SHAREHOLDERS' EQUITY

3 Months Ended

Mar. 31, 2017

SHAREHOLDERS' EQUITY

SHAREHOLDERS' EQUITY

NOTE 10—SHAREHOLDERS' EQUITY

Common Stock

As of March 31, 2017 and December 31, 2016, the Company had 100,000,000 shares of common stock authorized with a par value of $0.001 per share. As of March 31, 2017 and December 31, 2016, 21,964,282 and 21,964,282 shares were issued and outstanding, respectively.

Activity for the three months ended March 31, 2017 included the following:

In connection with the completion of a private placement (Note 7), the Company received $8,057,400 in gross proceeds from the sale of 161.15 units consisting of convertible promissory notes and warrants during the three months ended March 31, 2017. The convertible notes payable are convertible into shares of common stock at $1.50 per share. Immediately following the closing, and including units sold during 2016, the outstanding convertible notes were convertible into 6,666,666 shares of common stock.

On April 1, 2017, in connection with the execution of two employment agreements, the Company issued 116,700 shares of restricted stock (Note 13). The shares are subject to certain vesting restrictions, but all 116,700 shares are eligible for full voting rights and eligible to receive dividends.

On April 3, 2017, the Company issued 450,000 shares valued at $1.80 per share in connection with the acquisition of oil and gas assets (Note 5).

Activity for the three months ended March 31, 2016 included the following:

In January 2016, the Company sold 95,000 shares of common stock at $1.00 per share to one accredited investor pursuant to a private placement.

Preferred Stock

As of March 31, 2017, the Company had 10,000,000 shares of preferred stock authorized with a par value of $0.01 per share. As of March 31, 2017 and December 31, 2016, there were no shares of preferred stock issued or outstanding.

Warrants

The table below summarizes warrants outstanding as of March 31, 2017:

	Shares Underlying Outstanding Warrants		Exercise Price		Expiration Date
Underwriter warrants		255,600	$	1.25		11/12/2020
Investor warrants		6,666,600	$	3.00		12/31/2019
Placement agent warrants		666,600	$	1.50		12/31/2021
Total warrants outstanding		7,588,800

Activity for the three months ended March 31, 2017 included the following:

On January 20, 2017 and January 30, 2017, in connection with the closings of a private placement, the Company issued 2,216,978 and 3,154,601 warrants to the purchasers of convertible promissory notes, respectively. The warrants are exercisable at $3.00 per share and expire on December 31, 2019 (Note 7).

On January 20, 2017 and January 30, 2017, in connection with the closings of a private placement, the Company issued 221,744 and 315,526 warrants to the placement agent, respectively. The warrants are exercisable at $1.50 per share and expire on December 31, 2021 (Note 7).

There was no activity for the three months ended March 31, 2016.