No offer or sale under this prospectus may be made by a stockholder unless that holder is listed in the table above, in a supplement to this prospectus or in an amendment to the related registration statement that has become effective under the Securities Act of 1933, as amended (the “Securities Act”). We will supplement or amend this prospectus to include additional selling stockholders upon request and upon provision of all required information to us, subject to the terms of the Registration Rights Agreement, as described under the “Description of Capital Stock -Registration Rights Agreement.”

WestPark Capital, Inc., which was the placement agent (the “Placement Agent”) for the May 2015 Private Placement, is a broker-dealer registered under Section 15 of the Exchange Act, or an affiliate of a broker-dealer registered under Section 15 of the Exchange Act.

PLAN OF DISTRIBUTION

We are registering the shares of common stock issuable pursuant to the terms of the Convertible Note and upon exercise of the Warrants to permit the resale of these shares of common stock by the holders of the Convertible Note and Warrants, as the case may be, from time to time after the date of this prospectus. We will not receive any of the proceeds from the sale by the selling stockholders of the shares of common stock. We will bear all fees and expenses incident to our obligation to register the shares of common stock.

The selling stockholders may sell all or a portion of the shares of common stock beneficially owned by them and offered hereby from time to time directly or through one or more underwriters, broker-dealers or agents. If the shares of common stock are sold through underwriters or broker-dealers, the selling stockholders will be responsible for underwriting discounts or commissions or agent’s commissions. The shares of common stock may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time of sale, or at negotiated prices. These sales may be effected in transactions, which may involve crosses or block transactions,

If a selling stockholder effects such transactions by selling shares of common stock to or through underwriters, broker-dealers or agents, such underwriters, broker-dealers or agents may receive commissions in the form of discounts, concessions or commissions from the selling stockholder or commissions from purchasers of the shares of common stock for whom they may act as agent or to whom they may sell as principal (which discounts, concessions or commissions as to particular underwriters, broker-dealers or agents may be in excess of those customary in the types of transactions involved). In connection with sales of the shares of common stock or otherwise, a selling stockholder may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the shares of common stock in the course of hedging in positions they assume. A selling stockholder may also sell shares of common stock short and deliver shares of common stock covered by this prospectus to close out short positions and to return borrowed shares in connection with such short sales. A selling stockholder may also loan or pledge shares of common stock to broker-dealers that in turn may sell such shares.

A selling stockholder may pledge or grant a security interest in some or all of the convertible notes, warrants or shares of common stock owned by it and, if we default in the performance of our secured obligations, the pledgees or secured parties may offer and sell the shares of common stock from time to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act of 1933, as amended, amending, if necessary, the list of selling stockholders to include the pledgee, transferee or other successors in interest as a selling stockholder under this prospectus. The selling stockholders also may transfer and donate the shares of common stock in other circumstances in which case the transferees, donees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.

A selling stockholder and any broker-dealer participating in the distribution of the shares of common stock may be deemed to be “underwriters” within the meaning of the Securities Act, and any commission paid, or any discounts or concessions allowed to, any such broker-dealer may be deemed to be underwriting commissions or discounts under the Securities Act. At the time a particular offering of the shares of common stock is made, a prospectus supplement, if required, will be distributed which will set forth the aggregate amount of shares of common stock being offered and the terms of the offering, including the name or names of any broker-dealers or agents, any discounts, commissions and other terms constituting compensation from the selling stockholder and any discounts, commissions or concessions allowed or reallowed or paid to broker-dealers.

Under the securities laws of some states, the shares of common stock may be sold in such states only through registered or licensed brokers or dealers. In addition, in some states the shares of common stock may not be sold unless such shares have been registered or qualified for sale in such state or an exemption from registration or qualification is available and is complied with.

There can be no assurance that any selling stockholder will sell any or all of the shares of common stock registered pursuant to the registration statement, of which this prospectus forms a part.

A selling stockholder and any other person participating in such distribution will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including, without limitation, Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any of the shares of common stock by the selling stockholder and any other participating person. Regulation M may also restrict the ability of any person engaged in the distribution of the shares of common stock to engage in market-making activities with respect to the shares of common stock. All of the foregoing may affect the marketability of the shares of common stock and the ability of any person or entity to engage in market-making activities with respect to the shares of common stock.

We will pay all expenses of the registration of the shares of common stock pursuant to the registration rights agreement, estimated to be $30,000 in total, including, without limitation, Securities and Exchange Commission filing fees and expenses of compliance with state securities or “blue sky” laws; provided, however, that a selling stockholder will pay all underwriting discounts and selling commissions, if any. We will indemnify the selling stockholders against liabilities, including some liabilities under the Securities Act, in accordance with the registration rights agreements, or the selling stockholders will be entitled to contribution. We may be indemnified by the selling stockholders against civil liabilities, including liabilities under the Securities Act that may arise from any written information furnished to us by the selling stockholder specifically for use in this prospectus, in accordance with the related registration rights agreement or we may be entitled to contribution.

Once sold under the registration statement, of which this prospectus forms a part, the shares of common stock will be freely tradable in the hands of persons other than our affiliates.

DESCRIPTION OF BUSINESS

Overview

Infinity Energy Resources, Inc. is an independent energy company that is pursuing an oil and gas exploration opportunity offshore of Nicaragua in the Caribbean Sea. On March 5, 2009, the Nicaraguan government granted us the Concessions to explore approximately1.4 million acres offshore Nicaragua. Since such point we have focused our efforts on these Concessions. Previously we were engaged in the acquisition, exploration and development of natural gas and oil properties in the United States. We ceased all domestic oil and gas exploration and production in the United States by December 2009

Nicaragua

We began pursuing an oil and gas exploration opportunity offshore Nicaragua in the Caribbean Sea in 1999. Since such time, we built relationships with the Instituto Nicaraguense de Energia (“INE”) and undertook the geological and geophysical research that helped us to become one of only six companies qualified to bid on offshore blocks in the first international bidding round held by INE in January 2003.

On March 5, 2009, we signed certain contracts pursuant to which we acquired the contracts granting us the Perlas and Tyra concession blocks offshore Nicaragua (the “Nicaraguan Concessions” or “Concessions”). Since ourConcessions. After such acquisition, of the Nicaraguan Concessions, we have conducted an environmental study and developed geological information from the reprocessing and additional evaluation of existing 2-D seismic data acquired over our Perlas and Tyra concession blocks.of the Concessions. In April 2013, the Nicaraguan government formally approved our Environmental Impact Assessment,environmental impact assessment, at which time we had commenced significant activity under thean initial work plan involving the acquisition of new seismic data on the two Nicaraguan Concessions. We undertook seismic shoots during late 2013 that resulted in the acquisition of new 2-D and 3-D seismic data and are reviewinghad reviewed it in order to select our initial drilling sites for exploratory wells.

Business StrategyWe were in default of various provisions of the Concessions agreements for several years and the Nicaraguan Government subsequently terminated the Concessions agreements. We had been seeking a resolution of these defaults, including the ability to renew and/or renegotiate the terms of the Concessions contracts, with the Nicaraguan government to permit us to cure such defaults. However, the Nicaraguan political climate and domestic issues, as well other factors, caused the Company to abandon such efforts and the Concessions in 2020. As a result, as of the date of this prospectus, the Concessions agreements remain terminated and the Company has abandoned all of its efforts to renew and/or renegotiate the terms of the Concessions agreements with the Nicaraguan government to cure such defaults.

Our principal objective is to create stockholder value through the development of our Nicaraguan Concessions. We have commenced significant activity under the initial work plan and received formal governmental approval of the environmental study in 2013. We have used previously existing reprocessed 2-D seismic data to identify or evaluate the prospects. We had additional 2-D and 3-D seismic mapping done on the Concessions to provide additional data. We are reviewing the data in order to evaluate the potential oil and gas producing structures and select our initial drilling sites for exploratory wells, given sufficient capital and necessary Nicaraguan government approvals.

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. To this end we completed the May 2015 Private Placement. We plan to seek joint venture or working interest partners prior to the commencement of any exploratory drilling operations on the Nicaraguan Concessions. In this connection, we may seek offers from other industry operators for interests in the acreage in exchange for cash and a carried interest in exploration and development operations or other strategic partnership.

Recent Developments

On May 7, 2015 weSide Letter and Bill of Sale

As previously disclosed in the Company’s Current Report on Form 8-K filed with the SEC on April 6, 2021 (the “April 2021 Form 8-K”), the Company and Core, as well as all of the members of Core, Mandalay LLC and Coal Creek Energy, LLC (collectively, the “Seller”) entered into that certain side letter agreement on March 31, 2021 (the “Side Letter”), pursuant to which the Company 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 “APA”), to April 1, 2021 (the “APA Closing Date”). Pursuant to the Side Letter, the Company was responsible for reimbursing the Seller for certain prorated revenues and expenses from January 1, 2021 through the APA Closing Date.

In addition, in connection with the entry into the Side Letter, on April 1, 2021, the Company and Core entered into that certain Assignment and Bill of Sale, effective as of January 1, 2021 (the “Bill of Sale”), pursuant to which Core granted the Company all of Core’s right, title, and interest in and to certain properties and interest, including, among other things, the Properties, all production and mineral rights to and a leasehold interest in the Properties and all contracts, agreements and instruments by which the Properties are bound. Pursuant to the Bill of Sale, the Company assumed responsibility for the payment of ad valorem taxes for the 2021 tax year. As described above, on April 1, 2021 the Company completed the private placementacquisition of the $12.0 million principal amount Convertible NoteProperties pursuant to the APA and Warrant to purchase 18,000,000 shares of our common stock with oneSide Letter and has commenced development of the selling stockholders. The Convertible Note ranks senior to our existing and future indebtedness and is secured by allProperties during the second quarter of our assets, excluding the Nicaraguan Concessions. At the closing on May 7, 2015, the selling stockholder acquired the Convertible Note by paying $450,000 in cash and issuing the Investor Note, as defined below, secured by cash, with a principal amount of $9,550,000. Assuming all amounts payable to us under the Investor Note are paid, the private placement will result in gross proceeds of $10.0 million before Placement Agent fees and other expenses associated with the transaction, subject to the satisfaction of certain conditions. We used the initial proceeds from the closing to retire certain outstanding obligations, including delinquent 2015 area and training fees of approximately $155,000 owed to the Nicaraguan government relating to our Nicaragua Concessions, and to provide additional working capital. We will receive the remaining cash proceeds upon each voluntary or mandatory prepayment of the Investor Note. See “Description of Securities - May 2015 Private Placement of Convertible Note and Warrants.”2021.

Granada DevelopmentIssuance of Shares of Common Stock in April 2021

On October 13, 2014 weApril 1, 2021, the Company and the holder of a $50,000 outstanding convertible note entered into a Lettersettlement agreement, pursuant to which the Company issued to such holder 145,000 shares of Intent (“LOI”)Common Stock in consideration for the extinguishment of the outstanding principal and accrued interest on such note and the cancellation of common stock purchase warrants of the Company issued in connection with Granada Exploration, LLC (“Granada Exploration”), which has agreedthe issuance of such note. The 145,000 shares of Common Stock issued to join with ussuch holder pursuant to explore for potential hydrocarbonssuch settlement agreement were valued at $40,600, based on the Concessions. Under the termsclosing market price of the LOI, Granada Exploration will provide its services in exchange for a working interest inCommon Stock on the Nicaraguan Concessions. The scopedate of such services will be more specifically describedextinguishment and cancellation.

Also on April 1, 2021, the Company and the holder of a $35,000 outstanding convertible note entered into a settlement agreement pursuant to which the Company issued to such holder 100,000 shares of Common stock in a mutually acceptable Exploration Services Agreement (“ESA”), which we are currently negotiatingconsideration for the extinguishment of the outstanding principal and accrued interest on such note and the cancellation of common stock purchase warrants of the Company issued in connection with Granada.the issuance of such note. The ESA is anticipated100,000 shares of Common Stock issued to provide that Granada Exploration will earn an assignment from us of an undivided 30% working interest in the Concessions,such holder pursuant to such settlement agreement were valued at $28,000, based on an 80% net revenue interest. We plan to enter into a Joint Operating Agreement with Granada Exploration under which Granada Exploration may, at its discretion, participate in an initial exploratory well for up to an additional undivided 20% working interest, on a prospect-by-prospect basis, with such additional interest to be based on an 80% net revenue interest.

The LOI is subject to Granada Exploration’s due diligence, including the evaluation of our filings with the Securities and Exchange Commission (“SEC”), Concession and other documents showing that we are is in good standing with the Nicaraguan government, negotiation and approval of mutually acceptable formal agreements, and final approval by a majorityclosing market price of the partnersCommon Stock on the date of Granada Exploration.such extinguishment and cancellation.

ExplorationAdditional Compensation Paid to Company’s President, Chief Executive Officer and Development - Nicaraguan ConcessionsChairman

As disclosed in the April 2021 Form 8-K, on April 1, 2021, the Company’s board of directors authorized the cash payment of $30,000 to Stanton E. Ross, the Company’s President, Chief Executive Officer and Chairman of the board of directors, in consideration for the time Mr. Ross devoted to assisting the Company acquire the Properties and commence its drilling program.

Additional Stock Option Grants to Company’s Board of Directors and Officers

On June 4, 2021, the Company’s board of directors authorized the grant of stock options to purchase up to (i) 500,000 shares of Common Stock to Stanton E. Ross, the Company’s President, Chief Executive Officer and Chairman of the board of directors, (ii) 100,000 shares of Common Stock to Leroy C. Richie, a member of the Company’s board of directors, (iii) 100,000 shares of Common Stock to Daniel F. Hutchins, the Company’s Chief Financial Officer, Treasurer, Corporate Secretary and member of the Company’s board of directors, (iv) 350,000 shares of Common Stock to John L. Loeffelbein, the Company’s Chief Operating Officer and (v) a total of 750,000 shares of Common Stock to three Company consultants. All such stock options were granted outside the Company’s 2015 Stock Option and Restricted Stock Plan, vest on June 4, 2022, contingent upon the holder of such options continuing to serve the Company on such date, have 10-year terms and are exercisable at $0.50 per share. Such individuals were granted such stock options in consideration for the time and efforts such individuals devoted to assisting the Company acquire the Properties and commence its drilling program.

Joint Venture Agreement Term Sheet

Preliminary analysesOn April 30, 2021, the Company and interpretationUS Noble Gas, LLC (“USNG”) entered a non-binding term sheet to set terms and conditions whereby the parties thereto would formalize a joint venture for the purpose of available 2-D seismicexploring for and developing various potential noble gas reserves on the Properties. The joint venture would cover all of the noble gas rights and production rights potentially existing on the approximate 11,000 acres included in the Properties.

Such term sheet contains various provisions and conditions, including the Company receiving the 50% net revenue-share of all noble gases sold, with the Company responsible for 37.5% of the related expenses. Pursuant to such term sheet, USNG, would provide, among other items, all research, testing and exploration data that it has developed on the Properties, the equipment necessary for extraction of all noble gases and all consulting necessary to explore for and develop any existing noble gas reserves. Pursuant to such term sheet, in the event that a joint venture is formed, the Company would be required to issue warrants exercisable for up to 2,000,000 shares of Common Stock at an exercise price of $0.50 for a five-year term to the principal consultants provided by independent consultants has revealedUSNG for such purposes.

Such term sheet requires the parties thereto to execute definitive agreements including a farmout agreement, operating agreement and any other agreements satisfactory to such parties to meet the terms of the joint venture described in such term sheet. There can be no assurances that such parties will complete and execute such definitive agreements and if successful, what the final terms will be. Furthermore, there can be no assurances that the Nica-Tinkham Ridge,Properties hold potential reserves of noble gases or that they can be produced on a commercially profitable basis.

Quotation of Common Stock on OTCQB

Effective, July 13, 2021, the single most important structureCompany’s Common Stock was approved for quotation on the OTCQB^® Venture Market under the symbol “IFNY.”

Principal Executive Offices

Our principal executive offices are located at 11900 College Boulevard, Suite 310, Overland Park, Kansas 66210. Our telephone number is (913) 948-9512. Our website is https://www.ifnyoil.com/. Information on our website does not constitute part of this prospectus or the registration statement of which this prospectus forms a part and should not be relied upon in the basin, traverses bothconnection with making any decision with respect to an investment in our shares of the blocks (Tyra and Perlas) in the Concessions and controlled the deposition of Eocene and possibly younger reef systems. Such preliminary analyses have identified four prospects covering a total of over 547 square miles. Common Stock.

Risk Factors Summary

Our consultants, Brazilian-based Consultoria em Geologia Geofísica e Informática do Petróleo LTDA (“CGGIP”) and its senior geological consultant, Luciano Seixas Chagas, working in concert with Thompson & Knight Global Energy Services LLC, are building a credible model suggesting that the Eocene geologic zone alone has a potential that hydrocarbons could be present, based upon certain assumptions involving porosity, saturation, recovery and other parameters. This model is also subject to the complex geology of the region and the fact that the reef system has never been drilled. The model is based upon preliminary conclusions andbusiness is subject to further analysisnumerous risks and uncertainties, including those in the section entitled “Risk Factors” and elsewhere in this prospectus. These risks include, but are not limited to, the following:

In addition, our management has concluded that our historical recurring losses from operations and negative cash flows from operations as well as our dependence on securing private equity and other financings raise substantial doubt about our ability to continue as a going concern and our auditor has included an explanatory paragraph relating to our ability to continue as a going concern in its audit reports for the fiscal years ended December 31, 2020 and 2019, as well as in our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2021.

ABOUT THIS OFFERING

This prospectus relates to the offer and resale by the Selling Stockholders of an aggregate of 18,972,834 shares of Common Stock, consisting of up to 7,117,500 Series A Conversion Shares, up to 11,789,404 Warrant Shares and up to 65,930 Note Conversion Shares. All of the Series A Conversion Shares, Warrant Shares and Note Conversion Shares, when sold, will be sold by the Selling Stockholders. The Selling Stockholders may sell such shares of Common Stock, from time to time, at fixed prices, at prevailing market prices at the time of sale, at varying prices related to prevailing market prices or at privately negotiated prices.

(1) The number of shares of our Common Stock outstanding prior to this offering is based on 18,793,265 shares of Common Stock outstanding as of July 20, 2021, which excludes: (a) 12,480,784 shares of Common Stock issuable upon the exercise of outstanding warrants (including the Warrant Shares offered hereby), with a weighted average exercise price of $0.46 per share, and (b) 2,077,000 shares of Common Stock issuable upon exercise of outstanding stock options, with a weighted average exercise price of $5.73 per share, as well as an aggregate of 7,183,430 of shares of Common Stock issuable upon full conversion of the shares of Series A Preferred Stock and Notes. Additionally, the number of shares of Common Stock that will be outstanding after this offering is based on the same number of shares of common stock outstanding as of July 20, 2021, which excludes (x) an aggregate of 691,380 shares of Common Stock issuable upon the exercise of outstanding warrants and (y) 2,077,000 shares of Common Stock issuable upon full exercise of outstanding options, but includes up to an aggregate of 18,972,834 shares of Common Stock issuable, assuming the full exercise or conversion, as applicable, of the Warrants, shares of Series A Preferred Stock and Notes.

RISK FACTORS

An investment in the shares of Common Stock offered hereby involves a high degree of risk. You should consider and read carefully all of the risks and uncertainties described below, together with all of the other information contained or incorporated by reference into the registration statement of which this prospectus forms a part, before deciding to invest in such shares of Common Stock. If any of the following risks, or any risk described elsewhere in such registration statement, this prospectus or in the documents incorporated by reference herein or therein, actually occurs, our business, business prospects, financial condition, results of operations or cash flows could be materially adversely affected. In any such case, the trading price of the Common Stock could decline, and you could lose all or part of your investment. The risks described below and in the documents incorporated by reference such registration statement and this prospectus are not the only ones facing the Company. Additional risks not currently known to us or that we currently deem immaterial may also adversely affect us. The registration statement and this prospectus also contains forward-looking statements, estimates and projections that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of specific factors, including the risks described below and in the documents incorporated by reference herein and therein.

Risks Related to the COVID-19 Pandemic

Risks Related to Our Business

Our business and operations have been adversely affected by and are expected to continue to be adversely affected by, the coronavirus disease 2019 (“COVID-19”) pandemic, and may be adversely affected by other similar virus or disease outbreaks, epidemics and pandemics.

As a result of the ongoing COVID-19 pandemic and related adverse public health developments, including, but not limited to, voluntary and mandatory quarantines, travel restrictions and other restrictions, our operations, and those of our subcontractors, customers and suppliers, have and are anticipated to continue to experience delays or disruptions and temporary suspensions of operations. In addition, our financial condition and results of operations have been and are likely to continue to be adversely affected by the COVID-19 pandemic.

The timeline and potential magnitude of the COVID-19 pandemic are currently unknown. The continuation or amplification of COVID-19 could continue to more recent 2-Dbroadly affect the United States and 3-D seismic datathe global economy, including the demand for oil and interpretation,gas, which would adversely affect our business and various assumptionsoperations. For example, the outbreak of COVID-19 has resulted in a widespread health crisis that cannot be confirmedwill adversely affect the economies and financial markets of many countries, resulting in an economic downturn that has and will continue to affect our operating results. Other contagious viruses or disproved untildiseases in the prospects are drilled. We believehuman population could have similar adverse effects. In addition, the model supportseffects of COVID-19 and concerns regarding its global spread have negatively impacted the domestic and international demand for crude oil and natural gas, which has contributed to price volatility and will impact the value of our long-held belief thatworking interests and other oil and gas assets, affect the Nicaraguan Concessionsability of our vendors, suppliers and customers to continue operations, affect our operations and ultimately adversely impact our results of operations, liquidity and financial condition. A prolonged period of low market prices for oil and natural gas, or further declines in the market prices for oil and natural gas, will likely result in capital expenditures being further curtailed and will adversely affect our business, financial condition and liquidity and our ability to meet obligations, targets or financial commitments and could ultimately lead to restructuring or filing for bankruptcy, which would have a material adverse effect on our stock price and our ability to fulfill our obligations under any existing indebtedness. Additionally, lower oil and natural gas prices have, and may in the future, cause, a decline in our stock price. As the potential for oil discoveries, although we can offer no assurances in this regard.

In April 2011, we filed withimpact from COVID-19 is difficult to predict, the Nicaraguan government an Environmental Impact Assessment (“EIA”) covering proposed seismic activitiesextent to which it will negatively affect out operating results, or the duration of any potential business disruption is uncertain. The magnitude and duration of any impact will depend on future developments and new information that may emerge regarding the severity and duration of COVID-19 and the actions taken by authorities to contain it or treat its impact, including the efficiency of recent vaccines, the ability of governments to roll such vaccines out to the general public, and the willingness of individuals to obtain such vaccines, all of which are beyond our control. These potential impacts, while uncertain, have already negatively affected our results of operations, and are anticipated to have a negative impact on our Nicaraguan Concessions. The filingfuture results as well.

We have a history of losses and expect to continue to generate operating losses and experience negative cash flow and it is uncertain whether we will achieve future profitability, and as a result, investors may lose all of their investment if they purchase shares of Common Stock.

We have had a history of losses and have generated little or no operating revenues for a number of years, as we concentrated on development of the EIAConcessions, which was followed by a comment period during which there was interaction between uslong-term, high-risk and high-reward exploration project. We abandoned the Ministerio del Ambiente y los Recursos Naturales de Nicaragua, an agency of the Nicaraguan government; and the autonomous regions of Nicaragua that are nearestConcessions development project in early 2020 due to the Nicaraguan Concessions. In April 2013challenging economic and political issues in Nicaragua and the EIA was formally approved by the Nicaraguan government and we were cleared to commence 2-D and 3-D seismic mapping activities in the area. In late 2013 and early 2014 CGG Services (US) Inc. – NASA, a fully integrated Geoscience company that provides geological, geophysical and reservoir services to the global oil and gas industry conducted 2-D and 3-D seismic data covering selected areas within the boundariesin general. We have incurred losses in many of the Nicaraguan Concessions. In March 2014 we opened a seismic data room at CGG’s Houston headquarters in order for potential strategic and/or financial partners to view the fully processed resultsyears since our inception and had an accumulated deficit of the seismic survey activities conducted by CGG.

The final approval of the EIA by the Nicaraguan government of our environmental impact study onApril 13, 2013, beganSub-Period 2 as defined in the Nicaraguan Concessions. Therefore, we are now in Sub-Period 3 of the exploration phase of the 30-year Concession for both Perlas and Tyraapproximately $117,178,645 as of December 31, 2014. In accordance with the Concession agreements, we are required to provide the Ministry2020, which includes net income of Energy with letters of credit in the amounts of $1,356,227 for Perlas and $1,818,667 for Tyra, but have not done so. We made all required expenditures related to the Nicaraguan Concessionsapproximately $5,623,707 for the training fees, area fees and other expenditures andyear ended December 31, 2020, as “area fees,” for Tyra and Perlascompared to an accumulated deficit of approximately $122,802,352 as of December 31, 2019, which includes net income of approximately $1,844,775 for the years 2010 through May 2015, but will be required to pay such additional feesyear ended December 31, 2019. As of March 31, 2021, we had an accumulated deficit of $117,290,208, which includes a net loss of $203,624 for the 2015/2016 period inthree months ended March 201631, 2021, as compared to an accumulated deficit of approximately $155,000. Further, we are required to conduct 3-D seismic mapping on$117,178,645 as of March 31, 2020, which includes a net loss of $84,765 for the Perlas Concession in Sub-Period 3 prior to April 2016, which we estimate will cost approximately$2,500,000. Finally, we estimate we will need approximately $100,000 to prepare and submit an environmental supplement to the Nicaraguan government to identify and receive authorization to drill up to five wells in the Concessions.three months ended March 31, 2020.

We are negotiatingface challenges and uncertainties in financial planning as a result of uncertainties regarding the renewal and/nature, scope and results of our future activities. We may not be successful in implementing our business strategies or adjustmentin completing the development of the required lettersinfrastructure necessary to conduct our business as planned. In the event that one or more of credit with the Nicaraguan Government. Further, we intend to seek a waiver of the 3-D seismic mapping requirement because we doour development and drilling programs is not believe itcompleted or is delayed or terminated, our operating results will be effectiveadversely affected and our operations will differ materially from the activities described in providing additional information duethis prospectus and our subsequent annual and periodic reports. As a result of industry factors or factors relating specifically to the water depthus, we may have to change our methods of conducting business, which may cause a material adverse effect on our results of operations and other factors. We planfinancial condition. The uncertainty and risks described in this prospectus may impede our ability to prepare the necessary informationeconomically find, develop, exploit, and acquire oil and natural gas reserves. As a result, we may not be able to submit to the EIA in order to obtain the necessary authorizations to drill up to five locationsachieve or sustain profitability or positive cash flows provided by our operating activities in the Concessions.future.

We expect to continue to incur operating losses until such time, if ever, as we are able to achieve sufficient levels of revenue from operations. There can be no assurance that we will be successful anyever generate revenue or achieve profitability. Accordingly, the extent of the foregoing regards. Except for the foregoing items, we believe we are in full compliance with the terms of the Nicaraguan Concessions agreements.

Exploration expenditures in connection with our Nicaraguan Concessions in the fiscal years ended December 31, 2014 and 2013 of $115,622 and $6,051,411, respectively. Exploration costs during the year ended December 31, 2013 included $5,937,013 of costs incurred for the acquisition of new 2-D and 3-D seismic data on the Nicaragua Concessions.

The following charts set forth the minimum work programs required under for the Perlas and Tyra blocks comprising our Concessions in order for us to retain the Concessions.

Minimum Work Program – Perlas

Block Perlas – Exploration Minimum Work Commitment and Relinquishments

Minimum Work Program - Tyra

Block Tyra – Exploration Minimum Work Commitment and Relinquishments

Contractual and Fiscal Terms

Until April 13, 2014 when we received our initial environmental approval from the Nicaraguan government, we were in the environmental phase of Sub-Period 1 for both Perlas and Tyrafuture losses and the operational phase of Sub-Period 1 was suspended for both Concessions. Upon issuance of the environmental permit, the suspension was lifted and the operational phase for each Concession commenced. Thus, we have until July 11, 2016 and April 11, 2016time required to meet the requirements of Sub-Period 3 for the Tyra and Perlas Concessions, respectively. Additionally, we have until July 11, 2018 and April 11, 2018 to comply with the requirements of Sub-Period 4 of the Tyra and Perlas Concessions, respectively.achieve profitability, if ever, cannot be predicted at this point.

CompetitionDevelopment and operation of the Properties will require large amounts of capital that we may not be able to obtain.

We competepurchased the Properties on April 1, 2021 through the issuance of the shares of Series A Preferred Stock and the March Warrants, which raised approximately $2.05 million. We have commenced operations on the Properties and intend to continue development within 12 months following purchase of the Properties, subject to, among other things, additional and timely capital funding. In order to undertake such activities, we will need to obtain large amounts of additional capital, potentially subjecting our existing shareholders to potential significant dilution. The terms of such capital that may be available may not be acceptable or favorable to us. Our potential sources of financing for these activities in virtually all facetsthe longer term would include cash availability under credit facilities, future sales of equity securities or subordinated debt securities, as well as joint ventures or partnerships with third parties, which would dilute our businesses with numerous other companiesinterest in the Properties.

Future cash flows and the availability of financing are subject to a number of variables, such as:

Issuing equity securities to satisfy our financing or refinancing requirements could cause substantial dilution to existing stockholders. Debt financing could lead to:

In order to obtain capital, we could enter into a joint venture or partnership with another oil and gas company or companies in which we would maintain a carried or reduced working interest in the Properties. However, this would reduce our ownership and control over the projects and could significantly reduce our future revenue generated from oil and gas production. For example, on April 30, 2021, the Company and USNG entered a non-binding term sheet to set terms and conditions whereby the parties thereto would formalize a joint venture for the purpose of exploring for and developing various potential noble gas reserves on the Properties. The joint venture would cover all of the noble gas rights and production rights potentially existing on the approximate 11,000 acres included in the Properties. Such term sheet contains various provisions and conditions, including the Company receiving the 50% net revenue-share of all noble gases sold, with the Company responsible for 37.5% of the related expenses. There can be no assurances that such parties will complete and execute such definitive agreements and if successful, what the final terms will be. Furthermore, there can be no assurances that the Properties hold potential reserves of noble gases or that they can be produced on a commercially profitable basis. For additional information regarding the term sheet, see “Recent Developments – Joint Venture Agreement Term Sheet”, beginning on page 5.

In addition, future events, such as terrorist attacks, wars or combat peace-keeping missions, financial market disruptions, general economic recessions, oil and natural gas industry including many that have significantly greaterrecessions, large company bankruptcies, accounting scandals, pandemic diseases, overstated reserves estimates by major public oil companies and disruptions in the financial and other resources.capital markets have caused financial institutions, credit rating agencies and the public to more closely review the financial statements, capital structures and earnings of public companies, including energy companies. Such competitorsevents have constrained the capital available to the energy industry in the past, and such events or similar events could adversely affect our access to funding for our operations in the future.

Our future production is contingent on successful development and operation of the Properties.

Our future oil production is highly dependent on our level of success in development and operation of the Properties. The business of exploring for and developing reserves is capital intensive. Exploration will require significant additional capital expenditures and successful drilling operations. In our current financial situation, we are limited in our ability to engage in significant exploration or development efforts unless we receive additional funding. We will also need to raise additional funding to complete future potential acquisitions and will be required to raise additional funds to fund our operations and complete exploration and drilling operations beyond 2021 and acquire assets. Management’s plans in regard to these matters consist principally of seeking additional debt and/or equity financing combined with expected cash flows from current oil and gas assets held and additional oil and gas assets that we may acquire. Our efforts may not be successful, and funds may not be available on favorable terms, if at all. If we need to raise additional funds in the future by issuing equity securities, dilution to existing stockholders will result, and such securities may have rights, preferences and privileges senior to those holders of our Common Stock. In order to obtain capital, we could enter into a joint venture or partnership with another oil and gas company or companies in which we would maintain a carried or reduced working interest in the Properties. However, this would reduce our ownership and control over the projects and could significantly reduce our future revenue generated from oil and gas production. On April 30, 2021, the Company and USNG entered a non-binding term sheet to set terms and conditions whereby the parties thereto would formalize a joint venture for the purpose of exploring for and development of various potential noble gas reserves on the Properties. For additional information regarding such term sheet, see “Recent Developments - Joint Venture Agreement Term Sheet”.

If funding is insufficient at any time in the future and we are unable to generate sufficient revenue from new business arrangements, to complete planned acquisitions or operations, our results of operations and the value of our securities could be adversely affected.

Additionally, due to the nature of oil and gas interests, i.e., that rates of production generally decline over time as oil and gas reserves are depleted, if we are unable to drill additional wells and develop our reserves, either because we are unable to raise sufficient funding for such development activities, or otherwise, or in the event we are unable to acquire additional operating properties, we believe that our revenues will continue to decline over time. Furthermore, in the event we are unable to raise additional required funding in the future, we will not be able to payparticipate in the drilling of additional wells, will not be able to complete other drilling and/or workover activities, and may not be able to make required payments on our outstanding liabilities.

If this were to happen, we may be forced to scale back our business plan, sell or liquidate assets to satisfy outstanding debts, all of which could result in the value of our outstanding securities declining in value.

Our success is dependent on the prices of oil, natural gas and other mineral reserves. Low oil or natural gas prices and the substantial volatility in these prices have adversely affected, and are expected to continue to adversely affect, our business, financial condition and results of operations and our ability to meet our capital expenditure requirements and financial obligations.

The prices we receive for our oil and natural gas heavily influence our revenue, profitability, cash flow available for capital expenditures, access to capital and future rate of growth. Oil and natural gas are commodities and, therefore, their prices are subject to wide fluctuations in response to relatively minor changes in supply and demand. Historically, the commodities market has been volatile. For example, the price of crude oil has experienced significant volatility over the last 5 years, with the price per barrel of West Texas Intermediate crude oil rising from a monthly average low of approximately $38 in February 2016 to a high of approximately $79 in September 2018, then dropping below $20 per barrel in April 2020, due in part to reduced global demand stemming from the recent global COVID-19 outbreak, before recovering to between approximately $70 and $75 per barrel more recently. Prices for desirablenatural gas and natural gas liquids experienced declines of similar magnitude. An extended period of continued lower oil prices, or additional price declines, will have further adverse effects on us. The prices we receive for our production, and the levels of our production, will continue to depend on numerous factors, including the following:

If oil or natural gas prices remain depressed or our development and drilling efforts are unsuccessful, we could be required to write down the carrying value of certain of our oil and natural gas properties. Write downs may occur when oil and natural gas prices are low, or if we have downward adjustments to our estimated proved reserves, increases in our estimates of operating or development costs, deterioration in drilling results or mechanical problems with wells where the cost to re-drill or repair is not supported by the expected economics.

Under the full cost method of accounting, capitalized oil and gas leasesproperty costs less accumulated depletion and net of deferred income taxes may not exceed an amount equal to evaluate, bidthe present value, discounted at 10%, of estimated future net revenues from proved oil and gas reserves plus the cost of unproved properties not subject to amortization (without regard to estimates of fair value), or estimated fair value, if lower, of unproved properties that are subject to amortization. Should capitalized costs exceed this ceiling, an impairment would be recognized.

Declines in oil or natural gas prices have not, and will not, only reduce our revenue, but have and will reduce the amount of oil and natural gas that we can produce economically. Should natural gas or oil prices decline from current levels and remain there for an extended period of time, we may choose to shut-in our operated wells, delay some or all of our exploration and development plans for our prospects, or to cease exploration or development activities on certain prospects due to the anticipated unfavorable economics from such activities, and, as a result, we may have to make substantial downward adjustments to our estimated proved reserves, each of which would have a material adverse effect on our business, financial condition and results of operations.

We are subject to regulations affecting our activities with the Properties.

We are subject to legal and regulatory oversight by federal and local authorities, such as the Ministry of Energy and Mines and the Kansas Energy Office, with respect to the exploration for, and purchasethe development, production and marketing of, crude oil and natural gas, as well as safety matters. From time to time, in varying degrees, federal and state laws and regulations affect our operations in the Properties. In particular, price controls, taxes and other laws relating to the crude oil and natural gas industry, changes in these laws and changes in administrative regulations have affected, and in the future could affect, crude oil and natural gas production, operations and economics. We cannot predict the ultimate cost of compliance with these requirements or their effect on our operations in the Properties. As a greater numberresult, we may be required to make significant expenditures to comply with governmental laws and regulations.

Further, operations in the Properties are subject to complex federal and local environmental laws and regulations. The discharge of properties thannatural gas, crude oil, or other pollutants into the air, soil or water may give rise to significant liabilities on our financial or personnel resources permit.part to government agencies and third parties and may require us to incur substantial costs of remediation. In addition, in the future we may incur costs and penalties in addressing regulatory agency procedures involving instances of possible non-compliance.

All of our oil and gas production will be located in the Central Kansas Uplift geological formation, making us vulnerable to risks associated with operating in only one geographic area.

Our operations will be focused solely in the Central Kansas Uplift geological formation, which means our producing properties and new drilling opportunities will be geographically concentrated in one area. Because our operations will not be as diversified geographically as many of our competitors, the success of our operations and our profitability may be disproportionately exposed to the effect of any regional events, including:

Similarly, the concentration of our assets within one producing formation exposes us to risks, such as changes in field-wide rules that could adversely affect development activities or production relating to this formation. Such an event could have a material adverse effect on our results of operations and financial condition. In addition, in areas where exploration and production activities are increasing, as has been the case in recent months in the Central Kansas Uplift geological formation where our Properties are located, the demand for, and cost of, drilling rigs, equipment, supplies, personnel and oilfield services increase. Shortages or the high cost of drilling rigs, equipment, supplies, personnel or oilfield services could delay or adversely affect our development and exploration operations or cause us to incur significant expenditures that are not provided for in our capital forecast, which could have a material adverse effect on our business, strategy includes highly competitivefinancial condition or results of operations. Finally, our operations in Kansas may be negatively affected by quarantines put in place in Kansas in an effort to slow the spread of COVID-19 or other viruses or diseases.

We may have accidents, equipment failures or mechanical problems while drilling or completing wells or in production activities, which could adversely affect our business.

While we are drilling and completing wells or involved in production activities, we may have accidents or experience equipment failures or mechanical problems in a well that cause us to be unable to drill and complete the well or to continue to produce the well according to our plans. We may also damage a potentially hydrocarbon-bearing formation during drilling and completion operations. Such incidents may result in a reduction of our production and reserves from the well or in abandonment of the well.

Our operations are subject to operational hazards and unforeseen interruptions against which we were unable to maintain insurance.

There are numerous operational hazards inherent in oil and natural gas exploration, development, production and production.gathering, including:

In addition, there is an inherent risk of incurring significant environmental costs and liabilities in the performance of our operations, some of which may be material, due to our handling of petroleum hydrocarbons and wastes, our emissions to air and water, the underground injection or other disposal of our wastes, the use of hydraulic fracturing fluids and historical industry operations and waste disposal practices.

Any of these or other similar occurrences could result in the disruption or impairment of our operations, substantial repair costs, personal injury or loss of human life, significant damage to property, environmental pollution and substantial revenue losses. The location of our wells, gathering systems, pipelines and other facilities near populated areas, including residential areas, commercial business centers and industrial sites, if any, could significantly increase the level of damages resulting from these risks. Insurance against all operational risks is not available to us. We face intense competitionare not insured against all operational risks, including development and completion risks that are generally not recoverable from third parties or insurance. In addition, pollution and environmental risks are not assured. With respect to our other non-operated assets, we may elect to continue not obtaining insurance if we believe that the cost of available insurance is excessive relative to the perceived risks presented. Losses could, therefore, occur for uninsurable or uninsured risks and liabilities from uninsured and underinsured events could have a large numbermaterial adverse effect on our business, financial condition and results of independent exploration and development companies as well as majoroperations.

Unless we replace our oil and natural gas companiesreserves, our reserves and production will decline, which will adversely affect our business, financial condition and results of operations.

The rate of production from the Properties will decline as our reserves are depleted. Our future oil and natural gas reserves and production and, therefore, our income and cash flow, are highly dependent on our success in a number(a) efficiently developing and exploiting our current reserves on the Properties and (b) economically finding or acquiring additional oil and natural gas producing properties. In the future, we may have difficulty acquiring new properties. During periods of areas such as obtaininglow oil and/or natural gas prices, it will become more difficult to raise the capital necessary to pursuefinance expansion activities. If we are unable to replace our Nicaraguan Concessionsproduction, our reserves will decrease, and seekingour business, financial condition and results of operations would be adversely affected.

Our strategy includes future acquisitions of oil and natural gas properties, and our failure to identify or complete any such future acquisitions successfully, or not produce projected revenues associated with such future acquisitions, could reduce our earnings and hamper our growth.

We may be unable in the future to identify properties for acquisition or to make acquisitions on terms that we consider economically acceptable. There is intense competition for acquisition opportunities in our industry. Competition for acquisitions may increase the cost of, or cause us to refrain from, completing acquisitions. The completion and pursuit of acquisitions may be dependent upon, among other things, our ability to obtain debt and equity financing and, in some cases, regulatory approvals. Our ability to grow through acquisitions will require us to continue to invest in our operations, financial and management information systems and to attract, retain, motivate and effectively manage our employees. The inability to manage the integration of acquisitions into our business, including the integration of the Properties, could reduce our focus on subsequent acquisitions and current operations and could negatively impact our results of operations and growth potential. Our financial position and results of operations may fluctuate significantly from period to period as a result of the completion of significant acquisitions during particular periods. If we are not successful in identifying or acquiring any future material property interests, our earnings could be reduced and our growth could be restricted.

We may engage in bidding and negotiating to complete successful acquisitions. We may be required to alter or increase substantially our capitalization to finance these acquisitions through the use of cash on hand, the issuance of debt or equity securities, the sale of production payments, the sale of non-strategic assets, the borrowing of funds or otherwise. If we were to proceed with one or more acquisitions involving the issuance of the Common Stock, our stockholders would suffer dilution of their interests. Furthermore, our decision to acquire properties that are substantially different in operating or geologic characteristics or geographic locations from areas with which our staff is familiar may impact our productivity in such areas.

We may not be able to produce the services, equipment, laborprojected revenues related to our acquisition of the Properties and materials necessary to explore, operateour future acquisitions. There are many assumptions related to the projection of the revenues the Properties and develop those properties. Most of future acquisitions including, but not limited to, drilling success, oil and natural gas prices, production decline curves and other data. If revenues from the Properties or from future acquisitions do not meet projections, this could adversely affect our competitorsbusiness and financial condition.

If we complete acquisitions or enter into business combinations in the future, they may disrupt or have financiala negative impact on our business.

If we complete acquisitions or enter into business combinations in the future, funding permitting, we could have difficulty integrating the acquired companies’ assets, personnel and technological resources substantially exceeding those availableoperations with our own. Additionally, acquisitions, mergers or business combinations into which we may enter in the future could result in a change of control of the Company, and a change in the board of directors or officers of the Company. In addition, the key personnel of the acquired business may not be willing to work for us. We cannot predict the effect expansion may have on our core business. Regardless of whether we are successful in making an acquisition or completing a business combination, the negotiations could disrupt our ongoing business, distract our management and employees and increase our expenses. In addition to the risks described above, acquisitions and business combinations are accompanied by a number of inherent risks, including, without limitation, the following:

Our business could be sureseverely impaired if and to the extent that we willare unable to succeed in addressing any of these risks or other problems encountered in connection with an acquisition or business combination, many of which cannot be successful in developingpresently identified. These risks and operating profitable the Concessionsproblems could disrupt our ongoing business, distract our management and employees, increase our expenses and adversely affect our results of operations.

Any acquisition or business combination transaction we enter into in the facefuture could cause substantial dilution to existing stockholders, result in one party having majority or significant control over the Company or result in a change in business focus of this competition.the Company.

Government RegulationThe Properties may have, or we may purchase oil and natural gas properties in the future that may have, liabilities or risks that we did not know about or that we did not assess correctly, and, as a result, we could be subject to liabilities that could adversely affect our results of the Oil and Gas Industryoperations.

Before acquiring the Properties and any future oil and natural gas properties, we estimate the reserves, future oil and natural gas prices, operating costs, potential environmental liabilities and other factors relating to such properties. However, our review involves many assumptions and estimates, and their accuracy is inherently uncertain. As a result, we may not discover all existing or potential problems associated with the Properties or other properties that we acquire in the future. We may not become sufficiently familiar with such properties to assess fully their deficiencies and capabilities. We do not generally perform inspections on every well or property, and we may not be able to observe mechanical and environmental problems even when we conduct an inspection. The sellers of such properties may not be willing or financially able to give us contractual protection against any identified problems, and we may decide to assume environmental and other liabilities in connection with properties we acquire. We did assume the plugging and abandonment liability for the existing wells on our Properties. If the Properties have, or if we acquire properties in the future that have, risks or liabilities that we did not know about or that we did not assess correctly, our business, financial condition and results of operations could be adversely affected as we settle claims and incur cleanup costs related to these liabilities.

We may incur losses or costs as a result of title deficiencies in the properties in which we invest, including the Properties.

If an examination of the title history of a property that we have purchased, including the Properties, reveals an oil and natural gas lease has been purchased in error from a person who is not the owner of the property, our interest would be worthless. In such an instance, the amount paid for such oil and natural gas lease as well as any royalties paid pursuant to the terms of the lease prior to the discovery of the title defect would be lost.

Prior to the drilling of an oil and natural gas well, it is the normal practice in the oil and natural gas industry for the person or company acting as the operator of the well to obtain a preliminary title review of the spacing unit within which the proposed oil and natural gas well is to be drilled to ensure there are no obvious deficiencies in title to the well. Frequently, as a result of such examinations, certain curative work must be done to correct deficiencies in the marketability of the title, and such curative work entails expense. Our failure to cure any title defects may adversely impact our ability in the future to increase production and reserves. In the future, we may suffer a monetary loss from title defects or title failure. Additionally, unproved and unevaluated acreage has greater risk of title defects than developed acreage. If there are any title defects or defects in assignment of leasehold rights in properties in which we hold an interest, we will suffer a financial loss which could adversely affect our business, financial condition and results of operations.

We currently have a limited amount of past seismic and other geological data and may have difficulty obtaining additional data at a reasonable cost, which could adversely affect our future results of operations.

We acquired 3Dseismic and other geological data with our recent acquisition of the Properties to assist us in exploration and development activities on the Properties. We may obtain access to additional data in our areas of interest through licensing arrangements with companies that own or have access to that data or by paying to obtain that data directly. Seismic and geological data can be expensive to license or obtain. We may not be able to license or obtain such data at an acceptable cost. In addition, even when properly interpreted, seismic data and visualization techniques are not conclusive in determining if hydrocarbons are present in economically producible amounts and seismic indications of hydrocarbon saturation are generally not reliable indicators of productive reservoir rock, which may negatively affect our efficacy, resulting in little or no yielding of oil or natural gas in commercial quantities. As a result, we may not be able to continue our operations as proposed and could be forced to modify our drilling plans accordingly, which could adversely affect our business, financial condition and results of operations.

The unavailability or high cost of drilling rigs, completion equipment and services, supplies and personnel, including hydraulic fracturing equipment and personnel, could adversely affect our ability to establish and execute exploration and development plans within budget and on a timely basis, which could have a material adverse effect on our business, financial condition and results of operations.

Shortages or the high cost of drilling rigs, completion equipment and services, supplies or personnel could delay or adversely affect our operations. When drilling activity in the United States increases, associated costs typically also increase, including those costs related to drilling rigs, equipment, supplies and personnel and the services and products of other vendors to the industry. These costs may increase, and necessary equipment and services may become unavailable to us at economical prices. Should this increase in costs occur, we may delay drilling activities, which may limit our ability to establish and replace reserves, or we may incur these higher costs, which may negatively affect our business, financial condition and results of operations.

In addition, in the past, the demand for hydraulic fracturing services has exceeded the availability of fracturing equipment and crews across the industry and in our operating areas in particular. The accelerated wear and tear of hydraulic fracturing equipment due to its deployment in unconventional oil and natural gas fields characterized by longer lateral lengths and larger numbers of fracturing stages may further amplify this equipment and crew shortage. Although we believe there is currently sufficient supply of hydraulic fracturing services, if demand for fracturing services increases or the supply of fracturing equipment and crews decreases, then higher costs could result and could adversely affect our business, financial condition and results of operations.

The marketability of our production is dependent upon oil and natural gas gathering and transportation and storage facilities owned and operated by third parties, and the unavailability of satisfactory oil and natural gas transportation arrangements may have a material adverse effect on our revenue.

The unavailability of satisfactory oil and natural gas transportation arrangements may hinder our access to oil and natural gas markets and delay production from our wells. The availability of a ready market for our oil and natural gas production depends on a number of factors, including the demand for, and supply of, oil and natural gas and the proximity of reserves to pipelines, terminal facilities and storage facilities. Our ability to market our production depends in substantial part on the availability and capacity of gathering systems, pipelines and processing facilities owned and operated by third parties. Our failure to obtain these services on acceptable terms could materially harm our business. In the future we may be required to shut-in wells for lack of a market or because of inadequacy or unavailability of pipeline or gathering system capacity. When this occurs, we are unable to realize revenue from those wells until the market for oil and gas increases and/or until production arrangements are made to deliver our production to market. Furthermore, we are obligated to pay shut-in royalties to certain mineral interest owners in order to maintain our leases with respect to certain shut-in wells. We do not expect to purchase firm transportation capacity on third-party facilities. Therefore, we expect the transportation of our production to be generally interruptible in nature and lower in priority to those having firm transportation arrangements.

The disruption of third-party facilities due to maintenance and/or weather could negatively impact our ability to market and deliver our products. The third parties control when or if such facilities are restored after disruption, and what prices will be charged for products. Federal and state regulation of oil and natural gas production and transportation, tax and energy policies, changes in supply and demand, pipeline pressures, damage to or destruction of pipelines and general economic conditions could adversely affect our ability to produce, gather and transport oil and natural gas.

General

Financial difficulties encountered by our oil and natural gas purchasers, third-party operators or other third parties could decrease our cash flow from operations and adversely affect the exploration and development of our prospects and assets.

We will derive in the future, substantially all of our revenues from the sale of our oil and natural gas to unaffiliated third-party purchasers, independent marketing companies and mid-stream companies. Any delays in payments from our purchasers caused by financial problems encountered by them will have an immediate negative effect on our results of operations.

Liquidity and cash flow problems encountered by our working interest co-owners or the third-party operators of our non-operated properties may prevent or delay the drilling of a well or the development of a project. Our working interest co-owners may be unwilling or unable to pay their share of the costs of projects as they become due. In the case of a farmout party, we would have to find a new farmout party or obtain alternative funding in order to complete the exploration and development of the prospects subject to a farmout agreement. In the case of a working interest owner, we could be required to pay the working interest owner’s share of the project costs. We cannot assure you that we would be able to obtain the capital necessary to fund either of these contingencies or that we would be able to find a new farmout party.

We are continuing to negotiate with our creditors and may face additional claims in the future.

As of July 20, 2021, we have approximately $3.7 million of outstanding debt and liabilities. As of the date of this prospectus, we remain in default on payment of many of our obligations, including the Concessions agreements. As of December 31, 2020, the Concessions agreements remain terminated and the Company has abandoned all of its efforts to renew and/or renegotiate the terms of the Concessions agreements with the Nicaraguan government to cure the defaults. For additional information regarding the Concessions, see “Nicaraguan Concessions” in the prospectus summary on page 4.

We continue to have substantial liabilities which we are currently unable to pay. We continue to negotiate with our creditors to mitigate and settle our known liabilities to them or their claims of liabilities. Various suits have been filed to enforce payments of liabilities and we are working to address these suits. We may incur additional liabilities if our liquidity situation deteriorates further and may face additional claims from creditors seeking to protect their interests in light of our announcements regarding our financial condition and business plans. We are not able to predict our success in attempting to negotiate with these parties nor the expense related to such negotiations or in defending any litigation related to these claims. These creditors may take action to force us into bankruptcy involuntarily. In addition, if we are unable to manage our current liabilities or substantial additional claims are asserted against us, we may be forced to seek protection under the Bankruptcy Code. We may utilize a portion of the proceeds of this offering to help manage our current liabilities and negotiate with our creditors.

We may not be able to generate sufficient cash flow to repay any outstanding or future debt or meet our other obligations, including those relating to such debt and our outstanding shares of Series A Preferred Stock, due to events beyond our control.

If we fail to pay the principal and interest on our outstanding or future promissory notes and/or the payment of dividends on our shares of Series A Preferred Stock or preferred stock that we may issue in the future, or if we otherwise default on our obligations under such outstanding or future preferred stock, notes, security agreements, certificates of designation, or related documentation, including the Notes, it could have a material adverse effect on our business, operations and financial condition. We also have no revolving credit facility to fund our operating needs should it become necessary. It will be difficult to obtain an institutional line of credit facility given our recent operating losses, the current banking environment and the existence of such notes, which may adversely affect our ability to finance our business, grow or be profitable. Further, even if we could obtain a credit facility, in all likelihood would not be on terms favorable to us.

Our ability to generate cash flows from operations, to make payments on or refinance potential future indebtedness and to fund working capital needs and planned capital expenditures will depend on our future financial performance and our ability to generate cash in the future. Our future financial performance will be affected by a range of economic, financial, competitive, business and other factors that we cannot control, such as general economic, legislative, regulatory and financial conditions in our industry, the economy generally, the price of oil and other risks described herein. A significant reduction in operating cash flows resulting from changes in economic, legislative or regulatory conditions, increased competition or other events beyond our control could increase the need for additional or alternative sources of liquidity and could have a material adverse effect on our business, financial condition, results of operations, prospects and our ability to service future potential debt and other obligations. If we are unable to service future potential indebtedness or to fund our other liquidity needs, we may be forced to adopt an alternative strategy that may include actions such as reducing or delaying capital expenditures, selling assets, restructuring or refinancing such indebtedness, seeking additional capital, or any combination of the foregoing. If we incur additional debt, it would increase our interest expense, leverage and our operating and financial costs. We cannot assure you that any of these alternative strategies could be affected on satisfactory terms, if at all, or that they would yield sufficient funds to make required payments on future potential indebtedness or to fund our other liquidity needs. Reducing or delaying capital expenditures or selling assets could delay future cash flows. In addition, the terms of future debt agreements may restrict us from adopting any of these alternatives. We cannot assure you that our business will generate sufficient cash flows from operations or that future borrowings will be available in an amount sufficient to enable us to pay such future potential indebtedness or to fund our other liquidity needs.

If for any reason we are unable to meet our current or future potential debt service and repayment obligations, we may be in default under the terms of the agreements governing such indebtedness, which could allow our creditors at that time to declare such outstanding indebtedness to be due and payable. Under these circumstances, our lenders could compel us to apply all of our available cash to repay our borrowings. In addition, the lenders under our credit facilities or other secured indebtedness could seek to foreclose on any of our assets that are their collateral. If the amounts outstanding under such indebtedness were to be accelerated, or were the subject of foreclosure actions, our assets may not be sufficient to repay in full the money owed to the lenders or to our other debt holders.

Our business will suffer if we cannot obtain or maintain necessary licenses.

Our operations will require licenses, drilling permits, mechanical integrity inspections of our wells and in some cases renewals of licenses and permits from various governmental authorities. Our ability to obtain, sustain or renew such licenses and permits on acceptable terms is subject to change in regulations and policies and to the discretion of the applicable governments, among other factors. Our inability to obtain, or our loss of or denial of extension of, any of these licenses or permits could hamper our ability to produce revenues from our operations.

The Federal Government has instituted a moratorium on new oil and gas leases and permits on federal onshore and offshore lands, which if extended, or leads to a change in regulatory schemes, may have a material adverse effect on the Company and its results of operations.

On January 27, 2021, President Biden announced a moratorium on new oil and gas leases and permits on federal onshore and offshore lands “to the extent consistent with applicable law,” while a comprehensive review of existing fossil fuel leasing and permitting practices is conducted by the Interior Department. It is currently unclear whether the moratorium is the start of a change in federal policies regarding the grant of oil and gas permits on federal lands. The current moratorium does not currently affect the Company, as the Company has no near-term plans to drill new wells on any leases held on federal lands; however, if such moratorium was to become permanent, or the federal government in the future were to grant less permits on federal lands, make such permitting process more difficult, costly, or to institute more stringent rules relating to such permitting process, it could have a material adverse effect on the Company’s ability to undertake oil and gas operations on such portion of its leases on federal lands.

Failure to comply with government regulation of the oil and gas industry has and may continue to negatively impact our business.

Our business is affected by numerous laws and regulations, including, among others, laws and regulations relating to energy, environment, conservation and tax. Failure to comply with these laws and regulations may result in the assessment of administrative, civil and/or criminal penalties, the imposition of injunctive relief or both. Moreover, changes in any of these laws and regulations could have a material adverse effect on our business. In view of the many uncertainties with respect to current and future laws and regulations, including their applicability to Infinity,us, we cannot predict the overall effect of such laws and regulations on our future operations.

If we commence operations in Nicaragua we will be subject to legal and regulatory oversight by its energy-related agencies, such as the Nicaraguan Energy Institute, with respect to its energy or hydrocarbons laws. In such case, from time to time, in varying degrees, political developments and federal and state laws and regulations affect our operations in Nicaragua. In particular, price controls, taxes and other laws relating to the crude oil and natural gas industry, changes in these laws and changes in administrative regulations have affected and in the future could affect crude oil and natural gas production, operations and economics. We cannot predict how Nicaraguan agencies or courts will interpret existing laws and regulations or the effect these adoptions and interpretations may have on our business or financial condition at that point.

Further, future operations in Nicaragua will be subject to complex federal and local environmental laws and regulations. The discharge of natural gas, crude oil, or other pollutants into the air, soil or water may give rise to significant liabilities on our part to government agencies and third parties and may require us to incur substantial costs of remediation. In addition, in the future we may incur costs and penalties in addressing regulatory agency procedures involving instances of possible non-compliance.

The following discussion contains summaries of certain laws and regulations and is qualified as mentioned above.

Environmental and Land Use Regulation

Various federal, state and local laws and regulations relating to the protection of the environment affect our operations and costs. The areas affected include:

The environmental and land use laws and regulations affecting oil and natural gas operations have been changed frequently in the past, and in general, these changes have imposed more stringent requirements that increase operating costs and/or require capital expenditures in order to remain in compliance. Failure to comply with these requirements can result in civil and/or criminal fines and liability for non-compliance, clean-up costs, third-party claims for property damage, personal injuries fines and sanctions and other environmental damages. It is also possible that unanticipated developments or changes in law could cause us to make environmental expenditures significantly greater than those we currently expect.

We are not in compliance with existing federal, state and local laws, rules and regulations for our previously owned domestic oil and gas properties and this could have a material or significantly adverse effect upon our liquidity, capital expenditures, earnings or competitive position. All domestic oil and gas properties held by us in Wyoming and Texas were disposed of well prior to March 31, 2021; however, we may remain liable for certain asset retirement costs should the new owners not complete their obligations. Management believes that the total asset retirement obligations recorded of $1,716,003 as of March 31, 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. We have not maintained insurance on the domestic properties for a number of years nor have we owned/produced any oil & gas properties for a number of years prior to our April 1, 2021 acquisition of the Properties.

We believe that we will be in substantial compliance with applicable environmental laws and regulations with respect to the Properties. We do not currently anticipate that future compliance will have a materially adverse effect on our consolidated financial position, results of operations or cash flows. However, if we are deemed to not be in compliance with applicable environmental laws, we could be forced to expend substantial amounts to be in compliance, which would have a materially adverse effect on our financial condition.

Regulations could adversely affect our ability to hedge risks associated with our business and our operating results and cash flows.

Rules adopted by federal regulators establishing federal regulation of the over-the-counter derivatives market and entities that participate in that market may adversely affect our ability to manage certain of our risks on a cost-effective basis. Such laws and regulations may also adversely affect our ability to execute our strategies with respect to hedging our exposure to variability in expected future cash flows attributable to the future sale of our oil and gas.

We expect that our potential future hedging activities will remain subject to significant and developing regulations and regulatory oversight. However, the full impact of the various U.S. regulatory developments in connection with these activities will not be known with certainty until such derivatives market regulations are fully implemented and related market practices and structures are fully developed.

Drilling for and producing oil and natural gas are highly speculative and involve a high degree of risk, with many uncertainties that could adversely affect our business. We have not recorded proved reserves, and areas that we decide to drill may not yield oil or natural gas in commercial quantities or at all.

Exploring for and developing mineral reserves involves a high degree of operational and financial risk, which precludes us from definitively predicting the costs involved and time required to reach certain objectives. Our potential drilling locations are in various stages of evaluation, ranging from locations that are ready to drill, to locations that will require substantial additional interpretation before they can be drilled. The followingbudgeted costs of planning, drilling, completing and operating wells are often exceeded, and such costs can increase significantly due to various complications that may arise during the drilling and operating processes. Before a well is spudded, we may incur significant geological and geophysical (seismic) costs, which are incurred whether a well eventually produces commercial quantities of hydrocarbons or is drilled at all. Exploration wells bear a much greater risk of loss than development wells. The analogies we draw from available data from other wells, more fully explored locations or producing fields may not be applicable to our drilling locations. If our actual drilling and development costs are significantly more than our estimated costs, we may not be able to continue our operations as proposed and could be forced to modify our drilling plans accordingly.

If we decide to drill a certain location, there is a summary discussionrisk that no commercially productive oil or natural gas reservoirs will be found or produced. We may drill or participate in new wells that are not productive. We may drill wells that are productive, but that do not produce sufficient net revenues to return a profit after drilling, operating and other costs. There is no way to predict in advance of drilling and testing whether any particular location will yield oil or natural gas in sufficient quantities to recover exploration, drilling or completion costs or to be economically viable. Even if sufficient amounts of oil or natural gas exist, we may damage the potentially productive hydrocarbon-bearing formation or experience mechanical difficulties while drilling or completing the well, resulting in a reduction in production and reserves from the well or abandonment of the frameworkwell.

In addition, production and reserves, if any, attributable to the use of keyenhanced recovery methods are inherently difficult to predict. If our enhanced recovery methods do not allow for the extraction of crude oil, natural gas, and associated liquids in a manner or to the extent that we anticipate, we may not realize an acceptable return on our investments in such projects. As proposed legislation and regulatory initiatives relating to hydraulic fracturing become law, the cost of some of these enhanced recovery methods could increase substantially.

Whether a well is ultimately productive and profitable depends on a number of additional factors, including the following:

If we do not drill productive and profitable wells in the future, our business, financial condition and results of operations could be materially and adversely affected.

Competition due to advances in renewable fuels may lessen the demand for our products and negatively impact our profitability.

Alternatives to petroleum-based products and production methods are continually under development. For example, a number of automotive, industrial and power generation manufacturers are developing alternative clean power systems using fuel cells or clean-burning gaseous fuels that may address increasing worldwide energy costs, the long-term availability of petroleum reserves and environmental concerns, which if successful could lower the demand for oil and landgas. If these non-petroleum-based products and oil alternatives including any improvement in or new discoveries of alternative energy technologies (such as wind, solar, geothermal, fuel cells and biofuels) continue to expand and gain broad acceptance such that the overall demand for oil and gas is decreased it could have an adverse effect on our operations and the value of our assets.

Competition in the oil and natural gas industry is intense, making it difficult for us to acquire properties, market oil and natural gas and secure trained personnel.

We operate in the highly competitive areas of oil and natural gas acquisition, exploration, development and production with many other companies. We face intense competition from a large number of independent companies as well as major oil and natural gas companies in a number of areas such as:

In addition, there is substantial competition for capital available for investment in the oil and natural gas industry. Many of our competitors possess and employ financial, technical and personnel resources substantially greater than ours, and many of our competitors have more established presences in the United States than we have. Those companies may be able to pay more for productive oil and natural gas properties and exploratory prospects and to evaluate, bid for and purchase a greater number of properties and prospects than our financial or personnel resources permit. In addition, other companies may be able to offer better compensation packages to attract and retain qualified personnel than we are able to offer. The cost to attract and retain qualified personnel has increased in recent years due to competition and may increase substantially in the future. We may not be able to compete successfully in the future in acquiring prospective reserves, developing reserves, marketing hydrocarbons, attracting and retaining quality personnel and raising additional capital, which could have a material adverse effect on our business, financial condition and results of operations.

Our competitors may use superior technology and data resources that we may be unable to afford or that would require a costly investment by us in order to compete with them more effectively.

Our industry is subject to rapid and significant advancements in technology, including the introduction of new products and services using new technologies and databases. As our competitors use or develop new technologies, we may be placed at a competitive disadvantage, and competitive pressures may force us to implement new technologies at a substantial cost. In addition, many of our competitors will have greater financial, technical and personnel resources that allow them to enjoy technological advantages and may in the future allow them to implement new technologies before we can. We cannot be certain that we will be able to implement technologies on a timely basis or at a cost that is acceptable to us. One or more of the technologies that we will use or that we may implement in the future may become obsolete, and we may be adversely affected.

Competition for hydraulic fracturing services and water disposal could impede our ability to develop our oil and gas plays.

The unavailability or high cost of high-pressure pumping services (or hydraulic fracturing services), chemicals, proppant, water and water disposal and related services and equipment could limit our ability to execute our exploration and development plans on a timely basis and within our budget. The U.S. oil and natural gas industry is experiencing a growing emphasis on the exploitation and development of shale natural gas and shale oil resource plays, which are dependent on hydraulic fracturing for economically successful development. Hydraulic fracturing in oil and gas plays requires high pressure pumping service crews. A shortage of service crews or proppant, chemical, water or water disposal options, especially if this shortage occurred in the Properties, could materially and adversely affect our operations and the timeliness of executing our development plans within our budget.

Our operations are substantially dependent on the availability of water and any restrictions on our ability to obtain water may have an adverse effect on our financial condition, results of operations and cash flows.

Water is an essential component of shale oil and natural gas production during both the drilling and hydraulic fracturing processes. When drought conditions occur, governmental authorities may restrict the use of water subject to their jurisdiction for hydraulic fracturing to protect local water supplies. If we are unable to obtain water to use in our operations from local sources or dispose of or recycle water used in operations, or if the price of water or water disposal increases significantly, we may be unable to produce oil and natural gas economically, which could have a material adverse effect on our financial condition, results of operations, and cash flows.

Part of our strategy involves using certain of the latest available enhanced recovery methods for our horizontal production well, which involve additional risks and uncertainties in their application if compared to conventional production wells.

We plan to utilize some of the latest enhanced recovery methods for our existing horizontal production well in order to maximize production and ultimate recoveries and therefore generate the highest possible returns. The additional risks that we face while drilling horizontally include, but are not limited to, the following:

Risks that we face while reworking our existing producing wells include, but are not limited to, the following:

Ultimately, the success of these drilling and completion techniques can only be evaluated over time as more wells are drilled and production profiles are established over a sufficiently long time period. If our drilling results are less than anticipated or we are unable to execute our drilling program because of capital constraints, lease expirations, limited access to gathering systems and takeaway capacity, and/or prices for crude oil and natural gas decline, then the return on our investment for a particular project may not be as attractive as we anticipated and we could incur material write-downs of oil and gas properties and the value of our undeveloped acreage could decline in the future.

Prospects that we decide to drill may not yield oil or natural gas in commercially viable quantities.

Our prospects are in various stages of evaluation, ranging from prospects that are currently being drilled to prospects that will require substantial additional seismic data processing and interpretation. There is no way to predict in advance of drilling and testing whether any particular prospect will yield oil or natural gas in sufficient quantities to recover drilling or completion costs or to be economically viable. This risk may be enhanced in our situation, due to the fact that a significant percentage of our reserves is undeveloped. The use of seismic data and other technologies and the study of producing fields in the same area will not enable us to know conclusively prior to drilling whether oil or natural gas will be present or, if present, whether oil or natural gas will be present in commercial quantities. We cannot assure you that the analogies we draw from available data obtained by analyzing other wells, more fully explored prospects or producing fields will be applicable to our drilling prospects.

In addition, estimates of reserves and of future net revenues prepared by different petroleum engineers may vary substantially depending, in part, on the assumptions made and may be subject to adjustment either up or down in the future. Our actual amounts of production, revenue, taxes, development expenditures, operating expenses, and quantities of recoverable oil and gas reserves may vary substantially from the estimates. Oil and gas reserve estimates are necessarily inexact and involve matters of subjective engineering judgment. In addition, any estimates of our future net revenues and the present value thereof are based on assumptions derived in part from historical price and cost information, which may not reflect current and future values, and/or other assumptions made by us that only represent our best estimates. If these estimates of quantities, prices and costs prove inaccurate, we may be unsuccessful in expanding our oil and gas reserves base with our acquisitions. Additionally, if declines in and instability of oil and gas prices occur, then write downs in the capitalized costs associated with any oil and gas assets we obtain may be required. Because of the nature of the estimates of our reserves and estimates in general, reductions to our estimated proved oil and gas reserves and estimated future net revenues may not be required in the future, and/or that our estimated reserves may not present and/or commercially extractable. If our reserve estimates are incorrect, we may be forced to write down the capitalized costs of our oil and gas properties.

Decommissioning costs are unknown and may be substantial. Unplanned costs could divert resources from other projects.

We may become responsible for costs associated with abandoning and reclaiming wells, facilities and pipelines which we use for production of oil and natural gas reserves. Abandonment and reclamation of these facilities and the costs associated therewith is often referred to as “decommissioning.” We will accrue a liability for decommissioning costs associated with our wells and we have not established any cash reserve account for these potential costs in respect of the Properties. If decommissioning is required before economic depletion of the Properties or if our estimates of the costs of decommissioning exceed the value of the reserves remaining at any particular time to cover such decommissioning costs, we may have to draw on funds from other sources to satisfy such costs. The use of other funds to satisfy such decommissioning costs could impair our ability to focus capital investment in other areas of our business.

Negative public perception regarding us and/or our industry could have an adverse effect on our operations.

Negative public perception regarding us and/or our industry resulting from, among other things, concerns raised by advocacy groups about hydraulic fracturing, waste disposal, oil spills, seismic activity, climate change, explosions of natural gas transmission lines and the development and operation of pipelines and other midstream facilities may lead to increased regulatory scrutiny, which may, in turn, lead to new state and federal safety and environmental laws, regulations, guidelines and enforcement interpretations. Additionally, environmental groups, landowners, local groups and other advocates may oppose our operations through organized protests, attempts to block or sabotage our operations or those of our midstream transportation providers, intervene in regulatory or administrative proceedings involving our assets or those of our midstream transportation providers, or file lawsuits or other actions designed to prevent, disrupt or delay the development or operation of our assets and business or those of our midstream transportation providers. These actions may cause operational delays or restrictions, increased operating costs, additional regulatory burdens and increased risk of litigation. Moreover, governmental authorities exercise considerable discretion in the timing and scope of permit issuance and the public may engage in the permitting process, including through intervention in the courts. Negative public perception could cause the permits we require to conduct our operations to be withheld, delayed or burdened by requirements affectingthat restrict our ability to profitably conduct our business.

Significant studies and research have been devoted to climate change and global warming, and climate change has developed into a major political issue in the United States and globally. Certain research suggests that greenhouse gas emissions contribute to climate change and pose a threat to the environment. Recent scientific research and political debate has focused in part on carbon dioxide and methane incidental to oil and natural gas exploration development,and production. As such, activists have directed their attention towards sources of funding for fossil-fuel energy companies, which has resulted in certain financial institutions, funds and other sources of capital restricting or eliminating their investment in energy-related activities. Ultimately, this could make it more difficult to secure funding for exploration and production and transportation operations.activities.

Operating HazardsWeather and Insuranceclimate may have a significant and adverse impact on us.

TheDemand for crude oil and natural gas business involvesis, to a varietydegree, dependent on weather and climate, which impacts, among other things, the price we receive for the commodities we produce and, in turn, our cash flows and results of operating risks. We were unableoperations. For example, relatively warm temperatures during a winter season generally result in relatively lower demand for natural gas (as less natural gas is used to maintain insurance against such potential risksheat residences and losses.businesses) and, as a result, lower prices for natural gas production.

In addition, pollutionthere has been public discussion that climate change may be associated with more frequent or more extreme weather events, changes in temperature and environmental risks are not insured. Ifprecipitation patterns, changes to ground and surface water availability, and other related phenomena, which could affect some, or all, of our operations. Our exploration, exploitation and development activities and equipment could be adversely affected by extreme weather events, such as winter storms, flooding and tropical storms and hurricanes, which may cause a significant accidentloss of production from temporary cessation of activity or damaged facilities and equipment. Such extreme weather events could also impact other event occurs not covered by insurance, it couldareas of our operations, including access to our drilling and production facilities for routine operations, maintenance and repairs, the installation and operation of gathering, processing, compression, storage and transportation facilities and the availability of, and our access to, necessary third-party services, such as gathering, processing, compression, storage and transportation services. Such extreme weather events and changes in weather patterns may materially and adversely affect us.our business and, in turn, our financial condition and results of operations.

EmployeesWe depend on key personnel.

Our success will be largely dependent upon the efforts of our executive officers, Stanton E. Ross, Daniel F. Hutchins and John Loeffelbein. We do not have two employees, our CEO and CFO, whose salaries we have deferred. We also use outside contractors to perform services.

DESCRIPTION OF PROPERTY

We own a 100% interest in the Perlas Block (560,000 acres/2,268 km) and Tyra Block (826,000 acres/3,342 km) located in shallow waters offshore Nicaragua. Within 15 days of entering an exploration sub-period, we are required to provide an irrevocable guarantee (“Irrevocable Guarantee”) in favoremployment agreements with Messrs. Ross, Hutchins or Loeffelbein. The loss of the Nicaraguan Ministryservices of Energy, payable in Nicaragua, in an amount equal to the estimated costany of such exploration sub-period, subject to an accumulated credit carry forward for the excess of work performed in the preceding exploration sub-period, as provided in the Nicaraguan Concession agreements.

Subsequent to the initial award of the Nicaraguan Concessions in 2003, we negotiatedthese individuals could have a number of key terms and conditions of an exploration and production contract covering the approximate 1.4 million acre Tyra (approximately 826,000 acres in the north) and Perlas (approximately 560,000 acres in the south) concession areas offshore Nicaragua. The contract, which was finalized in 2009, contemplates an exploration period of up to six years with four sub-phases and a production period of up to 30 additional years (with a potential five-year extension). We submitted an environmental study in 2011, which was approved in April 2013 by the Nicaraguan government which allowed us to commence our exploration activities. We have acquired new specific geological information from the acquisition of new 2-D and 3-D seismic studies during 2013 and 2014 along with the reprocessing and additional evaluation of existing 2-D seismic data over the Perlas and Tyra Concession blocks.

The following table sets forth the gross and net acres of developed and undeveloped oil and gas leases we held as of December 31, 2014.

LEGAL PROCEEDINGS

We are involved in litigation as follows:

Exterran Energy Solutions, L.P., f/k/a Hanover Compression Limited Partnership, which filed an action in the District Court of Erath County, Texas, number CV30512, on March 31, 2010 against Infinity Oil and Gas of Texas, Inc., Infinity Energy Resources, Inc., Longhorn Properties, LLC, and Forest Oil Corporation. Exterran Energy Solutions, L.P. provided certain gas compressor and related equipment pursuant to a Gas Compressor/Production Equipment Master Rental & Servicing Agreement with Infinity dated January 3, 2005 in Erath County, Texas and has claiming breach of contract for failure to pay amounts due. On October 13, 2011, a default judgment was entered against us in the amount of $445,521 plus interest and attorney fees. We have included the impacts of this litigation as liabilities in its accounts payable. We will seek to settle the default judgment when we have the financial resources to do so.

In October 2012 the State of Texas filed a lawsuit naming Infinity-Texas, the Company and the corporate officers of Infinity-Texas, seeking $30,000 of reclamation costs associated with a single well, in addition to administrative expenses and penalties. We have engaged in negotiations with the State of Texas in late 2012 and early 2013 and has reached a settlement agreement that would reduce the aggregate liability, in this action and any extension of this to other Texas wells, to $45,103, which amount has been paid. Certain performance obligations remain that must be satisfied in order to finally settle and dismiss the matter.

Pending satisfactory performance of the performance obligations and their acceptance by the State of Texas, the officers retain potential liability on the above matter, and the officers are held personally harmless by our indemnification provisions. Therefore these liabilities, to the extent they might become actual, are our obligations, to the extent of our financial ability. We estimate that the liabilities associated with this matter will not exceed $780,000, calculated as $30,000 for each of the 26 Infinity-Texas operated wells. This related liability, less the payment made to the State of Texas in 2012 in the amount of $45,103, is classified as an asset retirement obligationmaterial adverse effect on our consolidated balance sheets.

Timothy Berge, who filed an action in the District Court, Citybusiness and County of Denver Colorado number 09CV9566, was granted a default judgment on November 8, 2010 against us in the amount of $304,921 plus costs. Mr. Berge provided certain geological services to Infinity Oil and Gas of Texas, Inc. and claimed breach of contract for failure to pay amounts he alleged were due. On May 27, 2014 we settled this litigation by the issuance of 100,000 shares of common stock and the payment of $10,000 cash. We had previously established a provision of $304,878 related to this litigation as an accrued liability in our accompanying balance sheet. The value of the 100,000 shares of common stock and $10,000 cash paid in settlement of this litigation totaled $125,000, resulting in a gain of $179,878, which was recorded in our statement of operations.

Cambrian Consultants America, Inc. (“Cambrian”) filed an action in the District Court of Harris County, Texas, number CV2014-55719, on September 26, 2014 against us relating to certain professional consulting services provided for quality control and management of seismic operations during November and December 2013 on the Nicaraguan Concessions. Cambrian provided these services under a Master Consulting Agreement with us, dated November 20, 2013, and is claiming breach of contract for failure to pay amounts due. On December 8, 2014, a default judgment was entered against us in the amount of $96,877 plus interest and attorney fees. We have included the impacts of this litigation as liabilities in our accounts payable. We will seek to settle the default judgment when we have the financial resources to do so.

Torrey Hills Capital, Inc. (“Torrey”) notified us by letter dated August 15, 2014 of its demand for the payment of $56,000, which it alleged was unpaid and owed under a consulting agreement, dated October 18, 2013. The parties entered into a consulting agreement under which Torrey agreed to provide investor relations services in exchange for payment of $7,000 per month and the issuance of 15,000 shares of common stock. The agreement was for an initial three month-term with automatic renewals unless terminated upon 30 days’ written notice by either party. We made payments totaling $14,000 and issued the 15,000 shares of common stock during 2013. We contend that Torrey breached the agreement by not performing the required services and that it had provided proper notice of termination to Torrey. Furthermore, we contend that the parties agreed to settle the dispute on or about June 19, 2014, under which it would issue 28,000 shares of common stock in full settlement of any balance then owed and final termination of the agreement. Torrey disputes our contentions and has submitted the dispute to binding arbitration. We have accrued $49,000 in accounts payable as of December 31, 2014, which we believe is sufficient to provide for the ultimate resolution of this dispute.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

This prospectus 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, 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 thereprospects. There can be no assurance that the statement of expectation or beliefwe 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 eventsable to differ from those anticipatedretain the services of such individuals in the forward-looking statements included herein includefuture. We have not obtained key-man life insurance policies on these individuals. We are also dependent to a substantial degree on our outsourced experienced consulting and technical staff. Loss of the risk factors described below.

services of any of these people could have a material adverse effect on our operations. Our success will be dependent upon our ability to hire and retain additional qualified personnel as we may require. In particular, our exploratory drilling success and the success of other activities integral to our operations will depend, in part, on our ability to attract and retain experienced engineers and other professionals. Competition for experienced engineers and some other professionals is extremely intense. If we cannot retain our technical personnel or attract additional experienced technical personnel, our ability to compete could be harmed. We will compete with other companies with greater financial and other resources for such personnel. Although we believe that the expectations reflectedhave not experienced difficulty 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 theattracting qualified personnel to 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 in this prospectus, which speak only as of the date of the prospectus. We believe the information contained in this prospectus 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 or contribute to our actual results differing materially from those discussed herein or for our stock price to be adversely affected include, but are not limited to: (i) we have a history of losses and are experiencing substantial liquidity problems; (ii) we have substantial obligations to a number of third parties, including our subordinated note in the original principal amount of $1,050,000 due in April 2016 and the $12.0 million Convertible Note due May 2018, which begins amortizing in November 2015, and there can be no assurance that we will be able to meet them; (iii)retain our present personnel or acquire additional qualified personnel as and when needed.

Because we require working capital for our operations and obligations forare a small company, the next 12 months and capital to continue our exploration and development efforts on the Nicaraguan Concessions,requirements of being a public company, including compliance with the letter of credit and otherreporting requirements of the Nicaraguan Concessions, and there can be no assurances we will be able to obtain it or do so on terms favorable to us; (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 and planned future exploration activities are in a country with a developing economy and are subject 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 may not have sufficient resources to conduct required seismic mapping on our Nicaraguan Concessions; (viii) the oil and gas exploration business involves a high degree of business and financial risk; (ix) we will be subject to regulations affecting our activities with the Nicaraguan Concessions; (x) our operations may be adversely affected by changes in the fiscal regime of Nicaragua; (xi) we are continuing 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) our common stock is traded on the OTCQB, 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 of a few of our larger stockholders to make corporate governance decisions that could have significant effect on usExchange Act and the other stockholders, including Amegy Bank, NA; (xxi) salerequirements of substantial amounts of our common stock that may have a depressive effect on the market price of the outstanding shares of our common stock; (xxii) possible issuance of common stock subject to the Series B Preferred, options and warrants may dilute the interest of stockholders; (xxiii) our ability to comply with Sarbanes-Oxley Act of 2002 Section 404 as it(the “Sarbanes-Oxley Act”) and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), may strain our resources, increase our costs and distract management, and we may be required; (xxiv) our nonpaymentunable to comply with these requirements in a timely or cost-effective manner.

As a public company with quoted equity securities, we must comply with the federal securities laws, rules and regulations, including certain corporate governance provisions of dividendsthe Sarbanes-Oxley Act and lackthe Dodd-Frank Act, related rules and regulations of plansthe SEC and the OTCQB, with which a private company is not required to pay dividends in the future; (xxv) future sale or issuancecomply. Complying with these laws, rules and regulations will occupy a significant amount of a substantial number of sharestime of our common stock thatboard of directors and management and will significantly increase our costs and expenses, which we cannot estimate accurately at this time. Among other things, we must:

These factors 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 rights of the holdersattract and retain qualified members of our common stock; (xxvii) our stock price is likely to be highly volatile due to a numberboard of factors, including a relatively limited public float; (xxviii) indemnification of our officersdirectors 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.

The following information should be read in conjunction with the Consolidated Financial Statements and Notes presented elsewhere in prospectus. We follow the full-cost method of accounting for oil and gas properties. See “Summary of Significant Accounting Policies,” included in Note 1 to the Consolidated Financial Statements for the Years Ended December 31, 2014 and 2013.qualified executive officers.

Off-Balance Sheet ArrangementsWe may have difficulty managing growth in our business, which could have a material adverse effect on our business, financial condition and results of operations and our ability to execute our business plan in a timely fashion.

Because of our small size, growth in accordance with our business plans, if achieved, will place a significant strain on our financial, technical, operational and management resources. As we expand our activities, including our planned increase in oil exploration, development and production, and increase the number of projects we are evaluating or in which we participate, there will be additional demands on our financial, technical and management resources. The failure to continue to upgrade our technical, administrative, operating and financial control systems or the occurrence of unexpected expansion difficulties, including the inability to recruit and retain experienced managers, geoscientists, petroleum engineers and landmen could have a material adverse effect on our business, financial condition and results of operations and our ability to execute our business plan in a timely fashion.

Our business could be adversely affected by security threats, including cybersecurity threats.

We do notface various security threats, including cybersecurity threats to gain unauthorized access to our sensitive information or to render our information or systems unusable, and threats to the security of our facilities and infrastructure or third-party facilities and infrastructure, such as gathering and processing facilities, refineries, rail facilities and pipelines. The potential for such security threats subjects our operations to increased risks that could have any off-balance sheet debt nor did we have any transactions, arrangements, obligations (including contingent obligations)a material adverse effect on our business, financial condition and results of operations. For example, unauthorized access to our seismic data, reserves information or other relationships with any unconsolidated entitiesproprietary information could lead to data corruption, communication interruptions, or other persons that may have material current or future effect on financial conditions, changes in the financial conditions, results of operations, liquidity, capital expenditures, capital resources, or significant components of revenue or expenses.disruptions to our operations.

For the Three Months Ended March 31, 2015Our implementation of various procedures and 2014

Resultscontrols to monitor and mitigate such security threats and to increase security for our information, systems, facilities and infrastructure may result in increased capital and operating costs. Moreover, there can be no assurance that such procedures and controls will be sufficient to prevent security breaches from occurring. If any of Operations

Overview

Infinity incurred a net loss applicablethese security breaches were to common shareholdersoccur, they could lead to losses of, $301,028, or $0.01 per share, for the three months ended March 31, 2015 compareddamage to, a net loss applicablesensitive information or facilities, infrastructure and systems essential to common shareholders of $1,915,289, or $0.08 per share, for the three months ended March 31, 2014. The Company issued Series A Preferredour business and Series B Preferred effective April 13, 2012. The 6% cumulative dividend accruedoperations, as well as the accretiondata corruption, reputational damage, communication interruptions or other disruptions to our operations, which, in the value ascribed to the Series A Preferredturn, could have a material adverse effect on our business, financial position and Series B Preferred (which represents value attributable to holdersresults of the Series A Preferred and Series B Preferred rather than common stock) affects the Company’s net income (loss) by $-0- and $(25,527) to arrive at net loss applicable to common shareholders for the three months ended March 31, 2015 and 2014, respectively. The Series A Preferred was converted to common stock on December 30, 2013 and the Series B Preferred was converted to common stock on February 28, 2014, which eliminated the 6% cumulative dividend accrued in 2015 compared to 2014.operations.

Revenue

The Company had no revenues in either 2015 or 2014. It focused solely on the exploration, development and financing of the Nicaraguan Concessions.

ProductionThe threat and Other Operating Expenses (income)

The Company had no production related operating expenses in either 2015 or 2014. The Company sold its investment in Infinity-Texas in July 2012, and had no developed oil and gas properties in the United States in 2015 and 2014.

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

Stock-based compensation

Stock-based compensation expenses of $58,360 for the three months ended March 31, 2015 decreased 90% from those in 2014, which were $559,962. 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. The significant decrease in stock-based compensation expense during 2015 compared to 2014 is attributable to the full vesting of the November 2012 stock option grant in November 2014, which eliminated the related amortization during the three months ended March 31, 2015 and lower market price of the Company’s common stock compared to the $3.00 per share exercise price on the date of the most recent stock option grant in January 2014, which is being amortized over two years. The significant decrease in the market price the common stock compared to the $3.00 per share exercise price resulted in substantially less grant date fair value of the January 2014 option grant that deceased the overall amount amortized in the three months ended March 31, 2015.

General and Administrative Expenses

General and administrative expenses of $105,869 for the three months ended March 31, 2015 decreased $35,506, or 25% from those in 2014, which were $141,375. The decrease in general and administrative expenses is attributable to an overall decrease in professional fees of $16,400 as the Company engaged in less legal activities during the three months ended March 31, 2015 compared to 2014 and changed its auditors and stock transfer agent for cost containment purposes. Reductions in general and administrative expenses was also attributable to us attending less investor conferencesterrorist attacks, cyber-attacks or similar forums during the three months ended March 31, 2015 as compared to 2014.

Interest expense

Interest expense decreased from $1,246,134 for the three months ended March 31, 2014 to $573,083 in 2015. This significant decrease is attributable to the Company converting approximately $575,000 of its interest bearing debt to common stock during the three months ended March 31, 2015. The Company issued short-term notes payable at the issuance dates and extension dates as additional compensation to the lender. The fair value of the warrants issued to the note holders at the origination date and extension date of the short-term promissory notes was recorded as a discount on the related debt. Amortization of the warrants and revenue sharing interests granted to the holders resulted in a substantial increase in the overall effective borrowing costs during the three months ended March 31, 2014 compared to 2015. Discount amortization represents a non-cash expense and totaled $523,784 and $1,202,516 of total interest expense recognized in the three months ended March 31, 2015 and 2014, respectively. The Company’s current financial condition has made traditional bank loans and customary financing terms unattainable; therefore, the Companyhostilities may find it necessary to continue with these types of short-term borrowings with high effective interest rates.

Change in Derivative Fair Value

The conversion feature of the promissory notes and the common stock purchase warrants issued in connection with such short-term notes during 2015 and 2014 are treated as derivative instruments because the promissory notes and warrants contain ratchet and anti-dilution provisions. Accordingly, we adjusted the value of the outstanding derivative liabilities to fair value as of March 31, 2015 and 2014. The mark-to-market process resulted in a gain of $265,267 during the three months ended December 31, 2015 and a loss of $15,126 during the three months ended March 31, 2014. The gain recognized in 2015 is attributable to the significant reduction in the market value ofadversely impact our common stock experienced during 2015 as compared to 2014. The closing market price of our common stock was $0.37 per share at March 31, 2015 compared to $1.41 per share as of March 31, 2014 which resulted in lower estimates of the warrant’s derivative liabilities.

Other income

Other income increased from $72,835 in for the three months ended March 31, 2014 to $171,017 in 2015. Other income in both 2015 and 2014 is primarily related to derecognition of certain liabilities due to the expiration of the statute of limitations on collection of obligations of the Company.

Income Tax

For income tax purposes, the Company has net operating loss carry-forwards of approximately $57,675,000, which expire from 2025 through 2029. 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 March 31, 2015, the Company realized net losses. The Company 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 carryforward, any deferred tax asset at March 31, 2015 that resulted from anticipated benefit from future utilization of such carryforward has been fully offset by a valuation allowance.

Net loss

As a result of the above, we reported a net loss of $301,028 and $1,889,762 for the three months years ended March 31, 2015 and 2014, respectively, an improvement of $1,588,734 (84%).

Loss applicable to common shareholders

The Company issued Series A Preferred and Series B Preferred effective April 13, 2012. The 6% cumulative dividend accrued as well as the accretion in the value ascribed to the Series A Preferred and Series B Preferred (which represents value attributable to holders of the Series A Preferred and Series B Preferred rather than common stock) affects the Company’s net loss by $-0- and $25,527 to arrive at net loss applicable to common shareholders for the three months ended March 31, 2015 and 2014, respectively. The Series A Preferred was converted to common stock on December 30, 2013 and the Series B Preferred was converted to common stock on February 28, 2014, which reduced the amount of the 6% cumulative dividend accrued in 2015 compared to 2014.

The Series A Preferred and Series B Preferred had a preference over common shareholders and therefore such amounts have been deducted from net loss to report loss applicable to common shareholders of $301,028 and $1,915,289 for the three months ended March 31, 2015 and 2014, respectively.

Basic and Diluted Loss per Share

Basic net loss per share is computed by dividing the net loss attributable to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing the net 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 from continuing operations 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.

The basic and diluted loss per share was $0.01 and $0.08 for the three months ended March 31, 2015 and 2014, respectively, for the reasons previously noted. All outstanding stock options were considered antidilutive and therefore excluded from the calculation of diluted loss per share for the three months ended March 31, 2015 and 2014 because of the net loss reported for each period. Potential common shares as of March 31, 2015 that have been excluded from the computation of diluted net loss per share amounted to 8,062,210 shares, which included 3,887,710 outstanding warrants and 4,174,500 outstanding stock options.

For the Years Ended December 31, 2014 and 2013

Results of Operations

Overview

We incurred a net loss applicable to common shareholders of $3,707,052, or $0.15 per share, for the year ended December 31, 2014 compared to a net loss applicable to common shareholders of $5,587,909, or $0.26 per share, for the year ended December 31, 2013. We issued Series A Preferred and Series B Preferred effective April 13, 2012. The 6% cumulative dividend accrued as well as the accretion in the value ascribed to the Series A Preferred and Series B Preferred (which represents value attributable to holders of the Series A Preferred and Series B Preferred rather than common stock) affects the our net income (loss) by $(25,527) and $(3,161,043) to arrive at net loss applicable to common shareholders for the years ended December 31, 2014 and 2013, respectively. The Series A Preferred was converted to common stock on December 30, 2013 and the Series B Preferred was converted to common stock on February 28, 2014, which reduced the amount of the 6% cumulative dividend accrued as well as the accretion in the liquidation value in 2014 compared to 2013.

Revenueoperations.

We had had no revenues incannot assess the extent of either 2014the threat or 2013. We focused solelythe potential impact of future terrorist attacks on the exploration, developmentenergy industry in general, and financingon us in particular, either in the short-term or in the long-term. Uncertainty surrounding such hostilities may affect our operations in unpredictable ways, including the possibility that infrastructure facilities, including pipelines and gathering systems, production facilities, processing plants and refineries, could be targets of, the Nicaraguan Concessions.or indirect casualties of, an act of terror, a cyber-attack or electronic security breach, or an act of war.

Stock-based compensationFailure to adequately protect critical data and technology systems could materially affect our operations.

Stock-based compensation expensesInformation technology solution failures, network disruptions and breaches of $1,087,103 for the year ended December 31, 2014 decreased 33% from those in 2013, which were $1,631,098. We had minimal resources to pay employees, consultantsdata security could disrupt our operations by causing delays or cancellation of customer orders, impeding processing of transactions and other service providers. Therefore, we have issued stock options to compensate and motivate our officers, directors and other service providers. During the year ended December 31, 2014, we granted options exercisable to purchase 900,000 shares at an exercise price of $3.00 per share and a term of ten years. A total of 300,000 shares vested immediately, while the remaining 600,000 shares vest at a rate of 300,000 shares for each of the two years thereafter. During the year ended December 31, 2014, we granted options exercisable to purchase 900,000 shares at an exercise price of $3.00 share and a term of ten years. We granted options exercisable to purchase 1,250,000 shares in November 2012 at an exercise price of $3.00 share and a term of nine years, which shares were partially amortized during 2014 and 2013. The options granted in 2012 vested one-third immediately, and one-third on the first and second anniversary of the award (November 2013 and 2014). The significant decrease in stock-based compensation expense during 2013 compared to 2012 is attributable to significantly lower market price of our common stock compared to the $3.00 per share exercise price on the date of grant in January 2014. The significant decreasereporting financial results, resulting in the market price the common stock compared to the $3.00 per share exercise price resulted in substantially less grant date fair valueunintentional disclosure of the January 2014 option grant compared to the 2013 and November 2012 option grants that were partially amortized in 2014.

General and Administrative Expenses

General and administrative expenses of $734,702 for the year ended December 31, 2014 decreased $82,497,customer, employee or 10% from those in 2013, which were $817,199. The decrease in general and administrative expenses is attributable to a decrease of $109,273 in general and administrative expenses related to its Nicaraguan Concessions chiefly because legal fees declined in 2014 compared to 2013. Legal fees attributable to the Nicaraguan Concessions decreased in 2014 compared to 2013 after the Environmental Impact Assessment was accepted by the Nicaraguan government in April 2013, which reduced our need for legal representation in Nicaragua. Reductions in general and administrative expenses relatedinformation, or damage to our Nicaraguan Concessions during 2014 were partially offset by increases in expenses associated with seeking new capital by attending investor conferences or similar forums.

Gain on sale of undeveloped leases

We sold undeveloped acreage under leases in Colorado during 2014 and 2013, which resulted in the gain on sale of asset totaling $10,000 and $68,640, respectively. We held no remaining domestic proved or unproved oil and gas properties as of December 31, 2014.

Gain on settlement of litigation

We settled litigation with Timothy Berge on May 27, 2014 by the issuance of 100,000 shares of common stock and the payment of $10,000 cash. We had previously established a provision of $304,878 related to this litigation as an accrued liability representing the amount of the default judgment granted on November 8, 2010 against us. The value of the 100,000 shares of common stock and $10,000 cash paid in settlement of this litigation totaled $125,000, resulting in a gain of $179,878.

Interest expense

Interest expense increased from $832,651 for the year ended December 31, 2013 to $3,498,808 in 2014. This significant increase is attributable to our financing our activities in 2013 and 2014 by the issuance of short-term promissory notes bearing interest at 8% per annum together with warrants exercisable to purchase common stock. We were unable to raise long-term capital in 2014 to pay off the short-term promissory notes on their respective maturity dates. We were able to negotiate extensions of the maturity dates on these notes generally by issuing additional warrants exercisable to purchase shares of common stock and, in one case, granting a revenue sharing interest in our Nicaraguan Concessions. The fair value of the warrants and revenue sharing interests issued to the holders at the origination date and extension date of the short-term promissory notes was recorded as a discount on the related debt. Amortization of the warrants and revenue sharing interests granted to the holders resulted in a substantial increase in the overall effective borrowing costs. Discount amortization represents a non-cash expense and totaled $3,317,672 and $776,421 of total interest expense recognized in the years ended December 31, 2014 and 2013, respectively. Our current financial condition has made traditional bank loans and customary financing terms unattainable; therefore, we may find it necessary to continue with these types of short-term borrowings with high effective interest rates.

Change in Derivative Fair Value

The conversion feature of the promissory notes and the common stock purchase warrants issued in connection with such short-term notes during 2014 and 2013 are treated as derivative instruments because the promissory notes and warrants contain ratchet and anti-dilution provisions. Accordingly, we adjusted the value of the outstanding derivative liabilities to fair value as of December 31, 2014 and 2013. The mark-to-market process resulted in a gain of $1,376,311 during the year ended December 31, 2014 and a loss of $75,017 during the year ended December 31, 2013. The gain recognized in 2014 is attributable to the significant reduction in the market value of our common stock experienced during 2014. The closing market price of our common stock was $0.55 per share at December 31, 2014 compared to $1.39 per share as of December 31, 2013.

Loss on Conversion of Note

During the year ended December 31, 2013, we conducted a private placement of our common stock in which we sold 556,250 units, each consisting of one share of common stock and one half of a common stock purchase warrant at a price of $1.60 per unit, for total proceeds of $890,000. One holder of a promissory note issued by us in February 2013 participated in the private placement and converted the principal amount of $125,000 plus accrued interest into 79,170 units. As a result of the conversion, we recognized a loss on conversion of $11,085 during the year ended December 31, 2013. The common stock purchase warrants provide for an exercise price of $2.50 per share, are immediately exercisable and have a term of five years.

Other income

Other income decreased from $218,543 in for the year ended December 31, 2013 to $72,900 in 2014. Other income in both 2014 and 2013 primarily related to derecognition of certain liabilities due to the expiration of the statute of limitations on collection of certain of our obligations.

Income Tax

For income tax purposes, we have net operating loss carry-forwards of approximately $57,675,000, which expire from 2025 through 2029. We have 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.

We appealed an assessment of Kansas corporate income tax that had been issued by the Department of Revenue for the tax year ended December 31, 2006 in the amount of approximately $653,000, which was accrued for in the consolidated balance sheet. On July 30, 2013, the Kansas Department of Revenue issued a letter to us advising us that we no longer owed any corporate income tax to the State of Kansas and released the Company from the payment of such taxes. Consequently, the related accrual was reversed and an income tax benefit of $653,000 was recorded for the year ended December 31, 2013.

For the year ended December 31, 2014, we realized net losses. We anticipate operating losses and additional tax losses for the foreseeable future and do not believe that the utilization of our tax loss carryforward is more likely than not. Therefore, because of the uncertainty as to the ultimate utilization of our loss carryforward, any deferred tax asset at December 31, 2014 that resulted from anticipated benefit from future utilization of such carryforward has been fully offset by a valuation allowance.

Net loss

As a result of the above, we reported a net loss of $3,681,525 and $2,426,866 for the years ended December 31, 2014 and 2013, respectively, a deterioration of $1,254,659 (52%).

Loss applicable to common shareholders

We issued Series A Preferred and Series B Preferred effective April 13, 2012. The 6% cumulative dividend accrued as well as the accretion in the value ascribed to the Series A Preferred and Series B Preferred (which represents value attributable to holders of the Series A Preferred and Series B Preferred rather than common stock) affects our net loss by $25,527 and $3,161,043 to arrive at net loss applicable to common shareholders for the years ended December 31, 2014 and 2013, respectively. The Series A Preferred was converted to common stock on December 30, 2013 and the Series B Preferred was converted to common stock on February 28, 2014, which reduced the amount of the 6% cumulative dividend accrued as well as the accretion in the liquidation value in 2014 compared to 2013.

The Series A Preferred and Series B Preferred had a preference over common shareholders and therefore such amounts have been deducted from net loss to report loss applicable to common shareholders of $3,707,052 and $5,587,909 for the years ended December 31, 2014 and 2013, respectively.

Basic and Diluted Loss per Share

Basic net loss per share is computed by dividing the net loss attributable to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing the net 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 from continuing operations 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.

The basic and diluted loss per share was $0.15 and $0.26 for the years ended December 31, 2014 and 2013, respectively, for the reasons previously noted. All outstanding stock options were considered antidilutive and therefore excluded from the calculation of diluted loss per share for the years ended December 31, 2014 and 2013 because of the net loss reported for each period. Potential common shares as of December 31, 2014 that have been excluded from the computation of diluted net loss per share amounted to 7,867,210 shares, which included 3,662,710 outstanding warrants and 4,204,500 outstanding stock options.

Liquidity and Capital Resources; Going Concern

We have had a history of losses. We financed our operations primarily through a line of credit with Amegy and Offshore through February 28, 2012, when we entered into definitive agreements with Amegy and Off-Shore relating to outstanding debt and other obligations we owed to them. Effective April 13, 2012, we issued shares of common stock and Series A Preferred and Series B Preferred stock in satisfaction of all the outstanding Amegy and Off-Shore debt, related accrued interest and other fees, and the Amegy Warrant. Although the conversion of Amegy and Offshore debt to equity in 2012 relieved us of a considerable portion of our current liabilities, we continue to have a significant working capital deficit and to experience substantial liquidity issues. Amegy exchanged all of its shares of Series A Preferred, including accrued and unpaid dividends, for shares of common stock as of December 30, 2013 and Offshore converted all of its shares of Series B Preferred, including accrued and unpaid dividends, into shares of common stock on February 28, 2014.

During 2012 we borrowed $250,000 under a short-term credit facility with a related party. We issued an interest-bearing note and common stock purchase warrants in connection with the facility. During 2013 we borrowed approximately $1,825,000 on a short-term basis by issuing various subordinated promissory notes with detachable warrants to purchase common shares. The fair value of the warrants resulted in a substantial increase in the overall effective borrowing costs. We used the proceeds of these notes to repay previously issued notes, including the foregoing related party note, to meet obligations and conduct seismic mapping related to our Nicaraguan Concessions and to provide working capital.

In April 2013, we conducted a private placement of units composed of common stock and warrants under which we raised $890,000 in proceeds and exchanged $125,000 principal amount of an outstanding note plus accrued interest for units. We used part of these proceeds to retire notes issued earlier in 2013.

We were unable to raise long-term capital in 2014 to pay off the majority of the outstanding short-term promissory notes on their respective maturity dates. We were able to negotiate extensions of the maturity dates on these short-term promissory notes by issuing additional warrants exercisable to purchase shares of common stock and, in one case, granting a revenue sharing interest in our Nicaraguan Concessions. See “Recent Issuances of Unregistered Securities.”

As of December 31, 2014, we owed $33,807 on our line-of-credit, which is due in February 2015 and a total of $1,625,000 short term promissory notes that are due: (i) $575,000 in February 2015 and (ii) $1,050,000 in April 2015. In the first quarter 2015, we were able to increase our line-of-credit to a maximum of $100,000, which provided us some liquidity, but were unable to obtain other sources of capital. On February 28, 2015, the short-term note holders exercised their right to convert principal balances totaling $475,000 and accrued interest totaling $28,630 into 1,007,260 shares of common stock at an exchange rate of $0.50 per share. In addition on March 31, 2015, the lender who provides the line-of-credit facility exercised its right to convert a partial principal balance totaling $50,000 into 100,000 shares of common stock at an exchange rate of $0.50 per share. These debt to equity conversions helped to reduce our near term cash needs.

As of March 31, 2015, we owed $46,225 on our line-of-credit, which is due in May 2015 and a total of $1,150,000 short term promissory notes that are due: (i) $100,000 on demand and (ii) $1,050,000 in April 2015. We intend to negotiate extensions of the $1,050,000 note or raise long-term debt or equity capital to retire these notes as they become due, 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 these types of short-term borrowings with high effective interest rates.

On May 7, 2015 we completed the private placement of $12.0 million principal amount Convertible Note and a Warrant to purchase 18,000,000 shares of our common stock with one of the selling stockholders. At the closing the selling stockholder acquired the Convertible Note by paying $450,000 in cash and issuing the Investor Note in the principal amount of $9,550,000, secured by cash. Assuming all amounts payable to us under the Investor Note are paid, the private placement will result in gross proceeds of $9,550,000 before placement agent fees and other expenses associated with the transaction, subject to the satisfaction of certain conditions. We used the initial proceeds from the closing to retire certain outstanding obligations, including delinquent 2015 area and training fees of approximately $155,000 owed to the Nicaraguan government under the Concessions, provide working capital.

During December 2013 and January 2014, we completed the 2-D and 3-D seismic survey activities in the area as required under both of the Nicaraguan Concessions at such point. In order to meet our obligations under the Nicaraguan Concession, we have until April 2016 to drill our initial exploratory well or risk being in default and potentially losing our rights under the Nicaraguan Concessions.

In accordance with the Concession agreements, we are currently required to provide the Ministry of Energy with letters of credit in the amounts of $1,356,227 for Perlas and $1,818,667 for Tyra, but have not done so. We made all required expenditures related to the Nicaraguan Concessions for the training fees, area fees and other expenditures and as “area fees,” for Tyra and Perlas for the years 2010 through May 2015, but will be required to pay such additional fees for the 2015/2016 period prior to March 2016 of approximately $155,000. Further, we are required to conduct 3-D seismic mapping on the Perlas Concession in Sub-Period 3, which we estimate will cost approximately $2,500,000. Finally, we estimate we will need approximately $100,000 to prepare and submit an environmental supplement to the Nicaraguan government to identify and receive authorization to drill up to five wells in the Concessions.

In addition to the minimum cash requirements related to the Nicaraguan Concessions, we estimate that we will require approximately $330,000 of working capital to maintain corporate operations for the next 12 months, but not including approximately $1,050,000 principal amount of a short-term promissory note due in April 2016, plus accrued interest and the $61,275 currently outstanding under a revolving line of credit due August 2015. We owe $4,945,000 in trade payables related to seismic activities already performed (in December 2013) but not yet paid; however, we believe such party has agreed to extend the time for payment of this obligation to until such time as the Company begins drilling operations on the Nicaraguan Concessions. We also owe other obligations to third parties as noted on our balance sheet, which we intend to pay, negotiate and settle when we begin drilling operations, although there is no assurance that we will be able negotiate settlements with such venders or avoid collection activities.

We are negotiating the renewal and/or adjustment of the required letters of credit with the Nicaraguan Government. Further, we intend to seek a waiver of the 3-D seismic mapping requirement because we do not believe it will be effective in providing additional information due to the water depth and other factors. We plan to prepare the necessary information to submit to the EIA in order to obtain the necessary authorizations to drill up to five locations in the Concessions.reputation. There can be no assurance that wea system failure or data security breach will be successful anynot have a material adverse effect on our financial condition, results of the foregoing regards. Except for the foregoing items, we believe we are in full compliance with the terms of the Nicaraguan Concessions agreements.operations or cash flows.

We have received a going concern opinion from our auditors.

We must raise substantial amounts of debthave an accumulated deficit and equity capitalhave had negative cash flows from our operations. Accordingly, we have received a report from our independent auditors in the immediate future in order to fund: (1) the required letters of credit to the Nicaraguan Government, 3-D seismic and training and other fees; (2) the drilling of at least one exploratory well on the Perlas Block of the Nicaraguan Concessions prior to April 2016 atconnection with our audited financial statements that include an estimated cost of $3.0 million; (3) the payment of normal day-to-day operations and corporate overhead; and (4) payment of outstanding debt and financial obligations as they become due. These are substantial operational and financial issues that must be successfully mitigated during 2015 and 2016 or our ability to satisfy the conditions necessary to maintain its Nicaragua Concessions will be in significant doubt. We are actively seeking new outside sources of debt and equity capital in order fund the substantial needs enumerated above in addition to the funds from the May 2015 Private Placement; however, there can be no assurance that we 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 our ongoing requirements relative to drilling the exploratory wells.

We plan to raise long-term capital to satisfy the foregoing needs through an offering of our equity or debt securities and/or through a commercial relationship with other industry operators, which may involve the granting of revenue or other interests in the Nicaraguan Concessions in exchange for cash and a carried interest in exploration and development operations or the creation of a joint venture or other strategic partnership. There can be no assurance that we will obtain such funding or obtain it on terms acceptable to us. Further, if we cannot meet our obligations respecting the Nicaraguan Concessions, we may lose our rights to them.

Due to the uncertainties related to these matters, there existsexplanatory paragraph describing their substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments relatingThis may negatively impact our ability to the recoverability and classification of asset carrying amountsobtain additional funding or the amount and classification of liabilities that might result should we be unablefunding on terms attractive to continue as a going concern.us.

Critical Accounting Policies and EstimatesOur stockholders will likely not receive any proceeds from our dissolution or the liquidation of our assets.

The discussion and analysisIn the event of our financial condition and resultsdissolution or liquidation, the proceeds realized from the liquidation of operations is based uponassets, if any, will be distributed to our consolidated financial statements, which have been preparedcreditors before any distributions are made to stockholders in accordance with accounting principles generally acceptedapplicable state law and our certificate of incorporation, as then in effect. Given our current financial condition, it is unlikely that our stockholders will participate in the United States of America. We believe certain critical accounting policies affect the more significant judgments and estimates used in the preparation of our consolidated financial statements. Our significant accounting policies are summarized in the notes to our consolidated financial statements included in Item 8, “Financial Statements”, of this annual report.

The application of our accounting policies regarding full cost accounting for oil and gas properties (Note 8), accounting for the issuance and valuation of derivative liabilities (Note 6 and 7), accounting for deferred tax assets (Note 9) and estimates involving our stock-based compensation, are considered critical to four accounting estimates made in 2014 and 2013 (Note 5).proceeds from such dissolution or liquidation, if any.

OilWe are a party to several lawsuits as a defendant in which we may ultimately not prevail resulting in losses and Gas Properties -The Company follows the full cost method of accounting for exploration and development activities and capitalizes direct costs, overhead costs and interest relatedmay cause our stock price to such activities. All of the Company’s investment in such costs at December 31, 2014 and 2013 relate to unproved properties that relate to the Nicaraguan Concessions. Management must assess at least annually to ascertain whether impairment of the recorded values has occurred, which involves evaluation of estimates of lease terms for the properties; geographic and geologic data obtained, and estimated future net revenues. For the Nicaraguan Concessions this involves considering terms of the Concessions, status of ongoing environmental study, evaluation of seismic data, and plans to seek industry participation in future exploration and development.decline.

Derivative liabilities -The estimated fair value of the Company’s derivative liabilities, all of which are related to the conversion features and detachable warrants issued in connection with notes payable, were estimated using a closed-ended option pricing model utilizing assumptions related to the contractual term of the instruments, estimated volatility of the price of the Company’s common stock, interest rates, the probability of both the downward adjustment of the exercise price and the upward adjustment to the number of warrants as provided by the note payable and warrant agreement terms (Note 2 and 6) and non-performance risk factors, among other items (ASC 820,Fair Value Measurements (“ASC 820”) fair value hierarchy Level 3). When the note payable is extinguished, the derivative liability will be adjusted to fair value and the resulting derivative liability will be transitioned from a liability to equity as of such date. None of the notes payable was extinguished during the year ended December 31, 2014. The assumptions used for determining the fair value of derivative liabilities outstanding during the years ended December 31, 2014 and 2013 are reflected in Note 6 to the Consolidated Financial statements.

Deferred income taxes –Accounting for income taxes requires significant estimates and judgments on the part of management. Such estimates and judgments include, but are not limited to, the effective tax rate anticipated to apply to tax differences that are expected to reverse in the future, the sufficiency of taxable income in future periods to realize the benefits of net deferred tax assets and net operating losses currently recorded and the likelihood that tax positions taken in tax returns will be sustained on audit.

As required by authoritative guidance, we record deferred tax assets or liabilities based on differences between financial reporting and tax bases of assets and liabilities using currently enacted rates that will be in effect when the differences are expected to reverse. Authoritative guidance also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. As of December 31, 2013, cumulative valuation allowances in the amount of $24,374,000 were recorded in connection with the net deferred income tax assets. Based on a review of our deferred tax assets and recent operating performance, we determined that our valuation allowance should be increased to $25,788,000 to fully reserve our deferred tax assets as of December 31, 2014. We determined that it was appropriate to continue to provide a full valuation reserve on our net deferred tax assets as of December 31, 2014 because of the overall net operating loss carryforwards available and our history of operating and tax losses. We expect to continue to maintain a full valuation allowance until we determine that we can sustain a level of profitability that demonstrates our ability to realize these assets. To the extent we determine 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. Such a reversal would be recorded as an income tax benefit and, for some portion related to deductions for stock option exercises, an increase in shareholders’ equity.

As required by authoritative guidance, we have performed a comprehensive review of our portfolio of uncertain tax positions in accordance with recognition standards established by the FASB, an uncertain tax position represents our expected treatment of a tax position taken in a filed tax return, or planned to be taken in a future tax return, that has not been reflected in measuring income tax expense for financial reporting purposes. We have no recorded liability as of December 31, 2014 representing uncertain tax positions.

We have generated substantial deferred income tax assets relatedare involved as a defendant in routine litigation and administrative proceedings incidental to our operations primarilybusiness from the chargetime to compensation expense taken for stock options, certain tax credit carryforwards and net operating loss carryforwards. For us to realize the income tax benefit of these assets, we must generate sufficient taxable income in future periods when such deductions are allowed for income tax purposes. In some cases where deferred taxes were the result of compensation expense recognized on stock options, our ability to realize the income tax benefit of these assets is also dependent on our share price increasing to a point where these options have intrinsic value at least equal to the grant date fair value and are exercised. In assessing whether a valuation allowance is needed in connection with our deferred income tax assets, we have evaluated our ability to generate sufficient taxable income in future periods to utilize the benefit of the deferred income tax assets. We continue to evaluate our ability to use recorded deferred income tax asset balances. If we fail to generate taxable income for financial reporting in future years, no additional tax benefit would be recognized for those losses, since we will not have accumulated enough positive evidence to support our ability to utilize net operating loss carryforwards in the future. Therefore, we may be required to increase our valuation allowance in future periods should our assumptions regarding the generation of future taxable income not be realized.

For income tax purposes, the Company has net operating loss carry-forwards of approximately $57,710,000, which expire from 2025 through 2029. The Company has provided a 100% valuation allowance due to the uncertainty of realizing the tax benefits from its net deferred tax asset.

Stock options - We grant stock options to our employees and directors and such benefits provided are share-based payment awards, which require us to make significant estimates related to determining the value of our share-based compensation. Our expected stock-price volatility assumption is based on historical volatilities of the underlying stock obtained from public data sources. We granted options exercisable to purchase 900,000 and 96,000 shares during the years ended December 31, 2014 and 2013, respectively. The assumptions used for determining the grant-date fair value of options granted during the year ended December 31, 2014 are reflected in Note 5 to the Consolidated Financial statements.

If factors change and we develop different assumptions in future periods, the compensation expense that we record in the future may differ significantly from what we have recorded in the current period. There is a high degree of subjectivity involved when using option pricing models to estimate share-based compensation. Changes in the subjective input assumptions can materially affect our estimates of fair values of our share-based compensation. Certain share-based payment awards, such as employee stock options, may expire worthless or otherwise result in zero intrinsic value compared to the fair values originally estimated on the grant date and reportedtime. See “Item 3. Legal Proceedings” in our financial statements. Alternatively, values may be realized from these instruments that are significantly in excess of the fair values originally estimatedlatest Annual Report on the grant date and reported in our financial statements. Although the fair value of employee share-based awards is determined using an established option pricing model, that value may not be indicative of the fair value observed in a willing buyer/willing seller market transaction.

As of andForm 10-K for the year ended December 31, 2014, there2020, filed with the SEC on March 30, 2021 and “Legal Proceedings” in Part II, Item 1 in our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2021, filed with the SEC on May 13, 2021. Due to lack of funds, we have not been noable to defend adequately in certain of these matters. Accordingly, the outcome of any pending cases and proceedings may have a material changesadverse effect on our business or updates to our critical accounting policies.financial condition.

InflationWe may hedge our exposure to reductions in oil and Seasonalitynatural gas prices, which involves credit risk and may limit future revenues from price increases and result in significant fluctuations in our profitability.

Inflation has not materially affected us duringWe account for derivative instruments or hedging activities under the past fiscal year. We do not believeprovisions of Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 815 Derivatives and Hedging, to achieve more predictable cash flow and to reduce our exposure to price fluctuations. While the use of hedging transactions limits the downside risk of price declines, their use may limit future revenues from price increases. Hedging transactions also involve the risk that our business is seasonal in nature.the counterparty may be unable to satisfy its obligations.

MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT’S COMMON EQUITY

AND RELATED STOCKHOLDER MATTERSRisks Related to our Common Stock

Principal MarketThe market for our Common Stock is limited and Price Rangemay not provide adequate liquidity.