Note 11 Subsequent Events
From July 1, 2016 through August 15, 2016, the Company issued a total of 164,669 shares of common stock to the holder of the secured convertible note payable in the form of interest payments aggregating $2,697. See Note 2 Secured Convertible Note Payable.
The Company has not resolved the contingency related to the expired letters of credit for its Nicaraguan Concessions (See Note 9). The Company continues to negotiate the renewal of the letters of credit with the Nicaraguan Government and its lenders; however, there can be no assurance that the Company will be successful in that regard.
On December 27, 2013 the Company borrowed $1,050,000 under an unsecured credit facility with a private, third-party lender which has an outstanding principal balance of $1,000,000. The facility is represented by a promissory note (the Note). Effective April 7, 2016 the Company and the lender have agreed in principal to extend the maturity date of the Note from April 7, 2016 to the earlier of (i) April 7, 2017 or (ii) the payment in full of the Investor Note issued to the Company by Hudson Bay Master Fund, Ltd. in the principal amount of $9,490,000 (the New Maturity Date). All other terms of the Note are expected to remain the same.
The Note may be prepaid without penalty at any time. The Note is subordinated to all existing and future secured indebtedness, as such terms are defined in the Note.
In connection with the proposed extension of the maturity date of the Note to the New Maturity Date, the Company (i) will issue to the lender 20,000 shares of restricted common stock; and (ii) agreed to pay $50,000 toward amounts due under the Note as soon as sufficient funds are available to do so. The Company will issue no additional warrants to the lender in connection with the proposed extension of the Note to the New Maturity Date. If the Company fails to pay the Note on or before its New Maturity Date, the number of shares issuable under the Warrant increases to 1,333,333 and the exercise price drops to $0.75 per share. All other terms of the warrant are expected to remain the same.
The parties are negotiating and finalizing the documents relative to this proposed extension, therefore the terms may change as and when such documents are finalized and executed. However, there can be no assurance that such extension will be completed or that the current agreed terms will be the finalized terms of such extension.
The above information was disclosed in a filing to the SEC. To see the filing, click here.
To receive a free e-mail notification whenever INFINITY ENERGY RESOURCES, INC makes a similar move, sign up!