Indonesia Energy (INDO) - 2022 Q2 - Quarterly Report

Revenue and Financial Performance - Revenue for the six months ended June 30, 2022, was $2,332,509, representing a 120.5% increase compared to $1,057,138 for the same period in 2021[4] - Net loss for the six months ended June 30, 2022, was $1,060,377, a significant reduction from a net loss of $2,932,213 in the same period of 2021, reflecting a 63.8% improvement[4] - The company reported total operating costs and expenses of $4,248,371 for the six months ended June 30, 2022, which is a 63.0% increase from $3,990,368 in the same period of 2021[4] - The basic net loss per share for the six months ended June 30, 2022, reflects the impact of potentially dilutive securities, with 783,907 potentially dilutive securities excluded from the computation due to their anti-dilutive effect[27] - The Company reported a net loss of $1,060,377 and net cash used in operating activities of $3,059,907 for the six months ended June 30, 2022[73] Assets and Liabilities - Total current assets increased to $8,725,681 as of June 30, 2022, up from $3,532,756 as of December 31, 2021, marking a 147.5% growth[2] - Total liabilities increased to $7,550,716 as of June 30, 2022, compared to $4,270,358 as of December 31, 2021, indicating a 76.5% rise[2] - The total shareholders' equity increased to $11,573,440 as of June 30, 2022, up from $7,819,743 as of December 31, 2021, reflecting a 48.5% increase[2] - As of June 30, 2022, the company's net property and equipment amounted to $276,864, a decrease from $292,538 as of December 31, 2021[35] - The Company had an accumulated deficit of $34,878,538 and working capital of $5,502,080 as of June 30, 2022[73] Cash and Financing Activities - Cash and cash equivalents, along with restricted cash, totaled $7,385,759 at the end of June 30, 2022, compared to $6,567,987 at the end of June 30, 2021, showing a 12.5% increase[11] - The company raised $8,589,000 from the issuance of convertible notes and warrants during the six months ended June 30, 2022[11] - The company incurred interest expense of $15,500 for the six months ended June 30, 2022, compared to $5,712 for the same period in 2021[37] - The company has a convertible note payable of $400,000 as of June 30, 2022, following the closing of a $5,000,000 tranche with L1 Capital[38] - A total of $9,600,000 of the $10,000,000 principal amount of the convertible notes has been converted into Ordinary Shares at $6.00 per share by L1 Capital as of June 30, 2022[48] Operational Activities and Plans - The Company plans to drill a total of 18 new wells at the Kruh Block, with 5 wells in 2021, 6 wells in 2022, and 7 wells in 2023, although delays have been experienced due to permitting and COVID-19[21] - For the six months ended June 30, 2022, the Company incurred development costs of $1,512,127, primarily for drilling two new wells at Kruh Block[32] - The Company plans to commence a new seismic program at Kruh Block starting in Q4 2022, expected to take approximately 10 to 12 months[79] - The Company plans to drill a total of 18 wells at Kruh Block through the end of 2024, with the current drilling program expected to be completed by the end of 2025[79] Market Conditions and Risks - Crude oil prices were negatively impacted in 2020 and 2021 due to low demand and production disputes, although prices rose significantly in the first half of 2022[14] - The Company continues to face operational delays due to COVID-19, which has impacted drilling and exploration operations, as well as project approvals[14] Shareholder and Equity Activities - The weighted average number of ordinary shares outstanding increased to 7,854,830 for the six months ended June 30, 2022, compared to 7,433,673 for the same period in 2021[4] - The Company issued 199,259 restricted Ordinary Shares upon the exercise of vested options by certain executive officers on March 3, 2022[57] - The Company issued 60,000 restricted Ordinary Shares to the President, valued at $2.85 per share, totaling $128,079 charged to general and administrative expenses for the six months ended June 30, 2022[58] Legal and Compliance - The Company has no significant pending litigation as of June 30, 2022, and management believes no claims are expected to have a material adverse effect on its financial position[62] Taxation - The effective tax rate for the six months ended June 30, 2022, was 0%, consistent with the same period in 2021, due to unrecovered expenditures[55]