NOTE 14. SUBSEQUENT EVENTS

All shares of the Series A Preferred Stock are being converted to common shares of stock. The Company determined that this conversion automatically occurred on May 3, 2022, per the terms of the Certificate of Designations of Petrolia Energy Corporation Establishing the Designations, Preferences, Limitations and Relative Rights of Its Series A Convertible Preferred Stock, filed with the Secretary of State of Texas on May 3, 2017. The accrued dividends on the Series A Preferred Stock were adjusted. They stopped accruing on May 3, 2022, however the unpaid dividends accrued interest at a rate of 12%. The accrued dividends were adjusted to reflect this, and instructions have been sent to the Company’s transfer agent to complete the conversion. Series A Preferred shareholders are being informed of this conversion by letter, as required by the Certificate filed with the State of Texas.

All outstanding shares of Petrolia’s Series A Preferred Stock automatically converted into common stock of the Company pursuant to Section 3.2 of that certain Certificate of Designations of Petrolia Energy Corporation Establishing the Designations, Preferences, Limitations and Relative Rights of Its Series A Convertible Preferred Stock filed by the Company with the Secretary of State of Texas on May 3, 2017.

Specifically, (a) Section 3.2 of the Designation provides that “[e]ach share of Series A Preferred Stock and all Accrued Dividends thereon, shall automatically and without any required action by any Holder, be converted into that number of fully-paid, non-assessable shares of Common Stock as determined by dividing the Original Issue Price of each share of Series A Preferred and all Accrued Dividends thereon by the Conversion Price, on the Automatic Conversion Date”; and (b) Section 15.1 of the Designation provides that “Automatic Conversion Date” means “the first to occur of (i) the Holders of a majority of the shares of Series A Preferred Stock then outstanding consenting to an Automatic Conversion; (ii) the closing of Qualified Public Offering; (iii) the five year anniversary of the date that this Designation is filed with the Secretary of State of Texas; and (iv) the date that the average closing price per share of the Corporation’s Common Stock as reported on a national securities exchange, NASDAQ, the OTCQX, the OTCQB, or the OTC Pink market, equals or exceeds $0.28 per share (subject to adjustment in connection with any Recapitalization) during any period of thirty (30) consecutive trading days.” The Automatic Conversion occurred on May 3, 2022. The Company has determined that because this is a recapitalization, prior periods will not be restated.