by a board member of another corporation for which Infinity’s CEO serves as CEO and chairman of the board. The Company issued a short-term note bearing interest at 8% per annum and maturing February 28, 2013 to such party. The note and all accrued interest was repaid on its maturity date in accordance with the terms of the note. In connection with the transaction, the Company issued the lender a warrant exercisable to purchase 120,000 shares of the Company’s common stock at a price of $2.50 per share, expiring August 2017. | |
As discussed in Note 2, the Company entered into a line-of-credit facility on September 23, 2013 that provides for borrowings on a revolving basis up to a maximum of $50,000. The entity providing the credit facility is owned by an officer of another corporation for which Infinity’s CEO serves as CEO and chairman of the board. The facility is unsecured, bears interest at 8% per annum and expires on November 23, 2013. The Company granted the holder a common stock purchase warrant exercisable to acquire 15,000 shares of common stock at a price of $3.50 per share. The warrant is immediately exercisable and terminates on September 23, 2015. The Company estimated the fair value of these warrants at $32,734 of the date, which amount has been recorded as debt issuance costs, classified in prepaid expenses and amortized ratably over the term of the credit facility. Amortization of the debt issuance cost totaled $3,818 for the three and nine months ended September 30, 2013 and the remaining unamortized balance was $28,916 as of September 30, 2013. |
Subsequent_Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2013 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
Note 11 — Subsequent Events | |
On October 10, 2013, the Company issued 31,521 shares of common stock pursuant to the cashless exercise of 125,000 warrants to purchase common stock. | |
On October 21, 2013, the Company entered into a consulting agreement with an entity to provide investor relations services. The agreement has an initial 90-day term with automatic extensions unless terminated by either party with 30-day written notice. The Company will compensate the consultant with a monthly payment of $7,000 (plus out-of-pocket expenses) and a one-time issuance of 15,000 shares of common stock. | |
On November 4, 2013, the Company granted the entity providing the line of credit facility set forth in Note 9 - Related Party Transactions a warrant exercisable to purchase an additional 10,000 shares on the same terms as the original warrant in consideration for the entity increasing the facility to $75,000. |
Nature_of_Operations_Basis_of_1
Nature of Operations, Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | ||||||||
Unaudited Interim Financial Information | ' | ||||||||
Unaudited Interim Financial Information | |||||||||
Infinity Energy Resources, Inc. and its subsidiaries (collectively, “we,” “ours,” “us,” “Infinity” or the “Company”) has prepared the accompanying consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting. These consolidated financial statements are unaudited and, in our opinion, include all adjustments consisting of normal recurring adjustments and accruals necessary for a fair presentation of our consolidated balance sheets, statements of operations, and cash flows for the periods presented. Operating results for the periods presented are not necessarily indicative of the results that may be expected for 2013 due to various factors. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been omitted in accordance with the rules and regulations of the SEC. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes in Item 8, “Financial Statements and Supplementary Data,” of our Annual Report on Form 10-K, filed with the SEC. | |||||||||
Nature of Operations | ' | ||||||||
Nature of Operations | |||||||||
We are engaged in the exploration of potential oil and gas resources in the Perlas and Tyra concession blocks offshore Nicaragua in the Caribbean Sea (the “Nicaraguan Concessions”). The Company sold its wholly-owned subsidiary, Infinity Oil and Gas of Texas, Inc. in 2012 and continues to hold its wholly-owned subsidiary, Infinity Oil and Gas of Wyoming, Inc., which has been inactive in recent years. | |||||||||
Going Concern | ' | ||||||||
Going Concern | |||||||||
As reflected in the accompanying Consolidated Statements of Operations, the Company has a history of losses. In addition, the Company has a significant working capital deficit and is currently experiencing substantial liquidity issues. | |||||||||
On February 28, 2012, we signed definitive agreements with Amegy Bank (“Amegy”) and Off-Shore, LLC (“Off-Shore”) relating to outstanding debt and other obligations we owed to them (see Note 3). Although the cash outflow necessary to pay Amegy has been eliminated under terms of the Stock Purchase Agreement, we are still in need of additional capital to meet our obligations under the Nicaraguan Concessions, and are seeking sources of additional equity or debt financing. There can be no assurance that we will be able to obtain such capital or obtain it on favorable terms. | |||||||||
The Company conducted an environmental study and developed geological information from the reprocessing and additional evaluation of existing 2-D seismic data acquired over its Nicaraguan Concessions. It issued letters of credit totaling $851,550 for this and additional work on the leases as required by the Nicaraguan Concessions. The Company has completed certain activity under the initial work plan to date, but there remain significant additional activities to comply with certain requirements of the Nicaraguan Concessions. The Company intends to seek joint venture or working interest partners prior to the commencement of any significant exploration or drilling operations on the Nicaraguan Concessions. The Company’s commitment to acquire, process and interpret additional 2-D seismic data must be completed by January 2014 or the Nicaragua Concessions will be at risk of forfeiture. The Company must successfully contract with a company that has the capabilities to perform, process and interpret the 2-D seismic activities required by the work plan and consequently the Company must raise the necessary funding to negotiate, close and pay for the contract necessary to fulfill such requirements. These are substantial operational and financial requirements that the Company must satisfy prior to January 2014 in order to maintain its Nicaragua Concessions and there can be no assurance that it will be able to do so. | |||||||||
Due to the uncertainties related to these matters, there exists substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern. | |||||||||
Fair Value of Financial Instruments | ' | ||||||||
Fair Value of Financial Instruments | |||||||||
As defined in ASC 820, fair value is the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based upon observability of those inputs. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement), pricing inputs are other than quoted prices in active markets, but are either directly or indirectly observable and are valued using models or other valuation methodologies (level 2 measurement), and the lowest priority to unobservable inputs (level 3 measurement). There were no changes in valuation techniques or reclassifications of fair value measurements between levels 1, 2 or 3 during the nine months ended September 30, 2013. | |||||||||
The carrying values of the Company’s accounts receivable, accounts payable and accrued liabilities represent the estimated fair value due to the short-term nature of the accounts. | |||||||||
The estimated fair value of the Company’s non-current derivative liabilities, all of which are related to detachable warrants issued in connection with notes payable, were estimated using a closed-ended option pricing model utilizing assumptions related to the contractual term of the instruments, estimated volatility of the price of the Company’s common stock, interest rates, the probability of both the downward adjustment of the exercise price and the upward adjustment to the number of warrants as provided by the warrant agreement terms (Note 2) and non-performance risk factors, among other items (ASC 820, Fair Value Measurements (“ASC 820”) fair value hierarchy Level 3). All notes payable have been paid off as of September 30, 2013, therefore the derivative liability was adjusted as of the extinguishment date of the notes and the resulting derivative liability was transitioned from a liability to equity as of such date. A comparison of the assumptions used in calculating estimated fair value of derivative liabilities at the issue date and as of the date of the transition from liability to equity is as follows: | |||||||||
Upon Issuance | As of date of transition to equity | ||||||||
Volatility – range | 89.75% - 94.5% | 90.13% - 90.71% | |||||||
Contractual term | 2 years | 2 years | |||||||
Exercise price | $2.50 | $2.50 | |||||||
Number of warrants in aggregate | 825,000 | 825,000 | |||||||
The following table provides a summary of the changes in fair value, including net transfers in and/or out, of the derivative financial instruments, measured at fair value on a recurring basis using significant unobservable inputs: | |||||||||
Balance at December 31, 2012 | $ | 42,508 | |||||||
Fair value of warrant derivative liabilities at issuance | 698,064 | ||||||||
Unrealized derivative losses included in other expense | 24,410 | ||||||||
Transition of derivative liability to equity | (764,982 | ) | |||||||
Balance at September 30, 2013 | $ | - | |||||||
The estimated initial fair value of the Company’s Series A and B redeemable convertible preferred stock was determined based upon estimates of the expected occurrence and timing of certain future events, such as the date such shares might be redeemed or converted (assumed to be December 31, 2013); an estimate of discount rates to be utilized in determining net present value of the preferred stock, based upon rates observed in similar or analogous, but not identical, market transactions, upon past Company-specific effective borrowing rates, and the assessment of each instrument’s specific rights and obligations. (ASC 820, Fair Value Measurements (“ASC 820”) fair value hierarchy Level 3. | |||||||||
Reclassifications | ' | ||||||||
Reclassifications | |||||||||
Certain amounts in the prior period were reclassified to conform to the current period’s financial statement presentation. These reclassifications had no effect on previously reported net loss or accumulated deficit. |
Nature_of_Operations_Basis_of_2
Nature of Operations, Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | ||||||||
Estimated Fair Value Assumptions of Derivative Liabilities | ' | ||||||||
A comparison of the assumptions used in calculating estimated fair value of derivative liabilities at the issue date and as of the date of the transition from liability to equity is as follows: | |||||||||
Upon Issuance | As of date of transition to equity | ||||||||
Volatility – range | 89.75% - 94.5% | 90.13% - 90.71% | |||||||
Contractual term | 2 years | 2 years | |||||||
Exercise price | $2.50 | $2.50 | |||||||
Number of warrants in aggregate | 825,000 | 825,000 | |||||||
Summary of Changes in Fair Value of Derivative Financial Instruments | ' | ||||||||
The following table provides a summary of the changes in fair value, including net transfers in and/or out, of the derivative financial instruments, measured at fair value on a recurring basis using significant unobservable inputs: | |||||||||
Balance at December 31, 2012 | $ | 42,508 | |||||||
Fair value of warrant derivative liabilities at issuance | 698,064 | ||||||||
Unrealized derivative losses included in other expense | 24,410 | ||||||||
Transition of derivative liability to equity | (764,982 | ) | |||||||
Balance at September 30, 2013 | $ | - |
Debt_Tables
Debt (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
Schedule of Debt Outstanding | ' | ||||||||
Debt consists of the following at September 30, 2013 and December 31, 2012: | |||||||||
30-Sep-13 | 31-Dec-12 | ||||||||
Line-of-credit with related party | $ | 21,025 | $ | - | |||||
Note payable to related party, net of discount, short-term | $ | - | $ | 234,314 | |||||
Notes payable, net of discount, long-term | $ | - | $ | 176,291 |
Stock_Options_Tables
Stock Options (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||||||||
Summary of Stock Option Activity | ' | ||||||||||||||||
The following table summarizes stock option activity for the nine months ended September 30, 2013: | |||||||||||||||||
Number of | Weighted | Weighted | Aggregate | ||||||||||||||
Options | Average | Average | Intrinsic | ||||||||||||||
Exercise | Remaining | Value | |||||||||||||||
Price Per | Contractual | ||||||||||||||||
Share | Term | ||||||||||||||||
Outstanding at December 31, 2012 | 3,303,500 | $ | 4.17 | 7.3 years | $ | - | |||||||||||
Granted | 96,000 | 3 | 5.8 years | - | |||||||||||||
Exercised | - | - | - | - | |||||||||||||
Forfeited | - | - | - | - | |||||||||||||
Outstanding at September 30, 2013 | 3,399,500 | $ | 4.14 | 6.6 years | $ | - | |||||||||||
Outstanding and exercisable at September 30, 2013 | 2,526,167 | $ | 4.53 | 6.2 years | $ | - |
Warrants_Tables
Warrants (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Warrants and Rights Note Disclosure [Abstract] | ' | ||||||||||||
Summary of Warrant Option Activity | ' | ||||||||||||
The following table summarizes warrant option activity for the nine months ended September 30, 2013: | |||||||||||||
Number of | Weighted | Weighted | |||||||||||
Warrants | Average | Average | |||||||||||
Exercise | Remaining | ||||||||||||
Price Per | Contractual | ||||||||||||
Share | Term | ||||||||||||
Outstanding and exercisable at December 31, 2012 | 120,000 | $ | 2.5 | 4.7 years | |||||||||
Issued in conjunction with notes payable (Note 2) | 825,000 | 2.5 | 1.5 years | ||||||||||
Issued in private placement of common stock (Note 4) | 317,710 | 2.5 | 4.7 years | ||||||||||
Issued in conjunction with line-of-credit (Note 2) | 15,000 | 3 | 2.0 years | ||||||||||
Outstanding and exercisable at September 30, 2013 | 1,277,710 | $ | 2.5 | 2.5 years |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||||||||
Schedule of Minimum Exploration Work Commitment and Relinquishments by Individual Blocks | ' | ||||||||||
Minimum Work Program – Perlas | |||||||||||
Block Perlas – Exploration Minimum Work Commitment and Relinquishments | |||||||||||
Exploration Period | Duration | Work Commitment | Relinquishment | Irrevocable | |||||||
(6 Years) | (Years) | Guarantee | |||||||||
Sub-Period 1 | 2 | - Environmental Impact Study | 26km2 | $ | 443,100 | ||||||
- Acquisition & interpretation of | |||||||||||
333km of new 2D seismic | |||||||||||
- Acquisition, processing & interpretation of | |||||||||||
333km of new 2D seismic (or equivalent in 3D) | |||||||||||
Sub-Period 2 | 1 | - Acquisition, processing & interpretation of | 53km2 | $ | 1,356,227 | ||||||
Optional | 200km of new 2D seismic (or equivalent in 3D) | ||||||||||
Sub-Period 3 | 1 | - Drilling of one exploration well to the | 80km2 | $ | 10,220,168 | ||||||
Optional | Cretaceous or 3,500m, whichever is shallower | ||||||||||
Sub-Period 4 | 2 | - Drilling of one exploration well to the | All acreage except | $ | 10,397,335 | ||||||
Optional | Cretaceous or 3,500m, whichever is shallower | areas with discoveries | |||||||||
- Geochemical analysis | |||||||||||
Minimum Work Program - Tyra | |||||||||||
Block Tyra – Exploration Minimum Work Commitment and Relinquishments | |||||||||||
Exploration Period | Duration | Work Commitment | Relinquishment | Irrevocable | |||||||
(6 Years) | (Years) | Guarantee | |||||||||
Sub-Period 1 | 1.5 | - Environmental Impact Study | 26km2 | $ | 408,450 | ||||||
- Acquisition & interpretation of | |||||||||||
667km of existing 2D seismic | |||||||||||
- Acquisition of 667km of new 2D seismic (or | |||||||||||
equivalent in 3D) | |||||||||||
Sub-Period 2 | 0.5 | - Processing & interpretation of the 667km 2D | 40km2 | $ | 278,450 | ||||||
Optional | seismic (or equivalent in 3D) acquired in the | ||||||||||
previous sub-period | |||||||||||
Sub-Period 3 | 2 | - Acquisition, processing & interpretation of | 160km2 | $ | 1,818,667 | ||||||
Optional | 250km2 of new 3D seismic | ||||||||||
Sub-Period 4 | 2 | - Drilling of one exploration well to the | All acreage except | $ | 10,418,667 | ||||||
Optional | Cretaceous or 3,500m, whichever is shallower | areas with discoveries | |||||||||
- Geochemical analysis | |||||||||||
Schedule of Contractual and Fiscal Terms | ' | ||||||||||
Contractual and Fiscal Terms | |||||||||||
Training Program | US $50,000 per year, per block | ||||||||||
Area Fee | Yr 1-3 | $0.05/hectare | |||||||||
Yr 4-7 | $0.10/hectare | ||||||||||
Yr 8 fwd | $0.15/hectare | ||||||||||
Royalties | Recovery Factor | Percentage | |||||||||
0 – 1.5 | 5% | ||||||||||
1.5 – 3.0 | 10% | ||||||||||
>3.0 | 15% | ||||||||||
Natural Gas Royalties | Market value at production | 5% | |||||||||
Corporate Tax | Rate no higher than 30% | ||||||||||
Social Contribution | 3% of the net profit (1.5% for each autonomous region) | ||||||||||
Investment Protection | ICSID arbitration | ||||||||||
OPIC insurance |
Sale_of_InfinityTexas_Related_1
Sale of Infinity-Texas, Related Potential Litigation, and Discontinued Operations Reporting (Tables) | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Discontinued Operations and Disposal Groups [Abstract] | ' | ||||
Schedule of Gain on Sale of Discontinued Operation | ' | ||||
The analysis below sets forth the total assets and liabilities of Infinity-Texas as of the date of sale (July 31, 2012) and the determination of the gain recognized on sale of discontinued operation of Infinity-Texas: | |||||
Total liabilities of Infinity-Texas | $ | 5,155,103 | |||
Total assets of Infinity-Texas | 2,992 | ||||
Net liabilities of Infinity-Texas | 5,152,111 | ||||
Potential liabilities related to indemnification of officers by the Company | (780,000 | ) | |||
Gain on sale of discontinued operation, during the three and nine months ended September 30, 2012 | $ | $4,372,111 | |||
Schedule of Operating Expenses | ' | ||||
The operating expenses of Infinity-Texas for the nine months ended September 30, 2012: | |||||
General and administrative expenses | $ | - | |||
Accretion expense | 17,736 | ||||
Interest expense | 44,553 | ||||
Total expenses | $ | 62,289 |
Nature_of_Operations_Basis_of_3
Nature of Operations, Basis of Presentation and Summary of Significant Accounting Policies (Details Narrative) (USD $) | Sep. 30, 2013 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Letters of credit | $851,550 |
Nature_of_Operations_Basis_of_4
Nature of Operations, Basis of Presentation and Summary of Significant Accounting Policies - Estimated Fair Value Assumptions of Derivative Liabilities (Details) (Warrant [Member], USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Contractual term | '2 years |
Exercise price | $2.50 |
Number of warrants in aggregate | 825,000 |
Minimum [Member] | ' |
Volatility - range | 90.13% |
Maximum [Member] | ' |
Volatility - range | 90.71% |
Upon Issuance [Member] | ' |
Contractual term | '2 years |
Exercise price | $2.50 |
Number of warrants in aggregate | 825,000 |
Upon Issuance [Member] | Minimum [Member] | ' |
Volatility - range | 89.75% |
Upon Issuance [Member] | Maximum [Member] | ' |
Volatility - range | 94.50% |
Nature_of_Operations_Basis_of_5
Nature of Operations, Basis of Presentation and Summary of Significant Accounting Policies - Summary of Changes in Fair Value of Derivative Financial Instruments (Details) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Balance | $42,508 |
Fair value of warrant derivative liabilities at issuance | 698,064 |
Unrealized derivative losses included in other expense | 24,410 |
Transition of derivative liability to equity | -764,982 |
Balance | ' |
Debt_Details_Narrative
Debt (Details Narrative) (USD $) | 0 Months Ended | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||
Nov. 04, 2013 | Sep. 23, 2013 | Sep. 23, 2013 | Aug. 28, 2012 | Nov. 30, 2012 | Sep. 30, 2013 | Feb. 28, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Aug. 23, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Maximum [Member] | Notes Payable - Short-Term [Member] | Notes Payable - Short-Term [Member] | Notes Payable To Related Party [Member] | Notes Payable To Related Party [Member] | Interest Bearing Liabilities To Vendors [Member] | Interest Bearing Liabilities To Vendors [Member] | Interest Bearing Liabilities To Vendors [Member] | Interest Bearing Liabilities To Vendors [Member] | Interest Bearing Liabilities To Vendors [Member] | |||||||||||
Line of credit facility maximum borrowing capacity | ' | $50,000 | $50,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of loan agreement, bearing interest rate | ' | 8.00% | 8.00% | ' | 3.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8.00% | ' | 8.00% | ' | 8.00% |
Debt maturity date | ' | ' | 23-Nov-13 | 28-Feb-13 | 14-Mar-14 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of warrants to purchase common stock | 10,000 | 15,000 | 15,000 | 120,000 | ' | ' | ' | ' | ' | ' | 8,250,000 | ' | 825,000 | ' | ' | ' | ' | ' | ' | ' |
Fair value of warrants recorded as debt issuance cost | ' | ' | 32,734 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of warrants common stock purchase price per share | ' | $3.50 | $3.50 | $2.50 | ' | $2.50 | ' | $2.50 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average grant date fair value of warrants | ' | ' | $2.18 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock market price | ' | $3.38 | $3.38 | ' | ' | ' | ' | ' | ' | ' | $2.75 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expected volatility rate | ' | ' | 132.00% | ' | ' | ' | ' | ' | ' | ' | 132.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Discount rate of options | ' | ' | 0.35% | ' | ' | ' | ' | ' | ' | ' | 0.60% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expected term of options | ' | ' | '2 years | ' | ' | ' | ' | ' | ' | ' | '10 years | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization of debt costs | ' | ' | ' | ' | ' | 3,818 | ' | 3,818 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unamortized debt issuance cost | ' | ' | ' | ' | ' | 28,916 | ' | 28,916 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Note payable | ' | ' | ' | ' | 212,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 410,500 | ' | 410,500 | ' | 410,500 |
Debt discount unamortized | ' | ' | ' | 48,654 | 40,435 | ' | ' | ' | ' | 17,735 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stated interest rate of loan | ' | ' | ' | ' | 3.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,071 | 22,304 | ' | ' | ' | ' | ' | ' | ' |
Convertible price per common share | ' | ' | ' | ' | $3 | ' | ' | ' | ' | $3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common shares issued in full satisfaction of promissory note | ' | ' | ' | ' | ' | ' | ' | ' | ' | 72,464 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Promissory note principal and accrued interest, total | ' | ' | ' | ' | 217,392 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from borrowings | ' | ' | ' | 250,000 | ' | ' | ' | ' | ' | ' | ' | ' | 825,000 | ' | ' | ' | ' | ' | ' | ' |
Reduction in warrants exercise price | ' | ' | ' | ' | ' | $0.10 | ' | $0.10 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest expense included in amortized debt discount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 381,327 | 698,064 | 15,686 | 15,686 | ' | ' | ' | ' | ' |
Subsidiary ownership percentage | ' | ' | ' | 49.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt instrument, interest rate | ' | ' | ' | 8.00% | ' | ' | ' | ' | ' | ' | ' | ' | 8.00% | ' | ' | ' | ' | ' | ' | ' |
Amortization of debt discount | ' | ' | ' | ' | ' | ' | 48,654 | 735,942 | 29,280 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Increase in warrant derivative liability | ' | ' | ' | ' | ' | ' | 192,604 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accrued liabilities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 410,500 | ' | 410,500 | ' | 410,500 |
Accrued interest | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8,277 | 8,277 | 24,652 | 24,652 | ' |
Fee paid to law firm | ' | ' | ' | ' | $212,400 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrant expiration date | ' | 23-Sep-15 | 23-Sep-15 | 31-Aug-17 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt_Schedule_of_Debt_Outstand
Debt - Schedule of Debt Outstanding (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Aug. 28, 2012 |
Debt Disclosure [Abstract] | ' | ' | ' |
Line-of-credit with related party | $21,025 | ' | ' |
Note payable to related party, net of discount, short-term | ' | 234,314 | 250,000 |
Notes payable, net of discount, long-term | ' | $176,291 | ' |
Cancellation_of_Debt_and_Relat1
Cancellation of Debt and Related Obligations and Issuance of Securities in Exchange for Debt (Details Narrative) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | |
Apr. 13, 2012 | Feb. 28, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | |
Cancellation of exercisable warrants issued to purchase of common stock | 931,561 | ' | ' | ' |
Cancellation of aggregate amount of debt, accrued interest, fees and derivative liability relative to warrants | ' | $21,883,393 | ' | ' |
Percentage of Series A and Series B Redeemable Convertible Preferred Stock annual dividends convertible to common stock price | ' | 6.00% | ' | ' |
Percentage of annual dividends convertible to common stock, price per share | ' | $6.50 | ' | ' |
Closing price of common stock per share | ' | $7.50 | ' | ' |
Redeemable convertible preferred stock price per share | ' | $100 | ' | ' |
Common stock, value | 2,980,000 | ' | ' | ' |
Redeemable, convertible preferred stock, Series A | 9,743,210 | ' | 12,462,792 | 12,462,792 |
Redeemable, convertible preferred stock, Series B | 1,106,625 | ' | 1,436,005 | 1,436,005 |
Preferred stock, accreted value | ' | ' | 577,737 | 1,662,144 |
Accrued dividends payable | ' | ' | 1,276,141 | 1,276,141 |
Dividends payable increased during the period | ' | ' | $217,524 | $652,572 |
Common Stock [Member] | ' | ' | ' | ' |
Stock issued during period for settlement of debt | 2,000,000 | ' | ' | ' |
Series A Redeemable Convertible Preferred Stock [Member] | ' | ' | ' | ' |
Stock issued during period for settlement of debt | 130,000 | ' | ' | ' |
Series B Redeemable Convertible Preferred Stock [Member] | ' | ' | ' | ' |
Stock issued during period for settlement of debt | 15,016 | ' | ' | ' |
Common_Stock_Details_Narrative
Common Stock (Details Narrative) (USD $) | 0 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Oct. 21, 2013 | Feb. 28, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Equity [Abstract] | ' | ' | ' | ' | ' | ' |
Private placement of common stock and warrants, shares | ' | ' | ' | ' | 556,250 | ' |
Common stock unit conversion description | ' | ' | ' | ' | ' | ' |
a private placement of its common stock in which it sold 556,250 units, each consisting of one share of common stock and one half of a common stock purchase warrant | ||||||
Common stock sales price per share | ' | ' | $1.60 | ' | $1.60 | ' |
Proceeds from sale of stock in private placement | ' | ' | ' | ' | $890,000 | ' |
Converted principal amount | ' | 125,000 | ' | ' | ' | ' |
Issuance of common stock on conversion of note, shares | ' | 79,170 | ' | ' | ' | ' |
Loss on conversion of note | ' | ' | ' | ' | 11,085 | ' |
Warrants exercise price | ' | ' | 2.5 | ' | 2.5 | ' |
Shares issued to a consultant for services rendered | 15,000 | ' | ' | ' | 25,000 | ' |
Shares issued to a consultant for services rendered, value | ' | ' | ' | ' | $39,750 | ' |
Stock_Options_Details_Narrativ
Stock Options (Details Narrative) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | |
Sep. 23, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | |
Number of options granted | ' | ' | 96,000 | ' |
Stock options, exercise price | ' | ' | $3 | ' |
Number of options immediately vested | ' | ' | 36,000 | ' |
Number of options vested | ' | ' | 60,000 | ' |
Number of option vested description | ' | ' | ' | ' |
A total of 36,000 options vested immediately while the remaining 60,000 options vest at a rate of 30,000 for each of the two years thereafter. | ||||
Stock options, weighted average fair value | ' | ' | $1.93 | ' |
Stock options, stock price | $3.38 | ' | ' | ' |
Stock options, expected volatility | 132.00% | ' | ' | ' |
Stock options, discount rate | 0.35% | ' | ' | ' |
Stock options, expected terms | '2 years | ' | ' | ' |
Recognized compensation and legal expense in connection with vesting of options granted | ' | $353,730 | $1,476,383 | ' |
Intrinsic value of all outstanding stock options | ' | ' | ' | ' |
Intrinsic value of all vested options | ' | $1,337,685 | $1,337,685 | ' |
Minimum [Member] | ' | ' | ' | ' |
Options exercise period ranging | ' | ' | '5 years | ' |
Stock options, stock price | ' | $2.14 | $2.14 | ' |
Stock options, expected volatility | ' | ' | 131.00% | ' |
Stock options, discount rate | ' | ' | 0.13% | ' |
Stock options, expected terms | ' | ' | '2 years 6 months | ' |
Maximum [Member] | ' | ' | ' | ' |
Options exercise period ranging | ' | ' | '10 years | ' |
Stock options, stock price | ' | $2.75 | $2.75 | ' |
Stock options, expected volatility | ' | ' | 132.00% | ' |
Stock options, discount rate | ' | ' | 0.60% | ' |
Stock options, expected terms | ' | ' | '10 years | ' |
Stock_Options_Summary_of_Stock
Stock Options - Summary of Stock Option Activity (Details) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' |
Number of Options Outstanding, Beginning | 3,303,500 |
Granted | 96,000 |
Exercised | ' |
Forfeited | ' |
Number of Options Outstanding, Ending | 3,399,500 |
Number of Options Outstanding and exercisable | 2,526,167 |
Weighted Average Exercise Price Per Share Outstanding, Beginning | $4.17 |
Granted | $3 |
Exercised | ' |
Forfeited | ' |
Weighted Average Exercise Price Per Share Outstanding, Ending | $4.14 |
Weighted Average Exercise Price Per Share Outstanding and exercisable | $4.53 |
Weighted Average Remaining Contractual Term Outstanding, Beginning | '7 years 3 months 18 days |
Granted | '5 years 9 months 18 days |
Weighted Average Remaining Contractual Term Outstanding, Ending | '6 years 7 months 6 days |
Outstanding and exercisable, Weighted Average Remaining Contractual Term | '6 years 2 months 12 days |
Aggregate Intrinsic Value Outstanding, Beginning | ' |
Granted | ' |
Exercised | ' |
Forfeited | ' |
Aggregate Intrinsic Value, Outstanding, Ending | ' |
Outstanding and exercisable, Aggregate Intrinsic Value | ' |
Warrants_Details_Narrative
Warrants (Details Narrative) (Warrant [Member], USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Warrant [Member] | ' |
Intrinsic value of outstanding common stock purchase warrants | $1,048,049 |
Intrinsic value of all vested options | $1,048,049 |
Warrants_Summary_of_Warrant_Op
Warrants - Summary of Warrant Option Activity (Details) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Warrants and Rights Note Disclosure [Abstract] | ' |
Outstanding and exercisable, Number of Warrants, Beginning balance | 120,000 |
Number of Warrants Issued in conjunction with notes payable | 825,000 |
Number of Warrants Issued in private placement of common stock | 317,710 |
Number of Warrants Issued in conjunction with line-of-credit | 15,000 |
Outstanding and exercisable, Number of Warrants, Ending balance | 1,277,710 |
Outstanding and exercisable, Weighted Average Exercise Price Per Share | $2.50 |
Weighted Average Exercise Price Per Share Issued in conjunction with notes payable | $2.50 |
Weighted Average Exercise Price Per Share Issued in private placement of common stock | $2.50 |
Outstanding and exercisable, Weighted Average Exercise Price Per Share | $2.50 |
Outstanding and exercisable, Weighted Average Remaining Contractual Term | '4 years 8 months 12 days |
Weighted Average Remaining Contractual Term Issued in conjunction with notes payable | '1 year 6 months |
Weighted Average Remaining Contractual Term Issued in private placement of common stock | '4 years 8 months 12 days |
Weighted Average Remaining Contractual Term Issued in conjunction with line-of-credit | '2 years |
Outstanding and exercisable, Weighted Average Remaining Contractual Term | '2 years 6 months |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details Narrative) (USD $) | 0 Months Ended | 1 Months Ended | 9 Months Ended | |||||
Sep. 23, 2013 | Nov. 08, 2010 | Sep. 08, 2009 | Jun. 06, 2009 | Mar. 23, 2009 | Oct. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2009 | |
Letters of credit | ' | ' | ' | ' | ' | ' | $851,550 | ' |
Letters of credit expiration date | 23-Nov-13 | ' | ' | ' | ' | ' | ' | ' |
Minimum cash requirements after approval | ' | ' | ' | ' | ' | ' | 1,968,000 | ' |
Minimum cash requirements after approval relating to seismic | ' | ' | ' | ' | ' | ' | 1,635,000 | ' |
Minimum cash requirements after approval relating to training and area fees | ' | ' | ' | ' | ' | ' | 333,000 | ' |
Minimum working capital requirements | ' | ' | ' | ' | ' | ' | 600,000 | ' |
Secured subordinated promissory notes | ' | ' | ' | ' | 1,275,000 | ' | ' | ' |
Percentage of revenue sharing Interest | ' | ' | ' | ' | 1.00% | ' | ' | ' |
Amount funded by Off-Shore | ' | ' | ' | ' | ' | ' | ' | 1,275,000 |
Percentage of payment of revenue to Off-Shore | ' | ' | ' | ' | ' | ' | 1.00% | ' |
Percentage of payment of revenue to officers and directors | ' | ' | ' | 1.00% | ' | ' | ' | ' |
Percentage of payment of revenue to Jeff Roberts | ' | ' | 1.00% | ' | ' | ' | ' | ' |
Percentage of payment of revenue to Thompson Knight Global Energy Services | ' | ' | 1.00% | ' | ' | ' | ' | ' |
Percentage of Upfront fee needs to pay to parent on basis of $20 million | ' | ' | ' | ' | ' | ' | 5.00% | ' |
Percentage of upfront fee need to pay to parent on basis of excess revenue $20 million | ' | ' | ' | ' | ' | ' | 10.00% | ' |
Percentage of success fee needs to pay to affiliates for remaining cash investments | ' | ' | ' | ' | ' | ' | 2.00% | ' |
Revenue sharing agreement description | ' | ' | ' | ' | ' | ' | ' | ' |
the Company agreed to compensate Thompson Knight a success fee of 5% of the upfront cash fee paid to Infinity by a third party earning an interest in the Nicaragua asset up to $20 million and 10% of any amount exceeding the $20 million. A 2% success fee would be paid to Thompson Knight of the remaining cash investment in subsequent years. | ||||||||
Reclamation costs | ' | ' | ' | ' | ' | 30,000 | ' | ' |
Payment for legal settlements | ' | ' | ' | ' | ' | 45,103 | ' | ' |
Total estimated liability relating to all operating wells | ' | ' | ' | ' | ' | ' | 780,000 | ' |
Estimated liability relating each operating well | ' | ' | ' | ' | ' | ' | 30,000 | ' |
Default judgment granted against the company | ' | 304,921 | ' | ' | ' | ' | ' | ' |
Minimum [Member] | ' | ' | ' | ' | ' | ' | ' | ' |
Estimated actual cost of seismic for acreage | ' | ' | ' | ' | ' | ' | 4,000,000 | ' |
Maximum [Member] | ' | ' | ' | ' | ' | ' | ' | ' |
Estimated actual cost of seismic for acreage | ' | ' | ' | ' | ' | ' | 8,000,000 | ' |
Perlas [Member] | ' | ' | ' | ' | ' | ' | ' | ' |
Letters of credit | ' | ' | ' | ' | ' | ' | 443,100 | ' |
Letters of credit expiration date | ' | ' | ' | ' | ' | ' | 31-Mar-14 | ' |
Tyra [Member] | ' | ' | ' | ' | ' | ' | ' | ' |
Letters of credit | ' | ' | ' | ' | ' | ' | $408,450 | ' |
Letters of credit expiration date | ' | ' | ' | ' | ' | ' | 30-Sep-14 | ' |
Commitments_and_Contingencies_2
Commitments and Contingencies - Schedule of Minimum Exploration Work Commitment and Relinquishments by Individual Blocks (Details) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Sub-Period1 [Member] | Block Perlas [Member] | ' |
Duration | '2 years |
Minimum Work Commitment | ' |
- Environmental Impact Study | |
- Acquisition & interpretation of 333 km of new 2D seismic | |
- Acquisition, processing & interpretation of 333 km of new 2D seismic (or equivalent in 3D) | |
Minimum Relinquishments | ' |
26 km2 | |
Irrevocable Guarantee | $443,100 |
Sub-Period1 [Member] | Block Tyra [Member] | ' |
Duration | '1 year 6 months |
Minimum Work Commitment | ' |
- Environmental Impact Study | |
- Acquisition & interpretation of 667km of existing 2D seismic | |
- Acquisition of 667km of new 2D seismic (or equivalent in 3D) | |
Minimum Relinquishments | ' |
26 km2 | |
Irrevocable Guarantee | 408,450 |
Sub-Period 2 Optional [Member] | Block Perlas [Member] | ' |
Duration | '1 year |
Minimum Work Commitment | ' |
- Acquisition, processing & interpretation of 200km of new 2D seismic (or equivalent in 3D) | |
Minimum Relinquishments | ' |
53 km2 | |
Irrevocable Guarantee | 1,356,227 |
Sub-Period 2 Optional [Member] | Block Tyra [Member] | ' |
Duration | '6 months |
Minimum Work Commitment | ' |
- Processing & interpretation of the 667km 2D seismic (or equivalent in 3D) acquired in the previous sub-period | |
Minimum Relinquishments | ' |
40 km2 | |
Irrevocable Guarantee | 278,450 |
Sub-Period 3 Optional [Member] | Block Perlas [Member] | ' |
Duration | '1 year |
Minimum Work Commitment | ' |
- Drilling of one exploration well to the Cretaceous or 3,500 m, whichever is shallower | |
Minimum Relinquishments | ' |
80 km2 | |
Irrevocable Guarantee | 10,220,168 |
Sub-Period 3 Optional [Member] | Block Tyra [Member] | ' |
Duration | '2 years |
Minimum Work Commitment | ' |
- Acquisition, processing & interpretation of 250km2 of new 3D seismic | |
Minimum Relinquishments | ' |
160 km2 | |
Irrevocable Guarantee | 1,818,667 |
Sub-Period 4 Optional [Member] | Block Perlas [Member] | ' |
Duration | '2 years |
Minimum Work Commitment | ' |
- Drilling of one exploration well to the Cretaceous or 3,500m, whichever is shallower | |
- Geochemical analysis | |
Minimum Relinquishments | ' |
All acreage except areas with discoveries | |
Irrevocable Guarantee | 10,397,335 |
Sub-Period 4 Optional [Member] | Block Tyra [Member] | ' |
Duration | '2 years |
Minimum Work Commitment | ' |
- Drilling of one exploration well to the Cretaceous or 3,500m, whichever is shallower | |
- Geochemical analysis | |
Minimum Relinquishments | ' |
All acreage except areas with discoveries | |
Irrevocable Guarantee | $10,418,667 |
Commitments_and_Contingencies_3
Commitments and Contingencies - Schedule of Contractual and Fiscal Terms (Details) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Amount of contract per year, per block | $50,000 |
Natural Gas Royalties | ' |
Market value at production | |
Percentage of Natural Gas Royalties | 5.00% |
Corporate Tax | 30.00% |
Percentage of social contribution of net profit | 3.00% |
Percentage of social contribution of net profit for each autonomous region | 1.50% |
Investment Protection | ' |
ICSID arbitration | |
OPIC insurance | |
Factor One [Member] | ' |
Royalties recovery factor, minimum | 0 |
Royalties recovery factor, maximum | 1.5 |
Percentage of royalties | 50.00% |
Factor Two [Member] | ' |
Royalties recovery factor, minimum | 1.5 |
Royalties recovery factor, maximum | 3 |
Percentage of royalties | 10.00% |
Factor Three [Member] | ' |
Royalties recovery factor, maximum | 3 |
Percentage of royalties | 15.00% |
Period One [Member] | ' |
Period of area fee per hectare, minimum | '1 year |
Period of area fee per hectare, maximum | '3 years |
Area fee per hectare | $0.05 |
Period Two [Member] | ' |
Period of area fee per hectare, minimum | '4 years |
Period of area fee per hectare, maximum | '7 years |
Area fee per hectare | $0.10 |
Period Three [Member] | ' |
Period of area fee per hectare, maximum | '8 years |
Area fee per hectare | $0.15 |
Income_Taxes_Details_Narrative
Income Taxes (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2006 | |
Income Tax Disclosure [Abstract] | ' | ' | ' | ' | ' | ' |
Accrued liabilities | $2,657,560 | ' | $2,657,560 | ' | $3,361,583 | $653,000 |
Income tax benefits | -653,000 | ' | -653,000 | ' | ' | ' |
Net operating loss carry-forward | $82,285,000 | ' | $82,285,000 | ' | ' | ' |
Net operating loss carry-forward balance expires | ' | ' | ' | ' | ' | ' |
2025 through 2028. |
Sale_of_InfinityTexas_Related_2
Sale of Infinity-Texas, Related Potential Litigation, and Discontinued Operations Reporting (Details Narrative) (USD $) | 0 Months Ended | |
Jul. 31, 2012 | Sep. 30, 2013 | |
Stock price | ' | $1.60 |
Infinity Texas [Member] | ' | ' |
Sale of stock, percentage | 100.00% | ' |
Percentage of stock purchase | 100.00% | ' |
Stock price | $1 | ' |
Net liabilities of Infinity-Texas | $5,152,111 | $5,152,111 |
Sale_of_InfinityTexas_Related_3
Sale of Infinity-Texas, Related Potential Litigation, and Discontinued Operations Reporting - Schedule of Gain on Sale of Discontinued Operation (Details) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Jul. 31, 2012 | |
Infinity Texas [Member] | Infinity Texas [Member] | Infinity Texas [Member] | |||||
Total liabilities of Infinity-Texas | ' | ' | ' | ' | $5,155,103 | $5,155,103 | ' |
Total assets of Infinity-Texas | ' | ' | ' | ' | 2,992 | 2,992 | ' |
Net liabilities of Infinity-Texas | ' | ' | ' | ' | 5,152,111 | 5,152,111 | 5,152,111 |
Potential liabilities related to indemnification of officers by the Company | ' | ' | ' | ' | -780,000 | -780,000 | ' |
Gain on sale of discontinued operation, during the three and nine months ended September 30, 2012 | ' | $4,372,111 | ' | $4,372,111 | $4,372,111 | $4,372,111 | ' |
Sale_of_InfinityTexas_Related_4
Sale of Infinity-Texas, Related Potential Litigation, and Discontinued Operations Reporting - Schedule of Operating Expenses (Details) (Infinity Texas [Member], USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Infinity Texas [Member] | ' |
General and administrative expenses | ' |
Accretion expense | 17,736 |
Interest expense | 44,553 |
Total expenses | $62,289 |
Related_Party_Transactions_Det
Related Party Transactions (Details Narrative) (USD $) | 0 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||
Nov. 04, 2013 | Sep. 23, 2013 | Sep. 23, 2013 | Aug. 28, 2012 | Nov. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Apr. 13, 2012 | |
Billing for CFO staff for consideration of office services | ' | ' | ' | ' | ' | $0 | $59,745 | $0 | $203,328 | ' | ' |
Aggregate amount of off-shore subordinated loan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,275,000 |
Accrued compensation to related parties | ' | ' | ' | ' | ' | 770,208 | ' | 770,208 | ' | 705,208 | ' |
Proceeds from borrowings | ' | ' | ' | 250,000 | ' | ' | ' | ' | ' | ' | ' |
Percentage of ownership held by board member | ' | ' | ' | 49.00% | ' | ' | ' | ' | ' | ' | ' |
Debt instrument, interest rate | ' | ' | ' | 8.00% | ' | ' | ' | ' | ' | ' | ' |
Notes maturity date | ' | ' | 23-Nov-13 | 28-Feb-13 | 14-Mar-14 | ' | ' | ' | ' | ' | ' |
Issuance of warrants to purchase common stock | 10,000 | 15,000 | 15,000 | 120,000 | ' | ' | ' | ' | ' | ' | ' |
Issuance of warrants common stock purchase price per share | ' | $3.50 | $3.50 | $2.50 | ' | $2.50 | ' | $2.50 | ' | ' | ' |
Company borrowed amount by issued a short-term note payable | ' | ' | ' | 250,000 | ' | ' | ' | ' | ' | 234,314 | ' |
Warrant expiration date | ' | 23-Sep-15 | 23-Sep-15 | 31-Aug-17 | ' | ' | ' | ' | ' | ' | ' |
Line of credit facility, borrowing capacity | ' | 50,000 | 50,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Line of credit facility, interest rate | ' | 8.00% | 8.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Line of credit facility, expiration date | ' | 23-Nov-13 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of warrants | ' | 32,734 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization of the debt issuance cost | ' | ' | ' | ' | ' | 3,818 | ' | 3,818 | ' | ' | ' |
Unamortized of the debt issuance cost | ' | ' | ' | ' | ' | 28,916 | ' | 28,916 | ' | ' | ' |
CFO's Firm [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Due to related party for consideration of services | ' | ' | ' | ' | ' | $767,407 | ' | $767,407 | ' | $767,407 | ' |
Subsequent_Event_Details_Narra
Subsequent Event (Details Narrative) (USD $) | 0 Months Ended | 9 Months Ended | |||||
Nov. 04, 2013 | Oct. 21, 2013 | Oct. 10, 2013 | Sep. 23, 2013 | Sep. 23, 2013 | Aug. 28, 2012 | Sep. 30, 2013 | |
Subsequent Events [Abstract] | ' | ' | ' | ' | ' | ' | ' |
Number of stock issued by the company for warrants exercise | ' | ' | 31,521 | ' | ' | ' | ' |
Number of warrants exercise to purchase common stock | ' | ' | 125,000 | ' | ' | ' | ' |
Monthly payment of consultant agreement | ' | $7,000 | ' | ' | ' | ' | ' |
Number of stock issued during period for consultant service | ' | 15,000 | ' | ' | ' | ' | 25,000 |
Issuance of warrants to purchase common stock | 10,000 | ' | ' | 15,000 | 15,000 | 120,000 | ' |
Increase in facility | $75,000 | ' | ' | ' | ' | ' | ' |