8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): April 19, 2018

Petrolia Energy Corporation

(Exact name of registrant as specified in its charter)

Texas	000-52690	86-1061005
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

710 N. Post Oak Rd., Ste. 512, Houston, Texas	77024
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: 832-941-0011

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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. ☐

Item 1.01 Entry into a Material Definitive Agreement.

On April 19, 2018, Petrolia Energy Corporation (the “Company”) entered into a Separation and Release Agreement with James E. Burns, its then President (the “Separation Agreement”). Pursuant to the Separation Agreement, Mr. Burns and the Company agreed:

(a)	that Mr. Burns would resign as President of the Company, effective May 1, 2018;
(b)	that the Company would pay Mr. Burns $33,000 in cash, issue him a warrant to purchase 3,000,000 shares of common stock (the “Separation Warrants” (which have a term of three years and an exercise price of $0.10 per share)) and issue him 2,000,000 shares of restricted common stock (the “Separation Shares”);
(c)	that Mr. Burns would release the Company from any further obligations under his prior employment agreement and release the Company from any other liabilities or claims; and
(d)	that Mr. Burns would refrain from using the Company’s confidential information, pursuant to the terms of the Separation Agreement.

The description of the Separation Agreement and warrants described above is qualified in all respects by the actual terms, conditions and provisions of the Separation Agreement and Warrant to Purchase Common Stock, which are filed herewith as Exhibits 10.1 and 10.3, and incorporated by reference into this Item 1.01.

Item 3.02 Unregistered Sales of Equity Securities.

We claim an exemption from registration pursuant to Section 4(a)(2) and/or Rule 506(b) of Regulation D of the Securities Act of 1933, as amended (the “Securities Act”), and the rules and regulations promulgated thereunder in connection with the issuance and grant of the Separation Warrants and Separation Shares, described above, and the Letter Warrants and Letter Shares, described below, since the foregoing issuances and grants did not involve a public offering, the recipient was (a) an “accredited investor”, and/or (b) had access to similar documentation and information as would be required in a Registration Statement under the Securities Act. With respect to the transaction described above, no general solicitation was made either by us or by any person acting on our behalf. The transaction was privately negotiated, and did not involve any kind of public solicitation. No underwriters or agents were involved in the foregoing issuance and we paid no underwriting discounts or commissions.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory

Effective on May 1, 2018, the Board of Directors of the Company (a) appointed Zel C. Khan (the current Chief Executive Officer and Director of the Company) as President of the Company; and (b) appointed James E. Burns, the Company’s President prior to May 1, 2018, as Chairman of the Board of Directors of the Company.

On April 26, 2018, and effective May 1, 2018, the Company entered into a letter agreement with Mr. Burns dated April 20, 2018, pursuant to which, he agreed to serve as Chairman of the Company and the Company agreed to pay him (a) $500 per month as an automobile allowance, (b) up to $25,000 per year for he and his family’s health insurance, (c) $65,000 per year for compensation as Chairman (provided that such compensation is accrued until the Company has sufficient available capital to pay such amounts in cash and Mr. Burns is to receive 1-for-1 warrant coverage, with a $0.10 per share exercise price, for all accrued salary, issuable at the end of each calendar quarter), (d) 500,000 shares of the Company’s restricted common stock (the “Letter Shares”), (e) warrants to purchase 2,000,000 shares of the Company’s common stock, vesting at the rate of 750,000 of such warrants per quarter, upon completing and filing of each of the following four periodic filings with the Securities and Exchange Commission, having a term of 36 months, and an exercise price of $0.10 per share (the “Letter Warrants”), and (f) the right to earn bonuses as approved by the Board of Directors in its discretion from time to time. The letter agreement has a term through April 30, 2019, provided that Mr. Burn’s position as Chairman and/or director can be terminated at any time if he is not re-nominated to serve as Chairman/director, at which time the Company is required to pay the compensation due to Mr. Burns pursuant to the terms of the agreement for the lesser of three months and until the end of the term.

The description of the letter agreement and warrants described herein is qualified in all respects by the actual terms, conditions and provisions of the letter agreement and Warrant to Purchase Common Stock, which are filed herewith as Exhibits 10.2 and 10.3, and incorporated by reference into this Item 1.01.

Item 8.01 Other Events

On May 1, 2018, the Company released a press release disclosing the items described in Item 1.01 and 5.02 above, a copy of which is furnished herewith as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

Exhibit No.	Description
10.1*	Separation and Release Agreement dated April 19, 2018, by and between James E. Burns and Petrolia Energy Corporation
10.2*	Chairman Offer Letter dated April 20, 2018, by and between James E. Burns and Petrolia Energy Corporation
10.3*	Warrant to Purchase Common Stock, evidencing warrants to purchase 5,000,000 shares of common stock granted to James E. Burns on April 19, 2018
99.1**	Press Release dated May 1, 2018

* Filed herewith.

** Furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Petrolia Energy Corporation

/s/ Tariq Chaudhary

Tariq Chaudhary

CFO

Date: May 1, 2018

EXHIBIT INDEX

Exhibit No.	Description
10.1*	Separation and Release Agreement dated April 19, 2018, by and between James E. Burns and Petrolia Energy Corporation
10.2*	Chairman Offer Letter dated April 20, 2018, by and between James E. Burns and Petrolia Energy Corporation
10.3*	Warrant to Purchase Common Stock, evidencing warrants to purchase 5,000,000 shares of common stock granted to James E. Burns on April 19, 2018
99.1**	Press Release dated May 1, 2018

* Filed herewith.

** Furnished herewith.

EX-10.1

Petrolia Energy Corporation 8-K

Exhibit 10.1

 

 

EX-10.2

Petrolia Energy Corporation 8-K

Exhibit 10.2

 

 

EX-10.3

Petrolia Energy Corporation 8-K

Exhibit 10.3

 

 

 

EX-99.1

Petrolia Energy Corporation 8-K

Exhibit 99.1

™

Petrolia Energy Welcomes a New Director and a New Chairman

HOUSTON, TX – May 1, 2018 -- Petrolia Energy Corporation (OTCQB: BBLS) (“Petrolia”, “Petrolia Energy” or the “Company”) is pleased to announce the appointment of Mr. Ivar Siem to its Board of Directors. Mr. Siem fills the vacancy left following the recent passing of Mr. Lee Lytton.

“Mr. Siem has a wealth of knowledge and experience, especially in the Permian Basin, and is a tremendous asset to the Company,” commented Mr. Zel C. Khan, CEO of Petrolia.

Ivar Siem is the Chairman of privately held American Resources Inc. ("American") and served as CEO of American from January 2013 until August 2017. Mr. Siem has broad experience from both the upstream and the service segments of the oil and gas industry. Mr. Siem previously served as the Chairman, CEO and Director of Blue Dolphin Energy (Nasdaq: BDCO) from January 1990 to May 2014. He has been the founder of several companies and involved in multiple roll-ups and restructuring processes throughout his career. These include Fred Olsen, Inc., Dolphin International, Inc., Blue Dolphin Energy, Seateam Technology ASA, DI Industries/Grey Wolf Drilling, American Resources Offshore, Inc., and Equimavenca SA. He has served on a number of public and private company boards including Frupor SA, Avenir ASA, Wellcem AS, and Siem Industries, Inc.

Mr. Siem holds a Bachelor of Science Degree in Mechanical Engineering from the University of California, Berkeley and an Executive MBA from the Amos Tuck School of Business, Dartmouth University.

The Company also announces that having served as Chairman of the Board since 2014, Mr. Leo Womack has decided to relinquish the Chairman’s position. Mr. Womack will continue to provide valuable leadership as a Director and head of the Audit Committee of the Company. Mr. James E. Burns has been selected as the new Chairman of the Board. Mr. Burns will resign as President to take on the role of Chairman effective May 1, 2018. Mr. Khan will take on the role of President in addition to his role as the CEO.

“Over the past 12 months, James has been an integral part of Petrolia’s expansion, and as we head towards our next growth phase, his leadership and experience in both the domestic and international arena will be essential as Chairman,” stated Mr. Leo Womack.

Mr. Burns is an experienced Executive and Board Director with a long career in the Energy field and in many senior corporate positions at Shell, Texaco and ARCO as well as Director and President roles in Transfuels and Fortress Energy Partners. Mr. Burns is a Senior Executive with year-after-year success achieving revenue, profit, and business growth objectives within start-up, turnaround, and rapid-change environments.

Mr. Burns has a BS in Business Administration from California State University and an Executive MBA from the University of Houston.

About Petrolia Energy Corporation

Petrolia Energy Corporation is headquartered in Houston, Texas, the energy capital of the world. With over 80 years of operational and management experience throughout the energy industry, the Company explores oil and gas development opportunities. Petrolia Energy’s core focus is on the utilization of new technology as well as the implementation of its own proprietary technologies in order to improve the recoverability of existing oil fields.

Petrolia Energy’s team of experts has an outstanding record of converting legacy oil fields into compliant, producing, and profitable entities. Petrolia Energy is committed to achieving these results by being a good neighbor and partner in the communities it operates in, as well as being excellent stewards of the environment. This can only be achieved long term with regulatory compliant operations that embrace the concepts of environmental stewardship.

Petrolia Energy’s primary goal is to locate undervalued assets, identify properties with resolvable environmental and mechanical issues and lowering lift costs resulting in increased shareholder value.

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Forward-looking Statements

Certain information in this press release constitutes forward-looking statements within the meaning of applicable securities laws, including, but not limited to, statements regarding well production, use of proceeds, future drilling, operating expenses, and additional funding. Any statement that does not contain a historical fact may be deemed to be a forward-looking statement. In some cases, forward-looking statements can be identified by terminology such as "may," "will," "should," "expect," "plan," "intend," "anticipate," "believe," "estimate," "predict," "potential," or "continue," the negative of such terms, or other comparable terminology, although not all forward-looking statements contain such identifying words.

Forward-looking statements are subject to a number of assumptions, risks, and uncertainties, many of which are beyond the Company's control, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. Such assumptions, risks, and uncertainties include, among others, those associated with exploration activities, oil and gas production, marketing and transportation, costs of operations, loss of markets, volatility of oil and gas prices, reserve and future production estimates, environmental risks, competition, inability to access sufficient capital from internal and external sources, general economic conditions, litigation, and changes in regulation and legislation. Readers are cautioned that the foregoing list is not exhaustive.

Additional information on these and other factors that could affect Petrolia's operations or financial results is available by contacting Petrolia and is included in the risk factors and other sections of Petrolia’s most recent annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. The forward-looking statements contained in this press release are made as of the date of this press release, and Petrolia does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events, or otherwise, except as expressly required by applicable law. The Company's SEC filings are available at http://www.sec.gov.

For more Information contact:

Media Contact:

Press@PetroliaEnergy.com

Investor Relations Contact:

IR@PetroliaEnergy.com

www.PetroliaEnergy.com

Petrolia Energy Corporation (OTCQB: BBLS) trades on the OTCQB Venture Market for early stage and developing U.S. and international companies. Companies are current in their reporting and undergo an annual verification and management certification process. Investors can find Real-Time quotes and market information for the company on www.otcmarkets.com.

Source: Petrolia Energy Corporation 

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