| 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 2021 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 “Infinity,” the “Company,”
“we,” “us” and “our” refer collectively to Infinity Energy Resources, Inc., its predecessors and subsidiaries
or one or more of them as the context may require. 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. Civil unrest within Nicaragua and difficulties
encountered with negotiations on extensions and the issuance of permits to drill with the Nicaraguan government made the exploration and
development of the underlying concessions problematic. In addition, the Company was in technical default of the certain terms of the Nicaraguan
Concession and the Nicaraguan government terminated both of the underlying Concessions. As a result, the Company abandoned all of its
efforts to explore and develop the Nicaraguan Concessions effective January 1, 2020. We sold our wholly-owned subsidiary, Infinity Oil
and Gas of Texas, Inc. (“Infinity Texas”) in 2012 and its wholly-owned subsidiary, Infinity Oil and Gas of Wyoming, Inc. (“Infinity
Wyoming”), was administratively dissolved in 2009. Subsequent to the termination of the Nicaraguan Concessions,
we 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 non-refundable deposit of $50,000 to bind the 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. On September 2, 2020, the Company acquired a new Option from Core under similar terms as the previous Option, however
the newly acquired Option permitted the Company to purchase the Properties at a reduced price of $900,000 at any time prior to November
1, 2020 and the Company agreed to immediately conduct a capital raise of between approximately $2-10 million to fund its acquisition and
development of the Properties. On December 14, 2020 the parties executed an Asset Purchase and Sale Agreement which extended the new Option
to January 11, 2021, which expired. We and Core, as well as all of the members of Core,
Mandalay LLC and Coal Creek Energy, LLC (collectively, the “Seller”) entered into that certain side letter agreement on March
31, 2021 (the “Side Letter”), pursuant to which we and Core agreed to set the closing date on which the Properties would be
purchased pursuant to the asset purchase and sale agreement, entered into by the Company and the Seller on December 14, 2020 (the “Asset
Purchase Agreement”), to April 1, 2021 (the “APA Closing Date”). Pursuant to the Side Letter, the Company is responsible
for reimbursing the Seller for certain prorated revenues and expenses from January 1, 2021 through the APA Closing Date. On April 1, 2021 we completed the acquisition of the
Properties, under the same terms of the Asset Purchase Agreement which provided a purchase price of $900,000. The Company raised approximately
$2.05 million on March 26, 2021 through the issuance of Convertible Preferred Stock with detachable common stock purchase warrants. The
funds raised pursuant to the Convertible Preferred Stock issuance were used to complete the acquisition of the Properties on April 1,
2021 and to retire all outstanding Convertible Notes Payable. The purchase of the Properties included 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 commenced rework the existing production wells
after completion of the acquisition of the Properties and intend to continue doing so during the second quarter of 2021. Thereafter, the
Company plans to develop the Properties existing oil & gas reserves including the exploration for the existence of new oil & gas
zones and other mineral reserves Properties may hold. We may find it necessary to obtain new sources of
debt and/or equity capital to fund the exploration and development of the Properties enumerated above, as well as satisfying our existing
debt obligations. We can provide no assurance that we will be able to obtain sufficient new debt/equity capital to fund our planned development
of the Properties. Covid–19 Pandemic The unaudited condensed financial statements contained
in this quarterly report on Form 10-Q 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, 2021. Economies throughout the world have been and
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 quarterly 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. Going Concern The Company must raise substantial amounts of debt
and equity capital from other sources in the future in order to fund the (i) development of the Properties acquired on April 1, 2021;
(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 2021. The Company has made substantial progress in resolving
many of its existing financial obligations during the three months ended March 31, 2021. In that regard, on March 31, 2021, the Company
and six creditors entered into Debt Settlement Agreements which extinguished accounts payable and accrued liabilities totalling $2,866,497
in exchange for the issuance of $28,665 in principal balance of 3% Convertible Promissory Notes with detachable warrants to purchase 5,732,994
shares of common stock for $0.50 per share. On April 1, 2021, the Company and the holders of two notes payable that were in default reached
a settlement whereby the Company issued a total of 245,000 shares of Common stock in exchange for the extinguishment of the outstanding
principal, accrued interest and associated common stock purchase warrants which totalled $123,830 as of April 1, 2021. The Company has
made substantial progress in resolving its financial obligations, however, there remains significant amounts of obligations that are currently
past due and are in default that the Company is attempting to obtain extensions of the maturity dates and/or compromises regarding payment
of its obligations. The Company will have significant financial commitments
to execute its planned exploration and development of the Properties. The Company may find it necessary to raise substantial amounts of
debt or equity capital to fund such exploration and development activities and may 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. There can be no assurance that it will be able to obtain such new funding or be able to reach agreements with
industry operators and other third parties 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 unaudited condensed financial statements are issued. The unaudited condensed 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. Convertible Instruments In August 2020, the FASB issued ASU 2020-06, “Debt
– Debt with Conversion and Other Options (Subtopic 470- 20) and Derivatives and Hedging – Contracts in Entity’s Own
Equity (Subtopic 815-40)” The amendments in ASU 2020-06 are effective for public
entities that meet the definition of an SEC filer, excluding smaller reporting companies as defined by the SEC, for fiscal years beginning
after December 15, 2021. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023. Early
adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. The Company early adopted ASU 2020-06 effective January
1, 2021 and has applied its effects to the 3% Convertible Promissory Notes issued on March 31, 2021 (See Note 2). The Company elected
to adopt ASU 2020-06 using the modified retrospective method which enables entities to apply the transition requirements in this ASU at
the effective date of ASU 2020-06 (rather than as of the earliest comparative period presented) with the effect of initially adopting
ASU 2020-06 recognized as a cumulative-effect adjustment to retained earnings (accumulated deficit) on the first day of the period adopted.
Therefore, this transition method applies the amendments in ASU 2020-06 to outstanding financial instruments as of the beginning of the
fiscal year of adoption (January 1, 2021), with the cumulative effect of the change recognized as an adjustment to the opening balance
of retained earnings (accumulated deficit) as of the date of adoption. In accordance with the modified retrospective method, no adjustment
was made to the comparative-period information including earnings (loss) per share. The Company applied ASU-2020-06 to all outstanding
financial instruments as of January 1, 2021, (the date of adoption of ASU 2020-06). The convertible notes payable issued on August 19,
2020 was the only outstanding financial instrument effected by this new accounting standard as of January 1, 2021. Therefore the application
of ASU-2020-06 to this convertible note payable was used to determine the cumulative effect of the adoption of the new accounting standard.
The cumulative effect of the adoption of the new accounting standard was determined and recognized as an adjustment to the opening balance
of retained earnings (accumulated deficit) which resulted in an increase to the carrying value of convertible notes payable as of January
1, 2021 by $160,900, a decrease to additional paid in capital of $252,961 and a decrease to accumulated deficit of $92,061. See Note 2. Prior to the adoption of ASU 2020-06, the Company
applied the existing accounting standards for derivatives and hedging and for distinguishing liabilities from equity when accounting for
hybrid contracts that feature conversion options. The accounting standards require companies to bifurcate conversion options from their
host instruments and account for them as free-standing derivative financial instruments according to certain criteria. The criteria includes
circumstances in which (i) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related
to the economic characteristics and risks of the host contract, (ii) the hybrid instrument that embodies both the embedded derivative
instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles
with changes in fair value reported in earnings as they occur and (iii) a separate instrument with the same terms as the embedded derivative
instrument would be considered a derivative instrument. The derivative is subsequently marked to market at each reporting date based on
current fair value, with the changes in fair value reported in results of operations. Conversion options that contain variable settlement
features such as provisions to adjust the conversion price upon subsequent issuances of equity or equity linked securities at exercise
prices more favorable than that featured in the hybrid contract generally result in their bifurcation from the host instrument. 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 fair value of derivative liabilities, stock-based awards, and
the realization of deferred tax assets. Basic and Diluted Earnings (Loss) Per Share Net earnings (loss) per share is calculated in accordance
with FASB ASC 260, Earnings Per Share, for the periods presented. Basic net loss per share is based upon the weighted average number of
shares of Common Stock outstanding. Diluted net earnings (loss) per share is based on the assumption that all dilutive convertible shares,
warrants and stock options were converted or exercised or excluded from the calculations if their inclusion would be antidilutive. Dilution
is computed by applying the if-converted/treasury stock method. Under this method, options and warrants are assumed exercised at the beginning
of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase shares of Common Stock at
the average market price during the period. The Company has outstanding convertible promissory notes payable and Convertible Preferred
Stock both of which is potentially dilutive. Such potential dilutive effect is included in diluted earnings (loss) per share at the beginning
of the period (or at the time of issuance, if later) if they have a dilutive effect or such potentially dilutive securities are excluded
from the calculations if their inclusion would be antidilutive. The Company has outstanding
convertible promissory notes payable and convertible preferred stock both of which is potentially dilutive. The adoption of ASU 2020-06
requires the Company to assume share settlement when an instrument can be settled in cash or shares at the entity’s option. This
applies both to convertible instruments and freestanding arrangements that could result in cash or share settlement. ASU 2020-06 also
stipulates that an average market price for the period should be used in the computation of the diluted earnings (loss) per share denominator
in cases when the exercise price of an instrument may change based on an entity’s share price or changes in the entity’s share
price may affect the number of shares that would be used to settle a financial instrument. Lastly, an entity should use the weighted-average
share count from each quarter when calculating the year-to-date weighted average share count for all potentially dilutive securities. During the three months ended March 31, 2021, the
Company had outstanding the following securities that were potentially dilutive; 1) Series A Convertible Preferred Stock, 2) Convertible
Note Payable through its retirement on March 26, 2021, 3) Convertible Promissory Notes issued on March 31, 2021, 4) Common Stock purchase
warrants and 5) stock purchase options. The inclusion of all potentially dilutive securities in diluted earnings (loss) for the three
months ended March 31, 2021 and 2020 were excluded because of their anti-dilutive effect because of the net loss reported for both periods. Recent Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, “Income
Taxes (Topic 740): Simplifying the Accounting for Income Taxes,” Management does not believe that there are any other
recently issued and effective or not yet effective pronouncements that would have or are expected to have any significant effect on the
Company’s financial position, cash flows or results of operations. |
