|12 Months Ended|
Dec. 31, 2021
|Subsequent Events [Abstract]|
NOTE 16. SUBSEQUENT EVENTS
On February 16, 2022, the Company entered into both a Purchase and Sale Agreement and a Debt Settlement Agreement with Prospera Energy, effective as of October 1, 2021. Prospera agreed to purchase the Company’s twenty-eight percent (28%) working interest in the Cuthbert, Luseland and Heart Hills assets in Saskatchewan and Alberta. Under these agreements Prospera will forgive $1,720,613 CAD in accounts payable from the Company, arising from joint interest billings. Prospera will also issue a $510,000 CAD convertible debenture to Petrolia Canada, which can be converted to common share units. Lastly, Prospera will pay the Company $75,000 CAD in five equal installments. See Form 8-K reference in Exhibits section below.
On March 11, 2022, the Company filed a lawsuit in Harris County Texas against Jovian Petroleum Corporation, Zel Khan and Quinten Beasley. The lawsuit claims fraud and breach of contract against all named defendants, as well as breach of fiduciary duty claims against Zel Khan and Quinten Beasley. Petrolia and Petrolia Canada are demanding a jury trial and are seeking monetary relief of more than $1 million against the Defendants. In September 2022, Defendants filed an amended answer and counterclaims. Defendants are seeking indemnification under the Company’s governing documents and statutory provisions. Beasley is also seeking repayment of the outstanding balance of $5,000 plus accrued interest in connection with a promissory note entered into with the Company on July 14, 2016. On October 11, 2022, Petrolia and Petrolia Canada filed a general denial of all of the Defendants’ counterclaims. The outcome of the above litigation is currently unknown; however, the Company disputes the Defendants’ counterclaims and intends to defend the matter vigorously, while also continuing to seek all damages which it is due. See Form 8-K(s) referenced in Exhibits section below.
On March 16, 2022, Petrolia Canada Corporation received a Notice of Intention to Retain Collateral Pursuant to Section 62 of the Personal Property Security Act (Alberta) from the counsel of Blue Sky Resources Ltd. related to a Loan Agreement and General Security Agreement between Petrolia Canada Corporation and Emmett Lescroart. Petrolia Canada Corporation was notified that Blue Sky Resources Ltd., as assignee of the Emmet Lescroart loan, intends to retain the Utikuma loan collateral pursuant to the General Security Agreement with Petrolia Canada Corporation. On March 30, 2022, Petrolia Canada Corporation’s counsel responded to Blue Sky Resources, Ltd. with a Notice of Objection.
On January 28, 2022, the Securities and Exchange Commission filed an Order Instituting Administrative Proceedings and Notice of Hearing Pursuant to Section 12(j) of the Securities Exchange Act of 1934 to suspend for a period not exceeding twelve months or revoke the registration of each class of securities registered pursuant to Section 12 of the Exchange Act of the Company. The Division of Enforcement at the Securities and Exchange Commission (the “Division”) filed a Motion for Summary Disposition in this matter and the Company filed a Response to the Motion for Summary Disposition in April 2022. On May 5, 2022, the Division filed its Response in Support of its Motion for Summary Disposition.
On June 13, 2022, a Letter Agreement was signed between Blue Sky Resources Ltd. (“BSR”) and Petrolia Energy Corporation whereby Petrolia Canada Corporation (“PCC”) will sell to Blue Sky Resources its 50% working interest in the Utikuma Lake oil field. See Form 8-K reference in Exhibits section below.
Effective June 15, 2022, Heather Monk was promoted from Corporate Controller to Interim Chief Financial Officer.
The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef