~~11900~~15612 College Blvd ~~Suite 310, Overland Park,~~ , Lenexa, KS ~~66210~~66219

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ~~[X]~~ ☒ No ~~[ ]~~☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ~~[X]~~ ☒ No ~~[ ]~~☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated ~~filer”~~filer,” “accelerated ~~filer”~~filer,” “smaller reporting company,” and ~~“smaller reporting~~“emerging growth company” in Rule 12b-2 of Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ~~[ ]~~ ☐ No ~~[X]~~ ☒

~~Indicate~~As of November 12, 2021, the ~~number~~registrant had 18,793,265 shares of ~~shares outstanding of each of the issuer’s classes of capital, as of the latest practicable date:~~common stock, $0.0001 par value per share outstanding.

	September 30, 2017			December 31, 2016			September 30, 2021			December 31, 2020
		(unaudited)					(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	6,936		$	12,339		$	10,162		$	11,042
Account receivable								25,545			—
Prepaid expenses								16,590			—
Deposit to Acquire oil and gas property								—			75,000

Total current assets		6,936			12,339			52,297			86,042
Oil and gas properties and equipment:
Oil and gas properties and equipment								913,425			—
Accumulated depreciation, depletion and impairment								(61,668	)		—

Property and equipment, net								851,757			—

Total assets	$	6,936		$	12,339		$	904,054		$	86,042

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	6,000,216		$	5,965,329		$	1,073,184		$	1,190,309
Accrued liabilities (including $788,520 due to related party at September 30, 2017 and December 31, 2016)		3,446,906			3,161,290
Income tax liability		150,000			150,000
Accrued liabilities (including $-0- and $788,520 due to related party at September 30, 2021 and December 31, 2020)								1,159,741			3,737,580
Accrued interest		364,104			277,369			1,744			47,754
Asset retirement obligations		1,716,003			1,716,003
Secured convertible note payable-current		1,989,222			91,736
Convertible notes payable-short term		1,325,000			1,285,000
Notes payable, net								—			218,563

Total current liabilities		14,991,451			12,646,727			2,234,669			5,194,206

Secured convertible note payable-long term		—			49,592
Asset retirement obligations								1,729,986			1,716,003
Convertible promissory notes, net of unamortized discount								76,858			—
Derivative liabilities		105,079			183,430			—			321
Total long-term liabilities		105,079			233,022
Commitments and contingencies (Note 8)

Total liabilities								4,041,513			6,910,530
Commitments and contingencies (Note 11)								--

Stockholders’ deficit:
Preferred stock; par value $.0001 per share, 10,000,000 shares authorized; No shares issued or outstanding as of September 30, 2017 and December 31, 2016		—			—
Common stock, par value $.0001 per share, authorized 75,000,000 shares, issued and outstanding 7,712,569 shares at September 30, 2017 and December 31, 2016		771			771
Preferred stock; par value $.0001 per share, 10,000,000 shares authorized; Series A Convertible – 27,778 shares authorized with stated/liquidation value of $100 per share, 22,776 shares issued and outstanding as of September 30, 2021 and 0 shares issued or outstanding at December 31, 2020								2			—
Common stock, par value $.0001 per share, 75,000,000 shares authorized, 18,793,265 shares issued and outstanding at September 30, 2021 and 18,548,265 shares issued and outstanding at December 31, 2020								1,879			1,855
Additional paid-in capital		109,080,273			109,080,273			115,094,472			110,352,302
Accumulated deficit		(124,170,638	)		(121,948,454	)		(118,233,812	)		(117,178,645	)
Total stockholders’ deficit		(15,089,594	)		(12,867,410	)		(3,137,459	)		(6,824,488	)
Total liabilities and stockholders’ deficit	$	6,936		$	12,339		$	904,054		$	86,042

The accompanying notes are an integral part of these unaudited condensed financial statements.

~~INFINITY ENERGY RESOURCES, INC.~~(formerly Infinity Energy Resources, Inc.)

The accompanying notes are an integral part of these unaudited condensed financial statements.

~~INFINITY ENERGY RESOURCES, INC.~~(formerly Infinity Energy Resources, Inc.)

The accompanying notes are an integral part of these unaudited condensed financial statements.

~~INFINITY ENERGY RESOURCES, INC.~~(formerly Infinity Energy Resources, Inc.)

	Nine months ended September 30,						2021			2020
	2017			2016			For the Nine Months Ended September 30,
							2021			2020
Cash flows from operating activities:
Net loss	$	(2,222,184	)	$	(381,530	)
Adjustments to reconcile net loss to net cash used in operating activities:
Net (loss) income							$	(1,147,228	)	$	5,812,659
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Change in fair value of derivative liability								(199	)		(248	)
Stock-based compensation		—			7,598			345,749			154,441
Change in fair value of derivative liability		(78,351	)		(167,830	)
Change in fair value of senior convertible note		1,847,894			67,591
Amortization of debt discount		—			53,297
Change in operations assets and liabilities:
Increase in accounts payable and accrued liabilities		407,238			382,897
Depreciation, depletion and amortization								61,668			—
Accretion of asset retirement obligations								558			—
Gain on settlement of litigation								(23,000	)		—
Gain on exchange and extinguishment of liabilities								(179,407	)		(6,150,142	)
Loss on retirement of convertible note payable								115,805			—
Expiration and charge-off of deposit to acquire oil & gas properties								75,000			—
Amortization of discount on convertible note payable								30,016			44,094
Change in operating assets and liabilities, net of acquisitions of business:

Increase in accounts receivable								(25,545	)		—
Increase in prepaid expenses								(16,590	)		—
Increase (decrease) in accounts payable								194,645			(16,982	)
Decrease in accrued liabilities								(112	)		(30,112	)
Increase in accrued interest								10,146			51,865
Net cash used in operating activities		(43,403	)		(37,977	)		(558,494	)		(134,425	)

Cash flows from investing activities:		—			—
Net cash provided by (used in) investing activities		—			—
Acquisition of oil and gas properties and equipment								(900,000	)		—
Net cash used in investing activities								(900,000	)		—

Cash flows from financing activities:
Proceeds from issuance of senior convertible note payable		40,000			35,000
Cash dividends paid on preferred stock								(117,936	)		—
Repayment of convertible note payable								(453,539	)		—
Net proceeds from issuance of convertible preferred stock								1,929,089			—
Issuance of convertible promissory note with detachable warrants to purchase common stock								100,000			—
Repayment of notes payable pursuant to exchange agreements								—			(100,000	)
Proceeds from issuance of note payable-related party								—			41,000
Repayment of notes payable - related party								—			(41,000	)
Repayment of note payable								—			(19,125	)
Net proceeds from issuance of convertible notes payable								—			325,000
Net cash provided by financing activities		40,000			35,000			1,457,614			205,875

Net decrease in cash and cash equivalents		(5,403	)		(2,977	)
Net (decrease) increase in cash and cash equivalents								(880	)		71,450

Cash and cash equivalents:
Beginning		12,339			3,734			11,042			1,785
Ending	$	6,936		$	757		$	10,162		$	73,235
Supplemental cash flow information:
Cash paid for interest	$	—		$	—		$	17,448		$	15,536
Cash paid for taxes	$	—		$	—		$	—		$	—
Supplemental noncash disclosures:
Issuance of common stock for principal and interest payments on senior convertible note payable	$	—		$	231,819
Warrant derivatives issued in connection with notes payable and extensions	$	—		$	851
Issuance of common stock purchase warrants for debt issuance costs	$	—		$	1,212

Supplemental disclosure of non-cash investing and financing activities:
Assumption of asset retirement obligation related to the purchase of oil and gas properties and equipment							$	13,425		$	—
Issuance of convertible promissory notes pursuant to debt settlement agreements							$	28,665		$	—
Issuance of detachable common stock purchase warrants pursuant to debt settlements agreements							$	1,605,178		$	—
Capital contribution attributable to related party debt extinguishment							$	1,108,477		$	—
Issuance of common stock pursuant to debt settlement agreements							$	68,600		$	—
Cumulative effect of adoption of ASU 2020-06							$	160,900		$	—
Issuance of convertible note payable with detachable warrants to purchase common stock							$	56,000		$	—
Beneficial conversion feature on issuance of convertible note payable with detachable warrants to purchase common stock							$	—		$	325,000
Issuance of common shares for deposit to acquire oil and gas property							$	—		$	75,000
Issuance of restricted common stock							$	—		$	500
Issuance of common shares pursuant to exchange agreements							$	—		$	132,756

The accompanying notes are an integral part of these unaudited condensed financial statements.

~~INFINITY ENERGY RESOURCES, INC.~~(formerly Infinity Energy Resources, Inc.)

Note 1 – Nature of Operations, Basis of Presentation and Summary of Significant Accounting Policies

American Noble Gas, Inc., formerly Infinity Energy Resources, Inc., (collectively, “we,” “ours,” “us,” ~~“Infinity”~~“AMNG” 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 ~~2017~~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.

~~The Company is pursuing~~“AMNG,” the “Company,” “we,” “us” and “our” refer collectively to American Noble Gas, 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. ~~The~~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 ~~its~~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 gas and oil properties in the ~~Nicaraguan Concessions,~~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 ~~represents~~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 ~~principal asset and only exploration~~acquisition and development ~~project.~~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 September 2, 2020 (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 ~~5, 2009 Infinity signed~~26, 2021 through the ~~contracts relating~~issuance of Convertible Preferred Stock with detachable common stock purchase warrants. The funds raised pursuant to ~~its Nicaraguan Concessions. Infinity has conducted activities~~the Convertible Preferred Stock issuance were used to ~~develop geological information~~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 ~~processing~~Reagan Sand zone with an approximate depth of 3,600 feet.

We commenced rework of the existing production wells after completion of the acquisition of the Properties and have performed testing and evaluation of ~~2-D seismic data that was acquired~~the existence of noble gas reserves on the Properties including helium, argon and other rare earth minerals/gases. Testing of the Properties for noble gas reserves has provided encouraging but not conclusive results and the ~~Nicaraguan Concessions. The~~ Company has ~~identified multiple sites for exploratory drilling and intends to plan the initial exploratory well on the Perlas Block in order~~yet to determine the possibility of commercializing the noble gas reserves on the Properties. The Company plans to assess the Properties existing oil & gas reserves while continuing the evaluation of the existence of commercial hydrocarbon reserves, subject to receipt from the Nicaraguan government of authorizations for the drilling of up to five wells, financing and satisfaction of other conditions. In order to meet its obligations under the Perlas Block of the Nicaraguan Concession, the Company had to drill its initial exploratory well during 2016, which did not occur. As a result of thisnew oil & gas zones and other ~~defaults,~~mineral reserves and specifically the ~~Company is in default of~~noble gas reserves that the ~~Perlas development plan and~~Properties may lose its rights under the Nicaraguan Concessions. The work plan on the Tyra block now requires the Company to shoot additional seismic prior to the commencement of exploratory drilling. The Company is seeking a waiver of the additional seismic mapping on the Tyra Block and extension of time to complete its initial well from the Nicaraguan government. The Company has not been able to pay the 2016 and 2017 area fees and training fees for both the Perlas and Tyra blocks as required under the Nicaraguan Concessions and is in technical default. The Company is attempting to negotiate extensions, waivers and/or new Perlas and Tyra Concession agreements with the Nicaraguan government at September 30, 2017 to cure such defaults. There can be no assurance whetherhold.

We may find it ~~will be able~~necessary to obtain ~~such extensions, waivers~~new sources of debt and/or new agreements that will cure its various defaults under the Nicaraguan Concessions. The current environment for oil and gas development projects, especially discoveries in otherwise undeveloped regions of the world, is very challenging given the depressed commodity prices for oil and gas products and the resulting industry-wide reduction inequity capital expenditure budgets for exploration and development projects. There can be no assurance whether the Company will be able to cure its various defaults under the Nicaraguan Concessions and obtain adequate financing to fund the exploration and development of ~~its Nicaraguan Concessions.~~

~~On May 7, 2015,~~ the ~~Company completed the private placement (the “May 2015 Private Placement”) of a $12.0 million principal amount Secured Convertible Note (the “Note”) and a common stock purchase warrant~~Properties enumerated above, as well as satisfying our existing debt obligations. We can provide no assurance that we will be able to ~~purchase 1,800,000 shares~~obtain sufficient new debt/equity capital to fund our planned development of the ~~Company’s common stock (the “Warrant”)~~Properties.

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 September 30, 2021. Economies throughout the world continue to suffer disruptions 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) including the recent rise of the new Delta variant. 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 followed by the recent resurgence in oil and natural gas prices.. In addition, the capital markets have experienced periods of disruption and our efforts to raise necessary capital in the future may be adversely impacted by the pandemic and investor sentiment and we cannot forecast with ~~an institutional investor (the “Investor”). At~~any certainty when the ~~closing,~~lingering uncertainty caused by the ~~Investor acquired~~Covid-19 pandemic will cease to impact our business and the ~~Note~~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 ~~paying $450,000 in cash and issuing a promissory note, secured by cash, with a principal amount~~the outbreak of ~~$9,550,000 (the “Investor Note”).~~Covid-19.

The Company must raise substantial amounts of debt and equity capital from other sources in the ~~Investor notified~~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 and beyond.

The Company has made substantial progress in resolving many of its existing financial obligations during the nine months ended September 30, 2021. In that regard, on March 31, 2021, 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~~six creditors entered into Debt Settlement Agreements which extinguished accounts payable and accrued liabilities totaling $2,866,497 in exchange for the ~~satisfaction~~issuance of $28,665 in ~~full and cancellation of the Investor Note. The Convertible Note had an aggregate outstanding~~ principal balance of ~~$11,687,231 as~~3% Convertible Promissory Notes with detachable warrants to purchase 5,732,994 shares of ~~the date of the exchange. The Investor requested~~common stock for $0.50 per share. On April 1, 2021, the Company ~~to deliver~~and the holders of two notes payable that were in default reached a new convertible note (the “Replacement Note”) with respect to the remaining principal balance of $2,197,231 to replace the Convertible Note. The Replacement Note provides for a one-year maturity from May 7, 2017, a conversion price of $0.50 per share and is due in monthly installment payments through May 2018 either in cash or stock, among other terms. The Company plans to negotiate with the Investor regarding the issuance of the Replacement Note under the terms of the financing and taking into consideration that the Investor only funded $510,000 in the entire transaction, but there can be no assurance that it will be successful in this regard.

The Note was to mature on the three-year anniversary of its issuance, bore interest at 8% per annum, and was convertible at any time at the option of the holder into shares of the Company’s common stock at $5.00 per share (the “Conversion Price”). As a part of the May 2015 Private Placement,settlement whereby the Company issued a ~~Warrant to the Investor giving it the right to purchase up to an aggregate~~total of ~~1,800,000~~245,000 shares of Common stock in exchange for the ~~Company’s~~extinguishment of the outstanding principal, accrued interest and associated common stock ~~at an exercise price~~purchase warrants which totaled $123,830 as of ~~$5.00 per share.~~ April 1, 2021. The ~~Warrant~~Company has made substantial progress in resolving its financial obligations: however, there is ~~exercisable commencing nine months from~~in excess of $1.9 million remaining that are in default and that the ~~date of issuance for a period of seven years from the date of issuance. The Note ranked senior~~Company is attempting to ~~the Company’s existing and future indebtedness and is secured by all the assets~~obtain extensions of the maturity dates and/or compromises regarding payment of its obligations.

The Company ~~excluding~~will have significant financial commitments to execute its planned exploration and development of the ~~Concessions. The proposed Replacement Note would have the same security interest as the Convertible Note.~~

~~In addition,~~Properties especially if the Company ~~continues~~determines that it will explore for and develop the potential noble gas reserves that may be on 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 ~~acreage in the Nicaraguan Concessions~~Properties in exchange for cash and a carried interest in exploration and development operations or other joint venture arrangement.

As reflected in the accompanying statements of operations, the Company has had a history of losses. In addition, the Company has a significant working capital deficit, has notes payable that are in default and is currently experiencing substantial liquidity issues. In addition, the Company’s most significant asset and its primary business plan is the exploration and development of the Nicaraguan Concessions which are now in default and in risk of being terminated.

The Company has relied on raising debt and equity capital in recent years in order to fund its ongoing maintenance/expenditure obligations under the Nicaraguan Concession, for its day-to-day operations and its corporate overhead because it has generated no operating revenues or cash flows in recent history. The $1.0 million December 2013 Note (See Note 3) matured in April 2016 and is currently in technical default and two other notes payable with principal balances of $85,000 as of September 30, 2017 are now in default. The Company is seeking extensions of the maturity date for these notes payable; however, there There can be no assurance that it will be able to obtain such ~~extensions~~new funding or what the final terms will be if the lenders agree to such extensions. The Company and its lenders are assessing the status of the Nicaraguan Concessions and what effect that may have on the extension or renewal of these notes.

The Company is in default of various provisions of the 30-year Concession for both Perlas and Tyra blocks as of September 30, 2017, including (1) the drilling of at least one exploratory well on the Perlas Block during 2016; (2) the shooting of additional seismic on the Tyra Block during 2016; (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 and 2017 area fees required for both the Perlas and Tyra which total $97,243; and (5) payment of the 2016 and 2017 training fees required for both the Perlas and Tyra totaling $175,000. The Company is seeking to extend, renew and/or renegotiate the terms of the Nicaraguan Concessions with the Nicaraguan government to cure the defaults. There can be no assurance whether it will be able to ~~extend, renew and/or renegotiate the Nicaraguan Concessions and whether any new terms will be favorable to the Company. The Company has held meetings and is pursuing additional meetings~~reach agreements with ~~Nicaraguan Government officials in order to address the pending defaults.~~

The Company must raise substantial amounts of debt and equity capital from other sources in the immediate future in order to fund: (1) the annual training program and area fees for 2016 and 2017; (2) required letters of credit to the Nicaraguan Government; (3) the drilling of at least one exploratory well on the Perlas Block of the Nicaraguan Concessions during 2017; (4) the shooting of additional seismic on the Tyra Block of the Nicaraguan Concessions should it be unable to negotiate a waiver of such requirement from the Nicaraguan government; (5) normal day-to-day operations and corporate overhead; and (6) outstanding debtindustry operators and other financial obligations as they become due, including the $1.0 million December 2013 Note, and the two notes payable totaling $85,000, which are in technical default and the Replacement Note, if issued. These are substantial operational and financial issues that must be successfully addressed during 2017third parties or ~~the Company’s ability to satisfy the conditions necessary to maintain and/or renegotiate its Nicaragua Concessions will be in significant doubt.~~on what terms.

The Company is seeking new outside sources of debt and equity capital in order to fund the substantial needs enumerated above; however, there can be no assurance that it will be able to obtain such capital or obtain it on favorable terms or within the timeframe necessary to cure the technical defaults existing on the Nicaraguan Concessions or to meet its ongoing requirements relative to drilling the exploratory wells. The current environment for oil and gas development projects, especially discoveries in otherwise undeveloped regions of the world, is very challenging given the depressed commodity prices for oil and gas products, and the resulting industry-wide reduction in capital expenditure budgets for exploration and development projects. These are substantial impediments for the Company to obtain adequate financing to fund the exploration and development of its Nicaraguan projects.

Due to the uncertainties related to ~~these~~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~~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.

On January 1, 2018, the Company adopted ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” and the series of related accounting standard updates that followed, using the modified retrospective method of adoption. Adoption of the ASU did not require an adjustment to the opening balance of equity and did not change the Company’s amount and timing of revenues.

The Company’s revenues are primarily derived from its interests in the sale of oil and natural gas production. To date, such revenues have only included the sale of oil however the Company expects to begin generating revenues from the sale of natural gas and noble gases in the future. The Company recognizes revenue from its interests in the sales of oil and gas in the period that its performance obligations are satisfied. Performance obligations are satisfied when the customer obtains control of product, when the Company has no further obligations to perform related to the sale, when the transaction price has been determined and when collectability is probable. The sales of oil and gas are made under contracts which the third-party operators of the wells have negotiated with customers, which typically include variable consideration that is based on pricing tied to local indices and volumes delivered in the current month. The Company receives payment from the sale of oil and gas production from one to three months after delivery. At the end of each month when the performance obligation is satisfied, the variable consideration can be reasonably estimated and amounts due from customers are accrued in trade receivables, net in the balance sheets. Variances between the Company’s estimated revenue and actual payments are recorded in the month the payment is received, however, differences have been and are insignificant. The Company’s oil is typically sold at delivery points under contracts terms that are common in our industry.

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)” which is intended to reduce complexity in applying GAAP to certain financial instruments with characteristics of liabilities and equity. The guidance in ASU 2020-06 simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470-20, Debt: Debt with Conversion and Other Options, that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock. The guidance in ASC 470-20 applies to convertible instruments for which the embedded conversion features are not required to be bifurcated from the host contract and accounted for as derivatives. In addition, the amendments revise the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification. These amendments are expected to result in more freestanding financial instruments qualifying for equity classification (and, therefore, not accounted for as derivatives), as well as fewer embedded features requiring separate accounting from the host contract. The amendments in ASU 2020-06 further revise the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares.

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 and the 8% Convertible Promissory Note issued on August 30, 2021(See Note 3). 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 3.

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.

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~~include, but are not limited to, ~~the financial statements include the estimated carrying value~~oil and gas reserves; depreciation, depletion and amortization of ~~unproved properties, the estimated~~proved oil and gas properties; future cash flows from oil and gas properties; impairment of long-lived assets; fair value of ~~derivative liabilities, secured convertible note payable, stock-based awards and overriding royalty interests, and~~derivatives; fair value of equity compensation; the realization of deferred tax ~~assets.~~assets; fair values of assets acquired and liabilities assumed in business combinations.

On April 1, 2021 we completed the acquisition of the Properties, under the terms of the Asset Purchase Agreement which provided a purchase price of $900,000. The ~~Company’s business plan consists~~purchase of ~~developing~~ the ~~Nicaraguan Concessions~~Properties included the existing production equipment, infrastructure and ~~it expects~~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 Company has performed workovers of the wells subsequent to the Properties purchase which was necessary to put the lease back into production status. Therefore, these tangible and intangible workover costs were expensed as lease operating expenses rather than capitalized in the full cost pool in the three and nine months ended September 30, 2021. In addition, the Company is currently evaluating the Properties oil and gas reserves and specifically the potential for noble gas reserves such as helium, argon and krypton. Based on these evaluations, the Company may redirect its efforts to the production of noble gases rather than crude oil on the Properties. These noble gas evaluation costs have also been expensed as lease operating costs during the three and nine months ended September 30, 2021.

The accounting for, and disclosure of, oil and gas producing activities require that we choose between two GAAP alternatives: the full cost method or the successful efforts method. We adopted and use the full cost method of accounting, which involves capitalizing all exploration, exploitation, development and acquisition costs. Once we incur costs, they are recorded in the depletable pool of proved properties or in unproved properties, collectively, the full cost pool. Our unproved property costs, which include unproved oil and gas properties, properties under development, and major development projects, which were zero at September 30, 2021 and December 31, 2020, and are not subject to depletion. We review our unproved oil and gas property costs on a quarterly basis to assess for impairment and transfer unproved costs to proved properties as a result of extensions or discoveries from drilling operations or determination that no proved reserves are attributable to such costs. We expect these costs to be ~~active~~evaluated in ~~Nicaragua for~~one to seven years and transferred to the foreseeable future, given sufficient capital and curing the defaults under the Nicaraguan Concessions. The political climate in Nicaragua could become unstable and subject to radical change over a short period of time. In the event of a significant negative change in political and economic stability in the vicinity of the Nicaraguan Concessions or of the inability of the Company to obtain sufficient financing, the Company might be forced to abandon or suspend its efforts and its rights under its Nicaraguan Concessions.

~~The United States dollar is the functional currency for the Company’s operations. Although the Company’s acquisition and exploration activities have been conducted in Nicaragua, a significant~~depletable portion of the ~~payments~~full cost pool during that time. The full cost pool is comprised of intangible drilling costs, lease and well equipment and exploration and development costs incurred ~~for exploration activities are denominated in United States dollars. The Company expects that a significant portion of its required~~plus acquired proved and discretionary expenditures in the foreseeable future will also be denominated in United States dollars. Any foreign currency gains and losses are included in the results of operations in the period in which they occur. The Company does not have any cash accounts denominated in foreign currencies.unproved leaseholds.

When we acquire significant amounts of undeveloped acreage, we capitalize interest on the acquisition costs in accordance with FASB ASC Subtopic 835-20 for Capitalization of Interest. We capitalize interest upon identification and development of shale resource opportunities in the Haynesville and Marcellus areas. When the unproved property costs are moved to proved developed and undeveloped oil and gas properties, or the properties are sold, we cease capitalizing interest.

Capitalized costs to acquire oil and ~~Cash Equivalents~~natural gas properties are depreciated and depleted on a units-of-production basis based on estimated proved reserves. Capitalized costs of exploratory wells and development costs are depreciated and depleted on a units-of-production basis based on estimated proved developed reserves. Under this method, the sum of the full cost pool, excluding the book value of unproved properties, and all estimated future development costs are divided by the total estimated quantities of proved reserves. This rate is applied to our total production for the quarter, and the appropriate expense is recorded. Support equipment and other property, plant and equipment related to oil and gas producing activities, as well as property, plant and equipment unrelated to oil and gas producing activities, are recorded at cost and depreciated on a straight-line basis over the estimated useful lives of the assets.

~~For purposes~~Sales, dispositions and other oil and gas property retirements are accounted for as adjustments to the full cost pool, with no recognition of ~~reporting cash flows, cash consists~~gain or loss, unless the disposition would significantly alter the amortization rate and/or the relationship between capitalized costs and Proved Reserves.

Pursuant to Rule 4-10(c)(4) of ~~cash on hand and demand deposits with financial institutions. Although~~Regulation S-X, at the ~~Company had minimal cash as~~end of ~~September 30, 2017 and December 31, 2016, it is the Company’s policy~~each quarterly period, companies that ~~all highly liquid investments with a maturity of three months or less when purchased would be cash equivalents and would be included along with cash as cash and equivalents.~~

~~The Company follows~~use the full cost method of accounting for ~~exploration~~their oil and ~~development activities. Accordingly, all~~gas properties must compute a limitation on capitalized costs, ~~incurred in~~or ceiling test. The ceiling test involves comparing the ~~acquisition, exploration,~~net book value of the full cost pool, after taxes, to the full cost ceiling limitation defined below. In the event the full cost ceiling is less than the full cost pool, we must record a ceiling test write-down of our oil and ~~development~~gas properties to the value of ~~properties (including costs~~the full cost ceiling. The full cost ceiling limitation is computed as the sum of ~~surrendered and abandoned leaseholds, delay lease rentals, dry holes and seismic costs) and~~ the ~~fair~~present value of estimated future ~~costs of site restoration, dismantlement, and abandonment activities are capitalized. Overhead related to development activities is also capitalized during~~net revenues from our proved reserves by applying average prices as prescribed by the ~~acquisition phase.~~

Depletion of proved oil and gas properties is computed on the units-of-production method, with oil and gas being converted to a common unit of measure based on relative energy content, whereby capitalized costs, as adjusted forSEC Release No. 33-8995, less estimated future ~~development costs~~expenditures (based on current costs) to develop and ~~estimated asset retirement costs, are amortized over~~produce the ~~total estimated~~ proved ~~reserve quantities. Investments in unproved properties, including capitalized interest and internal costs, are not depleted pending determination of the existence of proved reserves.~~

Unproved properties are assessed periodically (at least annually) to ascertain whether impairment has occurred. Unproved properties whose costs are individually significant are assessed individually by considering the primary lease terms of the properties, the holding period of the properties, geographic and geologic data obtained relating to the properties, and estimatedreserves, discounted future net cash flows from the properties. Estimated discounted future net cash flows are based on discounted future net revenues associated with probable and possible reserves, risk adjusted as appropriate. Where it is not practicable to assess individually the amount of impairment of properties for which costs are not individually significant, such properties are grouped for purposes of assessing impairment. The amount of impairment assessed is deducted from the costs to be amortized, and reported as a period expense when the impairment is recognized. All unproved property costs as of September 30, 2017 and December 31, 2016 relate to the Nicaraguan Concessions. In assessing the unproved property costs for impairment, the Company takes into consideration various information including: (i) the terms of the Concessions, (ii) the status of the Company’s compliance with the Nicaraguan Concessions’ requirements, (iii) the ongoing evaluation of the seismic data, (iv) the commodity prices for oil and gas products, (v) the overall environment related to oil and gas exploration and development projects for unproven targets in unproven regions of the world, (vi) the availability of financing for financial and strategic partners, and (vii) other factors that would impact the viability of a significant long-term oil and gas exploration and development project.

The current environment for oil and gas development projects, especially discoveries in otherwise undeveloped regions of the world, is very challenging given the depressed commodity prices for oil and gas products and the resulting industry-wide reduction in capital expenditure budgets for exploration and development projects. These are substantial impediments for the Company to obtain adequate financing to fund the exploration and development of its Nicaraguan projects. The Company has performed its impairment tests as of September 30, 2017 and December 31, 2016 and has concluded that a full impairment reserve should be provided on the costs capitalized for the Nicaraguan Concessions oil and gas properties. All costs related to the Nicaraguan Concessions from January 1, 2016 through September 30, 2017 have been charged to operating expenses as incurred.

Pursuant to full cost accounting rules, the Company must perform a “ceiling test” each quarter. The ceiling test provides that capitalized costs less related accumulated depletion and deferred income taxes for each cost center may not exceed the sum of (1) the present value of future net revenue from estimated production of proved oil and gas reserves using prices based on the arithmetic mean of the previous 12 months’ first-of month prices and current costs, including the effects of derivative instruments accounted for as cash flow hedges, but excluding the future cash outflows associated with settling asset retirement obligations that have been accrued on the balance sheet, and a discount factor ofat 10%;, plus ~~(2)~~ the cost of properties not being amortized ~~if any; plus (3)~~and the lower of cost or estimated fair value of unproved properties included in the costs being amortized, ~~if any; less (4)~~net of income tax ~~effects related~~effects.

The ceiling test is computed using the simple average spot price for the trailing twelve-month period using the first day of each month. For the period ended September 30, 2021, the trailing twelve-month reference price was $52.13 per Bbl for the West Texas Intermediate oil at Cushing, Oklahoma. This reference price for oil is further adjusted for quality factors and regional differentials to ~~differences in the book and tax basis~~derive estimated future net revenues. Under full cost accounting rules, any ceiling test write-downs of oil and gas ~~properties. If capitalized costs exceed the ceiling, the excess must be charged to expense and~~properties may not be reversed in ~~future~~subsequent periods. ~~As of~~There were no ceiling test write-downs for the three or nine months ended September 30, ~~2017~~2021.

The ceiling test calculation is based upon estimates of proved reserves. There are numerous uncertainties inherent in estimating quantities of proved reserves, in projecting the future rates of production and ~~December 31, 2016,~~in the ~~Company did not have~~timing of development activities. The accuracy of any ~~proved~~reserve estimate is a function of the quality of available data and of engineering and geological interpretation and judgment. Results of drilling, testing and production subsequent to the date of the estimate may justify revision of such estimate. Accordingly, reserve estimates are often different from the quantities of oil and gas ~~properties,~~that are ultimately recovered.

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 ~~unproved property costs relate~~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 ~~its Nicaraguan Concessions.~~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.

Proceeds from the sales of oil and gas properties are accounted for as adjustments to capitalized costs with no gain or loss recognized, unless such adjustments would significantly alter the relationship between capitalized costs and proved reserves of oil and gas, in which case the gain or loss would be recognized in the determination of the Company’s net earnings/loss.

The Company records estimated future asset retirement obligations pursuant to the provisions of ASC 410. ASC 410 requires entities to record the fair value of a liability for an asset retirement obligation in the period in which it is incurred with a corresponding increase in the carrying amount of the related long-lived asset. Subsequent to initial measurement, the asset retirement liability is required to be accreted each period. The Company’s asset retirement obligations consist of costs related to the plugging of wells, the removal of facilities and equipment, and site restoration on oil and gas properties. Capitalized costs are depleted as a component of the full cost pool using the units of production method. Although the Company had divested all of its domestic oil properties that contain operating and abandoned wells as of December 31, 2012, the Company may have obligations related to the divestiture of certain abandoned non-producing domestic leasehold properties should the new owner not perform its obligations to reclaim abandoned wells in a timely manner. Management believes the Company has been relieved from asset retirement obligation related to Infinity-Texas because of the sale of its Texas oil and gas properties in 2011 and its sale of 100% of the stock in Infinity-Texas in 2012. The Company has recognized an additional liability of $734,897 related to its former Texas oil and gas producing properties (included in asset retirement obligations) to recognize the potential personal liability of the Company and its officers for the Infinity-Texas oil and gas properties should the new owner not perform its obligations to reclaim abandoned wells in a timely manner. In addition, management believes the Company has been relieved from asset retirement obligations related to Infinity-Wyoming because of the sale of its Wyoming and Colorado oil and gas properties in 2008; however, the Company has recognized since 2012 an additional liability of $981,106 related to its former Wyoming and Colorado oil and gas producing properties (included in asset retirement obligations) to recognize the potential liability of the Company and its officers should the new owner not perform its obligations to reclaim abandoned wells in a timely manner.

~~The Company accounts for derivative instruments or hedging activities under the provisions of ASC 815~~~~Derivatives and Hedging~~. ASC 815 requires the Company to record derivative instruments at their fair value. If the derivative is designated as a fair value hedge, the changes in the fair value of the derivative and of the hedged item attributable to the hedged risk are recognized in earnings. If the derivative is designated as a cash flow hedge, the effective portions of changes in the fair value of the derivative are recorded in other comprehensive income (loss) and are recognized in the statement of operations when the hedged item affects earnings. Ineffective portions of changes in the fair value of cash flow hedges, if any, are recognized in earnings. Changes in the fair value of derivatives that do not qualify for hedge treatment are recognized in earnings.

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 September 30, 2017 and December 31, 2016 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 and 6), those warrants are required to be accounted for as derivatives at estimated fair value, with changes in fair value recognized in operations.

The carrying values of the Company’s accounts receivable, accounts payable and accrued liabilities and short term notes represent the estimated fair value due to the short-term nature of the accounts.

The carrying value of the Company’s debt under its line-of-credit with related party represents its estimated fair value due to its short-term nature, its rate of interest, associated fees and expenses and initially recorded discount.

~~In accordance with ASC Topic 820 —~~~~Fair Value Measurements and Disclosures~~(“ASC 820”), the Company utilizes the market approach to measure fair value for its financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets, liabilities or a group of assets or liabilities, such as a business.

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:

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 September 30, 2017 and December 31, 2016 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 September 30, 2017 and December 31, 2016:~~

~~There were no changes in valuation techniques or reclassifications of fair value measurements between Levels 1, 2 or 3 during the periods ended September 30, 2017 and December 31, 2016.~~

~~Pursuant to FASB ASC Topic 260,~~~~Earnings per Share,~~ basic net income (loss) per share is computed by dividing the net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share is computed by dividing the net income (loss) attributable to common shareholders by the weighted-average number of common and common equivalent shares outstanding during the period. Common share equivalents included in the diluted computation represent shares issuable upon assumed exercise of stock options and warrants using the treasury stock and “if converted” method. For periods in which net losses are incurred, weighted average shares outstanding is the same for basic and diluted loss per share calculations, as the inclusion of common share equivalents would have an anti-dilutive effect.

~~Certain amounts~~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 ~~prior period were reclassified to conform to the current period’s financial statement presentation. These reclassifications had no effect on previously reported net loss or accumulated deficit.~~

~~Secured Convertible Note (the “Note) payable consists~~computation of the ~~following at September 30, 2017 and December 31, 2016:~~

~~Following is~~diluted earnings (loss) per share denominator in cases when the exercise price of an ~~analysis of the activity~~instrument may change based on an entity’s share price or changes in the ~~secured convertible note during~~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.

~~On May 7, 2015,~~2021, the Company ~~completed~~had outstanding the ~~May 2015 Private Placement~~following securities that were potentially dilutive; 1) Series A Convertible Preferred Stock, 2) Convertible Note Payable through its retirement on March 26, 2021, 3) 3% Convertible Promissory Notes issued on March 31, 2021, 4) 8% Convertible Promissory Note issued on August 30, 2021, 5) Common Stock purchase warrants and 5) stock purchase options. The inclusion 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~~all potentially dilutive securities in diluted earnings (loss) for the ~~Company in the transaction will receive a fee of 6% of cash proceeds, or $600,000, if~~three 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 the Investor. The May 2015 Private Placement was made pursuant to an exemption from registration under such 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 has recorded the fair value of the Convertible Note assuming that the remaining par value is $2,197,231 as asserted by the Investor, resulting in a change in the estimated fair value of $1,847,894 during the nine months ended September 30, ~~2017.~~2021 and 2020 were excluded because of their anti-dilutive effect because of the net loss reported for both periods.

Reference Rate Reform. - In March 2020, the Financial Accounting Standard Board (the “FASB”) issued an accounting standard update which provides optional expedients and expectations for applying GAAP to contracts, hedging relationships and other transactions to ease financial reporting burdens to the expected market transition from the London Interbank Offered Rate (“LIBOR”) or another reference rate to alternative reference rates. The ~~Replacement Note provides~~amendments in this accounting standards update became effective March 12, 2020, and an entity may elect to apply the amendments prospectively through December 31, 2022. The Company is currently evaluating the impact this guidance may have on the Company’s financial statements.

Income Taxes – Simplifying the Accounting for Income Taxes. In December 2019, the FASB issued an accounting standard update which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. This accounting standards update removes the following exceptions: (i) exception to the incremental approach for intraperiod tax allocation when there is a loss from continuing operations and income or a gain from other items; (ii) exception to the requirements to recognize a deferred tax liability for equity method investments when a foreign subsidiary becomes an equity method investment; (iii) exception to the ability not to recognize a deferred tax liability for a ~~one-year maturity~~foreign subsidiary when a foreign equity method investment becomes a subsidiary; and (iv) exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. The amendments in the accounting standards update also improve consistency and simplify other areas of Topic 740 by clarifying and amending existing guidance. The guidance became effective for interim and annual periods beginning after December 15, 2020, with early adoption permitted. The Company adopted the guidance effective January 1, 2021, with all of the anticipated and applicable effects to be required on a prospective basis. The adoption of this guidance did not have a material impact on our consolidated financial statements.

Other accounting standards that have been issued by the FASB or other standards-setting bodies are not expected to have a material impact on the Company’s financial position, results of operations and cash flows.

On April 1, 2021, the Company completed the previously announced acquisition of certain oil and gas properties and interests from ~~May 7, 2017,~~Core Energy, LLC, effective as of January 1, 2021 (the “Oil & Gas Properties Acquisition”). On December 14, 2020, the Company entered into an asset purchase and sale agreement (the “Agreement”) with Core Energy, as well as all of the members of Core, Mandalay LLC and Coal Creek Energy, LLC, to purchase certain oil and gas properties in the Central Kansas Uplift geological formation, covering over 11,000 contiguous acres, including, among other things, the production and mineral rights to and a ~~conversion~~leasehold interest in the Oil & Gas Properties and all contracts, agreements and instruments. The Agreement provided for an aggregate purchase price consisting of ~~$0.50 per share and is due in monthly installment payments through May 2018 either~~$900,000 in cash ~~or stock, among other terms. It is~~at closing.

The following represents the purchase price allocation for the Oil & Gas Properties Acquisition for $900,000 in cash. The Oil & Gas Property Acquisition qualify as an asset acquisition. As such, AMNG recognized the assets acquired and liabilities assumed at their fair values as of April 1, 2021, the date of closing. The fair value of the Oil & Gas Properties acquired approximate the value of the consideration paid, and the asset retirement obligation to be ~~secured~~assumed, which management has concluded approximates the fair value that would be paid by a typical market participant. As a result, neither goodwill nor a bargain purchase gain will be recognized related to the same extent as the Convertible Note. The Company plans to negotiate with the Investor regarding the issuance of the Replacement Note under the terms of the financing and taking into consideration the Investor’s minimal funding in the entire transaction, but there can be no assurance that it will be successful in this regard.acquisition.

~~Description~~The Company determined the amount of the ~~Secured Convertible Note~~

asset retirement obligation assumed to be $13,425 as of the date of acquisition. The ~~Note was secured~~obligation relates to legal requirements associated with the retirement of long-lived assets that result from the acquisitions, construction, development, or normal use of the asset. The obligation relates primarily to the ~~Company’s existing~~requirement to plug and ~~future indebtedness~~abandon oil and ~~is secured by all~~natural gas wells and support wells at the conclusion of their useful lives.

The following table summarizes the allocation of the assets acquired and the liabilities assumed related to the Oil & Gas Properties:

Debt obligations is comprised of the following at September 30, 2021 and December 31, 2020:

On March 31, 2021, the Company ~~excluding~~entered into Debt Settlement Agreements with six creditors (five of which were related parties) which extinguished accounts payable and accrued liabilities totaling $2,866,497 in exchange for the ~~Nicaraguan Concessions, and~~issuance of $28,665 in principal balance of 3% Convertible Promissory Notes (the “ 3% Notes”) with detachable warrants to ~~the extent and as provided in the related security documents.~~

purchase 5,732,994 shares of Common Stock for $0.50 per share. The ~~Note was convertible~~3% Notes allow for prepayment at any time with all principal and accrued interest becoming due and payable at maturity on March 30, 2026 (“Maturity Date”). The 3% Notes are convertible as to principal and any accrued interest, at the option of the holder, into shares of the Company’s common stock at $5.00 per share (the “Conversion Price”). The Note was to mature on the three-year anniversary of the issuance date thereof. If the Company issues or sells shares of its common stock, rights to purchase shares of its common stock, or securities convertible into shares of its common stock for a price per share that is less than the Conversion Price then in effect, the then current Conversion Price will be decreased to equal such lower price. The foregoing adjustments to the Conversion Price for future stock issues will not apply to certain exempt issuances, including issuances pursuant to certain employee benefit plans. In addition, the Conversion Price is subject to adjustment upon stock splits, reverse stock splits, and similar capital changes.

On the first business day of each month beginning on the earlier of the (i) effectiveness of a registration statement the Company files to register the shares of common stock issuable upon conversion of the Note or exercise of the Warrant, as defined below, or (ii) sixth month following the date of the Note through and including the maturity date (the “Installment Dates”), the Company will pay to the Note holder an amount equal to (i) one-thirtieth (1/30th) of the original principal amount of the Note (or the principal outstanding on the Installment Date, if less) plus (ii) the accrued and unpaid interest with respect to such principal plus (iii) the accrued and unpaid late charges (if any) with respect to such principal and interest. The Investor has the ability to defer or accelerate such monthly payments in its sole discretion.

~~Prior to the maturity date, the Note bore interest at 8% per annum (or 18% per annum during an event of default) with interest payable in cash or in shares of~~ Common Stock ~~monthly in arrears on the first business day of each calendar month following the issuance date.~~

Each monthly payment may be made in cash, in shares of the Company’s common stock, or in a combination of cash and shares of its common stock. The Company’s ability to make such payments with shares of its common stock will be subject to various equity conditions, including the existence of an effective registration statement covering the resale of the shares issued in payment (or, in the alternative, the eligibility of the shares issuable pursuant to the Note and the Warrant, as defined below, for sale without restriction under Rule 144 and without the need for the Company to remain current with its public filing obligations) and certain minimum trading price and trading volume. Such shares will be valued, as of the date on which notice is given by the Company that payment will be made in shares, at the lower of (1) the then applicable Conversion Price and (2) a price that is 80.0% of the arithmetic average of the three lowest weighted average prices of the Company’s common stock during the twenty-trading day period ending two trading days before the applicable determination date (the “Measurement Period”). If the Company elects to pay such monthly payment in shares of the Company’s stock it is required to pre-deliver shares of the Company’s common stock and is required to deliver additional shares, if any, to a true-up such number of shares to the number of shares required to be delivered on the applicable Installment Date pursuant to the calculation above.

At any time after the ~~issuance~~issue date ~~the Company had the right to redeem all or any portion of the outstanding principal balance of the Note plus all accrued but unpaid interest~~ and any other charges at a price equal to 125% of such amount provided that (i) the arithmetic average of the closing sale price of the common stock for any twenty (20) consecutive Trading Days equals or exceeds 200% of the Conversion Price and (ii) among other conditions, there is an effective registration statement covering the resale of the shares issued in payment or, in the alternative, the eligibility of the shares issuable pursuantprior to the ~~Note and~~close of business on the ~~Warrant for sale without restriction under Rule 144 and without~~business day preceding the ~~need for~~Maturity Date at the ~~Company to remain current with its public filing obligations. The Investor has the right to convert any or all~~rate of ~~the amount to be redeemed into common stock prior to redemption.~~

Upon the occurrence of an event of default under the Note, the Investor may, so long as the event of default is continuing, require the Company to redeem all or a portion of its Note. Each portion of the Notefifty cents ($0.50) per share, subject to ~~such redemption must be redeemed by the Company, in cash, at a price equal to the greater of (1) 125% of the amount being redeemed, including principal, accrued~~normal and unpaid interest, and accrued and unpaid late charges, and (2) the product of (I) the amount being redeemed and (II) the quotient determined by dividing (A) the greatest closing sale price of the shares of common stock during the period beginning on the date immediately preceding the event of default and ending on the date the holder delivers a redemption notice to the Company, by (B) the lowest Conversion Price in effect during such period.customary adjustment.

~~Subject~~An aggregate of $2,577,727 of the total accounts payable and accrued liabilities that were extinguished were with five related parties. Such related parties were issued $25,777 principal balance of the 3% Convertible Promissory Notes and warrants to purchase 5,155,454 shares of Common Stock in exchange for the extinguishment of their respective debt obligations. See Note 9.

On August 30, 2021, the Company and an accredited investor (the “8% Note Investor”) agreed whereby the Company issued an unsecured convertible note due October 29, 2022 (the “8% Note”), with an aggregate principal face amount of approximately $100,000. The 8% Note is, subject to certain conditions, ~~the Investor may also require the Company to redeem all or a portion~~convertible into an aggregate of ~~its Note in connection with a transaction that results in a Change~~200,000 shares of ~~Control, as defined in the Note. The Company must redeem each portion of the Note subject to such redemption in cash~~Common Stock, at a price ~~equal to the greater~~ of ~~(1) 125% of the amount being redeemed (including principal, accrued~~$0.50 per share. The Company also issued a five and unpaid interest, and accrued and unpaid late charges), and (2) the product of (I) the amount being redeemed and (II) the quotient determined by dividing (A) the greatest closing sale price of the shares ofone half-year common stock during the period beginning on the date immediately preceding the earlier to occur of (i) the consummation of the Change of Control and (ii) the public announcement of such Change of Control and ending on the date the holder delivers a redemption notice to the Company, by (B) the lowest Conversion Price in effect during such period.

~~As a part of the May 2015 Private Placement, the Company issued a Warrant to the Investor giving it the right~~purchase warrant to purchase up to ~~an aggregate of 1,800,000~~200,000 shares of ~~the Company’s common stock~~Common Stock at an exercise price of ~~$5.00~~$0.50 per ~~share.~~share, subject to customary adjustments (the “8% Note Warrants”) which are immediately exercisable. The 8% Note Investor purchased the 8% Note and 8% Note Warrant ~~is exercisable commencing nine months~~ from the ~~date~~Company for an aggregate purchase price of ~~issuance~~$100,000 and the ~~exercise prices~~proceeds were used for general working capital purposes. The Company also granted the ~~Warrant is subject to adjustment for~~8% Note Investor certain ~~events, such as stock splits and stock dividends. If~~piggy-back registration rights whereby the Company ~~issues or sells~~has agreed to register for resale the shares ~~of its common stock, rights to purchase shares of its common stock, or securities convertible into shares of its common stock for a price per share that is less than~~underlying the ~~exercise price then in effect,~~8% Note Warrant and the ~~exercise price~~conversion of the ~~Warrant will be decreased to equal such lesser price. Upon each such adjustment, the number of~~8% Note unless the shares of the ~~Company’s common stock issuable upon~~Company commences to trade on the NYSE American; the Nasdaq Capital Market; the Nasdaq Global Market; the Nasdaq Global Select Market; or the New York Stock Exchange, within one hundred twenty (120) days after the Closing Date.

The 8% Note bears interest at a rate of eight percent (8%) per annum, may be voluntarily repaid in cash in full or in part by the Company at any time in an amount equal to 120% of the principal amount of the 8% Notes and any accrued and unpaid interest. Fifty percent (50%) of the 8% Notes shall be mandatorily repaid in cash in an amount equal to 120% of the principal amount of the 8% Note and any accrued and unpaid interest in the event of the consummation by the Company of any public or private offering or other financing pursuant to which the Company receives gross proceeds of at least $2,000,000 and one-hundred percent (100%) of the 8% Note plus accrued interest shall be mandatorily repaid in an amount equal to 120% of outstanding principal and interest in cases in which the Company receives gross proceeds of at least $3,000,000. In addition, pursuant to the 8% Notes, so long as the 8% Notes remain outstanding, the Company cannot enter into any financing transactions pursuant to which the Company sells its securities at a price lower than $0.50 cents per share without the written consent of the 8% Note Investors.

The conversion of the 8% Note and the exercise of the 8% Note Warrant will increase proportionately. The foregoing adjustments to the exercise price for future stock issues will not apply to certain exempt issuances, including issuances pursuant to certain employee benefit plans. In addition, the Conversion Price isare each subject to ~~adjustment upon stock splits, reverse stock splits, and similar capital changes. The Warrant will expire on~~beneficial ownership limitations such that the ~~seventh (7th) anniversary of~~8% Note Investor may not convert the ~~date of issuance.~~

~~The Investor has no right to convert the~~8% Note or exercise the 8% Note Warrant to the extent that such conversion or exercise would result in the 8% Note Investor being the beneficial owner in excess of ~~9.99%~~4.99% (or, upon election of the ~~Company’s common stock. The Company was required to hold a meeting~~8% Investor, 9.99%) of ~~its shareholders to approve an increase in~~ the number of ~~its authorized~~ shares ~~to meet its obligations under the Purchase Agreement to have reserved 200%~~ of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon such conversion ofor exercise, which beneficial ownership limitation may be increased or decreased up to 9.99% upon notice to the Company, provided that any increase in such limitation will not be effective until 61 days following notice to the Company.

The Company and the 8% Note Investor agreed that for so long as the 8% Note and ~~exercise~~8% Note Warrant remain outstanding, the 8% Note Investor has the right to participate in any issuance of ~~the Warrant.~~ Common Stock, conventional debt, or a combination of such securities and/or debt, up to an amount equal to thirty-five percent (35%) of such subsequent financing.

The ~~Company held its Annual Meeting~~8% Note and 8% Note Warrant contain customary events of ~~Shareholders on September 25, 2015 and the shareholders approved the reverse split~~default, representations, warranties, agreements of ~~the Company’s common stock issued and outstanding shares, which satisfied this requirement.~~

~~In connection with the May 2015 Private Placement,~~ the Company and the 8% Investor ~~entered into a Registration Rights Agreement under which~~and customary indemnification rights and obligations of the parties thereto, as applicable.

As described in Note 1 the Company ~~is required, on or before 45 days after~~elected to early adopt ASU 2020-06 using the ~~closing~~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 ~~May 2015 Private Placement, to file a registration statement~~earliest comparative period presented) with the ~~Securities and Exchange Commission (the “SEC”) covering~~effect of initially adopting ASU 2020-06 recognized as a cumulative-effect adjustment to retained earnings (accumulated deficit) on the ~~resale of 130%~~first day of the shares of the Company’s common stock issuable pursuant to the Note and Warrant and to use its best efforts to have the registration declared effective as soon as practicable. The Company will be subject to certain monetary penalties, as set forth in the Registration Rights Agreement, if the registration statement is not filed or does not remain available for the resale (subject to certain allowable grace periods) of the Registrable Securities, as such term is defined in the Registration Rights Agreement. The Company filed the required registration statement on Form S-1 on June 19, 2015 and the Securities and Exchange Commission declared the Form S-1 effective on October 9, 2015 and has thereby satisfied this requirement.period adopted.

~~If, during~~The Company has applied ASU-2020-06 to all outstanding financial instruments as of January 1, 2021, (the date of adoption of ASU 2020-06) and those entered into after January 1, 2021 including the ~~period beginning on~~8% Note. As a result, the ~~closing date~~8% Convertible Note was required to be separated into its debt and ~~ending on the four (4) year anniversary~~equity components because of the ~~closing date,~~issuance of detachable warrants together with the 8% Note. Accordingly, the Company ~~offers, sells, grants any option to purchase, or otherwise disposes of any of its or its subsidiaries’ equity or equity equivalent securities (a “Subsequent Placement”),~~allocated the ~~Investor will have the right to participate for 50% of any such future Subsequent Placement.~~

~~Description~~proceeds of the ~~Financial Accounting and Reporting~~8% note as follows:

Schedule of Convertible Promissory Note with Detachable Warrants to Purchase Common Stock

The ~~Company elected to account for~~8% Note was recorded at its par value less the ~~Note on~~discount established at its ~~fair value basis, therefore,~~origination date. The note discount is amortized over the term of the convertible note utilizing the level-interest method. The following is the assumptions used in calculating the estimated grant-date fair value of the ~~Note, including its embedded conversion feature, were estimated together utilizing a binomial lattice model on its origination date and~~detachable warrants to purchase common stock granted in connection with the ~~Black-Scholes model at September 30, 2017. Such assumptions included the following:~~

The Company received $450,000 of proceeds at the date of issuance and after repayments and additional funding the net principal balance was $129,960 as of September 30, 2017. The fair market value of the8% Note was estimated to be $682,400 as of the issuance date, $141,328 at December 31, 2016 and $1,989,222 as of September 30, 2017. The net change in fair market value of the Note of $1,847,894 and $67,591 is included in change in fair value of senior secured convertible note payable in the accompanying statement of operations for the nine months ended September 30, 2017 and 2016, respectively.

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 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 has recorded the fair value of the Convertible Notes assuming that the remaining par value is $2,197,231 as asserted by the Investor, resulting in a change in the estimated fair value of $1,847,894 during the nine months ended September 30, ~~2017.~~2021:

Following is a summary of activity relative to the 8% Note as previously reported on December 31, 2020 through September 30, 2021 follows:

On August 19, 2020, the Company entered into a securities purchase agreement with an accredited investor (the “August Investor”) for the Company’s senior unsecured convertible note due August 19, 2021 (the “August Note”), with an aggregate principal face amount of approximately $365,169. The August Note was, subject to certain conditions, convertible into an aggregate of 3,943,820 shares of Common Stock, at a price of $0.10 per share. The Company plans to negotiate with the Investor regarding the issuance of the Replacement Note under the terms of the financing and taking into consideration the Investor’s minimal funding in the entire transaction, but there can be no assurance that it will be successful in this regard.

~~The Warrant~~also issued toa five-year common stock purchase 1,800,000 common shares in connection with the Note was treated as a derivative liability for accounting purposes due to its ratchet and anti-dilution provisions. The estimated fair value of the warrant derivative as of September 30, 2017 was $90,909, representing a change of $64,552 from December 31, 2016, which is included in changes in derivative fair value in the accompanying statement of operations for the nine months ended September 30, 2017. See Note 5.

~~The~~ warrant to purchase ~~240,000~~up to 800,000 shares ~~issued as part~~of Common Stock at an exercise price of $0.50 per share, subject to customary adjustments (the “August Warrant”). The August Warrant is immediately exercisable and on a cashless basis if the shares underlying such warrant have not been registered within 180 days after the date of issuance. The August Investor purchased such securities from the Company for an aggregate purchase price of $325,000. The Company also granted the August Investor certain automatic and piggy-back registration rights whereby the Company has agreed to register the resale by the August Investor of the ~~placement fee in connection with~~shares underlying the ~~Note was treated as a derivative liability for accounting purposes due to its ratchet~~August Warrant and ~~anti-dilution provisions. Changes in~~ the ~~fair value~~conversion of the warrant derivative liability totaled $8,607 (decrease in the derivative liability) through September 30, 2017, which is included in changes in derivative fair value in the accompanying statement of operations for the nine months ended September 30, 2017. The warrant derivative liability balance related to such warrants was $12,121 and $20,728 as of September 30, 2017 and December 31, 2016, respectively. See Note 5.August Note.

The August Note bore interest at a rate of eight percent (8%) per annum with 12 months guaranteed, may be voluntarily repaid in cash in full or in part by the Company at any time in an amount equal to 115% of the principal amount of the August Note and any accrued and unpaid interest, and shall be mandatorily repaid in cash in an amount equal to 115% of the principal amount of the August Note and any accrued and unpaid interest in the event of the consummation by the Company of any public or private offering or other financing pursuant to which the Company receives gross proceeds of at least $2,500,000. In addition, pursuant to the August Note, so long as the August Note remained outstanding, the Company could not enter into any financing transactions pursuant to which the Company sells its securities at a price lower than ten cents per share without written consent of the August Investor.

The conversion of the August Note and the exercise of the August Warrant are each subject to beneficial ownership limitations such that the August Investor may not convert the August Note or exercise the August Warrant to the extent that such conversion or exercise would result in the August Investor being the beneficial owner in excess of 4.99% (or, upon election of the August Investor, 9.99%) of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon such conversion or exercise, which beneficial ownership limitation may be increased or decreased up to 9.99% upon notice to the Company, provided that any increase in such limitation will not be effective until 61 days following notice to the Company.

The Company ~~is required~~and the August Investor agreed that for so long as the August Note and August Warrant remains outstanding, the August Investor has a right to ~~make monthly installment payments~~participate in ~~the form~~any issuance of ~~cash, common stock~~Common Stock, conventional debt, or a combination of ~~both.~~ such securities and/or debt, up to an amount equal to thirty-five percent (35%) of such subsequent financing.

The ~~Holder has suspended such installments during~~August Note and August Warrant each contain customary events of default, representations, warranties, agreements of the ~~third and fourth quarters of 2016~~Company and the ~~nine months ended~~August Investor and customary indemnification rights and obligations of the parties thereto, as applicable.

As described in Note 1 the Company elected to early 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.

On March 26, 2021, the Company exercised its right to retire the August Note in conjunction with the issuance of Convertible Preferred Stock (See Note 3 and 11). In accordance with the prepayment provisions contained in the August Note, the Company paid all principal, accrued interest and the 15% prepayment premium as follows:

The prepayment premium was charged to non-operating expense as a loss from retirement of convertible note payable (See Note 9).

Following is a summary of the August Note as previously reported on December 31, 2020 through September 30, ~~2017.~~2021 follows:

The Company entered into a line-of-credit facility on September 23, 2013 that provided it with borrowing capacity on a revolving basis up to a maximum of $50,000, which was increased to $75,000 at August 28, 2015 and an initial maturity of November 28, 2013. The line of credit was convertible to common stock at a rate of $5.00 per share. The entity providing the credit facility is owned by an officer of another corporation for which Infinity’s president and chairman of the board serves as president and chairman of the board. The facility was unsecured, bore interest at 8% per annum, and was paid off at its maturity in November 2016.

On December 27, 2013, the Company borrowed ~~$1,050,000~~$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”~~“December 2013 Warrant”) exercisable to purchase 100,000 shares of its ~~common stock~~Common Stock at an exercise price of ~~$15.00~~$15.00 per share. In connection with an extension to April 2015, the ~~parties~~Company and such lender amended the date for exercise of the December 2013 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 December 2013 Note to the ~~New~~new April 2015 maturity date (the “New Maturity ~~Date.~~Date”). If the Company ~~fails~~failed to pay the December 2013 Note on or before ~~its~~the New Maturity Date, the number of shares issuable under the December 2013 Warrant increases to 1,333,333 and the exercise price drops to ~~$0.75~~$0.75 per share. All other terms of the December 2013 Warrant ~~remain~~remained the same. The December 2013 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.

~~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 fails 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 remain the same. The December 2013 Note may be prepaid without penalty at any time. The Note is subordinated to all existing and future senior indebtedness, as such terms are defined in the Note. The December 2013 Note is in technical default and the Company is seeking an extension of the maturity date of this Note from the holder; however, there can be no assurances such efforts will be successful. The Company and its lender are assessing the status of the Nicaraguan Concessions and what effect that may have on the extension or renewal of these notes.

~~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 December 2013 Warrant expired as of September 30, 2020 and is no longer exercisable.

In connection with an additional extension of the December 2013 Note to April 7, 2016, the Company agreed to enter into a definitive revenue sharing agreement with the lender (the “Revenue Sharing Agreement”) 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 percentage 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 December 2013 Note and amortized ratably over the extended term of such note. Such prospective Revenue Sharing Agreement is void with the abandonment of the Nicaraguan Concessions.

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 December 2013 Warrant to $5.00 per share and extended the term of the December 2013 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 December 2013 Note to the New Maturity Date. If the Company failed to pay the December 2013 Note on or before the New Maturity Date, the number of shares issuable under the December 2013 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 Company failed to make the required payment previously described and the reset of the terms of the December 2013 Warrant occurred, however such warrant expired in March 2017 unexercised. 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 December 2013 Note. The December 2013 Note was in default and the parties agreed to 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.

The December 2013 Warrant was treated as a derivative liability whereby the value of the December 2013 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 December 2013 Warrant expired in 2019 and is not deemed outstanding as of September 30, 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~~Common Stock issued ($~~104,000)~~104,000) and the increased value of the outstanding warrants due to the decrease in their exercise price ($~~68,716)~~68,716) as an additional discount on the ~~note payable~~December 2013 Note to be amortized ratably over the extended term of such note.

~~The discount recorded~~Company entered into an Exchange and Settlement Agreement (the “September Exchange Agreement”) with the December 2013 Note holder (the “Holder”), pursuant to which the Holder agreed to exchange the December 2013 Note in the original principal amount of $1,050,000, representing outstanding principal balance of $1,000,000 and accrued and unpaid interest thereon (which totaled $542,762 as of September 24, 2020), for (i) a cash payment in the amount of $100,000 and (ii) 737,532 newly issued shares of Common Stock (the “Exchange”).

In connection with the September Exchange Agreement, the Company and the Holder agreed to terminate the following agreements: (i) the preemptive rights agreement, dated as of December 27, 2013, ~~origination~~between the Company and the Holder, (ii) the revenue sharing agreement, dated as of May 30, 2014, between the Company and the Holder, and (iii) the indemnity agreement, dated as of December 27, 2013, between the Company and the Holder. Additionally, pursuant to the September Exchange Agreement, the Holder acknowledged the expiration on March 12, 2017, by its terms, of a common stock purchase warrant, issued to the Holder, for the purchase of up to 100,000 shares of Common Stock. The Company and the Holder also agreed to provide mutual limited releases, releasing each of them from all liabilities and obligations to the other, as between them with respect to claims relating to the December 2013 Note, such preemptive rights agreement, the Holder’s warrant and all other agreements relating thereto.

The closing of the Exchange occurred concurrently with the execution of the September Exchange Agreement. At the closing, the Company made the $100,000 cash payment and issued 737,532 shares of Common Stock (valued at $132,756 based on the closing market price of the Common Stock on the date of the ~~note~~Exchange) to the Holder and ~~as a result~~the underlying documents and obligations summarized above were surrendered and/or cancelled.

A summary of the ~~amendments to the Note terms~~gain on exchange and ~~extensions~~extinguishment of ~~the maturity date has been amortized ratably over the term and extended terms of the note~~debt and the ~~remaining unamortized discount was $-0-~~related accrued interest as of ~~September 30, 2017~~ and ~~December 31, 2016. The related warrant derivative liability balance was $449 and $4,429 as of September 30, 2017 and December 31, 2016, respectively. See Note 5.~~

~~Other than the Note described above, during~~for the nine months ended September 30, ~~2017 the~~2020 follows:

The Company had short-term notes outstanding with entities or individuals as follows:

Accrued liabilities consist of the following at September 30, 2021 and December 31, 2020:

The Company applies ASC 718,Stock Compensation, which requires companies to recognize compensation expense for share-based payments based on the estimated fair value of the awards. ASC 718 also requires tax benefits relating to the deductibility of increases in the value of equity instruments issued under share-based compensation arrangements to be presented as financing cash inflows in the statement of cash flows. Compensation cost is recognized based on the grant-date fair value for all share-based payments granted and is estimated in accordance with the provisions of ASC 718.

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~~Common Stock is 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~~Common Stock were reserved for issuance under the 2005 and 2006 Plans; however, such Plans 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~~shares 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 and 2006 Plans.

~~The~~At the Annual Meeting of Stockholders ~~was~~ 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 2015 Plan.

As of September 30, ~~2017,~~ 2021, 500,000 shares were available for future grants under the 2015 ~~Plan as all~~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.~~based on historical volatility. 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 no1,800,000 options issued during the nine months ended September 30, 2021 and there were 0 stock options granted during the nine months ended September 30, ~~2017.~~2020.

The following is the assumptions used in calculating the estimated grant-date fair value of the stock options granted during the nine months ended September 30, 2021:

The following table summarizes stock option activity for the nine months ended September 30, ~~2017:~~2021:

	Number of Options			Weighted Average Exercise Price Per Share			Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value		Number of Options			Weighted Average Exercise Price Per Share			Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
Outstanding at December 31, 2016		393,450		$	37.46			4.6 years	$	—
Outstanding at December 31, 2020												332,000		$	41.86			1.28 years	$	—
Granted		—			—							1,800,000			0.50					-
Exercised		—			—							—			—
Forfeited		(16,500	)		(31.94	)						(115,000	)		(64.24	)
Outstanding at September 30, 2017		376,950		$	37.82			4.1 years	$	—
Outstanding and exercisable at September 30, 2017		376,950		$	37.82			4.1 years	$	—
Outstanding at September 30, 2021												2,017,000		$	3.67			8.75 years	$	—
Outstanding and exercisable at September 30, 2021												217,000		$	30.00			1.03 years	$	—

The Company recorded stock-based compensation expense in connection with the vesting of options granted aggregating ~~$-0-~~$76,499 and ~~$7,598~~$101,999 during the three and nine months ended September 30, 2021, respectively, and $-0- and for the three and nine months ended September 30, 2020.

The total grant date fair value of the 1,800,000 stock options issued during the nine months ended September 30, ~~2017~~2021 was $305,997 in total or $0.17 per share and ~~2016, respectively.~~there were 0 stock options granted during the nine months ended September 30, 2020.

The intrinsic value as of September 30, ~~2017~~2021 related to the vested and unvested stock options as of that date was ~~$-0.~~$-0-. The unrecognized compensation cost as of September 30, ~~2017~~2021 related to the unvested stock options as of that date was ~~$-0-.~~$203,998 which will be amortized over the next eight months in accordance with the respective vesting scale.

Restricted stock grants. During August 2020 the Board of Directors granted 5,000,000 shares of restricted stock awards to our officers, directors and a consultant. During October 2019 the Board of Directors granted 2,000,000 shares of restricted stock awards to our new Chief Operating Officer. Restricted stock awards are valued on the date of grant and have no purchase price for the recipient. Restricted stock awards typically vest over a period of time generally corresponding to yearly anniversaries of the grant date. Unvested shares of restricted stock awards may be forfeited upon the termination of service of employment with the Company, depending upon the circumstances of termination. Except for restrictions placed on the transferability of restricted stock, holders of unvested restricted stock have full stockholder’s rights, including voting rights and the right to receive cash dividends.

A summary of all restricted stock activity under the equity compensation plans for the nine months ended September 30, 2021 is as follows:

The Company recorded stock-based compensation expense in connection with the issuance/vesting of restricted granted aggregating $81,250 and $243,750 during the three and nine months ended September 30, 2021, respectively. The Company recorded stock-based compensation expense in connection with the issuance/vesting of restricted granted aggregating $24,575 and $73,192 during the three and nine months ended September 30, 2020, 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 September 30, 2021, there were $243,750 of total unrecognized compensation costs related to all remaining non-vested restricted stock grants, which will be amortized over the next 9 months in accordance with the respective vesting scale.

The estimated fair value of the Company’s derivative liabilities, all of which ~~are~~were related to the detachable warrants issued in connection with various notes payable, ~~and the secured convertible note,~~ 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 and current 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 note payable and warrant agreement terms (Note 2 and 3) and non-performance risk factors, among other items (ASC 820,~~Fair Value Measurements~~ ~~(“ASC 820”) fair value hierarchy Level 3).~~rates. The detachable warrants issued in connection with ~~the secured convertible note (See Note 2), the December 2013 Note (See Note 3) and~~ the two other short-term notes payable (See Note 3) ~~contain~~contained ratchet and anti-dilution provisions that remain in effect during the term of the ~~warrant~~warrants while the ratchet and anti-dilution provisions of the other notes payable cease when the related note payable is extinguished. ~~When~~

On April 1, 2021, the ~~note~~outstanding warrants treated as derivatives and the related notes payable containing such ratchet and anti-dilution provisions iswere extinguished through an exchange transaction as described in Note 3. Therefore, the derivative liability ~~will be~~was adjusted to fair value and extinguished and included in the ~~resulting derivative liability will be transitioned from a liability to equity~~gain on extinguishment of notes payable as of ~~such date. The derivative liability associated with~~ the warrants issued in connection with the secured convertible note payable will remain in effect until such time as the underlying warrant is exercised or terminated and the resulting derivative liability will be transitioned from a liability to equity as of such date.termination date (See Note 9).

The Company has issued warrants to purchase an aggregate of 2,174,000 common shares in connection with various outstanding debt instruments which require derivative accounting treatment as of September 30, 2017. A comparison of the assumptions used in calculating estimated fair value of such derivative liabilities as of ~~September 30, 2017~~the April 1, 2021 termination date and December 31, 2020 is as follows:

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:

~~The warrant derivative liability consists of the following at September 30, 2017 and December 31, 2016:~~Note 7 – Warrants

The following table summarizes warrant activity for the nine months ended September 30, ~~2017:~~2021:

The weighted average term of all outstanding common stock purchase warrants was ~~4.1~~4.7 years as of September 30, ~~2017.~~2021. The intrinsic value of all outstanding common stock purchase warrants and the intrinsic value of all vested common stock purchase warrants was ~~zero~~0 as of September 30, ~~2017.~~2021.

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 September 30, 2021 and 2020.

The Company has incurred operating losses in recent years, and it continues to be in a three-year cumulative loss position at September 30, 2021. 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 ~~$66,270,000,~~$61,235,000 in accordance with its 2020 Federal Income tax return as filed, which expire from ~~2025~~2028 through ~~2030.~~ 2039.

The Company has ~~provided a 100% valuation allowance due to the uncertainty of realizing the tax benefits from its net deferred tax asset.~~

~~The Company has not~~recently completed the filing of its tax returns for the tax years 2012 through ~~2016.~~2020. 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. ~~Current estimates prepared by the Company on a preliminary basis indicate that no~~Management has completed its review of whether such ownership changes have occurred, and ~~are~~based upon such review, management believes that the Company is not currently ~~not~~ subject to an annual limitation ~~but~~or the possibility of the complete elimination of the net operating loss carry- forwards. In addition, the Company may be ~~further~~ limited by additional ownership changes which may occur in the future.

During the three and nine months ended September 30, 2021 and 2020, the Company recorded gains on the extinguishment of liabilities through the negotiation of settlements with certain creditors and through the operation of law.

Gain on exchange and extinguishment of liabilities - On March 31, 2021, the Company entered into Debt Settlement Agreements with six creditors (five of which were related parties) which extinguished accounts payable and accrued liabilities totaling $2,866,497 in exchange for the issuance of $28,665 in principal balance of 3% Convertible Promissory Notes (the “3% Notes”) with detachable warrants to purchase 5,732,994 shares of Common Stock for $0.50 per share. The 3% Notes allows for prepayment at any time with all principal and accrued interest becoming due and payable at maturity on March 30, 2026. The 3% Notes are convertible as to principal and any accrued interest, at the option of holder, into shares of the company’s Common Stock at any time after the issue date and prior to the close of business on the business day preceding the Maturity Date at the rate of fifty cents ($0.50) per share, subject to normal and customary adjustment.

The warrants to purchase 5,732,994 shares of common stock issued pursuant to the Debt Settlement Agreements were valued at $1,605,178 using the black-scholes methodology. The following assumptions were used in calculating the estimated fair value of the warrants as of March 31, 2021, their date of issuance:

An aggregate of $2,577,727 of the total accounts payable and accrued liabilities that were extinguished were with five related parties. Such related parties were issued $25,777 principal balance of the 3% Convertible Promissory Notes and warrants to purchase 5,155,454 shares of Common Stock in exchange for the extinguishment of their respective debt obligations. The Company recognized a gain on extinguishment of liabilities for the portion of the extinguishment with non-related parties. Furthermore, it recognized the portion of the gain on extinguishment of liabilities with related parties as a contribution of capital.

The gain on extinguishment of liabilities from the Debt Settlement Agreements was determined as follows:

Gain on extinguishment of trade payables - The Company incurred trade payable obligations totaling $4,840,136 during 2013 which were extinguished in 2020 pursuant to the relevant Statute of Limitations.

The Company’s asset retirement obligations primarily relate to the Company’s portion of future plugging and abandonment costs for wells and related facilities. The following table presents the changes in the asset retirement obligations for the nine months ended September 30, 2021:

The $1,716,003 asset retirement obligation existing at December 31, 2020 and in years prior to 2020 represented the remaining potential liability for wells AMNG had owned in Texas and Wyoming prior to their sales/disposal in 2012. AMNG was not in compliance with then existing federal, state and local laws, rules and regulations for its previously owned Texas and Wyoming domestic oil and gas properties. Regardless, that all previously owned domestic oil and gas properties held by Infinity – Wyoming and Infinity-Texas being disposed of in 2012 and prior years; the Company may remain liable for certain asset retirement costs should the new owners not complete their asset retirement obligations. Management believes the asset retirement obligations recorded relative to these Texas and Wyoming wells of $1,716,003 as of September 30, 2021 and December 31, 2020 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 $13,425 asset retirement obligation assumed pursuant to an acquisition on April 1, 2021 and the related $558 accretion expense during the nine months ended September 30, 2021 related to the acquisition of the Oil & Gas Properties as further described in Note 2.

The Company has not maintained insurance coverage on its U.S domestic oil and gas properties for several 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.

The Company is in default of various provisions of the 30-year Concession for both Perlas and Tyra blocks as of September 30, 2017, including (1) the drilling of at least one exploratory well on the Perlas Block during 2016; (2) the shooting of additional seismic on the Tyra Block during 2016; (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 and 2017 area fees required for both the Perlas and Tyra which total $97,243; and (5) payment of the 2016 and 2017 training fees required for both the Perlas and Tyra totaling $175,000. The Company is seeking to extend, renew and/or renegotiate the terms of the Nicaraguan Concessions with the Nicaraguan government to cure the defaults. There can be no assurance whether it will be able to extend, renew and/or renegotiate the Nicaraguan Concessions and whether any new terms will be favorable to the Company. The Company has held meetings and is pursuing additional meetings with Nicaraguan Government officials in order to address the pending defaults.

The Company must raise substantial amounts of debt and equity capital from other sources in the immediate future in order to fund: (1) the annual training program and area fees for 2016 and 2017; (2) required letters of credit to the Nicaraguan Government; (3) the drilling of at least one exploratory well on the Perlas Block of the Nicaraguan Concessions during 2017; (4) the shooting of additional seismic on the Tyra Block of the Nicaraguan Concessions should it be unable to negotiate a waiver of such requirement from the Nicaraguan government; (5) normal day-to-day operations and corporate overhead; and (6) outstanding debt and other financial obligations as they become due including the $1.0 million December 2013 Note, and the notes payable totaling $285,000, which currently are in technical default and resolution of the Replacement Note matter. These are substantial operational and financial issues that must be successfully addressed during 2017 or the Company’s ability to satisfy the conditions necessary to maintain and/or renegotiate its Nicaragua Concessions will be in significant doubt.

The following charts set forth the minimum work programs required under for the Perlas and Tyra blocks comprising the Concessions in order for the Company to retain them unless it is successful in obtaining extensions, renewals or the renegotiation of the entire Concessions Agreements for the Perlas and Tyra blocks.

On March 23, 2009, the Company entered into a Securities Purchase Agreement, dated effective as of March 23, 2009, with Offshore Finance, LLC, an accredited investor, to issue a subordinated promissory note in the aggregate principal amount of up to $1,275,000 and a one percent (1%) revenue sharing interest in the Nicaraguan Concessions. Off-Shore funded a total of $1,275,000 and subsequently converted the subordinated promissory note to common stock.

Under the Revenue Sharing Agreement (the “Revenue Agreement”), Infinity assigned to Off-Shore a monthly payment (the “RSP”) equal to the revenue derived from one percent (1%) of Infinity’s share of the hydrocarbons produced at the wellhead from the Nicaraguan Concessions. The RSP will bear its proportionate share of all costs incurred to deliver the hydrocarbons to the point of sale to an unaffiliated purchaser, including its share of production, severance and similar taxes, and certain additional costs. The RSP will be paid to Off-Shore by the last day of each month based on the revenue received by Infinity from the purchaser of the production during the previous month from the Nicaraguan Concessions. The Revenue Agreement does not create any obligation for Infinity to maintain or develop the Nicaraguan Concessions, and does not create any rights in the Nicaraguan Concessions for Off-Shore. In connection with its dissolution Off-Shore assigned its RSP to its individual members.

On June 6, 2009, the Company entered into a Revenue Sharing Agreement with the officers and directors for services provided. Infinity assigned to officers and directors a monthly payment equal to the revenue derived from one percent (1%) of Infinity’s share of the hydrocarbons produced at the wellhead from the Nicaraguan Concessions. The RSP will bear its proportionate share of all costs incurred to deliver the hydrocarbons to the point of sale to an unaffiliated purchaser, including its share of production, severance and similar taxes, and certain additional costs.

The RSP 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 Agreement does not create any obligation for Infinity to maintain or develop the Nicaraguan Concessions, and does not create any rights in the Nicaraguan Concessions for officers and directors.

The Company intends to seek joint venture or working interest partners (the “Farmout”) prior to the commencement of any exploratory drilling operations on the Nicaraguan Concessions. On September 8, 2009, the Company entered into a Revenue Sharing Agreement with Jeff Roberts to assist the Company with its technical studies of gas and oil holdings in Nicaragua and managing and assisting in the Farmout. Infinity assigned to Jeff Roberts a monthly payment equal to the revenue derived from one percent (1%) of Infinity’s share of the hydrocarbons produced at the wellhead from the Nicaraguan Concessions. The RSP will bear its proportionate share of all costs incurred to deliver the hydrocarbons to the point of sale to an unaffiliated purchaser, including its share of production, severance and similar taxes, and certain additional costs. The RSP shall be paid to Jeff Roberts by the last day of each month based on the revenue received by Infinity from the purchaser of the production during the previous month from the Nicaraguan Concessions. The Revenue Agreement does not create any obligation for Infinity to maintain or develop the Nicaraguan Concessions, and does not create any rights in the Nicaraguan Concessions for Jeff Roberts.

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.

~~Infinity has~~AMNG was not ~~been~~ in compliance with then existing federal, state and local laws, rules and regulations for ~~its previously owned~~ domestic oil and gas properties owned and ~~this~~disposed of in 2012 and in years prior to 2012 and could have a material or significantly adverse effect upon the liquidity, capital expenditures, earnings or competitive position of ~~Infinity.~~AMNG. All domestic oil and gas properties held by Infinity – Wyoming and Infinity-Texas were disposed of ~~prior to September 30, 2017;~~in 2012 and prior; 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 for these prior matters of ~~$1,716,003~~$1,716,003 as of September 30, ~~2017~~2021 and December 31, ~~2016~~2020 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.~~

The Company is subject to ~~numerous~~various 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 authorized to issue up to 10,000,000 preferred shares with a par value of $0.0001 per share.

On March 16, 2021, the Company approved and filed a Certificate of Designation of Preferences, Rights and Limitations of the Series A Convertible Preferred Stock (“COD”). The COD provides for the issuance of up to 27,778 shares of Series A Convertible Preferred Stock with a stated/liquidation value of $100 per share. Pursuant to the provisions of the COD, the Series A Convertible Preferred Stock is convertible, at the option of the holders thereof, at any time, subject to certain beneficial ownership limitations, into shares of Common Stock determined on a per share basis by dividing the $100 stated/liquidation value of such share of Convertible Preferred Stock by the $0.32 per share conversion price, which conversion price is subject to certain adjustments. In addition, the COD provides for the payment of 10% per annum cumulative dividends, in (i) cash, or (ii) shares of Common Stock, to the holders of the Series A Convertible Preferred Stock based on the stated/liquidation value, until the earlier of (i) the date on which the shares of Series A Convertible Preferred Stock are converted to common stock or (ii) date the Company’s obligations under the COD have been satisfied in full. The shares of Series A Convertible Preferred Stock also (i) vote on an as-converted to Common Stock basis, subject to certain beneficial ownership limitations, (ii) are subject to mandatory conversion into Common Stock upon the closing of any equity financing transaction consummated after the original issue date, pursuant to which the Company raises gross proceeds of not less than $5,000,000, (iii) rank senior to the Common Stock and any class or series of capital stock created after the Series A Convertible Preferred Stock and (iv) have a special preference upon the liquidation of the Company.

On March 26, 2021 the Company entered into a securities purchase agreement with five (5) accredited investors providing for an aggregate investment of $2,050,000 by the investors for the issuance by the Company to them of (i) 22,776 shares of Series A Convertible Preferred Stock, par value $0.0001 per share, with a stated/liquidation value of $100 per share; and (ii) warrants, with a term of five and a half (5.5) years, exercisable six (6) months after issuance, to purchase an aggregate of up to 5,256,410 shares of Common Stock at an exercise price of $0.39 per share, subject to customary adjustments thereunder. The Series A Convertible Preferred stock is convertible into an aggregate of up to 7,117,500 shares of Common Stock. Holders of the Warrants may exercise them by paying the applicable cash exercise price or, if there is not an effective registration statement for the sale of the Warrant Shares within six (6) months following the Closing Date, as defined in the Warrants, by exercising on a cashless basis pursuant to the formula provided in the Warrants. Net proceeds from the issuance of Series A Convertible Preferred Stock totaled $1,929,089 after deducting the placement agent fee and other expenses of the offering. The Company intends to use the proceeds of the Series A Convertible Preferred Stock offering to complete the acquisition and development of the Properties, to pay-off the outstanding convertible note payable (See Note 3 & 9) and for general working capital purposes.

The Company also entered into that certain registration rights agreement, pursuant to which the Company agreed to file a registration statement within forty-five (45) days following the closing of the acquisition of the Properties which occurred on April 1, 2021 to register the conversion shares and the warrant Shares. The Company is to use its best efforts to cause such registration statement to be declared effective within forty-five (45) days after the filing thereof, but in any event no later than the ninetieth (90^th) calendar day following the closing of the acquisition of the Properties which occurred on April 1, 2021.

The holders of the Series A Convertible Preferred Stock agreed to a 4.99% beneficial ownership cap that limits the investors’ ability to convert its Series A Convertible Preferred Stock and/or exercise its common stock purchase warrants. Such limitation can be raised to 9.99% upon 60 days advance notice to the Company.

The Company has accrued and paid preferred dividends totaling $57,408 and $117,936 relative to the Series A Convertible Preferred Stock which was charged to additional paid in capital as during the three and nine months ended September 30, 2021, respectively.

The Company’s Chief Operating Officer is a non-controlling member of Core. The Company acquired an Option from Core to purchase the production and mineral rights/leasehold for the Properties. The Company paid a non-refundable deposit of $50,000 in 2019 to bind the original 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. 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. The parties entered into a second Side Letter agreement on March 31, 2021, pursuant to which we and Core agreed to set the closing date on which the Properties would be purchased to April 1, 2021. Pursuant to the second Side Letter, the Company is responsible for reimbursing Core for certain prorated revenues and expenses from January 1, 2021 through the April 1, 2021 closing date. On April 1, 2021 we completed the acquisition of the Properties, under the same terms of the asset purchase agreement executed on December 14, 2020 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 Series A Convertible Preferred Stock issuance were used to complete the acquisition of the Properties on April 1, 2021, to retire the outstanding convertible note payable and for working capital purposes.

The Company does not have any employees other than ~~the CEO~~its Chief Executive Officer, Chief Operating Officer and ~~CFO.~~Chief Financial Officer. In previous years, certain general and administrative services (for which payment is deferred) had been provided by the ~~CFO’s~~Company’s Chief Financial Officer’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~~its Chief Financial Officer’s accounting firm for such support services and was not billed for any such services during the nine months ended September 30, ~~2017~~2021 and ~~2016. The amount~~2020. On March 31, 2021 the parties entered into a Debt Settlement Agreement whereby all amounts due to such firm for services totaling $762,407 were extinguished upon the issuance of $7,624 principal balance of 3% Note and the issuance of warrants to purchase 1,524,814 shares of Common Stock as further described in Notes 3, 7 & 9. Total amounts due to the ~~CFO’s firm for services previously provided~~related party was ~~$762,407 at~~$-0- and $762,407 as of September 30, ~~2017~~2021 and December 31, ~~2016,~~2020, respectively.

The Company has accrued compensation to its officers and ~~is included~~directors in ~~accrued liabilities at both dates.~~

~~On June 6, 2009,~~previous years. The Board of Directors authorized the Company to cease the accrual of compensation for its officers and directors, effective January 1, 2018. On March 31, 2021 the parties entered into ~~a Revenue Sharing Agreement with~~Debt Settlement Agreements whereby all accrued amounts due for such services totaling $1,789,208 were extinguished upon the issuance of $17,892 principal balance of 3% Convertible Promissory Note and the issuance of warrants to purchase 3,578,416 shares of Common Stock as further described in Notes 3, 7 & 9. Total amounts due to the officers and directors ~~for services provided. Infinity assigned~~related to ~~officers~~accrued compensation was $-0- and ~~directors a monthly payment equal to the revenue derived from one percent (1%)~~$1,789,208 as of Infinity’s share of the hydrocarbons produced at the wellhead from the Nicaraguan Concessions. The RSP will bear its proportionate share of all costs incurred to deliver the hydrocarbons to the point of sale to an unaffiliated purchaser, including its share of production, severanceSeptember 30, 2021 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 Agreement does not create any obligation for Infinity to maintain or develop the Nicaraguan Concessions and does not create any rights in the Nicaraguan Concessions for officers and directors.December 31, 2020, respectively.

Offshore Finance, LLC was ~~granted a one percent (1%) revenue sharing interest in the Nicaraguan Concessions~~owed financing costs in connection with a subordinated loan ~~provided previously~~to the Company which was ~~subsequently~~ converted to common ~~stock.~~shares in 2014. The managing partner of Offshore and the Company’s CFO are partners in the accounting firm which the Company used for general corporate purposes in the past. ~~In connection with its dissolution, Offshore assigned its RSP~~On March 31, 2021 the parties entered into a Debt Settlement Agreement whereby all amounts due for such services totaling $26,113 were extinguished upon the issuance of $261 principal balance of 3% Convertible Promissory Note and the issuance of warrants to ~~its individual members, which includes the former managing partner~~purchase 52,226 shares of ~~Offshore.~~

Ascommon stock as further described in Notes 3, 7 & 9. Total amounts due to this related party was $-0- and $26,113 as of September 30, ~~2017~~2021 and December 31, ~~2016,~~2020, respectively.

On May 13, 2020, the Company ~~had~~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. The entire $41,000 principal balance and $654 of accrued ~~compensation~~interest related to ~~its officers~~the note was retired on August 19, 2020 and ~~directors~~there is no remaining balance as of ~~$1,770,208~~September 30, 2021 and ~~$1,601,208, respectively.~~December 31, 2020.

On October 29, 2021, the Company entered into a ~~line-of-credit facility on September 23, 2013 that provided it~~securities purchase agreement with ~~borrowing capacity on a revolving basis up~~accredited investors (the “October Note Investors”) for the Company’s unsecured convertible notes due October 29, 2022 (the “October Notes”), with an aggregate principal face amount of approximately $550,000. The October Notes are, subject to ~~a maximum~~certain conditions, convertible into an aggregate of ~~$50,000, which was increased to $75,000 at August 28, 2015 and an initial maturity~~1,100,000 shares of ~~November 28, 2013. The line of credit was convertible to common stock~~Common Stock, at a ~~rate~~price of ~~$5.00~~$0.50 per share. The ~~entity providing the credit facility is owned by an officer of another corporation for which Infinity’s president~~Company also issued a five and chairman of the board serves as president and chairman of the board. The facility was unsecured, bore interest at 8% per annum, and was renewed at its maturity several times until it was paid in full on its extended maturity date on November 28, 2016. In consideration for the origination of the line of credit facility and the various renewals, the Company granted the lenderone half - year common stock purchase ~~warrants. On February 28, 2016, the Company extended the line-of-credit expiration date to May 28, 2016 and issued a~~ warrant to purchase ~~10,000 common~~up to 1,650,000 shares of Common Stock at an exercise price of ~~$5.00~~$0.50 per share, subject to customary adjustments (the “October Note Warrants” which ~~warrants were~~are immediately ~~exercisable and expire on February 28, 2021. On May 28, 2016,~~exercisable. The October Note Investors purchased such securities from the Company ~~extended~~for an aggregate purchase price of $550,000 and the ~~line-of-credit expiration date~~proceeds were used to ~~August 28, 2016~~acquire the option to acquire current production and ~~issued~~leasehold rights to approximately 52,000 acres in Kansas (see subsequent event described below) and for general working capital purposes. The Company also granted the October Note Investors certain piggy-back registration rights whereby the Company has agreed to register for resale the shares underlying the October Note Warrants and the conversion of the October Notes unless the shares of the Company commences to trade on the NYSE American; the Nasdaq Capital Market; the Nasdaq Global Market; the Nasdaq Global Select Market; or the New York Stock Exchange, within one hundred twenty (120) days after the Closing Date.

The October Note bears interest at a ~~warrant~~rate of eight percent (8%) per annum, may be voluntarily repaid in cash in full or in part by the Company at any time in an amount equal to 120% of the principal amount of the October Notes and any accrued and unpaid interest. Fifty percent (50%) of the October Notes shall be mandatorily repaid in cash in an amount equal to 120% of the principal amount of the October Notes and any accrued and unpaid interest in the event of the consummation by the Company of any public or private offering or other financing pursuant to which the Company receives gross proceeds of at least $2,000,000 and one-hundred percent (100%) of the October Note plus accrued interest shall be mandatorily repaid in an amount equal to 120% of outstanding principal and interest in cases in which the Company receives gross proceeds of at least $3,000,000. In addition, pursuant to the October Notes, so long as the October Notes remain outstanding, the Company cannot enter into any financing transactions pursuant to which the Company sells its securities at a price lower than $0.50 cents per share without the written consent of the October Note Investors.

The conversion of the October Notes and the exercise of the October Note Warrants are each subject to beneficial ownership limitations such that the October Note Investors may not convert their October Note or exercise their October Note Warrants to the extent that such conversion or exercise would result in the October Note Investors being the beneficial owner in excess of 4.99% (or, upon election of the October Investor, 9.99%) of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon such conversion or exercise, which beneficial ownership limitation may be increased or decreased up to 9.99% upon notice to the Company, provided that any increase in such limitation will not be effective until 61 days following notice to the Company.

The Company and the October Note Investors agreed that for so long as the October Notes and October Note Warrants remain outstanding, the October Note Investors have the right to participate in any issuance of Common Stock, conventional debt, or a combination of such securities and/or debt, up to an amount equal to thirty-five percent (35%) of such subsequent financing.

The October Notes and October Note Warrants contain customary events of default, representations, warranties, agreements of the Company and the October Investor and customary indemnification rights and obligations of the parties thereto, as applicable.

Term Sheet to Acquire Current Production and Leasehold Rights to Approximately 52,000 Acres in Kansas

On November 4, 2021 the Company acquired an option to purchase ~~10,000~~the production and mineral rights/leasehold for oil & gas properties primarily in the Central Kansas Uplift geological formation covering over 52,000 acres (the “Properties”). The purchase option gives the Company the right to acquire the Properties from the owner for $12 million in cash prior to December 31, 2021. The option also provides AMNG the right to acquire a related oilfield service company for $4 million in cash prior to December 31, 2022.

The acquisition of the Properties include production from 200 oil wells currently producing 280 barrels of oil per day, 100 natural gas wells producing 1.8 million cubic feet of natural gas per day and 40 thousand cubic feet of helium per day. The acquisition will include all existing infrastructure including approximately 200 miles of gas gathering pipelines/systems, salt-water injection and disposal wells/systems, and all existing above and below ground production equipment including gas compression facilities. Approximately 43,000 acres of the Properties contain proven helium content of between 1.5% to 6% which AMNG believes will complement its strategic plan of becoming a leading producer of rare noble gases in the United States and potentially the world. The Properties provide AMNG with the opportunity to drill new wells for noble gases and traditional oil & natural gas production, reworking existing wells to enhance oil & natural gas as well as noble gas production and to implement secondary recovery projects such as water-floods to existing production fields. The gas gathering pipeline infrastructure is expected to provide a benefit to the Company’s when integrated with its recently acquired Central Kansas Uplift Property by providing a gas gathering and compression system to economically market the natural gas and noble gas produced by the Company’s Central Kansas Properties.

AMNG also acquired an option to acquire a related oilfield service company that has been servicing the Kansas oil and gas community for over 40 years. The acquisition will include retail-supply stores, well cementing services, acidizing and small fracture treatment services, cased-hole logging and perforating services, oil well pulling, servicing and completion services, propane sales and delivery services as well as many other ancillary well servicing businesses. The purchase of the oil field service business is expected to provide benefits to AMNG relative to its current properties and future acquisitions including the one under the acquired option.

The Company held its annual meeting of the shareholders (the “Annual Meeting”) on Wednesday, October 13, 2021. There were 13,222,427 shares of common stock, par value $0.0001 per share (the “Common Stock”), represented in person or by proxy at the Annual Meeting, constituting approximately 58.5% of the outstanding shares of Common Stock on August 24, 2021, the record date for the Annual Meeting (the “Record Date”), and establishing a quorum. The matters voted upon at the Annual Meeting and the results of such voting are set forth below:

Letter Agreement with US Noble Gas, LLC to Provide Exploration, Testing, Production and Distribution of Noble Gas and Rare Earth Element/Minerals

On November 10, 2021, the Company and US Noble Gas, LLC (“USNG”) entered a Letter Agreement which covers terms and conditions under which USNG would provide consulting services to the Company for exploration, testing, refining, production, marketing and distribution of various potential reserves of noble gases and rare earth element/minerals on the Company’s recently acquired Properties. The Letter Agreement would cover all of the noble gas and rare earth elements/minerals potentially existing on the approximate 11,000 acres included in the Company’s Properties and future acquisitions.

The Letter Agreement also provides that USNG will supply a gas extraction/separator unit which is a large vessel designed for flows up to 5,000 barrels of water per day at low pressures. It is a dewatering vessel that could be used for multiple wells in the future. USNG will also supply a gas metering device currently being installed on the Company’s test well. The equipment US Noble delivers free of charge shall belong to AMNG along with all data and proprietary information regarding gases and minerals collected.

USNG will receive as consideration The Company will issue warrants to issue 2,000,000 shares of common stock at an exercise price of ~~$5.00~~$0.50 for a five-year term as consideration for the Letter Agreement to the principal consultants involved with USNG. USNG will also receive a monthly cash fee equal to $8,000 per ~~share, which warrants were immediately exercisable~~month beginning at the onset of commercial helium or minerals production and ~~expire on May 28, 2021. On August 28, 2016,~~sales, subject to certain thresholds. Such monthly fees will become due and payable for any month that AMNG receives cash receipts in excess of $25,000 derived from the sale of noble gases and/or rare earth elements/minerals.

The Letter Agreement requires the Company ~~extended~~to establish a four-member advisory board composed of various experts involved in noble gas and rare earth elements/minerals. The advisory board will be formed to help attract both industry partners and financial partners for developing a large helium, noble gas and/or rare earth element/mineral resource, that may exist in the ~~line-of-credit expiration date~~region where AMNG currently operates. Industry partners would include helium, noble gas and/or rare earth element/mineral purchasers, exploration and development companies from the energy industry and financial partners may include large family offices or small institutions. The members of the advisory board collectively, are to ~~November 28, 2016 and issued a warrant~~receive warrants to purchase ~~10,000~~1,200,000 common shares atwith an exercise price of ~~$5.00~~$0.50 per share ~~which warrants were immediately exercisable and expire on August 28, 2021.~~for a period of five years.

Reincorporation of AMGAS from the State of Delaware to the State of Nevada

On October 22, 2021, the Board of Directors of AMGAS approved the reincorporation of the Company in the State of Nevada, pursuant to a merger with and into a wholly-owned subsidiary of the Company (the “Reincorporation Merger”). On October 22, 2021 the holders of a majority of the Company’s voting power approved, by written consent, the Reincorporation Merger. The consenting voting stockholders and their respective ownership percentage of the voting stock of the Company, total in the aggregate of more than 50% of the outstanding voting stock, which is required under the Delaware General Corporation Law, as amended and our bylaws. We expect that the Reincorporation Merger will become effective on or about December 3, 2021, at which time, a Certificate of Merger will be filed with the Secretary of State of the State of Delaware and Articles of Merger will be filed with the Secretary of State of the State of Nevada.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

~~ITEM 2.~~~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

This quarterly report on Form 10-Q contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which are intended to be covered by the safe harbors created thereby. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue,” “intends,” and other variations of these words or comparable words. In addition, any statements that refer to expectations, projections or other characterizations of events, circumstances or trends and that do not relate to historical matters are forward-looking statements. To the extent that there are statements that are not recitations of historical fact, such statements constitute forward-looking statements that, by definition, involve risks and uncertainties. In any forward-looking statement, where we express an expectation or belief as to future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the statement of expectation or belief will be achieved or accomplished. The actual results or events may differ materially from those anticipated and as reflected in forward-looking statements included ~~herein. Factors that may cause actual results or events to differ from those anticipated~~ in ~~the forward-looking statements included herein include the risk factors described below.~~this report.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this report. Except as required by law, we do not undertake to update or revise any of the forward-looking statements to conform these statements to actual results, whether as a result of new information, future events or otherwise.

Readers are cautioned not to place undue reliance on the forward-looking statements contained herein, which speak only as of the date hereof. We believe the information contained in this quarterly report on Form 10-Q to be accurate as of the date hereof. Changes may occur after that date, and we will not update that information except as required by law.

~~Factors that could cause~~As used in this quarterly report, “AMNG,” the “Company,” “we,” “us” and “our” refer collectively to American Noble Gas, Inc., formerly Infinity Energy Resources, Inc., its predecessors and subsidiaries or ~~contribute to our actual results differing materially from those discussed herein~~one or ~~for our stock price to be adversely affected include, but are not limited to: (i) we have a history~~more of ~~losses, are experiencing substantial liquidity problems~~them as the context may require.

The Company is an oil and ~~our continuation as a going concern; (ii) we have substantial obligations to a number of third parties, including our December 2013~~gas exploration, development and production company, which is primarily in the ~~original principal amount~~business of ~~$1,050,000 due~~drilling and operating oil and gas wells. From 2009 to 2020, the Company had pursued the exploration of potential oil and gas resources 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. However, in January 2020, the Company abandoned the Concessions. The Company has also assessed various opportunities and strategic alternatives involving the acquisition, exploration and development of 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, such as in the Central Kansas Uplift geological formation covering over 11,000 acres (the “Properties”).

On April ~~2016, notes~~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 ~~total principal balance~~detachable common stock purchase warrants. The funds raised pursuant to the Convertible Preferred Stock issuance were used to complete the acquisition of ~~$325,000~~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 may find it necessary to ~~execute in May 2017~~obtain new sources of debt and/or equity capital to fund the exploration and ~~due May 2018, and there~~development of the Properties enumerated above, as well as to satisfy our existing debt obligations. We can beprovide no assurance that we will be able to ~~meet them; (iii) we require working~~obtain sufficient new debt/equity capital ~~for~~to fund our planned development of the Properties.

The 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 September 30, 2021. Economies throughout the world continue to suffer disruptions by the effects of the quarantines, business closures and ~~obligations~~the reluctance of individuals to leave their homes as a result of the outbreak of the coronavirus (Covid-19) including the recent rise of the new Delta variant. In particular, the oil and gas market has been severely adversely impacted by the effects of the Covid-19 pandemic because of the substantial and abrupt decrease in the demand for oil and gas globally followed by the ~~next 12 months~~recent resurgence in oil and natural gas prices. In addition, the capital markets have experienced periods of disruption and our efforts to ~~continue~~raise necessary capital in the future may be adversely impacted by the Covid-19 pandemic and investor sentiment and we cannot forecast with any certainty when the lingering uncertainty caused by the Covid-19 pandemic will cease to impact our ~~exploration~~business and ~~development efforts~~the results of our operations. In reading this Quarterly Report on ~~the Nicaraguan Concessions,~~Form 10-Q, including our ~~defaults under the letter~~discussion of credit and other requirements of the Nicaraguan Concessions to maintain our rights to the Concessions, and there can be no assurances we will be able to obtain the necessary waivers or revised compliance terms or do so on a basis favorable to us to maintain the Nicaraguan Concessions; (iv) we and our independent registered public accounting firm have concluded that there exists substantial doubt about our ability to continue as a going ~~concern; (v) our Nicaraguan Concessions~~concern set forth herein, in each case, consider the additional uncertainties caused by the outbreak of Covid-19.

The Company’s 2021 operating objectives have focused on: 1) completing the acquisition of the Properties, 2) raising the necessary funds to complete the acquisition of the Properties, 3) commencing rework on the Properties including testing and ~~planned future exploration activities are~~evaluation of noble gas reserves in ~~a country with a developing economy and are subject~~additional to the risks of political and economic instability associated with such economies; (vi) exploration and development of our Nicaraguan Concessions will require large amounts of capital or a commercial relationship with an industry operator which we may not be able to obtain; (vii) we do not have sufficient resources to conduct required seismic mapping on our Nicaraguan Concessions; (viii) the oil and gas ~~exploration business involves~~producing zones and 4) resolution of obligations in default and/or past due.

Issuance of Convertible Preferred Stock - On March 26, 2021, the Company issued Convertible Preferred Stock (the “Preferred Stock”), with an aggregate principal face amount of up to $2,500,000 subject to a ~~high degree~~10% original issue discount. The Convertible Preferred Stock is, subject to certain conditions, convertible into shares of ~~business~~Common Stock at a rate of $0.32 per share and ~~financial risk; (ix) we~~ will be subject to ~~regulations affecting our activities with~~a 10% dividend rate per annum, payable quarterly in cash or registered Common Stock, subject to equity conditions. The holders were also granted demand registration rights. The Company also issued warrants along side of the ~~Nicaraguan Concessions; (x) our operations may be adversely affected by changes in~~Convertible Preferred Stock investors to purchase up to 6,410,250 shares (assuming the ~~fiscal regime~~$2.5 million offering is fully subscribed) of ~~Nicaragua; (xi) we are continuing~~Common Stock at an exercise price of $0.39 per share, subject to negotiate with our creditors and may face additional claims in the future; (xii) oil prices may be affected by regional factors; (xiii) any future production will be contingent on successful exploration, development and acquisitions to establish reserves and revenue in the future; (xv) the oil and gas industry is highly competitive; (xvi) exploratory drilling is an uncertain process with many risks; (xvii) oil and gas prices are volatile, and declines in prices would hurt our revenues and ability to achieve profitable operations; (xviii) ourcustomary adjustments. The common stock ~~is traded through~~purchase warrants are exercisable commencing six (6) months after issuance on a cashless basis at the ~~Pink Sheets, which may not have the visibility or liquidity that we seek for our common stock; (xix) we depend on key personnel; (xx) sufficient voting power by coalitions~~holders’ discretion with a term of a few of our larger stockholders to make corporate governance decisions that could have significant effect on us and the other stockholders, including Amegy Bank, NA; (xxi) sale of substantial amounts of our common stock that may have a depressive effect on the marketfive (5) years. On March 26, 2021, investors purchased Preferred Stock with an aggregate cash purchase price of ~~the outstanding~~$2,050,000 together with warrants to purchase a total of 5,256,410 shares of ~~our common stock, including sales~~Common Stock.

Net proceeds from the issuance of ~~shares of common stock issued to~~Convertible Preferred Stock was $1,929,089 after deducting the ~~Investor holding the Warrants~~placement agent fee and ~~upon its conversion~~other expenses of the ~~Replacement Note, if it is issued; (xxii) possible issuance of common stock subject to options and warrants may dilute~~offering. The Company used the interest of stockholders; (xxiii) our ability to comply with Sarbanes-Oxley Act of 2002 Section 404 as it may be required; (xxiv) our nonpayment of dividends and lack of plans to pay dividends in the future; (xxv) future sale or issuance of a substantial number of shares of our common stock that could depress the trading price of our common stock, lower our value and make it more difficult for us to raise capital; (xxvi) our additional securities available for issuance, which, if issued, could adversely affect the rightsproceeds of the ~~holders~~Convertible Preferred Stock offering to complete the acquisition and development of ~~our common stock; (xxvii) our stock price is likely~~the Properties, to ~~be highly volatile due to a number of factors, including a relatively limited public float; (xxviii) indemnification of our officers~~pay-off all outstanding convertible notes payable and ~~directors; and (xxix) whether we will be able to find an industry or other financial partner to enable us to explore and develop our Nicaraguan Concessions and meet our other obligations.~~for general working capital.

Issuance of 8% Convertible Promissory Notes with Detachable Warrants – On August 30, 2021, the Company entered into a securities purchase agreement with an accredited investor (the “8% Note Investor”) for the Company’s senior unsecured convertible note due October 29, 2022 (the “8% Note”), with an aggregate principal face amount of approximately $100,000. The ~~following information should be read~~8% Note is, subject to certain conditions, convertible into an aggregate of 200,000 shares of Common Stock, at a price of $0.50 per share. The Company also issued a five and one half - year common stock purchase warrant to purchase up to 200,000 shares of Common Stock at an exercise price of $0.50 per share, subject to customary adjustments (the “8% Note Warrant”). 8% Note Investor purchased the 8% Note and 8% Note Warrant from the Company for an aggregate purchase price of $100,000. The Company also granted the 8% Note Investor certain piggy-back registration rights whereby the Company has agreed to register the resale by the 8% Note Investor of the shares underlying the 8% Note Warrant and the conversion of the 8% Note unless the Company commences to trade on the NYSE American; the Nasdaq Capital Market; the Nasdaq Global Market; the Nasdaq Global Select Market; or the New York Stock Exchange, within one hundred twenty (120) days after the Closing Date, as defined in ~~conjunction~~the 8% Note and 8% Note Warrant.

Issuance of 3% Convertible Promissory Notes with Detachable Warrants - On March 31, 2021, the ~~Condensed Financial Statements~~Company entered into Debt Settlement Agreements with six creditors (five of which were related parties) which extinguished accounts payable and accrued liabilities totaling $2,866,497 in exchange for the issuance of $28,665 in principal balance of 3% Convertible Promissory Notes ~~presented elsewhere in this quarterly report~~(the “3% Notes”) with detachable warrants to purchase 5,732,994 shares of Common Stock for $0.50 per share. The 3% Notes allows for prepayment at any time with all principal and accrued interest becoming due and payable at maturity on ~~Form 10-Q. See Note 1 –~~~~“Nature~~March 30, 2026. The 3% Notes are convertible as to principal and any accrued interest, at the option of ~~Operations, Basis~~holder, into shares of ~~Presentation~~the Common Stock at any time after the issue date and ~~Summary of Significant Accounting Policies,”~~prior to the ~~Condensed Financial Statements~~close of business on the business day preceding March 30, 2026 at the rate of fifty cents ($0.50) per share, subject to normal and customary adjustments. The warrants to purchase 5,732,994 shares of Common Stock issued pursuant to the Debt Settlement Agreements were valued at $1,605,178 using the Black-Scholes methodology.

Issuance of Convertible Notes Payable - On August 19, 2020, we entered into a securities purchase agreement with an accredited investor (the “August Investor”) for our senior unsecured convertible note payable due August 19, 2021 (the “August Note”), with an aggregate principal face amount of approximately $365,169. The August Note is, subject to certain conditions, convertible into an aggregate of 3,943,820 shares of Common Stock, at a price of $0.10 per share (the “Fixed Conversion Price”). We also issued a five-year common stock purchase warrant (the “August Warrant”) to purchase up to 800,000 shares of Common Stock at an exercise price of $0.50 per share, subject to customary adjustments. The August Warrant is immediately exercisable and on a cashless basis if the ~~Three~~shares underlying such warrant have not been registered within 180 days after the date of issuance. The August Investor purchased such securities from the Company for an aggregate purchase price of $325,000. We also granted the August Investor certain automatic and ~~Nine months ended September 30, 2017 and 2016.~~

~~The Nicaraguan Concessions represent our most substantial asset and is~~piggy-back registration rights whereby we agreed to register the ~~focal point of our business plan. The Company is in default of various provisions~~resale by the August Investor of the ~~30-year Concession for both~~shares underlying the ~~Perlas~~August Warrant and ~~Tyra blocks as~~the conversion of ~~September 30, 2017, as noted above.~~the August Note.

The ~~Company must raise substantial amounts~~August Note bears interest at a rate of ~~debt~~eight percent (8%) per annum with 12 months guaranteed, may be voluntarily repaid in cash in full or in part by us at any time in an amount equal to 115% of the principal amount of the August Note and ~~equity capital from other sources~~any accrued and unpaid interest, and shall be mandatorily repaid in cash in an amount equal to 115% of the principal amount of the August Note and any accrued and unpaid interest in the ~~immediate future~~event of the consummation by us of any public or private offering or other financing pursuant to fund its obligations under the Concessions. The most immediate funding needs include the following: (1) the annual training program and area fees for 2016 and 2017; (2) required letters of credit to the Nicaraguan Government; (3) the drillingwhich we receive gross proceeds of at least ~~one exploratory well on~~$2,500,000. The August Note is convertible at any time by the ~~Perlas Block~~August Investor and we shall have the right to request that the August Investor convert the August Note in full or in part at the Fixed Conversion Price in the event that the VWAP (as defined in the August Note) of the ~~Nicaraguan Concessions during 2017; (4)~~Common Stock exceeds $0.75 for twenty consecutive trading days. In addition, pursuant to the ~~shooting of additional seismic on~~August Note, so long as the ~~Tyra Block~~August Note remains outstanding, we shall not enter into any financing transactions pursuant to which the Company sells its securities at a price lower than the Fixed Conversion Price, without written consent of the ~~Nicaraguan Concessions should it be unable to negotiate a waiver~~August Investor.

The conversion of ~~such requirement from~~ the ~~Nicaraguan government; (5) normal day-to-day operations and corporate overhead; and (6) outstanding debt and other financial obligations as they become due, including the $1.0 million December 2013~~August Note and the ~~notes payable totaling $285,000, which currently~~exercise of the August Warrant are ~~in technical default and the notes payable aggregating $240,000 that will become due in November 2017 and April 2018. These are substantial operational and financial issues~~each subject to beneficial ownership limitations such that the ~~Company must successfully address during 2017 and 2018~~August Investor may not convert the August Note or ~~its ability~~exercise the August Warrant to ~~satisfy~~ the ~~conditions necessary to remain viable and maintain its Nicaragua Concessions will be~~extent that such conversion or exercise would result in ~~significant doubt. The Company is seeking new outside sources~~the August Investor being the beneficial owner in excess of debt and equity capital in order to fund the substantial needs enumerated above; however, there can be no assurance that it will be able to obtain such capital or obtain it on favorable terms or within the timeframe necessary to cure the technical defaults existing on the Nicaraguan Concessions or to meet its ongoing working capital requirements. The current environment for oil and gas development projects, especially discoveries in otherwise undeveloped regions4.99% (or, upon election of the ~~world, is very challenging given~~August Investor, 9.99%) of the ~~depressed commodity prices for oil and gas products, and~~number of shares of the ~~resulting industry-wide reduction~~Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon such conversion or exercise, which beneficial ownership limitation may be increased or decreased up to 9.99% upon notice to us, provided that any increase in ~~capital expenditure budgets for exploration and development projects. These are substantial impediments for the Company~~such limitation will not be effective until 61 days following notice to ~~obtain adequate financing to fund the exploration and development of its Nicaraguan projects.~~us.

During 2017 and 2018 we will also seek offers from industry operators and other third parties for interests in the acreage in the Nicaraguan Concessions in exchange for cash and a carried interest in exploration and development operations or other joint venture arrangement. Accordingly, we intend to finance our business strategy through external financing, which may include debt and equity capital raised in public and private offerings, joint ventures, sale of working or other interests, employment of working capital and cash flow from operations, if any, and net proceeds from the sales of assets.

~~Our ability~~We used the proceeds of the August Note to ~~complete these activities~~pay off $60,125 in principal balance of notes payable that were in default, to pay the $100,000 required by the Exchange Agreement (as defined and described below) and for general working capital.

On March 26, 2021, the Company exercised its right to retire the August Note in conjunction with the issuance of Series A Convertible Preferred Stock. In accordance with the prepayment provisions contained in the August Note, the Company paid all principal, accrued interest and the 15% prepayment premium which totaled $453,539.

Debt Settlement Agreements- On March 31, 2021, the Company entered into Debt Settlement Agreements with six creditors (five of which were related parties) which extinguished accounts payable and accrued liabilities totaling $2,866,497 in exchange for the issuance of $28,665 in principal balance of 3% Notes with detachable warrants to purchase 5,732,994 shares of Common Stock for $0.50 per share. The 3% Notes allow for prepayment at any time with all principal and accrued interest becoming due and payable at maturity on March 30, 2026. The 3% Notes are convertible as to principal and any accrued interest, at the option of holder of the 3% Notes, into shares of the Common Stock at any time after the issue date and prior to the close of business on the business day preceding March 30, 2026 at the rate of fifty cents ($0.50) per share, subject to normal and customary adjustment. The warrants to purchase 5,732,994 shares of Common Stock issued pursuant to the Debt Settlement Agreements were valued at $1,605,178 using the Black-Scholes methodology.

Extinguishment of Convertible Note Payable- On March 26, 2021, the Company exercised its right to retire the Convertible Note issued in August 2020 with a par value of $365,169 in conjunction with the issuance of the Series A Convertible Preferred Stock. In accordance with the prepayment provisions contained in the August Note, the Company paid $453,539 to retire all principal, accrued interest and the 15% prepayment premium.

Extinguishment of Notes Payable– On April 1, 2021, the Company and the holder of a $50,000 note payable that was in default reached a settlement whereby the Company issued a total of 145,000 shares of Common Stock in exchange for the extinguishment of the outstanding principal, accrued interest and associated common stock purchase warrants which totaled $72,874 as of April 1, 2021. The 145,000 shares issued to extinguish the debt obligations were valued at $40,600 based on the closing market price on the date of the extinguishment. The extinguishment of the debt obligations resulted in a gain of $32,274 which was recorded in the nine months ended September 30, 2021.

On April 1, 2021, the Company and the holder of the $35,000 note payable that was in default reached a settlement whereby the Company issued a total of 100,000 shares of Common Stock in exchange for the extinguishment of the outstanding principal, accrued interest and associated common stock purchase warrants which totaled $50,956 as of April 1, 2021. The 100,000 shares issued to extinguish the debt obligations were valued at $28,000 based on the closing market price on the date of the extinguishment. The extinguishment of the debt obligations resulted in a gain of $22,956 which was recorded in the three and nine months ended September 30, 2021.

Extinguishment of $1,050,000 Note Payable – On December 27, 2013, the Company borrowed $1,050,000 under an unsecured credit facility with a private, third-party lender. The facility is ~~dependent on~~represented by a ~~number~~promissory note (the “December 2013 Note”) with an original maturity date of ~~factors, including, but not limited to:~~March 12, 2014. On September 24, 2020, the Company entered into an Exchange and Settlement Agreement (the “Exchange Agreement”) with the holder of the December 2013 Note (the “Holder”), pursuant to which the Holder agreed to exchange its 8% promissory note in the original principal amount of $1,050,000, representing outstanding principal balance of $1,000,000 and accrued and unpaid interest thereon (which totaled $542,762 as of September 24, 2020), for (i) a cash payment in the amount of $100,000 and (ii) 737,532 newly issued shares of Common Stock (the “Exchange”).

	●	~~The availability of the capital resources required to fund the activities;~~
	36
	●	~~The availability of third party contractors for completion services; and~~

	●	~~The approval by regulatory agencies of applications for permits to conduct exploration activities in a timely manner.~~

In connection with the Exchange Agreement, the Company and the Holder agreed to terminate the following agreements: (i) the preemptive rights agreement, dated as of December 27, 2013, between the Company and the Holder, (ii) the revenue sharing agreement, dated as of May 30, 2014, between the Company and the Holder and (iii) the indemnity agreement, dated as of December 27, 2013, between the Company and the Holder. Additionally, pursuant to the Exchange Agreement, the Holder acknowledged the expiration on March 12, 2017, by its terms, of a common stock purchase warrant, issued to the Holder, for the purchase of up to 100,000 shares of Common Stock. The Company and the Holder also agreed to provide mutual limited releases, releasing each of them from all liabilities and obligations to the other, as between them with respect to claims relating to the December 2013 Note, such preemptive rights agreement, the Holder’s warrant and all other agreements relating thereto.

The closing of the Exchange occurred concurrently with the execution of the Exchange Agreement. At the closing, the Company made the $100,000 cash payment and issued 737,532 shares of Common Stock (valued at $132,756 based on the closing market price of the shares on the date of the Exchange) to the Holder and the underlying documents and obligations summarized above were surrendered and/or cancelled.

On July 31, 2019, we acquired an option from Core Energy, LLC, a closely held company (“Core”), to purchase the production and mineral rights/leasehold for the Properties. We ~~are considering~~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. The newly acquired option, however, now permits the Company to purchase the Properties at a reduced price of $900,000 at any time prior to November 1, 2020 and the Company has 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 (“Asset Purchase Agreement”) which extended the new option to January 11, 2021, which has 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 a 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 Agreement to April 1, 2021. 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 April 1, 2021 closing date.

On April 1, 2021, we completed the acquisition of ~~domestic~~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.

Upon completion of the acquisition, the purchase 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 of the existing production wells immediately after completion of the acquisition of the Properties and have performed testing and evaluation of the existence of noble gas reserves on the Properties including helium, argon and other rare earth minerals/gases. Testing of the Properties for noble gas reserves has provided encouraging but not conclusive results and the Company has yet to determine the possibility of commercializing the noble gas reserves on the Properties. The Company plans to assess the existing oil & gas reserves on the Properties while continuing the evaluation of the existence of new oil & gas zones and other mineral reserves and specifically the noble gas ~~properties with both proven and unproven reserves. We believe~~reserves that the ~~current distressed state for oil and gas properties and the resulting decline in valuations~~Properties may yield an opportunity for us to accumulate undervalued domestic oil and gas assets at attractive prices and terms with the objective of achieving positive cash flows despite the decline in natural gas and crude oil commodity prices. We are seeking financing for such cash generating oil and gas properties at reasonable cost of capital. This initiative is intended to provide us with positive cash flows to address immediate working capital needs until the environment improves for exploration projects such as the Nicaraguan Concessions. No assurances can be given regarding our ability to identify, acquire and finance such domestic properties or whether such properties would provide positive cash flow.hold.

We do not have any off-balance sheet debt, nor did we have any transactions, arrangements, obligations (including contingent obligations) or other relationships with any unconsolidated entities or other persons that may have a material current or future effect on our financial conditions, changes in ~~the~~our financial conditions, or our results of operations, liquidity, capital expenditures, capital resources, or significant components of revenue or expenses.

The Company ~~had no~~began generating revenues ~~in either 2017 or 2016 as it focused solely on~~from the ~~pursuit~~production and sale of crude oil resulting from the closing of its acquisition of the ~~exploration, development, financing and maintenance of the Nicaraguan Concessions.~~

The Company had no production related operating expenses in either 2017 or 2016. The Company sold its investment in Infinity-Texas in July 2012 and held no developed or undeveloped oil and gas properties in the United States in 2017 and 2016.

~~The Company has no current or planned domestic exploration and development activities at this time. It is not actively working~~Properties on ~~any domestic property, focusing instead on the exploration, development and financing of the Nicaraguan Concessions.~~

~~General and administrative expenses of $103,531~~April 1, 2021. Revenues totaled $35,392 for the three months ended September 30, ~~2017 decreased~~2021. The Company had no revenues in 2020 as it focused on identification of acquisition of domestic oil & gas producing properties targets.

On April 1, 2021, we completed the acquisition of the Properties, under the terms of the Asset Purchase Agreement which provided a purchase price of $900,000. 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.

The Company began generating revenues from the production and sale of crude oil resulting from the closing of its acquisition of the Properties on April 1, 2021. Total oil and gas lease operating expenses totaled $220,767 for the three months ended September 30, 2021.

We commenced rework of the existing production wells after completion of the acquisition of the Properties in order to restore the three producing wells to full operational condition and all such rework costs were expensed as routine maintenance rather capitalized to oil and gas properties and equipment under the full-cost method. In addition, we have performed certain testing and evaluation for the existence of noble gas reserves on the Properties including helium, argon and other rare earth minerals/gases. Testing of the Properties for noble gas reserves has provided encouraging but not conclusive results and the Company has yet to determine the possibility of commercializing the noble gas reserves on the Properties. The Company plans to assess the existing oil & gas reserves on the Properties while continuing the evaluation of the existence of new oil & gas zones and other mineral reserves and specifically the noble gas reserves that the Properties may hold.

The Company had no oil and gas lease operating expenses in 2020 as it held no oil and gas producing properties and instead was focused on identification of acquisition of domestic oil & gas producing properties targets.

The Company began generating revenues from the production and sale of crude oil resulting from the closing of its acquisition of the Properties on April 1, 2021 (the “Property Acquisition”) which it acquired for $900,000 cash plus the assumption of asset retirement obligations of $13,425. The Company allocated the purchase price of $913,425 to oil and gas properties and equipment which is subject to depreciation, depletion and amortization as the Property Acquisition qualified as an asset acquisition. Total depreciation, depletion and amortization was $30,834 for the three months ended September 30, 2021. There was no depreciation, depletion and amortization for the three months ended September 30, 2020 as the Company held no properties 2020 as it focused on identification of acquisition of domestic oil & gas producing properties targets.

Capitalized costs to acquire oil and natural gas properties are depreciated and depleted on a units-of-production basis based on estimated proved reserves. Capitalized costs of exploratory wells and development costs are depreciated and depleted on a units-of-production basis based on estimated proved developed reserves. Under this method, the sum of the full cost pool, excluding the book value of unproved properties, and all estimated future development costs are divided by ~~$4,172,~~the total estimated quantities of proved reserves. This rate is applied to our total production for the quarter, and the appropriate expense is recorded. Support equipment and other property, plant and equipment related to oil and gas producing activities, as well as property, plant and equipment unrelated to oil and gas producing activities, are recorded at cost and depreciated on a straight-line basis over the estimated useful lives of the assets.

Total expense for the accretion of asset retirement obligations was $279 and $-0- for the three months ended September 30, 2021 and 2020, respectively. The Company determined the amount of the asset retirement obligation assumed to be $13,425 as of April 1, 2021, the closing date of the Property Acquisition. The obligation relates to legal requirements associated with the retirement of long-lived assets that result from the acquisitions, construction, development, or 4%normal use of the asset. The obligation relates primarily to the requirement to plug and abandon oil and natural gas wells and support wells at the conclusion of their useful lives.

The Company began generating revenues from the production and sale of crude oil resulting from the closing of its acquisition of the Properties on April 1, 2021. Oil and gas production related taxes totaled $1,626 and $-0- for the three months ended September 30, 2021 and 2020, respectively. Such taxes are deducted from gross oil and gas revenue by the crude oil purchaser upon payment to the Company and include primarily severance taxes imposed by the State of Kansas and Kansas conservation assessment fees to a lesser extent. Revenues totaled $35,392 for the three months ended September 30, 2021 which resulted in the deduction of $1,626 in production related taxes. The Company had no revenues in 2020 as it focused on identification of acquisition of domestic oil & gas producing properties targets and therefore there was no deduction for Kansas production related taxes.

Other general and administrative expenses were $294,440 for the three months ended September 30, 2021, an increase of $174,272, or 145%, from ~~$107,703~~other general and administrative expenses of $120,168 in the same period in ~~2016.~~2020. The ~~decrease~~increase in other general and administrative expenses is primarily attributable to an increase of $84,991 for legal fees, an increase in $20,571 related to geological services and a ~~decrease~~$6,000 increase in ~~expenses attributable to the Nicaraguan Concessions~~audit fees as the Company ~~has ceased many~~began operating the Properties which required various filings with the Securities and Exchange Commission (the “SEC”). In addition, the increase in other general and administrative expenses were attributable to a $30,000 bonus paid to the Company’s CEO attributable to his efforts in closing the Property Acquisition and an increase in stock-based compensation of $51,925 related to the amortization of the ~~ancillary activities as it attempts~~June 2021 stock option grants and the August 2020 restricted stock grants in 2021 compared to ~~clarify~~2020. The stock option expense will be amortized ratable through June 2022 and the ~~status~~restricted stock granted to our officers, directors and certain consultants will also continue to be amortized ratably through June 2022.

Interest expense decreased to $5,724 for the three months ended September 30, 2021, compared to $67,370 for the comparable period in 2020, a decline of $61,646, or 92%. Interest expense declined during the three months ended September 30, 2021 primarily due to the pay-off of the ~~Concession itself with the Nicaraguan Government.~~August Note issued in August 2020, which had a stated principal balance of $365,169 and bore interest at an 8% rate until it was retired on March 26, 2021.

~~Stock-based compensation~~On April 1, 2021, the Company and the holder of the $50,000 note payable that was in default reached a settlement whereby the Company issued a total of 145,000 shares of Common Stock in exchange for the extinguishment of the outstanding principal, accrued interest and associated common stock purchase warrants which totaled $72,874 as of April 1, 2021. In addition, on April 1, 2021, the Company and the holder of the $35,000 note payable that was in default reached a settlement whereby the Company issued a total of 100,000 shares of Common Stock in exchange for the extinguishment of the outstanding principal, accrued interest and associated common stock purchase warrants which totaled $50,956 as of April 1, 2021. The 100,000 shares issued to extinguish the debt obligations were valued at $28,000 based on the closing market price on the date of the extinguishment. Accordingly, there was less interest related to these notes payable in the three months ended September 30, 2021 as compared to the same period in 2020.

~~Stock-based compensation expenses~~On March 31, 2021, the Company issued $28,665 principal balance of 3% Notes in connection with the Debt Settlement Agreements. On August 30, 2021 the Company issued $100,000 principal balance 8% Note with detachable warrants to purchase common stock. Interest expense totaled $5,723 related to these outstanding promissory notes and were the only interest-bearing notes outstanding during the three months ended September 30, 2021 and will continue to affect interest expense in future quarters.

The Company reported a gain on extinguishment of liabilities of $-0- for the three months ended September 30, ~~2017~~2021, as compared to ~~$-0- during~~$6,150,142 for the same period in ~~2016.~~ 2020.

The ~~Company has had minimal resources~~gain on extinguishment of liabilities is attributable to ~~pay employees, consultants and other service providers. Therefore, it has issued stock options to compensate and motivate its officers, directors and other service providers in previous years~~two transactions that ~~vest generally over a two-year period. The Company did not grant any stock options in 2017 and 2016. All~~extinguished outstanding ~~stock options were fully vested as of September 30, 2017 as all stock options became fully vested in January 2016. Therefore, there was no stock-based compensation expense~~liabilities during the three months ended September 30, ~~2017 compared to 2016.~~

~~Interest expense remained virtually~~2020; (i) the ~~same at $27,455 for the three months ended September 30, 2016 compared to $29,048 for the three months ended September 30, 2017.~~

~~The Company’s current financial condition has made traditional bank loans and customary financing terms unattainable; therefore, the Company may find it necessary to continue~~Exchange Agreement, which extinguished a promissory note with ~~short-term borrowings with high effective interest rates especially as the notes currently in default are negotiated and extended.~~

We issued the Secured Convertible Note in the May 2015 Private Placement and elected to account for and record such Note on a fair value basis. 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 the Replacement Note representing the remaining principal balance of $2,197,231 to replace the Convertible Note. The Company has recorded the fair value of the Convertible Notes assuming that the remaining par value is $2,197,231 as asserted by the Investor,$1,000,000, $542,762 in accrued interest and other obligations previously outstanding and resulting in a ~~change~~total gain of $1,310,006, and (ii) the extinguishment of trade payable obligations totaling $4,840,136 that arose during 2013 which were extinguished in 2020 pursuant to the ~~estimated fair value~~relevant statute of $166,431 during the three months ended September 30, 2017 compared to a change of $2,807 for the 2016 period. The Company plans to negotiate with the Investor regarding the issuance of the Replacement Note under the terms of the financing and taking into consideration that the Investor only funded $510,000 in the entire transaction, but there can be no assurance that it will be successful in this regard.limitations.

The conversion feature ~~of the~~in certain outstanding promissory notes and ~~the~~ common stock purchase warrants issued in connection with short-term notes ~~and the Secured Convertible Note outstanding during 2017 and 2016~~ are treated as derivative instruments because ~~the promissory~~such notes and warrants contain ratchet and anti-dilution provisions. ~~Accordingly, we adjusted~~The underlying notes payable were paid off on April 1, 2021 and the ~~value of~~derivative warrants were terminated which resulted in no derivative warrants outstanding during the three months ended September 30, 2021. Such notes payable and the related derivative warrants were outstanding during the three months ended September 30, 2020 and treated as derivative ~~liabilities to their estimated~~instruments because such notes and warrants contain ratchet and anti-dilution provisions. The change in derivative fair value ~~as of~~was $-0- during the three months ended September 30, ~~2017~~2021 and ~~2016. The~~the mark-to-market process resulted in a gain of ~~$40,186~~$824 during the three months ended September 30, ~~2017~~2020.

The Company recorded no income tax benefit (expense) in the three months ended September 30, 2021 and 2020. The Company has been in a ~~gain of $50,062~~cumulative tax loss position and has substantial net operating loss carryforwards available for its utilization at September 30, 2021. The Company has continued to carry a 100% reserve on its net deferred tax assets and therefore recorded no income tax expense on its income before income taxes during the three months ended September 30, ~~2016. The decrease in the gain recognized is primarily the result of the smaller change in the closing market price of our common stock between the September 30, 2017 ($0.06 per share)~~2021 and June 30, 2017 ($0.08 per share) compared to the corresponding period in 2016 ($0.03 at September 30, 2016 versus $0.07 at June 30, 2016). Generally, the fair value of the derivative liability declines when the market value of the underlying common stock decreases compared to the derivatives exercise price.2020.

~~For income tax purposes, the Company has net operating loss carry-forwards of approximately $66,270,000 as of September 30, 2017, which expire from 2025 through 2030.~~ The Company ~~has provided a 100% valuation allowance against the resulting deferred tax asset due to the uncertainty of realizing the tax benefits from its net operating loss carry-forwards.~~

For the three months ended September 30, 2017 and 2016, the Company realized net losses and it anticipates operating losses and additional tax losses for the foreseeable future and does not believe that utilization of its tax loss carryforward is more likely than not. Therefore, because of the uncertainty as to the ultimate utilization of the Company’s loss carryforwards, any deferred tax asset at September 30, 2017 that resulted from anticipated benefit from future utilization of such carryforward has been fully offset by a valuation allowance.

~~As a result of the above, we~~ reported a net loss of ~~$258,824~~$518,278 for the three months ended September 30, ~~2017~~2021, compared to net income of $5,963,428 for the same period in 2020. This represents a deterioration of $6,481,706 in 2021 compared to 2020.

The Company recorded $57,408 and $-0- in convertible preferred stock dividends in the three months ended September 30, 2021 and 2020, respectively. On March 26, 2021 the Company issued and classified its Series A Convertible Preferred Stock as equity securities in the condensed balance sheet. Such Convertible Preferred Stock bears a cumulative dividend at a 10% rate based on its stated/liquidation value. There were no outstanding Series A Convertible Preferred Stock during the three months ended September 30, 2020.

The Series A Convertible Preferred Stock issued on March 26, 2021 has a preference over Common Stock and therefore such accrued Convertible Preferred Stock dividend amounts have been deducted from net ~~loss~~income (loss) to report net income (loss) applicable to common stockholders of ~~$87,903~~$(575,686) and $5,963,428 for the three months ended September 30, ~~2016. This represents a deterioration of $170,921.~~2021 and 2020, respectively.

Basic and Diluted ~~Loss~~Net Income (Loss) Attributable to Common Stockholders per Share

Basic net ~~loss~~income (loss) attributable to common stockholders per share is computed by dividing the net ~~loss~~income (loss) attributable to common stockholders by the weighted-average number of shares of common ~~shares~~stock outstanding during the period. Diluted net ~~loss~~income (loss) attributable to common stockholders per share is computed by dividing the net ~~loss~~income (loss) attributable to common stockholders by the weighted-average number of shares of common stock and dilutive common ~~equivalent shares~~stock equivalents outstanding during the period. Common ~~share~~stock equivalents included in the diluted net income (loss) attributable to common stockholders per share computation represent shares of common stock issuable upon the assumed conversion of Convertible Promissory Notes, Convertible Preferred Stock and the assumed exercise of stock options and warrants using the treasury stock and “if converted” method. For periods in which net losses ~~from continuing operations~~attributable to common stockholders are incurred, weighted average shares outstanding is the same for basic and diluted loss per share calculations, as the inclusion of common ~~share~~stock equivalents would have an anti-dilutive effect. In addition, in periods in which there is net income attributable to common stockholders and the effect of including common stock equivalents in the diluted per share calculations would be anti-dilutive (such as when the conversion or exercise price of the common stock equivalents are higher than the average closing market price per share) such anti-dilutive common stock equivalents would also be excluded from the calculation of basic and diluted weighted average shares outstanding.

The Company incurred a net loss attributable to common stockholders during the three months ended September 30, 2021, therefore all Common Stock equivalents were considered anti-dilutive and excluded from diluted net income (loss) attributable to common stockholders per share computations. The basic and diluted ~~loss~~net income (loss) attributable to common stockholders per share ~~was $0.03~~were $(0.03) for the three months ended September 30, ~~2017, for the reasons previously noted. The basic and diluted loss per share was $0.01 for~~2021.

During the three months ended September 30, ~~2016.~~2020, the shares of Common Stock issuable upon conversion of the August Note were considered Common Stock equivalents and therefore the dilutive effect of such issuance was included in the computation of diluted income (loss) per share. All shares of Common Stock issuable upon conversion of convertible debt (other than the August Note) and the exercise of outstanding stock options and warrants ~~to purchase common stock~~ were ~~considered~~ antidilutive, and, therefore, ~~excluded from~~not included in the ~~calculation~~computation of diluted ~~loss~~income (loss) per share for the three months ended September 30, ~~2017~~2020. The basic and ~~2016 because~~diluted net income (loss) attributable to common stockholders per share were $0.40 and $0.36 for the ~~exercise price of the stock options and warrants were substantially higher than market price in 2017 and 2016 and the net loss reported for both periods.~~ three months ended September 30, 2020, respectively.

Potential equivalent shares of common stock as of September 30, ~~2017 that have been excluded from the computation~~2021 totaled 22,062,614 shares of ~~diluted net loss per share amounted to 2,882,721 shares,~~Common Stock, which included ~~2,505,771~~257,330 shares of Common Stock underlying the Convertible Promissory Notes, 7,117,500 shares of Common Stock underlying the conversion of Series A Convertible Preferred Stock, 12,670,784 shares of Common Stock underlying outstanding warrants and ~~376,950~~2,017,000 shares of Common Stock underlying outstanding stock options.

For the Nine ~~months~~Months Ended September 30, ~~2017~~2021 and ~~2016~~2020

~~General and administrative expenses of $365,906~~April 1, 2021. Revenues totaled $56,220 for the nine months ended September 30, ~~2017 increased~~2021. The Company had no revenues in 2020 as it focused on identification of acquisition of domestic oil & gas producing properties targets.

On April 1, 2021 we completed the Property Acquisition, under the terms of the Asset Purchase Agreement which provided a purchase price of $900,000. 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 of the existing production wells immediately after completion of the Property Acquisition and have performed testing and evaluation of the existence of noble gas reserves on the Properties including helium, argon and other rare earth minerals/gases. Testing of the Properties for noble gas reserves has provided encouraging but not conclusive results and the Company has yet to determine the possibility of commercializing the noble gas reserves on the Properties. The Company plans to assess the existing oil & gas reserves on the Properties while continuing the evaluation of the existence of new oil & gas zones and other mineral reserves and specifically the noble gas reserves that the Properties may hold.

The Company began generating revenues from the production and sale of crude oil resulting from the closing of the Property Acquisition on April 1, 2021. Total oil and gas lease operating expenses totaled $446,849 for the nine months ended September 30, 2021.

We commenced rework of the existing production wells after completion of the Property Acquisition in order to restore the three producing wells to full operational condition and all such rework costs were expensed as routine maintenance rather capitalized to oil and gas properties and equipment under the full-cost method. In addition, we have performed certain testing and evaluation for the existence of noble gas reserves on the Properties including helium, argon and other rare earth minerals/gases. Testing of the Properties for noble gas reserves has provided encouraging but not conclusive results and the Company has yet to determine the possibility of commercializing the noble gas reserves on the Properties. The Company plans to assess the existing oil & gas reserves on the Properties while continuing the evaluation of the existence of new oil & gas zones and other mineral reserves and specifically the noble gas reserves that the Properties may hold.

The Company began generating revenues from the production and sale of crude oil resulting from the closing of the Property Acquisition on April 1, 2021 which it acquired for $900,000 cash plus the assumption of asset retirement obligations of $13,425. The Company allocated the purchase price of $913,425 to oil and gas properties and equipment which is subject to depreciation, depletion and amortization as the Property Acquisition qualified as an asset acquisition. Total depreciation, depletion and amortization was $61,668 for the nine months ended September 30, 2021. There was no depreciation, depletion and amortization for the nine months ended September 30, 2020 as the Company held no properties 2020 as it focused on identification of acquisition of domestic oil & gas producing properties targets.

Capitalized costs to acquire oil and natural gas properties are depreciated and depleted on a units-of-production basis based on estimated proved reserves. Capitalized costs of exploratory wells and development costs are depreciated and depleted on a units-of-production basis based on estimated proved developed reserves. Under this method, the sum of the full cost pool, excluding the book value of unproved properties, and all estimated future development costs are divided by ~~$26,707,~~the total estimated quantities of proved reserves. This rate is applied to our total production for the quarter, and the appropriate expense is recorded. Support equipment and other property, plant and equipment related to oil and gas producing activities, as well as property, plant and equipment unrelated to oil and gas producing activities, are recorded at cost and depreciated on a straight-line basis over the estimated useful lives of the assets.

Total expense for the accretion of asset retirement obligations was $558 and $-0- for the nine months ended September 30, 2021 and 2020, respectively. The Company determined the amount of the asset retirement obligation assumed to be $13,425 as of April 1, 2021, the date of the Property Acquisition. The obligation relates to legal requirements associated with the retirement of long-lived assets that result from the acquisitions, construction, development, or ~~7.9%~~normal use of the asset. The obligation relates primarily to the requirement to plug and abandon oil and natural gas wells and support wells at the conclusion of their useful lives.

The Company began generating revenues from the production and sale of crude oil resulting from the closing of the Property Acquisition on April 1, 2021. Oil and gas production related taxes totaled $2,592 and $-0- for the nine months ended September 30, 2021 and 2020, respectively. Such taxes are deducted from gross oil and gas revenue by the crude oil purchaser upon payment to the Company and include primarily severance taxes imposed by the State of Kansas and Kansas conservation assessment fees to a lesser extent. Revenues totaled $56,220 for the nine months ended September 30, 2021 which resulted in the deduction of $2,592 in production related taxes. The Company had no revenues in 2020 as it focused on identification of acquisition of domestic oil & gas producing properties targets and therefore there was no deduction for Kansas production related taxes.

Other general and administrative expenses were $738,419 for the nine months ended September 30, 2021, an increase of $512,184, or 226%, from ~~$339,199~~other general and administrative expenses of $226,235 in the same period in ~~2016.~~2020. The increase in other general and administrative expenses is primarily attributable to an increase of $137,944 for legal fees, $28,071 for geological services and a $41,000 increase in ~~Delaware Franchise taxes~~auditor fees as the Company began operating the Properties which required various filings with the SEC. In addition, the increase in other general and administrative expenses were attributable to the $75,000 charge-off of the option to acquire the Properties which expired, a $30,000 bonus paid to the Company’s CEO attributable to his efforts in closing the Property Acquisition and an increase in ~~professional fees in particular audit fees,~~stock-based compensation of $191,308 related to the ~~annual audit~~amortization of the June 2021 stock option grants and ~~various filings with~~ the ~~Securities~~August 2020 restricted stock grants in 2021 compared to 2020. The stock option expense will be amortized ratable through June 2022 and ~~Exchange Commission.~~the restricted stock granted to our officers, directors and certain consultants will also continue to be amortized ratably through June 2022.

~~Stock-based compensation expenses was $-0-~~Interest expense decreased to $40,163 for the nine months ended September 30, ~~2017~~2021, compared to ~~$7,598 during~~$111,496 for the ~~same~~comparable period in 2016. The Company has had minimal resources to pay employees, consultants and other service providers. Therefore, it has issued stock options to compensate and motivate its officers, directors and other service providers in previous years that vest generally over2020, a ~~two-year period. The Company did not grant any stock options in 2017 and 2016. All outstanding stock options are fully vested as~~decline of ~~September 30, 2017 as all stock options became fully vested in January 2016.~~

$71,333, or 64%. Interest expense decreased to $86,735 for the nine months ended September 30, 2017 as compared to $134,972 for the nine months ended September 30, 2016. The decrease is the result of the debt discount becoming fully amortized in early 2016 as $53,297 was amortized to interest expense in 2016 and $-0- on the 2017 period. The debt discount resulted from the issuance of detachable common stock purchase warrants in connection with short-term borrowings.

The Company’s current financial condition has made traditional bank loans and customary financing terms unattainable; therefore, the Company may find it necessary to continue with of short-term borrowings with high effective interest rates especially as the notes currently in default are negotiated and extended.

We issued the Secured Convertible Note in the May 2015 Private Placement and elected to account for and record such Note on a fair value basis. 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 the Replacement Note representing the remaining principal balance of $2,197,231 to replace the Convertible Note. The Company has recorded the fair value of the Convertible Notes assuming that the remaining par value is $2,197,231 as asserted by the Investor, resulting in a change in the estimated fair value of $1,847,894declined during the nine months ended September 30, ~~2017~~2021 was primarily due to the pay-off of the convertible note payable issued in August 2019, which had a stated principal balance of $365,169 and bore interest at an 8% rate until it was retired on March 26, 2021. The retirement of the two notes payable totaling $85,000 on April 1, 2021 and the August Note on March 31, 2021 resulted in less interest expense being reported during the nine months ended September 30, 2021 as compared to ~~$67,591~~the same period in 2020.

On April 1, 2021, the Company and the holder of the $50,000 note payable that was in default reached a settlement whereby the Company issued a total of 145,000 shares of Common Stock in exchange for the extinguishment of the outstanding principal, accrued interest and associated common stock purchase warrants which totaled $72,874 as of April 1, 2021. In addition, on April 1, 2021, the Company and the holder of the $35,000 note payable that was in default reached a settlement whereby the Company issued a total of 100,000 shares of Common Stock in exchange for the extinguishment of the outstanding principal, accrued interest and associated common stock purchase warrants which totaled $50,956 as of April 1, 2021. The 100,000 shares issued to extinguish the debt obligations were valued at $28,000 based on the closing market price on the date of the extinguishment. Accordingly, there was less interest related to these notes payable in the ~~comparable~~three months ended September 30, 2021 as compared to the same period in ~~2016.~~ 2020.

On March 31, 2021, the Company issued $28,665 principal balance of 3% Notes in connection with the Debt Settlement Agreements and on August 30, 2021 the Company issued $100,000 principal balance of 8% Notes with detachable warrants to purchase common stock which were the only interest-bearing notes outstanding at September 30, 2021. Interest expense totaled $40,163 related to these outstanding promissory notes and were outstanding during the nine months ended September 30, 2021 and will continue to affect interest expense in future quarters.

The Company ~~plans~~reported a gain on exchange and extinguishment of liabilities of $86,602 and $6,150,142 in the nine months ended September 30, 2021 and 2020, respectively.

On April 1, 2021, the Company and the holder of the $50,000 note payable that was in default reached a settlement whereby the Company issued a total of 145,000 shares of Common stock in exchange for the extinguishment of the outstanding principal, accrued interest and associated common stock purchase warrants which totaled $72,874 as of April 1, 2021. The 145,000 shares issued to ~~negotiate~~extinguish the debt obligations were valued at $40,600 based on the closing market price on the date of the extinguishment. The extinguishment of the debt obligations resulted in a gain of $32,274 which was recorded in the nine months ended September 30, 2021.

On April 1, 2021, the Company and the holder of the $35,000 note payable that was in default reached a settlement whereby the Company issued a total of 100,000 shares of Common stock in exchange for the extinguishment of the outstanding principal, accrued interest and associated common stock purchase warrants which totaled $50,956 as of April 1, 2021. The 100,000 shares issued to extinguish the debt obligations were valued at $28,000 based on the closing market price on the date of the extinguishment. The extinguishment of the debt obligations resulted in a gain of $22,956 which was recorded in the nine months ended September 30, 2021.

On March 31, 2021 the Company recorded a net gain on extinguishment of liabilities totaling $31,372 which was attributable to six transactions that extinguished outstanding liabilities during the nine months ended September 30, 2021; (i) the Debt Settlement Agreements which extinguished accounts payable and accrued liabilities with ~~the Investor regarding~~a total outstanding balance of $2,866,497 for the issuance of ~~the Replacement Note under the terms~~$28,665 in principal balance of the ~~financing~~3% Notes with detachable warrants to purchase 5,732,994 shares of Common Stock for $0.50 per share which was valued at $1,605,178 which resulted in a total gain of $1,232,654 of which $124,177 was reported as a gain on extinguishment of liabilities and ~~taking into consideration~~$1,108,477 was reported as a capital contribution because it was attributable to related parties, (ii) the $23,000 gain from settlement of litigation which extinguished $33,000 of trade payables for a cash payment of $10,000 and (iii) the loss of $115,805 relative to the early retirement of $365,169 principal balance of August 2020 Note. There were no similar extinguishments during the nine months ended September 30, 2020.

The gain on extinguishment of liabilities is attributable to two transactions that extinguished outstanding liabilities during the ~~Investor only funded $510,000~~three months ended September 30, 2020; (i) the Exchange Agreement, which extinguished a promissory note with an outstanding principal balance of $1,000,000, $542,762 in accrued interest and other obligations previously outstanding and resulting in a total gain of $1,310,006, and (ii) the ~~entire transaction, but there can be no assurance~~extinguishment of trade payable obligations totaling $4,840,136 that ~~it will be successful~~arose during 2013 which were extinguished in ~~this regard.~~2020 pursuant to the relevant statute of limitations.

The conversion feature ~~of the~~in certain outstanding promissory notes and ~~the~~ common stock purchase warrants issued in connection with short-term notes ~~and the Secured Convertible Note~~ outstanding during ~~2017~~the nine months ended September 30, 2021 and ~~2016~~2020 are treated as derivative instruments because ~~the promissory~~such notes and warrants contain ratchet and anti-dilution provisions. ~~Accordingly, we adjusted the value of the outstanding derivative liabilities to their estimated fair value as of September 30, 2017 and 2016.~~ The mark-to-market process resulted in a gain of ~~$78,351~~$199 during the nine months ended September 30, ~~2017~~2021, compared to a gain of ~~$167,830~~$248 during the nine months ended September 30, ~~2016. The decrease in the gain recognized is primarily the result of the change in the closing market price of our common stock between the September 30, 2017 ($0.06 per share)~~2020. All short-term notes and ~~December 31, 2016 ($0.10 per share) compared to the corresponding period in 2016 ($0.03 at September 30, 2016 versus $0.16 at December 31, 2015). Generally, the fair value of the~~their related derivative ~~liability declines when the market value of the underlying common stock decreases compared to the derivatives exercise price.~~

~~For income tax purposes, the Company has net operating loss carry-forwards of approximately $66,270,000~~warrants have been terminated as of September 30, ~~2017, which expire from 2025 through 2030.~~ 2021.

The Company ~~has provided a 100% valuation allowance against the resulting deferred~~recorded no income tax ~~asset due to the uncertainty of realizing the tax benefits from its net operating loss carry-forwards.~~

~~For~~benefit (expense) in the nine months ended September 30, ~~2017~~2021 and ~~2016, the~~2020. The Company ~~realized net losses and the Company anticipates operating losses and additional tax losses for the foreseeable future and does not believe that utilization of its~~has been in a cumulative tax loss ~~carryforward is more likely than not. Therefore, because of the uncertainty as to the ultimate utilization of the Company’s~~position and has substantial net operating loss carryforwards ~~any deferred tax asset~~available for its utilization at September 30, ~~2017 that resulted from anticipated benefit from future utilization of such carryforward~~2021. The Company has ~~been fully offset by~~continued to carry a ~~valuation allowance.~~100% reserve on its net deferred tax assets and therefore recorded no income tax expense on its income before income taxes during the nine months ended September 30, 2021 and 2020.

~~As a result of the above, we~~The Company reported a net loss of ~~$2,222,184~~$1,147,228 for the nine months ended September 30, ~~2017~~2021, compared to net income of $5,812,659 for the same period in 2020. This represents a deterioration of $6,959,887 in 2021 compared to 2020.

The Company recorded $117,936 and $-0- in convertible preferred stock dividends in the nine months ended September 30, 2021 and 2020, respectively. On March 26, 2021 the Company issued and classified its Series A Convertible Preferred Stock as equity securities in the condensed balance sheet. Such Convertible Preferred Stock bears a cumulative dividend at a 10% rate based on its stated/liquidation value. There were no outstanding Series A Convertible Preferred Stock during the nine months ended September 30, 2020.

The Series A Convertible Preferred Stock issued on March 26, 2021 has a preference over Common Stock and therefore such accrued Convertible Preferred Stock dividend amounts have been deducted from net ~~loss~~income (loss) to report net income (loss) applicable to common stockholders of ~~$381,530~~$(1,265,164) and $5,812,659 for the nine months ended September 30, ~~2016. This represents a deterioration of $1,840,654.~~2021 and 2020, respectively.

Basic and Diluted ~~Loss~~Net Income (Loss) Attributable to Common Stockholders per Share

The Company incurred a net loss attributable to common stockholders during the nine months ended September 30, 2021, therefore all Common Stock equivalents were considered anti-dilutive and excluded from diluted net income (loss) attributable to common stockholders per share computations. The basic and diluted ~~loss~~net income (loss) attributable to common stockholders per share ~~was $0.29~~were $(0.07) for the nine months ended September 30, ~~2017,~~2021.

During the nine months ended September 30, 2020, the shares of Common Stock issuable upon conversion of the August Note were considered Common Stock equivalents and therefore the dilutive effect of such issuance was included in the computation of diluted income (loss) per share. All shares of Common Stock issuable upon conversion of convertible debt (other than the August Note) and the exercise of outstanding stock options and warrants were antidilutive, and, therefore, not included in the computation of diluted income (loss) per share for the ~~reasons previously noted.~~three months ended September 30, 2020. The basic and diluted ~~loss~~net income (loss) attributable to common stockholders per share ~~was $0.06~~were $0.44 and $0.43 for the nine months ended September 30, 2016. All outstanding stock options and warrants to purchase common stock were considered antidilutive and therefore excluded from the calculation of diluted loss per share for the nine months ended September 30, 2017 and 2016 because the exercise price of the stock options and warrants were substantially higher than market price in 2017 and 2016 and the net loss reported for both periods. 2020, respectively.

We have had a history of losses and have generated little or no operating revenues for a number of years, as we concentrated on the development of our Nicaraguan Concessions, which iswas a long-term, high-risk/reward exploration project in an otherwise unproven part of the world. We abandoned the Concessions in early 2020 due to the challenging economic and political issues in Nicaragua and the oil and gas industry in general. We have been assessing various opportunities and strategic alternatives involving the acquisition, exploration and development of 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, we completed the purchase of the Properties on April 1, 2021 and have commenced certain rework to the existing producing wells and intend to perform workovers and other develop activities on the Properties for the remainder of 2021. We plan to evaluate the Properties for additional reserves of noble gases which may change our development plans should we determine that reserves of noble gases exist on the Properties at commercial quantities. The planned development of the Properties will require us to raise additional capital to accomplish our operating plan, which cannot be assured. Historically, we financed our operations through the issuance of ~~redeemable preferred stock~~equity and various short and long-term debt financing that contained some level of detachable warrants to provide the holders with a level of equity ~~participation should~~participation.

Inacquired the ~~first quarter 2015, we were able~~option from Core to ~~increase our line-of-credit~~purchase the production and mineral rights/leasehold for the Properties. We paid a non-refundable deposit of $50,000 to ~~a maximum of $100,000,~~bind the option, which provided us ~~some liquidity, but were unable to obtain other sources of capital. On February 28, 2015,~~ the ~~short-term note holders of maturing debt exercised their~~ right to ~~convert principal balances totaling $475,000~~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. the newly acquired option, however, permits the Company to purchase the Properties at a reduced price of $900,000 at any time prior to November 1, 2020 and ~~accrued interest totaling $28,630~~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 the Asset Purchase Agreement which extended the new option to January 11, 2021, which has expired.

We, Core, and Seller entered into ~~100,726 shares~~the Side Letter on September 2, 2020 and a second Side Letter on March 31, 2021, pursuant to which we and Core agreed to set the closing date on which the Properties would be purchased pursuant to the Asset Purchase Agreement to April 1, 2021. Pursuant to the Side Letter, the Company is responsible for reimbursing Core for certain prorated revenues and expenses from January 1, 2021 through the April 1, 2021 closing date.

On April 1, 2021 we completed the Property Acquisition, 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 atpurchase 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 ~~exchange rate~~approximate depth of ~~$5.00 per share. In addition,~~3,600 feet.

We commenced rework of the existing production wells immediately after completion of the Property Acquisition and have performed testing and evaluation of the existence of noble gas reserves on ~~September 30, 2015,~~ the ~~lender who provides~~Properties including helium, argon and other rare earth minerals/gases. Testing of the line-of-credit facility converted a partial principal balance totaling $50,000 into 10,000 shares of common stock at a price of $5.00 per share. Such debt to equity conversions helped to reduce our near term cash needs.

~~In July 2015,~~Properties for noble gas reserves has provided encouraging but not conclusive results and the Company ~~issued two promissory notes for total cash proceeds~~has yet to determine the possibility of ~~$85,000.~~commercializing the noble gas reserves on the Properties. The ~~promissory notes have maturity dates that have been extended several times and matured in October 2016 and are currently in default. In connection with~~Company plans to assess the ~~origination and extension~~existing oil & gas reserves on the Properties while continuing the evaluation of the ~~notes,~~existence of new oil & gas zones and other mineral reserves and specifically the Company issued warrants exercisable to purchase shares of common stock at an exercise price of $5.60 per share. The warrants are immediately exercisable and terminate five years from their dates of issuance. The Company is seeking an extension ofnoble gas reserves that the maturity date of these notes; however, there can be no assurance that it will be able to obtain such extensions or what the final terms will be if the lenders agree to such extensions. The Company and its lenders are assessing the status of the Nicaraguan Concessions and what effect thatProperties may ~~have on the extension or renewal of these notes.~~hold.

~~In November 2016,~~We may find it necessary to obtain new sources of debt and/or equity capital to fund the ~~Company issued a $200,000 convertible promissory note which required no principal or interest payments until its November 2017 maturity date~~exploration and bears 8% interest. The proceeds of this note were used to pay off the Company’s line-of-credit upon its maturity in November 2017 and for general working capital purposes. The Company is seeking an extensiondevelopment of the ~~maturity date of this note.~~

On December 27, 2013, the Company borrowed $1,050,000 under the December 2013 Note, which is an unsecured credit facility with a private, third-party lender. Effective April 7, 2015 the Company and the lender agreedProperties enumerated above, as well as to extend the maturity date of the December 2013 Note from April 7, 2015 to the earlier of (i) April 7, 2016 or (ii) the payment in full of the Investor Note issued in the May 2015 Private Placement in the principal amount of $9,550,000 (the “New Maturity Date”). All other terms of the Note remained the same and the remaining principal balance was reduced to $1,000,000 as of September 30, 2016 after the $50,000 principal repayment required by the extension agreement.

~~The December 2013 Note may be prepaid without penalty at any time. The December 2013 Note is subordinated to all~~satisfy our existing and future senior indebtedness, as such terms are defined in the December 2013 Note. The December 2013 Note matured in April 2016 and is currently in technical default. The Company is seeking an extension of the maturity date; however, theredebt obligations. We can be no assurance that it will be able to obtain such extension or what the final terms will be if the lender agrees to such an extension. The Company and its lender are assessing the status of the Nicaraguan Concessions and what effect that may have on the extension or renewal of December 2013 Note.

On May 7, 2015, the Company completed the May 2015 Private Placement of $12.0 million Secured Convertible Note and a Warrant exercisable to purchase 1,800,000 shares of the Company’s common stock with an institutional investor. At the closing of the May 2015 Private Placement, the investor acquired the Convertible Note by paying $450,000 in cash and issuing the Investor Note, secured by cash, with a principal amount of $9,550,000. The Company used the initial proceeds from the closing to retire certain outstanding obligations, including the 2015 area and training fees of approximately $155,000 owed to the Nicaraguan government relating to its Nicaragua Concessions, and to provide ~~additional working capital.~~

The Convertible Note was to mature on the three-year anniversary of its issuance, bore interest at 8% per annum, and was convertible at any time at the option of the holder into shares of the Company’s common stock at $5.00 per share (the “Conversion Price”). As a part of the May 2015 Private Placement, the Company issued a Warrant to the investor giving it the right to purchase up to an aggregate of 1,800,000 shares of the Company’s common stock at an exercise price of $5.00 per share. The Warrant is exercisable commencing nine months from the date of issuance for a period of seven years from the date of issuance.

The investor has no right to convert the Convertible Note or exercise the Warrant to the extent that such conversion or exercise would result in the investor being the beneficial owner of in excess of 9.99% of the Company’s common stock. The Convertible Note ranks senior to the Company’s existing and future indebtedness and is secured by all of the assets of the Company, excluding the Nicaraguan Concessions.

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 the Replacement Note representing the remaining principal balance of $2,197,231 to replace the Convertible Note. The Company has recorded the fair value of the Convertible Notes assuming that the remaining par value is $2,197,231 as asserted by the Investor, resulting in a change in the estimated fair value of $1,847,894 during the nine months ended September 30, 2017. The Company plans to negotiate with the Investor regarding the issuance of the Replacement Note under the terms of the financing and taking into consideration that the Investor only funded $510,000 in the entire transaction, but there can be no assurance that it will be successful in this regard.

WestPark Capital acted as placement agent for the Company in the May 2015 Private Placement and 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 plus the reimbursement of legal fees totaling $7,500. The Company also issued WestPark a warrant exercisable to purchase 240,000 shares of common stock at a price of $5.00 per share. The warrant was exercisable from the date of issuance for a period of seven years.

In summary, as of September 30, 2017, the following debt was outstanding: (i) $200,000 on our convertible promissory note, which was due November 7, 2017 and for which we are seeking an extension; (ii) $40,000 on our convertible promissory note, which is due April 19, 2018; (iii) the two promissory notes in the total principal amount of $85,000, which matured in October 2016 are currently in technical default and for which we are seeking extensions; (iv) the Replacement Note, if issued, with a fair value of $1,989,222, which is due in monthly installment payments through May 2018 either in cash or stock; and (v) the December 2013 Note in the principal amount of $1,000,000, which was due in April 2016 and is currently in technical default. We are seeking to extend the maturity date to cure the technical defaults; however, there can be no assurance that we will be able to obtain ~~such extensions or what the final terms will be if the lenders agree to such extensions. We intend to seek additional capital through the sale of~~ sufficient new debt/equity ~~or short-term debt financing to provide the funds necessary to meet our obligations when they come due and to provide working~~ capital to fund normal operations, although we can provide no assurances that we will be successful in this regard. Our current financial condition has made traditional bank loans and normal financing terms unattainable; therefore, we may find it necessary to continue with the type of short-term borrowings with high effective interest rates that we have used in the past.

~~The Company is in default of various provisions~~our planned development of the 30-year Concessions for both Perlas and Tyra blocks as of September 30, 2017, as noted earlier. The Company is currently pursuing meetings with Nicaraguan Government officials in order to address the pending defaults.Properties.

The Company must raise substantial amounts of debt and equity capital from other sources in the ~~immediate~~ future in order to ~~fund: (1)~~fund the ~~annual training program and area fees for 2016 and 2017; (2) required letters of credit to the Nicaraguan Government; (3) the drilling of at least one exploratory well on the Perlas Block~~(i) development of the ~~Nicaraguan Concessions during 2017; (4) the shooting of additional seismic~~Properties acquired on ~~the Tyra Block of the Nicaraguan Concessions should it be unable to negotiate a waiver of such requirement from the Nicaraguan government; (5)~~April 1, 2021; (ii) normal day-to-day operations and corporate overhead; and ~~(6)~~(iii) outstanding debt and other financial obligations including the payment of preferred stock dividends as they become due, ~~including the $1.0 million December 2013 Note, and the two notes payable totaling $85,000, which currently are in technical default, and the Replacement Note, if issued.~~as described below. These are substantial operational and financial issues that must be successfully addressed during ~~2017~~ the remainder of 2021.

The Company has made substantial progress in resolving many of its existing financial obligations during the nine months ended September 30, 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 totaling $2,866,497 in exchange for the issuance of $28,665 in principal balance of 3% 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 totaled $123,830 as of April 1, 2021. The Company has made substantial progress in resolving its financial obligations: however, there is in excess of $1.9 million remaining that are in default and 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 ~~Company’s ability to satisfy the conditions~~Properties. The Company may find it necessary to ~~maintain and/or renegotiate its Nicaragua Concessions will be in significant doubt.~~

~~The Company is seeking new outside sources~~raise substantial amounts of debt ~~and~~or equity capital ~~in order~~ to fund such exploration and development activities and may seek offers from industry operators and other third parties for interests in the ~~substantial needs enumerated above; however, there~~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 ~~capital~~new funding or ~~obtain it~~be able to reach agreements with industry operators and other third parties or on favorable terms or within the timeframe necessary to cure the technical defaults existing on the Nicaraguan Concessions or to meet its ongoing requirements relative to drilling the exploratory wells. The current environment for oil and gas development projects, especially discoveries in otherwise undeveloped regions of the world, is very challenging given the depressed commodity prices for oil and gas products, and the resulting industry-wide reduction in capital expenditure budgets for exploration and development projects. These are substantial impediments for the Company to obtain adequate financing to fund the exploration and development of its Nicaraguan projects.what terms.

Due to the uncertainties related to ~~these~~the foregoing matters, there exists substantial doubt about the Company’s ability to continue as a going ~~concern.~~concern within one year after the date the financials 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.

As of September 30, 2021, we had cash and cash equivalents with an aggregate balance of $10,162, a decrease from a balance of $11,042 at December 31, 2020. Summarized immediately below and discussed in more detail in the subsequent subsections are the main elements of the $880 net decrease in cash during the nine months ended September 30, 2021:

The net result of these activities was a decrease in cash of $880 to $10,162 for the nine months ended September 30, 2021.

Capital Expenditures. We had no material commitments for capital expenditures at September 30, 2021.

Repayment of Debt. Debt obligations is comprised of the following at September 30, 2021 and December 31, 2020:

The Company is subject to various 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.

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures to provide reasonable assurance of achieving the control objectives, as defined in Rules 13a-15(e) and 15d-15(e) of the ~~Securities~~ Exchange ~~Act of 1934.~~Act. Based on their evaluation as of September 30, ~~2017,~~2021, the end of the period covered by this quarterly report on Form 10-Q, our principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures are not effective in assuring that financial statement presentation and disclosure are in conformity with those which are required to be included in our periodic SEC filings.

There have been no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

Internal control systems, no matter how well designed and operated, have inherent limitations. Therefore, even a system which is determined to be effective cannot provide absolute assurance that all control issues have been detected or prevented. Our systems of internal controls are designed to provide reasonable assurance with respect to financial statement preparation and presentation.

The ~~Company~~information regarding certain legal proceedings in which American Noble Gas, Inc. (the “AMNG”, “Company”, “we”, “us” or “our”) are involved is ~~currently~~set forth in Note 11 of the Notes to the Unaudited Condensed Financial Statements, entitled “Commitments and Contingencies – Litigation”, which is included in Part I, Item 1 of this Quarterly Report on Form 10-Q, and such information is incorporated by reference into this Item 1.

In addition to such legal proceedings, we may become involved in ~~litigation as follows:~~various other claims and threatened legal proceedings arising in the normal course of our businesses. At this time, we do not believe any material losses under such other claims and threatened proceedings to be probable. While the ultimate outcome of such legal proceedings cannot be predicted with certainty, it is in the opinion of management, after consultation with legal counsel, that the final outcome in such proceedings, in the aggregate, would not have a material adverse effect on our financial condition, results of operations or cash flows.

As a smaller reporting company, we are not required to provide the information required by this Item.

On August 30, 2021, the Company entered into an agreement with an accredited investor (the “8% Note Investor”) for the Company’s senior unsecured convertible note due October 29, 2022 (the “8% Note”), with an aggregate principal face amount of $100,000. The 8% Note is, subject to certain conditions, convertible into an aggregate of 200,000 shares of Common Stock, at a price of $0.50 per share. The Company also issued a five and one half - year common stock purchase warrant to purchase up to 200,000 shares of Common Stock at an exercise price of $0.50 per share, subject to customary adjustments (the “8% Note Warrant”), which is immediately exercisable. The 8% Note Investor purchased the 8% Note and 8% Note Warrant from the Company for an aggregate purchase price of $100,000. The Company also granted the 8% Note Investor certain piggy-back registration rights whereby the Company has agreed to register for resale the shares underlying the 8% Note Warrant and the conversion of the 8% Note unless the shares of the Company commences to trade on the NYSE American; the Nasdaq Capital Market; the Nasdaq Global Market; the Nasdaq Global Select Market; or the New York Stock Exchange, within one hundred twenty (120) days after the closing date.

The 8% Note bears interest at a rate of eight percent (8%) per annum, may be voluntarily repaid in cash in full or in part by the Company at any time in an amount equal to 120% of the principal amount of the 8% Note and any accrued and unpaid interest. Fifty percent (50%) of the 8% Note shall be mandatorily repaid in cash in an amount equal to 120% of the principal amount of the 8% Note and any accrued and unpaid interest in the event of the consummation by the Company of any public or private offering or other financing pursuant to which the Company receives gross proceeds of at least $2,000,000 and one-hundred percent (100%) of the 8% Note plus accrued interest shall be mandatorily repaid in an amount equal to 120% of outstanding principal and interest in cases in which the Company receives gross proceeds of at least $3,000,000. In addition, pursuant to the 8% Note, so long as the 8% Note remained outstanding, the Company could not enter into any financing transactions pursuant to which the Company sells its securities at a price lower than $0.50 cents per share without written consent of the 8% Note Investor.

The conversion of the 8% Note and the exercise of the 8% Note Warrant are each subject to beneficial ownership limitations such that the 8% Note Investor may not convert the 8% Note or exercise the 8% Note Warrant to the extent that such conversion or exercise would result in the 8% Note Investor being the beneficial owner in excess of 4.99% (or, upon election of the August Investor, 9.99%) of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon such conversion or exercise, which beneficial ownership limitation may be increased or decreased up to 9.99% upon notice to the Company, provided that any increase in such limitation will not be effective until 61 days following notice to the Company.

The 8% Note and the 8% Note Warrant to purchase common shares were issued to the creditor pursuant to Section 4(a)(2) of the Securities Act of 1933 because the creditor represented that it had sufficient sophistication and knowledge of the Company, and the issuance did not involve any form of general solicitation or general advertising. Furthermore, the creditor made representations that the securities issued to extinguish the obligations were taken for investment purposes and not with a view to resale.

The Company has not resolved the various contingencies related to the default status of its Nicaraguan Concessions (See Note 8). The Company continues to attempt to negotiate extensions, waivers or a new Concession agreement with the Nicaraguan Government; however, there can be no assurance that the Company will be successful in that regard. The Company is currently pursuing meetings with Nicaraguan Government officials in order to address the pending defaults.None.

On December 27, 2013 the Company borrowed $1,050,000 under an unsecured credit facility with a private, third-party lender which facility has an outstanding principal balance of $1,000,000. The facility is represented by a promissory note (the “Note”) that matured in April 2016, and is currently in technical default. The Company is seeking an extension of the maturity date; however, there can be no assurance that it will be able to obtain an extension or what the final terms will be if the lender agrees to such extension. The Company and its lender is assessing the status of the Nicaraguan Concessions and what effect that may have on the extension or renewal of the Note.

During July 2015 the Company borrowed a total of $85,000 under an unsecured credit facility with two private, third-party lenders which facility has an outstanding principal balance of $85,000 as of September 30, 2017. The facility is represented by promissory notes that matured in October 2016, and is currently in technical default. The Company is seeking an extension of the maturity dates; however, there can be no assurance that it will be able to obtain extensions or what the final terms will be if the lenders agree to such extensions. The Company and its lenders are assessing the status of the Nicaraguan Concessions and what effect that may have on the extension or renewal of these notes.

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 requires no principal or interest payments until its maturity date of November 7, 2017 and bears interest at 8% per annum. The note was not paid on its original maturity date. The Company is currently pursuing an extension from the Holder.

In accordance with the requirements of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Large accelerated filer ~~[ ]~~☐		Accelerated filer ~~[ ]~~☐
	Non-accelerated filer ~~[ ] (Do not check if a smaller reporting company)~~ ☒		Smaller reporting company ~~[X]~~☒
			Emerging growth company ☐

~~Class~~		~~Outstanding at November 10, 2017~~
~~Common Stock, $0.0001 par value~~		~~7,712,569~~

	Page
PART I - Financial Information
Item 1. Financial Statements
Condensed Balance Sheets: September 30, ~~2017 (unaudited)~~2021(Unaudited) and December 31, ~~2016~~2020	3
Condensed Statements of Operations: Three and ~~nine~~Nine months ended September 30, ~~2017~~2021 and ~~2016~~2020 (Unaudited)	4
Condensed Statement of Changes in Stockholders’ Deficit: Three and Nine months ended September 30, ~~2017~~2021and 2020 (Unaudited)	5
Condensed Statements of Cash Flows: Nine months ended September 30, ~~2017 and 2016~~2021and 2020 (Unaudited)	6
Notes to Condensed Financial Statements (Unaudited)	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	2733
Item 3. Quantitative and Qualitative Disclosures About Market Risk	3549
Item 4. Controls and Procedures	3550
PART II - Other Information
Item 1. Legal Proceedings	3650
Item 1A Risk Factors	50
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	3750
Item 3. Defaults Upon Senior Securities	3751
Item 4. Mine Safety Disclosures	3751
Item 5. Other Information	3751
Item 6. Exhibits	3751
Signatures	38
~~Exhibits~~	3952

	Three months ended September 30,						Nine months ended September 30,
	2017			2016			2017			2016

Operating expenses:
General and administrative expenses	$	103,531		$	107,703		$	365,906		$	339,199
Stock-based compensation		—			—			—			7,598
Total operating expenses		103,531			107,703			365,906			346,797

Operating loss		(103,531	)		(107,703	)		(365,906	)		(346,797	)

Other income (expense):
Interest expense		(29,048	)		(27,455	)		(86,735	)		(134,972	)
Change in fair value of secured convertible note payable		(166,431	)		(2,807	)		(1,847,894	)		(67,591	)
Change in derivative fair value		40,186			50,062			78,351			167,830
Total other income (expense)		(155,293	)		19,800			(1,856,278	)		(34,733	)

Loss before income taxes		(258,824	)		(87,903	)		(2,222,184	)		(381,530	)
Income tax expense (benefit)		—			—			—			—

Net loss	$	(258,824	)	$	(87,903	)	$	(2,222,184	)	$	(381,530	)

Basic and diluted net loss per share:
Basic	$	(0.03	)	$	(0.01	)	$	(0.29	)	$	(0.06	)
Diluted	$	(0.03	)	$	(0.01	)	$	(0.29	)	$	(0.06	)
Weighted average shares outstanding – basic and diluted		7,712,569			7,690,227			7,712,569			6,498,312


		Common Stock				Additional Paid-in			Accumulated			Stockholders’
		Shares		Amount		Capital			Deficit			Deficit
Balance, December 31, 2019	-		12,310,733	$	1,231	$	109,583,945		$	(122,802,352	)	$	(13,217,176	)

Stock-based compensation			—		—		24,308			—			24,308
Issuance of common shares in consideration for deposit to acquire oil and gas property
Issuance of common shares in consideration for deposit to acquire oil and gas property, shares
Issuance of common shares pursuant to exchange agreements
Issuance of common shares pursuant to exchange agreements, shares
Beneficial conversion feature on issuance of convertible note with detachable warrants to purchase common stock
Issuance of restricted stock
Issuance of restricted stock, shares
Cumulative effect of adoption of ASU 2020-06
Issuance of preferred stock with detachable warrants to purchase common stock
Issuance of preferred stock with detachable warrants to purchase common stock, shares
Issuance of warrants to purchase common stock pursuant to debt settlement agreements
Extinguishment of liabilities with related parties pursuant to debt settlement agreements
Accrual of preferred stock dividends
Issuance of common stock pursuant to debt settlement agreements
Issuance of common stock pursuant to debt settlement agreements, shares
Issuance of warrants to purchase common stock pursuant to issuance of debt

Net loss	-		—		—		—			(84,765	)		(84,765	)

Balance, March 31, 2020	-		12,310,733		1,231		109,608,253			(122,887,117	)		(13,277,633	)

Stock-based compensation			—		—		24,308			—			24,308

Net loss	-		—		—		—			(66,004	)		(66,004	)

Balance, June 30, 2020	-		12,310,733		1,231		109,632,561			(122,953,121	)		(13,319,329	)

Stock-based compensation			—		—		105,825			—			105,825

Issuance of common shares in consideration for deposit to acquire oil and gas property			500,000		50		74,950			—			75,000

Issuance of common shares pursuant to exchange agreements			737,532		74		132,682			—			132,756

Beneficial conversion feature on issuance of convertible note with detachable warrants to purchase common stock			—		—		325,000			—			325,000

Issuance of restricted stock			5,000,000		500		(500	)		—			—

Net income	-		—		—		—			5,963,428			5,963,428

Balance, September 30, 2020	-		18,548,265	$	1,855	$	110,270,518		$	(116,989,693	)	$	(6,717,320	)

Title of each class		Trading Symbol(s)		Name of exchange on which registered
—		—		—

●	~~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.~~

September 30, 2017	Level 1		Level 2		Level 3		Total
Liabilities:
Senior convertible note payable	$	—	$	—	$	1,989,222	$	1,989,222
Derivative liabilities		—		—		105,079		105,079
	$	—	$	—	$	2,094,301	$	2,094,301

	September 30, 2017			December 31, 2016
Secured convertible note payable, at fair value	$	1,989,222		$	141,328
Less: Current maturities		(1,989,222	)		(91,736	)

Secured convertible note payable, long-term	$	—		$	49,592

	Amount
Balance at December 31, 2016	$	141,328
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		1,847,894

Balance at September 30, 2017	$	1,989,222

	Amount
Oil and gas properties, subject to depreciation, depletion and amortization	$	913,425
Asset retirement obligation assumed		(13,425	)
Total purchase price of the Oil & Gas Properties	$	900,000

	September 30, 2021		December 31, 2020
Notes payable:
3% Convertible promissory notes payable	$	28,665	$	—
8% Convertible promissory notes payable(less discount of $51,807 and $-0- as of September 30, 2021 and December 31, 2020, respectively)		48,193	$	—
Convertible note payable, (less discount of $-0- and $231,606 as of September 30, 2021 and December 31, 2020, respectively)		—		133,563
Note payable		—		50,000
Note payable		—		35,000

Total notes payable		76,858		218,563
Less: Long-term portion		76,858		—
Notes payable, short-term	$	—	$	218,563

Years ended	Principal balance due

2021 (October 1, 2021 through December 31, 2021)	$	—
2022		48,193
2023		—
2024		—
2025		—
2026		28,665
Total	$	76,858

	Amount
Proceeds allocated to 8% convertible note	$	44,000
Proceeds allocated to detachable warrants to purchase common stock		56,000

Total proceeds	$	100,000

	Upon Issuance			As of September 30, 2017

Volatility – range		102.6	%		294.2	%
Risk-free rate		1.00	%		1.62	%
Contractual term		3.0 years			0.6 years
Conversion price	$	5.00		$	5.00
Par value of note	$	540,000		$	2,197,231

	As of August 30, 2021 (issuance date)

Volatility – range		369.4	%
Risk-free rate		0.77	%
Contractual term		5.5 years
Exercise price	$	0.50
Number of warrants in aggregate		200,000

	Amount
Balance December 31, 2020 – 8% Convertible Note	$	—
Issuance of 8% Note, at par		100,000
Discount on 8% Note at issuance date		(56,000	)
Amortization of discount during the period to interest expense		4,193

Balance September 30, 2021 - 8% Convertible Note	$	48,193

	Amount
Principal balance at par	$	365,169
Remaining discount included in principal balance		(44,883	)
Accrued interest		17,448
Prepayment premium (including remaining discount due to early retirement)		115,805

Total payment to retire the August Note	$	453,539

	Amount
Balance December 31, 2020 - August Note	$	133,563
Cumulative effect of adoption of ASU 2020-06		160,900
Amortization of discount through the March 26, 2021 retirement date		25,823
Remaining discount recognized as a loss from retirement of convertible note payable		44,883
Retirement of August Note at par value on March 26, 2021		(365,169	)

Balance September 30, 2021 - August Note	$	—

	September 30, 2017		December 31, 2016
Convertible notes payable, short term:
Note payable, (in default)	$	1,000,000	$	1,000,000
Note payable		200,000		200,000
Note payable		40,000		-
Note payable, (in default)		50,000		50,000
Note payable (in default)		35,000		35,000
Total notes payable, short-term	$	1,325,000	$	1,285,000

	Amount
Principal balance of December 2013 Note extinguished as a result of the Exchange	$	1,000,000

Accrued interest extinguished as a result of the Exchange		542,762

Total obligations extinguished as a result of the Exchange		1,542,762

Cash payment to Holder as a result of the Exchange		(100,000	)

Value of Common Stock issued as a result of the Exchange		(132,756	)

Gain on extinguishment of debt and related accrued interest	$	1,310,006

	●	On ~~November 8, 2016~~July 7, 2015, the Company borrowed a total of ~~$200,000~~$50,000 from an individual under a convertible note payable with the conversion rate of $5.00 per share. The note requires no principal or interest payments until its maturity date of November 7, 2017 and bears interest at 8% per annum. The note was not paid on its original maturity date. The Company is currently pursuing an extension from the Holder.

	●	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 requires no principal or interest payments until its maturity date of April 19, 2018 and bears interest at 8% per annum.

	●	~~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~~$5.60 per share. The term of ~~the~~such note was for a period of 90 days and bears interest at 8% per annum. In connection with the loan and subsequent extensions, the Company issued the ~~entity~~individual a warrant for the purchase of 5,000 shares of ~~common stock~~Common Stock at ~~$5.60~~$5.60 per share for a period of five years from the date of ~~the note. The terms of the~~such 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.and/or extensions. The ratchet provision in ~~the stock purchase~~such warrant requires that ~~the~~such 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 is currently pursuing an additional extension from the Holder. The Company and its lender are assessing the status of the Nicaraguan Concessions and what effect that may have on the extension or renewal of these notes. 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 newly issued 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 ~~$942~~$72 and ~~$1,654~~$189 as of ~~September 30, 2017~~April 1, 2021 (the extinguishment date) and December 31, ~~2016,~~2020, respectively. See Note 5.6.

	●	On April 1, 2021, the Company and the holder of the $50,000 note payable that was in default reached a settlement whereby the Company issued a total of 145,000 shares of Common stock in exchange for the extinguishment of the outstanding principal, accrued interest and associated common stock purchase warrants which totaled $72,874 as of April 1, 2021. The 145,000 shares issued to extinguish the debt obligations were valued at $40,600 based on the closing market price on the date of the extinguishment. The extinguishment of the debt obligations resulted in a gain of $32,274 which was recorded in the nine months ended September 30, 2021.

	●	On July 15, 2015, the Company borrowed a total of ~~$35,000~~$35,000 from an individual under a convertible note payable with the conversion rate of ~~$5.60~~$5.60 per share. The term of ~~the~~such note was for a period of 90 days and bears interest at 8% per annum. In connection with the loan and subsequent extensions, the Company issued the ~~entity~~individual a warrant for the purchase of 3,500 shares of ~~common stock~~Common Stock at ~~$5.60~~$5.60 per share for a period of five years from the date of ~~the note. The terms of the~~such 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.and/or extensions. The ratchet provision in ~~the stock purchase~~such warrant requires that ~~the~~such 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 currently pursuing an additional extension from the Holder. The Company and its lender are assessing the status of the Nicaraguan Concessions and what effect that may have on the extension or renewal of these notes. 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 newly issued warrants on January 15, 2016 totaled $267 and $74 on May 15, 2016, both of which are being amortized over the extension period (through October 15, 2016). The related warrant derivative liability balance was ~~$658~~$50 and ~~$1,158~~$132 as of ~~September 30, 2017~~April 1, 2021 (the extinguishment date) and December 31, ~~2016,~~2020, respectively. See Note 5.6.

		On April 1, 2021, the Company and the holder of the $35,000 note payable that was in default reached a settlement whereby the Company issued a total of 100,000 shares of Common stock in exchange for the extinguishment of the outstanding principal, accrued interest and associated common stock purchase warrants which totaled $50,956 as of April 1, 2021. The 100,000 shares issued to extinguish the debt obligations were valued at $28,000 based on the closing market price on the date of the extinguishment. The extinguishment of the debt obligations resulted in a gain of $22,956 which was recorded in the nine months ended September 30, 2021.

	September 30, 2021		December 31, 2020
Accrued compensation (see Notes 9 and 13)	$	—	$	1,425,708
Accrued board of director fees (see Notes 9 and 13)		—		363,500
Accrued accounting services – Related party (see Notes 9 and 13)		—		762,407
Accrued rent		614,917		614,917
Accrued Nicaragua Concession fees		544,485		544,485
Accrued financing costs – Related party (see Notes 9 and 13)		—		26,113
Accrued franchise taxes		339		450

Total accrued liabilities	$	1,159,741	$	3,737,580

	As of June 4, 2021 (issuance date)

Volatility – range		286.6	%
Risk-free rate		1.56	%
Contractual term		10.0 years
Exercise price	$	0.50
Number of options in aggregate		1,800,000

	Number of Restricted shares			Weighted average grant date fair value
Nonvested balance, December 31, 2020		3,750,000		$	0.13
Granted		—			—
Vested		(1,875,000	)		(0.13	)
Forfeited		—			—
Nonvested balance, September 30, 2021		1,875,000		$	0.13

	As of April 1, 2021 (termination date)			As of December 31, 2020

Volatility – range		373.9	%		379.4	%
Risk-free rate		0.92	%		0.38	%
Contractual term		0.2 years			0.5 – 0.8 years
Exercise price	$	5.60		$	5.60
Number of warrants in aggregate		8,500			17,000

	~~As of~~ ~~September 30, 2017~~

~~Volatility – range~~		~~207.7% - 294.2~~	%
~~Risk-free rate~~		~~1.62% - 2.16~~	%
~~Contractual term~~		~~0.5 - 4.6 years~~
~~Exercise price~~		~~$5.00 - $5.60~~
~~Number of warrants in aggregate~~		~~2,174,000~~

	Amount
Balance at December 31, 2020	$	321
Unrealized derivative gains included in other income/expense for the period		(199	)
Extinguishment of derivative liability as part of the exchange of debt for common stock (See Note 3 & 9)		(122	)

Balance at September 30, 2021	$	—

	September 30, 2017		December 31, 2016
Warrant issued to holder of Secured convertible note (Note 2)	$	90,909	$	155,461
Warrant issued to placement agent (Note 2)		12,121		20,728
Warrant issued to holder of December 2013 Note (Note 3)		449		4,429
Warrants issued to holders of notes payable - short term (Note 3)		1,600		2,812
Total warrant derivative liability	$	105,079	$	183,430

	Number of Warrants			Weighted Average Exercise Price Per Share
Outstanding and exercisable at December 31, 2016		2,517,771		$	5.34
Issued for extension of notes payable (Note 3)		—			—
Issued for extension of line-of-credit (Note 3)		—			—
Exercised/forfeited		(12,000	)		25.00

Outstanding and exercisable at September 30, 2017		2,505,771		$	5.25

	Number of Warrants			Weighted Average Exercise Price Per Share
Outstanding and exercisable at December 31, 2020		1,528,380		$	0.65
Issued in connection with issuance of Series A convertible preferred stock (See Note 3)		5,256,410			0.39
Issued in connection with issuance of 3% convertible promissory notes (see Note 3 & 13)		5,732,994			0.50
Issued in connection with issuance of 8% convertible promissory notes (see Note 3)		200,000			0.50
Forfeited/expired		(47,000	)		(5.22	)

Outstanding and exercisable at September 30, 2021		12,670,784		$	0.45


	Three months ended September 30,				Nine months ended September 30,
	2021		2020		2021			2020

Gain (loss) on Exchange and Extinguishment of Liabilities:
Gain on exchange and extinguishment of liabilities	$	—	$	—	$	124,177		$	—
Gain from settlement of litigation (See Note 11)		—		—		23,000			—
Loss from retirement of convertible note payable (See Notes 3)		—		—		(115,805	)		—
Extinguishment of trade payables		—		4,840,136		—			4,840,136
Gain from exchange and extinguishment of notes payable (See Note 3)		—		1,310,006		55,230			1,310,006

Total	$	—	$	6,150,142	$	86,602		$	6,150,142

	As of March 31, 2021

Volatility – range		374.0	%
Risk-free rate		0.92	%
Contractual term		5.0 years
Exercise price	$	0.50
Number of warrants in aggregate		5,732,994

	Amount

Total accounts payable and accrued liabilities extinguished	$	2,866,497
Less: Principal balance of 3% Convertible Promissory Notes issued		(28,665	)
Less: Fair value of warrants to purchase common stock issued		(1,605,178	)

Total gain on extinguishment of liabilities	$	1,232,654
Less: Related party amounts reported as a capital contribution		(1,108,477	)

Gain on extinguishment of liabilities	$	124,177