Annual report pursuant to Section 13 and 15(d)

NOTE 7. EQUITY

v3.7.0.1
NOTE 7. EQUITY
 12 Months Ended
Dec. 31, 2016
Stockholders' Equity Note [Abstract]  
Stockholders' Equity Note Disclosure [Text Block]
NOTE 7. EQUITY

Preferred Stock – 1,000,000 shares authorized, none issued or outstanding.

Common Stock –

On May 1, 2015, the Company commenced a private offering of its securities under Regulation D to accredited investors. Each unit is comprised of 100,000 shares of common stock at a price of $0.10 per share and one warrant to purchase an additional 100,000 shares of common stock at a price of $0.12 per share at any time prior to August 5, 2018. As of December 31, 2015 fourteen (14) units had been subscribed for and 1,400,000 shares of common stock had been purchased by various accredited investors. See Note 6 for financial related details on all purchases.

On September 1, 2015, the Company commenced a private offering of its securities under Regulation D to accredited investors. Each unit is comprised of 100,000 shares of common stock at a price of $0.06 per share and one warrant to purchase an additional 100,000 shares of common stock at a price of $0.10 per share at any time prior to August 31, 2018. As of December 31, 2015 twenty seven (27) units had been subscribed for and 2,700,000 shares of common stock had been purchased. Seven (7) of those units were purchased by accredited investors. This offering was closed on May 31, 2016.

On September 23, 2015, the Company acquired a 10% working interest from Jovian in the SUDS field, in exchange for 10,586,805 shares of restricted common stock.  For further details see Note 9.

On September 24, 2015, the Board of Directors of the Company approved the adoption of the 2015 Stock Incentive Plan (the “Plan”). The Plan provides an opportunity, subject to approval of our Board of Directors of individual grants and awards, for any employee, officer, director or consultant of the Company. The maximum aggregate number of shares of common stock which may be issued pursuant to awards under the Plan is 4,000,000 shares. The plan was ratified by the stockholders at the Company’s annual meeting which was held on April 14, 2016.

At the 2015 Annual Meeting of our Stockholders, held on April14, 2016, the shareholders voted to increase the total number of authorized shares of common stock to 150,000,000.

On November 4, 2015, the Company acquired a 15%  net working interest in the TLSAU field and all operating equipment on the field, pursuant to the terms of a Memorandum of Agreement between the Company and BSNM, which was dated November 4, 2015 (the “Purchase Agreement”).

On February 1, 2016, the Company acquired 100% of the issued and outstanding shares in Askarii Resources, LLC, a private Texas based oil & gas service company for 1,000,000 shares of Company common stock.  See Note 9 for further details on this transaction.

On March 11, 2016, the Board of Directors granted three (3) contract employees 700,000 shares of the Company’s restricted common stock for settlement of outstanding payables. The shares were issued at the current market price of $0.06 per share on March 11, 2016, at an aggregate value of $42,000.

On August 17, 2016 the Board of Directors issued two key employees (Carla Petty and Jason Bagby) 200,000 shares of the Company’s restricted common stock.  The shares were issued at current market price of $0.077 per share on August 17, 2016 at a value of $15,400 and recorded as stock based compensation.

On September 1, 2016, the Company acquired an additional 25% working interest ownership of TLSAU field through the issuance of 3,500,000 shares of its restricted common stock with an unrelated party.  See Note 9 for additional details on this transaction.

On September 28, 2016, the Company issued 24,308,985 shares of its restricted common stock to Jovian to acquire an additional 40% working interest ownership of SUDS. See Note 9 for further details of this transaction.

On September 30, 2016, per the consulting agreement, a contractor was issued 11,607 shares of common stock in exchange for services.  These shares were valued at $1,625 at a market price of $0.14 per share.

Effective September 30, 2016, the seven (7) Advisory Board members were compensated for their service from April 1, 2016 through September 30, 2016 (for two quarters) though the granting of 12,500 warrants each (87,500 total warrants per quarter), per quarter per Board member, to purchase 12,500 shares of the Company’s common stock at an average exercise price of $0.095 per share, which vested immediately, and are exercisable for 36 months thereafter. In 2016, a total of 262,000 warrants were issued with a fair value of $29,161 based on an average $0.095 valuation, volatility of 235%, a discount rate of 1.09% and a 3 year term. The total amount of the warrants was expensed in 2016. These warrants are subject to a clawback provision which would be ratably invoked if an advisory board member did not complete his 2016 service term.

On December 7, 2016 the Board of Directors issued a key employee (Horacio Fernandez) 100,000 shares of the Company’s restricted common stock.  The shares were issued at current market price of $0.12 per share on the effective date of November 17, 2016 at a value of $12,000 and recorded as stock based compensation.

During December 2016, warrants to purchase 100,000 shares of common stock were issued for short term debt. The loans were provided by accredited investors.  These warrants had a valuation of $14,870 with an exercise price of $0.12 per share and expire in December 2019.

On December 31, 2016, a contractor was granted warrants to purchase 40,000 shares of common stock with an exercise price of $0.14 per share.  These warrants were valued at $5,545 at a market price of $0.16 per share.

On December 31, 2016, per the consulting agreement, a contractor was issued 18,157 shares of common stock in exchange for services.  These shares were valued at $2,869 at a market price of $0.16 per share.

Summary information regarding common stock warrants issued and outstanding as of December 31, 2016, is as follows: 

 
  
Warrants
    
Weighted Average Exercise Price
    
Aggregate intrinsic value
    
Weighted average remaining contractual life (years)
  
Outstanding at year ended December 31, 2014
    
4,170,111
    
$
0.77
    
$
—
      
6.1
  
Granted
    
7,740,000
      
0.10
      
—
      
2.6
  
Exercised
    
—
      
—
      
—
          
Expired
    
—
      
—
      
—
          
Outstanding at year ended December 31, 2015
    
11,910,111
      
0.33
      
—
      
3.5
  
Granted
    
5,740,416
      
0.09
      
—
      
2.6
  
Exercised
    
(825,000
)
    
—
      
—
          
Expired
    
—
      
—
      
—
          
Outstanding at year ended December 31, 2016
    
16,825,527
    
$
0.25
    
$
—
      
3.2
  

   
Year Ended
December 31,
  
   
2016
    
2015
  
Warrants Granted
            
  Board of Director Service
    
2,500,000
      
2,000,000
  
  PORRI
    
150,000
          
  Deferred Salary – CEO, CFO
    
206,666
      
40,000
  
  Providing Bond Related Collateral
    
31,250
          
  Pre-bridge Loans
    
290,000
          
  Short-term Debt
    
100,000
          
  Advisory Board
    
262,500
          
  Deferred loan penalty
    
10,000
          
  Consulting Agreements
    
340,000
          
  Rick Wilber Loan
    
500,000
          
  Signing Bonus – CEO, CFO
    
550,000
          
  Private Placement Memo (Sept 2015)
    
800,000
      
3,500,000
  
  Private Placement Memo (May 2015)
          
2,200,000
  
    Total
    
5,740,416
      
7,740,000