UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2021

☐ Transition Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from __________ to __________

Commission File Number: 000-52690

PETROLIA ENERGY CORPORATION

(Exact name of registrant as specified in its charter)

Texas

86-1061005

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

710 N. Post Oak Road, Suite 400

Houston, Texas

77024

(Address of principal executive offices)

(Zip Code)

(832-723-1266)

(Issuer’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None.

Indicate by check mark whether the registrant: (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the issuer was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☐ No ☒

Indicate by check mark whether the registrant is large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” accelerated filer” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer ☐	Accelerated filer ☐

Non-accelerated filer ☒	Smaller Reporting Company ☒

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 176,988,322 shares of common stock as of June 15, 2022.

TABLE OF CONTENTS

		Page
Part I Financial Information

Item 1.	Consolidated Financial Statements	3

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20

Item 3	Quantitative and Qualitative Disclosures about Market Risk	23

Item 4.	Controls and Procedures	23

Part II Other Information

Item 1	Legal Proceedings	24

Item 1A.	Risk Factors	25

Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	25

Item 3	Defaults Upon Senior Securities	25

Item 4	Mine Safety Disclosures	25

Item 5	Other Information	25

Item 6.	Exhibit Index	25

SIGNATURES		26

EXHIBITS		27

PART I: Financial Information

Item 1. Consolidated Financial Statements

PETROLIA ENERGY CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31, 2021			December 31, 2020
	(unaudited)			(audited)
ASSETS
Current assets
Cash	$	98,268		$	155,045
Accounts receivable		451,239			5,000
Other current assets		39,443			39,443
Total current assets		588,950			199,488

Property & equipment
Oil and gas, on the basis of full cost accounting
Evaluated properties		8,673,423			8,619,427
Furniture, equipment & software		201,110			201,110
Less accumulated depreciation and depletion		(3,085,709	)		(2,868,453	)
Net property and equipment		5,788,824			5,952,084

Other assets
Operating lease right-of-use asset		20,612			23,145
Other assets		997,516			985,187

Total Assets	$	7,395,902		$	7,159,904

LIABILITIES & STOCKHOLDERS DEFICIT

Current liabilities
Accounts payable	$	1,102,076		$	1,067,841
Accounts payable – related parties		—			587
Operating lease liability – current		11,028			13,107
Accrued liabilities		761,879			1,572,055
Accrued liabilities – related parties		738,757			751,949
Notes payable, current portion		3,239,546			3,037,737
Notes payable – related parties, current portion		950,516			1,035,329
Total current liabilities		6,803,802			7,478,605

Asset retirement obligations		3,746,828			3,624,133
Notes payable, net of current portion		—			573
Operating lease liability		13,718			13,909
Derivative liability		371,514			183,798
Total Liabilities	$	10,935,862		$	11,301,018

Stockholders’ Deficit
Preferred stock, $0.001 par value, 1,000,000 shares authorized; 199,100 shares issued and outstanding	$	199		$	199
Common stock, $0.001 par value; 400,000,000 shares authorized; 176,988,322 and 168,696,226 shares issued and outstanding		176,988			168,696
Additional paid in capital		60,082,160			59,044,519
Shares to be issued		—			—
Accumulated other comprehensive income		(264,105	)		(266,432	)
Accumulated deficit		(63,535,202	)		(63,088,096	)
Total Stockholders’ Deficit		(3,539,960	)		(4,141,114	)

Total Liabilities and Stockholders’ Deficit	$	7,395,902		$	7,159,904

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

PETROLIA ENERGY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

	Three months ended March 31, 2021			Three month ended March 31, 2020
Oil and gas sales
Oil and gas sales	$	1,082,248		$	481,121
Total Revenue		1,082,248			481,121

Operating expenses
Lease operating expense		535,393			603,249
Production tax		1,163			678
General and administrative expenses		331,014			245,263
Depreciation, depletion and amortization		183,139			302,378
Asset retirement obligation accretion		88,206			48,945
Total operating expenses		1,138,915			1,200,693

Loss from operations		(56,667	)		(719,572	)

Other income (expenses)
Interest expense		(158,048	)		(185,813	)
Other income		—			407
Change in fair value of derivative liabilities		(187,716	)		(126,675	)
Total other income (expenses)		(345,764	)		(312,081	)
Net loss before taxes		(402,431	)		(1,031,653	)

Series A Preferred Dividends		(44,675	)		(44,675	)

Net loss attributable to common stockholders		(447,106	)		(1,076,328	)

Income (loss) per share
(Basic & diluted)		0.00			(0.01	)

Weighted average number of common shares outstanding, basic & diluted		170,685,245			165,140,155	)

Other comprehensive income, net of tax
Foreign currency translation adjustments		2,327			(127,548	)
Comprehensive income (loss)		(444,779	)		(1,203,876	)

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

PETROLIA ENERGY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

(Unaudited)


									Additional		Shares			Accumulated other						Stockholders’
	Preferred stock				Common stock				paid-in		to be			comprehensive			Accumulated			equity
	Shares		Amount		Shares		Amount		capital		issued			income			deficit			(deficit)
Balance at December 31, 2019		199,100	$	199		164,548,726	$	164,549	$	57985,359	$	55,375		$	(281,565	)	$	(52,600,378	)	$	5,386,539

Stock-based compensation		—		—		—		—		67,193		—			—			—			67,193
Common shares issued		—		—		591,250		591		54,784		(55,375	)		—			—			—
Series A preferred dividends		—		—		—		—		—		—			—			(44,675	)		(44,675	)
Warrants issued as financing fees		—		—		—		—		7,234		—			—			—			7,234
Shares for conversion of related party debt		—		—		156,250		156		12,344		—			—			—			12,500
Warrants issued with loans		—		—		—		—		332,881		—			—			—			332,881
Stock to be issued		-		-		—		—		—		69,375			—			—			69,375
Other comprehensive income (loss)		—		—		—		—		—		—			(127,548	)		—			(127,548	)
Net loss		—		—		—		—		—		—			—			(1,031,653	)		(1,031,653	)
Balance at March 31, 2020		199,100	$	199		165,296,226	$	165,296	$	58,459,795	$	69,375		$	(346,113	)	$	(53,676,706	)	$	4,671,846

Balance at December 31, 2020		199,100	$	199		168,696,226	$	168,696	$	59,044,519	$	—		$	(266,432	)	$	(63,088,096	)	$	(4,141,114	)

Stock-based compensation		—		—		—		—		27,369		—			—			—			27,369
Series A preferred dividends		—		—		—		—		—		—			—			(44,675	)		(44,675	)
Warrants issed as financing fee		—		—		—		—		9,252		—			—			—			9,252
Common shares issued for conversion of debt		—		—		2,700,000		2,700		86,400		—			—			—			89,100
Common shares issued for settlement of related party fee		—		—		5,592,096		5,592		158,895		—			—			—			164,487
Warrants issued for settlement of loans		—		—		—		—		200,378		—			—			—			200,378
Gain on modification of related party debt		—		—		—		—		181,791		—			—			—			181,791
Gain on issuance of shares for settlement of accrued related party fees		—		—		—		—		373,556		—			—			—			373,556
Other comprehensive income (loss)		—		—		—		—		—		—			2,327			—			2,327
Net Income (loss)		—		—		—		—		—		—			—			(402,431	)		(402,431	)
Balance at March 31, 2021		199,100	$	199		176,988,322	$	176,988	$	60,082,160	$	—		$	(264,105	)	$	(63,535,202	)	$	(3,539,960	)

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

PETROLIA ENERGY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended March 31, 2021			Three Months Ended March 31, 2020
Cash Flows from Operating Activities
Net income (loss)	$	(402,431	)	$	(1,031,653	)
Adjustment to reconcile net loss to net cash provided by (used in) operating activities:
Depletion, depreciation and amortization		183,139			302,378
Asset retirement obligation accretion		88,206			48,945
Operating lease		263			—
Amortization of debt discount		63,007			49,594
Change in fair value of derivative liabilities		187,716			126,675
Stock-based compensation expense		27,369			67,193
Warrants issued as financing fees		9,252			7,234
Changes in operating assets and liabilities
Accounts receivable		(446,238	)		(12,701	)
Other current assets		—			(19,438	)
Accounts payable		24,483			29,601
Accounts payable – related parties		(587	)		—
Accrued liabilities		(112,776	)		166,627
Accrued liabilities – related parties		331,640			25,685
Net cash flows from operating activities		(46,957	)		(239,860	)

Cash Flows from Investing Activities
Escrow for property purchase		—			1,374,353	)
Cash flows from investing activities		—			(1,374,353	)

Cash Flows from Financing Activities
Proceeds from notes payable		—			1,418,934
Repayments on notes payable		(1,926	)		(1,836	)
Proceeds from related party notes payable		—			200,000
Repayments on related party notes payable		(10,221	)		(33,799	)
Shares to be issued		—			69,375
Cash flows from financing activities		(12,147	)		1,652,674

Changes in foreign exchange rate		2,327			(59,680	)

Net change in cash		(56,777	)		(21,219	)
Cash at beginning of period		155,045			34,513
Cash at end of period	$	98,268		$	13,294

SUPPLEMENTAL DISCLOSURES

	Three Months Ended March 31, 2021		Three Months Ended March 31, 2020
SUPPLEMENTAL DISCLOSURES
Interest paid	$	71,565	$	—
Income taxes paid		—		—
NON-CASH INVESTING AND FINANCIAL DISCLOSURES
Series A preferred dividends accrued		44,675		44,675
Debt discount on warrant issue		—		332,881
Conversion of related party debt and payables		527,520		—
Settlement of notes payable related party for common shares		135,000		12,500
Issuing of previous shares to be issued		—		55,375

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

PETROLIA ENERGY CORPORATION

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020

(Unaudited)

NOTE 1. ORGANIZATION AND BASIS OF PRESENTATION:

Petrolia Energy Corporation (the “Company”) is in the business of oil and gas exploration, development and production.

Basis of Presentation

The accompanying unaudited condensed consolidated interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s latest Annual Report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the results of operations for the interim periods presented have been reflected herein. The results of operations for such interim periods are not necessarily indicative of operations for a full year. Notes to the consolidated financial statements which would substantially duplicate the disclosure contained in the audited financial statements for the year ended December 31, 2020, as reported in Form 10-K, have been omitted.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Leases

Leases are classified as operating leases or financing leases based on the lease term and fair value associated with the lease. The assessment is done at lease commencement and reassessed only when a modification occurs that is not considered a separate contract.

Lessee arrangements

Where the Company is the lessee, leases classified as operating leases are recorded as lease liabilities based on the present value of minimum lease payments over the lease term, discounted using the lessor’s rate implicit in the lease or the Company’s incremental borrowing rate, if the lessor’s implicit rate is not readily determinable. The lease term includes all periods covered by renewal and termination options where the Company is reasonably certain to exercise the renewal options or not to exercise the termination options. Corresponding right-of-use assets are recognized consisting of the lease liabilities, initial direct costs and any lease incentive payments.

Lease liabilities are drawn down as lease payments are made and right-of-use assets are depreciated over the term of the lease. Operating lease expenses are recognized on a straight-line basis over the term of the lease, consisting of interest accrued on the lease liability and depreciation of the right-of-use asset, adjusted for changes in index-based variable lease payments in the period of change.

Lease payments on short-term operating leases with lease terms twelve months or less are expensed as incurred.

Fair Value of Financial Instruments

Fair value of financial instruments requires disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of March 31, 2021, the amounts reported for cash, accrued interest and other expenses, notes payable, convertible notes, and derivative liability approximate the fair value because of their short maturities.

We adopted ASC Topic 820 for financial instruments measured as fair value on a recurring basis. ASC Topic 820 defines fair value, established a framework for measuring fair value in accordance with accounting principles generally accepted in the United States and expands disclosures about fair value measurements.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. The hierarchy is broken down into three levels based on the observability of inputs as follows:

	●	Level 1 — Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Valuation adjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment;
	●	Level 2 — Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly; and
	●	Level 3 — Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

We measure certain financial instruments at fair value on a recurring basis. Assets and liabilities measured at fair value on a recurring basis are as follows at March 31, 2021 and December 31,2020.

March 31, 2021	Level 1		Level 2		Level 3		Total
Derivative liabilities		—		—		371,514		371,514
ARO liabilities		—		—		3,746,828		3,746,828

December 31, 2020
Derivative liabilities		—		—		183,798		183,798
ARO liabilities		—		—		3,624,133		3,624,133

NOTE 3. GOING CONCERN

The Company has suffered recurring losses from operations and currently has a working capital deficit. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The Company plans to generate profits by reworking its existing oil or gas wells, as needed, funding permitting. The Company will need to raise funds through either the sale of its securities, issuance of corporate bonds, joint venture agreements and/or bank financing to accomplish its goals. The Company does not have any commitments or arrangements from any person to provide the Company with any additional capital.

If additional financing is not available when needed, we may need to cease operations. The Company may not be successful in raising the capital needed to drill and/or rework existing oil wells. Any additional wells that the Company may drill may be non-productive. Management believes that actions presently being taken to secure additional funding for the reworking of its existing infrastructure will provide the opportunity for the Company to continue as a going concern. Since the Company has an oil producing asset, its goal is to increase the production rate by optimizing its current infrastructure. The accompanying financial statements have been prepared assuming the Company will continue as a going concern; no adjustments to the financial statements have been made to account for this uncertainty.

NOTE 4. EVALUATED PROPERTIES

The Company’s current properties can be summarized as follows.

Cost	Canadian properties		United States properties			Total
As of December 31, 2019	$	2,563,434	$	10,350,538		$	12,913,972
Additions		678,765		—			678,765
Dispositions		—		(5,648,994	)		(5,648,994	)
Impairment of oil and gas properties		—		(396,922	)		(396,922	)
Asset retirement cost additions		906,146		—			906,146
Foreign currency translation		166,460		—			166,460
As of December 31, 2020	$	4,314,805	$	4,304,622		$	8,619,427
Foreign currency translations		53,996		—			53,996
As of March 31, 2021	$	4,368,801	$	4,304,622		$	8,673,423

Accumulated depletion
As of December 31, 2019		1,458,976		61,551			1,520,527
Depletion		1,115,595		—			1,115,595
Foreign currency translation		57,178		—			57,178
As of December 31, 2020	$	2,631,749	$	61,551		$	2,693,300
Depletion		175,394		—			175,394
Foreign currency translation		34,117		—			34,117
As of March 31, 2021	$	2,841,259	$	61,551		$	2,902,811

Net book value as of December 31, 2020	$	1,683,056	$	4,243,071		$	5,926,127
Net book value as of March 31, 2021	$	1,527,542	$	4,234,071		$	5,770,612

On August 6, 2019, the Company entered into a Purchase and Sale Agreement (“PSA”) for the sale of the same NOACK property with Flowtex Energy LLC. (“FT”). The purchaser agreed to pay $400,000 for the NOACK Assets including a $20,000 deposit that was received on August 15, 2019 and the remaining balance of $380,000 to be received by September 30, 2019. By December 31, 2019, FT had made cumulative payments of $375,000, resulting in a $25,000 account receivable to the Company at March 31, 2021 which is included in other current assets. The $400,000 was recorded as a gain on sale of properties. On July 6, 2021, the remaining $25,000 accounts receivable was settled via the following. The purchaser remitted a cash payment of $8,995, as well as paying (on the Company’s behalf) $16,005 of outstanding property tax invoices previously incurred by the Company.

On May 01 2020, Petrolia Energy Corporation acquired a 50% working interest in approximately 28,000 net working interest acres located in the Utikuma Lake area in Alberta, Canada. The property is an oil-weighted asset currently producing approximately 525 bopd of light oil. The working interest was acquired from Blue Sky Resources Ltd. in an affiliated party transaction as Zel C. Khan, the Company’s former Chief Executive Officer, is related to the ownership of Blue Sky. Blue Sky acquired a 100% working interest in the Canadian Property from Vermilion Energy Inc. via Vermilion’s subsidiary Vermilion Resources. The effective date of the acquisition was May 1, 2020. The total purchase price of the property was $2,000,000 (CAD), with $1,000,000 of that total due initially. The additional $1,000,000 was contingent on the future price of WTI crude. At the time WTI price exceeded $50/bbl, the Company would pay an additional $750,000. In addition, at the time WTI price exceeded $57/bbl the Company would pay an additional $250,000 (for a cumulative contingent total of $1,000,000). Note that WTI crude prices did not exceed those price thresholds until 2021, so the contingent $1,000,000 will not be recorded until 2021. Included in the terms of the agreement, the Company also funded their portion of the Alberta Energy Regulator (“AER”) bond fund requirement ($607,357), necessary for the wells to continue in production after the acquisition. Additional funds ($390,159 USD) remain in the other current asset balance for future payments from BSR, related to the acquisition.

On July 27, 2020, the Company entered into a settlement agreement with their Trustee pursuant to which nine leases totaling approximately 3,800 acres of the 4,880-acre Twin Lakes San Andres Unit were forfeited as a part of the settlement agreement. Consequently, the Company no longer has the right to produce oil, gas, or other hydrocarbons and any other minerals from the mineral estate encumbered by the leases and owned by the Trustee. The company accounted for the forfeiture of the TLSAU properties, in accordance with Reg S-W.T.Rule 4-10(c)(6). Accordingly, an analysis of multi-period reserve reports was performed to determine the percentage of the cumulative US full cost pool’s reserves that were forfeited (56% or 943,820). Then that percentage was multiplied by the period end net property balance of $10,175,456. This resulted in a write down of $5,648,994 ($10,175,456 * 56%) of the US cost pool, which was recorded as part of operating expenses for the year ended December 31, 2020. Note that both TLSAU and SUDS make up the US full cost pool.

NOTE 5. LEASES

Our adoption of ASU 2016-02, Leases (Topic 842), and subsequent ASUs related to Topic 842, requires us to recognize substantially all leases on the balance sheet as an ROU asset and a corresponding lease liability. The new guidance also requires additional disclosures as detailed below. We adopted this standard on the effective date of January 1, 2019 and used this effective date as the date of initial application. Under this application method, we were not required to restate prior period financial information or provide Topic 842 disclosures for prior periods. We elected the ‘package of practical expedients,’ which permitted us to not reassess our prior conclusions related to lease identification, lease classification, and initial direct costs, and we did not elect the use of hindsight.

Lease ROU assets and liabilities are recognized at commencement date of the lease, based on the present value of lease payments over the lease term. The lease ROU asset also includes any lease payments made and excludes any lease incentives. When readily determinable, we use the implicit rate in determining the present value of lease payments. When leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the lease commencement date, including the lease term.

Short-term leases with an initial term of 12 months or less are not recorded on the balance sheet. Lease expense for short-term leases is recognized on a straight-line basis over the lease term. As of March 31, 2021 we did not have any short-term leases.

The tables below present financial information associated with our lease.

SCHEDULE OF FINANCIAL INFORMATION LEASE

	Balance Sheet Classification	March 31, 2021		December 31, 2020

Right-of-use assets	Other long-term assets		20,612		23,145
Current lease liabilities	Other current liabilities		11,028		13,107
Non-current lease liabilities	Other long-term liabilities		13,718		13,909

As of March 31, 2021, the maturities of our lease liability are as follows:

SCHEDULE OF MATURITIES LEASE LIABILITY


2021	$	15,050
Total	$	15,050
Less: Imputed interest		(1,332	)
Present value of lease liabilities	$	13,718

NOTE 6. NOTES PAYABLE

The following table summarizes the Company’s notes payable:

SCHEDULE OF NOTES PAYABLE

	Interest rate			Date of maturity		March 31, 2021			December 31, 2020
Truck loan ⁽ⁱ⁾		5	%		January 20, 2022	$	7,990		$	9,916
Credit note I ⁽ⁱⁱ⁾		12	%		May 11, 2021		—			800,000
Credit note II ⁽ⁱⁱⁱ⁾		12	%		October 17, 2019		—			346,038
Credit note III ^(iv)		15	%		April 25, 2021		—			750,000
Discount on credit note III		—			—		—			(5,976	)
Credit note IV^(v)		10	%		June 30, 2021		933,095			937,109
Discount on credit note IV		—			—		(238,577	)		(285,768	)
Credit note V^(vi)		10	%		December 31, 2021		918,049			—
Discount on credit note V		—			—		(1,195	)		—
Credit note VI ^(vii)		10	%		December 31, 2021		1,133,104			—
Lee Lytton		—			On demand		3,500			3,500
Joel Oppenheim ^(viii)		10	%		On demand		—			161,900
Joel Oppenheim ^(viii)		10	%		On demand		—			15,000
Joel Oppenheim^(viii)		10	%		October 17, 2018		—			240,000
Credit Note VII ^(viii)		10	%		December 31, 2021		416,900			—
Origin Bank (PPP loan) ^(ix)		—			—		56,680			56,680
M. Horowitz		10	%		October 14, 2016		10,000			10,000
						$	3,239,546		$	3,038,309
Current portion:
Truck loan						$	7,990		$	9,343
Credit note I							—			800,000
Credit note II							—			346,038
Credit note III							—			744,023
Credit note IV							694,518			651,251
Credit note V							916,854			—
Credit note VII							1,133,104			—
Lee Lytton							3,500			3,500
Joel Oppenheim							—			161,900
Joel Oppenheim							—			15,000
Joel Oppenheim							—			240,000
Credit note VII							416,900			—
Origin Bank (PPP loan)							56,680			56,680
M. Horowitz							10,000			10,000
Current portion of notes payable						$	3,239,546		$	3,037,737

(i)

On January 6, 2017, the Company purchased a truck and entered into an installment note in the amount of $35,677 for a term of five years and interest at 5.49% per annum. Payments of principal and interest in the amount of $683 are due monthly.

	(ii)	On May 9, 2018, Bow entered into an Amended and Restated Loan Agreement with a third party. The Loan Agreement increased by $800,000 the amount of a previous loan agreement entered into between Bow and the Lender, to $1,530,000. The amount owed under the Loan Agreement accrues interest at the rate of 12% per annum (19% upon the occurrence of an event of default) and is due and payable on May 11, 2021, provided that the amount owed can be prepaid prior to maturity, beginning 60 days after the date of the Loan Agreement, provided that the Company gives the Lender 10 days’ notice of our intent to repay and pays the Lender the interest which would have been due through the maturity date at the time of repayment. The Loan Agreement contains standard and customary events of default, including cross defaults under other indebtedness obligations of us and Bow, and the occurrence of any event which would have a material adverse effect on us or Bow. The Company is required to make principal payments of $10,000 per month from January through September 2019 with the remaining balance of $710,000 due at maturity on May 11, 2021. The additional $800,000 borrowed in connection with the entry into the Loan Agreement was used by the Company to acquire a 25% working interest in approximately 41,526 acres located in the Luseland, Hearts Hill, and Cuthbert fields, located in Southwest Saskatchewan and Eastern Alberta, Canada (collectively, the “Canadian Properties” and the “Working Interest”). Upon the disposition of Bow, a total of $730,000 of the obligations owed under the Loan Agreement were transferred to Blue Sky Resources Ltd. (“Blue Sky”).

		In order to induce the Lender to enter into the Loan Agreement, the Company agreed to issue the Lender 500,000 shares of restricted common stock (the “Loan Shares”), which were issued on May 18, 2018, and warrants to purchase 2,320,000 shares of common stock (the “Loan Warrants”), of which warrants to purchase (a) 320,000 shares of common stock have an exercise price of $0.10