Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | Jun. 22, 2020 | |
Schedule of Income Taxes (Tables): | ||
Entity Registrant Name | INFINITY ENERGY RESOURCES, INC | |
Entity Central Index Key | 0000822746 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 12,310,733 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2020 |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 1,293 | $ 1,785 |
Total current assets | 1,293 | 1,785 |
Total assets | 1,293 | 1,785 |
Current liabilities: | ||
Accounts payable | 6,130,443 | 6,091,453 |
Accrued liabilities (including $788,520 due to related party at March 31, 2020 and December 31, 2019) | 3,777,243 | 3,777,580 |
Accrued interest | 550,706 | 528,684 |
Asset retirement obligations | 1,716,003 | 1,716,003 |
Convertible notes payable-short term | 1,104,125 | 1,104,125 |
Total current liabilities | 13,278,520 | 13,217,845 |
Derivative liabilities | 406 | 1,116 |
Total liabilities | 13,278,926 | 13,218,961 |
Commitments and contingencies (Note 8) | ||
Stockholders' deficit: | ||
Preferred stock; par value $.0001 per share, 10,000,000 shares authorized; no shares issued or outstanding as of March 31, 2020 and December 31, 2019 | ||
Common stock, par value $.0001 per share, authorized 75,000,000 shares, issued and outstanding 12,310,733 shares at March 31, 2020 and December 31, 2019 | 1,231 | 1,231 |
Additional paid-in capital | 109,608,253 | 109,583,945 |
Accumulated deficit | (122,887,117) | (122,802,352) |
Total stockholders' deficit | (13,277,633) | (13,217,176) |
Total liabilities and stockholders' deficit | $ 1,293 | $ 1,785 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Due to related party | $ 788,520 | $ 788,520 |
Preferred stock, par value | $ .0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ .0001 | $ 0.0001 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 12,310,733 | 12,310,733 |
Common stock, shares outstanding | 12,310,733 | 12,310,733 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Operating expenses: | ||
General and administrative expenses | $ 63,453 | $ 74,533 |
Total operating expenses | 63,453 | 74,533 |
Operating loss | (63,453) | (74,533) |
Other income (expense): | ||
Interest expense | (22,022) | (28,638) |
Change in derivative fair value | 710 | (68,447) |
Total other income (expense) | (21,312) | (97,085) |
Loss before income taxes | (84,765) | (171,618) |
Income tax benefit (expense) | ||
Net loss | $ (84,765) | $ (171,618) |
Net loss per share - basic and diluted | $ (0.01) | $ (0.02) |
Weighted average shares outstanding - basic and diluted | 12,310,733 | 7,712,569 |
Condensed Statement of Stockhol
Condensed Statement of Stockholders' Deficit (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2018 | $ 771 | $ 109,080,273 | $ (124,647,127) | $ (15,566,083) |
Balance, shares at Dec. 31, 2018 | 7,712,569 | |||
Net loss | (171,618) | (171,618) | ||
Balance at Mar. 31, 2019 | $ 771 | 109,080,273 | (124,818,745) | (15,737,701) |
Balance, shares at Mar. 31, 2019 | 7,712,569 | |||
Balance at Dec. 31, 2019 | $ 1,231 | 109,583,945 | (122,802,352) | (13,217,176) |
Balance, shares at Dec. 31, 2019 | 12,310,733 | |||
Stock-based compensation | 24,308 | 24,308 | ||
Net loss | (84,765) | (84,765) | ||
Balance at Mar. 31, 2020 | $ 1,231 | $ 109,608,253 | $ (122,887,117) | $ (13,277,633) |
Balance, shares at Mar. 31, 2020 | 12,310,733 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities: | ||
Net loss | $ (84,765) | $ (171,618) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Change in fair value of derivative liability | (710) | 68,447 |
Stock-based compensation | 24,308 | 0 |
Change in operations assets and liabilities: | ||
Increase in accounts payable | 38,990 | 35,479 |
Increase in accrued liabilities | (337) | 38,604 |
Increase in accrued interest | 22,022 | 28,639 |
Net cash used in operating activities | (492) | (449) |
Cash flows from investing activities | ||
Net cash provided by (used in) investing activities | ||
Cash flows from financing activities: | ||
Net cash provided by (used in) financing activities | ||
Net decrease in cash and cash equivalents | (492) | (449) |
Cash and cash equivalents: | ||
Beginning | 1,785 | 1,367 |
Ending | 1,293 | 918 |
Supplemental cash flow information: | ||
Cash paid for interest | ||
Cash paid for taxes |
Nature of Operations, Basis of
Nature of Operations, Basis of Presentation and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
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. (collectively, “we,” “ours,” “us,” “Infinity” or the “Company”) has prepared the accompanying condensed financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting. These 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 condensed balance sheets, statements of operations, statements of stockholders’ deficit 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 2020 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 condensed financial statements should be read in conjunction with the audited 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 Since 2009 we had planned to pursue the exploration of potential oil and gas resources in the United States and in the Perlas and Tyra concession blocks offshore Nicaragua in the Caribbean Sea (the “Nicaraguan Concessions” or “Concessions”), which contain a total of approximately 1.4 million acres. We sold our wholly-owned subsidiary Infinity Oil and Gas of Texas, Inc. in 2012 and its wholly-owned subsidiary, Infinity Oil and Gas of Wyoming, Inc., was administratively dissolved in 2009. We also began assessing various opportunities and strategic alternatives involving the acquisition, exploration and development of natural gas and oil properties in the United States, including the possibility of acquiring businesses or assets that provide support services for the production of oil and gas in the United States. As a result, on July 31, 2019 we acquired an option (the “Option”) from Core Energy, LLC, a closely held company (“Core”), to purchase the production and mineral rights/leasehold for oil & gas properties, subject to overriding royalties to third parties, in the Central Kansas Uplift geological formation covering over 11,000 contiguous acres (the “Properties”). We paid a nonrefundable deposit of $50,000 to bind the purchase option, which provided us the right to acquire the Properties for $2.5 million prior to December 31, 2019. The Company was not able to exercise the option prior to December 31, 2019 and the parties are negotiating for an extension of such Option and lowering of the purchase price of the Properties. There can be no assurance that the parties will negotiate an extension and acceptable reduced price, particularly in light of recent events including the coronavirus pandemic and its impact on the oil and gas industry. If the parties agree to extend, reprice or otherwise complete the acquisition, the purchase will include the existing production equipment, infrastructure and ownership of 11 square miles of existing 3-D seismic data on the acreage. The Properties include a horizontal producing well, horizontal saltwater injection well, conventional saltwater disposal well and two conventional vertical producing wells, which currently produce from the Reagan Sand zone with an approximate depth of 3,600 feet. We intend to complete the acquisition of the Properties prior to the end of 2020, subject to successful renegotiations and obtaining adequate financing. The Option includes a provision permitting Core to exercise a buy-out clause and sell the Properties to a third-party purchaser prior to our exercise of the Option. If such a sale occurs, we would be entitled to 10% of the proceeds of the sale on the closing date. In such event, Core will for a period of nine months following the buy-out find a project of like kind and provide us a first right of refusal to acquire such asset. We must obtain new sources of debt and/or equity capital to fund the substantial needs enumerated above, as well as satisfying our existing debt obligations. We are attempting to obtain extensions of the maturity date for our outstanding debt; however, there can be no assurance that we will be able to do so or what the final terms will be if the lenders agree to such extensions. Further, we can provide no assurance that we will be able to obtain sufficient new debt/equity capital to exercise the Option. Nicaragua We began pursuing an oil and gas exploration opportunity offshore Nicaragua in the Caribbean Sea in 1999. Since such time, we built relationships with the Instituto Nicaraguense de Energia (“INE”) and undertook the geological and geophysical research that helped us to become one of only six companies qualified to bid on offshore blocks in the first international bidding round held by INE in January 2003. On March 5, 2009, we signed the contracts granting us the Perlas and Tyra concession blocks offshore Nicaragua (the “Nicaraguan Concessions” or “Concessions”). Since our acquisition of the Nicaraguan Concessions, we have conducted an environmental study and developed geological information from the reprocessing and additional evaluation of existing 2-D seismic data acquired over our Perlas and Tyra concession blocks. In April 2013, the Nicaraguan government formally approved our Environmental Impact Assessment, at which time we commenced significant activity under the initial work plan involving the acquisition of new seismic data on the two Nicaraguan Concessions. We undertook seismic shoots during late 2013 that resulted in the acquisition of new 2-D and 3-D seismic data and have reviewed it to select initial drilling sites for exploratory wells. We relied on raising debt and equity capital to fund our ongoing maintenance/expenditure obligations under the Nicaraguan Concession, our day-to-day operations and corporate overhead because we have generated no operating revenues or cash flows in recent years. The $1.0 million December 2013 Note (See Note 3) matured in April 2016 and is currently in default and three other notes payable with principal balances of $104,125 as of March 31, 2020 are now either due on demand or currently in default. In 2020 we abandoned the Concessions. Going Concern The Company must raise substantial amounts of debt and equity capital from other sources in the immediate future in order to fund the (i) acquisition of the Properties under the Option; (ii) normal day-to-day operations and corporate overhead; and (iii) outstanding debt and other financial obligations as they become due, as described below. These are substantial operational and financial issues that must be successfully addressed during 2020. The Company is seeking new sources of debt and equity capital to fund the needs enumerated above. The Company is attempting to obtain extensions of the maturity dates for its debt or compromises of the debt. In addition, the Company will seek offers from industry operators and other third parties for interests in the Properties in exchange for cash and a carried interest in exploration and development operations or other joint venture arrangement. The Company has restructured certain obligations that were in default during 2019; however, there can be no assurance that it will be able to obtain such funding, extensions or additional restructurings or on what terms. Due to the uncertainties related to the foregoing matters, there exists substantial doubt about the Company’s ability to continue as a going concern within one year after the date the financials are issued. 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. Management Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates with regard to the financial statements include the estimated carrying value of unproved properties, the estimated fair value of derivative liabilities, stock-based awards and overriding royalty interests, and the realization of deferred tax assets. Derivative Instruments The Company accounts for derivative instruments or hedging activities under the provisions of ASC 815 Derivatives and Hedging The purpose of hedging is to provide a measure of stability to the Company’s cash flows in an environment of volatile oil and gas prices and to manage the exposure to commodity price risk. As of March 31, 2020 and December 31, 2019 and during the periods then ended, the Company had no oil and natural gas derivative arrangements outstanding. As a result of certain terms, conditions and features included in certain common stock purchase warrants issued by the Company (Notes 2, 3, 5 and 6), those warrants are required to be accounted for as derivatives at estimated fair value, with changes in fair value recognized in operations. Fair Value of Financial Instruments The carrying values of the Company’s accounts payable, accrued liabilities and short-term notes represent the estimated fair value due to the short-term nature of the accounts. In accordance with ASC Topic 820 — Fair Value Measurements and Disclosures ASC 820 utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels: ● Level 1 — Quoted prices in active markets for identical assets and liabilities. ● Level 2 — Other significant observable inputs (including quoted prices in active markets for similar assets or liabilities). ● Level 3 — Significant unobservable inputs (including the Company’s own assumptions in determining the fair value. The estimated fair value of the Company’s Note and various derivative liabilities, which are related to detachable warrants issued in connection with various 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 of the downward adjustment of the exercise price and the upward adjustment to the number of warrants as provided by the warrant agreement terms and non-performance risk factors, among other items. The fair values for the warrant derivatives as of March 31, 2020 and December 31, 2019 were classified under the fair value hierarchy as Level 3. The following table represents the Company’s hierarchy for its financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2020 and December 31, 2019: March 31, 2020 Level 1 Level 2 Level 3 Total Liabilities: Derivative liabilities $ — $ — $ 406 $ 406 $ — $ — $ 406 $ 406 December 31, 2019 Level 1 Level 2 Level 3 Total Liabilities: Derivative liabilities $ — $ — $ 1,116 $ 1,116 $ — $ — $ 1,116 $ 1,116 There were no changes in valuation techniques or reclassifications of fair value measurements between Levels 1, 2 or 3 during the periods ended March 31, 2020 and December 31, 2019. |
Secured Convertible Note Payabl
Secured Convertible Note Payable | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Secured Convertible Note Payable | Note 2 – Secured Convertible Note Payable Secured Convertible Note (the “Note) payable consists of the following at March 31, 2020 and December 31, 2019: March 31, 2020 December 31, 2019 Secured convertible note payable, at fair value $ — $ — Less: Current maturities — — Secured convertible note payable, long-term $ — $ — Following is an analysis of the activity in the Note during the three months ended March 31, 2019: Amount Balance at December 31, 2018 $ 2,197,231 Funding under the Investor Note during the period — Principal repaid during the period by issuance of common stock — Change in fair value of secured convertible note during the period — Exchange of secured convertible note payable for common stock — Balance at March 31, 2019 $ 2,197,231 Following is an analysis of the activity in the Note during the three months ended March 31, 2020: Amount Balance at December 31, 2019 $ — Funding under the Investor Note during the period — Principal repaid during the period by issuance of common stock — Change in fair value of secured convertible note during the period — Exchange of secured convertible note payable for common stock — Balance at March 31, 2020 $ — On May 7, 2015, the Company completed the May 2015 Private Placement of a $12.0 million principal amount secured convertible note (the “Note”) and Warrant to purchase 1,800,000 shares of the Company’s common stock, $0.0001 par value. The placement agent for the Company in the transaction received a fee of 6% of cash proceeds, or $600,000, if and when the Company receives the full cash proceeds. It received $27,000 of such amount at the closing. In addition, the placement agent was granted a warrant to purchase 240,000 shares of common stock at $5.00 per share, which warrant is immediately exercisable. The Note and Warrant were issued pursuant to a Securities Purchase Agreement, dated May 7, 2015, by and between the Company and an institutional investor (the “Investor”). The May 2015 Private Placement was made pursuant to an exemption from registration under the Securities Act of 1933, as amended (the “33 Act”). At the closing, the Investor acquired the secured convertible note by paying $450,000 in cash and issuing a secured promissory note, secured by cash, with an aggregate initial principal amount of $9,550,000 (the “Investor Note”). On May 4, 2017, the Investor notified the Company that it elected to effect an Investor Optional Offset under Section 7(a) of the Investor Note of the full $9,490,000 principal amount outstanding under the Investor Note against $9,490,000 in aggregate principal outstanding under the Convertible Note. It did so by surrendering and concurrently cancelling $9,490,000 in aggregate principal of the Convertible Note in exchange for the satisfaction in full and cancellation of the Investor Note. The Convertible Note had an aggregate outstanding principal balance of $11,687,231 as of the date of the exchange. The Investor requested the Company to deliver a new convertible note (the “Replacement Note”) with respect to the remaining principal balance of $2,197,231 to replace the Convertible Note. The aggregate outstanding principal balance of $11,687,231 of the Convertible Note included an approximate $2.0 million original issue discount; however, the Investor funded only $510,000 under the Investor Note. The Company had recorded the fair value of the Replacement Note assuming that the remaining par value was $2,197,231 as asserted by the Investor. The Replacement Note provided for a maturity date of May 7, 2018, a conversion price of $0.50 per share and was due in monthly installment payments through May 2018 either in cash or stock, among other terms. The Company did not repay the Replacement Note at its maturity and it was therefore in technical default. The Replacement Note was to be secured to the same extent as the Convertible Note. The Company and the Investor have negotiated a resolution of these outstanding matters regarding the default status and the issuance of the Replacement Note under the terms of the financing. On May 23, 2019, the Company and the Investor agreed to an omnibus resolution to these outstanding matters and entered into the Exchange Agreement and Side-Letter Agreement as described below: Exchange Agreement As a result of the exchange transactions described above, the Investor no longer owns any of the Original Securities, including any rights thereunder, and the Company cancelled the certificate(s) and other physical documentation evidencing the Investor’s ownership of the Original Securities. Side-letter Agreement ● A-B= aggregate number of Right Shares ● A = 9.99% of shares of Common Stock outstanding on November 23, 2019 (calculated based on the Number of Fully-Diluted Shares Outstanding (as defined below)) ● B = The shares of Common Stock Issued to the Investor contemporaneously with the Exchange Agreement For the purposes of the Side-Letter Agreement, “Number of Fully-Diluted Shares Outstanding” means, as of any time of determination, the sum of (i) the aggregate number of issued and outstanding shares of Common Stock as of such time of determination; (ii) the aggregate maximum number of shares of Common Stock issuable on an as-converted and as-exchanged basis, as applicable (excluding any exercise of warrants to purchase Common Stock), pursuant to all capital stock and all other securities of the Company or any of its subsidiaries (excluding any warrants to purchase Common Stock and all Rights issued pursuant to the Exchange Agreement) outstanding as of such time of determination (or issuable pursuant to agreements in effect as of such time) that are at any time and under any circumstances (after issuance thereof, if applicable), directly or indirectly, convertible into or exchangeable for, or which otherwise entitles the holder thereof to acquire, Common Stock (assuming, for such purpose, that each such security is convertible or exchangeable, as applicable, at the lowest price per share for which one share of Common Stock is at any time, directly or indirectly, issuable upon the conversion or exchange, as applicable, of any such security and without regards to any limitations on conversion or exchange applicable thereto); and (iii) without duplication with clause (ii) above, the aggregate maximum number of shares of Common Stock issuable pursuant to any agreement (excluding any warrants to purchase Common Stock and all Rights issued pursuant to the Exchange Agreement) of any person with the Company or any of its subsidiaries in effect as of such time of determination (assuming, for such purpose, that the shares of Common Stock, directly or indirectly, issued pursuant to such agreement is issued at the lowest price per share for which one share of Common Stock is at any time, directly or indirectly, issuable pursuant to such agreement). Notwithstanding the foregoing, if any warrants to purchase Common Stock are outstanding (or issuable upon conversion or exchange of securities outstanding) as of such six-month anniversary (each, an “Outstanding Warrant”), on such six-month anniversary, the Company shall issue the Investor an additional Right to acquire a warrant (the “New Warrant”) exercisable for up to 9.99% of the shares of Common Stock issuable upon exercise of all Outstanding Warrants as of such six-month anniversary (the “New Warrant Shares”). The New Warrant Shares shall be of like tenor to the Outstanding Warrants. Pursuant to the Side-Letter Agreement, the Company also agreed that from the execution date of the Exchange Agreement until twelve (12) months from such date, the Company will not raise capital at a price that is below $0.10 per share of Common Stock (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations and similar events) without the Investor’s consent. On May 30, 2019, the Company and the Investor entered into Amendment No. 1 to Exchange Agreement (the “Amendment”). Following execution of the Exchange Agreement on May 23, 2019, the Company and the Investor became aware of an inadvertent error regarding the number of shares of Common Stock to be issued to the Investor pursuant to the Exchange Agreement. The Company and the Investor agreed to amend the Exchange Agreement so it reflects the correct number of shares of Common Stock to be issued and to ensure that the Investor does not beneficially own in excess of 9.99% of the shares of Common Stock outstanding immediately following the effective date of the Exchange Agreement. Pursuant to the Amendment, the Company and the Investor agreed that the number of shares of Common Stock to be issued to the Investor would be an aggregate of 605,816 shares, instead of the 770,485 shares stated in the Exchange Agreement. Consistent with the developments above, effective November 23, 2019 the parties finalized the reconciliation pursuant to the Side-Letter Agreement described above and the related issuance of the True-Up Shares. Pursuant to the provisions of the Side-letter Agreement the parties agreed to the issuance of an additional 567,348 common shares, par value $0.0001 per share and the issuance of a warrant to purchase 61,380 common shares at an exercise price of $0.50 per share and an expiration date of June 19, 2026. Following is an analysis of gain on exchange of the debt and warrant obligations pursuant to the Exchange Agreement which was finalized on November 23, 2019: Amount Obligations extinguished on the date of exchange, May 23, 2019: Convertible Note balance at the date of exchange, May 23, 2019 $ 2,197,231 Accrued interest on the Convertible Note at the date of exchange, May 23, 2019 28,643 Fair value of Warrant Derivative at the date of exchange, May 23, 2019 116,731 Securities issued in exchange for the obligations extinguished on the date of Exchange, May 23, 2019 and the finalization of the Side-Letter Agreement at November 23, 2019: 605,816 Common shares issued on the date of exchange May 23, 2019 valued at $0.121 per share, the closing market price on May 23, 2019 (73,304 ) 567,348 Common shares issued pursuant to the finalization of the Side-Letter agreement on November 23, 2019 (68,082 ) Issuance of warrants to purchase 61,380 common shares issued pursuant to the finalization (7,358 ) Gain on exchange of debt and warrant obligations $ 2,193,861 In addition, the Company issued a warrant in May 2015 to purchase 240,000 shares issued as part of the placement fee in connection with the Note. The warrant contained an expiration date of May 7, 2022 and an exercise price of $5.00 per share and is subject to certain price protection and dilution provisions. Such warrant was treated as a derivative liability for accounting purposes due to its ratchet and anti-dilution provisions. On June 4, 2019, the Company entered into an exchange agreement with the warrant holder to extinguish the original warrant including its certain price protection and dilution provisions, for a new warrant to purchase up to 50,000 common shares with a termination date of June 4, 2026 at an exercise price of $0.50 per share without any price protection or dilution provisions. The estimated fair value of the original warrant derivative as of May 23, 2019, the date of the exchange agreement, was $37,368 representing a change of $29,795 from January 1, 2019. As a result of the exchange agreement, the Company extinguished the derivative liability of $37,368 attributable to the original warrant and recognized the estimated value of the new warrant of $7,985 as of June 4, 2019, the date of the exchange agreement. The resulting $29,383 difference been the estimated fair value of the old warrant extinguished and the new warrant issued to the holder was recorded as a gain on exchange of debt and warrant obligations effective June 4, 2019. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Note 3 – Debt Debt consists of the following at March 31, 2020 and December 31, 2019: March 31, 2020 December 31, 2019 Convertible notes payable, short term: Note payable, (in default) $ 1,000,000 $ 1,000,000 Note payable, (in default) 50,000 50,000 Note payable (in default) 35,000 35,000 Note payable (due on demand) 19,125 19,125 Total notes payable, short-term $ 1,104,125 $ 1,104,125 Note Payable – Short-term On December 27, 2013 the Company borrowed $1,050,000 under an unsecured credit facility with a private, third-party lender. The facility is represented by a promissory note (the “December 2013 Note”) with an original maturity date of March 12, 2014. In connection with the December 2013 Note, the Company granted the lender a warrant (the “Warrant”) exercisable to purchase 100,000 shares of its common stock at an exercise price of $15.00 per share. In connection with an extension to April 2015, the parties amended the date for exercise of the Warrant to be a period commencing April 7, 2015 and expiring on the third anniversary of such date. The Company issued no additional warrants to the lender in connection with the extension of the Note to the New Maturity Date. If the Company failed to pay the Note on or before its New Maturity Date, the number of shares issuable under the Warrant increases to 1,333,333 and the exercise price drops to $0.75 per share. All other terms of the Warrant remained the same. The Warrant has been treated as a derivative liability whereby the value of Warrant is estimated at the date of grant and recorded as a derivative liability and as a discount on the note payable. The warrant liability is revalued to fair value at each reporting date with the corresponding income (loss) reflected in the statement of operations as change in derivative liability. The discount is amortized ratably through the original maturity date and each of the extended maturity dates. The warrant expired as of March 31, 2020 and is no longer exercisable. In connection with an extension of the December 2013 Note to April 7, 2016, the Company agreed to enter into a definitive revenue sharing agreement with the lender to grant the lender under the revenue sharing agreement an irrevocable right to receive a monthly payment equal to one half of one percent (1/2%) of the gross revenue derived from the share of all hydrocarbons produced at the wellhead from the Nicaraguan Concessions and any other oil and gas concessions that the Company and its affiliates may acquire in the future. This percent increased to one percent (1%) when the Company did not pay the December 2013 Note in full by August 7, 2014. Therefore, the revenue sharing agreement is fixed at one percent (1%). The value of the one percent (1.0%) definitive revenue sharing agreement granted to the lender as consideration for the extension of the maturity date to December 7, 2014 was estimated to be $964,738. Such amount was recorded as a reduction of oil and gas properties and as a discount on the renewed note payable and amortized ratably over the extended term of the note. In connection with the extension of the maturity date of the December 2013 Note to April 7, 2016, the Company also (i) issued the lender 20,000 shares of restricted common stock; (ii) decreased the exercise price of the warrant to $5.00 per share and extended the term of the warrant to a period commencing on the New Maturity Date and expiring on the third anniversary of such date; and (iii) paid $50,000 toward amounts due under the December 2013 Note. The Company issued no additional warrants to the lender in connection with the extension of the Note to the New Maturity Date. If the Company failed to pay the December 2013 Note on or before its New Maturity Date, the number of shares issuable under the Warrant increases to 1,333,333 and the exercise price drops to $0.75 per share. All other terms of the warrant remained the same. The warrant expired as of March 31, 2020 and December 31, 2019. The December 2013 Note may be prepaid without penalty at any time. The December 2013 Note is subordinated to all existing and future senior indebtedness, as such terms are defined in the Note. The December 2013 Note is in default and the Company is pursuing a resolution to this default, including completing the extinguishment of the note balance, accrued interest and revenue sharing agreement through an exchange agreement which is further described below; however, there can be no assurances such efforts will be successful. The Warrant was treated as a derivative liability whereby the value of Warrant is estimated at the date of grant and recorded as a derivative liability and as a discount on the note payable. The warrant liability was revalued to fair value at each reporting date with the corresponding income (loss) reflected in the statement of operations as change in derivative liability. The Warrant expired as of March 31, 2020 and December 31, 2019. The discount was amortized ratably through the original maturity date and each of the extended maturity dates. The Company recognized the value of the 20,000 shares of common stock issued ($104,000) and the increased value of the outstanding warrants due to the decrease in their exercise price ($68,716) as an additional discount on the note payable to be amortized ratably over the extended term of the underlying note. On July 29, 2019 the Company entered into a non-binding term sheet with the holder of the December 2013 Note which has an unpaid principal balance of $1.0 million as of March 31, 2020 and December 31, 2019. The term sheet, if consummated, will resolve the default contingencies regarding the December 2013 Note through an exchange agreement. Under the proposed terms the Company will make a cash payment of $100,000 within 60 days of the execution of an Exchange Agreement and will issue 740,500 shares of common stock to the holder in exchange for and cancellation of the following obligations: ● December 2013 Note with an original principal balance of $1,050,000 and current principal balance of $1,000,000; ● Accrued and unpaid interest of approximately $505,000 as of March 31, 2020 related to the December 2013 Note; ● Common Stock Purchase Warrant issued December 27, 2013 to acquire 100,000 shares of common stock with an exercise price of $5.00 per share; ● Preemptive Rights Agreement dated December 27, 2013; and ● Revenue Sharing Agreement issued May 30, 2014 representing one half of one percent (1/2%) of the gross revenue derived from the share of all hydrocarbons produced at the wellhead from the Nicaraguan Concessions. The term sheet is non-binding until such time as the cash payment is made and the common stock are issued to the holder and there can be no assurance that the Company will successfully complete the Exchange Agreement. The Company did not make the required $100,000 cash payment within the contractual 60-day time period and therefore the term sheet is not binding on the parties. The parties are attempting to resolve the payment default and otherwise complete the Exchange Agreement as described above. The following notes were extinguished on June 19, 2019: ● On November 8, 2016 the Company borrowed a total of $200,000 from an individual under a convertible note payable with the conversion rate of $5.00 per share. The note required no principal or interest payments until its maturity date of November 7, 2017 and bore interest at 8% per annum. The note was not paid on its original maturity date. ● On April 20, 2017, the Company borrowed $40,000 under an unsecured credit facility with a private, third-party lender which is convertible at a rate of $5.00 per share. The note required no principal or interest payments until its maturity date of April 19, 2018 and bore interest at 8% per annum. The note was not paid on its maturity date. On June 19, 2019, the Company and the holder of these two convertible notes entered into an exchange agreement whereby the two convertible notes with an unpaid principal balance of $240,000 and related accrued interest totaling $45,020 were extinguished. Under the exchange agreement the Company issued the individual a new warrant exercisable to purchase up to 570,000 shares of common stock at an exercise price of $0.50 per share with a termination date of June 19, 2026 without any price protection or dilution provisions in exchange for the extinguishment of the two convertible notes and related accrued interest. The Black-Scholes valuation of the warrant issued to the holder on June 19, 2019 totaled $62,564. Following is an analysis of gain on extinguishment of the obligations pursuant to the Exchange Agreement on June 19, 2019: Amount Obligations extinguished on the date of exchange, June 19, 2019: Convertible Notes balance at the date of exchange, June 19, 2019 $ 240,000 Accrued interest on the Convertible Notes at the date of exchange, June 19, 2019 45,020 Securities issued in exchange for the obligations extinguished on the date of the exchange, June 19, 2019: Value of the stock purchase warrant issued on the date of exchange, June 19, 2019 (62,564 ) Gain on exchange of debt and warrant obligations $ 222,456 Other than the December 2013 Note, at March 31, 2020 the Company had short-term notes outstanding with entities or individuals as follows: ● On July 7, 2015 the Company borrowed a total of $50,000 from an individual under a convertible note payable with the conversion rate of $5.60 per share. The term of the note was for a period of 90 days and bears interest at 8% per annum. In connection with the loan, the Company issued the entity a warrant for the purchase of 5,000 shares of common stock at $5.60 per share for a period of five years from the date of the note. The terms of the note and warrant provide that should the note and interest not be paid in full by its maturity date, the number of warrants automatically increases to 10,000 shares and the exercise price remains at $5.60 per share. The ratchet provision in the stock purchase warrant requires that the warrant be accounted for as derivative liability. The Company recorded the estimated fair value of the warrant totaling $22,314 as a discount on note payable and as a derivative liability in the same amount, as of the origination date. On October 7, 2015, the note was extended for an additional 90 days or until January 7, 2016 and later to May 7, 2016 and ultimately to October 7, 2016. The Company and its lender are pursuing a resolution of this default. There can be no assurance that the Company will be successful in this regard. In consideration, the Company granted the lender common stock purchase warrants exercisable to purchase 5,000 shares of common stock on each extension date at an exercise price of $5.60 per share, which warrants were immediately exercisable and expire in five years. The value of the 5,000 warrants issued on January 7, 2016 totaled $379 and $131 on May 7, 2016, both of which were amortized over the extension period (through October 7, 2016). The related warrant derivative liability balance was $239 and $662 as of March 31, 2020 and December 31, 2019, respectively. See Note 5. ● On July 15, 2015, the Company borrowed a total of $35,000 from an individual under a convertible note payable with the conversion rate of $5.60 per share. The term of the note was for a period of 90 days and bears interest at 8% per annum. In connection with the loan, the Company issued the entity a warrant for the purchase of 3,500 shares of common stock at $5.60 per share for a period of five years from the date of the note. The terms of the note and warrant provide that should the note and interest not be paid in full by its maturity date, the number of warrants automatically increases to 7,000 shares and the exercise price remains at $5.60 per share. The ratchet provision in the stock purchase warrant requires that the warrant be accounted for as a derivative liability. The Company recorded the estimated fair value of the warrant totaling $11,827 as a discount on note payable and as a derivative liability in the same amount, as of the origination date. On October 15, 2015, the note was extended for an additional 90 days or until January 15, 2016 and later to October 15, 2016. The Company is pursuing a resolution of this default including an additional extension from the holder. There can be no assurance that the Company will be successful in this regard. In consideration, the Company granted the lender common stock purchase warrants exercisable to purchase an aggregate of 3,500 shares of common stock on each extension date at an exercise price of $5.60 per share, which warrants were immediately exercisable and expire in five years. The value of the 3,500 warrants on January 15, 2016 totaled $267 and $74 on May 15, 2016, both of which were amortized over the extension period (through October 15, 2016). The related warrant derivative liability balance was $167 and $454 as of March 31, 2020 and December 31, 2019, respectively. See Note 5. ● On May 21, 2018 the Company borrowed $13,125 under an unsecured promissory note with a private third-party lender which is convertible into common stock at a rate of $0.50 per share. During June 2019 and August 2019 the Company borrowed an additional $50,500 and $5,500, respectively, from this same third-party lender under the same terms. The note is due on demand and bears interest at 8% per annum. In October 2019 the Company repaid $50,000 in principal on this demand note. The outstanding principal on the notes totaled $19,125 as of March 31, 2020 and December 31, 2019. |
Stock Options
Stock Options | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock Options | Note 4 – Stock Options The Company applies ASC 718, Stock Compensation In May 2006, the Company’s stockholders approved the 2006 Equity Incentive Plan (the “2006 Plan”), under which both incentive and non-statutory stock options may be granted to employees, officers, non-employee directors and consultants. An aggregate of 47,000 shares of the Company’s common stock are reserved for issuance under the 2006 Plan. In June 2005, the Company’s stockholders approved the 2005 Equity Incentive Plan (the “2005 Plan”), under which both incentive and non-statutory stock options may be granted to employees, officers, non-employee directors and consultants. An aggregate of 47,500 shares of the Company’s common stock were reserved for issuance under the 2005 Plan and 2006 Plan; however, the 2005 Plan and the 2006 Plan have now expired and no further issuances can be made. Options granted under the 2005 Plan and 2006 Plan allow for the purchase of common stock at prices not less than the fair market value of such stock at the date of grant, become exercisable immediately or as directed by the Company’s Board of Directors and generally expire ten years after the date of grant. The Company also has issued other stock options not pursuant to a formal plan with terms similar to the 2005 Plan and 2006 Plan. At the Annual Meeting of Stockholders held on September 25, 2015 and the stockholders approved the Infinity Energy Resources, Inc. 2015 Stock Option and Restricted Stock Plan (the “2015 Plan”) and reserved 500,000 shares for issuance under the Plan. As of March 31, 2020, 500,000 shares were available for future grants under the 2015 Plan. All other plans have now expired. The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model, which requires the input of subjective assumptions, including the expected term of the option award, expected stock price volatility and expected dividends. These estimates involve inherent uncertainties and the application of management judgment. For purposes of estimating the expected term of options granted, the Company aggregates option recipients into groups that have similar option exercise behavioral traits. Expected volatilities used in the valuation model are based on the expected volatility that would be used by an independent market participant in the valuation of certain of the Company’s warrants. The risk-free rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The Company’s forfeiture rate assumption used in determining its stock-based compensation expense is estimated based on historical data. The actual forfeiture rate could differ from these estimates. There were no stock options granted during the three months ended March 31, 2020 and 2019. The following table summarizes stock option activity for the three months ended March 31, 2020: Number of Options Weighted Average Exercise Weighted Aggregate Outstanding at December 31, 2019 332,000 $ 41.86 2.29 years $ — Granted — — Exercised — — Forfeited — — Outstanding at March 31, 2020 332,000 $ 41.86 2.04 years $ — Outstanding and exercisable at March 31, 2020 332,000 $ 41.86 2.04 years $ — The Company recorded stock-based compensation expense in connection with the vesting of options granted aggregating $-0- and $-0- during the three months ended March 31, 2020 and 2019, respectively. The intrinsic value as of March 31, 2020 related to the vested and unvested stock options as of that date was $-0-. The unrecognized compensation cost as of March 31, 2020 related to the unvested stock options as of that date was $-0- Restricted stock grants. A summary of all restricted stock activity under the equity compensation plans for the three months ended March 31, 2020 is as follows: Number of Weighted Nonvested balance, December 31, 2019 750,000 $ 0.13 Granted — — Vested — — Forfeited — — Nonvested balance, March 31, 2020 750,000 $ 0.13 The Company recorded stock-based compensation expense in connection with the issuance/vesting of restricted granted aggregating $24,308 and $-0- during the three months ended March 31, 2020 and 2019, respectively. The Company estimated the fair market value of these restricted stock grants based on the closing market price on the date of grant. As of March 31, 2020, there were $49,418 of total unrecognized compensation costs related to all remaining non-vested restricted stock grants, which will be amortized over the next seven months in accordance with the respective vesting scale. The nonvested balance of restricted stock vests as follows: Years ended Number of 2020 750,000 |
Derivative Instruments
Derivative Instruments | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Note 5 – Derivative Instruments The estimated fair value of the Company’s derivative liabilities, all of which are related to the detachable warrants issued in connection with various 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 3) and non-performance risk factors, among other items (ASC 820, Fair Value Measurements The Company issued warrants to purchase an aggregate of 34,000 shares of common stock, in connection with various outstanding debt instruments which require derivative accounting treatment as of March 31, 2020 and December 31, 2019. A comparison of the assumptions used in calculating estimated fair value of such derivative liabilities as of March 31, 2020 and December 31, 2019 is as follows: As of March 31, 2020 As of December 31, 2019 Volatility – range 344.8 % 316.2 % Risk-free rate 0.37 % 1.69 % Contractual term 0.25 – 1.08 years 0.5 – 1.3 years Exercise price $ 5.60 $ 5.60 Number of warrants in aggregate 34,000 34,000 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 for both open and closed derivatives: Amount Balance at December 31, 2019 $ 1,116 Unrealized derivative gains included in other income/expense for the period (710 ) Balance at March 31, 2020 $ 406 |
Warrants
Warrants | 3 Months Ended |
Mar. 31, 2020 | |
Warrants and Rights Note Disclosure [Abstract] | |
Warrants | Note 6 – Warrants The following table summarizes warrant activity for the three months March 31, 2020: Number of Weighted Outstanding and exercisable at December 31, 2019 946,943 $ 1.78 Issued — — Exercised/forfeited (171,563 ) (5.00 ) Outstanding and exercisable at March 31, 2020 775,380 $ 1.07 The weighted average term of all outstanding common stock purchase warrants was 5.5 years as of March 31, 2020. The intrinsic value of all outstanding common stock purchase warrants and the intrinsic value of all vested common stock purchase warrants was zero as of March 31, 2020. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 7 – Income Taxes The effective income tax rate on income (loss) before income tax benefit varies from the statutory federal income tax rate primarily due to the net operating loss history of the Company maintaining a full reserve on all net deferred tax assets during the three months ended March 31, 2020 and 2019. In addition, the Tax Cuts and Jobs Act (the “Act”) enacted on December 22, 2017 which significantly changed U.S. corporate income tax laws by, among other things, reducing the U.S. corporate income tax rate to 21% starting in 2018. Under the Act, corporations are no longer subject to the AMT, effective for taxable years beginning after December 31, 2017. The Company has incurred operating losses in recent years and it continues to be in a three-year cumulative loss position at March 31, 2019. Accordingly, the Company determined there was not sufficient positive evidence regarding its potential for future profits to outweigh the negative evidence of our three-year cumulative loss position under the guidance provided in ASC 740. Therefore, it determined to continue to provide a 100% valuation allowance on its net deferred tax assets. The Company expects to continue to maintain a full valuation allowance until it determines that it can sustain a level of profitability that demonstrates its ability to realize these assets. To the extent the Company determines that the realization of some or all of these benefits is more likely than not based upon expected future taxable income, a portion or all of the valuation allowance will be reversed. For income tax purposes, the Company has net operating loss carry-forwards of approximately $66,950,000 in accordance with its 2019 Federal Income tax return as filed, which expire from 2025 through 2038. The Company has recently completed the filing of its tax returns for the tax years 2012 through 2019. Therefore, all such tax returns are open to examination by the Internal Revenue Service. The Internal Revenue Code contains provisions under Section 382 which limit a company’s ability to utilize net operating loss carry-forwards in the event that it has experienced a more than 50% change in ownership over a three-year period. Management has not completed its review of whether such ownership changes have occurred, and whether the Company currently is subject to an annual limitation or the possibility of the complete elimination of the net operating loss carry- forwards might have occurred. In addition, the Company may be further limited by additional ownership changes which may occur in the future. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 8 – Commitments and Contingencies The Company has not maintained insurance coverage on its U.S domestic oil and gas properties for a number of years. 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 relative to its Texas oil and gas properties that were sold in 2012. The ultimate resolution of these compliance issues could have a material adverse impact on the Company’s financial statements. Nicaraguan Concessions The Company was in default of various provisions of the 30-year Concession for both Perlas and Tyra blocks as of December 31, 2019, including (1) the drilling of at least one exploratory well on the Perlas Block; (2) the shooting of additional seismic on the Tyra Block; (3) the provision of the Ministry of Energy with the required letters of credit in the amounts totaling $1,356,227 for the Perlas block and $278,450 for the Tyra block for exploration requirements on the leases; (4) payment of the 2016, 2017, 2018 and 2019 area fees required for both the Perlas and Tyra which total approximately $194,485; and (5) payment of the 2016, 2017, 2018 and 2019 training fees required for both the Perlas and Tyra totaling approximately $350,000. The Company had been seeking a resolution of these defaults including the ability to extend, renew and/or renegotiate the terms of the Nicaraguan Concessions with the Nicaraguan government to cure the defaults; however, the political climate, domestic issues and other factors caused the Company to halt such efforts and to abandon the Concessions in 2020. In connection with the extension of the December 2013 Note with a $1,050,000 principal balance issued in December 2013, the Company entered into a Revenue Sharing Agreement in May 2014. Infinity assigned to the note holder a monthly payment equal to the revenue derived from one percent (1%) of 8/8ths of Infinity’s share of the hydrocarbons produced at the wellhead from the Nicaraguan Concessions and any other oil and gas concessions that the Company and its affiliates may acquire in the future. 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 shall 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 Sharing Agreement does not create any obligation for Infinity to maintain or develop the Nicaraguan Concessions. Lack of Compliance with Law Regarding Domestic Properties Infinity has not been in compliance with existing federal, state and local laws, rules and regulations for its previously owned domestic oil and gas properties and this could have a material or significantly adverse effect upon the liquidity, capital expenditures, earnings or competitive position of Infinity. All domestic oil and gas properties held by Infinity – Wyoming and Infinity-Texas were disposed of well prior to December 31, 2019; however, the Company may remain liable for certain asset retirement costs should the new owners not complete their obligations. Management believes the total asset retirement obligations recorded of $1,716,003 as of March 31, 2020 and December 31, 2019 are sufficient to cover any potential noncompliance liabilities relative to the plugging of abandoned wells, the removal of facilities and equipment, and site restoration on oil and gas properties for its former oil and gas properties. The Company has not maintained insurance on the domestic properties for a number of years nor has it owned/produced any oil & gas properties for a number of years. Binding Term Sheet to Acquire Domestic Oil and Gas Properties On July 31, 2019 the Company acquired the Option from Core to purchase the production and mineral rights/leasehold for the Properties. The Company paid a nonrefundable deposit of $50,000 to bind the Option, which gave it the right to acquire the Properties for $2.5 million prior to December 31, 2019. The Company was not able to exercise the option prior to December 31, 2019 and the parties are negotiating for an extension of such option and a reduction of the purchase price, although there can be no assurance that the parties will reach an agreement to do so. The Company has expensed all costs related to the Option to acquire the Properties as of March 31, 2020 and December 31, 2019 as the Option expired on December 31, 2019. The purchase was to include the existing production equipment, infrastructure and ownership of 11 square miles of existing 3-D seismic data on the acreage. The Properties include a horizontal producing well, horizontal saltwater injection well, conventional saltwater disposal well and two conventional vertical producing wells, which currently produce from the Reagan Sand zone with an approximate depth of 3,600 feet. The Option includes a provision permitting Core to exercise a buy-out clause and sell the Properties to a third-party purchaser prior to our exercise of the Option. If such a sale occurs, the Company would be entitled to 10% of the proceeds of the sale on the closing date. In such event, Core will for a period of nine months following the buy-out find a project of like kind and provide the Company a first right of refusal to acquire such asset. 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: ● 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 engaged in negotiations with the State of Texas in late 2012 and early 2013 and 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 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 have potential liability regarding the above matter, and the officers are held personally harmless by indemnification provisions of the Company. Therefore, to the extent they might actually occur, these liabilities 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 included in the asset retirement obligation on the accompanying balance sheets. ● Cambrian Consultants America, Inc. (“Cambrian”) filed an action in the District Court of Harris County, Texas, number CV2014-55719, on September 26, 2014 against Infinity Energy Resources, Inc. resulting from certain professional consulting services provided for quality control and management of seismic operations during November and December 2013 on the Nicaraguan Concessions. Cambrian provided these services pursuant to a Master Consulting Agreement with Infinity, dated November 20, 2013, and has claimed breach of contract for failure to pay amounts due. On December 8, 2014, a default judgment was entered against the Company in the amount of $96,877 plus interest and attorney fees. The Company has included the impact of this litigation as a liability in its accounts payable. The Company will seek to settle the default judgment when it has the financial resources to do so. ● Torrey Hills Capital, Inc. (“Torrey”) notified the Company by letter, dated August 15, 2014, of its demand for the payment of $56,000, which it alleged was unpaid and owed under a consulting agreement dated October 18, 2013. The parties entered into a consulting agreement under which Torrey agreed to provide investor relations services in exchange for payment of $7,000 per month and the issuance of 15,000 shares of common stock. The agreement was for an initial three month-term with automatic renewals unless terminated upon 30 days’ written notice by either party. The Company made payments totaling $14,000 and issued 15,000 shares of common stock during 2013. The Company contends that Torrey breached the agreement by not performing the required services and that it had provided proper notice of termination to Torrey. Furthermore, the Company contends that the parties agreed to settle the dispute on or about June 19, 2014 under which it would issue 2,800 shares of common stock in full settlement of any balance then owed and final termination of the agreement. Torrey disputed the Company’s contentions and submitted the dispute to binding arbitration. The Company was unable to defend itself and the arbitration panel awarded Torrey a total of $79,594 in damages. The Company has accrued this amount in accounts payable as of March 31 2020 and December 31, 2019, which management believes is sufficient to provide for the ultimate resolution of this dispute. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 9 – Related Party Transactions The Company does not have any employees other than the CEO, COO and CFO. In previous years, certain general and administrative services (for which payment is deferred) had been provided by the CFO’s accounting firm at its standard billing rates plus out-of-pocket expenses consisting primarily of accounting, tax and other administrative fees. The Company no longer utilizes the CFO’s accounting for such support services and was not billed for any such services during the three months ended March 31, 2020 and 2019. The amount due to the CFO’s firm for services previously provided was $762,407 at March 31, 2020 and December 31, 2019 and is included in accrued liabilities at both dates. On July 31, 2019 the Company acquired an Option from Core to purchase the production and mineral rights/leasehold for the Properties. The Company paid a nonrefundable deposit of $50,000 to bind the purchase option which gave it the right to acquire the Properties for $2.5 million prior to December 31, 2019. The Company was not able to exercise the option prior to December 31, 2019 and the parties are negotiating an extension of such Option and a reduction of the purchase price, although there can be no assurance that the parties will reach an agreement to do so. As of March 31, 2020 and December 31, 2019, the Company had accrued compensation to its officers and directors of $1,829,208. The Board of Directors authorized the Company to cease compensation for its officers and directors effective January 1, 2018. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 10 Subsequent Events COVID – 19 PANDEMIC The condensed financial statements contained in this Report as well as the description of our business contained herein, unless otherwise indicated, principally reflect the status of our business and the results of our operations as of March 31, 2020. Continuing after such date, economies throughout the world continue to be severely disrupted by the effects of the quarantines, business closures and the reluctance of individuals to leave their homes as a result of the outbreak of the coronavirus (Covid-19). In particular, the oil and gas market has been severely impacted by the negative effects of the coronavirus because of the substantial and abrupt decrease in the demand for oil and gas globally. In addition, the capital markets have been disrupted and our efforts to raise necessary capital will likely be adversely impacted by the outbreak of the virus and we cannot forecast with any certainty when the disruptions caused by it will cease to impact our business and the results of our operations. In reading this report on Form 10-Q, including our discussion of our ability to continue as a going concern set forth herein, in each case, consider the additional uncertainties caused by the outbreak of Covid-19. NICARAGUA CONCESSIONS The Company has not resolved the various contingencies related to the default status of its Nicaraguan Concessions (See Note 8). The Company had been seeking a resolution of these defaults including the ability to extend, renew and/or renegotiate the terms of the Nicaraguan Concessions with the Nicaraguan government to cure the defaults; however, the political climate, domestic issues and other factors caused the Company to halt such efforts in 2020 and abandon the project relating to the Concessions. DEBT OBLIGATIONS The Company has not resolved the contingencies regarding its various notes payable related to their default status as described in Notes 3 other than the December 2013 Note described above. The Company continues to pursue resolutions of these defaults including to negotiate extensions, waivers or new note agreements; however, there can be no assurance that the Company will be successful in that regard. On July 29, 2019 the Company entered into a non-binding term sheet with the holder of the December 2013 Note which had an unpaid principal balance of $1.0 million as of December 31, 2019. The term sheet, if consummated, will resolve the default contingencies regarding the December 2013 Note through an exchange agreement. See Note 3, “Debt.” OIL AND GAS PROPERTY ACQUISITION On July 31, 2019 the Company acquired an Option from Core to purchase the production and mineral rights/leasehold for the Properties. The Company paid a nonrefundable deposit of $50,000 to bind the purchase option which gave it the right to acquire the Properties for $2.5 million prior to December 31, 2019. The Company was not able to exercise the option prior to December 31, 2019 and the parties are negotiating for an extension of such Option and a reduction of the purchase price, although there can be no assurance that the parties will reach an agreement to do so. RELATED PARTY DEBT OBLIGATION On May 13, 2020, the Company borrowed $41,000 from its Chairman, CEO & President in the form of an unsecured promissory note bearing 6% interest and due on demand. The proceeds were used for general working capital purposes. |
Nature of Operations, Basis o_2
Nature of Operations, Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Unaudited Interim Financial Information | Unaudited Interim Financial Information Infinity Energy Resources, Inc. (collectively, “we,” “ours,” “us,” “Infinity” or the “Company”) has prepared the accompanying condensed financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting. These 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 condensed balance sheets, statements of operations, statements of stockholders’ deficit 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 2020 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 condensed financial statements should be read in conjunction with the audited 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 Since 2009 we had planned to pursue the exploration of potential oil and gas resources in the United States and in the Perlas and Tyra concession blocks offshore Nicaragua in the Caribbean Sea (the “Nicaraguan Concessions” or “Concessions”), which contain a total of approximately 1.4 million acres. We sold our wholly-owned subsidiary Infinity Oil and Gas of Texas, Inc. in 2012 and its wholly-owned subsidiary, Infinity Oil and Gas of Wyoming, Inc., was administratively dissolved in 2009. We also began assessing various opportunities and strategic alternatives involving the acquisition, exploration and development of natural gas and oil properties in the United States, including the possibility of acquiring businesses or assets that provide support services for the production of oil and gas in the United States. As a result, on July 31, 2019 we acquired an option (the “Option”) from Core Energy, LLC, a closely held company (“Core”), to purchase the production and mineral rights/leasehold for oil & gas properties, subject to overriding royalties to third parties, in the Central Kansas Uplift geological formation covering over 11,000 contiguous acres (the “Properties”). We paid a nonrefundable deposit of $50,000 to bind the purchase option, which provided us the right to acquire the Properties for $2.5 million prior to December 31, 2019. The Company was not able to exercise the option prior to December 31, 2019 and the parties are negotiating for an extension of such Option and lowering of the purchase price of the Properties. There can be no assurance that the parties will negotiate an extension and acceptable reduced price, particularly in light of recent events including the coronavirus pandemic and its impact on the oil and gas industry. If the parties agree to extend, reprice or otherwise complete the acquisition, the purchase will include the existing production equipment, infrastructure and ownership of 11 square miles of existing 3-D seismic data on the acreage. The Properties include a horizontal producing well, horizontal saltwater injection well, conventional saltwater disposal well and two conventional vertical producing wells, which currently produce from the Reagan Sand zone with an approximate depth of 3,600 feet. We intend to complete the acquisition of the Properties prior to the end of 2020, subject to successful renegotiations and obtaining adequate financing. The Option includes a provision permitting Core to exercise a buy-out clause and sell the Properties to a third-party purchaser prior to our exercise of the Option. If such a sale occurs, we would be entitled to 10% of the proceeds of the sale on the closing date. In such event, Core will for a period of nine months following the buy-out find a project of like kind and provide us a first right of refusal to acquire such asset. We must obtain new sources of debt and/or equity capital to fund the substantial needs enumerated above, as well as satisfying our existing debt obligations. We are attempting to obtain extensions of the maturity date for our outstanding debt; however, there can be no assurance that we will be able to do so or what the final terms will be if the lenders agree to such extensions. Further, we can provide no assurance that we will be able to obtain sufficient new debt/equity capital to exercise the Option. Nicaragua We began pursuing an oil and gas exploration opportunity offshore Nicaragua in the Caribbean Sea in 1999. Since such time, we built relationships with the Instituto Nicaraguense de Energia (“INE”) and undertook the geological and geophysical research that helped us to become one of only six companies qualified to bid on offshore blocks in the first international bidding round held by INE in January 2003. On March 5, 2009, we signed the contracts granting us the Perlas and Tyra concession blocks offshore Nicaragua (the “Nicaraguan Concessions” or “Concessions”). Since our acquisition of the Nicaraguan Concessions, we have conducted an environmental study and developed geological information from the reprocessing and additional evaluation of existing 2-D seismic data acquired over our Perlas and Tyra concession blocks. In April 2013, the Nicaraguan government formally approved our Environmental Impact Assessment, at which time we commenced significant activity under the initial work plan involving the acquisition of new seismic data on the two Nicaraguan Concessions. We undertook seismic shoots during late 2013 that resulted in the acquisition of new 2-D and 3-D seismic data and have reviewed it to select initial drilling sites for exploratory wells. We relied on raising debt and equity capital to fund our ongoing maintenance/expenditure obligations under the Nicaraguan Concession, our day-to-day operations and corporate overhead because we have generated no operating revenues or cash flows in recent years. The $1.0 million December 2013 Note (See Note 3) matured in April 2016 and is currently in default and three other notes payable with principal balances of $104,125 as of March 31, 2020 are now either due on demand or currently in default. In 2020 we abandoned the Concessions. |
Going Concern | Going Concern The Company must raise substantial amounts of debt and equity capital from other sources in the immediate future in order to fund the (i) acquisition of the Properties under the Option; (ii) normal day-to-day operations and corporate overhead; and (iii) outstanding debt and other financial obligations as they become due, as described below. These are substantial operational and financial issues that must be successfully addressed during 2020. The Company is seeking new sources of debt and equity capital to fund the needs enumerated above. The Company is attempting to obtain extensions of the maturity dates for its debt or compromises of the debt. In addition, the Company will seek offers from industry operators and other third parties for interests in the Properties in exchange for cash and a carried interest in exploration and development operations or other joint venture arrangement. The Company has restructured certain obligations that were in default during 2019; however, there can be no assurance that it will be able to obtain such funding, extensions or additional restructurings or on what terms. Due to the uncertainties related to the foregoing matters, there exists substantial doubt about the Company’s ability to continue as a going concern within one year after the date the financials are issued. 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. |
Management Estimates | Management Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates with regard to the financial statements include the estimated carrying value of unproved properties, the estimated fair value of derivative liabilities, stock-based awards and overriding royalty interests, and the realization of deferred tax assets. |
Derivative Instruments | Derivative Instruments The Company accounts for derivative instruments or hedging activities under the provisions of ASC 815 Derivatives and Hedging The purpose of hedging is to provide a measure of stability to the Company’s cash flows in an environment of volatile oil and gas prices and to manage the exposure to commodity price risk. As of March 31, 2020 and December 31, 2019 and during the periods then ended, the Company had no oil and natural gas derivative arrangements outstanding. As a result of certain terms, conditions and features included in certain common stock purchase warrants issued by the Company (Notes 2, 3, 5 and 6), those warrants are required to be accounted for as derivatives at estimated fair value, with changes in fair value recognized in operations. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying values of the Company’s accounts payable, accrued liabilities and short-term notes represent the estimated fair value due to the short-term nature of the accounts. In accordance with ASC Topic 820 — Fair Value Measurements and Disclosures ASC 820 utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels: ● Level 1 — Quoted prices in active markets for identical assets and liabilities. ● Level 2 — Other significant observable inputs (including quoted prices in active markets for similar assets or liabilities). ● Level 3 — Significant unobservable inputs (including the Company’s own assumptions in determining the fair value. The estimated fair value of the Company’s Note and various derivative liabilities, which are related to detachable warrants issued in connection with various 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 of the downward adjustment of the exercise price and the upward adjustment to the number of warrants as provided by the warrant agreement terms and non-performance risk factors, among other items. The fair values for the warrant derivatives as of March 31, 2020 and December 31, 2019 were classified under the fair value hierarchy as Level 3. The following table represents the Company’s hierarchy for its financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2020 and December 31, 2019: March 31, 2020 Level 1 Level 2 Level 3 Total Liabilities: Derivative liabilities $ — $ — $ 406 $ 406 $ — $ — $ 406 $ 406 December 31, 2019 Level 1 Level 2 Level 3 Total Liabilities: Derivative liabilities $ — $ — $ 1,116 $ 1,116 $ — $ — $ 1,116 $ 1,116 There were no changes in valuation techniques or reclassifications of fair value measurements between Levels 1, 2 or 3 during the periods ended March 31, 2020 and December 31, 2019. |
Nature of Operations, Basis o_3
Nature of Operations, Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table represents the Company’s hierarchy for its financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2020 and December 31, 2019: March 31, 2020 Level 1 Level 2 Level 3 Total Liabilities: Derivative liabilities $ — $ — $ 406 $ 406 $ — $ — $ 406 $ 406 9 December 31, 2019 Level 1 Level 2 Level 3 Total Liabilities: Derivative liabilities $ — $ — $ 1,116 $ 1,116 $ — $ — $ 1,116 $ 1,116 |
Secured Convertible Note Paya_2
Secured Convertible Note Payable (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Secured Convertible Note Payable | Secured Convertible Note (the “Note) payable consists of the following at March 31, 2020 and December 31, 2019: March 31, 2020 December 31, 2019 Secured convertible note payable, at fair value $ — $ — Less: Current maturities — — Secured convertible note payable, long-term $ — $ — |
Schedule of Activity in Secured Convertible Note | Following is an analysis of the activity in the Note during the three months ended March 31, 2019: Amount Balance at December 31, 2018 $ 2,197,231 Funding under the Investor Note during the period — Principal repaid during the period by issuance of common stock — Change in fair value of secured convertible note during the period — Exchange of secured convertible note payable for common stock — Balance at March 31, 2019 $ 2,197,231 Following is an analysis of the activity in the Note during the three months ended March 31, 2020: Amount Balance at December 31, 2019 $ — Funding under the Investor Note during the period — Principal repaid during the period by issuance of common stock — Change in fair value of secured convertible note during the period — Exchange of secured convertible note payable for common stock — Balance at March 31, 2020 $ — |
Schedule of Gain on Exchange of Debt and Warrant Obligations | Following is an analysis of gain on exchange of the debt and warrant obligations pursuant to the Exchange Agreement which was finalized on November 23, 2019: Amount Obligations extinguished on the date of exchange, May 23, 2019: Convertible Note balance at the date of exchange, May 23, 2019 $ 2,197,231 Accrued interest on the Convertible Note at the date of exchange, May 23, 2019 28,643 Fair value of Warrant Derivative at the date of exchange, May 23, 2019 116,731 Securities issued in exchange for the obligations extinguished on the date of Exchange, May 23, 2019 and the finalization of the Side-Letter Agreement at November 23, 2019: 605,816 Common shares issued on the date of exchange May 23, 2019 valued at $0.121 per share, the closing market price on May 23, 2019 (73,304 ) 567,348 Common shares issued pursuant to the finalization of the Side-Letter agreement on November 23, 2019 (68,082 ) Issuance of warrants to purchase 61,380 common shares issued pursuant to the finalization (7,358 ) Gain on exchange of debt and warrant obligations $ 2,193,861 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Debt Outstanding | Debt consists of the following at March 31, 2020 and December 31, 2019: March 31, 2020 December 31, 2019 Convertible notes payable, short term: Note payable, (in default) $ 1,000,000 $ 1,000,000 Note payable, (in default) 50,000 50,000 Note payable (in default) 35,000 35,000 Note payable (due on demand) 19,125 19,125 Total notes payable, short-term $ 1,104,125 $ 1,104,125 |
Schedule of Gain on Extinguishment of Debt | Following is an analysis of gain on extinguishment of the obligations pursuant to the Exchange Agreement on June 19, 2019: Amount Obligations extinguished on the date of exchange, June 19, 2019: Convertible Notes balance at the date of exchange, June 19, 2019 $ 240,000 Accrued interest on the Convertible Notes at the date of exchange, June 19, 2019 45,020 Securities issued in exchange for the obligations extinguished on the date of the exchange, June 19, 2019: Value of the stock purchase warrant issued on the date of exchange, June 19, 2019 (62,564 ) Gain on exchange of debt and warrant obligations $ 222,456 |
Stock Options (Tables)
Stock Options (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Stock Option Activity | The following table summarizes stock option activity for the three months ended March 31, 2020: Number of Options Weighted Average Exercise Weighted Aggregate Outstanding at December 31, 2019 332,000 $ 41.86 2.29 years $ — Granted — — Exercised — — Forfeited — — Outstanding at March 31, 2020 332,000 $ 41.86 2.04 years $ — Outstanding and exercisable at March 31, 2020 332,000 $ 41.86 2.04 years $ — |
Schedule of Restricted Stock Unit Activity | A summary of all restricted stock activity under the equity compensation plans for the three months ended March 31, 2020 is as follows: Number of Weighted Nonvested balance, December 31, 2019 750,000 $ 0.13 Granted — — Vested — — Forfeited — — Nonvested balance, March 31, 2020 750,000 $ 0.13 |
Schedule of Nonvested Restricted Stock Unit Activity | The nonvested balance of restricted stock vests as follows: Years ended Number of 2020 750,000 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Estimated Fair Value of Derivative Liabilities | A comparison of the assumptions used in calculating estimated fair value of such derivative liabilities as of March 31, 2020 and December 31, 2019 is as follows: As of March 31, 2020 As of December 31, 2019 Volatility – range 344.8 % 316.2 % Risk-free rate 0.37 % 1.69 % Contractual term 0.25 – 1.08 years 0.5 – 1.3 years Exercise price $ 5.60 $ 5.60 Number of warrants in aggregate 34,000 34,000 |
Summary of Changes in Fair Value 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 for both open and closed derivatives: Amount Balance at December 31, 2019 $ 1,116 Unrealized derivative gains included in other income/expense for the period (710 ) Balance at March 31, 2020 $ 406 |
Warrants (Tables)
Warrants (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Warrants and Rights Note Disclosure [Abstract] | |
Summary of Warrant Activity | The following table summarizes warrant activity for the three months March 31, 2020: Number of Weighted Outstanding and exercisable at December 31, 2019 946,943 $ 1.78 Issued — — Exercised/forfeited (171,563 ) (5.00 ) Outstanding and exercisable at March 31, 2020 775,380 $ 1.07 |
Nature of Operations, Basis o_4
Nature of Operations, Basis of Presentation and Summary of Significant Accounting Policies (Details Narrative) | Jul. 31, 2019USD ($)a | Apr. 20, 2017 | Nov. 08, 2016 | Dec. 27, 2013 | Mar. 31, 2020USD ($)a | Dec. 31, 2019USD ($) | Jul. 29, 2019USD ($) |
Percentage of proceeds from sale | 10.00% | ||||||
Debt maturity date | Apr. 19, 2018 | Nov. 7, 2017 | |||||
Notes payable current | $ 1,104,125 | $ 1,104,125 | |||||
December 2013 Note [Member] | |||||||
Principal amount of senior secured convertible notes | $ 1,000,000 | ||||||
Notes payable current | $ 1,000,000 | ||||||
December 2013 Note [Member] | |||||||
Debt maturity date | Mar. 12, 2014 | Apr. 30, 2016 | |||||
Three Other Notes Payable [Member] | |||||||
Notes payable current | $ 104,125 | ||||||
Core Energy, LLC [Member] | |||||||
Contiguous acres | a | 11,000 | ||||||
Core Energy, LLC [Member] | Purchase Option, Prior to December 31, 2019 [Member] | |||||||
Non refundable deposits | $ 50,000 | ||||||
Acquisition of oil and gas properties | $ 2,500,000 | ||||||
Acquisition of oil and gas properties, description | If the parties agree to extend, reprice or otherwise complete the acquisition, the purchase will include the existing production equipment, infrastructure and ownership of 11 square miles of existing 3-D seismic data on the acreage. The Properties include a horizontal producing well, horizontal saltwater injection well, conventional saltwater disposal well and two conventional vertical producing wells, which currently produce from the Reagan Sand zone with an approximate depth of 3,600 feet. | ||||||
Nicaraguan Concessions [Member] | |||||||
Nature of operations oil and gas resources acres | a | 1,400,000 |
Nature of Operations, Basis o_5
Nature of Operations, Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Derivative liabilities | $ 406 | $ 1,116 |
Fair Value, Measurements, Recurring [Member] | ||
Derivative liabilities | 406 | 1,116 |
Fair value on liabilities | 406 | 1,116 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | ||
Derivative liabilities | ||
Fair value on liabilities | ||
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | ||
Derivative liabilities | ||
Fair value on liabilities | ||
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | ||
Derivative liabilities | 406 | 1,116 |
Fair value on liabilities | $ 406 | $ 1,116 |
Secured Convertible Note Paya_3
Secured Convertible Note Payable (Details Narrative) - USD ($) | Nov. 23, 2019 | Jun. 04, 2019 | May 30, 2019 | May 23, 2019 | May 04, 2017 | May 15, 2016 | May 07, 2016 | Jan. 15, 2016 | Jan. 07, 2016 | Jul. 15, 2015 | Jul. 07, 2015 | May 07, 2015 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Apr. 20, 2017 | Nov. 08, 2016 | Oct. 15, 2015 | Oct. 07, 2015 | May 31, 2015 |
Issuance of warrant to purchase shares of common stock | 34,000 | 34,000 | ||||||||||||||||||
Common stock, par value | $ .0001 | $ 0.0001 | ||||||||||||||||||
Warrants price per share | $ 5.60 | $ 5.60 | $ 5.60 | $ 5.60 | ||||||||||||||||
Conversion price per share | $ 5.60 | $ 5.60 | $ 5 | $ 5 | ||||||||||||||||
Accrued interest | $ 550,706 | $ 528,684 | ||||||||||||||||||
Change in fair value derivatives | 710 | $ (68,447) | ||||||||||||||||||
Estimated fair value of conversion feature and warrants | $ 74 | $ 131 | $ 267 | $ 379 | $ 11,827 | $ 22,314 | ||||||||||||||
Warrant [Member] | ||||||||||||||||||||
Issuance of warrant to purchase shares of common stock | 50,000 | 240,000 | ||||||||||||||||||
Warrants price per share | $ 0.50 | $ 5 | ||||||||||||||||||
Warrant expiration date | Jun. 4, 2026 | May 7, 2022 | ||||||||||||||||||
Investor Note [Member] | ||||||||||||||||||||
Notes payable principal balance | $ 9,490,000 | |||||||||||||||||||
Additional amount funded from related parties | 510,000 | |||||||||||||||||||
Convertible Note [Member] | ||||||||||||||||||||
Notes payable principal balance | $ 11,687,231 | |||||||||||||||||||
Convertible debt outstanding | 9,490,000 | |||||||||||||||||||
Cancellation of convertible note principal amount | 9,490,000 | |||||||||||||||||||
Debt original issue of discount | 2,000,000 | |||||||||||||||||||
Replacement Note [Member] | ||||||||||||||||||||
Notes payable principal balance | $ 2,197,231 | |||||||||||||||||||
Conversion price per share | $ 0.50 | |||||||||||||||||||
Exchange Agreement [Member] | Warrant [Member] | ||||||||||||||||||||
Fair value of the original warrant derivative | $ 37,368 | |||||||||||||||||||
Change in fair value derivatives | $ 29,795 | |||||||||||||||||||
Exchange Agreement [Member] | Derivative [Member] | ||||||||||||||||||||
Extinguishment of debt | $ 37,368 | |||||||||||||||||||
Estimated fair value of conversion feature and warrants | 7,985 | |||||||||||||||||||
Gain on exchange of debt and warrant obligations | $ 29,383 | |||||||||||||||||||
Side-letter Agreement [Member] | ||||||||||||||||||||
Issuance of warrant to purchase shares of common stock | 61,380 | |||||||||||||||||||
Warrants price per share | $ 0.50 | |||||||||||||||||||
Percentage of fully diluted shares outstanding | 9.99% | |||||||||||||||||||
Number of shares issued values | $ 567,348 | |||||||||||||||||||
Shares issued price per share | $ 0.0001 | |||||||||||||||||||
Warrant expiration date | Jun. 19, 2026 | |||||||||||||||||||
Side-letter Agreement [Member] | Minimum [Member] | ||||||||||||||||||||
Sale of stock, price per share | $ 0.10 | |||||||||||||||||||
Side-letter Agreement [Member] | New Warrant [Member] | ||||||||||||||||||||
Percentage of fully diluted shares outstanding | 9.99% | |||||||||||||||||||
Exchange Agreement Amendment 1 [Member] | ||||||||||||||||||||
Percentage of fully diluted shares outstanding | 9.99% | |||||||||||||||||||
Number of shares issued values | $ 605,816 | |||||||||||||||||||
May 2015 Private Placement [Member] | ||||||||||||||||||||
Notes payable principal balance | $ 12,000,000 | |||||||||||||||||||
Issuance of warrant to purchase shares of common stock | 1,800,000 | |||||||||||||||||||
Common stock, par value | $ 0.0001 | |||||||||||||||||||
Percentage of fee received of cash proceeds | 6.00% | |||||||||||||||||||
Proceeds from issuance of common stock | $ 600,000 | |||||||||||||||||||
Received amount at closing | $ 27,000 | |||||||||||||||||||
May 2015 Private Placement [Member] | Exchange Agreement [Member] | Convertible Note Payable [Member] | ||||||||||||||||||||
Convertible debt outstanding | $ 2,197,231 | |||||||||||||||||||
Accrued interest | $ 28,643 | |||||||||||||||||||
May 2015 Private Placement [Member] | Registration Rights Agreement [Member] | Convertible Note Payable [Member] | ||||||||||||||||||||
Common stock, capital shares reserved for future issuance | 770,485 | |||||||||||||||||||
Placement Agent [Member] | ||||||||||||||||||||
Issuance of warrant to purchase shares of common stock | 240,000 | |||||||||||||||||||
Warrants price per share | $ 5 | |||||||||||||||||||
Private Placement Memorandum [Member] | Securities Purchase Agreement [Member] | ||||||||||||||||||||
Notes payable principal balance | $ 9,550,000 | |||||||||||||||||||
Note payments for cash and issuing promissory note | $ 450,000 |
Secured Convertible Note Paya_4
Secured Convertible Note Payable - Schedule of Secured Convertible Note Payable (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Debt Disclosure [Abstract] | ||
Secured convertible note payable, at fair value | ||
Less: Current maturities | ||
Secured convertible note payable, long-term |
Secured Convertible Note Paya_5
Secured Convertible Note Payable - Schedule of Activity in Secured Convertible Note (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Debt Disclosure [Abstract] | ||
Balance, beginning | $ 2,197,231 | |
Funding under the Investor Note during the period | ||
Principal repaid during the period by issuance of common stock | ||
Change in fair value of secured convertible note during the period | ||
Exchange of secured convertible note payable for common stock | ||
Balance, ending | $ 2,197,231 |
Secured Convertible Note Paya_6
Secured Convertible Note Payable - Schedule of Gain on Exchange of Debt and Warrant Obligations (Details) | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Exchange Agreement on May 23, 2019 [Member] | |
Gain on exchange of debt and warrant obligations | $ 2,193,861 |
Exchange Agreement on May 23, 2019 [Member] | Convertible Note [Member] | |
Gain on exchange of debt and warrant obligations | 2,197,231 |
Exchange Agreement on May 23, 2019 [Member] | Accrued Interest [Member] | |
Gain on exchange of debt and warrant obligations | 28,643 |
Exchange Agreement on May 23, 2019 [Member] | Warrant Derivative [Member] | |
Gain on exchange of debt and warrant obligations | 116,731 |
Exchange Agreement on May 23, 2019 [Member] | Exchange of Securities [Member] | |
Gain on exchange of debt and warrant obligations | (73,304) |
Side-Letter Agreement on November 23, 2019 [Member] | Common Shares Issued [Member] | |
Gain on exchange of debt and warrant obligations | (68,082) |
Side-Letter Agreement on November 23, 2019 [Member] | Warrants Shares Issued [Member] | |
Gain on exchange of debt and warrant obligations | $ (7,358) |
Secured Convertible Note Paya_7
Secured Convertible Note Payable - Schedule of Gain on Exchange of Debt and Warrant Obligations (Details) (Parenthetical) - $ / shares | Nov. 23, 2019 | May 23, 2019 | Oct. 18, 2013 | Dec. 31, 2013 |
Number of shares issued | 15,000 | 15,000 | ||
Exchange Agreement on May 23, 2019 [Member] | Exchange of Securities [Member] | ||||
Number of shares issued | 605,816 | |||
Shares issued price per share | $ 0.121 | |||
Side-Letter Agreement on November 23, 2019 [Member] | Common Shares Issued [Member] | ||||
Number of shares issued | 567,348 | |||
Side-Letter Agreement on November 23, 2019 [Member] | Warrants Shares Issued [Member] | ||||
Number of shares issued | 61,380 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) | Jul. 29, 2019 | Jun. 19, 2019 | May 21, 2018 | Apr. 20, 2017 | Nov. 08, 2016 | May 15, 2016 | May 07, 2016 | Jan. 15, 2016 | Jan. 07, 2016 | Oct. 15, 2015 | Oct. 07, 2015 | Jul. 15, 2015 | Jul. 07, 2015 | Dec. 27, 2013 | Oct. 18, 2013 | Oct. 31, 2019 | Aug. 31, 2019 | Jun. 30, 2019 | Mar. 31, 2020 | Dec. 31, 2013 | Dec. 31, 2019 |
Proceeds from unsecured credit facility | $ 40,000 | ||||||||||||||||||||
Debt maturity date | Apr. 19, 2018 | Nov. 7, 2017 | |||||||||||||||||||
Issuance of warrants exercisable to purchase of common stock | 3,500 | 5,000 | 3,500 | 5,000 | |||||||||||||||||
Warrants exercise price per share | $ 5.60 | $ 5.60 | $ 5.60 | $ 5.60 | |||||||||||||||||
Increase of warrants issuance | 7,000 | 10,000 | |||||||||||||||||||
Warrants exercise price drops price per share | $ 5.60 | $ 5.60 | |||||||||||||||||||
Number of shares issued | 15,000 | 15,000 | |||||||||||||||||||
Notes payable current | $ 1,104,125 | $ 1,104,125 | |||||||||||||||||||
Warrant to purchase shares of common stock | 34,000 | 34,000 | |||||||||||||||||||
Proceeds from convertible debt | $ 200,000 | $ 35,000 | $ 50,000 | ||||||||||||||||||
Conversion price per share | $ 5 | $ 5 | $ 5.60 | $ 5.60 | |||||||||||||||||
Debt instruments interest rate | 8.00% | 8.00% | 8.00% | 8.00% | |||||||||||||||||
Estimated fair value of conversion feature and warrants | $ 74 | $ 131 | $ 267 | $ 379 | $ 11,827 | $ 22,314 | |||||||||||||||
Warrants expiration period | 5 years | 5 years | 5 years | 5 years | |||||||||||||||||
Debt maturity extended date | Jan. 15, 2016 | Jan. 7, 2016 | |||||||||||||||||||
Debt maturity extended later date | Oct. 15, 2016 | May 7, 2016 | |||||||||||||||||||
Two Convertible Notes [Member] | |||||||||||||||||||||
Debt maturity date | Jun. 19, 2026 | ||||||||||||||||||||
Issuance of warrants exercisable to purchase of common stock | 570,000 | ||||||||||||||||||||
Warrants exercise price per share | $ 0.50 | ||||||||||||||||||||
Unpaid principal balance | $ 240,000 | ||||||||||||||||||||
Accrued and unpaid interest | 45,020 | ||||||||||||||||||||
Estimated fair value of conversion feature and warrants | $ 62,564 | ||||||||||||||||||||
Revenue Sharing Agreement [Member] | |||||||||||||||||||||
Gross revenue percentage, description | One half of one percent (1/2%) of the gross revenue derived from the share of all hydrocarbons produced at the wellhead from the Nicaraguan Concessions | ||||||||||||||||||||
Debt instrument description | The Company did not make the required $100,000 cash payment within the contractual 60-day time period and therefore the term sheet is not binding on the parties. The parties are attempting to resolve the payment default and otherwise complete the Exchange Agreement as described above | ||||||||||||||||||||
Common Stock Purchase Warrant [Member] | |||||||||||||||||||||
Warrants exercise price per share | $ 5 | ||||||||||||||||||||
Warrant to purchase shares of common stock | 100,000 | ||||||||||||||||||||
December 2013 Note [Member] | |||||||||||||||||||||
Proceeds from unsecured credit facility | $ 1,050,000 | ||||||||||||||||||||
Debt maturity date | Mar. 12, 2014 | Apr. 30, 2016 | |||||||||||||||||||
Issuance of warrants exercisable to purchase of common stock | 100,000 | ||||||||||||||||||||
Warrants exercise price per share | $ 15 | ||||||||||||||||||||
Increase of warrants issuance | 1,333,333 | ||||||||||||||||||||
Warrants exercise price drops price per share | $ 0.75 | ||||||||||||||||||||
December 2013 Note [Member] | Revenue Sharing Agreement [Member] | |||||||||||||||||||||
Notes payable principal balance | $ 1,050,000 | ||||||||||||||||||||
December 2013 Note to April 7, 2016 One [Member] | |||||||||||||||||||||
Percentage of revenue sharing agreement description | In connection with an extension of the December 2013 Note to April 7, 2016, the Company agreed to enter into a definitive revenue sharing agreement with the lender to grant the lender under the revenue sharing agreement an irrevocable right to receive a monthly payment equal to one half of one percent (1/2%) of the gross revenue derived from the share of all hydrocarbons produced at the wellhead from the Nicaraguan Concessions and any other oil and gas concessions that the Company and its affiliates may acquire in the future. This percent increased to one percent (1%) when the Company did not pay the December 2013 Note in full by August 7, 2014. Therefore, the revenue sharing agreement is fixed at one percent (1%). The value of the one percent (1.0%) definitive revenue sharing agreement granted to the lender as consideration for the extension of the maturity date to December 7, 2014 was estimated to be $964,738. | ||||||||||||||||||||
Estimated revenue | $ 964,738 | ||||||||||||||||||||
December 2013 Note to April 7, 2016 Two [Member] | |||||||||||||||||||||
Warrants exercise price per share | $ 5 | ||||||||||||||||||||
Increase of warrants issuance | 1,333,333 | ||||||||||||||||||||
Warrants exercise price drops price per share | $ 0.75 | ||||||||||||||||||||
Restricted common stock issued | 20,000 | ||||||||||||||||||||
Repayment of debt | $ 50,000 | ||||||||||||||||||||
Warrant expiration date description | March 31, 2020 and December 31, 2019 | ||||||||||||||||||||
Number of shares issued | 20,000 | ||||||||||||||||||||
Number of shares issued, value | $ (104,000) | ||||||||||||||||||||
Increased value of the outstanding warrants | (68,716) | ||||||||||||||||||||
December 2013 Note [Member] | |||||||||||||||||||||
Number of shares issued | 740,500 | ||||||||||||||||||||
Unpaid principal balance | 1,000,000 | $ 1,000,000 | |||||||||||||||||||
Repayments of notes payable | $ 100,000 | ||||||||||||||||||||
Notes payable principal balance | 1,050,000 | ||||||||||||||||||||
Notes payable current | 1,000,000 | ||||||||||||||||||||
Accrued and unpaid interest | $ 505,000 | ||||||||||||||||||||
Convertible Note Payable [Member] | |||||||||||||||||||||
Derivative liability | 239 | 662 | |||||||||||||||||||
Convertible Notes Payable One [Member] | |||||||||||||||||||||
Derivative liability | 167 | 454 | |||||||||||||||||||
Unsecured Promissory Note [Member] | |||||||||||||||||||||
Repayments on unsecured promissory note | $ 50,000 | ||||||||||||||||||||
Outstanding principal on unsecured promissory note | $ 19,125 | $ 19,125 | |||||||||||||||||||
Unsecured Promissory Note [Member] | Private Third Lender [Member] | |||||||||||||||||||||
Proceeds from convertible debt | $ 13,125 | $ 5,500 | $ 50,500 | ||||||||||||||||||
Conversion price per share | $ 0.50 | ||||||||||||||||||||
Debt instruments interest rate | 8.00% |
Debt - Schedule of Debt Outstan
Debt - Schedule of Debt Outstanding (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Total notes payable, short-term | $ 1,104,125 | $ 1,104,125 |
Note Payable (In Default) One [Member] | ||
Total notes payable, short-term | 1,000,000 | 1,000,000 |
Notes Payable (In Default) Two [Member] | ||
Total notes payable, short-term | 50,000 | 50,000 |
Notes Payable (In Default) Three [Member] | ||
Total notes payable, short-term | 35,000 | 35,000 |
Note Payable (Due on Demand) Four [Member] | ||
Total notes payable, short-term | $ 19,125 | $ 19,125 |
Debt - Schedule of Gain on Exti
Debt - Schedule of Gain on Extinguishment of Debt (Details) - Exchange Agreement on June 19, 2019 [Member] | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Gain on exchange of debt and warrant obligations | $ 222,456 |
Convertible Note [Member] | |
Gain on exchange of debt and warrant obligations | 240,000 |
Accrued Interest on Convertible Notes [Member] | |
Gain on exchange of debt and warrant obligations | 45,020 |
Stock Purchase Warrant [Member] | |
Gain on exchange of debt and warrant obligations | $ (62,564) |
Stock Options (Details Narrativ
Stock Options (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Number of options granted | ||
Stock-based compensation expense in connection with vesting of options granted | $ 0 | $ 0 |
Share based vested and unvested stock options, intrinsic value | 0 | |
Unrecognized compensation cost related to unvested stock options | 0 | |
Stock-based compensation expense | 24,308 | $ 0 |
Unrecognized compensation costs to non-vested restricted stock grants | $ 49,418 | |
2006 Equity Incentive Plan [Member] | ||
Issuance of reserved common stock, shares | 47,000 | |
2005 Equity Incentive Plan [Member] | ||
Issuance of reserved common stock, shares | 47,500 | |
2005 Plan and 2006 Plan [Member] | ||
Stock date of granted expiration period | 10 years | |
2015 Stock Option and Restricted Stock Plan [Member] | ||
Issuance of reserved common stock, shares | 500,000 | |
Shares available for future grants under all plans | 500,000 |
Stock Options - Summary of Stoc
Stock Options - Summary of Stock Option Activity (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | ||
Number of Options, Outstanding, Beginning | 332,000 | |
Number of Options, Granted | ||
Number of Options, Exercised | ||
Number of Options, Forfeited | ||
Number of Options, Outstanding, Ending | 332,000 | |
Number of Options, Outstanding and Exercisable | 332,000 | |
Weighted Average Exercise Price Per Share, Outstanding, Beginning | $ 41.86 | |
Weighted Average Exercise Price Per Share, Granted | ||
Weighted Average Exercise Price Per Share, Exercised | ||
Weighted Average Exercise Price Per Share, Forfeited | ||
Weighted Average Exercise Price Per Share, Outstanding, Ending | 41.86 | |
Weighted Average Exercise Price Per Share, Outstanding and Exercisable | $ 41.86 | |
Weighted Average Remaining Contractual Term, Outstanding, Beginning | 2 years 3 months 15 days | |
Weighted Average Remaining Contractual Term, Outstanding, Ending | 2 years 15 days | |
Weighted Average Remaining Contractual Term, Outstanding and Exercisable | 2 years 15 days | |
Aggregate Intrinsic Value, Outstanding, Beginning | ||
Aggregate Intrinsic Value, Outstanding, Ending | ||
Aggregate Intrinsic Value, Outstanding and Exercisable |
Stock Options - Schedule of Res
Stock Options - Schedule of Restricted Stock Unit Activity (Details) - Restricted Stock [Member] | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Number of Restricted shares, Nonvested balance, beginning | shares | 750,000 |
Number of Restricted shares, Granted | shares | |
Number of Restricted shares, Vested | shares | |
Number of Restricted shares, Forfeited | shares | |
Number of Restricted shares, Nonvested balance, end | shares | 750,000 |
Weighted average grant date fair value, Nonvested balance, beginning | $ / shares | $ 0.13 |
Weighted average grant date fair value, Granted | $ / shares | |
Weighted average grant date fair value, Vested | $ / shares | |
Weighted average grant date fair value, Forfeited | $ / shares | |
Weighted average grant date fair value, Nonvested balance, end | $ / shares | $ 0.13 |
Stock Options - Schedule of Non
Stock Options - Schedule of Nonvested Restricted Stock Unit Activity (Details) | 3 Months Ended |
Mar. 31, 2020USD ($) | |
2020 [Member] | |
Number of shares nonvested balance of restricted stock | $ 750,000 |
Derivative Instruments (Details
Derivative Instruments (Details Narrative) - shares | Mar. 31, 2020 | Dec. 31, 2019 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Warrant to purchase shares of common stock | 34,000 | 34,000 |
Derivative Instruments - Schedu
Derivative Instruments - Schedule of Estimated Fair Value of Derivative Liabilities (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020$ / sharesshares | Dec. 31, 2019$ / sharesshares | |
Number of warrants in aggregate | shares | 34,000 | 34,000 |
Derivative [Member] | Volatility - Range [Member] | ||
Fair value assumptions, measurement input | 344.8 | 316.2 |
Derivative [Member] | Risk Free Rate [Member] | ||
Fair value assumptions, measurement input | 0.37 | 1.69 |
Derivative [Member] | Contractual Term [Member] | Minimum [Member] | ||
Fair value assumptions, measurement input, term | 2 months 30 days | 6 months |
Derivative [Member] | Contractual Term [Member] | Maximum [Member] | ||
Fair value assumptions, measurement input, term | 1 year 29 days | 1 year 3 months 19 days |
Derivative [Member] | Exercise Price [Member] | ||
Fair value assumptions, measurement input, exercise price | $ / shares | $ 5.60 | $ 5.60 |
Derivative Instruments - Summar
Derivative Instruments - Summary of Changes in Fair Value Derivative Financial Instruments (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Beginning balance | $ 1,116 | |
Unrealized derivative gains included in other income/expense for the period | (710) | $ 68,447 |
Ending balance | $ 406 |
Warrants (Details Narrative)
Warrants (Details Narrative) - USD ($) | 3 Months Ended | ||||
Mar. 31, 2020 | Oct. 15, 2015 | Oct. 07, 2015 | Jul. 15, 2015 | Jul. 07, 2015 | |
Weighted average of purchase warrants term | 5 years | 5 years | 5 years | 5 years | |
Warrant [Member] | |||||
Weighted average of purchase warrants term | 5 years 6 months | ||||
Common stock purchase warrants and intrinsic value | $ 0 |
Warrants - Summary of Warrant A
Warrants - Summary of Warrant Activity (Details) - Warrant [Member] | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Number of warrants, Outstanding and exercisable, beginning balance | shares | 946,943 |
Number of warrants, Issued pursuant to exchange agreements | shares | |
Number of warrants, Exercised/forfeited | shares | (171,563) |
Number of warrants, Outstanding and exercisable, ending balance | shares | 775,380 |
Weighted Average Exercise Price Per Share, Outstanding and exercisable, beginning balance | $ / shares | $ 1.78 |
Weighted Average Exercise Price Per Share, Issued pursuant to exchange agreements | $ / shares | |
Weighted Average Exercise Price Per Share, Exercised/forfeited | $ / shares | (5) |
Weighted Average Exercise Price Per Share, Outstanding and exercisable, ending balance | $ / shares | $ 1.07 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Income Tax Disclosure [Abstract] | |
Corporate tax rate | 21.00% |
Percentage on valuation allowance | 100.00% |
Net operating loss carry-forward | $ 66,950,000 |
Net operating loss carry-forward balance expires | Expire from 2025 through 2038. |
Change in ownership percentage | 50.00% |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | Jul. 31, 2019 | Dec. 08, 2014 | Aug. 15, 2014 | Oct. 18, 2013 | Oct. 31, 2012 | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2013 |
Asset retirement obligations | $ 45,103 | $ 1,716,003 | $ 1,716,003 | |||||
Seeking of reclamation costs | 30,000 | |||||||
Estimated liability relating each operating well | 45,103 | |||||||
Total estimated liability relating to all operating wells | $ 780,000 | |||||||
Liability relating to all operating wells, description | 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. | |||||||
Payment for demand | $ 56,000 | |||||||
Payment for investor relations services | $ 7,000 | $ 14,000 | ||||||
Number of shares issued | 15,000 | 15,000 | ||||||
Number of shares issued during period settlement of final termination agreement | 2,800 | |||||||
Damages amount | $ 79,594 | |||||||
Cambrian Consultants America, Inc [Member] | ||||||||
Default judgment granted against the company | $ 96,877 | |||||||
Core Energy, LLC [Member] | ||||||||
Proceeds from sale of property, percentage | 10.00% | |||||||
Purchase Option, Prior to December 31, 2019 [Member] | Core Energy, LLC [Member] | ||||||||
Non refundable deposits | $ 50,000 | |||||||
Acquisition of oil and gas properties | $ 2,500,000 | |||||||
December 2013 Note [Member] | Revenue Sharing Agreement [Member] | ||||||||
Notes payable principal balance | $ 1,050,000 | |||||||
Percentage of payment of revenue to related party | 1.00% | |||||||
Block Perlas [Member] | ||||||||
Letters of credit | 1,356,227 | |||||||
Block Tyra [Member] | ||||||||
Letters of credit | 278,450 | |||||||
Perlas Block and Tyra Block [Member] | 2016 [Member] | ||||||||
Payments of area fees | 194,485 | |||||||
Payments of training fees | 350,000 | |||||||
Perlas Block and Tyra Block [Member] | 2017 [Member] | ||||||||
Payments of area fees | 194,485 | |||||||
Payments of training fees | 350,000 | |||||||
Perlas Block and Tyra Block [Member] | 2018 [Member] | ||||||||
Payments of area fees | 194,485 | |||||||
Payments of training fees | 350,000 | |||||||
Perlas Block and Tyra Block [Member] | 2019 [Member] | ||||||||
Payments of area fees | 194,485 | |||||||
Payments of training fees | $ 350,000 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Jul. 31, 2019 | Mar. 31, 2020 | Dec. 31, 2019 |
Core Energy, LLC [Member] | Purchase Option, Prior to December 31, 2019 [Member] | |||
Non refundable deposits | $ 50,000 | ||
Acquisition of oil and gas properties | $ 2,500,000 | ||
Officers and Directors [Member] | |||
Accrued compensation | $ 1,829,208 | $ 1,829,208 | |
CFO's Firm [Member] | |||
Due to related party for consideration of services | $ 762,407 | $ 762,407 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | May 13, 2020 | Jul. 31, 2019 | Mar. 31, 2020 | Dec. 31, 2019 | Apr. 20, 2017 | Nov. 08, 2016 | Jul. 15, 2015 | Jul. 07, 2015 |
Debt instruments interest rate | 8.00% | 8.00% | 8.00% | 8.00% | ||||
Subsequent Event [Member] | Chairman, CEO & President [Member] | ||||||||
Proceeds from unsecured promissory note | $ 41,000 | |||||||
Debt instruments interest rate | 6.00% | |||||||
Core Energy, LLC [Member] | Purchase Option, Prior to December 31, 2019 [Member] | ||||||||
Non refundable deposits | $ 50,000 | |||||||
Acquisition of oil and gas properties | $ 2,500,000 | |||||||
December 2013 Note [Member] | ||||||||
Unpaid principal balance | $ 1,000,000 | $ 1,000,000 |