SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 8, 2020 (September 2, 2020)
Infinity Energy Resources, Inc.
(Exact name of registrant as specified in its charter)
(State or other jurisdiction
11900 College Blvd., Suite 310, Overland Park, KS 66210
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (913) 948-9512
Securities registered pursuant to Section 12(b) of the Act:
|Title of each class||Trading Symbol(s)||Name of exchange on which registered|
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
|[ ]||Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)|
|[ ]||Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)|
|[ ]||Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))|
|[ ]||Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))|
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
|Item 1.01||Entry into a Material Definitive Agreement.|
On September 2, 2020, Infinity Energy Resources, Inc. (“Infinity” or the “Company”) acquired an option (the “Option”) from Core Energy, LLC (“Core”) to purchase the production and mineral rights to and a leasehold interest in certain oil and gas properties in the Central Kansas Uplift geological formation, covering over 11,000 contiguous acres (the “Properties”). The Option grants the Company the right to acquire 100% of the working and leasehold interests in the Properties upon payment to Core of $900,000 at any time prior to November 1, 2020. On September 2, 2020, the Company issued 500,000 shares of its common stock, par value $0.0001 per share, to Core in consideration for the Option. The shares issued as consideration for the Option were not registered under the Securities Act of 1933, as amended (the “Securities Act”), in reliance on the exemptions contained in Section 4(a)(2) of the Securities Act based in part on representations made by Core and such issuance did not involve any form of general solicitation or general advertising.
Upon its exercise of the Option, the Company will enter into a purchase sale agreement with Core for the purchase of 100% of the working and leasehold interests in the Properties, including various net revenue interests in the Properties’ underlying leases (with an approximate weighted average net revenue interest of 82.5%, based on acreage), production, equipment and seismic data files, maps, oil in tank and any related oil and gas documents of the Properties in Core’s possession. The Properties currently contain one horizontal producing well, one horizontal injection well, one saltwater disposal well and two vertical producing wells which produce from the Reagan Sand Zone at an approximate depth of 3,600 feet. Such purchase will include the existing production equipment, above ground and in-ground infrastructure and ownership of eleven square miles of existing three-dimensional seismic data on the acreage.
Infinity intends to complete the acquisition of the Properties prior to the Option’s expiration date of November 1, 2020, subject to obtaining adequate financing. Pursuant to the Option, Infinity has agreed to immediately conduct a capital raise of between approximately $2-10 million to fund its acquisition and development of the Properties.
The foregoing description of the Option is qualified in its entirety by reference to the full text of such Option, the form of which is attached as Exhibit 10.1 to this Current Report on Form 8-K (this “Form 8-K”), and which is incorporated herein in its entirety by reference.
|Item 2.03||Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.|
The applicable information set forth in Item 1.01 of this Form 8-K with respect to the Option is incorporated by reference in this Item 2.03.
|Item 9.01||Financial Statements and Exhibits.|
|Exhibit 10.1||Form of Option Term Sheet, dated September 2, 2020, by and between the Company and Core.|
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: September 8, 2020
|Infinity Energy Resources, Inc.|
|By:||/s/ Stanton E. Ross|
|Name:||Stanton E. Ross|
|Title:||Chairman, President and Chief Executive Officer|
INFINITY ENERGY RESOURCES, INC.
SUMMARY OF PROPOSED TERMS
CORE ENERGY, LLC OIL & GAS LEASE ACQUISITION
|Date of this Term Sheet||September 2nd, 2020|
|Proposed parties to the transaction||Infinity Energy Resources, Inc., a Delaware Corporation (the “Company”) will be the Acquirer.|
|Core Energy, LLC, a Kansas Limited Liability Company is the Seller|
|Binding Nature of the Term Sheet||This term sheet is non-binding until:|
|1) agreed to and executed by both parties|
|2) 500,000 shares of Infinity Common Stock to CORE ENERGY, LLC due on or before September 31st, 2020.|
|3) $900,000 total purchase price received by Core Energy by Friday, November 1st, 2020 at the end of business day.|
|Transaction Structure||The transaction will be structured as Infinity Energy, Inc. purchasing all of the Working Interest, Leasehold Interest, production, equipment (AS IS) Seismic data, files maps, oil in tank and any related oil and gas documents of the Otis/Albert Field in possession of Core Energy, LLC.|
|Proposed property to be acquired in the transaction||Core Energy has acquired or has authority to enter into any contract related to its mineral rights/leasehold to approximately 11,000 acre in Rusk and Barton County, Kansas of which 960 are HBP in the Wagner Unit Core. (the “Oil & Gas Property”).|
|The Oil & Gas Property/project will include approximately 11,000 acres of leasehold including but not limited to the Core Energy Leasehold.|
|The Oil & Gas Property/project will include access to Seismic data with an approximate value paid of $650,000.|
|Proposed property to be acquired in the transaction (continued)||The Oil & Gas Property/project has 1 Horizontal producing well, one Horizontal Injection well, 1 Salt Water Disposal well, 2 vertical producing wells which produce from the Reagan Sand approximately 3600’ deep.|
|Transaction includes all equipment and infrastructure in place and current production including but not limited to, all oil in tanks as of closing Effective Date.|
|Leasehold Interests to be acquired in the transaction||Leasehold ownership for the Oil & Gas Property subject to this sale is a 100% Working Interest in the Oil & Gas Property with various net revenue interests in the underlying leases with an approximate weighted average Net Revenue Interest of 82.5%, based on acreage.|
|Purchase Price||The parties will enter into purchase and sale agreement (“PSA”) to acquire the Oil & Gas Property (100% of the working interest). The closing date is scheduled for November 1, 2020.|
|The seller will continue to utilize Popp Operating, LLC which is currently operating the property to the best of its ability to maintain all wells.|
|Capital Raises related to the Transaction||Infinity Resources Capital. Inc. will immediately launch a capital raise of approximately $2-10 million USD to fund the acquisition and development of the Oil & Gas Property (sources and uses file indicated in Exhibit A).|
|Company Information||Please refer to the Company’s Annual Report and its Quarterly Report, including the Risk Factors highlighted in Item 7 in the Annual Report.|
Agreed to and accepted on September 2, 2020 by:
|Infinity Energy Resources, Inc.:|
|Stanton E. Ross, Chairman, CEO & President|
|Core Energy, LLC:|
|Coal Creek Energy, LLC|
|John Loeffelbein, Member|
|Harvey M. Burstein, Member|