6-K
Strata Power Corp (SPOWF)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
Pursuant to Rule 13-a16 or 15d-16 under the Securities Exchange Act of 1934
For the month of January 2024
STRATA POWER CORPORATION
(Registrant’s Name)
34334 Forrest Terrace
Abbotsford, BC V2S 1G7
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F: Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____
This Form 6-K filing is made to mirror similar filings made by the Registrant on SEDAR in Canada in accordance with its Canadian Securities Administrators National Instrument NI-51-102 Continuous Disclosure Obligations. This Form 6-K filing includes the attached exhibits as follows:
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
Strata Power Corporation
___/s/ Trevor Newton______________
By: /s/ Trevor Newton
Name: Trevor Newton
Title: President
Date: January 10, 2024
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Exhibit 99.1
Strata Power Corporation (An Exploration Stage Company) FINANCIAL STATEMENTS For the Three Months ended March 31, 2021 and 2020 (unaudited) (Stated in US Dollars) 1
STRATA POWER CORPORATION BALANCE SHEETS As of March 31, 2021, and December 31, 2020 (Expressed in US Dollars) December 31, 2020 March 31, 2021 (unaudited) ASSETS Current assets: $ 21,717 $ 10,924 Cash 2,348 2,445 GST receivables 24,065 13,369 Total current assets 99,916 101,167 Reclamation deposits 59,828 59,828 PetroSteam license $ 183,809 $ 174,363 Total assets LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: 2 $ 101,367 $ 102,647 Accounts payable and accrued liabilities 21,958 22,205 Accounts payable and accrued liabilities – related party 8,537 8,694 Notes payable 24,336 28,498 Derivative liability 156,198 162,044 Total current liabilities 300,000 300,000 Deferred revenue - royalty agreement (Note 8) 197,904 205,074 Asset retirement obligation 497,904 505,074 Total long - term liabilities 654,102 667,118 Total liabilities – – Commitments and Contingencies Stockholders' equity (deficit): – – Preferred stock: no par value, unlimited shares authorized, and none issued – – Common stock: no par value, unlimited shares authorized; 20,085,119 shares issued and outstanding at March 31, 2021 and December 31, 2021, respectively 23,404,083 23,404,083 Additional paid - in capital 5,000 5,000 Common shares to be issued (23,474,066) (23,496,144) Accumulated deficit (470,293) (405,694) Accumulated other comprehensive income (488,567) (492,755) Total stockholders' deficit $ 183,809 $ 174,363 Total liabilities and Stockholders' equity (deficit) The accompanying notes are an integral part of these unaudited financial statements.
STRATA POWER CORPORATION STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Expressed in US Dollars) (Unaudited) For the Three Months Ended March 31, 2019 2020 $6,500 $6,500 Operating Expenses: Professional fees 670 214 Office and sundry - 1,356 Consulting fees 225 95 Transfer agent fees 3,018 4,940 Accretion expense 7,786 3,025 Oil & gas properties expense $18,199 16,130 Total operating expenses 464 124 Other income (expense): Interest income (63) (61) Interest expense, related party 12,264 (2,124) Foreign exchange gain (loss) (702) (3,887) Change in fair value of derivative liability 11,963 (5,948) Total other income (expense) $(6,236) (22,078) Net loss 2,586 (384) Other comprehensive income (loss) Foreign currency translation adjustment $(3,650) $(22,462) Comprehensive loss ($0.00) ($0.00) Income per common share Basic ($0.00) ($0.00) Diluted Weighted average number of shares outstanding: 20,085,119 20,085,119 Basic 20,085,119 20,085,119 Diluted 3 The accompanying notes are an integral part of these unaudited financial statements.
STRATA POWER CORPORATION STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) (Expressed in US Dollars) Common Stock Additional Paid - in Common Shares to be Accumulated Accumulated Other Comprehensive Total Stockholders' Shares Capital Issued Deficit Income Equity (Deficit) Balance December 31, 2019 20,085,119 $ 23,404,083 $ 0 $ (23,451,107) $ (403,012) $ (290,521) Net loss and comprehensive income – – 20,085,119 $ 23,40
4,083 $ (6,236) 2,586 (3,650) Balance March 31, 2020 0 $ (23,457,343) $ (401,986) $ (455,245) Balance December 31, 2020 20,085,119 $ 23,404,083 $ 5,000 $ (23,474,066) $ (405,310) $ (470,293) Net loss and comprehensive income – – 20,085,119 $ 23,404,083 $ (22,078) (384) (22,462) Balance March 31, 2021 5,000 $ (23,496,144) $ (405,694) $ (492,755) The accompanying notes are an integral part of these unaudited financial statements. 4
5 STRATA POWER CORPORATION STATEMENTS OF CASH FLOWS (Expressed in US Dollars) (Unaudited) For the three months ending March 31, 2021 2020 Cash flows from operating activities: $ (6,236) $ (22,078) Net Loss Adjustments to reconcile net loss to net cash used in operating activities 3,018 4,940 Accretion expense 702 3,887 Change in fair value of derivative liability Change in assets and liabilities 173 (97) GST receivable 461 - Prepaid expenses 11,939 1,281 Accounts payable 63 61 Accrued interest expense – related party 10,120 (12,006) Net cash provided by (used in) operating activities Cash flows from investing activities: Reclamation Deposits Net provided used in investing activities (124) (124) (464) (464) Cash flows from financing activities: - - - - Net cash provided by financing activities Foreign exchange effect on cash 1,337 (9,893) Net decrease in cash Cash, beginning balance Cash, ending balance (10,793) 21,717 $ 10,924 (237) 4,557 $ 4,320 Supplemental disclosure of cash paid for: Interest Income taxes $ – $ – $ – $ – The accompanying notes are an integral part of these unaudited financial statements
6 STRATA POWER CORPORATION NOTES TO FINANCIAL STATEMENTS March 31, 2021 (Expressed in US Dollars) (Unaudited) NOTE 1. NATURE OF BUSINESS Strata Power Corporation (the “Company”) is currently engaged in the acquisition, exploration and, if warranted, feasible development of heavy oil projects in the Peace River oil sands region in Northern Alberta, Canada . The Company was incorporated under the laws of the State of Nevada on November 18 , 1998 and commenced operations in January 1999 . The Company completed its initial public offering in February 2000 . The Company is presently incorporated under the Canada Business Corporations Act . On December 27 , 2018 , the Company filed a Certificate of Amendment with Corporations Canada changing its name from Strata Oil & Gas Inc . to Strata Power Corporation . As of March 31 , 2021 , the Company has a 50 % interest in 7 oil sands leases, totaling 40 , 704 hectares and 8 , 704 hectares, all located in the Peace River oil sands area . In addition, the Company has a royalty interest in 10 oil sands leases and owns 3 non - producing wells . The Company also has a Metallic and Industrial Minerals Permit in Alberta, totaling 9 , 800 hectares . NOTE 2. ABILITY TO CONTINUE AS A GOING CONCERN As shown in the accompanying financial statements, the Company has not realized any revenue from its present operations . During the three - month period ended March 31 , 2021 , the Company incurred a net loss of $ 22 , 078 , had cash flows used in operations of $ 12 , 006 and is expected to incur negative operating cash flows in the foreseeable future . The Company has an accumulated deficit of $ 23 , 496 , 144 at March 31 , 2021 . These conditions raise substantial doubt regarding the Company’s ability to continue as a going concern . The financial statements have been prepared on a going concern basis, which contemplates realization of assets and liquidation of liabilities in the ordinary course of business . The Company's ability to continue as a going concern is dependent on its ability to develop its oil and gas properties and ultimately achieve profitable operations, and to generate sufficient cash flow from financing and operations to meet its obligations as they become payable . The Company expects that it will need approximately $ 115 , 000 to fund its operations during the next twelve months, which will include minimum annual property lease payments, expected exploration expenditures for permitting and drilling, as well as operating expenses . Management has plans to seek additional capital through a private placement of its common stock . Although there are no assurances that management’s plans will be realized, management believes that the Company will be able obtain sufficient capital to continue operations in the next 12 months . Accordingly, no adjustment relating to the recoverability and classification of recorded asset amounts and the classification of liabilities has been made to the accompanying financial statements in anticipation of the Company not being able to continue as a going concern . NOTE 3. SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The interim financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission . Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate so as to make the information presented not misleading .
7 Reclassifications Certain amounts related to the prior year financial presentation have been reclassified to conform with the presentation as of March 31, 2021. Management’s Estimates and Assumptions The preparation of the unaudited financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the balance sheet date, and revenues and expenses for the period then ended . Management believes that all applicable estimates and adjustments are appropriate . Actual results could differ significantly from those estimates . Oil and Gas Property Payments and Exploration Costs All costs incurred in the acquisition, exploration and development of natural gas and oil interests are expensed as incurred . When it has been determined that the natural gas and oil properties can be economically developed as a result of proven and probable reserves, the costs incurred to acquire and develop such property will be capitalized . Such costs will be amortized using the units - of - production method over the estimated life of the probable reserve . No costs have been capitalized through March 31 , 2021 . Cash and Cash Equivalents The Company considers all highly liquid investments purchased with a maturity of 90 days or less to be cash equivalents . The Company maintains cash and cash equivalent balances with financial institutions that may exceed federally insured limits . There were no cash equivalent balances as of March 31 , 2021 or December 31 , 2020 . GST Receivables Goods and Services Tax (GST) receivables are presented net of an allowance for doubtful accounts . Receivables consist of goods and services input tax credits . The allowance for doubtful accounts on GST receivables was $ nil at March 31 , 2021 and December 31 , 2020 . Impairment of Long - lived Assets In accordance with ASC 360 , Property, Plant and Equipment, long lived assets such as equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable . Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset . If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset . Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount of fair value less costs to sell and are no longer depreciated . The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet . Asset Retirement Obligations In accordance with ASC 410 , Asset Retirement and Environmental Obligations, the fair value of an asset retirement cost, and corresponding liability, should be recorded as part of the cost of the related long - lived asset and subsequently allocated to expense using a systematic and rational method . The Company has recorded an asset retirement obligation at March 31 , 2021 and December 31 , 2020 (Note 7 ) to reflect its legal obligations related to future abandonment of its oil and gas interests using estimated expected cash flow associated with the obligation and discounting the amount using a credit - adjusted, risk - free interest rate . At least annually, the Company will reassess the obligation to determine whether a change in any estimated obligation is necessary . The Company will evaluate whether there are indicators that suggest the estimated cash flows underlying the obligation have materially changed . Should those indicators suggest the estimated obligation has materially changed the Company will accordingly update its assessment . The liability accretes until the Company settles the obligation .
8 Income Taxes The Company follows the asset and liability method of accounting for income taxes whereby deferred tax assets and liabilities are recognized for the future tax consequences of differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases . If it is determined that the realization of the future tax benefit is not more likely than not, the Company establishes a valuation allowance . Foreign Exchange Translation The Company's functional currency is Canadian dollars but reports its financial statements in US dollars . The Company translates its Canadian dollar balances to US dollars in the following manner : Assets and liabilities have been translated using the rate of exchange at the balance sheet date . Equity transactions and results of operations have been translated at historical rates . Translation gains or losses resulting from the changes in the exchange rates are accumulated as other comprehensive income or loss in a separate component of stockholders' equity . All amounts included in the accompanying financial statements and footnotes are stated in US dollars. Derivative Financial Instruments The Company reviews the terms of its equity instruments and other financing arrangements to determine whether there are embedded derivative instruments that are required to be accounted for separately as a derivative financial instrument . Also, in connection with the issuance of financing instruments, the Company has issued freestanding warrants that are accounted for as derivative instrument liabilities because they are exercisable in a currency other than the functional currency of the Company and thus do not meet the “fixed - for - fixed” criteria of ASC 815 - 40 - 15 . The warrants are exercisable in United States dollars and the Company’s functional currency is the Canadian dollar . Derivative financial instruments are initially measured at their fair value . For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re - valued at each reporting date, with changes in the fair value reported as charges or credits to income . For option and warrant - based derivative financial instruments, the Company uses the Black - Scholes option pricing model to value the derivative instruments . Any exercise or cancellation of an equity instrument which meets the classification of a derivative financial instrument is trued - up to fair value at that date and the fair value of the exercised instrument is then reclassified from liability to additional paid in capital . The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period . If reclassification is required, the fair value of the derivative instrument, as of the determination date, is reclassified . Any previous charges or credits to income for changes in the fair value of the derivative instrument are not reversed . Derivative instrument liabilities are classified in the balance sheet as current or non - current based on whether net - cash settlement of the derivative instrument could be required within 12 months of the balance sheet date . Stock Based Compensation In accordance with ASC 718 , “Compensation – Stock Compensation” (“ASC 718 ”), which was adopted as of January 1 , 2019 , the Company measures all employee stock - based compensation awards using a fair value method on the date of grant and recognizes such expense in its financial statements over the requisite service period . The Company uses the Black - Scholes pricing model to determine the fair value of stock - based compensation awards on the date of grant . The Black - Scholes pricing model requires management to make assumptions regarding option lives, expected volatility, and risk - free interest rates . The Company accounts for non - employee stock - based awards in accordance with the provision of ASC 505 , “Equity Based Payments to Non - Employees” (“ASC 505 ”), which requires that such equity instruments are recorded at their fair value on the measurement date . The measurement of stock - based compensation is subject to periodic adjustment as the underlying equity instruments vest . The Company uses the Black - Scholes pricing model to
9 determine the fair value of stock - based compensation awards . The Black - Scholes pricing model requires management to make assumptions regarding option lives, expected volatility, and risk - free interest rates . The Company uses historical data to estimate option exercise, forfeiture and employee termination within the valuation model . For non - employees, the expected term of the options approximates the full term of the options . The risk - free interest rate is based on a treasury instrument whose term is consistent with the expected term of the stock options . The Company has not paid and does not anticipate paying dividends on its common stock ; therefore, the expected dividend yield is assumed to be zero . In addition, accounting standard requires companies to utilize an estimated forfeiture rate when calculating the expense for the reporting period . Based on its best estimate, management applied the estimated forfeiture rate of nil in determining the expense recorded in the accompanying Statements of Operations and Comprehensive Income (Loss) . Expected volatilities are calculated using the historical volatility of the Company’s stock . When applicable, the Company will use historical data to estimate option exercise, forfeiture and employees’ termination within the valuation model . For non - employees, the expected term of the options approximates the full term of the options . Earnings (Loss) Per Share of Common Stock Basic earnings (loss) per share of common stock is computed by dividing net income (loss) available to common shareholders by the weighted - average number of common shares outstanding for the period . Diluted earnings per share of common stock reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company . Dilutive potential common shares are calculated in accordance with the treasury stock method, which assumes that proceeds from the exercise of all warrants and options are used to repurchase common stock at market value . The number of shares remaining after the proceeds are exhausted represents the potentially dilutive effect of the securities . For the three months ended March 31 , 2021 and 2020 , all of the outstanding options and warrants had an exercise price above the average stock price for the three - month period . Accordingly, all of the potentially dilutive shares were excluded from the computation of diluted shares outstanding as they would have had an anti - dilutive impact on the Company’s loss from continuing operations . Fair Value of Financial Instruments The book values of GST receivables, notes receivable, accounts payable and accrued expenses approximate their respective fair values due to the short - term nature of these instruments . The fair value hierarchy under GAAP distinguishes between assumptions based on market data (observable inputs) and an entity’s own assumptions (unobservable inputs) . The hierarchy consists of three levels : · Level one - Quoted market prices in active markets for identical assets or liabilities; · Level two - Inputs other than level one inputs that are either directly or indirectly observable; and · Level three - Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use. Determining which category an asset or liability falls within the hierarchy requires significant judgment . We evaluate our hierarchy disclosures each balance sheet date . Liabilities measured at fair value are summarized as follows as of March 31 , 2020 : Fair Value Measurement at December 31, 2020 Fair Value Measurement at March 31, 2021 Total Using Level 3 Total Using Level 3 Liabilities: $ 24,336 $ 24,336 $ 28,498 $ 28,498 Derivative liabilities 197,904 197,904 205,074 205,074 Asset Retirement Obligation (see Note 7)
10 The Company measures and reports the fair value liability for warrants with a strike price currency different than the functional currency of the Company on a recurring basis . The fair value liabilities for warrants have been recorded as determined utilizing the Black - Scholes option pricing model . A slight change in an unobservable input like historical volatility could have a significant impact on the fair value measurement of the derivative liabilities . See Note 5 “Derivative Liabilities” for further discussion of the inputs used in determining the fair value . Comprehensive Income (Loss) Comprehensive income (loss) is defined to include all changes in equity except those resulting from investments by owners and distributions to owners . The Company's items of other comprehensive income (loss) are foreign currency translation adjustments . Related Party Transactions A related party is generally defined as (i) any person who holds 10 % or more of the Company’s securities and their immediate families, (ii) the Company’s management, (iii) an entity or person who directly or indirectly controls, is controlled by or is under common control and/or management with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company . A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties . New Accounting Pronouncements The Company has implemented all new accounting pronouncements that are in effect . These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations . NOTE 4. PETROSTEAM LICENSE On March 20 , 2019 , the Company entered into an exclusive license agreement with PetroSteam LLC to obtain an exclusive right to deploy patented and field - tested proprietary technologies utilizing steam generation applied to bitumen and heavy oil recovery in the Provinces of Alberta and Saskatchewan . In exchange, the Company has issued 2 , 991 , 400 restricted common shares . In addition, the Company has agreed, subject to certain qualifications and milestones being met, to purchase steam generation equipment from PetroSteam totaling $ 12 , 500 , 000 to be used on its bitumen/heavy - oil projects . NOTE 5. DERIVATIVE LIABILITIES Derivative liabilities consist of common stock warrants with an exercise price in a different currency than the Company’s functional currency and they are accounted for as separate liabilities measured at their respective fair values as follows : $ 48,055 Balance, December 31, 2019 (1,487) Exercise of warrants (16) Fair value of expired warrant (23,185) Change in fair value of derivative liabilities 969 Foreign exchange effect on derivative liability $ 24,336 Balance, December 31, 2020 (1,065) Fair value of expired warrant 4,953 Change in fair value of derivative liabilities 274 Foreign exchange effect on derivative liability $ 28,498 Balance, March 31, 2021
11 The fair value of the derivative liabilities has been determined using the Black - Scholes option pricing model using the following range of assumptions: December 31, 2020 March 31, 2021 411.10% 469.7% Volatility 0.33 to 3.12 years .08 to 2.88 years Expected life 0.20% - 0.67% 0.21% - 1.55% Risk - free interest rate 0.00% 0.00% Dividend yield NOTE 6. OIL AND GAS PROPERTIES During the period June 2006 through January 2007 , the Company acquired the rights to multiple oil sands leases within the Peace River area of Alberta, Canada (the “Peace River Properties”) . The leases were granted by the Province of Alberta . All the leases are for a 15 - year term, require minimum annual lease payments, and grant the Company the right to explore and develop oil sands on the respective leases . On February 22 , 2016 , the Company acquired an additional 45 oil sands leases by entering into two purchase and sale agreements . The oil sands leases represent 39 , 680 hectares ( 98 , 051 acres) in the Peace River area of Alberta . One of the purchase / sale agreements was with a related party . On May 14 , 2019 , the Company sold the shallower oil sands rights on two of its oil sands lease blocks in the Cadotte East area to an unrelated third party, but has retained the deeper oil sands rights, including the Debolt - Elkton formations . The Company has also retained a 2 . 5 % overriding royalty on all petroleum substances produced from the shallower oil sands rights on those two lease blocks . The Company will continue to pay annual lease fees on those two oil sands lease blocks, but at a rate of 50 % , and the unrelated third party will pay the other 50 % . On three of its oil sands lease blocks in the Reno area, the Company has sold 100 % of its interest to an unrelated third party and has retained a 2 . 5 % overriding royalty on all petroleum substances produced from those oil sands lease blocks . On those three oil sands lease blocks, the unrelated third party has taken over 100 % of the annual lease fees . In connection with these sales, the Company recorded a gain of $ 44 , 569 . On June 11 , 2020 , the Company sold the shallower oil sands rights on five of its oil sands leases in the Cadotte Central area to an unrelated third party, but has retained the deeper oil sands rights, including the Debolt - Elkton formations . The Company has also retained a 2 . 5 % overriding royalty on all petroleum substances produced from those oil sands lease blocks . The Company will continue to pay annual lease fees on those two oil sands lease blocks, but at a rate of 50 % , and the unrelated third party will pay the other 50 % . In connection with this sale, the Company recorded a gain of $ 29 , 437 . Throughout 2020 , the Company has chosen not to renew their remaining oil sands leases due to weak conditions in the Alberta heavy oil sector . All the Company’s leases in the Peace River area are subject to royalties payable to the government of the Province of Alberta . The royalty is calculated using a revenue - less - cost formula . In years prior to the recovery of the project’s capital investment, the royalty is 1 % of gross revenue . Once the project costs have been recovered, the royalty is the greater of 1 % of gross revenue or 25 % of net revenue . The Company completed drilling four exploratory wells during the fiscal year ended December 31 , 2007 . Since then, the Company has completed several third - party technical reports on its oil sands leases including a prefeasibility study and has developed an oil sands exploration program . The Company intends to move forward on the program and projects when adequate funding is available . NOTE 7 . ASSET RETIREMENT OBLIGATIONS During 2007 , the Company drilled four wells on its Peace River Property . Total future asset retirement obligations were estimated by management based on the Company’s working interest in its wells and facilities, estimated costs
12 to remediate, reclaim and abandon the wells and facilities and the estimated timing of the costs to be incurred in future periods . The Company has estimated the net present value of its total asset retirement obligations to be approximately $ 205 , 074 at March 31 , 2021 , based on an undiscounted total future liability of $ 225 , 229 (CDN $ 293 , 000 ) . These payments are expected to be incurred between 2021 and 2030 . The Company used a credit adjusted discount rate of 10 % per annum and an inflation rate of 2 % to calculate the present value of the asset retirement obligation . Accretion expense of $ 4 , 940 and $ 3 , 018 for th three months ended March 31 , 2021 and 2020 , respectfully, has been recorded in the Statements of Operations and Comprehensive Income (Loss) . NOTE 8 . RELATED PARTY TRANSACTIONS Related party transactions not disclosed elsewhere in these financial statements include: Deferred Revenue - Royalty Agreement The Company has negotiated a royalty agreement with a related party by common CEO and director . In exchange for a non - refundable payment of $ 300 , 000 , the Company has sold a royalty to this related party on the gross production of Vanadium Oxide (“Vanadium”) from 19 of the Company’s oil sands leases . For each barrel of bitumen produced from the specified oil sands until March 21 , 2039 , or upon termination of mining, whichever is earlier, the Company will pay a royalty equal to 25 grams of Vanadium per barrel of bitumen produced, multiplied by the price of Vanadium Pentoxide 98 % min in - warehouse Rotterdam published on the last business day of the month in which the gross production of bitumen occurred . The $ 300 , 000 is recorded as deferred revenue and will be recognized at such time as the Company begins to produce Vanadium . Notes payable to related party In December 2015 , the Company borrowed $ 6 , 553 ( $ 9 , 000 Canadian) under a note agreement with related parties . The lenders were related parties through an immediate family relationship with officers or directors of the Company and a common director . The note payable bore interest at the Bank of Canada Prime rate plus 1 % . The Company could repay the loan and outstanding interest thereon by giving notice to the lender 15 days prior to the anticipated repayment . At March 31 , 2020 , the effective interest rate on these notes payable was 3 . 45 % . The balance of note payable, including interest, to related parties at March 31 , 2021 and December 31 , 2020 was $ 8 , 694 and $ 8 , 537 , respectively . The Company recognized interest expense of $ 61 and $ 63 for the three months ended March 31 , 2021 and 2020 , respectively, in its Statements of Operations and Comprehensive Income (Loss) . Consulting fees Mr . Newton is the President and a member of the Board of Directors of the Company . Mr . Newton does not bill the Company for his services as President ; however, he has a service agreement with the Company . No consulting fees were incurred for the three months ended March 31 , 2021 and 2020 . Dr . Michael Ranger is a member of the Board of Directors of the Company . Dr . Ranger does not receive compensation for his services as a member of the board ; however, he has a service agreement with the Company, including consulting time and expense reimbursement . Pursuant to this agreement, the Company recognized consulting expenses of $ 1 , 356 and $ 0 for the three months ended March 31 , 2021 and 2020 , respectively . NOTE 9. COMMITMENTS AND CONTINGENCIES Environmental Matters The Company is engaged in oil and gas exploration and may become subject to certain liabilities as they relate to environmental cleanup of sites or other environmental restoration procedures as they relate to the exploration of oil and gas . Should it be determined that a liability exists with respect to any environmental clean - up or restoration, the liability to cure such a violation could fall upon the Company . No claim has been made, nor is the Company aware of any liability, which it may have, as it relates to any environmental clean - up, restoration or the violation of any
13 rules or regulations relating thereto . Liabilities for expenditures are recorded when environmental assessment and/or remediation is probable, and the costs can be reasonably estimated . NOTE 10 . SUBSEQUENT EVENTS In accordance with SFAS 165 (ASC 855 - 10 ) management has performed an evaluation of subsequent events through the date that the financial statements were available to be issued and has determined that it does not have any material subsequent events to disclose in these financial statements .
Exhibit 99.2
Strata Power Corporation Interim MD&A – Quarterly Highlights For the Three Months ended 3/31/21 Management’s Discussion and Analysis of Financial Condition and Results of Operations Management’s Discussion and Analysis of Financial Condition ("MD&A") and Results of Operations should be read in conjunction with the accompanying un - audited financial statements. The financial statements are presented in United States dollars and have been prepared in accordance with accounting principles generally accepted in the United States, referred to as US GAAP. Certain statements contained in the MD&A constitute forward - looking statements. Such forward - looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward - looking statements. Readers are cautioned not to place undue reliance on these forward - looking statements which speak only as of the date the financial statements were made and readers are advised to consider such forward - looking statements in light of the risks set forth both below and in the Company’s most recent annual report. RESULTS OF OPERATIONS Three months ended March 31, 2021 compared to three months ended March 31, 2020. For the three months ended March 31, 2021 and 2020, the Company had a net loss from operations of $22,078 and $6,236, respectively, for an approximate $16,000 increase of net loss. The primary reasons for the increased net loss are the change in the foreign exchange gain (loss) of $14,000 and the change in the fair value of derivative liability of $3,000. This was offset by the decrease in the oil & gas properties expense of $5,000. For the three months ended March 31, 2021 and 2020, the Company recorded a loss in the change in fair value of derivative liability of $3,887 and $702, respectively. This item is a non - cash item and was recorded in accordance with ASC 850 - 40 - 15. This guidance requires entities to evaluate whether an equity - linked financial instrument (or embedded feature) is indexed to its own stock by assessing the instrument’s contingent exercise provisions and settlement provisions. Instruments not indexed to their own stock fail to meet the scope exception of Accounting for Derivative Instruments and Hedging Activities, ASC 815 - 10 - 15 - 74(a), and should be classified as a liability and marked - to - market. REVENUES The Company did not earn any revenue for the three months ended March 31 , 2021 or 2020 . We do not anticipate earning revenues until such time as we have entered into commercial production of our oil and gas properties . We can provide no assurance that we will enter into commercial production of our oil and gas properties . DISCONTINUED OPERATIONS There was no discontinued operations activity in 2021 or 2020. INTEREST AND OTHER INCOME (EXPENSE) Included in other income (expense) for the three months ended March 31, 2021 is a foreign exchange loss of $2,124. This compares to a foreign exchange gain of $12,264 for the three months ended March 31, 2020. Liquidity and Capital Resources As of March 31, 2021, we had $10,924 in cash, a decrease of $10,793 from December 31, 2019. Management estimates that the Company will require approximately $115,000 to fund planned operations for the next twelve
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months . Therefore, current cash on hand is not sufficient to fund planned operations for 2021 . Our policy is to pay all operational expenses when due, provided that the vendor, in the normal course of business, has satisfied all necessary conditions for payment . Net cash used in operating activities during the three months ended March 31 , 2021 was $ 12 , 006 , compared to net cash provided by operating activities of $ 10 , 120 for the same period in the prior year . The decrease in cash provided by operating activities was the payment of accounts payable . Cash used in investing activities for the three months ended March 31 , 2021 and 2020 was $ 124 and $ 464 , respectively, resulting from the change in the value of the reclamation deposits . The Company generated no cash inflows from financing activities for the three months ended March 31 , 2021 and 2020 . We are an exploration stage company with limited operating history, which raises substantial doubt as to our ability to successfully develop profitable business operations and makes an investment in our common shares very risky . We have no long - term debt . We believe that our available cash may not be sufficient to fund our working capital requirements to maintain, explore and develop our property interests for the next twelve months . If capital is not available to fund future operations, we will not be able to pursue our business plan and operations would come to a halt and our common shares could be nearly worthless . We will require substantial additional capital to participate in the development of our properties which have not had any production of oil or natural gas as well as for acquisition and/or development of other producing properties . Because we currently do not have any cash flow from operations, we need to raise additional capital, which may be in the form of loans from current shareholders and/or from private equity offerings . Our ability to access capital will depend on our success in participating in properties that are successful in exploring for and producing oil and gas at profitable prices . It will also be dependent upon the status of the capital markets at the time such capital is sought . Should sufficient capital not be available, the development of our business plan could be delayed and, accordingly, the implementation of our business strategy would be adversely affected . In such event it would not be likely that investors would obtain a profitable return on their investments or a return of their investments at all . We anticipate that we will incur the following expenditures through our current fiscal year : $15,000 in connection with property lease payments and follow up analysis on the Company’s oil sands properties $100,000 for operating expenses, including working capital, consulting fees, general and administrative, professional, legal and accounting expenses In 2021 , our capital requirements will mostly be associated with the maintenance of our lease payments to the Crown . Going forward we expect the short - term and long - term funding of our oil and gas operations to be financed primarily through equity issuance in the form of private placements and the exercise of warrants . In addition, we continue to work with potential partners to discuss funding arrangements which would facilitate furtherance of our property interests . We cannot be certain that any required additional financing will be available on terms favorable to us as the risky nature of this enterprise and lack of tangible assets places debt financing beyond the credit - worthiness required by most banks or typical investors of corporate debt until such time as the economic viability of our oil sands properties can be demonstrated . If additional funds are raised by the issuance of our equity securities, existing stockholders will experience dilution of their ownership interest . If adequate funds are not available or not available on acceptable terms, we may be unable to continue, fund expansion, pursue further development or respond to competitive pressures . Our financing prospects must be considered in light of the risks, expenses and difficulties frequently encountered in establishing a business in the oil and natural gas industries . We have yet to generate any revenues from operations . There is nothing at this time on which to base an assumption that our business operations will prove to be successful or that we will ever be able to operate profitably . Our future operating results will depend on many factors, including :
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our ability to raise adequate working capital success of our exploration and development demand for natural gas and oil the level of our competition our ability to attract and maintain key management and employees and our ability to efficiently explore, develop and produce sufficient quantities of marketable natural gas or oil in a highly competitive and speculative environment while maintaining quality and controlling costs Volatility of oil and gas prices and markets could make it more difficult for us to achieve profitability and less likely for investors in our common shares to receive a return on their investment . Our ability to achieve profitability is substantially dependent on prevailing prices for natural gas and oil . The amounts and price obtainable for any oil and gas production that we achieve will be affected by market factors beyond our control . If these factors are not favorable over time to our financial interests, it is likely that owners of our common shares could lose their investments . Such factors include : worldwide or regional demand for energy, which is affected by economic conditions the domestic and foreign supply of natural gas and oil weather conditions domestic and foreign governmental regulations political conditions in natural gas and oil producing regions the ability of members of the Organization of Petroleum Exporting Countries to agree upon and maintain oil prices and production levels ; the price and availability of other fuels Additionally, due to worldwide economic uncertainty, the availability and cost of funds for production and other expenses have become increasingly difficult, if not impossible, to project . These changes and events may materially affect our financial performance .
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Exhibit 99.3
FORM 52 - 109F2 CERTIFICATION OF INTERIM FILINGS - FULL CERTIFICATE I, Trevor Newton, Chief Executive Officer of Strata Power Corporation Inc., certify the following: 1. Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Strata Power Corporation Inc. (the “issuer”) for the interim period ended March 31, 2021. 2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings. 3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings. 4. Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52 - 109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer. 5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings a. designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that i. material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and ii. information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and b. designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP. 1. Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. 2. N/A 3. N/A 6 . Reporting changes in ICFR : The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on January 1 , 2021 and ended on March 31 , 2021 that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR . 1/2
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Date: May 14, 2021 (signed) "Trevor Newton" Trevor Newton Chief Executive Officer
Exhibit 99.4
FORM 52 - 109F2 CERTIFICATION OF INTERIM FILINGS - FULL CERTIFICATE I, Trevor Newton, Chief Financial Officer of Strata Power Corporation, certify the following: 1. Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Strata Power Corporation (the “issuer”) for the interim period ended March 31, 2021. 2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings. 3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings. 4. Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52 - 109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer. 5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings a. designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that i. material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and ii. information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and b. designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP. 1. Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. 2. N/A 3. N/A 6 . Reporting changes in ICFR : The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on January 1 , 2021 and ended on March 31 , 2021 that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR . 1/2
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Date: May 14, 2021 (signed) "Trevor Newton" Trevor Newton Chief Financial Officer
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Exhibit 99.5
Strata Power Corporation (An Exploration Stage Company) FINANCIAL STATEMENTS For the Six Months ended June 30, 2021 and 2020 (unaudited) (Stated in US Dollars) 1
STRATA POWER CORPORATION BALANCE SHEETS As of June 30, 2021, and December 31, 2020 (Expressed in US Dollars) December 31, 2020 June 30, 2021 (unaudited) ASSETS Current assets: $ 21,717 $ 5,689 Cash 2,348 2,487 GST receivables 24,065 8,176 Total current assets 99,916 102,810 Reclamation deposits 59,828 - PetroSteam license $ 183,809 $ 110,986 Total assets LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: 2 $ 101,367 $ 55,309 Accounts payable and accrued liabilities 21,958 22,537 Accounts payable and accrued liabilities – related party 8,537 59,298 Notes payable 24,336 52,903 Derivative liability 156,198 190,047 Total current liabilities 300,000 300,000 Deferred revenue - royalty agreement (Note 8) 197,904 211,096 Asset retirement obligation 497,904 511,096 Total long - term liabilities 654,102 701,143 Total liabilities – – Commitments and Contingencies Stockholders' equity (deficit): – – Preferred stock: no par value, unlimited shares authorized, and none issued – – Common stock: no par value, unlimited shares authorized; 20,085,119 shares issued and outstanding at June 30, 2021 and December 31, 2021, respectively 23,404,083 23,404,083 Additional paid - in capital 5,000 5,000 Common shares to be issued (23,474,066) (23,593,032) Accumulated deficit (470,293) (406,208) Accumulated other comprehensive income (488,567) (590,157) Total stockholders' deficit $ 183,809 $ 110,986 Total liabilities and Stockholders' equity (deficit) The accompanying notes are an integral part of these unaudited financial statements.
3 STRATA POWER CORPORATION STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Expressed in US Dollars) (Unaudited) For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2021 2020 2021 Operating Expenses: $8,805 $16,164 $2,305 9,664 Professional fees 1,039 405 370 192 Office and sundry - 1,356 - - Consulting fees 675 545 450 450 Transfer agent fees 6,157 7,892 3,138 2,952 Accretion expense - 59,838 - 59,828 License fee expense 29,182 (2,120) 21,396 (5,145) Oil & gas properties expense $45,858 84,070 $27,659 67,941 Total operating expenses 709 255 245 131 Other income (expense): Interest income (120) (534) (57) (473) Interest expense, related party 29,437 - 29,437 - Gain on disposal of properties 5,388 (6,751) (6,875) (4,627) Foreign exchange gain (loss) (1,083) (382) (27,866) (23,978) Change in fair value of derivative liability 34,331 (34,896) 22,368 (28,947) Total other income (expense) (11,527) (118,966) (5,291) (96,888) Net loss 1,364 (898) (1,222) (514) Other comprehensive income (loss) Foreign currency translation adjustment $(10,163) (119,864) $(6,514) (97,402) Comprehensive loss ($0.00) ($0.01) ($0.00) ($0.00) Income per common share Basic ($0.00) ($0.01) ($0.00) ($0.00) Diluted Weighted average number of shares outstanding: 20,085,119 20,085,119 20,085,119 20,085,119 Basic 20,085,119 20,085,119 20,085,119 20,085,119 Diluted The accompanying notes are an integral part of these unaudited financial statements.
STRATA POWER CORPORATION STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) (Expressed in US Dollars) Common Stock Shares Additional Paid - in Capital Common Shares to be Accumulated Deficit Accumulated Other Comprehensive Income Total Stockholders' Equity (Deficit) Issued $ (455,245) $ (401,986) $ (23,457,343) - $ 23,404,083 20,085,119 Balance March 31, 2020 500 - - 10,000 500 - Exercise of Options 4,500 (6,514) - (1,222) - (5,291) 81,000 - 4,500 - - - Exercise of Warrants Net loss and comprehensive loss (456,759) $ (403,208) $ (23,462,634) $ 91,000 23,409,083 $ 20,085,119 Balance June 30, 2020 $ (451,596) $ (404,572) $ (23,451,107) $ - $ 23,404,083 20,085,119 Balance December 31, 2019 500 - - 10,000 500 - Exercise of Options 4,500 - - 81,000 4,500 - Exercise of Warrants Net loss and (10,163) 1,364 (11,527) - - - comprehensive income $ (456,759) $ (403,208) $ (23,462,634) 91,000 $ 23,404,083 $ 20,085,119 Balance June 30, 2020 $ (492,755) $ (405,694) $ (23,496,144) 5,000 $ 23,404,083 $ 20,085,119 Balance March 31, 2021 (97,402) (514) (96,888) - - - Net loss and comprehensive loss $ (590,157) $ (406,208) $ (23,593,032 5,000 $ 23,404,083 20,085,119 Balance June 30, 2021 $ (470,293) $ (405,310) $ (23,474,066) 5,000 $ 23,404,083 $ 20,085,119 Balance December 31, 2020 (119,864) (898) (118,966) - - - Net loss and comprehensive loss $ (590,157) $ (406,208) $ (23,593,032) 5,000 $ 23,404,083 $ 20,085,119 Balance June 30, 2021 The accompanying notes are an integral part of these unaudited financial statements. 4
5 STRATA POWER CORPORATION STATEMENTS OF CASH FLOWS (Expressed in US Dollars) (Unaudited) For the six months ending June 30, 2021 2020 Cash flows from operating activities: $ (11,527) $ (118,966) Net Loss Adjustments to reconcile net loss to net cash used in operating activities 118 534 Accrued interest expense – related party 6,156 7,892 Accretion expense 1,083 27,866 Change in fair value of derivative liability - 59,828 Change in PetroSteam license (29,437) - Gain on disposal of oil and gas properties Change in assets and liabilities 87 (139) GST receivable 461 - Prepaid expenses 29,405 (53,058) Accounts payable 1,459 - Accrued interest expense – related party (2,195) (69,043) Net cash used in operating activities Cash flows from investing activities: (640) (255) Reclamation Deposits 29,437 - Proceeds from the sale of oil and gas properties 28,797 (255) Net cash provided by (used in) investing activities Cash flows from financing activities: Proceeds from issuance of convertible note Proceeds from the exercise of options and warrants Net cash provided by financing activities 50,000 - 50,000 - 5,000 5,000 Foreign exchange effect on cash 3,270 (5,061) Net increase (decrease) in cash Cash, beginning balance Cash, ending balance (16,028) 21,717 $ 5,689 26,541 4,557 $ 31,098 Supplemental disclosure of cash paid for: Interest Income taxes $ – $ – $ – $ – The accompanying notes are an integral part of these unaudited financial statements
6 STRATA POWER CORPORATION NOTES TO FINANCIAL STATEMENTS June 30, 2021 (Expressed in US Dollars) (Unaudited) NOTE 1. NATURE OF BUSINESS Strata Power Corporation (the “Company”) is currently engaged in the acquisition, exploration and, if warranted, feasible development of heavy oil projects in the Peace River oil sands region in Northern Alberta, Canada . The Company was incorporated under the laws of the State of Nevada on November 18 , 1998 and commenced operations in January 1999 . The Company completed its initial public offering in February 2000 . The Company is presently incorporated under the Canada Business Corporations Act . On December 27 , 2018 , the Company filed a Certificate of Amendment with Corporations Canada changing its name from Strata Oil & Gas Inc . to Strata Power Corporation . As of June 30 , 2021 , the Company has a 50 % interest in 7 oil sands leases, totaling 40 , 704 hectares and 8 , 704 hectares, all located in the Peace River oil sands area . In addition, the Company has a royalty interest in 10 oil sands leases and owns 3 non - producing wells . NOTE 2. ABILITY TO CONTINUE AS A GOING CONCERN As shown in the accompanying financial statements, the Company has not realized any revenue from its present operations . During the six - month period ended June 30 , 2021 , the Company incurred a net loss of $ 118 , 966 had cash flows used in operations of $ 69 , 043 and is expected to incur negative operating cash flows in the foreseeable future . The Company has an accumulated deficit of $ 23 , 593 , 032 at June 30 , 2021 . These conditions raise substantial doubt regarding the Company’s ability to continue as a going concern . The financial statements have been prepared on a going concern basis, which contemplates realization of assets and liquidation of liabilities in the ordinary course of business . The Company's ability to continue as a going concern is dependent on its ability to develop its oil and gas properties and ultimately achieve profitable operations, and to generate sufficient cash flow from financing and operations to meet its obligations as they become payable . The Company expects that it will need approximately $ 115 , 000 to fund its operations during the next twelve months, which will include minimum annual property lease payments, expected exploration expenditures for permitting and drilling, as well as operating expenses . Management has plans to seek additional capital through a private placement of its common stock . Although there are no assurances that management’s plans will be realized, management believes that the Company will be able obtain sufficient capital to continue operations in the next 12 months . Accordingly, no adjustment relating to the recoverability and classification of recorded asset amounts and the classification of liabilities has been made to the accompanying financial statements in anticipation of the Company not being able to continue as a going concern . NOTE 3. SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The interim financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission . Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate so as to make the information presented not misleading .
7 Management’s Estimates and Assumptions The preparation of the unaudited financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the balance sheet date, and revenues and expenses for the period then ended . Management believes that all applicable estimates and adjustments are appropriate . Actual results could differ significantly from those estimates . Oil and Gas Property Payments and Exploration Costs All costs incurred in the acquisition, exploration and development of natural gas and oil interests are expensed as incurred . When it has been determined that the natural gas and oil properties can be economically developed as a result of proven and probable reserves, the costs incurred to acquire and develop such property will be capitalized . Such costs will be amortized using the units - of - production method over the estimated life of the probable reserve . No costs have been capitalized through June 30 , 2021 . Cash and Cash Equivalents The Company considers all highly liquid investments purchased with a maturity of 90 days or less to be cash equivalents . The Company maintains cash and cash equivalent balances with financial institutions that may exceed federally insured limits . There were no cash equivalent balances as of June 30 , 2021 or December 31 , 2020 . GST Receivables Goods and Services Tax (GST) receivables are presented net of an allowance for doubtful accounts . Receivables consist of goods and services input tax credits . The allowance for doubtful accounts on GST receivables was $ nil at June 30 , 2021 and December 31 , 2020 . Impairment of Long - lived Assets In accordance with ASC 360 , Property, Plant and Equipment, long lived assets such as equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable . Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset . If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset . Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount of fair value less costs to sell and are no longer depreciated . The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet . Asset Retirement Obligations In accordance with ASC 410 , Asset Retirement and Environmental Obligations, the fair value of an asset retirement cost, and corresponding liability, should be recorded as part of the cost of the related long - lived asset and subsequently allocated to expense using a systematic and rational method . The Company has recorded an asset retirement obligation at June 30 , 2021 and December 31 , 2020 (see Note 7 ) to reflect its legal obligations related to future abandonment of its oil and gas interests using estimated expected cash flow associated with the obligation and discounting the amount using a credit - adjusted, risk - free interest rate . At least annually, the Company will reassess the obligation to determine whether a change in any estimated obligation is necessary . The Company will evaluate whether there are indicators that suggest the estimated cash flows underlying the obligation have materially changed . Should those indicators suggest the estimated obligation has materially changed the Company will accordingly update its assessment . The liability accretes until the Company settles the obligation . Income Taxes The Company follows the asset and liability method of accounting for income taxes whereby deferred tax assets and liabilities are recognized for the future tax consequences of differences between the financial statement carrying
8 amounts of existing assets and liabilities and their respective tax bases . If it is determined that the realization of the future tax benefit is not more likely than not, the Company establishes a valuation allowance . Foreign Exchange Translation The Company's functional currency is Canadian dollars but reports its financial statements in US dollars . The Company translates its Canadian dollar balances to US dollars in the following manner : Assets and liabilities have been translated using the rate of exchange at the balance sheet date . Equity transactions and results of operations have been translated at historical rates . Translation gains or losses resulting from the changes in the exchange rates are accumulated as other comprehensive income or loss in a separate component of stockholders' equity . All amounts included in the accompanying financial statements and footnotes are stated in US dollars. Derivative Financial Instruments The Company reviews the terms of its equity instruments and other financing arrangements to determine whether there are embedded derivative instruments that are required to be accounted for separately as a derivative financial instrument . Also, in connection with the issuance of financing instruments, the Company has issued freestanding warrants that are accounted for as derivative instrument liabilities because they are exercisable in a currency other than the functional currency of the Company and thus do not meet the “fixed - for - fixed” criteria of ASC 815 - 40 - 15 . The warrants are exercisable in United States dollars and the Company’s functional currency is the Canadian dollar . Derivative financial instruments are initially measured at their fair value . For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re - valued at each reporting date, with changes in the fair value reported as charges or credits to income . For option and warrant - based derivative financial instruments, the Company uses the Black - Scholes option pricing model to value the derivative instruments . Any exercise or cancellation of an equity instrument which meets the classification of a derivative financial instrument is trued - up to fair value at that date and the fair value of the exercised instrument is then reclassified from liability to additional paid in capital . The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period . If reclassification is required, the fair value of the derivative instrument, as of the determination date, is reclassified . Any previous charges or credits to income for changes in the fair value of the derivative instrument are not reversed . Derivative instrument liabilities are classified in the balance sheet as current or non - current based on whether net - cash settlement of the derivative instrument could be required within 12 months of the balance sheet date . Stock Based Compensation In accordance with ASC 718 , “Compensation – Stock Compensation” (“ASC 718 ”), which was adopted as of January 1 , 2019 , the Company measures all employee stock - based compensation awards using a fair value method on the date of grant and recognizes such expense in its financial statements over the requisite service period . The Company uses the Black - Scholes pricing model to determine the fair value of stock - based compensation awards on the date of grant . The Black - Scholes pricing model requires management to make assumptions regarding option lives, expected volatility, and risk - free interest rates . The Company accounts for non - employee stock - based awards in accordance with the provision of ASC 505 , “Equity Based Payments to Non - Employees” (“ASC 505 ”), which requires that such equity instruments are recorded at their fair value on the measurement date . The measurement of stock - based compensation is subject to periodic adjustment as the underlying equity instruments vest . The Company uses the Black - Scholes pricing model to determine the fair value of stock - based compensation awards . The Black - Scholes pricing model requires management to make assumptions regarding option lives, expected volatility, and risk - free interest rates .
9 The Company uses historical data to estimate option exercise, forfeiture and employee termination within the valuation model . For non - employees, the expected term of the options approximates the full term of the options . The risk - free interest rate is based on a treasury instrument whose term is consistent with the expected term of the stock options . The Company has not paid and does not anticipate paying dividends on its common stock ; therefore, the expected dividend yield is assumed to be zero . In addition, accounting standard requires companies to utilize an estimated forfeiture rate when calculating the expense for the reporting period . Based on its best estimate, management applied the estimated forfeiture rate of nil in determining the expense recorded in the accompanying Statements of Operations and Comprehensive Income (Loss) . Expected volatilities are calculated using the historical volatility of the Company’s stock . When applicable, the Company will use historical data to estimate option exercise, forfeiture and employees’ termination within the valuation model . For non - employees, the expected term of the options approximates the full term of the options . Earnings (Loss) Per Share of Common Stock Basic earnings (loss) per share of common stock is computed by dividing net income (loss) available to common shareholders by the weighted - average number of common shares outstanding for the period . Diluted earnings per share of common stock reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company . Dilutive potential common shares are calculated in accordance with the treasury stock method, which assumes that proceeds from the exercise of all warrants and options are used to repurchase common stock at market value . The number of shares remaining after the proceeds are exhausted represents the potentially dilutive effect of the securities . For the six months ended June 30 , 2021 and 2020 , all of the outstanding options and warrants had an exercise price above the average stock price for the six - month period . Accordingly, all of the potentially dilutive shares were excluded from the computation of diluted shares outstanding as they would have had an anti - dilutive impact on the Company’s loss from continuing operations . Fair Value of Financial Instruments The book values of GST receivables, notes receivable, accounts payable and accrued expenses approximate their respective fair values due to the short - term nature of these instruments . The fair value hierarchy under GAAP distinguishes between assumptions based on market data (observable inputs) and an entity’s own assumptions (unobservable inputs) . The hierarchy consists of three levels : · Level one - Quoted market prices in active markets for identical assets or liabilities; · Level two - Inputs other than level one inputs that are either directly or indirectly observable; and · Level three - Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use. Determining which category an asset or liability falls within the hierarchy requires significant judgment . We evaluate our hierarchy disclosures each balance sheet date . Liabilities measured at fair value are summarized as follows as of June 30 , 2021 : Fair Value Measurement at December 31, 2020 Fair Value Measurement at June 30, 2021 Total Using Level 3 Total Using Level 3 Liabilities: $ 24,336 $ 24,336 $ 52,903 $ 52,903 Derivative liabilities 197,904 197,904 211,096 211,096 Asset Retirement Obligation (see Note 7)
10 The Company measures and reports the fair value liability for warrants with a strike price currency different than the functional currency of the Company on a recurring basis . The fair value liabilities for warrants have been recorded as determined utilizing the Black - Scholes option pricing model . A slight change in an unobservable input like historical volatility could have a significant impact on the fair value measurement of the derivative liabilities . See Note 5 “Derivative Liabilities” for further discussion of the inputs used in determining the fair value . Comprehensive Income (Loss) Comprehensive income (loss) is defined to include all changes in equity except those resulting from investments by owners and distributions to owners . The Company's items of other comprehensive income (loss) are foreign currency translation adjustments . Related Party Transactions A related party is generally defined as (i) any person who holds 10 % or more of the Company’s securities and their immediate families, (ii) the Company’s management, (iii) an entity or person who directly or indirectly controls, is controlled by or is under common control and/or management with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company . A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties . New Accounting Pronouncements The Company has implemented all new accounting pronouncements that are in effect . These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations . NOTE 4. PETROSTEAM LICENSE On March 20 , 2019 , the Company entered into an exclusive license agreement with PetroSteam LLC to obtain an exclusive right to deploy patented and field - tested proprietary technologies utilizing steam generation applied to bitumen and heavy oil recovery in the Provinces of Alberta and Saskatchewan . In exchange, the Company issued 2 , 991 , 400 restricted common shares . In addition, the Company agreed, subject to certain qualifications and milestones being met, to purchase steam generation equipment from PetroSteam totaling $ 12 , 500 , 000 to be used on its bitumen/heavy - oil projects . In 2021 , the PetroSteam license was cancelled by both parties . NOTE 5. DERIVATIVE LIABILITIES Derivative liabilities consist of common stock warrants with an exercise price in a different currency than the Company’s functional currency and they are accounted for as separate liabilities measured at their respective fair values as follows : $ 48,055 Balance, December 31, 2019 (1,487) Exercise of warrants (16) Fair value of expired warrant (23,185) Change in fair value of derivative liabilities 969 Foreign exchange effect on derivative liability $ 24,336 Balance, December 31, 2020 (1,258) Fair value of expired warrant 29,123 Change in fair value of derivative liabilities 702 Foreign exchange effect on derivative liability $ 52,903 Balance, June 30, 2021 The fair value of the derivative liabilities has been determined using the Black - Scholes option pricing model using
11 the following range of assumptions: December 31, 2020 June 30, 2021 411.10% 531.8% Volatility 0.33 to 3.12 years 0.3 to 2.63 years Expected life 0.20% - 0.67% 0.45% - 1.39% Risk - free interest rate 0.00% 0.00% Dividend yield NOTE 6. OIL AND GAS PROPERTIES During the period June 2006 through January 2007 , the Company acquired the rights to multiple oil sands leases within the Peace River area of Alberta, Canada (the “Peace River Properties”) . The leases were granted by the Province of Alberta . All the leases are for a 15 - year term, require minimum annual lease payments, and grant the Company the right to explore and develop oil sands on the respective leases . On February 22 , 2016 , the Company acquired an additional 45 oil sands leases by entering into two purchase and sale agreements . The oil sands leases represent 39 , 680 hectares ( 98 , 051 acres) in the Peace River area of Alberta . One of the purchase / sale agreements was with a related party . On May 14 , 2019 , the Company sold the shallower oil sands rights on two of its oil sands lease blocks in the Cadotte East area to an unrelated third party, but has retained the deeper oil sands rights, including the Debolt - Elkton formations . The Company has also retained a 2 . 5 % overriding royalty on all petroleum substances produced from the shallower oil sands rights on those two lease blocks . The Company will continue to pay annual lease fees on those two oil sands lease blocks, but at a rate of 50 % , and the unrelated third party will pay the other 50 % . On three of its oil sands lease blocks in the Reno area, the Company has sold 100 % of its interest to an unrelated third party and has retained a 2 . 5 % overriding royalty on all petroleum substances produced from those oil sands lease blocks . On those three oil sands lease blocks, the unrelated third party has taken over 100 % of the annual lease fees . In connection with these sales, the Company recorded a gain of $ 44 , 569 . On June 11 , 2020 , the Company sold the shallower oil sands rights on five of its oil sands leases in the Cadotte Central area to an unrelated third party, but has retained the deeper oil sands rights, including the Debolt - Elkton formations . The Company has also retained a 2 . 5 % overriding royalty on all petroleum substances produced from those oil sands lease blocks . The Company will continue to pay annual lease fees on those two oil sands lease blocks, but at a rate of 50 % , and the unrelated third party will pay the other 50 % . In connection with this sale, the Company recorded a gain of $ 29 , 437 . Throughout 2020 , the Company chose not to renew their remaining oil sands leases due to weak conditions in the Alberta heavy oil sector . All the Company’s leases in the Peace River area are subject to royalties payable to the government of the Province of Alberta . The royalty is calculated using a revenue - less - cost formula . In years prior to the recovery of the project’s capital investment, the royalty is 1 % of gross revenue . Once the project costs have been recovered, the royalty is the greater of 1 % of gross revenue or 25 % of net revenue . NOTE 7 . ASSET RETIREMENT OBLIGATIONS During 2007 , the Company drilled four wells on its Peace River Property . Total future asset retirement obligations were estimated by management based on the Company’s working interest in its wells and facilities, estimated costs to remediate, reclaim and abandon the wells and facilities and the estimated timing of the costs to be incurred in future periods . The Company has estimated the net present value of its total asset retirement obligations to be approximately $ 211 , 096 at June 30 , 2021 , based on an undiscounted total future liability of $ 225 , 229 (CDN $ 293 , 000 ) . These payments are expected to be incurred between 2021 and 2030 . The Company used a credit adjusted discount rate of 10 % per annum and an inflation rate of 2 % to calculate the present value of the asset retirement obligation . Accretion expense of $ 7 , 892 and $ 6 , 157 for the six months ended June 30 , 2021 and 2020 , respectfully, has been recorded in the Statements of Operations and Comprehensive Income (Loss) . However, the
12 Company is currently in the process of carrying out abandonment and remediation of its wells through the federally funded Site Rehabilitation Program . As a result, the actual Asset Retirement Obligation costs on these wells could be substantially lower than its current value but the actual amount cannot be reasonably estimated at this time . NOTE 8 . RELATED PARTY TRANSACTIONS Related party transactions not disclosed elsewhere in these financial statements include: Deferred Revenue - Royalty Agreement The Company has negotiated a royalty agreement with a related party by common CEO and director . In exchange for a non - refundable payment of $ 300 , 000 , the Company has sold a royalty to this related party on the gross production of Vanadium Oxide (“Vanadium”) from the Company’s oil sands leases . For each barrel of bitumen produced from the specified oil sands until March 21 , 2039 , or upon termination of mining, whichever is earlier, the Company will pay a royalty equal to 25 grams of Vanadium per barrel of bitumen produced, multiplied by the price of Vanadium Pentoxide 98 % min in - warehouse Rotterdam published on the last business day of the month in which the gross production of bitumen occurred . The $ 300 , 000 is recorded as deferred revenue and will be recognized at such time as the Company begins to produce Vanadium . Notes payable to related party In December 2015 , the Company borrowed $ 6 , 553 ( $ 9 , 000 Canadian) under a note agreement with related parties . The lenders were related parties through an immediate family relationship with officers or directors of the Company and a common director . The note payable bore interest at the Bank of Canada Prime rate plus 1 % . The Company could repay the loan and outstanding interest thereon by giving notice to the lender 15 days prior to the anticipated repayment . At June 31 , 2021 , the effective interest rate on these notes payable was 3 . 45 % . The balance of note payable, including interest, to related parties at June 30 , 2021 and December 31 , 2020 was $ 9 , 828 and $ 8 , 537 , respectively . The Company recognized interest expense of $ 123 and $ 120 for the six months ended June 30 , 2021 and 2020 , respectively, in its Statements of Operations and Comprehensive Income (Loss) . In May 2021 , the Company borrowed $ 50 , 000 under a note agreement with a related party . The note payable can be repaid at any time, in part or in full and bears interest at 10 % per annum . The note is convertible into restricted common shares at $ 0 . 01 per share or the most recent 30 - day volume - weighted moving average of the published share price, discounted by 40 % . The balance of the note payable, including interest, at June 30 , 2021 was $ 50 , 411 . The Company recognized interest expense of $ 411 for the six months ended June 30 , 2021 in its Statements of Operations and Comprehensive Income (Loss) . Consulting fees Mr . Newton is the President and a member of the Board of Directors of the Company . Mr . Newton does not bill the Company for his services as President ; however, he has a service agreement with the Company . No consulting fees were incurred for the six months ended June 30 , 2021 and 2020 . Dr . Michael Ranger is a member of the Board of Directors of the Company . Dr . Ranger does not receive compensation for his services as a member of the board ; however, he has a service agreement with the Company, including consulting time and expense reimbursement . Pursuant to this agreement, the Company recognized consulting expenses of $ 1 , 356 and $ 0 for the six months ended June 30 , 2021 and 2020 , respectively .
13 NOTE 9 . COMMITMENTS AND CONTINGENCIES Environmental Matters The Company is engaged in oil and gas exploration and may become subject to certain liabilities as they relate to environmental cleanup of sites or other environmental restoration procedures as they relate to the exploration of oil and gas . Should it be determined that a liability exists with respect to any environmental clean - up or restoration, the liability to cure such a violation could fall upon the Company . No claim has been made, nor is the Company aware of any liability, which it may have, as it relates to any environmental clean - up, restoration or the violation of any rules or regulations relating thereto . Liabilities for expenditures are recorded when environmental assessment and/or remediation is probable, and the costs can be reasonably estimated . NOTE 10 . SUBSEQUENT EVENTS In accordance with SFAS 165 (ASC 855 - 10 ) management has performed an evaluation of subsequent events through the date that the financial statements were available to be issued and has determined that it does not have any material subsequent events to disclose in these financial statements .
Exhibit 99.6
Strata Power Corporation Interim MD&A – Quarterly Highlights For the Six Months ended 6/30/21 Management’s Discussion and Analysis of Financial Condition and Results of Operations Management’s Discussion and Analysis of Financial Condition ("MD&A") and Results of Operations should be read in conjunction with the accompanying un - audited financial statements. The financial statements are presented in United States dollars and have been prepared in accordance with accounting principles generally accepted in the United States, referred to as US GAAP. Certain statements contained in the MD&A constitute forward - looking statements. Such forward - looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward - looking statements. Readers are cautioned not to place undue reliance on these forward - looking statements which speak only as of the date the financial statements were made and readers are advised to consider such forward - looking statements in light of the risks set forth both below and in the Company’s most recent annual report. RESULTS OF OPERATIONS Six months ended June 30, 2021 compared to six months ended June 30, 2020. For the six months ended June 30, 2021 and 2020, the Company had a net loss from operations of $118,864 and $11,527, respectively, for an approximate $107,000 increase of net loss. The primary reasons for the increased net loss are the elimination of the PetroSteam license of $60,000, the change in gain on disposal of properties of $29,000, the change in the foreign exchange gain (loss) of $12,000 and the change in the fair value of derivative liability of $27,000. This was offset by the decrease in the oil & gas properties expense of $31,000. For the six months ended June 30, 2021 and 2020, the Company recorded a loss in the change in fair value of derivative liability of $27,866 and $1,083, respectively. This item is a non - cash item and was recorded in accordance with ASC 850 - 40 - 15. This guidance requires entities to evaluate whether an equity - linked financial instrument (or embedded feature) is indexed to its own stock by assessing the instrument’s contingent exercise provisions and settlement provisions. Instruments not indexed to their own stock fail to meet the scope exception of Accounting for Derivative Instruments and Hedging Activities, ASC 815 - 10 - 15 - 74(a), and should be classified as a liability and marked - to - market. REVENUES The Company did not earn any revenue for the six months ended June 30, 2021 or 2020. We do not anticipate earning revenues until such time as we have entered into commercial production of our oil and gas properties. We can provide no assurance that we will enter into commercial production of our oil and gas properties. DISCONTINUED OPERATIONS There was no discontinued operations activity in 2021 or 2020. INTEREST AND OTHER INCOME (EXPENSE) Included in other income (expense) for the six months ended June 30, 2021 is a foreign exchange loss of $6,751. This compares to a foreign exchange gain of $5,388 for the six months ended June 30, 2020.
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Liquidity and Capital Resources As of June 30 , 2021 , we had $ 5 , 689 in cash, a decrease of $ 16 , 028 from December 31 , 2020 . Management estimates that the Company will require approximately $ 115 , 000 to fund planned operations for the next twelve months . Therefore, current cash on hand is not sufficient to fund planned operations for 2021 . Our policy is to pay all operational expenses when due, provided that the vendor, in the normal course of business, has satisfied all necessary conditions for payment . Net cash used in operating activities during the six months ended June 30 , 2021 was $ 69 , 043 , compared to net cash used in operating activities of $ 2 , 195 for the same period in the prior year . The decrease in cash used in operating activities was the change in the PetroSteam license of $ 59 , 828 and the change in the gain on disposal of oil and gas properties of $ 29 , 437 , offset by the decrease of accounts payable of $ 45 , 478 . Cash provided by (used in) investing activities for the six months ended June 30 , 2021 and 2020 was ( $ 255 ) and $ 28 , 797 , respectively, resulting primarily from the change in the proceeds from the sale of oil and gas properties . Net cash provided by financing activities for the six months ended June 30 , 2021 and 2020 was $ 50 , 000 and $ 5 , 000 , respectively . For June 30 , 2021 , the financing activities consisted of the issuance of convertible debt . For June 30 , 2020 , the financing activities consisted of the exercise of options and warrants . We are an exploration stage company with limited operating history, which raises substantial doubt as to our ability to successfully develop profitable business operations and makes an investment in our common shares very risky . We have no long - term debt . We believe that our available cash may not be sufficient to fund our working capital requirements to maintain, explore and develop our property interests for the next twelve months . If capital is not available to fund future operations, we will not be able to pursue our business plan and operations would come to a halt and our common shares could be nearly worthless . We will require substantial additional capital to participate in the development of our properties which have not had any production of oil or natural gas as well as for acquisition and/or development of other producing properties . Because we currently do not have any cash flow from operations, we need to raise additional capital, which may be in the form of loans from current shareholders and/or from private equity offerings . Our ability to access capital will depend on our success in participating in properties that are successful in exploring for and producing oil and gas at profitable prices . It will also be dependent upon the status of the capital markets at the time such capital is sought . Should sufficient capital not be available, the development of our business plan could be delayed and, accordingly, the implementation of our business strategy would be adversely affected . In such event it would not be likely that investors would obtain a profitable return on their investments or a return of their investments at all . We anticipate that we will incur the following expenditures through our current fiscal year : $15,000 in connection with property lease payments and follow up analysis on the Company’s oil sands properties $100,000 for operating expenses, including working capital, consulting fees, general and administrative, professional, legal and accounting expenses In 2021 , our capital requirements will mostly be associated with the maintenance of our lease payments to the Crown and general and administrative expenses . Going forward we expect the short - term and long - term funding of our oil and gas operations to be financed primarily through equity issuance in the form of private placements and the exercise of warrants . In addition, we continue to work with potential partners to discuss funding arrangements which would facilitate furtherance of our property interests . We cannot be certain that any required additional financing will be available on terms favorable to us as the risky nature of this enterprise and lack of tangible assets places debt financing beyond the credit - worthiness required by most banks or typical investors of corporate debt until such time as the economic viability of our oil sands properties can be demonstrated . If additional funds are raised by the issuance of our equity securities, existing stockholders will experience dilution of their ownership interest . If adequate funds are not available or not available on acceptable terms, we may be unable to continue, fund expansion, pursue further development or respond to competitive pressures .
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Our financing prospects must be considered in light of the risks, expenses and difficulties frequently encountered in establishing a business in the oil and natural gas industries . We have yet to generate any revenues from operations . There is nothing at this time on which to base an assumption that our business operations will prove to be successful or that we will ever be able to operate profitably . Our future operating results will depend on many factors, including : our ability to raise adequate working capital success of our exploration and development demand for natural gas and oil the level of our competition our ability to attract and maintain key management and employees and our ability to efficiently explore, develop and produce sufficient quantities of marketable natural gas or oil in a highly competitive and speculative environment while maintaining quality and controlling costs Volatility of oil and gas prices and markets could make it more difficult for us to achieve profitability and less likely for investors in our common shares to receive a return on their investment . Our ability to achieve profitability is substantially dependent on prevailing prices for natural gas and oil . The amounts and price obtainable for any oil and gas production that we achieve will be affected by market factors beyond our control . If these factors are not favorable over time to our financial interests, it is likely that owners of our common shares could lose their investments . Such factors include : worldwide or regional demand for energy, which is affected by economic conditions the domestic and foreign supply of natural gas and oil weather conditions domestic and foreign governmental regulations political conditions in natural gas and oil producing regions the ability of members of the Organization of Petroleum Exporting Countries to agree upon and maintain oil prices and production levels the price and availability of other fuels Additionally, due to worldwide economic uncertainty, the availability and cost of funds for production and other expenses have become increasingly difficult, if not impossible, to project . These changes and events may materially affect our financial performance .
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Exhibit 99.7
FORM 52 - 109F2 CERTIFICATION OF INTERIM FILINGS - FULL CERTIFICATE I, Trevor Newton, Chief Executive Officer of Strata Power Corporation Inc., certify the following: 1. Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Strata Power Corporation Inc. (the “issuer”) for the interim period ended June 30, 2021. 2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings. 3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings. 4. Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52 - 109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer. 5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings a. designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that i. material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and ii. information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and b. designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP. 1. Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. 2. N/A 3. N/A 6 . Reporting changes in ICFR : The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on April 1 , 2021 and ended on June 30 , 2021 that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR . 1/2
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Date August 13, 2021 (signed) "Trevor Newton" Trevor Newton Chief Executive Officer
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Exhibit 99.8
FORM 52 - 109F2 CERTIFICATION OF INTERIM FILINGS - FULL CERTIFICATE I, Trevor Newton, Chief Financial Officer of Strata Power Corporation, certify the following: 1. Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Strata Power Corporation (the “issuer”) for the interim period ended June 30, 2021. 2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings. 3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings. 4. Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52 - 109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer. 5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings a. designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that i. material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and ii. information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and b. designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP. 1. Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. 2. N/A 3. N/A 6 . Reporting changes in ICFR : The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on April 1 , 2021 and ended on June 30 , 2021 that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR . 1/2
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Date: August 13, 2021 (signed) "Trevor Newton" Trevor Newton Chief Financial Officer
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Exhibit 99.9
Strata Power Corporation (An Exploration Stage Company) FINANCIAL STATEMENTS For the Nine Months ended September 30, 2021 and 2020 (unaudited) (Stated in US Dollars) 1
STRATA POWER CORPORATION BALANCE SHEETS As of September 30, 2021, and December 31, 2020 (Expressed in US Dollars) December 31, September 30, 2020 2021 (unaudited) ASSETS $ 21,717 $ 397 Current assets: Cash 2,348 2,429 GST receivables 6,021 Prepaid expenses 24,065 8,847 Total current assets 99,916 100,447 Reclamation deposits 59,828 - PetroSteam license $ 183,809 $ 109,294 Total assets 2 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: $ 101,367 $ 44,589 Accounts payable and accrued liabilities 21,958 21,992 Accounts payable and accrued liabilities – related party 8,537 82,575 Notes payable 24,336 48,499 Derivative liability 156,198 197,655 Total current liabilities 300,000 300,000 Deferred revenue - royalty agreement (Note 8) 197,904 209,869 Asset retirement obligation 497,904 509,869 Total long - term liabilities 654,102 707,524 Total liabilities – – Commitments and Contingencies Stockholders' equity (deficit): – – Preferred stock: no par value, unlimited shares authorized, and none issued – – Common stock: no par value, unlimited shares authorized; 20,085,119 shares issued and outstanding at September 30, 2021 and December 31, 2021, respectively 23,404,083 23,404,083 Additional paid - in capital 5,000 5,000 Common shares to be issued (23,474,066) (23,601,925) Accumulated deficit (405,310) (405,388) Accumulated other comprehensive income (470,293) (598,230) Total stockholders' deficit $ 183,809 $ 109,294 Total liabilities and Stockholders' equity (deficit) The accompanying notes are an integral part of these unaudited financial statements.
3 STRATA POWER CORPORATION STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Expressed in US Dollars) (Unaudited) For the Three Months Ended September 30, For the Nine Months Ended September 30, 2020 2021 2020 2021 Operating Expenses: $15,378 16,164 $6,573 - Professional fees 1,363 614 323 208 Office and sundry - 1,356 - - - Consulting fees 1,125 995 450 450 Transfer agent fees 9,331 11,778 3,174 3,886 Accretion expense - 59,828 - - License fee expense 54,523 8,754 25,341 10,873 Oil & gas properties expense $81,720 99,489 $35,861 15,417 Total operating expenses Other income (expense): 790 382 80 128 Interest income (179) (2,029) (59) (1,494) Interest expense, related party 29,437 - - - Gain on disposal of properties 1,566 (2,057) (3,823) 4,690 Foreign exchange gain (loss) 3,334 4,418 (24,666) 3,200 Change in fair value of derivative liability 34,948 (28,370) 616 6,524 Total other income (expense) (46,772) (127,859) (35,245) (8,893) Net loss Other comprehensive income (loss) 703 (78) (661) 820 Foreign currency translation adjustment (46,069) (127,937) (35,906) (8,073) Comprehensive loss Income per common share ($0.00) ($0.01) $0.00 ($0.00) Basic ($0.00) ($0.01) $0.00 ($0.00) Diluted Weighted average number of shares outstanding: 20,085,119 20,085,119 20,085,119 20,085,119 Basic 20,085,119 20,085,119 20,085,119 20,085,119 Diluted The accompanying notes are an integral part of these unaudited financial statements.
STRATA POWER CORPORATION STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) (Expressed in US Dollars) Common Stock Shares Additional Paid - in Capital Common Shares to be Issued Accumulated Deficit Accumulated Other Comprehensive Income Total Stockholders' Equity (Deficit) $ (456,759) $ (403,208) $ (23,462,634) Balance June 30, 2020 20,085,119 $ 23,409,083 - (35,906) (661) (35,245) Net loss and comprehensive loss - - - $ (492,665) $ (403,869) $ (23,497,879) 91,000 $ 23,409,083 20,085,119 Balance September 30, 2020 $ (451,596) $ (404,572) $ (23,451,107) - $ 23,404,083 $ 20,085,119 Balance December 31, 2019 500 - - 10,000 500 - Exercise of Options 4,500 - - 81,000 4,500 - Exercise of Warrants Net loss and (46,069) 703 (46,772) - - - comprehensive income $ (492,665) $ (403,869) $ (23,497,879) 91,000 $ 23,409,083 $ 20,085,119 Balance September 30, 2020 $ (590,157) $ (406,208) $ (23,593,032) 5,000 $ 23,404,083 $ 20,085,119 Balance June 30, 2021 (8,073) 820 (8,893) - - - Net loss and comprehensive loss (598,230) (405,388) $ (23,601,925) 5,000 $ 23,404,083 20,085,119 Balance September 30, 2021 $ (470,293) $ (405,310) $ (23,474,066) 5,000 $ 23,404,083 $ 20,085,119 Balance December 31, 2020 Net loss and 127,937 (78) (127,859) - - - comprehensive loss (598,230) $ (405,388) $ (23,601,925) $ 5,000 23,404,083 $ $ 20,085,119 Balance September 30, 2021 The accompanying notes are an integral part of these unaudited financial statements. 4
5 STRATA POWER CORPORATION STATEMENTS OF CASH FLOWS (Expressed in US Dollars) (Unaudited) For the nine months ending September 30, 2021 2020 $ (127,859) $ (46,772) Cash flows from operating activities: Net Loss Adjustments to reconcile net loss to net cash used in operating activities Accrued interest expense – related party Accretion expense Change in fair value of derivative liability Change in PetroSteam license Gain on disposal of oil and gas properties Change in assets and liabilities GST receivable 2,027 11,778 24,666 59,828 173 9,331 (3,334) - - (29,437) (82) 35 461 (6,021) Prepaid expenses 54,668 (56,777) Accounts payable (184) - Accrued interest expense – related party (15,059) (92,440) Net cash used in operating activities Cash flows from investing activities: (721) (382) Reclamation Deposits 29,437 - Proceeds from the sale of oil and gas properties 28,716 (382) Net cash provided by (used in) investing activities Cash flows from financing activities: Proceeds from issuance of convertible note Proceeds from the exercise of options and warrants Net cash provided by financing activities 72,000 - 72,000 - 5,000 5,000 Foreign exchange effect on cash (498) 2,365 Net increase (decrease) in cash Cash, beginning balance Cash, ending balance (21,320) 21,717 $ 397 16,292 4,557 $ 20,849 Supplemental disclosure of cash paid for: Interest Income taxes $ – $ – $ – $ – The accompanying notes are an integral part of these unaudited financial statements
6 STRATA POWER CORPORATION NOTES TO FINANCIAL STATEMENTS September 30, 2021 (Expressed in US Dollars) (Unaudited) NOTE 1. NATURE OF BUSINESS Strata Power Corporation (the “Company”) is currently engaged in the acquisition, exploration and, if warranted, feasible development of heavy oil projects in the Peace River oil sands region in Northern Alberta, Canada . The Company was incorporated under the laws of the State of Nevada on November 18 , 1998 and commenced operations in January 1999 . The Company completed its initial public offering in February 2000 . The Company is presently incorporated under the Canada Business Corporations Act . On December 27 , 2018 , the Company filed a Certificate of Amendment with Corporations Canada changing its name from Strata Oil & Gas Inc . to Strata Power Corporation . As of September 30 , 2021 , the Company has a 50 % interest in 7 oil sands leases, totaling 40 , 704 hectares and 8 , 704 hectares, all located in the Peace River oil sands area . In addition, the Company has a royalty interest in 10 oil sands leases and owns 3 non - producing wells . NOTE 2. ABILITY TO CONTINUE AS A GOING CONCERN As shown in the accompanying financial statements, the Company has not realized any revenue from its present operations . During the nine - month period ended September 30 , 2021 , the Company incurred a net loss of $ 127 , 859 had cash flows used in operations of $ 92 , 440 and is expected to incur negative operating cash flows in the foreseeable future . The Company has an accumulated deficit of $ 23 , 601 , 925 at September 30 , 2021 . These conditions raise substantial doubt regarding the Company’s ability to continue as a going concern . The financial statements have been prepared on a going concern basis, which contemplates realization of assets and liquidation of liabilities in the ordinary course of business . The Company's ability to continue as a going concern is dependent on its ability to develop its oil and gas properties and ultimately achieve profitable operations, and to generate sufficient cash flow from financing and operations to meet its obligations as they become payable . The Company expects that it will need approximately $ 115 , 000 to fund its operations during the next twelve months, which will include minimum annual property lease payments, expected exploration expenditures for permitting and drilling, as well as operating expenses . Management has plans to seek additional capital through a private placement of its common stock . Although there are no assurances that management’s plans will be realized, management believes that the Company will be able obtain sufficient capital to continue operations in the next 12 months . Accordingly, no adjustment relating to the recoverability and classification of recorded asset amounts and the classification of liabilities has been made to the accompanying financial statements in anticipation of the Company not being able to continue as a going concern . NOTE 3. SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The interim financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission . Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading .
7 Management’s Estimates and Assumptions The preparation of the unaudited financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the balance sheet date, and revenues and expenses for the period then ended . Management believes that all applicable estimates and adjustments are appropriate . Actual results could differ significantly from those estimates . Oil and Gas Property Payments and Exploration Costs All costs incurred in the acquisition, exploration and development of natural gas and oil interests are expensed as incurred . When it has been determined that the natural gas and oil properties can be economically developed as a result of proven and probable reserves, the costs incurred to acquire and develop such property will be capitalized . Such costs will be amortized using the units - of - production method over the estimated life of the probable reserve . No costs have been capitalized through September 30 , 2021 . Cash and Cash Equivalents The Company considers all highly liquid investments purchased with a maturity of 90 days or less to be cash equivalents . The Company maintains cash and cash equivalent balances with financial institutions that may exceed federally insured limits . There were no cash equivalent balances as of September 30 , 2021 or December 31 , 2020 . GST Receivables Goods and Services Tax (GST) receivables are presented net of an allowance for doubtful accounts . Receivables consist of goods and services input tax credits . The allowance for doubtful accounts on GST receivables was $ nil at September 30 , 2021 and December 31 , 2020 . Impairment of Long - lived Assets In accordance with ASC 360 , Property, Plant and Equipment, long lived assets such as equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable . Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset . If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset . Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount of fair value less costs to sell and are no longer depreciated . The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet . Asset Retirement Obligations In accordance with ASC 410 , Asset Retirement and Environmental Obligations, the fair value of an asset retirement cost, and corresponding liability, should be recorded as part of the cost of the related long - lived asset and subsequently allocated to expense using a systematic and rational method . The Company has recorded an asset retirement obligation at September 30 , 2021 and December 31 , 2020 (see Note 7 ) to reflect its legal obligations related to future abandonment of its oil and gas interests using estimated expected cash flow associated with the obligation and discounting the amount using a credit - adjusted, risk - free interest rate . At least annually, the Company will reassess the obligation to determine whether a change in any estimated obligation is necessary . The Company will evaluate whether there are indicators that suggest the estimated cash flows underlying the obligation have materially changed . Should those indicators suggest the estimated obligation has materially changed the Company will accordingly update its assessment . The liability accretes until the Company settles the obligation . Income Taxes The Company follows the asset and liability method of accounting for income taxes whereby deferred tax assets and liabilities are recognized for the future tax consequences of differences between the financial statement carrying
8 amounts of existing assets and liabilities and their respective tax bases . If it is determined that the realization of the future tax benefit is not more likely than not, the Company establishes a valuation allowance . Foreign Exchange Translation The Company's functional currency is Canadian dollars but reports its financial statements in US dollars . The Company translates its Canadian dollar balances to US dollars in the following manner : Assets and liabilities have been translated using the rate of exchange at the balance sheet date . Equity transactions and results of operations have been translated at historical rates . Translation gains or losses resulting from the changes in the exchange rates are accumulated as other comprehensive income or loss in a separate component of stockholders' equity . All amounts included in the accompanying financial statements and footnotes are stated in US dollars. Derivative Financial Instruments The Company reviews the terms of its equity instruments and other financing arrangements to determine whether there are embedded derivative instruments that are required to be accounted for separately as a derivative financial instrument . Also, in connection with the issuance of financing instruments, the Company has issued freestanding warrants that are accounted for as derivative instrument liabilities because they are exercisable in a currency other than the functional currency of the Company and thus do not meet the “fixed - for - fixed” criteria of ASC 815 - 40 - 15 . The warrants are exercisable in United States dollars and the Company’s functional currency is the Canadian dollar . Derivative financial instruments are initially measured at their fair value . For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re - valued at each reporting date, with changes in the fair value reported as charges or credits to income . For option and warrant - based derivative financial instruments, the Company uses the Black - Scholes option pricing model to value the derivative instruments . Any exercise or cancellation of an equity instrument which meets the classification of a derivative financial instrument is trued - up to fair value at that date and the fair value of the exercised instrument is then reclassified from liability to additional paid in capital . The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period . If reclassification is required, the fair value of the derivative instrument, as of the determination date, is reclassified . Any previous charges or credits to income for changes in the fair value of the derivative instrument are not reversed . Derivative instrument liabilities are classified in the balance sheet as current or non - current based on whether net - cash settlement of the derivative instrument could be required within 12 months of the balance sheet date . Stock Based Compensation In accordance with ASC 718 , “Compensation – Stock Compensation” (“ASC 718 ”), which was adopted as of January 1 , 2019 , the Company measures all employee stock - based compensation awards using a fair value method on the date of grant and recognizes such expense in its financial statements over the requisite service period . The Company uses the Black - Scholes pricing model to determine the fair value of stock - based compensation awards on the date of grant . The Black - Scholes pricing model requires management to make assumptions regarding option lives, expected volatility, and risk - free interest rates . The Company accounts for non - employee stock - based awards in accordance with the provision of ASC 505 , “Equity Based Payments to Non - Employees” (“ASC 505 ”), which requires that such equity instruments are recorded at their fair value on the measurement date . The measurement of stock - based compensation is subject to periodic adjustment as the underlying equity instruments vest . The Company uses the Black - Scholes pricing model to determine the fair value of stock - based compensation awards . The Black - Scholes pricing model requires management to make assumptions regarding option lives, expected volatility, and risk - free interest rates .
9 The Company uses historical data to estimate option exercise, forfeiture and employee termination within the valuation model . For non - employees, the expected term of the options approximates the full term of the options . The risk - free interest rate is based on a treasury instrument whose term is consistent with the expected term of the stock options . The Company has not paid and does not anticipate paying dividends on its common stock ; therefore, the expected dividend yield is assumed to be zero . In addition, accounting standard requires companies to utilize an estimated forfeiture rate when calculating the expense for the reporting period . Based on its best estimate, management applied the estimated forfeiture rate of nil in determining the expense recorded in the accompanying Statements of Operations and Comprehensive Income (Loss) . Expected volatilities are calculated using the historical volatility of the Company’s stock . When applicable, the Company will use historical data to estimate option exercise, forfeiture and employees’ termination within the valuation model . For non - employees, the expected term of the options approximates the full term of the options . Earnings (Loss) Per Share of Common Stock Basic earnings (loss) per share of common stock is computed by dividing net income (loss) available to common shareholders by the weighted - average number of common shares outstanding for the period . Diluted earnings per share of common stock reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company . Dilutive potential common shares are calculated in accordance with the treasury stock method, which assumes that proceeds from the exercise of all warrants and options are used to repurchase common stock at market value . The number of shares remaining after the proceeds are exhausted represents the potentially dilutive effect of the securities . For the nine months ended September 30 , 2021 and 2020 , all of the outstanding options and warrants had an exercise price above the average stock price for the nine - month period . Accordingly, all of the potentially dilutive shares were excluded from the computation of diluted shares outstanding as they would have had an anti - dilutive impact on the Company’s loss from continuing operations . Fair Value of Financial Instruments The book values of GST receivables, notes receivable, accounts payable and accrued expenses approximate their respective fair values due to the short - term nature of these instruments . The fair value hierarchy under GAAP distinguishes between assumptions based on market data (observable inputs) and an entity’s own assumptions (unobservable inputs) . The hierarchy consists of three levels : · Level one - Quoted market prices in active markets for identical assets or liabilities; · Level two - Inputs other than level one inputs that are either directly or indirectly observable; and · Level three - Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use. Determining which category an asset or liability falls within the hierarchy requires significant judgment . We evaluate our hierarchy disclosures each balance sheet date . Liabilities measured at fair value are summarized as follows as of September 30 , 2021 : Fair Value Measurement at December 31, 2020 Fair Value Measurement at September 30, 2021 Total Using Level 3 Total Using Level 3 Liabilities: $ 24,336 $ 24,336 $ 48,499 $ 48,499 Derivative liabilities 197,904 197,904 209,869 209,869 Asset Retirement Obligation (see Note 7)
10 The Company measures and reports the fair value liability for warrants with a strike price currency different than the functional currency of the Company on a recurring basis . The fair value liabilities for warrants have been recorded as determined utilizing the Black - Scholes option pricing model . A slight change in an unobservable input like historical volatility could have a significant impact on the fair value measurement of the derivative liabilities . See Note 5 “Derivative Liabilities” for further discussion of the inputs used in determining the fair value . Comprehensive Income (Loss) Comprehensive income (loss) is defined to include all changes in equity except those resulting from investments by owners and distributions to owners . The Company's items of other comprehensive income (loss) are foreign currency translation adjustments . Related Party Transactions A related party is generally defined as (i) any person who holds 10 % or more of the Company’s securities and their immediate families, (ii) the Company’s management, (iii) an entity or person who directly or indirectly controls, is controlled by or is under common control and/or management with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company . A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties . New Accounting Pronouncements The Company has implemented all new accounting pronouncements that are in effect . These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations . NOTE 4. PETROSTEAM LICENSE On March 20 , 2019 , the Company entered into an exclusive license agreement with PetroSteam LLC to obtain an exclusive right to deploy patented and field - tested proprietary technologies utilizing steam generation applied to bitumen and heavy oil recovery in the Provinces of Alberta and Saskatchewan . In exchange, the Company issued 2 , 991 , 400 restricted common shares . In addition, the Company agreed, subject to certain qualifications and milestones being met, to purchase steam generation equipment from PetroSteam totaling $ 12 , 500 , 000 to be used on its bitumen/heavy - oil projects . In 2021 , the PetroSteam license was cancelled by both parties . NOTE 5. DERIVATIVE LIABILITIES Derivative liabilities consist of common stock warrants with an exercise price in a different currency than the Company’s functional currency and they are accounted for as separate liabilities measured at their respective fair values as follows : $ 48,055 Balance, December 31, 2019 (1,487) Exercise of warrants (16) Fair value of expired warrant (23,185) Change in fair value of derivative liabilities 969 Foreign exchange effect on derivative liability $ 24,336 Balance, December 31, 2020 (1,258) Fair value of expired warrant 26,001 Change in fair value of derivative liabilities (580) Foreign exchange effect on derivative liability $ 48,499 Balance, September 30, 2021 The fair value of the derivative liabilities has been determined using the Black - Scholes option pricing model using
11 the following range of assumptions: December 31, 2020 September 30, 2021 411.10% 549.7% Volatility 0.33 to 3.12 years 0.04 to 2.38 years Expected life 0.20% - 0.67% 0.53% - 1.51% Risk - free interest rate 0.00% 0.00% Dividend yield NOTE 6. OIL AND GAS PROPERTIES During the period June 2006 through January 2007 , the Company acquired the rights to multiple oil sands leases within the Peace River area of Alberta, Canada (the “Peace River Properties”) . The leases were granted by the Province of Alberta . All the leases are for a 15 - year term, require minimum annual lease payments, and grant the Company the right to explore and develop oil sands on the respective leases . On February 22 , 2016 , the Company acquired an additional 45 oil sands leases by entering into two purchase and sale agreements . The oil sands leases represent 39 , 680 hectares ( 98 , 051 acres) in the Peace River area of Alberta . One of the purchase / sale agreements was with a related party . On May 14 , 2019 , the Company sold the shallower oil sands rights on two of its oil sands lease blocks in the Cadotte East area to an unrelated third party, but has retained the deeper oil sands rights, including the Debolt - Elkton formations . The Company has also retained a 2 . 5 % overriding royalty on all petroleum substances produced from the shallower oil sands rights on those two lease blocks . The Company will continue to pay annual lease fees on those two oil sands lease blocks, but at a rate of 50 % , and the unrelated third party will pay the other 50 % . On three of its oil sands lease blocks in the Reno area, the Company has sold 100 % of its interest to an unrelated third party and has retained a 2 . 5 % overriding royalty on all petroleum substances produced from those oil sands lease blocks . On those three oil sands lease blocks, the unrelated third party has taken over 100 % of the annual lease fees . In connection with these sales, the Company recorded a gain of $ 44 , 569 . On June 11 , 2020 , the Company sold the shallower oil sands rights on five of its oil sands leases in the Cadotte Central area to an unrelated third party, but has retained the deeper oil sands rights, including the Debolt - Elkton formations . The Company has also retained a 2 . 5 % overriding royalty on all petroleum substances produced from those oil sands lease blocks . The Company will continue to pay annual lease fees on those two oil sands lease blocks, but at a rate of 50 % , and the unrelated third party will pay the other 50 % . In connection with this sale, the Company recorded a gain of $ 29 , 437 . Throughout 2020 , the Company chose not to renew their remaining oil sands leases due to weak conditions in the Alberta heavy oil sector . All the Company’s leases in the Peace River area are subject to royalties payable to the government of the Province of Alberta . The royalty is calculated using a revenue - less - cost formula . In years prior to the recovery of the project’s capital investment, the royalty is 1 % of gross revenue . Once the project costs have been recovered, the royalty is the greater of 1 % of gross revenue or 25 % of net revenue . NOTE 7 . ASSET RETIREMENT OBLIGATIONS During 2007 , the Company drilled four wells on its Peace River Property . Total future asset retirement obligations were estimated by management based on the Company’s working interest in its wells and facilities, estimated costs to remediate, reclaim and abandon the wells and facilities and the estimated timing of the costs to be incurred in future periods . The Company has estimated the net present value of its total asset retirement obligations to be approximately $ 211 , 096 at September 30 , 2021 , based on an undiscounted total future liability of $ 225 , 229 (CDN $ 293 , 000 ) . These payments are expected to be incurred between 2021 and 2030 . The Company used a credit adjusted discount rate of 10 % per annum and an inflation rate of 2 % to calculate the present value of the asset retirement obligation . Accretion expense of $ 11 , 778 and $ 9 , 331 for the nine months ended September 30 , 2021 and 2020 , respectfully, has been recorded in the Statements of Operations and Comprehensive Income (Loss) . However,
12 the Company is currently in the process of carrying out abandonment and remediation of its wells through the federally funded Site Rehabilitation Program . As a result, the actual Asset Retirement Obligation costs on these wells could be substantially lower than its current value but the actual amount cannot be reasonably estimated at this time . NOTE 8 . RELATED PARTY TRANSACTIONS Related party transactions not disclosed elsewhere in these financial statements include: Deferred Revenue - Royalty Agreement The Company has negotiated a royalty agreement with a related party by common CEO and director . In exchange for a non - refundable payment of $ 300 , 000 , the Company has sold a royalty to this related party on the gross production of Vanadium Oxide (“Vanadium”) from the Company’s oil sands leases . For each barrel of bitumen produced from the specified oil sands until March 21 , 2039 , or upon termination of mining, whichever is earlier, the Company will pay a royalty equal to 25 grams of Vanadium per barrel of bitumen produced, multiplied by the price of Vanadium Pentoxide 98 % min in - warehouse Rotterdam published on the last business day of the month in which the gross production of bitumen occurred . The $ 300 , 000 is recorded as deferred revenue and will be recognized at such time as the Company begins to produce Vanadium . Notes payable to related party In December 2015 , the Company borrowed $ 6 , 553 ( $ 9 , 000 Canadian) under a note agreement with related parties . The lenders were related parties through an immediate family relationship with officers or directors of the Company and a common director . The note payable bore interest at the Bank of Canada Prime rate plus 1 % . The Company could repay the loan and outstanding interest thereon by giving notice to the lender 15 days prior to the anticipated repayment . At September 30 , 2021 , the effective interest rate on these notes payable was 3 . 45 % . The balance of note payable, including interest, to related parties at September 30 , 2021 and December 31 , 2020 was $ 8 , 734 and $ 8 , 537 , respectively . The Company recognized interest expense of $ 232 and $ 179 for the nine months ended September 30 , 2021 and 2020 , respectively, in its Statements of Operations and Comprehensive Income (Loss) . In May 2021 , the Company borrowed $ 50 , 000 under a note agreement with a related party . In September, an additional $ 22 , 000 was borrowed . The note payable can be repaid at any time, in part or in full and bears interest at 10 % per annum . The note is convertible into restricted common shares at $ 0 . 01 per share or the most recent 30 - day volume - weighted moving average of the published share price, discounted by 40 % . The balance of the note payable, including interest, at September 30 , 2021 was $ 73 , 841 . The Company recognized interest expense of $ 1 , 841 for the nine months ended September 30 , 2021 in its Statements of Operations and Comprehensive Income (Loss) . Consulting fees Mr . Newton is the President and a member of the Board of Directors of the Company . Mr . Newton does not bill the Company for his services as President ; however, he has a service agreement with the Company . No consulting fees were incurred for the nine months ended September 30 , 2021 and 2020 . Dr . Michael Ranger is a member of the Board of Directors of the Company . Dr . Ranger does not receive compensation for his services as a member of the board ; however, he has a service agreement with the Company, including consulting time and expense reimbursement . Pursuant to this agreement, the Company recognized consulting expenses of $ 1 , 356 and $ 0 for the nine months ended September 30 , 2021 and 2020 , respectively .
13 NOTE 9 . COMMITMENTS AND CONTINGENCIES Environmental Matters The Company is engaged in oil and gas exploration and may become subject to certain liabilities as they relate to environmental cleanup of sites or other environmental restoration procedures as they relate to the exploration of oil and gas . Should it be determined that a liability exists with respect to any environmental clean - up or restoration, the liability to cure such a violation could fall upon the Company . No claim has been made, nor is the Company aware of any liability, which it may have, as it relates to any environmental clean - up, restoration or the violation of any rules or regulations relating thereto . Liabilities for expenditures are recorded when environmental assessment and/or remediation is probable, and the costs can be reasonably estimated . NOTE 10 . SUBSEQUENT EVENTS In accordance with SFAS 165 (ASC 855 - 10 ) management has performed an evaluation of subsequent events through the date that the financial statements were available to be issued and has determined that it does not have any material subsequent events to disclose in these financial statements .
Exhibit 99.10
Strata Power Corporation Interim MD&A – Quarterly Highlights For the Nine Months ended 9/30/21 Management’s Discussion and Analysis of Financial Condition and Results of Operations Management’s Discussion and Analysis of Financial Condition ("MD&A") and Results of Operations should be read in conjunction with the accompanying un - audited financial statements. The financial statements are presented in United States dollars and have been prepared in accordance with accounting principles generally accepted in the United States, referred to as US GAAP. Certain statements contained in the MD&A constitute forward - looking statements. Such forward - looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward - looking statements. Readers are cautioned not to place undue reliance on these forward - looking statements which speak only as of the date the financial statements were made and readers are advised to consider such forward - looking statements in light of the risks set forth both below and in the Company’s most recent annual report. RESULTS OF OPERATIONS Nine months ended September 30, 2021 compared to nine months ended September 30, 2020. For the nine months ended September 30, 2021 and 2020, the Company had a net loss from operations of $127,859 and $46,772, respectively, for an approximate $81,000 increase of net loss. The primary reasons for the increased net loss are the elimination of the PetroSteam license of $60,000, the change in gain on disposal of properties of $29,000, and the change in the fair value of derivative liability of $28,000. This was offset by the decrease in the oil & gas properties expense of $36,000. For the nine months ended September 30, 2021, the Company recorded a loss in the change in fair value of derivative liability of $24,666. This compares to a gain recognized for the nine months ended September 30, 2020 of $3,334. This item is a non - cash item and was recorded in accordance with ASC 850 - 40 - 15. This guidance requires entities to evaluate whether an equity - linked financial instrument (or embedded feature) is indexed to its own stock by assessing the instrument’s contingent exercise provisions and settlement provisions. Instruments not indexed to their own stock fail to meet the scope exception of Accounting for Derivative Instruments and Hedging Activities, ASC 815 - 10 - 15 - 74(a), and should be classified as a liability and marked - to - market. REVENUES The Company did not earn any revenue for the nine months ended September 30, 2021 or 2020. We do not anticipate earning revenues until such time as we have entered into commercial production of our oil and gas properties. We can provide no assurance that we will enter into commercial production of our oil and gas properties. DISCONTINUED OPERATIONS There was no discontinued operations activity in 2021 or 2020. INTEREST AND OTHER INCOME (EXPENSE) Included in other income (expense) for the nine months ended September 30, 2021 is a foreign exchange loss of $2,057. This compares to a foreign exchange gain of $1,566 for the nine months ended September 30, 2020.
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Liquidity and Capital Resources As of September 30 , 2021 , we had $ 397 in cash, a decrease of $ 21 , 320 from December 31 , 2020 . Management estimates that the Company will require approximately $ 115 , 000 to fund planned operations for the next twelve months . Therefore, current cash on hand is not sufficient to fund planned operations for 2021 . Our policy is to pay all operational expenses when due, provided that the vendor, in the normal course of business, has satisfied all necessary conditions for payment . Net cash used in operating activities during the nine months ended September 30 , 2021 was $ 92 , 440 , compared to net cash used in operating activities of $ 15 , 059 for the same period in the prior year . The decrease in cash used in operating activities was the change in the PetroSteam license of $ 59 , 828 , the change in the gain on disposal of oil and gas properties of $ 29 , 437 , and the increase of accounts payable of $ 56 , 743 . Cash provided by (used in) investing activities for the nine months ended September 30 , 2021 and 2020 was ( $ 382 ) and $ 28 , 716 , respectively, resulting primarily from the change in the proceeds from the sale of oil and gas properties . Net cash provided by financing activities for the nine months ended September 30 , 2021 and 2020 was $ 72 , 000 and $ 5 , 000 , respectively . For September 30 , 2021 , the financing activities consisted of the issuance of convertible debt . For September 30 , 2020 , the financing activities consisted of the exercise of options and warrants . We are an exploration stage company with limited operating history, which raises substantial doubt as to our ability to successfully develop profitable business operations and makes an investment in our common shares very risky . We have no long - term debt . We believe that our available cash may not be sufficient to fund our working capital requirements to maintain, explore and develop our property interests for the next twelve months . If capital is not available to fund future operations, we will not be able to pursue our business plan and operations would come to a halt and our common shares could be nearly worthless . We will require substantial additional capital to participate in the development of our properties which have not had any production of oil or natural gas as well as for acquisition and/or development of other producing properties . Because we currently do not have any cash flow from operations, we need to raise additional capital, which may be in the form of loans from current shareholders and/or from private equity offerings . Our ability to access capital will depend on our success in participating in properties that are successful in exploring for and producing oil and gas at profitable prices . It will also be dependent upon the status of the capital markets at the time such capital is sought . Should sufficient capital not be available, the development of our business plan could be delayed and, accordingly, the implementation of our business strategy would be adversely affected . In such event it would not be likely that investors would obtain a profitable return on their investments or a return of their investments at all . We anticipate that we will incur the following expenditures through our current fiscal year : $15,000 in connection with property lease payments and follow up analysis on the Company’s oil sands properties $100,000 for operating expenses, including working capital, consulting fees, general and administrative, professional, legal and accounting expenses In 2021 , our capital requirements will mostly be associated with the maintenance of our lease payments to the Crown and general and administrative expenses . Going forward we expect the short - term and long - term funding of our oil and gas operations to be financed primarily through equity issuance in the form of private placements and the exercise of warrants . In addition, we continue to work with potential partners to discuss funding arrangements which would facilitate furtherance of our property interests . We cannot be certain that any required additional financing will be available on terms favorable to us as the risky nature of this enterprise and lack of tangible assets places debt financing beyond the credit - worthiness required by most banks or typical investors of corporate debt until such time as the economic viability of our oil sands properties can be demonstrated . If additional funds are raised by the issuance of our equity securities, existing stockholders will experience dilution of their ownership interest . If adequate funds are not available or not available on acceptable terms, we may be unable to continue, fund expansion, pursue further development or respond to competitive pressures .
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Our financing prospects must be considered in light of the risks, expenses and difficulties frequently encountered in establishing a business in the oil and natural gas industries . We have yet to generate any revenues from operations . There is nothing at this time on which to base an assumption that our business operations will prove to be successful or that we will ever be able to operate profitably . Our future operating results will depend on many factors, including : our ability to raise adequate working capital success of our exploration and development demand for natural gas and oil the level of our competition our ability to attract and maintain key management and employees and our ability to efficiently explore, develop and produce sufficient quantities of marketable natural gas or oil in a highly competitive and speculative environment while maintaining quality and controlling costs Volatility of oil and gas prices and markets could make it more difficult for us to achieve profitability and less likely for investors in our common shares to receive a return on their investment . Our ability to achieve profitability is substantially dependent on prevailing prices for natural gas and oil . The amounts and price obtainable for any oil and gas production that we achieve will be affected by market factors beyond our control . If these factors are not favorable over time to our financial interests, it is likely that owners of our common shares could lose their investments . Such factors include : worldwide or regional demand for energy, which is affected by economic conditions the domestic and foreign supply of natural gas and oil weather conditions domestic and foreign governmental regulations political conditions in natural gas and oil producing regions the ability of members of the Organization of Petroleum Exporting Countries to agree upon and maintain oil prices and production levels the price and availability of other fuels Additionally, due to worldwide economic uncertainty, the availability and cost of funds for production and other expenses have become increasingly difficult, if not impossible, to project . These changes and events may materially affect our financial performance .
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Exhibit 99.11
FORM 52 - 109F2 CERTIFICATION OF INTERIM FILINGS - FULL CERTIFICATE I, Trevor Newton, Chief Executive Officer of Strata Power Corporation Inc., certify the following: 1. Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Strata Power Corporation Inc. (the “issuer”) for the interim period ended September 30, 2021. 2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings. 3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings. 4. Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52 - 109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer. 5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings a. designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that i. material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and ii. information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and b. designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP. 1. Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. 2. N/A 3. N/A 6 . Reporting changes in ICFR : The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on July 1 , 2021 and ended on September 30 , 2021 that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR . 1/2
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Date: November 15, 2021 (signed) "Trevor Newton" Trevor Newton Chief Executive Officer
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Exhibit 99.12
FORM 52 - 109F2 CERTIFICATION OF INTERIM FILINGS - FULL CERTIFICATE I, Trevor Newton, Chief Financial Officer of Strata Power Corporation, certify the following: 1. Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Strata Power Corporation (the “issuer”) for the interim period ended September 30, 2021. 2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings. 3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings. 4. Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52 - 109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer. 5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings a. designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that i. material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and ii. information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and b. designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP. 1. Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. 2. N/A 3. N/A 6 . Reporting changes in ICFR : The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on July 1 , 2021 and ended on September 30 , 2021 that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR . 1/2
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Date: November 15, 2021 (signed) "Trevor Newton" Trevor Newton Chief Financial Officer
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Exhibit 99.13
Strata Power Corporation (An Exploration Stage Company) FINANCIAL STATEMENTS For the Three Months ended March 31, 2022 and 2021 (unaudited) (Stated in US Dollars)
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STRATA POWER CORPORATION BALANCE SHEETS (Expressed in US Dollars) (Unaudited) March 31, 2022 December 31, 2021 ASSETS Current assets Cash $ 17,106 $ 7,696 GST receivables 2,476 2,448 Royalty receivables 14,442 19,619 Prepaid expenses 7,171 4,106 Total current assets 41,195 33,870 Reclamation deposits 102,375 101,139 Total assets $ 143,570 $ 135,009 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities Accounts payable and accrued liabilities $ 42,160 $ 42,503 Accounts payable and accrued liabilities - related party 10,708 22,115 Notes payable, net of debt discount 30,943 33,503 Derivative liabilities 127,767 210,929 Total current liabilities 211,578 309,050 Deferred revenue - royalty agreement (Note 9) 300,000 300,000 Asset retirement obligation 222,746 214,960 Total long - term liabilities 522,746 514,960 Total liabilities 734,324 824,010 Commitments and Contingencies – – Stockholders' equity (deficit) Preferred stock: no par value, unlimited shares authorized and none issued – – Common stock : no par value, unlimited shares authorized ; 20 , 085 , 119 shares issued and outstanding at March 31 , 2022 and December 31 , 2021 , respectively – – Additional paid - in capital 23,404,083 23,404,083 Common shares to be issued 5,000 5,000 Accumulated deficit (23,593,907) (23,692,529 ) Accumulated other comprehensive income (loss) (405,930) (405,555 ) (689,001 ) $ 135,009 Total stockholders' equity (deficit) (590,754 ) Total liabilities and stockholders' equity (deficit) $ 143,570 The accompanying notes are an integral part of these financial statements.
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STRATA POWER CORPORATION STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Expressed in US Dollars) (Unaudited) For the Three Months Ended March 31, 2021 2022 $0 $44,639 Operating Income: Royalty income 6,500 8,664 Operating Expenses: Professional fees 214 125 Office and sundry 1,356 - Consulting fees 95 (900) Transfer agent fees 4,940 5,433 Accretion expense 3,025 3,814 Oil & gas properties expense 16,130 17,136 Total operating expenses 124 128 Other income (expense): Interest income (9,000) Amortization of debt discount (61) (1,718) Interest expense, related party (2,124) (1,895) Foreign exchange gain (loss) (3,887) 83,604 Change in fair value of derivative liability (5,948) 71,119 Total other income (expense) (22,078) 98,622 Net income (loss) (384) (375) Other comprehensive income (loss) Foreign currency translation adjustment $(22,462) $98,247 Comprehensive income (loss) ($0.00) $0.00 Income per common share Basic ($0.00) $0.00 Diluted Weighted average number of shares outstanding: 20,085,119 20,085,119 Basic 20,085,119 20,085,119 Diluted The accompanying notes are an integral part of these financial statements.
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STRATA POWER CORPORATION STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) (Expressed in US Dollars) (Unaudited) Common Stock Additional Paid - in Common Shares to be Accumulated Accumulated Other Comprehensive Total Stockholders' Shares Capital Issued Deficit Income (Loss) Equity (Deficit) Balance December 31, 2020 20,085,119 $ 23,404,083 $ 5,000 $ (23,474,066) $ (405,310) $ (470,293) Net loss and comprehensive loss – – 20,085,119 $ 23,404,083 $ (22,078) (384) (22,462) Balance March 31, 2021 5,000 $ (23,496,144) $ (405,694) $ (492,755) $ (689,001) $ (405,555) $ (23,692,529) 5,000 $ 23,404,083 $ 20,085,119 Balance December 31, 2021 98,247 (375) 98,622 – – Net income and comprehensive loss (590,754) (405,930) $ (23,593,907) 5,000 $ 23,404,083 $ 20,085,119 Balance March 31, 2022 The accompanying notes are an integral part of these financial statements.
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STRATA POWER CORPORATION STATEMENTS OF CASH FLOWS (Expressed in US Dollars) (Unaudited) For the three months ending March 31, 2022 2021 Cash flows from operating activities: $ (22,078) $ 98,622 Net income (loss) Adjustments to reconcile net loss to net cash used in operating activities 4,940 5,433 Accretion expense - 9,000 Amortization of debt discount 3,887 (83,604) Change in fair value of derivative liability Change in assets and liabilities (97) (27) GST receivable - 5,177 Royalty receivable - (3,065) Prepaid expenses 1,281 (343) Accounts payable 61 (9,805) Accounts payable – related party (12,006) 21,388 Net cash provided by (used in) operating activities Cash flows from investing activities: (124) (127) Reclamation Deposits (124) (127) Net provided used in investing activities - (13,376) Cash flows from financing activities: Repayment of convertible note - (13,376) Net cash used in financing activities 1,337 1,525 Foreign exchange effect on cash (10,793) 9,410 Net increase (decrease) in cash 21,717 7,696 Cash, beginning balance $ 10,924 $ 17,106 Cash, ending balance Supplemental disclosure of cash paid for: $ – $ – Interest $ – $ – Income taxes The accompanying notes are an integral part of these financial statements.
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STRATA POWER CORPORATION Notes to the Financial Statements NOTE 1. NATURE OF BUSINESS Strata Power Corporation (the “Company”) is currently engaged in the acquisition, exploration and, if warranted, feasible development of heavy oil projects in the Peace River oil sands region in Northern Alberta, Canada . The Company was incorporated under the laws of the State of Nevada on November 18 , 1998 and commenced operations in January 1999 . The Company completed its initial public offering in February 2000 . The Company is presently incorporated under the Canada Business Corporations Act . On December 27 , 2018 , the Company filed a Certificate of Amendment with Corporations Canada changing its name from Strata Oil & Gas Inc . to Strata Power Corporation . As of March 31 , 2022 , the Company has a 50 % interest in 7 oil sands leases, totaling 8 , 704 hectares, all located in the Peace River oil sands area . In addition, the Company has a royalty interest in 10 oil sands leases and owns 3 non - producing wells . NOTE 2. ABILITY TO CONTINUE AS A GOING CONCERN As shown in the accompanying financial statements, the Company has realized minimal revenue from its present operations . During the three months ended March 31 , 2022 , the Company had net income of $ 98 , 622 , primarily due to royalty income and the change in the fair value of derivative liability . The Company had cash flows provided by operations of $ 21 , 388 but it is possible that the Company will incur negative operating cash flows in the foreseeable future . The Company has an accumulated deficit of $ 23 , 593 , 907 at March 31 , 2022 . These conditions raise substantial doubt regarding the Company’s ability to continue as a going concern . The financial statements have been prepared on a going concern basis, which contemplates realization of assets and liquidation of liabilities in the ordinary course of business . The Company's ability to continue as a going concern is dependent on its ability to develop its oil and gas properties and ultimately achieve profitable operations, and to generate sufficient cash flow from financing and operations to meet its obligations as they become payable . The Company expects that it will need approximately $ 115 , 000 to fund its operations during the next twelve months, which will include minimum annual property lease payments, expected exploration expenditures for permitting and drilling, as well as operating expenses . Management has plans to seek additional capital through a private placement of its common stock . Although there are no assurances that management’s plans will be realized, management believes that the Company will be able obtain sufficient capital to continue operations in the next 12 months . Accordingly, no adjustment relating to the recoverability and classification of recorded asset amounts and the classification of liabilities has been made to the accompanying financial statements in anticipation of the Company not being able to continue as a going concern . NOTE 3. SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) . Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate so as to make the information presented not misleading .
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Risks and Uncertainties The Company is subject to additional risks and uncertainties due to the COVID - 19 pandemic. The extent of the impact on the Company’s business is uncertain and difficult to predict. The Company considered the impact of COVID - 19 on the assumptions and estimates used and determined that there has been no material impact on the Company’s year - to - date results of operations. The Company cannot reasonably estimate with any degree of certainty the future impact COVID - 19 may have on the Company’s results of operations, financial position and liquidity. Management’s Estimates and Assumptions The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the balance sheet date, and revenues and expenses for the period then ended . Management believes that all applicable estimates and adjustments are appropriate . Actual results could differ significantly from those estimates . Concentration of Revenue For the three months ended March 31 , 2022 , the Company had a concentration of revenue related to a single royalty contract, accounting for 100 % of total revenue . The loss of this contract would have a material adverse effect on future operating results . As of March 31 , 2022 , 100 % of royalty receivables related to this contract . Oil and Gas Property Payments and Exploration Costs All costs incurred in the acquisition, exploration and development of natural gas and oil interests are capitalized as incurred . Capitalized costs associated with proven properties are amortized using the units - of - production method over the estimated life of the probable reserve . Capitalized costs associated with unproved properties are excluded from the amortization calculations and assessed, at least annually, to determine if impairment has occurred, until such time as those costs are proven . Impairment amounts are immediately expensed and no costs have been capitalized through March 31 , 2022 . Cash and Cash Equivalents The Company considers all highly liquid investments purchased with a maturity of 90 days or less to be cash equivalents . The Company maintains cash and cash equivalent balances with financial institutions that may exceed federally insured limits . There were no cash equivalent balances for the years ended March 31 , 2022 or December 31 , 2021 . GST Receivables Goods and Services Tax (GST) receivables are presented net of an allowance for doubtful accounts . Receivables consist of goods and services input tax credits . The allowance for doubtful accounts on GST receivables was $ nil at March 31 , 2022 and December 31 , 2021 . Impairment of Long - lived Assets In accordance with ASC 360 , Property, Plant and Equipment, long lived assets such as equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable . Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset . If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset . Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount of fair value less costs to sell and are no longer depreciated . The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet .
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Asset Retirement Obligations In accordance with ASC 410 , Asset Retirement and Environmental Obligations, the fair value of an asset retirement cost, and corresponding liability, should be recorded as part of the cost of the related long - lived asset and subsequently allocated to expense using a systematic and rational method . The Company has recorded an asset retirement obligation at March 31 , 2022 and December 31 , 2021 (Note 8 ) to reflect its legal obligations related to future abandonment of its oil and gas interests using estimated expected cash flow associated with the obligation and discounting the amount using a credit - adjusted, risk - free interest rate . At least annually, the Company will reassess the obligation to determine whether a change in any estimated obligation is necessary . The Company will evaluate whether there are indicators that suggest the estimated cash flows underlying the obligation have materially changed . Should those indicators suggest the estimated obligation has materially changed the Company will accordingly update its assessment . The liability accretes until the Company settles the obligation . Income Taxes The Company follows the asset and liability method of accounting for income taxes whereby deferred tax assets and liabilities are recognized for the future tax consequences of differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases . If it is determined that the realization of the future tax benefit is not more likely than not, the Company establishes a valuation allowance . Foreign Exchange Translation The Company's functional currency is the Canadian dollar but reports its financial statements in US dollars . The Company translates its Canadian dollar balances to US dollars in the following manner : Assets and liabilities have been translated using the rate of exchange at the balance sheet date . Equity transactions and results of operations have been translated at historical rates . Translation gains or losses resulting from the changes in the exchange rates are accumulated as other comprehensive income or loss in a separate component of stockholders' equity . All amounts included in the accompanying financial statements and footnotes are stated in U.S. dollars. Derivative Financial Instruments The Company reviews the terms of its equity instruments and other financing arrangements to determine whether there are embedded derivative instruments that are required to be accounted for separately as a derivative financial instrument . Also, in connection with the issuance of financing instruments, the Company has issued freestanding warrants that are accounted for as derivative instrument liabilities because they are exercisable in a currency other than the functional currency of the Company and thus do not meet the “fixed - for - fixed” criteria of ASC 815 - 40 - 15 . The warrants are exercisable in United States dollars and the Company’s functional currency is the Canadian dollar . Derivative financial instruments are initially measured at their fair value . For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re - valued at each reporting date, with changes in the fair value reported as charges or credits to income . For derivative financial instruments, the Company uses the Black - Scholes option pricing model to value the derivative instruments . Any exercise or cancellation of an equity instrument which meets the classification of a derivative financial instrument is trued - up to fair value at that date and the fair value of the exercised instrument is then reclassified from liability to additional paid in capital . The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period . If reclassification is required, the fair value of the derivative instrument, as of the determination date, is reclassified . Any previous charges or credits to income for changes in the fair value of the derivative instrument are not reversed . Derivative instrument liabilities are classified in the balance sheet as current or non - current based on whether or not net - cash settlement of the derivative instrument could be required within 12 months of the balance sheet date . Stock Based Compensation
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In accordance with ASC 718 , “Compensation – Stock Compensation” (“ASC 718 ”), which was adopted as of January 1 , 2019 , the Company measures all employee stock - based compensation awards using a fair value method on the date of grant and recognizes such expense in its financial statements over the requisite service period . The Company uses the Black - Scholes pricing model to determine the fair value of stock - based compensation awards on the date of grant . The Black - Scholes pricing model requires management to make assumptions regarding option lives, expected volatility, and risk - free interest rates . The Company accounts for non - employee stock - based awards in accordance with the provision of ASC 505 , “Equity Based Payments to Non - Employees” (“ASC 505 ”), which requires that such equity instruments are recorded at their fair value on the measurement date . The measurement of stock - based compensation is subject to periodic adjustment as the underlying equity instruments vest . The Company uses the Black - Scholes pricing model to determine the fair value of stock - based compensation awards . The Black - Scholes pricing model requires management to make assumptions regarding option lives, expected volatility, and risk - free interest rates . The Company uses historical data to estimate option exercise, forfeiture and employee termination within the valuation model . For non - employees, the expected term of the options approximates the full term of the options . The risk - free interest rate is based on a treasury instrument whose term is consistent with the expected term of the stock options . The Company has not paid and does not anticipate paying dividends on its common stock ; therefore, the expected dividend yield is assumed to be zero . In addition, accounting standard requires companies to utilize an estimated forfeiture rate when calculating the expense for the reporting period . Based on its best estimate, management applied the estimated forfeiture rate of nil in determining the expense recorded in the accompanying Statements of Operations and Comprehensive Income (Loss) . Expected volatilities are calculated using the historical volatility of the Company’s stock . When applicable, the Company will use historical data to estimate option exercise, forfeiture and employees’ termination within the valuation model . For non - employees, the expected term of the options approximates the full term of the options . Earnings (Loss) Per Share of Common Stock Basic earnings (loss) per share of common stock is computed by dividing net income (loss) available to common shareholders by the weighted - average number of common shares outstanding for the period . Diluted earnings per share of common stock reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company . Dilutive potential common shares are calculated in accordance with the treasury stock method, which assumes that proceeds from the exercise of all warrants and options are used to repurchase common stock at market value . The number of shares remaining after the proceeds are exhausted represents the potentially dilutive effect of the securities . For the three months ended March 31 , 2022 and 2021 , all of the outstanding options and warrants had an exercise price above the average stock price for year - end period . Accordingly, all of the potentially dilutive shares were excluded from the computation of diluted shares outstanding as they would have had an anti - dilutive impact on the Company’s income (loss) from continuing operations . Fair Value of Financial Instruments The book values of GST receivables, notes receivable, accounts payable and accrued expenses approximate their respective fair values due to the short - term nature of these instruments . The fair value hierarchy under GAAP distinguishes between assumptions based on market data (observable inputs) and an entity’s own assumptions (unobservable inputs) . The hierarchy consists of three levels : Level one - Quoted market prices in active markets for identical assets or liabilities; Level two - Inputs other than level one inputs that are either directly or indirectly observable; and Level three - Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use.
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Determining which category an asset or liability falls within the hierarchy requires significant judgment . Hierarchy disclosures are evaluated at each balance sheet date . Liabilities measured at fair value are summarized as follows as of : Fair Value Measurement at March 31, 2022 Using Fair Value Measurement at December 31, 2021 Using Total Level 3 Total Level 3 $ 210,929 $ 210,929 $ 127,767 $ 127,767 Derivative liabilities 214,960 214,960 222,746 222,746 Asset Retirement Obligation (see Note 8) The Company issued a convertible note in which the conversion rate is variable . As a result, a derivative liability was recorded (see Note 9 ) . In addition, the Company has warrants with a strike price currency different than the functional currency as has recorded a derivative liability associated with that . The Company measures and reports the fair value liability for these derivative liabilities on a recurring basis . The fair value liabilities have been recorded as determined utilizing the Black - Scholes option pricing model . A slight change in an unobservable input like historical volatility could have a significant impact on the fair value measurement of the derivative liabilities . See Note 6 “Derivative Liabilities” for further discussion of the inputs used in determining the fair value . Revenue Recognition The Company has adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 606 , Revenue from Contracts with Customers (“ASC 606 ”), which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers . The Company receives a royalty from an unrelated party of 2 . 5 % on all petroleum substances produced from five oil sands leases in the Cadotte Central area that were sold in June, 2020 (see Note 4 ) and recognizes revenue at the time petroleum is sold . The Company’s revenue recognition policy standards include the following elements under ASU 606 : 1. Identify the contract with the customer. The contract is documented in the Purchase and Sale Agreement dated 6/4/2020. 2. Identify the performance obligations in the contract. The performance obligation in the contract required Strata to relinquish its interest in five oil sands leases in the Cadotte Central area. 3. Determine the transaction price. The transaction price was C$40,000 in exchange for 2.5% of the petroleum substances produced from the five oil sands leases. 4. Allocate the transaction price to the performance obligations in the contract . The Company only has one performance obligation, the transfer of the rights to the five oil sands leases, which has already been fulfilled . 5. Recognize revenue when (or as) the entity satisfies a performance obligation . The C $ 40 , 000 was recognized as a sale of the shallower oil sands rights in 2020 , resulting in a gain from the disposition of the property . The 2 . 5 % petroleum royalties are recognized as revenue in the period that the other party produces and sells petroleum from the oil sands leases, which began in September 2021 . The royalties that have been received to date have been highly variable, as the amounts are dependent upon the monthly production, the demand of the buyers, the spot price of petroleum, etc . As such, management has determined that the revenue recognition shall be treated as variable consideration as defined in ASC 606 . Variable consideration should only be recognized to the extent that it is probable that a significant reversal of revenue will not occur when the uncertainty associated with the variable consideration is subsequently resolved . Given the fact that royalties to date have been highly variable with a great degree of uncertainty, and any attempts to estimate future revenue would likely result in a significant reversal of revenue, royalty revenue will be recognized when payments and settlement statements are received, in the period for which the petroleum was produced . It is at that time that any uncertainty related to royalty payments is resolved . The Company applied ASC 606 using the modified retrospective method applied to contracts not yet completed as of the date of adoption . Comprehensive Income (Loss)
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Comprehensive income (loss) is defined to include all changes in equity except those resulting from investments by owners and distributions to owners . The Company's items of other comprehensive income (loss) are foreign currency translation adjustments . Related Party Transactions A related party is generally defined as (i) any person who holds 10 % or more of the Company’s securities and their immediate families, (ii) the Company’s management, (iii) an entity or person who directly or indirectly controls, is controlled by or is under common control and/or management with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company . A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties . New Accounting Pronouncements In August 2020 , the FASB issued ASU 2020 - 06 , Debt - Debt with Conversion and Other Options (Subtopic 470 - 20 ) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815 - 40 ) : Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020 - 06 ”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity . This ASU ( 1 ) simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470 - 20 , Debt : Debt with Conversion and Other Options, that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock ; ( 2 ) revises the scope exception from derivative accounting in ASC 815 - 40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification ; and ( 3 ) revises the guidance in ASC 260 , Earnings Per Share, to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if - converted method . In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares . For SEC filers, excluding smaller reporting companies, ASU 2020 - 06 is effective for fiscal years beginning after December 15 , 2021 including interim periods within those fiscal years . Early adoption is permitted, but no earlier than fiscal years beginning after December 15 , 2020 . For all other entities, ASU 2020 - 06 is effective for fiscal years beginning after December 15 , 2023 , including interim periods within those fiscal years . Entities should adopt the guidance as of the beginning of the fiscal year of adoption and cannot adopt the guidance in an interim reporting period . The Company is currently evaluating the impact that ASU 2020 - 06 may have on its consolidated financial statements and related disclosures . The Company has implemented all new accounting pronouncements that are in effect . These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations . NOTE 4 . ROYALTY INTEREST Pursuant to the Purchase and Sale Agreement with an unrelated third party, the Company has a 2 . 5 % gross overriding royalty on all petroleum substances produced from five oil sands leases in the Cadotte Central area that were sold in June, 2020 . For the three months ended March 31 , 2022 and 2021 , the Company earned royalties of $ 44 , 639 and $ 0 , respectively . NOTE 5 . PETROSTEAM LICENSE On March 20 , 2019 , the Company entered into an exclusive license agreement with PetroSteam LLC to obtain an exclusive right to deploy patented and field - tested proprietary technologies utilizing steam generation applied to bitumen and heavy oil recovery in the Provinces of Alberta and Saskatchewan . In exchange, the Company issued 2 , 991 , 400 restricted common shares . In addition, the Company agreed, subject to certain qualifications and milestones being met, to purchase steam generation equipment from PetroSteam totaling $ 12 , 500 , 000 to be used on its bitumen/heavy - oil projects . In 2021 , the PetroSteam license was cancelled by both parties and the value of the license agreement was recognized as a license fee expense .
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NOTE 6 . DERIVATIVE LIABILITIES Derivative liabilities consist of common stock warrants with an exercise price in a different currency than the Company’s functional currency . In addition, the Company identified embedded derivatives related to a convertible promissory note issued in 2021 (see Note 9 ) . These embedded derivatives include certain conversion features . The derivative liabilities are accounted for as separate liabilities measured at their respective fair values as follows : Derivative liabilities associated with: Convertible Total Note Warrants 24,336 – $ 24,336 Balance, December 31, 2020 127,049 127,049 – Issuance of convertible note (1,258) – (1,258) Fair value of expired warrant 61,031 43,446 17,585 Change in fair value of derivative liabilities (229) – (229) Foreign exchange effect on derivative liability $ 210,929 $ 170,495 40,434 Balance, December 31, 2021 (83,605) (67,563) (16,042) Change in fair value of derivative liabilities 443 443 Foreign exchange effect on derivative liability 127,767 102,932 Balance, March 31, 2022 $ 24,835 The fair value of the derivative liabilities has been determined using the Black - Scholes option pricing model using the following range of assumptions: December 31, 2021 March 31, 2022 545.20% 485.7% Volatility 0.45 to 2.12 years 0.35 to 1.88 years Expected life 0.95% - 1.42% 2.27% - 2.40% Risk - free interest rate 0.00% 0.00% Dividend yield NOTE 7. OIL AND GAS PROPERTIES During the period June 2006 through January 2007 , the Company acquired the rights to multiple oil sands leases within the Peace River area of Alberta, Canada (the “Peace River Properties”) . The leases were granted by the Province of Alberta . All the leases were for a 15 - year term, required minimum annual lease payments, and granted the Company the right to explore and develop oil sands on the respective leases . On February 22 , 2016 , the Company acquired an additional 45 oil sands leases by entering into two purchase and sale agreements . The oil sands leases represented 39 , 680 hectares ( 98 , 051 acres) in the Peace River area of Alberta . One of the purchase / sale agreements was with a related party . On May 14 , 2019 , the Company sold the shallower oil sands rights on two of its oil sands lease blocks in the Cadotte East area to an unrelated third party, but retained the deeper oil sands rights, including the Debolt - Elkton formations . The Company also retained a 2 . 5 % overriding royalty on all petroleum substances produced from the shallower oil sands rights on those two lease blocks . The Company will continue to pay annual lease fees on those two oil sands lease blocks, but at a rate of 50 % , and the unrelated third party will pay the other 50 % . On three of its oil sands lease blocks in the Reno area, the Company sold 100 % of its interest to an unrelated third party and retained a 2 . 5 % overriding royalty on all petroleum substances produced from those oil sands lease blocks . On those three oil sands lease blocks, the unrelated third party has taken over 100 % of the annual lease fees . On June 11 , 2020 , the Company sold the shallower oil sands rights on five of its oil sands leases in the Cadotte Central area to an unrelated third party, but retained the deeper oil sands rights, including the Debolt - Elkton formations . The Company also retained a 2 . 5 % overriding royalty on all petroleum substances produced from those oil sands lease
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blocks . The Company will continue to pay annual lease fees on those two oil sands lease blocks, but at a rate of 50 % , and the third party will pay the other 50 % . In connection with this sale, the Company recorded a gain of $ 29 , 437 . Throughout 2020 , the Company chose to not renew their remaining oil sands leases due to the economic conditions in the Alberta heavy oil sector . All the Company’s lease interests in the Peace River area are subject to royalties payable to the government of the Province of Alberta . The royalty is calculated using a revenue - less - cost formula . In years prior to the recovery of the project’s capital investment, the royalty is 1 % of gross revenue . Once the project costs have been recovered, the royalty is the greater of 1 % of gross revenue or 25 % of net revenue . The Company completed drilling four exploratory wells during the fiscal year ended December 31 , 2007 . Since then, the Company completed several third - party technical reports on its oil sands leases including a prefeasibility study and developed an oil sands exploration program, which it was not able to execute on due to weak conditions in the heavy oil sector . NOTE 8 . ASSET RETIREMENT OBLIGATIONS During 2007 , the Company drilled four wells on its Peace River Property . Total future asset retirement obligations were estimated by management based on the Company’s working interest in its wells and facilities, estimated costs to remediate, reclaim and abandon the wells and facilities and the estimated timing of the costs to be incurred in future periods . The Company has estimated the net present value of its total asset retirement obligations to be approximately $ 222 , 746 at March 31 , 2022 , based on an undiscounted total future liability of $ 225 , 229 (CDN $ 293 , 000 ) . These payments are expected to be incurred between 2022 and 2030 . The Company used a credit adjusted discount rate of 10 % per annum and an inflation rate of 2 % to calculate the present value of the asset retirement obligation . Accretion expense of $ 5 , 433 and $ 4 , 940 for the three months ended March 31 , 2022 , and 2021 , respectively, has been recorded in the Statements of Operations and Comprehensive Income (Loss) . However, the Company is currently in the process of carrying out abandonment and remediation of its wells through the federally funded Site Rehabilitation Program . As a result, the actual Asset Retirement Obligation costs on these wells could be substantially lower than its current value but the actual amount cannot be reasonably estimated at this time . NOTE 9 . RELATED PARTY TRANSACTIONS Related party transactions not disclosed elsewhere in these financial statements include: Deferred Revenue - Royalty Agreement The Company has negotiated a royalty agreement with a related party by common CEO and director . In exchange for a non - refundable payment of $ 300 , 000 , the Company intends to provide a royalty stream to this related party based on the gross production of Vanadium Oxide (“Vanadium”) from the company’s the oil sands leases . For each barrel of bitumen produced from the specified oil sands until March 21 , 2039 , or upon termination of mining, whichever is earlier, the Company will pay a royalty equal to 25 grams of Vanadium per barrel of bitumen produced, multiplied by the price of Vanadium Pentoxide 98 % min in - warehouse Rotterdam published on the last business day of the month in which the gross production of bitumen occurred . The $ 300 , 000 is recorded as deferred revenue and will be recognized at such time as the Company begins to produce Vanadium . Notes payable to related party In December 2015 , the Company borrowed $ 6 , 553 ( $ 9 , 000 Canadian) under a note agreement with related parties . The lenders were related parties through an immediate family relationship with officers or directors of the Company and a common director . The note payable bore interest at the Bank of Canada Prime rate plus 1 % . The Company could repay the loan and outstanding interest thereon by giving notice to the lender 15 days prior to the anticipated repayment . At March 31 , 2022 , the effective interest rate on these notes payable was 3 . 70 % . The balance of note payable, including interest, to related parties at March 31 , 2022 and December 31 , 2021 was $ 9 , 004 and $ 8 , 844 , respectively . The Company recognized interest expense of $ 63 and $ 61 for the three months ended March 31 , 2022 , and 2021 , respectively, in its Statements of Operations and Comprehensive Income (Loss) .
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In 2021 , the Company borrowed $ 72 , 000 under a note agreement with a related party . The note payable can be repaid at any time, in part or in full on or before May 25 , 2023 and bears interest at 10 % per annum . The note is convertible into restricted common shares at $ 0 . 01 per share or the most recent 30 - day volume - weighted moving average of the published share price, discounted by 40 % , whichever is higher . Due to the variability of the conversion rate, an embedded derivative was identified . The Company recorded the fair value of the derivatives as of the inception date of the convertible note, which was determined to be $ 127 , 049 . The initial fair value of the embedded debt derivative was allocated as a debt discount up to the face value of the note ( $ 72 , 000 ), with the remaining $ 55 , 049 recognized as a loss on issuance of convertible note . The debt discount will be amortized over the life of the note and amortization expense of $ 9 , 000 and $ 0 was recognized for the three months ended March 31 , 2022 and 2021 , respectively . The balance of the note payable, including interest, at March 31 , 2022 and December 31 , 2021 was $ 63 , 939 and $ 75 , 659 , respectively . The Company recognized interest expense of $ 1 , 656 and $ 0 for the three months ended March 31 , 2022 and 2021 , respectively, in its Statements of Operations and Comprehensive Income (Loss) . Consulting fees Mr . Newton is the President and a member of the Board of Directors of the Company . Mr . Newton does not bill the Company for his services as President ; however, he has a service agreement with the Company . No consulting fees were incurred for the three months ended March 31 , 2021 and 2020 . Dr . Michael Ranger is a member of the Board of Directors of the Company . Dr . Ranger does not receive compensation for his services as a member of the board ; however, he has a service agreement with the Company, including consulting time and expense reimbursement . Pursuant to this agreement, the Company recognized consulting expenses of $ 0 and $ 1 , 356 , for the three months ended March 31 , 2022 , and 2021 , respectively . NOTE 10. COMMITMENTS AND CONTINGENCIES In the ordinary course of business, we may be exposed to claims and threatened litigation, and use various methods to resolve these matters in a manner that we believe serves the best interest of our shareholders and other constituents . When a loss is probable, we disclose the amount of probable loss, or disclose a range of reasonably possible losses if they are material and we are able to estimate such a range . If we cannot provide an estimate, we explain the factors that prevent us from doing so . We believe the recorded reserves in our consolidated financial statements are adequate in light of the probable and estimable liabilities . We do not presently believe that any claims or litigation will be material to our results of operations, cash flows, or financial condition . Environmental Matters The Company is engaged in oil and gas exploration and may become subject to certain liabilities as they relate to environmental cleanup of sites or other environmental restoration procedures as they relate to the exploration of oil and gas . Should it be determined that a liability exists with respect to any environmental clean - up or restoration, the liability to cure such a violation could fall upon the Company . No claim has been made, nor is the Company aware of any liability, which it may have, as it relates to any environmental clean - up, restoration or the violation of any rules or regulations relating thereto . Liabilities for expenditures are recorded when environmental assessment and/or remediation is probable, and the costs can be reasonably estimated . NOTE 11. SUBSEQUENT EVENTS In accordance with SFAS 165 (ASC 855 - 10 ) management has performed an evaluation of subsequent events through the date that the financial statements were available to be issued and has determined that it does not have any material subsequent events to disclose in these financial statements .
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Exhibit 99.14
Strata Power Corporation Interim MD&A – Quarterly Highlights For the Three Months ended March 31, 2022 Management’s Discussion and Analysis of Financial Condition and Results of Operations Management’s Discussion and Analysis of Financial Condition ("MD&A") and Results of Operations should be read in conjunction with the accompanying unaudited financial statements. The financial statements are presented in United States dollars and have been prepared in accordance with accounting principles generally accepted in the United States, referred to as US GAAP. Certain statements contained in the MD&A constitute forward - looking statements. Such forward - looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward - looking statements. Readers are cautioned not to place undue reliance on these forward - looking statements which speak only as of the date the financial statements were made and readers are advised to consider such forward - looking statements in light of the risks set forth both below and in the Company’s most recent annual report. RESULTS OF OPERATIONS Three months ended March 31, 2022 compared to three months ended March 31, 2021. For the three months ended March 31, 2022, the Company had a net income from operations of $98,622 compared to a net loss of $22,078 for the three months ended March 31, 2021, a change of $120,700. The primary reasons for the increased net income are the commencement of royalty income from an agreement with an unrelated third party and the change in the fair value of derivative liabilities. This was offset by $9,000 of amortization expense related to debt discount. For the three months ended March 31, 2022, the Company recorded a gain in the change in fair value of derivative liability of $83,604. This compares to a loss recognized for the three months ended March 31, 2021 of $3,887. This item is a non - cash item and was recorded in accordance with ASC 850 - 40 - 15. This guidance requires entities to evaluate whether an equity - linked financial instrument (or embedded feature) is indexed to its own stock by assessing the instrument’s contingent exercise provisions and settlement provisions. Instruments not indexed to their own stock fail to meet the scope exception of Accounting for Derivative Instruments and Hedging Activities, ASC 815 - 10 - 15 - 74(a), and should be classified as a liability and marked - to - market. REVENUES Pursuant to the Purchase and Sale Agreement with an unrelated third party, the Company has a 2 . 5 % gross overriding royalty on all petroleum substances produced from five oil sands leases in the Cadotte Central area that were sold in June, 2020 . For the three months ended March 31 , 2022 and 2021 , the Company earned royalties of $ 44 , 639 and $ 0 , respectively . DISCONTINUED OPERATIONS There was no discontinued operations activity in 2022 or 2021. INTEREST AND OTHER INCOME (EXPENSE) Included in other income (expense) for the three months ended March 31 2022 is a foreign exchange loss of $ 3 , 75 . This compares to a foreign exchange loss of $ 384 for the three months ended March 31 , 2021 .
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Liquidity and Capital Resources As of March 31 , 2022 , we had $ 17 , 106 in cash, an increase of $ 9 , 409 from December 31 , 2021 . Management estimates that the Company will require approximately $ 115 , 000 to fund planned operations for the next twelve months . Therefore, current cash on hand is not sufficient to fund planned operations for 2021 . Our policy is to pay all operational expenses when due, provided that the vendor, in the normal course of business, has satisfied all necessary conditions for payment . Net cash provided by operating activities during the three months ended March 31 , 2022 was $ 21 , 388 , compared to net cash used in operating activities of $ 12 , 006 for the same period in the prior year . The increase in cash provided by operating activities was the commencement of the royalty revenue . Cash used in investing activities for the three months ended March 31 , 2022 and 2021 was $ 127 and $ 124 , respectively, resulting primarily from the change in the reclamation deposits . Net cash used in financing activities for the three months ended March 31 , 2022 and 2021 was $ 13 , 376 and $ 0 , respectively . For March 31 , 2022 , the financing activities consisted of the repayment of convertible debt . We are an exploration stage company with limited operating history, which raises substantial doubt as to our ability to successfully develop profitable business operations and makes an investment in our common shares very risky . We have no long - term debt . We believe that our available cash may not be sufficient to fund our working capital requirements to maintain, explore and develop our property interests for the next twelve months . If capital is not available to fund future operations, we will not be able to pursue our business plan and operations would come to a halt and our common shares could be nearly worthless . We will require substantial additional capital to participate in the development of our properties which have not had any production of oil or natural gas as well as for acquisition and/or development of other producing properties . Because we currently do not have any cash flow from operations, we need to raise additional capital, which may be in the form of loans from current shareholders and/or from private equity offerings . Our ability to access capital will depend on our success in participating in properties that are successful in exploring for and producing oil and gas at profitable prices . It will also be dependent upon the status of the capital markets at the time such capital is sought . Should sufficient capital not be available, the development of our business plan could be delayed and, accordingly, the implementation of our business strategy would be adversely affected . In such event it would not be likely that investors would obtain a profitable return on their investments or a return of their investments at all . We anticipate that we will incur the following expenditures through our current fiscal year : $15,000 in connection with property lease payments and follow up analysis on the Company’s oil sands properties $100,000 for operating expenses, including working capital, consulting fees, general and administrative, professional, legal and accounting expenses In 2022 , our capital requirements will mostly be associated with the maintenance of our lease payments to the Crown and general and administrative expenses . Going forward we expect the short - term and long - term funding of our oil and gas operations to be financed primarily through equity issuance in the form of private placements and the exercise of warrants . In addition, we continue to work with potential partners to discuss funding arrangements which would facilitate furtherance of our property interests . We cannot be certain that any required additional financing will be available on terms favorable to us as the risky nature of this enterprise and lack of tangible assets places debt financing beyond the credit - worthiness required by most banks or typical investors of corporate debt until such time as the economic viability of our oil sands properties can be demonstrated . If additional funds are raised by the issuance of our equity securities, existing stockholders will experience dilution of their ownership interest . If adequate funds are not available or not available on acceptable terms, we may be unable to continue, fund expansion, pursue further development or respond to competitive pressures . Our financing prospects must be considered in light of the risks, expenses and difficulties frequently encountered in establishing a business in the oil and natural gas industries . We have yet to generate substantial revenues from
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operations . There is nothing at this time on which to base an assumption that our business operations will prove to be successful or that we will be able to operate profitably . Our future operating results will depend on many factors, including : our ability to raise adequate working capital success of our exploration and development demand for natural gas and oil the level of our competition our ability to attract and maintain key management and employees and our ability to efficiently explore, develop and produce sufficient quantities of marketable natural gas or oil in a highly competitive and speculative environment while maintaining quality and controlling costs Volatility of oil and gas prices and markets could make it more difficult for us to achieve profitability and less likely for investors in our common shares to receive a return on their investment . Our ability to achieve profitability is substantially dependent on prevailing prices for natural gas and oil . The amounts and price obtainable for any oil and gas production that we achieve will be affected by market factors beyond our control . If these factors are not favorable over time to our financial interests, it is likely that owners of our common shares could lose their investments . Such factors include : worldwide or regional demand for energy, which is affected by economic conditions the domestic and foreign supply of natural gas and oil weather conditions domestic and foreign governmental regulations political conditions in natural gas and oil producing regions the ability of members of the Organization of Petroleum Exporting Countries to agree upon and maintain oil prices and production levels the price and availability of other fuels Additionally, due to worldwide economic uncertainty, the availability and cost of funds for production and other expenses have become increasingly difficult, if not impossible, to project . These changes and events may materially affect our financial performance .
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Exhibit 99.15
FORM 52 - 109F2 CERTIFICATION OF INTERIM FILINGS - FULL CERTIFICATE I, Trevor Newton, Chief Executive Officer of Strata Power Corporation Inc., certify the following: 1. Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Strata Power Corporation Inc. (the “issuer”) for the interim period ended March 31, 2022. 2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings. 3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings. 4. Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52 - 109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer. 5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings a. designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that i. material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and ii. information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and b. designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP. 1. Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. 2. N/A 3. N/A 6 . Reporting changes in ICFR : The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on January 1 , 2022 and ended on March 31 , 2022 that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR . 1/2
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Date: May 13, 2022 (signed) "Trevor Newton" Trevor Newton Chief Executive Officer
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Exhibit 99.16
FORM 52 - 109F2 CERTIFICATION OF INTERIM FILINGS - FULL CERTIFICATE I, Trevor Newton, Chief Financial Officer of Strata Power Corporation, certify the following: 1. Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Strata Power Corporation (the “issuer”) for the interim period ended March 31, 2022. 2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings. 3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings. 4. Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52 - 109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer. 5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings a. designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that i. material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and ii. information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and b. designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP. 1. Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. 2. N/A 3. N/A 6 . Reporting changes in ICFR : The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on January 31 , 2022 and ended on March 31 , 2022 that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR . 1/2
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Date: May 13, 2022 (signed) "Trevor Newton" Trevor Newton Chief Financial Officer
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Exhibit 99.17
Strata Power Corporation (An Exploration Stage Company) FINANCIAL STATEMENTS For the Six Months ended June 30, 2022 and 2021 (unaudited) (Stated in US Dollars)
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STRATA POWER CORPORATION BALANCE SHEETS (Expressed in US Dollars) (Unaudited) June 30, 2022 December 31, 2021 ASSETS Current assets Cash $ 52,594 $ 7,696 GST receivables 2,401 2,448 Royalty receivables 78,171 19,619 Prepaid expenses 13,108 4,106 Total current assets 146,274 33,870 Reclamation deposits 99,519 101,139 Total assets $ 245,793 $ 135,009 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities Accounts payable and accrued liabilities $ 57,009 $ 42,503 Accounts payable and accrued liabilities - related party 10,383 22,115 Notes payable, net of debt discount 8,807 33,503 Derivative liabilities 17,689 210,929 Total current liabilities 93,888 309,050 Deferred revenue - royalty agreement (Note 9) 300,000 300,000 Asset retirement obligation 221,259 214,960 Total long - term liabilities 521,259 514,960 Total liabilities 615,147 824,010 Commitments and Contingencies – – Stockholders' equity (deficit) Preferred stock: no par value, unlimited shares authorized and none issued – – Common stock: no par value, unlimited shares authorized; 20,085,119 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively – – Additional paid - in capital 23,404,083 23,404,083 Common shares to be issued 5,000 5,000 Accumulated deficit (23,373,618) (23,692,529 ) Accumulated other comprehensive income (loss) (404,819) (405,555 ) (689,001 ) $ 135,009 Total stockholders' equity (deficit) (369,354 ) Total liabilities and stockholders' equity (deficit) $ 245,793 The accompanying notes are an integral part of these financial statements.
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STRATA POWER CORPORATION STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Expressed in US Dollars) (Unaudited) For the Six Months Ended June 30, For the Three Months Ended June 30, 2021 2022 2022 2021 Operating Income: $0 $229,691 $0 $185,052 Royalty income 16,164 30,580 9,664 21,916 Operating Expenses: Professional fees 405 395 192 270 Office and sundry 1,356 - - - Consulting fees 545 (375) 450 525 Transfer agent fees 7,892 10,711 2,952 5,278 Accretion expense 59,838 - 59,828 - License Fee (2,120) 9,962 (5,145) 6,148 Oil & gas properties expense $84,070 $51.273 $67,941 $34,137 Total operating expenses 255 378 131 251 Other income (expense): Interest income - (51,000) - (42,000) Amortization of debt discount (534) (2,689) (473) (971) Interest expense, related party (6,751) 875 (4,627) 2,769 Foreign exchange gain (loss) (27,866) 192,919 (23,978) 109,325 Change in fair value of derivative liability $(34,896) $140,493 $(28,947) $69,374 Total other income (expense) (118,966) 318,911 (96,888) 220,289 Net income (loss) (898) 736 (514) 1,111 Other comprehensive income (loss) Foreign currency translation adjustment $(119,864) $319,647 $(97,402) $221,400 Comprehensive income (loss) ($0.00) $0.02 ($0.00) $0.01 Income per common share Basic ($0.00) $0.02 ($0.00) $0.01 Diluted Weighted average number of shares outstanding: 20,085,119 20,085,119 20,085,119 20,085,119 Basic 20,085,119 20,085,119 20,085,119 20,085,119 Diluted The accompanying notes are an integral part of these financial statements.
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STRATA POWER CORPORATION STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) (Expressed in US Dollars) (Unaudited) Common Stock Additional Paid - in Common Shares to be Accumulated Accumulated Other Comprehensive Total Stockholders' Shares Capital Issued Deficit Income (Loss) Equity (Deficit) $ (492,755) $ (405,694) $ (23,496,144) 5,000 $ 23,404,083 $ 20,085,119 Balance March 31, 2021 (97,402) (514) (96,888) - Net loss and comprehensive loss $ (590,157) $ (406,208) $ (23,593,032 5,000 $ 23,404,083 20,085,119 Balance June 30, 2021 $ (470,293) $ (405,310) $ (23,474,066) 5,000 $ 23,404,083 $ 20,085,119 Balance December 31, 2020 (119,864) (898) (118,966) Net loss and comprehensive loss $ (590,157) $ (406,208) $ (23,593,032) 5,000 $ 23,404,083 $ 20,085,119 Balance June 30, 2021 (590,754) (405,930) $ (23,593,907) 5,000 $ 23,404,083 $ 20,085,119 Balance March 31, 2022 221,400 1,111 220,289 – – – Net income and comprehensive loss $ (369,354) $ (404,819) $ (23,373,618) 5,000 $ 23,404,083 $ Balance June 30, 2022 20,085,119 $ (689,001) $ (405,555) $ (23,692,529) 5,000 $ 23,404,083 $ Balance December 31, 2021 20,085,119 Net income and comprehensive loss – – 20,085,119 $ 23,404,083 $ – 318,911 736 319,647 Balance June 30, 2022 5,000 $ (23,373,618) $ (404,819) $ (369,354) The accompanying notes are an integral part of these financial statements.
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STRATA POWER CORPORATION STATEMENTS OF CASH FLOWS (Expressed in US Dollars) (Unaudited) For the six months ending June 30, 2022 2021 Cash flows from operating activities: $ (118,966) $ 318,911 Net income (loss) Adjustments to reconcile net loss to net cash used in operating activities 534 2,689 Accrued interest expense – related party 7,892 10,711 Accretion expense - 51,000 Amortization of debt discount 27,866 (192,930) Change in fair value of derivative liability 59,828 - Change in PetroSteam license Change in assets and liabilities (139) 48 GST receivable - (58,552) Royalty receivable - (9,003) Prepaid expenses (53,058) 14,507 Accounts payable - (11,523) Accounts payable – related party (69,043) 125,858 Net cash provided by (used in) operating activities Cash flows from investing activities: (255) (378) Reclamation Deposits (255) (378) Net provided used in investing activities Cash flows from financing activities: 50,000 700 Proceeds from issuance of convertible note - (78,909) Repayment of convertible note 50,000 (78,209) Net cash provided by (used in) financing activities 3,270 (2,373) Foreign exchange effect on cash (16,028) 44,898 Net increase (decrease) in cash 21,717 7,696 Cash, beginning balance $ 5,689 $ 52,594 Cash, ending balance Supplemental disclosure of cash paid for: $ – $ – Interest $ – $ – Income taxes The accompanying notes are an integral part of these financial statements.
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STRATA POWER CORPORATION NOTES TO FINANCIAL STATEMENTS June 30, 2022 (Expressed in US Dollars) (Unaudited) NOTE 1. NATURE OF BUSINESS Strata Power Corporation (the “Company”) is currently engaged in the acquisition, exploration and, if warranted, feasible development of heavy oil projects in the Peace River oil sands region in Northern Alberta, Canada . The Company was incorporated under the laws of the State of Nevada on November 18 , 1998 and commenced operations in January 1999 . The Company completed its initial public offering in February 2000 . The Company is presently incorporated under the Canada Business Corporations Act . On December 27 , 2018 , the Company filed a Certificate of Amendment with Corporations Canada changing its name from Strata Oil & Gas Inc . to Strata Power Corporation . As of June 30 , 2022 , the Company has a 50 % interest in 7 oil sands leases, totaling 8 , 704 hectares, all located in the Peace River oil sands area . In addition, the Company has a royalty interest in 10 oil sands leases and owns 3 non - producing wells . NOTE 2. ABILITY TO CONTINUE AS A GOING CONCERN As shown in the accompanying financial statements, the Company has realized minimal revenue from its present operations . During the six months ended June 30 , 2022 , the Company had net income of $ 318 , 911 , primarily due to royalty income and the change in the fair value of derivative liability . The Company had cash flows provided by operations of $ 125 , 858 but it is possible that the Company will incur negative operating cash flows in the future . The Company has an accumulated deficit of $ 23 , 373 , 618 at June 30 , 2022 . These conditions raise substantial doubt regarding the Company’s ability to continue as a going concern . The financial statements have been prepared on a going concern basis, which contemplates realization of assets and liquidation of liabilities in the ordinary course of business . The Company's ability to continue as a going concern is dependent on its ability to develop its oil and gas properties and ultimately achieve profitable operations, and to generate sufficient cash flow from financing and operations to meet its obligations as they become payable . The Company expects that it will need approximately $ 115 , 000 to fund its operations during the next twelve months, which will include minimum annual property lease payments, expected exploration expenditures for permitting and drilling, as well as operating expenses . Management has plans to seek additional capital through a private placement of its common stock . Although there are no assurances that management’s plans will be realized, management believes that the Company will be able obtain sufficient capital to continue operations in the next 12 months . Accordingly, no adjustment relating to the recoverability and classification of recorded asset amounts and the classification of liabilities has been made to the accompanying financial statements in anticipation of the Company not being able to continue as a going concern . NOTE 3. SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) . Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate so as to make the information presented not misleading .
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Management’s Estimates and Assumptions The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the balance sheet date, and revenues and expenses for the period then ended . Management believes that all applicable estimates and adjustments are appropriate . Actual results could differ significantly from those estimates . Concentration of Revenue For the six months ended June 30 , 2022 , the Company had a concentration of revenue related to a single royalty agreement, accounting for 100 % of total revenue . The loss of this revenue would have a material adverse effect on future operating results . As of June 30 , 2022 , 100 % of royalty receivables related to this agreement . Oil and Gas Property Payments and Exploration Costs All costs incurred in the acquisition, exploration and development of natural gas and oil interests are capitalized as incurred . Capitalized costs associated with proven properties are amortized using the units - of - production method over the estimated life of the probable reserve . Capitalized costs associated with unproved properties are excluded from the amortization calculations and assessed, at least annually, to determine if impairment has occurred, until such time as those costs are proven . Impairment amounts are immediately expensed and no costs have been capitalized through June 30 , 2022 . Cash and Cash Equivalents The Company considers all highly liquid investments purchased with a maturity of 90 days or less to be cash equivalents . The Company maintains cash and cash equivalent balances with financial institutions that may exceed federally insured limits . There were no cash equivalent balances for the years ended June 30 , 2022 or December 31 , 2021 . GST Receivables Goods and Services Tax (GST) receivables are presented net of an allowance for doubtful accounts . Receivables consist of goods and services input tax credits . The allowance for doubtful accounts on GST receivables was $ nil at June 30 , 2022 and December 31 , 2021 . Impairment of Long - lived Assets In accordance with ASC 360 , Property, Plant and Equipment, long lived assets such as equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable . Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset . If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset . Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount of fair value less costs to sell and are no longer depreciated . The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet . Asset Retirement Obligations In accordance with ASC 410 , Asset Retirement and Environmental Obligations, the fair value of an asset retirement cost, and corresponding liability, should be recorded as part of the cost of the related long - lived asset and subsequently allocated to expense using a systematic and rational method . The Company has recorded an asset retirement obligation at June 30 , 2022 and December 31 , 2021 (Note 8 ) to reflect its legal obligations related to future abandonment of its
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oil and gas interests using estimated expected cash flow associated with the obligation and discounting the amount using a credit - adjusted, risk - free interest rate . At least annually, the Company will reassess the obligation to determine whether a change in any estimated obligation is necessary . The Company will evaluate whether there are indicators that suggest the estimated cash flows underlying the obligation have materially changed . Should those indicators suggest the estimated obligation has materially changed the Company will accordingly update its assessment . The liability accretes until the Company settles the obligation . Income Taxes The Company follows the asset and liability method of accounting for income taxes whereby deferred tax assets and liabilities are recognized for the future tax consequences of differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases . If it is determined that the realization of the future tax benefit is not more likely than not, the Company establishes a valuation allowance . Foreign Exchange Translation The Company's functional currency is the Canadian dollar but reports its financial statements in US dollars . The Company translates its Canadian dollar balances to US dollars in the following manner : Assets and liabilities have been translated using the rate of exchange at the balance sheet date . Equity transactions and results of operations have been translated at historical rates . Translation gains or losses resulting from the changes in the exchange rates are accumulated as other comprehensive income or loss in a separate component of stockholders' equity . All amounts included in the accompanying financial statements and footnotes are stated in U.S. dollars. Derivative Financial Instruments The Company reviews the terms of its equity instruments and other financing arrangements to determine whether there are embedded derivative instruments that are required to be accounted for separately as a derivative financial instrument . Also, in connection with the issuance of financing instruments, the Company has issued freestanding warrants that are accounted for as derivative instrument liabilities because they are exercisable in a currency other than the functional currency of the Company and thus do not meet the “fixed - for - fixed” criteria of ASC 815 - 40 - 15 . The warrants are exercisable in United States dollars and the Company’s functional currency is the Canadian dollar . Derivative financial instruments are initially measured at their fair value . For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re - valued at each reporting date, with changes in the fair value reported as charges or credits to income . For derivative financial instruments, the Company uses the Black - Scholes option pricing model to value the derivative instruments . Any exercise or cancellation of an equity instrument which meets the classification of a derivative financial instrument is trued - up to fair value at that date and the fair value of the exercised instrument is then reclassified from liability to additional paid in capital . The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period . If reclassification is required, the fair value of the derivative instrument, as of the determination date, is reclassified . Any previous charges or credits to income for changes in the fair value of the derivative instrument are not reversed . Derivative instrument liabilities are classified in the balance sheet as current or non - current based on whether or not net - cash settlement of the derivative instrument could be required within 12 months of the balance sheet date . Stock Based Compensation In accordance with ASC 718 , “Compensation – Stock Compensation” (“ASC 718 ”), which was adopted as of January 1 , 2019 , the Company measures all employee stock - based compensation awards using a fair value method on the date of grant and recognizes such expense in its financial statements over the requisite service period . The Company uses the Black - Scholes pricing model to determine the fair value of stock - based compensation awards on the date of grant .
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The Black - Scholes pricing model requires management to make assumptions regarding option lives, expected volatility, and risk - free interest rates . The Company accounts for non - employee stock - based awards in accordance with the provision of ASC 505 , “Equity Based Payments to Non - Employees” (“ASC 505 ”), which requires that such equity instruments are recorded at their fair value on the measurement date . The measurement of stock - based compensation is subject to periodic adjustment as the underlying equity instruments vest . The Company uses the Black - Scholes pricing model to determine the fair value of stock - based compensation awards . The Black - Scholes pricing model requires management to make assumptions regarding option lives, expected volatility, and risk - free interest rates . The Company uses historical data to estimate option exercise, forfeiture and employee termination within the valuation model . For non - employees, the expected term of the options approximates the full term of the options . The risk - free interest rate is based on a treasury instrument whose term is consistent with the expected term of the stock options . The Company has not paid and does not anticipate paying dividends on its common stock ; therefore, the expected dividend yield is assumed to be zero . In addition, accounting standard requires companies to utilize an estimated forfeiture rate when calculating the expense for the reporting period . Based on its best estimate, management applied the estimated forfeiture rate of nil in determining the expense recorded in the accompanying Statements of Operations and Comprehensive Income (Loss) . Expected volatilities are calculated using the historical volatility of the Company’s stock . When applicable, the Company will use historical data to estimate option exercise, forfeiture and employees’ termination within the valuation model . For non - employees, the expected term of the options approximates the full term of the options . Earnings (Loss) Per Share of Common Stock Basic earnings (loss) per share of common stock is computed by dividing net income (loss) available to common shareholders by the weighted - average number of common shares outstanding for the period . Diluted earnings per share of common stock reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company . Dilutive potential common shares are calculated in accordance with the treasury stock method, which assumes that proceeds from the exercise of all warrants and options are used to repurchase common stock at market value . The number of shares remaining after the proceeds are exhausted represents the potentially dilutive effect of the securities . For the six months ended June 30 , 2022 and 2021 , all of the outstanding options and warrants had an exercise price above the average stock price for year - end period . Accordingly, all of the potentially dilutive shares were excluded from the computation of diluted shares outstanding as they would have had an anti - dilutive impact on the Company’s income (loss) from continuing operations . Fair Value of Financial Instruments The book values of GST receivables, notes receivable, accounts payable and accrued expenses approximate their respective fair values due to the short - term nature of these instruments . The fair value hierarchy under GAAP distinguishes between assumptions based on market data (observable inputs) and an entity’s own assumptions (unobservable inputs) . The hierarchy consists of three levels : Level one - Quoted market prices in active markets for identical assets or liabilities; Level two - Inputs other than level one inputs that are either directly or indirectly observable; and Level three - Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use. Determining which category an asset or liability falls within the hierarchy requires significant judgment . Hierarchy disclosures are evaluated at each balance sheet date . Liabilities measured at fair value are summarized as follows as of :
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Fair Value Measurement at June 30, 2022 Using Fair Value Measurement at December 31, 2021 Using Total Level 3 Total Level 3 $ 210,929 $ 210,929 $ 17,689 $ 17,689 Derivative liabilities 214,960 214,960 221,259 221,259 Asset Retirement Obligation (see Note 8) The Company issued a convertible note in which the conversion rate is variable . As a result, a derivative liability was recorded (see Note 9 ) . In addition, the Company has warrants with a strike price currency different than the functional currency as has recorded a derivative liability associated with that . The Company measures and reports the fair value liability for these derivative liabilities on a recurring basis . The fair value liabilities have been recorded as determined utilizing the Black - Scholes option pricing model . A slight change in an unobservable input like historical volatility could have a significant impact on the fair value measurement of the derivative liabilities . See Note 6 “Derivative Liabilities” for further discussion of the inputs used in determining the fair value . Revenue Recognition The Company has adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 606 , Revenue from Contracts with Customers (“ASC 606 ”), which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers . The Company receives an overriding royalty from an unrelated party of 2 . 5 % on all petroleum substances produced from three oil sands leases located in the southeast portion of the Peace River oil sands area that were sold in May 2019 (see Note 4 ) and recognizes revenue at the time petroleum is sold . The Company’s revenue recognition policy standards include the following elements under ASU 606 : 1. Identify the contract with the customer . The contract is documented in the Purchase and Sale Agreement dated 5 / 14 / 2019 . 2. Identify the performance obligations in the contract . The performance obligation in the contract required Strata to relinquish its interest in three oil sands located in the southeast portion of the Peace River oil sands area . 3. Determine the transaction price . The transaction price was C $ 60 , 000 and a 2 . 5 % gross overriding royalty of the petroleum substances produced from the three oil sands leases, in exchange for a 100 % interest in the three oil sands leases . 4. Allocate the transaction price to the performance obligations in the contract . The Company only has one performance obligation, the transfer of the rights to the three oil sands leases, which has already been fulfilled . 5. Recognize revenue when (or as) the entity satisfies a performance obligation . The C $ 60 , 000 was recognized as a sale of the oil sands rights in 2019 , resulting in a gain from the disposition of the leases . The 2 . 5 % overriding petroleum royalties are recognized as revenue in the period that the other party produces and sells petroleum from the oil sands leases, which began in September 2021 . The royalties that have been received to date have been highly variable, as the amounts are dependent upon the monthly production, the demand of the buyers, the spot price of petroleum, etc . As such, management has determined that the revenue recognition shall be treated as variable consideration as defined in ASC 606 . Variable consideration should only be recognized to the extent that it is probable that a significant reversal of revenue will not occur when the uncertainty associated with the variable consideration is subsequently resolved . Given the fact that royalties to date have been highly variable with a great degree of uncertainty, and any attempts to estimate future revenue would likely result in a significant reversal of revenue, royalty revenue will be recognized when payments and settlement statements are received, in the period for which the petroleum was produced . It is at that time that any uncertainty related to royalty payments is resolved . The Company applied ASC 606 using the modified retrospective method applied to contracts not yet completed as of the date of adoption . Comprehensive Income (Loss)
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Comprehensive income (loss) is defined to include all changes in equity except those resulting from investments by owners and distributions to owners . The Company's items of other comprehensive income (loss) are foreign currency translation adjustments . Related Party Transactions A related party is generally defined as (i) any person who holds 10 % or more of the Company’s securities and their immediate families, (ii) the Company’s management, (iii) an entity or person who directly or indirectly controls, is controlled by or is under common control and/or management with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company . A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties . New Accounting Pronouncements In August 2020 , the FASB issued ASU 2020 - 06 , Debt - Debt with Conversion and Other Options (Subtopic 470 - 20 ) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815 - 40 ) : Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020 - 06 ”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity . This ASU ( 1 ) simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470 - 20 , Debt : Debt with Conversion and Other Options, that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock ; ( 2 ) revises the scope exception from derivative accounting in ASC 815 - 40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification ; and ( 3 ) revises the guidance in ASC 260 , Earnings Per Share, to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if - converted method . In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares . For SEC filers, excluding smaller reporting companies, ASU 2020 - 06 is effective for fiscal years beginning after December 15 , 2021 including interim periods within those fiscal years . Early adoption is permitted, but no earlier than fiscal years beginning after December 15 , 2020 . For all other entities, ASU 2020 - 06 is effective for fiscal years beginning after December 15 , 2023 , including interim periods within those fiscal years . Entities should adopt the guidance as of the beginning of the fiscal year of adoption and cannot adopt the guidance in an interim reporting period . The Company is currently evaluating the impact that ASU 2020 - 06 may have on its consolidated financial statements and related disclosures . The Company has implemented all new accounting pronouncements that are in effect . These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations . NOTE 4 . ROYALTY INTEREST Pursuant to the Purchase and Sale Agreement with an unrelated third party, the Company has a 2 . 5 % gross overriding royalty on all petroleum substances produced from three oil sands leases located in the southeast portion of the Peace River oil sands area that were sold in May, 2019 . For the six months ended June 30 , 2022 and 2021 , the Company earned royalties of $ 229 , 691 and $ 0 , respectively . NOTE 5 . PETROSTEAM LICENSE On March 20 , 2019 , the Company entered into an exclusive license agreement with PetroSteam LLC to obtain an exclusive right to deploy patented and field - tested proprietary technologies utilizing steam generation applied to bitumen and heavy oil recovery in the Provinces of Alberta and Saskatchewan . In exchange, the Company issued 2 , 991 , 400 restricted common shares . In addition, the Company agreed, subject to certain qualifications and milestones being met, to purchase steam generation equipment from PetroSteam totaling $ 12 , 500 , 000 to be used on its bitumen/heavy - oil projects . In 2021 , the PetroSteam license was cancelled by both parties and the value of the license agreement was recognized as a license fee expense .
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NOTE 6 . DERIVATIVE LIABILITIES Derivative liabilities consist of common stock warrants with an exercise price in a different currency than the Company’s functional currency . In addition, the Company identified embedded derivatives related to a convertible promissory note issued in 2021 (see Note 9 ) . These embedded derivatives include certain conversion features . The derivative liabilities are accounted for as separate liabilities measured at their respective fair values as follows : Derivative liabilities associated with: Convertible Total Note Warrants 24,336 – $ 24,336 Balance, December 31, 2020 127,049 127,049 – Issuance of convertible note (1,258) – (1,258) Fair value of expired warrant 61,031 43,446 17,585 Change in fair value of derivative liabilities (229) – (229) Foreign exchange effect on derivative liability $ 210,929 $ 170,495 40,434 Balance, December 31, 2021 (192,930) (170,495) (22,435) Change in fair value of derivative liabilities (310 ) – (310 ) Foreign exchange effect on derivative liability 17,689 – Balance, June 30, 2022 $ 17,689 The fair value of the derivative liabilities has been determined using the Black - Scholes option pricing model using the following range of assumptions: December 31, 2021 June 30, 2022 545.20% 383.6% Volatility 0.45 to 2.12 years 0.10 to 4.96 years Expected life 0.95% - 1.42% 3.10% - 3.23% Risk - free interest rate 0.00% 0.00% Dividend yield NOTE 7. OIL AND GAS PROPERTIES During the period June 2006 through January 2007 , the Company acquired the rights to multiple oil sands leases within the Peace River area of Alberta, Canada (the “Peace River Properties”) . The leases were granted by the Province of Alberta . All the leases were for a 15 - year term, required minimum annual lease payments, and granted the Company the right to explore and develop oil sands on the respective leases . On February 22 , 2016 , the Company acquired an additional 45 oil sands leases by entering into two purchase and sale agreements . The oil sands leases represented 39 , 680 hectares ( 98 , 051 acres) in the Peace River area of Alberta . One of the purchase / sale agreements was with a related party . On May 14 , 2019 , the Company sold the shallower oil sands rights on two of its oil sands lease blocks in the Cadotte East area to an unrelated third party, but retained the deeper oil sands rights, including the Debolt - Elkton formations . The Company also retained a 2 . 5 % overriding royalty on all petroleum substances produced from the shallower oil sands rights on those two lease blocks . The Company will continue to pay annual lease fees on those two oil sands lease blocks, but at a rate of 50 % , and the unrelated third party will pay the other 50 % . On three of its oil sands lease blocks in the Reno area, the Company sold 100 % of its interest to an unrelated third party and retained a 2 . 5 % overriding royalty on all petroleum substances produced from those oil sands lease blocks . On those three oil sands lease blocks, the unrelated third party has taken over 100 % of the annual lease fees . On June 11 , 2020 , the Company sold the shallower oil sands rights on five of its oil sands leases in the Cadotte Central area to an unrelated third party, but retained the deeper oil sands rights, including the Debolt - Elkton formations . The Company also retained a 2 . 5 % overriding royalty on all petroleum substances produced from those oil sands lease
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blocks . The Company will continue to pay annual lease fees on those two oil sands lease blocks, but at a rate of 50 % , and the third party will pay the other 50 % . Throughout 2020 , the Company chose to not renew their remaining oil sands leases due to the economic conditions in the Alberta heavy oil sector . All the Company’s lease interests in the Peace River area are subject to royalties payable to the government of the Province of Alberta . The royalty is calculated using a revenue - less - cost formula . In years prior to the recovery of the project’s capital investment, the royalty is 1 % of gross revenue . Once the project costs have been recovered, the royalty is the greater of 1 % of gross revenue or 25 % of net revenue . The Company completed drilling four exploratory wells during the fiscal year ended December 31 , 2007 . Since then, the Company completed several third - party technical reports on its oil sands leases including a prefeasibility study and developed an oil sands exploration program, which it was not able to execute on due to weak conditions in the heavy oil sector . NOTE 8 . ASSET RETIREMENT OBLIGATIONS During 2007 , the Company drilled four wells on its Peace River Property . Total future asset retirement obligations were estimated by management based on the Company’s working interest in its wells and facilities, estimated costs to remediate, reclaim and abandon the wells and facilities and the estimated timing of the costs to be incurred in future periods . The Company has estimated the net present value of its total asset retirement obligations to be approximately $ 221 , 259 at June 30 , 2022 , based on an undiscounted total future liability of $ 225 , 229 (CDN $ 293 , 000 ) . These payments are expected to be incurred between 2022 and 2030 . The Company used a credit adjusted discount rate of 10 % per annum and an inflation rate of 2 % to calculate the present value of the asset retirement obligation . Accretion expense of $ 10 , 711 and $ 7 , 892 for the six months ended June 30 , 2022 , and 2021 , respectively, has been recorded in the Statements of Operations and Comprehensive Income (Loss) . However, the Company is currently in the process of carrying out abandonment and remediation of its wells through the federally funded Site Rehabilitation Program . As a result, the actual Asset Retirement Obligation costs on these wells could be substantially lower than its current value but the actual amount cannot be reasonably estimated at this time . NOTE 9 . RELATED PARTY TRANSACTIONS Related party transactions not disclosed elsewhere in these financial statements include: Deferred Revenue - Royalty Agreement The Company has negotiated a royalty agreement with a related party by common CEO and director . In exchange for a non - refundable payment of $ 300 , 000 , the Company intends to provide a royalty stream to this related party based on the gross production of Vanadium Oxide (“Vanadium”) from the company’s the oil sands leases . For each barrel of bitumen produced from the specified oil sands until March 21 , 2039 , or upon termination of mining, whichever is earlier, the Company will pay a royalty equal to 25 grams of Vanadium per barrel of bitumen produced, multiplied by the price of Vanadium Pentoxide 98 % min in - warehouse Rotterdam published on the last business day of the month in which the gross production of bitumen occurred . The $ 300 , 000 is recorded as deferred revenue and will be recognized at such time as the Company begins to produce Vanadium . Notes payable to related party In December 2015 , the Company borrowed $ 6 , 553 ( $ 9 , 000 Canadian) under a note agreement with related parties . The lenders were related parties through an immediate family relationship with officers or directors of the Company and a common director . The note payable bore interest at the Bank of Canada Prime rate plus 1 % . The Company could repay the loan and outstanding interest thereon by giving notice to the lender 15 days prior to the anticipated repayment . At June 30 , 2022 , the effective interest rate on these notes payable was 4 . 70 % . The balance of note payable, including interest, to related parties at June 30 , 2022 and December 31 , 2021 was $ 9 , 004 and $ 8 , 844 , respectively . The Company recognized interest expense of $ 141 and $ 123 for the six months ended June 30 , 2022 , and 2021 , respectively, in its Statements of Operations and Comprehensive Income (Loss) .
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In 2021 , the Company borrowed $ 72 , 000 under a note agreement with a related party, which has been fully repaid as of June 30 , 2022 . The note payable could be repaid at any time, in part or in full on or before May 25 , 2023 and bore interest at 10 % per annum . The note was convertible into restricted common shares at $ 0 . 01 per share or the most recent 30 - day volume - weighted moving average of the published share price, discounted by 40 % , whichever is higher . Due to the variability of the conversion rate, an embedded derivative was identified . The Company recorded the fair value of the derivatives as of the inception date of the convertible note, which was determined to be $ 127 , 049 . The initial fair value of the embedded debt derivative was allocated as a debt discount up to the face value of the note ( $ 72 , 000 ), with the remaining $ 55 , 049 recognized as a loss on issuance of convertible note . The debt discount was amortized over the life of the note, or until repayment and amortization expense of $ 51 , 000 and $ 0 was recognized for the six months ended June 30 , 2022 and 2021 , respectively . The balance of the note payable, including interest, at June 30 , 2022 and December 31 , 2021 was $ 0 and $ 75 , 659 , respectively . The Company recognized interest expense of $ 2 , 550 and $ 411 for the six months ended June 30 , 2022 and 2021 , respectively, in its Statements of Operations and Comprehensive Income (Loss) . Consulting fees Mr . Newton is the President and a member of the Board of Directors of the Company . Mr . Newton does not bill the Company for his services as President ; however, he has a service agreement with the Company . No consulting fees were incurred for the six months ended June 30 , 2022 and 2021 . Dr . Michael Ranger is a member of the Board of Directors of the Company . Dr . Ranger does not receive compensation for his services as a member of the board ; however, he has a service agreement with the Company, including consulting time and expense reimbursement . Pursuant to this agreement, the Company recognized consulting expenses of $ 0 and $ 1 , 356 , for the six months ended June 30 , 2022 , and 2021 , respectively . NOTE 10. COMMITMENTS AND CONTINGENCIES In the ordinary course of business, we may be exposed to claims and threatened litigation, and use various methods to resolve these matters in a manner that we believe serves the best interest of our shareholders and other constituents . When a loss is probable, we disclose the amount of probable loss, or disclose a range of reasonably possible losses if they are material and we are able to estimate such a range . If we cannot provide an estimate, we explain the factors that prevent us from doing so . We believe the recorded reserves in our consolidated financial statements are adequate in light of the probable and estimable liabilities . We do not presently believe that any claims or litigation will be material to our results of operations, cash flows, or financial condition . Environmental Matters The Company is engaged in oil and gas exploration and may become subject to certain liabilities as they relate to environmental cleanup of sites or other environmental restoration procedures as they relate to the exploration of oil and gas . Should it be determined that a liability exists with respect to any environmental clean - up or restoration, the liability to cure such a violation could fall upon the Company . No claim has been made, nor is the Company aware of any liability, which it may have, as it relates to any environmental clean - up, restoration or the violation of any rules or regulations relating thereto . Liabilities for expenditures are recorded when environmental assessment and/or remediation is probable, and the costs can be reasonably estimated . NOTE 11. SUBSEQUENT EVENTS In accordance with SFAS 165 (ASC 855 - 10 ) management has performed an evaluation of subsequent events through the date that the financial statements were available to be issued and has determined that it does not have any material subsequent events to disclose in these financial statements .
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Exhibit 99.18
Strata Power Corporation Interim MD&A – Quarterly Highlights For the Six Months ended June 30, 2022 Management’s Discussion and Analysis of Financial Condition and Results of Operations Management’s Discussion and Analysis of Financial Condition ("MD&A") and Results of Operations should be read in conjunction with the accompanying unaudited financial statements. The financial statements are presented in United States dollars and have been prepared in accordance with accounting principles generally accepted in the United States, referred to as US GAAP. Certain statements contained in the MD&A constitute forward - looking statements. Such forward - looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward - looking statements. Readers are cautioned not to place undue reliance on these forward - looking statements which speak only as of the date the financial statements were made and readers are advised to consider such forward - looking statements in light of the risks set forth both below and in the Company’s most recent annual report. RESULTS OF OPERATIONS Six months ended June 30, 2022 compared to six months ended June 30, 2021. For the six months ended June 30, 2022, the Company had a net income from operations of $318,911 compared to a net loss of $118,966 for the six months ended June 30, 2021, a change of $437,877. The primary reasons for the increased net income are the commencement of royalty income from an agreement with an unrelated third party and the change in the fair value of derivative liabilities. This was offset by $51,000 of amortization expense related to debt discount. For the six months ended June 30, 2022, the Company recorded a gain in the change in fair value of derivative liability of $192,919. This compares to a loss recognized for the six months ended June 30, 2021 of $27,866. This item is a non - cash item and was recorded in accordance with ASC 850 - 40 - 15. This guidance requires entities to evaluate whether an equity - linked financial instrument (or embedded feature) is indexed to its own stock by assessing the instrument’s contingent exercise provisions and settlement provisions. Instruments not indexed to their own stock fail to meet the scope exception of Accounting for Derivative Instruments and Hedging Activities, ASC 815 - 10 - 15 - 74(a), and should be classified as a liability and marked - to - market. REVENUES Pursuant to the Purchase and Sale Agreement with an unrelated third party, the Company has a 2 . 5 % gross overriding royalty on all petroleum substances produced from three oil sands leases located in the southeast portion of the Peace River oil sands area that were sold in May, 2019 . For the six months ended June 30 , 2022 and 2021 , the Company earned royalties of $ 229 , 691 and $ 0 , respectively . DISCONTINUED OPERATIONS There was no discontinued operations activity in 2022 or 2021. INTEREST AND OTHER INCOME (EXPENSE) Included in other income (expense) for the six months ended June 30 , 2022 is amortization of debt discount of $ 51 , 000 . There was no amortization of debt discount for the six months ended June 30 , 2021 . In addition, for the six months ended June 30 , 2022 , there was income of $ 192 , 919 from the change in fair value of derivative liability . This compares to an expense of $ 27 , 866 for the six months ended June 30 , 2021 .
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Liquidity and Capital Resources As of June 30 , 2022 , we had $ 52 , 594 in cash, an increase of $ 44 , 898 from December 31 , 2021 . Management estimates that the Company will require approximately $ 115 , 000 to fund planned operations for the next twelve months and will likely be funded from the receipt of royalty revenue . Our policy is to pay all operational expenses when due, provided that the vendor, in the normal course of business, has satisfied all necessary conditions for payment . Net cash provided by operating activities during the six months ended June 30 , 2022 was $ 125 , 858 , compared to net cash used in operating activities of $ 69 , 043 for the same period in the prior year . The increase in cash provided by operating activities was the commencement of the royalty revenue . Cash used in investing activities for the six months ended June 30 , 2022 and 2021 was $ 378 and $ 255 , respectively, resulting primarily from the change in the reclamation deposits . Net cash provided by (used in) financing activities for the six months ended June 30 , 2022 and 2021 was ( $ 78 , 209 ) and $ 50 , 000 , respectively . For June 30 , 2022 , the financing activities consisted of the repayment of convertible debt . For June 30 , 2021 , the financing activities consisted of proceeds from the issuance of convertible debt . We are an exploration stage company with limited operating history, which raises substantial doubt as to our ability to successfully develop profitable business operations and makes an investment in our common shares very risky . We have no long - term debt . We believe that our available cash may not be sufficient to fund our working capital requirements to maintain, explore and develop our property interests for the next twelve months . If capital is not available to fund future operations, we will not be able to pursue our business plan and operations would come to a halt and our common shares could be nearly worthless . We will require substantial additional capital to participate in the development of our properties which have not had any production of oil or natural gas as well as for acquisition and/or development of other producing properties . Because we currently have limited cash flow from operations, we need to raise additional capital, which may be in the form of loans from current shareholders and/or from private equity offerings . Our ability to access capital will depend on our success in participating in properties that are successful in exploring for and producing oil and gas at profitable prices . It will also be dependent upon the status of the capital markets at the time such capital is sought . Should sufficient capital not be available, the development of our business plan could be delayed and, accordingly, the implementation of our business strategy would be adversely affected . In such event it would not be likely that investors would obtain a profitable return on their investments or a return of their investments at all . We anticipate that we will incur the following expenditures through our current fiscal year : $15,000 in connection with property lease payments and follow up analysis on the Company’s oil sands properties $100,000 for operating expenses, including working capital, consulting fees, general and administrative, professional, legal and accounting expenses In 2022 , our capital requirements will mostly be associated with the maintenance of our lease payments to the Crown and general and administrative expenses . Going forward we expect the short - term and long - term funding of our oil and gas operations to be financed primarily through equity issuance in the form of private placements and the exercise of warrants . In addition, we continue to work with potential partners to discuss funding arrangements which would facilitate furtherance of our property interests . We cannot be certain that any required additional financing will be available on terms favorable to us as the risky nature of this enterprise and lack of tangible assets places debt financing beyond the credit - worthiness required by most banks or typical investors of corporate debt until such time as the economic viability of our oil sands properties can be demonstrated . If additional funds are raised by the issuance of our equity securities, existing stockholders will experience dilution of their ownership interest . If adequate funds are not available or not available on acceptable terms, we may be unable to continue, fund expansion, pursue further development or respond to competitive pressures .
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Our financing prospects must be considered in light of the risks, expenses and difficulties frequently encountered in establishing a business in the oil and natural gas industries . We have yet to generate substantial revenues from operations . There is nothing at this time on which to base an assumption that our business operations will prove to be successful or that we will be able to operate profitably . Our future operating results will depend on many factors, including : our ability to raise adequate working capital success of our exploration and development demand for natural gas and oil the level of our competition our ability to attract and maintain key management and employees and our ability to efficiently explore, develop and produce sufficient quantities of marketable natural gas or oil in a highly competitive and speculative environment while maintaining quality and controlling costs Volatility of oil and gas prices and markets could make it more difficult for us to achieve profitability and less likely for investors in our common shares to receive a return on their investment . Our ability to achieve profitability is substantially dependent on prevailing prices for natural gas and oil . The amounts and price obtainable for any oil and gas production that we achieve will be affected by market factors beyond our control . If these factors are not favorable over time to our financial interests, it is likely that owners of our common shares could lose their investments . Such factors include : worldwide or regional demand for energy, which is affected by economic conditions the domestic and foreign supply of natural gas and oil weather conditions domestic and foreign governmental regulations political conditions in natural gas and oil producing regions the ability of members of the Organization of Petroleum Exporting Countries to agree upon and maintain oil prices and production levels the price and availability of other fuels Additionally, due to worldwide economic uncertainty, the availability and cost of funds for production and other expenses have become increasingly difficult, if not impossible, to project . These changes and events may materially affect our financial performance .
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Exhibit 99.19
FORM 52 - 109F2 CERTIFICATION OF INTERIM FILINGS - FULL CERTIFICATE I, Trevor Newton, Chief Executive Officer of Strata Power Corporation Inc., certify the following: 1. Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Strata Power Corporation Inc. (the “issuer”) for the interim period ended June 30, 2022. 2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings. 3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings. 4. Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52 - 109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer. 5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings a. designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that i. material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and ii. information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and b. designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP. 1. Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. 2. N/A 3. N/A 6 . Reporting changes in ICFR : The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on April 1 , 2022 and ended on June 30 , 2022 that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR . 1/2
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Date: August 15, 2022 (signed) "Trevor Newton" Trevor Newton Chief Executive Officer
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Exhibit 99.20
FORM 52 - 109F2 CERTIFICATION OF INTERIM FILINGS - FULL CERTIFICATE I, Trevor Newton, Chief Financial Officer of Strata Power Corporation, certify the following: 1. Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Strata Power Corporation (the “issuer”) for the interim period ended June 30, 2022. 2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings. 3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings. 4. Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52 - 109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer. 5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings a. designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that i. material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and ii. information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and b. designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP. 1. Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. 2. N/A 3. N/A 6 . Reporting changes in ICFR : The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on April 1 , 2022 and ended on June 30 , 2022 that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR . 1/2
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Date: August 15, 2022 (signed) "Trevor Newton" Trevor Newton Chief Financial Officer
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Exhibit 99.21
Strata Power Corporation (An Exploration Stage Company) FINANCIAL STATEMENTS For the Nine Months ended September 30, 2022 and 2021 (unaudited) (Stated in US Dollars)
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STRATA POWER CORPORATION BALANCE SHEETS (Expressed in US Dollars) (Unaudited) December 31, 2021 September 30, 2022 ASSETS Current assets $ 7,696 $ 73,472 Cash 2,448 4,795 GST receivables 19,619 30,128 Royalty receivables 4,106 11,428 Prepaid expenses 33,870 119,823 Total current assets 101,139 93,076 Reclamation deposits Total assets $ 212,899 $ 135,009 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities Accounts payable and accrued liabilities $ 31,852 $ 42,503 Accounts payable and accrued liabilities - related party - 22,115 Notes payable, net of debt discount 8,306 33,503 Derivative liabilities 27,472 210,929 Total current liabilities 67,630 309,050 Deferred revenue - royalty agreement (Note 9) 300,000 300,000 Asset retirement obligation 211,143 214,960 Total long - term liabilities 511,143 514,960 Total liabilities 578,773 824,010 Commitments and Contingencies – – Stockholders' equity (deficit) Preferred stock: no par value, unlimited shares authorized and none issued – – Common stock: no par value, unlimited shares authorized; 20,085,119 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively – – Additional paid - in capital 23,404,083 23,404,083 Common shares to be issued 5,000 5,000 Accumulated deficit (23,372,363) (23,692,529 ) Accumulated other comprehensive income (loss) (402,594) (405,555 ) (689,001 ) $ 135,009 Total stockholders' equity (deficit) (365,874 ) Total liabilities and stockholders' equity (deficit) $ 212,899 The accompanying notes are an integral part of these financial statements.
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STRATA POWER CORPORATION STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Expressed in US Dollars) (Unaudited) For the Nine Months Ended September 30, For the Three Months Ended September 30, 2021 2022 2022 2021 Operating Income: $0 $321,683 $0 $91,992 Royalty income 16,164 30,687 - 107 Operating Expenses: Professional fees 614 513 208 119 Office and sundry 1,356 72,593 - 72,593 Consulting fees 995 75 450 450 Transfer agent fees 11,778 15,621 3,886 4,910 Accretion expense 59,828 - - - License Fee 8,754 14,963 10,873 5,001 Oil & gas properties expense 99,489 134,452 15,417 83,180 Total operating expenses 382 715 128 336 Other income (expense): Interest income - (51,000) - - Amortization of debt discount (2,029) (2,787) (1,494) (97) Interest expense, related party (2,057) 4,069 4,690 3,196 Foreign exchange gain (loss) (24,666) 181,937 3,200 (10,992) Change in fair value of derivative liability (28,370) 132,935 6,524 (7,557) Total other income (expense) (127,859) 320,166 (8,893) 1,255 Net income (loss) (78) 2,961 820 2,225 Other comprehensive income (loss) Foreign currency translation adjustment $(127,937) 323,127 $(8,073) $3,480 Comprehensive income (loss) ($0.00) $0.02 ($0.00) $0.00 Earnings per common share Basic ($0.00) $0.02 ($0.00) $0.00 Diluted Weighted average number of shares outstanding: 20,085,119 20,085,119 20,085,119 20,085,119 Basic 20,085,119 20,085,119 20,085,119 20,085,119 Diluted The accompanying notes are an integral part of these financial statements.
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STRATA POWER CORPORATION STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) (Expressed in US Dollars) (Unaudited) Common Stock Additional Paid - in Common Shares to be Accumulated Accumulated Other Comprehensive Total Stockholders' Shares Capital Issued Deficit Income (Loss) Equity (Deficit) 20,085,119 $ 23,404,083 $ 5,000 Balance June 30, 2021 $ (23,593,032) $ (406,208) $ (590,157) Net loss and comprehensive (8,073) 820 (8,893) - loss $ (598,230) $ (405,388) $ (23,601,925) 5,000 $ 23,404,083 $ 20,085,119 Balance September 30, 2021 $ (470,293) $ (405,310) $ (23,474,066) 5,000 $ 23,404,083 $ 20,085,119 Balance December 31, 2020 127,937 (78) (127,859) Net loss and comprehensive loss $ (598,230) $ (405,388) $ (23,601,925) 5,000 $ 23,404,083 $ 20,085,119 Balance September 30, 2021 $ (369,354) $ (404,819) $ (23,373,618) 5,000 $ 23,404,083 $ 20,085,119 Balance June 30, 2022 3,480 2,225 1,255 – – – Net income and comprehensive loss $ (365,874) $ (402,594) $ (23,372,363) 5,000 $ 23,404,083 $ 20,085,119 Balance September 30, 2022 $ (689,001) $ (405,555) $ (23,692,529) 5,000 $ 23,404,083 $ 20,085,119 Balance December 31, 2021 323,127 2,961 320,166 – – – Net income and comprehensive loss $ (365,874) $ (402,594) $ (23,372,363) 5,000 $ 23,404,083 $ 20,085,119 Balance September 30, 2022 The accompanying notes are an integral part of these financial statements.
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STRATA POWER CORPORATION STATEMENTS OF CASH FLOWS (Expressed in US Dollars) (Unaudited) For the nine months ending September 30, 2021 2022 Cash flows from operating activities: $ (127,859) $ 320,166 Net income (loss) Adjustments to reconcile net loss to net cash used in 2,027 2,787 operating activities Accrued interest expense – related party 11,778 15,621 Accretion expense - 51,000 Amortization of debt discount 24,666 (181,938) Change in fair value of derivative liability 59,828 - Change in PetroSteam license (82) (2,346) Change in assets and liabilities GST receivable - (10,508) Royalty receivable (6,021) (7,322) Prepaid expenses (56,777) (10,653) Accounts payable (21,907) Accounts payable – related party (92,440) 154,900 Net cash provided by (used in) operating activities (382) (714) Cash flows from investing activities: Reclamation Deposits (382) (714) Net cash used in investing activities 72,000 - Cash flows from financing activities: Proceeds from issuance of convertible note - (78,209) Repayment of convertible note 72,000 (78,209) Net cash provided by (used in) financing activities (498) (10,201) Foreign exchange effect on cash (21,320) 65,776 Net increase (decrease) in cash 21,717 7,696 Cash, beginning balance $ 397 $ 73,472 Cash, ending balance Supplemental disclosure of cash paid for: $ – $ – Interest $ – $ – Income taxes The accompanying notes are an integral part of these financial statements.
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STRATA POWER CORPORATION NOTES TO FINANCIAL STATEMENTS September 30, 2022 (Expressed in US Dollars) (Unaudited) NOTE 1. NATURE OF BUSINESS Strata Power Corporation (the “Company”) is currently engaged in the acquisition, exploration and, if warranted, feasible development of heavy oil projects in the Peace River oil sands region in Northern Alberta, Canada . The Company was incorporated under the laws of the State of Nevada on November 18 , 1998 and commenced operations in January 1999 . The Company completed its initial public offering in February 2000 . The Company is presently incorporated under the Canada Business Corporations Act . On December 27 , 2018 , the Company filed a Certificate of Amendment with Corporations Canada changing its name from Strata Oil & Gas Inc . to Strata Power Corporation . As of September 30 , 2022 , the Company has a 50 % interest in 7 oil sands leases, totaling 8 , 704 hectares, all located in the Peace River oil sands area . In addition, the Company has a royalty interest in 10 oil sands leases and owns 3 non - producing wells . NOTE 2. ABILITY TO CONTINUE AS A GOING CONCERN As shown in the accompanying financial statements, the Company has realized some revenue from its present operations . During the nine months ended September 30 , 2022 , the Company had net income of $ 320 , 166 , primarily due to royalty income and the change in the fair value of derivative liability . The Company had cash flows provided by operations of $ 154 , 900 but it is possible that the Company will incur negative operating cash flows in the future . The Company has an accumulated deficit of $ 23 , 372 , 363 at September 30 , 2022 . These conditions raise some doubt regarding the Company’s ability to continue as a going concern . The financial statements have been prepared on a going concern basis, which contemplates realization of assets and liquidation of liabilities in the ordinary course of business . The Company's ability to continue as a going concern is dependent on its ability to develop its oil and gas properties and ultimately achieve profitable operations, and to generate sufficient cash flow from financing and operations to meet its obligations as they become payable . The Company expects that it will need approximately $ 115 , 000 to fund its operations during the next twelve months, which will include minimum annual property lease payments, expected exploration expenditures for permitting and drilling, as well as operating expenses . Management has plans to seek additional capital through a private placement of its common stock . Although there are no assurances that management’s plans will be realized, management believes that the Company will be able obtain sufficient capital to continue operations in the next 12 months . Accordingly, no adjustment relating to the recoverability and classification of recorded asset amounts and the classification of liabilities has been made to the accompanying financial statements in anticipation of the Company not being able to continue as a going concern . NOTE 3. SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) . Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate so as to make the information presented not misleading .
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Management’s Estimates and Assumptions The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the balance sheet date, and revenues and expenses for the period then ended . Management believes that all applicable estimates and adjustments are appropriate . Actual results could differ significantly from those estimates . Concentration of Revenue For the nine months ended September 30 , 2022 , the Company had a concentration of revenue related to a single royalty agreement, accounting for 100 % of total revenue . The loss of this revenue would have a material adverse effect on future operating results . As of September 30 , 2022 , 100 % of royalty receivables related to this agreement . Oil and Gas Property Payments and Exploration Costs All costs incurred in the acquisition, exploration and development of natural gas and oil interests are capitalized as incurred . Capitalized costs associated with proven properties are amortized using the units - of - production method over the estimated life of the probable reserve . Capitalized costs associated with unproved properties are excluded from the amortization calculations and assessed, at least annually, to determine if impairment has occurred, until such time as those costs are proven . Impairment amounts are immediately expensed and no costs have been capitalized through September 30 , 2022 . Cash and Cash Equivalents The Company considers all highly liquid investments purchased with a maturity of 90 days or less to be cash equivalents . The Company maintains cash and cash equivalent balances with financial institutions that may exceed federally insured limits . There were no cash equivalent balances for the years ended September 30 , 2022 or December 31 , 2021 . GST Receivables Goods and Services Tax (GST) receivables are presented net of an allowance for doubtful accounts . Receivables consist of goods and services input tax credits . The allowance for doubtful accounts on GST receivables was $ nil at September 30 , 2022 and December 31 , 2021 . Impairment of Long - lived Assets In accordance with ASC 360 , Property, Plant and Equipment, long lived assets such as equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable . Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset . If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset . Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount of fair value less costs to sell and are no longer depreciated . The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet . Asset Retirement Obligations In accordance with ASC 410 , Asset Retirement and Environmental Obligations, the fair value of an asset retirement cost, and corresponding liability, should be recorded as part of the cost of the related long - lived asset and subsequently allocated to expense using a systematic and rational method . The Company has recorded an asset retirement obligation at September 30 , 2022 and December 31 , 2021 (Note 8 ) to reflect its legal obligations related to future abandonment
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of its oil and gas interests using estimated expected cash flow associated with the obligation and discounting the amount using a credit - adjusted, risk - free interest rate . At least annually, the Company will reassess the obligation to determine whether a change in any estimated obligation is necessary . The Company will evaluate whether there are indicators that suggest the estimated cash flows underlying the obligation have materially changed . Should those indicators suggest the estimated obligation has materially changed the Company will accordingly update its assessment . The liability accretes until the Company settles the obligation . Income Taxes The Company follows the asset and liability method of accounting for income taxes whereby deferred tax assets and liabilities are recognized for the future tax consequences of differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases . If it is determined that the realization of the future tax benefit is not more likely than not, the Company establishes a valuation allowance . Foreign Exchange Translation The Company's functional currency is the Canadian dollar but reports its financial statements in US dollars . The Company translates its Canadian dollar balances to US dollars in the following manner : Assets and liabilities have been translated using the rate of exchange at the balance sheet date . Equity transactions and results of operations have been translated at historical rates . Translation gains or losses resulting from the changes in the exchange rates are accumulated as other comprehensive income or loss in a separate component of stockholders' equity . All amounts included in the accompanying financial statements and footnotes are stated in U.S. dollars. Derivative Financial Instruments The Company reviews the terms of its equity instruments and other financing arrangements to determine whether there are embedded derivative instruments that are required to be accounted for separately as a derivative financial instrument . Also, in connection with the issuance of financing instruments, the Company has issued freestanding warrants that are accounted for as derivative instrument liabilities because they are exercisable in a currency other than the functional currency of the Company and thus do not meet the “fixed - for - fixed” criteria of ASC 815 - 40 - 15 . The warrants are exercisable in United States dollars and the Company’s functional currency is the Canadian dollar . Derivative financial instruments are initially measured at their fair value . For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re - valued at each reporting date, with changes in the fair value reported as charges or credits to income . For derivative financial instruments, the Company uses the Black - Scholes option pricing model to value the derivative instruments . Any exercise or cancellation of an equity instrument which meets the classification of a derivative financial instrument is trued - up to fair value at that date and the fair value of the exercised instrument is then reclassified from liability to additional paid in capital . The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period . If reclassification is required, the fair value of the derivative instrument, as of the determination date, is reclassified . Any previous charges or credits to income for changes in the fair value of the derivative instrument are not reversed . Derivative instrument liabilities are classified in the balance sheet as current or non - current based on whether or not net - cash settlement of the derivative instrument could be required within 12 months of the balance sheet date . Stock Based Compensation In accordance with ASC 718 , “Compensation – Stock Compensation” (“ASC 718 ”), which was adopted as of January 1 , 2019 , the Company measures all employee stock - based compensation awards using a fair value method on the date of grant and recognizes such expense in its financial statements over the requisite service period . The Company uses the Black - Scholes pricing model to determine the fair value of stock - based compensation awards on the date of grant .
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The Black - Scholes pricing model requires management to make assumptions regarding option lives, expected volatility, and risk - free interest rates . The Company accounts for non - employee stock - based awards in accordance with the provision of ASC 505 , “Equity Based Payments to Non - Employees” (“ASC 505 ”), which requires that such equity instruments are recorded at their fair value on the measurement date . The measurement of stock - based compensation is subject to periodic adjustment as the underlying equity instruments vest . The Company uses the Black - Scholes pricing model to determine the fair value of stock - based compensation awards . The Black - Scholes pricing model requires management to make assumptions regarding option lives, expected volatility, and risk - free interest rates . The Company uses historical data to estimate option exercise, forfeiture and employee termination within the valuation model . For non - employees, the expected term of the options approximates the full term of the options . The risk - free interest rate is based on a treasury instrument whose term is consistent with the expected term of the stock options . The Company has not paid and does not anticipate paying dividends on its common stock ; therefore, the expected dividend yield is assumed to be zero . In addition, accounting standard requires companies to utilize an estimated forfeiture rate when calculating the expense for the reporting period . Based on its best estimate, management applied the estimated forfeiture rate of nil in determining the expense recorded in the accompanying Statements of Operations and Comprehensive Income (Loss) . Expected volatilities are calculated using the historical volatility of the Company’s stock . When applicable, the Company will use historical data to estimate option exercise, forfeiture and employees’ termination within the valuation model . For non - employees, the expected term of the options approximates the full term of the options . Earnings (Loss) Per Share of Common Stock Basic earnings (loss) per share of common stock is computed by dividing net income (loss) available to common shareholders by the weighted - average number of common shares outstanding for the period . Diluted earnings per share of common stock reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company . Dilutive potential common shares are calculated in accordance with the treasury stock method, which assumes that proceeds from the exercise of all warrants and options are used to repurchase common stock at market value . The number of shares remaining after the proceeds are exhausted represents the potentially dilutive effect of the securities . For the nine months ended September 30 , 2022 and 2021 , all of the outstanding options and warrants had an exercise price above the average stock price for year - end period . Accordingly, all of the potentially dilutive shares were excluded from the computation of diluted shares outstanding as they would have had an anti - dilutive impact on the Company’s income (loss) from continuing operations . Fair Value of Financial Instruments The book values of GST receivables, notes receivable, accounts payable and accrued expenses approximate their respective fair values due to the short - term nature of these instruments . The fair value hierarchy under GAAP distinguishes between assumptions based on market data (observable inputs) and an entity’s own assumptions (unobservable inputs) . The hierarchy consists of three levels : Level one - Quoted market prices in active markets for identical assets or liabilities; Level two - Inputs other than level one inputs that are either directly or indirectly observable; and Level three - Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use. Determining which category an asset or liability falls within the hierarchy requires significant judgment . Hierarchy disclosures are evaluated at each balance sheet date . Liabilities measured at fair value are summarized as follows as of :
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Fair Value Measurement at September 30, 2022 Using Fair Value Measurement at December 31, 2021 Using Total Level 3 Total Level 3 $ 210,929 $ 210,929 $ 27,472 $ 27,472 Derivative liabilities 214,960 214,960 211,143 211,143 Asset Retirement Obligation (see Note 8) The Company issued a convertible note in which the conversion rate is variable . As a result, a derivative liability was recorded (see Note 9 ) . In addition, the Company has warrants with a strike price currency different than the functional currency as has recorded a derivative liability associated with that . The Company measures and reports the fair value liability for these derivative liabilities on a recurring basis . The fair value liabilities have been recorded as determined utilizing the Black - Scholes option pricing model . A slight change in an unobservable input like historical volatility could have a significant impact on the fair value measurement of the derivative liabilities . See Note 6 “Derivative Liabilities” for further discussion of the inputs used in determining the fair value . Revenue Recognition The Company has adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 606 , Revenue from Contracts with Customers (“ASC 606 ”), which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers . The Company receives an overriding royalty from an unrelated party of 2 . 5 % on all petroleum substances produced from three oil sands leases located in the southeast portion of the Peace River oil sands area that were sold in May 2019 (see Note 4 ) and recognizes revenue at the time petroleum is sold . The Company’s revenue recognition policy standards include the following elements under ASU 606 : 1. Identify the contract with the customer . The contract is documented in the Purchase and Sale Agreement dated 5 / 14 / 2019 . 2. Identify the performance obligations in the contract . The performance obligation in the contract required Strata to relinquish its interest in three oil sands located in the southeast portion of the Peace River oil sands area . 3. Determine the transaction price . The transaction price was C $ 60 , 000 and a 2 . 5 % gross overriding royalty of the petroleum substances produced from the three oil sands leases, in exchange for a 100 % interest in the three oil sands leases . 4. Allocate the transaction price to the performance obligations in the contract . The Company only has one performance obligation, the transfer of the rights to the three oil sands leases, which has already been fulfilled . 5. Recognize revenue when (or as) the entity satisfies a performance obligation . The C $ 60 , 000 was recognized as a sale of the oil sands rights in 2019 , resulting in a gain from the disposition of the leases . The 2 . 5 % overriding petroleum royalties are recognized as revenue in the period that the other party produces and sells petroleum from the oil sands leases, which began in September 2021 . The royalties that have been received to date have been highly variable, as the amounts are dependent upon the monthly production, the demand of the buyers, the spot price of petroleum, etc . As such, management has determined that the revenue recognition shall be treated as variable consideration as defined in ASC 606 . Variable consideration should only be recognized to the extent that it is probable that a significant reversal of revenue will not occur when the uncertainty associated with the variable consideration is subsequently resolved . Given the fact that royalties to date have been highly variable with a great degree of uncertainty, and any attempts to estimate future revenue would likely result in a significant reversal of revenue, royalty revenue will be recognized when payments and settlement statements are received, in the period for which the petroleum was produced . It is at that time that any uncertainty related to royalty payments is resolved . The Company applied ASC 606 using the modified retrospective method applied to contracts not yet completed as of the date of adoption .
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Comprehensive Income (Loss) Comprehensive income (loss) is defined to include all changes in equity except those resulting from investments by owners and distributions to owners . The Company's items of other comprehensive income (loss) are foreign currency translation adjustments . Related Party Transactions A related party is generally defined as (i) any person who holds 10 % or more of the Company’s securities and their immediate families, (ii) the Company’s management, (iii) an entity or person who directly or indirectly controls, is controlled by or is under common control and/or management with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company . A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties . New Accounting Pronouncements In August 2020 , the FASB issued ASU 2020 - 06 , Debt - Debt with Conversion and Other Options (Subtopic 470 - 20 ) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815 - 40 ) : Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020 - 06 ”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity . This ASU ( 1 ) simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470 - 20 , Debt : Debt with Conversion and Other Options, that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock ; ( 2 ) revises the scope exception from derivative accounting in ASC 815 - 40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification ; and ( 3 ) revises the guidance in ASC 260 , Earnings Per Share, to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if - converted method . In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares . For SEC filers, excluding smaller reporting companies, ASU 2020 - 06 is effective for fiscal years beginning after December 15 , 2021 including interim periods within those fiscal years . Early adoption is permitted, but no earlier than fiscal years beginning after December 15 , 2020 . For all other entities, ASU 2020 - 06 is effective for fiscal years beginning after December 15 , 2023 , including interim periods within those fiscal years . Entities should adopt the guidance as of the beginning of the fiscal year of adoption and cannot adopt the guidance in an interim reporting period . The Company is currently evaluating the impact that ASU 2020 - 06 may have on its consolidated financial statements and related disclosures . The Company has implemented all new accounting pronouncements that are in effect . These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations . NOTE 4 . ROYALTY INTEREST Pursuant to the Purchase and Sale Agreement with an unrelated third party dated May 2019 , in which the Company sold three oil sands leases located in the southeast portion of the Peace River oil sands area, the Company retained a 2 . 5 % gross overriding royalty on all petroleum substances produced from the leases . For the nine months ended September 30 , 2022 and 2021 , the Company earned royalties of $ 321 , 683 and $ 0 , respectively . NOTE 5 . PETROSTEAM LICENSE On March 20 , 2019 , the Company entered into an exclusive license agreement with PetroSteam LLC to obtain an exclusive right to deploy patented and field - tested proprietary technologies utilizing steam generation applied to bitumen and heavy oil recovery in the Provinces of Alberta and Saskatchewan . In exchange, the Company issued 2 , 991 , 400 restricted common shares . In addition, the Company agreed, subject to certain qualifications and milestones being met, to purchase steam generation equipment from PetroSteam totaling $ 12 , 500 , 000 to be used on its
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bitumen/heavy - oil projects . In 2021 , the PetroSteam license was cancelled by both parties and the value of the license agreement was recognized as a license fee expense . NOTE 6 . DERIVATIVE LIABILITIES Derivative liabilities consist of common stock warrants with an exercise price in a different currency than the Company’s functional currency . In addition, the Company identified embedded derivatives related to a convertible promissory note issued in 2021 (see Note 9 ) . These embedded derivatives include certain conversion features . The derivative liabilities are accounted for as separate liabilities measured at their respective fair values as follows : Derivative liabilities associated with: Convertible Total Note Warrants 24,336 – $ 24,336 Balance, December 31, 2020 127,049 127,049 – Issuance of convertible note (1,258) – (1,258) Fair value of expired warrant 61,031 43,446 17,585 Change in fair value of derivative liabilities (229) – (229) Foreign exchange effect on derivative liability $ 210,929 $ 170,495 40,434 Balance, December 31, 2021 (181,938) (170,495) (11,443) Change in fair value of derivative liabilities (1,519 ) – (1,519 ) Foreign exchange effect on derivative liability 27,472 – Balance, September 30, 2022 $ 27,472 The fair value of the derivative liabilities has been determined using the Black - Scholes option pricing model using the following range of assumptions: December 31, September 30, 2021 2022 545.20% 365.80% Volatility 0.45 to 2.12 years 0.66 to 4.85 years Expected life 0.95% - 1.42% 3.16% - 3.79% Risk - free interest rate 0.00% 0.00% Dividend yield NOTE 7. OIL AND GAS PROPERTIES During the period June 2006 through January 2007 , the Company acquired the rights to multiple oil sands leases within the Peace River area of Alberta, Canada (the “Peace River Properties”) . The leases were granted by the Province of Alberta . All the leases were for a 15 - year term, required minimum annual lease payments, and granted the Company the right to explore and develop oil sands on the respective leases . On February 22 , 2016 , the Company acquired an additional 45 oil sands leases by entering into two purchase and sale agreements . The oil sands leases represented 39 , 680 hectares ( 98 , 051 acres) in the Peace River area of Alberta . One of the purchase / sale agreements was with a related party . On May 14 , 2019 , the Company sold the shallower oil sands rights on two of its oil sands lease blocks in the Cadotte East area to an unrelated third party, but retained the deeper oil sands rights, including the Debolt - Elkton formations . The Company also retained a 2 . 5 % overriding royalty on all petroleum substances produced from the shallower oil sands rights on those two lease blocks . The Company will continue to pay annual lease fees on those two oil sands lease blocks, but at a rate of 50 % , and the unrelated third party will pay the other 50 % . On three of its oil sands lease blocks in the Reno area, the Company sold 100 % of its interest to an unrelated third party and retained a 2 . 5 % overriding royalty on all petroleum substances produced from those oil sands lease blocks . On those three oil sands lease blocks, the unrelated third party has taken over 100 % of the annual lease fees .
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On June 11 , 2020 , the Company sold the shallower oil sands rights on five of its oil sands leases in the Cadotte Central area to an unrelated third party, but retained the deeper oil sands rights, including the Debolt - Elkton formations . The Company also retained a 2 . 5 % overriding royalty on all petroleum substances produced from those oil sands lease blocks . The Company will continue to pay annual lease fees on those two oil sands lease blocks, but at a rate of 50 % , and the third party will pay the other 50 % . Throughout 2020 , the Company chose to not renew their remaining oil sands leases due to the economic conditions in the Alberta heavy oil sector . All the Company’s lease interests in the Peace River area are subject to royalties payable to the government of the Province of Alberta . The royalty is calculated using a revenue - less - cost formula . In years prior to the recovery of the project’s capital investment, the royalty is 1 % of gross revenue . Once the project costs have been recovered, the royalty is the greater of 1 % of gross revenue or 25 % of net revenue . The Company completed drilling four exploratory wells during the fiscal year ended December 31 , 2007 . Since then, the Company completed several third - party technical reports on its oil sands leases including a prefeasibility study and developed an oil sands exploration program, which it was not able to execute on due to weak conditions in the heavy oil sector . NOTE 8 . ASSET RETIREMENT OBLIGATIONS During 2007 , the Company drilled four wells on its Peace River Property . Total future asset retirement obligations were estimated by management based on the Company’s working interest in its wells and facilities, estimated costs to remediate, reclaim and abandon the wells and facilities and the estimated timing of the costs to be incurred in future periods . The Company has estimated the net present value of its total asset retirement obligations to be approximately $ 211 , 143 at September 30 , 2022 , based on an undiscounted total future liability of $ 225 , 229 (CDN $ 293 , 000 ) . These payments are expected to be incurred between 2023 and 2030 . The Company used a credit adjusted discount rate of 10 % per annum and an inflation rate of 2 % to calculate the present value of the asset retirement obligation . Accretion expense of $ 15 , 621 and $ 11 , 778 for the nine months ended September 30 , 2022 , and 2021 , respectively, has been recorded in the Statements of Operations and Comprehensive Income (Loss) . However, the Company is currently in the process of carrying out abandonment and remediation of its wells through the federally funded Site Rehabilitation Program . As a result, the actual Asset Retirement Obligation costs on these wells could be substantially lower than its current value but the actual amount cannot be reasonably estimated at this time . NOTE 9 . RELATED PARTY TRANSACTIONS Related party transactions not disclosed elsewhere in these financial statements include: Deferred Revenue - Royalty Agreement The Company has negotiated a royalty agreement with a related party by common CEO and director . In exchange for a non - refundable payment of $ 300 , 000 , the Company intends to provide a royalty stream to this related party based on the gross production of Vanadium Oxide (“Vanadium”) from the company’s the oil sands leases . For each barrel of bitumen produced from the specified oil sands until March 21 , 2039 , or upon termination of mining, whichever is earlier, the Company will pay a royalty equal to 25 grams of Vanadium per barrel of bitumen produced, multiplied by the price of Vanadium Pentoxide 98 % min in - warehouse Rotterdam published on the last business day of the month in which the gross production of bitumen occurred . The $ 300 , 000 is recorded as deferred revenue and will be recognized at such time as the Company begins to produce Vanadium . Notes payable to related party In December 2015 , the Company borrowed $ 6 , 553 ( $ 9 , 000 Canadian) under a note agreement with related parties . The lenders were related parties through an immediate family relationship with officers or directors of the Company and a common director . The note payable bore interest at the Bank of Canada Prime rate plus 1 % . The Company could repay the loan and outstanding interest thereon by giving notice to the lender 15 days prior to the anticipated repayment . At September 30 , 2022 , the effective interest rate on these notes payable was 6 . 45 % . The balance of note
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payable, including interest, to related parties at September 30 , 2022 and December 31 , 2021 was $ 8 , 306 and $ 8 , 844 , respectively . The Company recognized interest expense of $ 236 and $ 232 for the nine months ended September 30 , 2022 , and 2021 , respectively, in its Statements of Operations and Comprehensive Income (Loss) . In 2021 , the Company borrowed $ 72 , 000 under a note agreement with a related party, which has been fully repaid as of September 30 , 2022 . The note payable could be repaid at any time, in part or in full on or before May 25 , 2023 and bore interest at 10 % per annum . The note was convertible into restricted common shares at $ 0 . 01 per share or the most recent 30 - day volume - weighted moving average of the published share price, discounted by 40 % , whichever is higher . Due to the variability of the conversion rate, an embedded derivative was identified . The Company recorded the fair value of the derivatives as of the inception date of the convertible note, which was determined to be $ 127 , 049 . The initial fair value of the embedded debt derivative was allocated as a debt discount up to the face value of the note ( $ 72 , 000 ), with the remaining $ 55 , 049 recognized as a loss on issuance of convertible note . The debt discount was amortized over the life of the note, or until repayment and amortization expense of $ 51 , 000 and $ 0 was recognized for the nine months ended September 30 , 2022 and 2021 , respectively . The balance of the note payable, including interest, at September 30 , 2022 and December 31 , 2021 was $ 0 and $ 75 , 659 , respectively . The Company recognized interest expense of $ 2 , 550 and $ 1 , 841 for the nine months ended September 30 , 2022 and 2021 , respectively, in its Statements of Operations and Comprehensive Income (Loss) . Consulting fees Mr . Newton is the President and a member of the Board of Directors of the Company . Mr . Newton does not bill the Company for his services as President ; however, he has a service agreement with the Company . Consulting fees of $ 75 , 341 and $ 0 were incurred for the nine months ended September 30 , 2022 and 2021 , respectively . Dr . Michael Ranger is a member of the Board of Directors of the Company . Dr . Ranger does not receive compensation for his services as a member of the board ; however, he has a service agreement with the Company, including consulting time and expense reimbursement . Pursuant to this agreement, the Company recognized consulting expenses of $ 0 and $ 1 , 356 , for the nine months ended September 30 , 2022 , and 2021 , respectively . NOTE 10. COMMITMENTS AND CONTINGENCIES In the ordinary course of business, we may be exposed to claims and threatened litigation, and use various methods to resolve these matters in a manner that we believe serves the best interest of our shareholders and other constituents . When a loss is probable, we disclose the amount of probable loss, or disclose a range of reasonably possible losses if they are material and we are able to estimate such a range . If we cannot provide an estimate, we explain the factors that prevent us from doing so . We believe the recorded reserves in our consolidated financial statements are adequate in light of the probable and estimable liabilities . We do not presently believe that any claims or litigation will be material to our results of operations, cash flows, or financial condition . Environmental Matters The Company is engaged in oil and gas exploration and may become subject to certain liabilities as they relate to environmental cleanup of sites or other environmental restoration procedures as they relate to the exploration of oil and gas . Should it be determined that a liability exists with respect to any environmental clean - up or restoration, the liability to cure such a violation could fall upon the Company . No claim has been made, nor is the Company aware of any liability, which it may have, as it relates to any environmental clean - up, restoration or the violation of any rules or regulations relating thereto . Liabilities for expenditures are recorded when environmental assessment and/or remediation is probable, and the costs can be reasonably estimated . NOTE 11. SUBSEQUENT EVENTS In accordance with SFAS 165 (ASC 855 - 10 ) management has performed an evaluation of subsequent events through the date that the financial statements were available to be issued and has determined that it does not have any material subsequent events to disclose in these financial statements .
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Exhibit 99.22
Strata Power Corporation Interim MD&A – Quarterly Highlights For the Nine Months ended September 30, 2022 Management’s Discussion and Analysis of Financial Condition and Results of Operations Management’s Discussion and Analysis of Financial Condition ("MD&A") and Results of Operations should be read in conjunction with the accompanying unaudited financial statements. The financial statements are presented in United States dollars and have been prepared in accordance with accounting principles generally accepted in the United States, referred to as US GAAP. Certain statements contained in the MD&A constitute forward - looking statements. Such forward - looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward - looking statements. Readers are cautioned not to place undue reliance on these forward - looking statements which speak only as of the date the financial statements were made and readers are advised to consider such forward - looking statements in light of the risks set forth both below and in the Company’s most recent annual report. RESULTS OF OPERATIONS Nine months ended September 30, 2022 compared to nine months ended September 30, 2021. For the nine months ended September 30, 2022, the Company had a net income from operations of $320,166 compared to a net loss of $127,937 for the nine months ended September 30, 2021, a change of $448,103. The primary reasons for the increased net income are the commencement of royalty income from an agreement with an unrelated third party and the change in the fair value of derivative liabilities. This was offset by $51,000 of amortization expense related to debt discount. For the nine months ended September 30, 2022, the Company recorded a gain in the change in fair value of derivative liability of $181,937. This compares to a loss recognized for the nine months ended September 30, 2021 of $24,666. This item is a non - cash item and was recorded in accordance with ASC 850 - 40 - 15. This guidance requires entities to evaluate whether an equity - linked financial instrument (or embedded feature) is indexed to its own stock by assessing the instrument’s contingent exercise provisions and settlement provisions. Instruments not indexed to their own stock fail to meet the scope exception of Accounting for Derivative Instruments and Hedging Activities, ASC 815 - 10 - 15 - 74(a), and should be classified as a liability and marked - to - market. REVENUES Pursuant to the Purchase and Sale Agreement with an unrelated third party dated May 2019 , in which the Company sold three oil sands leases located in the southeast portion of the Peace River oil sands area, the Company retained a 2 . 5 % gross overriding royalty on all petroleum substances produced from the leases . For the nine months ended September 30 , 2022 and 2021 , the Company earned royalties of $ 321 , 683 and $ 0 , respectively . DISCONTINUED OPERATIONS There was no discontinued operations activity in 2022 or 2021. INTEREST AND OTHER INCOME (EXPENSE) Included in other income (expense) for the nine months ended September 30 , 2022 is amortization of debt discount of $ 51 , 000 . There was no amortization of debt discount for the nine months ended September 30 , 2021 . In addition, for the nine months ended September 30 , 2022 , there was income of $ 181 , 937 from the change in fair value of derivative liability . This compares to an expense of $ 24 , 666 for the nine months ended September 30 , 2021 .
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Liquidity and Capital Resources As of September 30 , 2022 , we had $ 73 , 472 in cash, an increase of $ 65 , 774 from December 31 , 2021 . Management estimates that the Company will require approximately $ 115 , 000 to fund planned operations for the next twelve months and will likely be funded from the receipt of royalty revenue . Our policy is to pay all operational expenses when due, provided that the vendor, in the normal course of business, has satisfied all necessary conditions for payment . Net cash provided by operating activities during the nine months ended September 30 , 2022 was $ 154 , 900 , compared to net cash used in operating activities of $ 92 , 440 for the same period in the prior year . The increase in cash provided by operating activities was the commencement of the royalty revenue . Cash used in investing activities for the nine months ended September 30 , 2022 and 2021 was $ 714 and $ 382 , respectively, resulting primarily from the change in the reclamation deposits . Net cash provided by (used in) financing activities for the nine months ended September 30 , 2022 and 2021 was ( $ 78 , 209 ) and $ 72 , 000 , respectively . For September 30 , 2022 , the financing activities consisted of the repayment of convertible debt . For September 30 , 2021 , the financing activities consisted of proceeds from the issuance of convertible debt . We are an exploration stage company with limited operating history, which raises substantial doubt as to our ability to successfully develop profitable business operations and makes an investment in our common shares very risky . We have no long - term debt . We believe that our available cash may not be sufficient to fund our working capital requirements to maintain, explore and develop our property interests for the next twelve months . If capital is not available to fund future operations, we will not be able to pursue our business plan and operations would come to a halt and our common shares could be nearly worthless . We will require substantial additional capital to participate in the development of our properties which have not had any production of oil or natural gas as well as for acquisition and/or development of other producing properties . Because we currently have limited cash flow from operations, we need to raise additional capital, which may be in the form of loans from current shareholders and/or from private equity offerings . Our ability to access capital will depend on our success in participating in properties that are successful in exploring for and producing oil and gas at profitable prices . It will also be dependent upon the status of the capital markets at the time such capital is sought . Should sufficient capital not be available, the development of our business plan could be delayed and, accordingly, the implementation of our business strategy would be adversely affected . In such event it would not be likely that investors would obtain a profitable return on their investments or a return of their investments at all . We anticipate that we will incur the following expenditures through our current fiscal year : $15,000 in connection with property lease payments and follow up analysis on the Company’s oil sands properties $100,000 for operating expenses, including working capital, consulting fees, general and administrative, professional, legal and accounting expenses In 2022 , our capital requirements will mostly be associated with the maintenance of our lease payments to the Crown and general and administrative expenses . Going forward we expect the short - term and long - term funding of our oil and gas operations to be financed primarily through equity issuance in the form of private placements and the exercise of warrants . In addition, we continue to work with potential partners to discuss funding arrangements which would facilitate furtherance of our property interests . We cannot be certain that any required additional financing will be available on terms favorable to us as the risky nature of this enterprise and lack of tangible assets places debt financing beyond the credit - worthiness required by most banks or typical investors of corporate debt until such time as the economic viability of our oil sands properties can be demonstrated . If additional funds are raised by the issuance of our equity securities, existing stockholders will experience dilution of their ownership interest . If adequate funds are not available or not available on acceptable terms, we may be unable to continue, fund expansion, pursue further development or respond to competitive pressures .
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Our financing prospects must be considered in light of the risks, expenses and difficulties frequently encountered in establishing a business in the oil and natural gas industries . We have yet to generate sustained revenues from operations . There is nothing at this time on which to base an assumption that our business operations will prove to be successful or that we will be able to operate profitably . Our future operating results will depend on many factors, including : our ability to raise adequate working capital success of our exploration and development demand for natural gas and oil the level of our competition our ability to attract and maintain key management and employees and our ability to efficiently explore, develop and produce sufficient quantities of marketable natural gas or oil in a highly competitive and speculative environment while maintaining quality and controlling costs Volatility of oil and gas prices and markets could make it more difficult for us to achieve profitability and less likely for investors in our common shares to receive a return on their investment . Our ability to achieve profitability is substantially dependent on prevailing prices for natural gas and oil . The amounts and price obtainable for any oil and gas production that we achieve will be affected by market factors beyond our control . If these factors are not favorable over time to our financial interests, it is likely that owners of our common shares could lose their investments . Such factors include : worldwide or regional demand for energy, which is affected by economic conditions the domestic and foreign supply of natural gas and oil weather conditions domestic and foreign governmental regulations political conditions in natural gas and oil producing regions the ability of members of the Organization of Petroleum Exporting Countries to agree upon and maintain oil prices and production levels the price and availability of other fuels Additionally, due to worldwide economic uncertainty, the availability and cost of funds for production and other expenses have become increasingly difficult, if not impossible, to project . These changes and events may materially affect our financial performance .
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Exhibit 99.23
FORM 52 - 109F2 CERTIFICATION OF INTERIM FILINGS - FULL CERTIFICATE I, Trevor Newton, Chief Executive Officer of Strata Power Corporation Inc., certify the following: 1. Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Strata Power Corporation Inc. (the “issuer”) for the interim period ended September 30, 2022. 2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings. 3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings. 4. Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52 - 109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer. 5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings a. designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that i. material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and ii. information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and b. designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP. 1. Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. 2. N/A 3. N/A 6 . Reporting changes in ICFR : The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on July 1 , 2022 and ended on September 30 , 2022 that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR . 1/2
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Date: Novembert 15, 2022 (signed) "Trevor Newton" Trevor Newton Chief Executive Officer
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Exhibit 99.24
FORM 52 - 109F2 CERTIFICATION OF INTERIM FILINGS - FULL CERTIFICATE I, Trevor Newton, Chief Financial Officer of Strata Power Corporation, certify the following: 1. Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Strata Power Corporation (the “issuer”) for the interim period ended September 30, 2022. 2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings. 3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings. 4. Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52 - 109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer. 5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings a. designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that i. material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and ii. information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and b. designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP. 1. Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. 2. N/A 3. N/A 6 . Reporting changes in ICFR : The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on July 1 , 2022 and ended on September 30 , 2022 that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR . 1/2
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Date: November 15, 2022 (signed) "Trevor Newton" Trevor Newton Chief Financial Officer
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Exhibit 99.25
Strata Power Corporation (An Exploration Stage Company) FINANCIAL STATEMENTS For the Three Months ended March 31, 2023 and 2022 (unaudited) (Stated in US Dollars)
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STRATA POWER CORPORATION BALANCE SHEETS (Expressed in US Dollars) (Unaudited) March 31, 2023 December 31, 2022 ASSETS Current assets Cash $ 56,884 $ 80,905 GST receivables 12,341 9,330 Royalty receivables 30,436 39,578 Prepaid expenses 7,842 10,697 Total current assets 107,503 140,510 Reclamation deposits 97,358 95,968 Total assets $ 204,861 $ 236,478 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities Accounts payable and accrued liabilities $ 32,677 $ 34,264 Accounts payable and accrued liabilities - related party 30,465 15,956 Notes payable, net of debt discount 8,736 8,584 Derivative liabilities 6,780 14,690 Total current liabilities 78,658 73,494 Deferred revenue - royalty agreement (Note 9) 300,000 300,000 Asset retirement obligation 72,204 71,975 Total long - term liabilities 372,204 371,975 Total liabilities 450,862 445,469 Commitments and Contingencies – – Stockholders' equity (deficit) Preferred stock: no par value, unlimited shares authorized and none issued – – Common stock : no par value, unlimited shares authorized ; 20 , 085 , 119 shares issued and outstanding at March 31 , 2023 and December 31 , 2022 , respectively – – Additional paid - in capital 23,404,083 23,404,083 Common shares to be issued 5,000 5,000 Accumulated deficit (23,251,766) (23,214,872 ) Accumulated other comprehensive income (loss) (403,318) (403,202 ) (208,991 ) $ 236,478 Total stockholders' equity (deficit) (246,001 ) Total liabilities and stockholders' equity (deficit) $ 204,861 The accompanying notes are an integral part of these financial statements.
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STRATA POWER CORPORATION STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Expressed in US Dollars) (Unaudited) For the Three Months Ended March 31, 2022 2023 $44,639 42,822 Operating Income: Royalty income 8,664 19,240 Operating Expenses: Professional fees 125 138 Office and sundry - 63,397 Consulting fees (900) 1,174 Transfer agent fees 5,433 - Accretion expense 3,814 5,229 Oil & gas properties expense 17,136 89,178 Total operating expenses 128 1,085 Other income (expense): Interest income (9,000) - Amortization of debt discount (1,718) (211) Interest expense, related party (1,895) 657 Foreign exchange gain (loss) 83,604 7,931 Change in fair value of derivative liability 71,119 9,462 Total other income (expense) 98,622 (36,894) Net income (loss) (375) (116) Other comprehensive income (loss) Foreign currency translation adjustment $98,247 (37,010) Comprehensive income (loss) $0.00 $0.00 Income per common share Basic $0.00 $0.00 Diluted Weighted average number of shares outstanding: 20,085,119 20,085,119 Basic 20,085,119 20,085,119 Diluted The accompanying notes are an integral part of these financial statements.
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STRATA POWER CORPORATION STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) (Expressed in US Dollars) (Unaudited) Common Stock Additional Paid - in Common Shares to be Accumulated Accumulated Other Comprehensive Total Stockholders’ Shares Capital Issued Deficit Income (Loss) Equity (Deficit) $ (689,001) $ (405,555) $ (23,692,529) 5,000 $ 23,404,083 $ 20,085,119 Balance December 31, 2021 98,247 (375) 98,622 – – Net income and comprehensive loss (590,754) (405,930) $ (23,593,907) 5,000 $ 23,404,083 $ 20,085,119 Balance March 31, 2022 Balance December 31, 2022 20,085,119 $ 23,404,083 $ – – 20,085,119 $ 23,404,083 $ 5,000 $ (23,214,872) $ (403,202) $ (208,991) Net loss and comprehensive loss (36,894 ) (116 ) (37,010) Balance March 31, 2023 5,000 $ (23,251,766 ) (403,318 ) (246,001) The accompanying notes are an integral part of these financial statements.
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STRATA POWER CORPORATION STATEMENTS OF CASH FLOWS (Expressed in US Dollars) (Unaudited) For the three months ending March 31, 2023 2022 Cash flows from operating activities: $ 98,622 $ (36,894) Net income (loss) Adjustments to reconcile net loss to net cash used in operating activities 125 Accrued interest 5,433 - Accretion expense 9,000 - Amortization of debt discount (83,604) (7,931) Change in fair value of derivative liability Change in assets and liabilities (27) (3,011) GST receivable 5,177 9,142 Royalty receivable (3,065) 2,854 Prepaid expenses (343) (1,588) Accounts payable (9,805) 14,509 Accounts payable – related party 21,388 (22,794) Net cash provided by (used in) operating activities Cash flows from investing activities: (127) (1,085) Reclamation Deposits (127) (1,085) Net provided used in investing activities (13,376) - Cash flows from financing activities: Repayment of convertible note (13,376) - Net cash used in financing activities 1,525 (142) Foreign exchange effect on cash 9,410 (24,021) Net increase (decrease) in cash 7,696 80,905 Cash, beginning balance $ 17,106 $ 56,884 Cash, ending balance Supplemental disclosure of cash paid for: $ – $ – Interest $ – $ – Income taxes The accompanying notes are an integral part of these financial statements.
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STRATA POWER CORPORATION Notes to the Financial Statements NOTE 1. NATURE OF BUSINESS Strata Power Corporation (the “Company”) is currently engaged in the acquisition, exploration and, if warranted, feasible development of heavy oil projects in the Peace River oil sands region in Northern Alberta, Canada . The Company was incorporated under the laws of the State of Nevada on November 18 , 1998 and commenced operations in January 1999 . The Company completed its initial public offering in February 2000 . On April 22 , 2003 , the Company filed a registration statement to effect a continuation of our corporate jurisdiction from the State of Nevada to Canada on Form S - 4 with the United States Securities and Exchange Commission (SEC) . The Form S - 4 was declared effective on or about July 7 , 2004 . The Company is presently incorporated under the Canada Business Corporations Act . On December 27 , 2018 , the Company filed a Certificate of Amendment with Corporations Canada changing its name from Strata Oil & Gas Inc . to Strata Power Corporation . As of March 31 , 2023 , the Company has a 50 % interest in 7 oil sands leases, totaling 8 , 704 hectares, all located in the Peace River oil sands area . In addition, the Company has a royalty interest in 10 oil sands leases and owns 1 non - producing well . NOTE 2. ABILITY TO CONTINUE AS A GOING CONCERN As shown in the accompanying financial statements, the Company has realized minimal revenue from its present operations . During the three months ended March 31 , 2023 , the Company had a net loss of $ 36 , 894 , primarily due to consulting fees and professional fees . The Company had cash flows used in operations of $ 22 , 794 and it is possible that the Company will incur negative operating cash flows in the foreseeable future . The Company has an accumulated deficit of $ 23 , 251 , 766 at March 31 , 2023 . These conditions raise substantial doubt regarding the Company’s ability to continue as a going concern . The financial statements have been prepared on a going concern basis, which contemplates realization of assets and liquidation of liabilities in the ordinary course of business . The Company's ability to continue as a going concern is dependent on its ability to develop its oil and gas properties and ultimately achieve profitable operations, and to generate sufficient cash flow from financing and operations to meet its obligations as they become payable . The Company expects that it will need approximately $ 200 , 000 to fund its operations during the next twelve months, which will include minimum annual property lease payments, expected exploration expenditures for permitting and drilling, as well as operating expenses . Management has plans to seek additional capital through a private placement of its common stock . Although there are no assurances that management’s plans will be realized, management believes that the Company will be able obtain sufficient capital to continue operations in the next 12 months . Accordingly, no adjustment relating to the recoverability and classification of recorded asset amounts and the classification of liabilities has been made to the accompanying financial statements in anticipation of the Company not being able to continue as a going concern . NOTE 3. SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) . Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate so as to make the information presented not misleading .
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Risks and Uncertainties The Company is subject to additional risks and uncertainties due to the COVID - 19 pandemic, although the extent of the impact on the Company’s business is uncertain and difficult to predict. The Company considered the impact of COVID - 19 on the assumptions and estimates used and determined that there has been no material impact on the Company’s year - to - date results of operations. The Company cannot reasonably estimate with any degree of certainty the future impact COVID - 19 may have on the Company’s results of operations, financial position and liquidity. Volatility of oil prices could make it more difficult for the Company to achieve profitability, as the Company’s royalty revenues are substantially dependent on prevailing prices for oil. The amounts and price obtainable for any oil production will be affected by market factors beyond the Company’s control. Management’s Estimates and Assumptions The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the balance sheet date, and revenues and expenses for the period then ended . Management believes that all applicable estimates and adjustments are appropriate . Actual results could differ significantly from those estimates . Concentration of Revenue For the three months ended March 31 , 2023 and 2022 , the Company had a concentration of revenue related to a single royalty contract, accounting for 100 % of total revenue . The loss of this contract would have a material adverse effect on future operating results . As of March 31 , 2023 and December 31 , 2022 , 100 % of royalty receivables related to this contract . Oil and Gas Property Payments and Exploration Costs All costs incurred in the acquisition, exploration and development of natural gas and oil interests are capitalized as incurred . Capitalized costs associated with proven properties are amortized using the units - of - production method over the estimated life of the probable reserve . Capitalized costs associated with unproved properties are excluded from the amortization calculations and assessed, at least annually, to determine if impairment has occurred, until such time as those costs are proven . Impairment amounts are immediately expensed and no costs have been capitalized through March 31 , 2023 . Cash and Cash Equivalents The Company considers all highly liquid investments purchased with a maturity of 90 days or less to be cash equivalents . The Company maintains cash and cash equivalent balances with financial institutions that may exceed federally insured limits . There were no cash equivalent balances for the years ended March 31 , 2023 or December 31 , 2022 . GST Receivables Goods and Services Tax (GST) receivables are presented net of an allowance for doubtful accounts . Receivables consist of goods and services input tax credits . The allowance for doubtful accounts on GST receivables was $ nil at March 31 , 2023 and December 31 , 2022 . Impairment of Long - lived Assets In accordance with ASC 360 , Property, Plant and Equipment, long lived assets such as equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable . Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset . If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying
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amount of the asset exceeds the fair value of the asset . Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount of fair value less costs to sell and are no longer depreciated . The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet . Asset Retirement Obligations In accordance with ASC 410 , Asset Retirement and Environmental Obligations, the fair value of an asset retirement cost, and corresponding liability, should be recorded as part of the cost of the related long - lived asset and subsequently allocated to expense using a systematic and rational method . The Company has recorded an asset retirement obligation at March 31 , 2023 and December 31 , 2022 (Note 8 ) to reflect its legal obligations related to future abandonment of its oil and gas interests using estimated expected cash flow associated with the obligation and discounting the amount using a credit - adjusted, risk - free interest rate . At least annually, the Company will reassess the obligation to determine whether a change in any estimated obligation is necessary . The Company will evaluate whether there are indicators that suggest the estimated cash flows underlying the obligation have materially changed . Should those indicators suggest the estimated obligation has materially changed the Company will accordingly update its assessment . The liability accretes until the Company settles the obligation . Income Taxes The Company follows the asset and liability method of accounting for income taxes whereby deferred tax assets and liabilities are recognized for the future tax consequences of differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases . If it is determined that the realization of the future tax benefit is not more likely than not, the Company establishes a valuation allowance . Foreign Exchange Translation The Company's functional currency is the Canadian dollar but reports its financial statements in US dollars . The Company translates its Canadian dollar balances to US dollars in the following manner : Assets and liabilities have been translated using the rate of exchange at the balance sheet date . Equity transactions and results of operations have been translated at historical rates . Translation gains or losses resulting from the changes in the exchange rates are accumulated as other comprehensive income or loss in a separate component of stockholders' equity . All amounts included in the accompanying financial statements and footnotes are stated in U.S. dollars. Derivative Financial Instruments The Company reviews the terms of its equity instruments and other financing arrangements to determine whether there are embedded derivative instruments that are required to be accounted for separately as a derivative financial instrument . Also, in connection with the issuance of financing instruments, the Company has issued freestanding warrants that are accounted for as derivative instrument liabilities because they are exercisable in a currency other than the functional currency of the Company and thus do not meet the “fixed - for - fixed” criteria of ASC 815 - 40 - 15 . The warrants are exercisable in United States dollars and the Company’s functional currency is the Canadian dollar . Derivative financial instruments are initially measured at their fair value . For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re - valued at each reporting date, with changes in the fair value reported as charges or credits to income . For derivative financial instruments, the Company uses the Black - Scholes option pricing model to value the derivative instruments . Any exercise or cancellation of an equity instrument which meets the classification of a derivative financial instrument is trued - up to fair value at that date and the fair value of the exercised instrument is then reclassified from liability to additional paid in capital . The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period . If reclassification is required, the fair value of the derivative instrument, as of the determination date, is reclassified . Any previous charges or credits to income for changes in the
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fair value of the derivative instrument are not reversed . Derivative instrument liabilities are classified in the balance sheet as current or non - current based on whether or not net - cash settlement of the derivative instrument could be required within 12 months of the balance sheet date . Stock Based Compensation In accordance with ASC 718 , “Compensation – Stock Compensation” (“ASC 718 ”), which was adopted as of January 1 , 2019 , the Company measures all employee stock - based compensation awards using a fair value method on the date of grant and recognizes such expense in its financial statements over the requisite service period . The Company uses the Black - Scholes pricing model to determine the fair value of stock - based compensation awards on the date of grant . The Black - Scholes pricing model requires management to make assumptions regarding option lives, expected volatility, and risk - free interest rates . The Company accounts for non - employee stock - based awards in accordance with the provision of ASC 505 , “Equity Based Payments to Non - Employees” (“ASC 505 ”), which requires that such equity instruments are recorded at their fair value on the measurement date . The measurement of stock - based compensation is subject to periodic adjustment as the underlying equity instruments vest . The Company uses the Black - Scholes pricing model to determine the fair value of stock - based compensation awards . The Black - Scholes pricing model requires management to make assumptions regarding option lives, expected volatility, and risk - free interest rates . The Company uses historical data to estimate option exercise, forfeiture and employee termination within the valuation model . For non - employees, the expected term of the options approximates the full term of the options . The risk - free interest rate is based on a treasury instrument whose term is consistent with the expected term of the stock options . The Company has not paid and does not anticipate paying dividends on its common stock ; therefore, the expected dividend yield is assumed to be zero . In addition, accounting standard requires companies to utilize an estimated forfeiture rate when calculating the expense for the reporting period . Based on its best estimate, management applied the estimated forfeiture rate of nil in determining the expense recorded in the accompanying Statements of Operations and Comprehensive Income (Loss) . Expected volatilities are calculated using the historical volatility of the Company’s stock . When applicable, the Company will use historical data to estimate option exercise, forfeiture and employees’ termination within the valuation model . For non - employees, the expected term of the options approximates the full term of the options . Earnings (Loss) Per Share of Common Stock Basic earnings (loss) per share of common stock is computed by dividing net income (loss) available to common shareholders by the weighted - average number of common shares outstanding for the period . Diluted earnings per share of common stock reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company . Dilutive potential common shares are calculated in accordance with the treasury stock method, which assumes that proceeds from the exercise of all warrants and options are used to repurchase common stock at market value . The number of shares remaining after the proceeds are exhausted represents the potentially dilutive effect of the securities . For the three months ended March 31 , 2023 and 2022 , all of the outstanding options and warrants had an exercise price above the average stock price for year - end period . Accordingly, all of the potentially dilutive shares were excluded from the computation of diluted shares outstanding as they would have had an anti - dilutive impact on the Company’s income (loss) from continuing operations . Fair Value of Financial Instruments The book values of GST receivables, notes receivable, accounts payable and accrued expenses approximate their respective fair values due to the short - term nature of these instruments . The fair value hierarchy under GAAP distinguishes between assumptions based on market data (observable inputs) and an entity’s own assumptions (unobservable inputs) . The hierarchy consists of three levels : Level one - Quoted market prices in active markets for identical assets or liabilities; Level two - Inputs other than level one inputs that are either directly or indirectly observable; and
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Level three - Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use. Determining which category an asset or liability falls within the hierarchy requires significant judgment . Hierarchy disclosures are evaluated at each balance sheet date . Liabilities measured at fair value are summarized as follows as of : Fair Value Measurement at March 31, 2023 Using Fair Value Measurement at December 31, 2022 Using Total Level 3 Total Level 3 $ 14,690 $ 14,690 $ 6,780 $ 6,780 Derivative liabilities 71,975 71,975 72,204 72,204 Asset Retirement Obligation (see Note 8) In 2021 , the Company issued a convertible note in which the conversion rate was variable . As a result, a derivative liability was recorded (see Note 9 ) . In addition, the Company has warrants with a strike price currency different than the functional currency as has recorded a derivative liability associated with that . The Company measures and reports the fair value liability for these derivative liabilities on a recurring basis . The fair value liabilities have been recorded as determined utilizing the Black - Scholes option pricing model . A slight change in an unobservable input like historical volatility could have a significant impact on the fair value measurement of the derivative liabilities . See Note 6 “Derivative Liabilities” for further discussion of the inputs used in determining the fair value . Revenue Recognition The Company has adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 606 , Revenue from Contracts with Customers (“ASC 606 ”), which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers . The Company receives a royalty from an unrelated party of 2 . 5 % on all petroleum substances produced from three oil sands leases located in the southeast portion of the Peace River oil sands area that were sold in May 2019 (see Note 4 ) and recognizes revenue at the time petroleum is sold . The Company’s revenue recognition policy standards include the following elements under ASU 606 : 1. Identify the contract with the customer . The contract is documented in the Purchase and Sale Agreement dated 5 / 14 / 2019 2. Identify the performance obligations in the contract . The performance obligation in the contract required Strata to relinquish its interest in three oil sands located in the southeast portion of the Peace River oil sands area . 3. Determine the transaction price . The transaction price was C $ 60 , 000 in exchange for 2 . 5 % gross overriding royalty of the petroleum substances produced from the three oil sands leases, in exchange for a 100 % interest in the three oil sands leases . 4. Allocate the transaction price to the performance obligations in the contract . The Company only has one performance obligation, the transfer of the rights to the three oil sands leases, which has already been fulfilled . 5. Recognize revenue when (or as) the entity satisfies a performance obligation . The C $ 60 , 000 was recognized as a sale of the shallower oil sands rights in 2019 , resulting in a gain from the disposition of the leases . The 2 . 5 % petroleum royalties are recognized as revenue in the period that the other party produces and sells petroleum from the oil sands leases, which began in September 2021 . The royalties that have been received to date have been highly variable, as the amounts are dependent upon the monthly production, the demand of the buyers, the spot price of petroleum, etc . As such, management has determined that the revenue recognition shall be treated as variable consideration as defined in ASC 606 . Variable consideration should only be recognized to the extent that it is probable that a significant reversal of revenue will not occur when the uncertainty associated with the variable consideration is subsequently resolved . Given the fact that royalties to date have been highly variable with a great degree of uncertainty, and any attempts to estimate future revenue would likely result in a significant reversal of revenue, royalty revenue will be recognized when payments and settlement statements are received, in the period for which the petroleum was produced .
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It is at that time that any uncertainty related to royalty payments is resolved. The Company applied ASC 606 using the modified retrospective method applied to contracts not yet completed as of the date of adoption. Comprehensive Income (Loss) Comprehensive income (loss) is defined to include all changes in equity except those resulting from investments by owners and distributions to owners . The Company's items of other comprehensive income (loss) are foreign currency translation adjustments . Related Party Transactions A related party is generally defined as (i) any person who holds 10 % or more of the Company’s securities and their immediate families, (ii) the Company’s management, (iii) an entity or person who directly or indirectly controls, is controlled by or is under common control and/or management with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company . A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties . New Accounting Pronouncements In August 2020 , the FASB issued ASU 2020 - 06 , Debt - Debt with Conversion and Other Options (Subtopic 470 - 20 ) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815 - 40 ) : Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020 - 06 ”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity . This ASU ( 1 ) simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470 - 20 , Debt : Debt with Conversion and Other Options, that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock ; ( 2 ) revises the scope exception from derivative accounting in ASC 815 - 40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification ; and ( 3 ) revises the guidance in ASC 260 , Earnings Per Share, to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if - converted method . In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares . For SEC filers, excluding smaller reporting companies, ASU 2020 - 06 is effective for fiscal years beginning after December 15 , 2021 including interim periods within those fiscal years . Early adoption is permitted, but no earlier than fiscal years beginning after December 15 , 2020 . For all other entities, ASU 2020 - 06 is effective for fiscal years beginning after December 15 , 2023 , including interim periods within those fiscal years . Entities should adopt the guidance as of the beginning of the fiscal year of adoption and cannot adopt the guidance in an interim reporting period . The Company is currently evaluating the impact that ASU 2020 - 06 may have on its consolidated financial statements and related disclosures . The Company has implemented all new accounting pronouncements that are in effect . These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations . NOTE 4 . ROYALTY INTEREST Pursuant to the Purchase and Sale Agreement with an unrelated third party dated May 2019 , in which the Company sold three oil sands leases located in the southeast portion of the Peace River oil sands area, the Company has a 2 . 5 % gross overriding royalty on all petroleum substances produced the leases . For the three months ended March 31 , 2023 and 2022 , the Company earned royalties of $ 42 , 822 and $ 44 , 639 , respectively . NOTE 5 . PETROSTEAM LICENSE On March 20 , 2019 , the Company entered into an exclusive license agreement with PetroSteam LLC to obtain an exclusive right to deploy patented and field - tested proprietary technologies utilizing steam generation applied to bitumen and heavy oil recovery in the Provinces of Alberta and Saskatchewan . In exchange, the Company issued
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2 , 991 , 400 restricted common shares . In addition, the Company agreed, subject to certain qualifications and milestones being met, to purchase steam generation equipment from PetroSteam totaling $ 12 , 500 , 000 to be used on its bitumen/heavy - oil projects . In 2021 , the PetroSteam license was cancelled by both parties and the value of the license agreement was recognized as a license fee expense . NOTE 6 . DERIVATIVE LIABILITIES Derivative liabilities consist of common stock warrants with an exercise price in a different currency than the Company’s functional currency . In addition, the Company identified embedded derivatives related to a convertible promissory note issued in 2021 (see Note 9 ) . These embedded derivatives include certain conversion features . The derivative liabilities are accounted for as separate liabilities measured at their respective fair values as follows : Derivative liabilities associated with: Convertible Total Note Warrants $ 210,929 $ 170,495 $ 40,434 Balance, December 31, 2021 (195,252) (170,495) (24,757) Change in fair value of derivative liabilities (987) - (987) Foreign exchange effect on derivative liability 14,690 - 14,690 Balance, December 31, 2022 (7,956) - (7,956) Change in fair value of derivative liabilities 46 46 Foreign exchange effect on derivative liability $ 6,780 $$ - $ 6,780 Balance, March 31, 2023 The fair value of the derivative liabilities has been determined using the Black - Scholes option pricing model using the following range of assumptions: December 31, 2022 March 31, 2023 322.4% 348.7% Volatility 0.41 to 9.99 years 0.16 to 9.74 years Expected life 3.27% - 4.06% 2.86% - 3.74% Risk - free interest rate 0.00% 0.00% Dividend yield NOTE 7. OIL AND GAS PROPERTIES During the period June 2006 through January 2007 , the Company acquired the rights to multiple oil sands leases within the Peace River area of Alberta, Canada (the “Peace River Properties”) . The leases were granted by the Province of Alberta . All the leases were for a 15 - year term, required minimum annual lease payments, and granted the Company the right to explore and develop oil sands on the respective leases . On February 22 , 2016 , the Company acquired an additional 45 oil sands leases by entering into two purchase and sale agreements . The oil sands leases represented 39 , 680 hectares ( 98 , 051 acres) in the Peace River area of Alberta . One of the purchase / sale agreements was with a related party . On May 14 , 2019 , the Company sold the shallower oil sands rights on two of its oil sands lease blocks in the Cadotte East area to an unrelated third party, but retained the deeper oil sands rights, including the Debolt - Elkton formations . The Company also retained a 2 . 5 % overriding royalty on all petroleum substances produced from the shallower oil sands rights on those two lease blocks . The Company will continue to pay annual lease fees on those two oil sands lease blocks, but at a rate of 50 % , and the unrelated third party will pay the other 50 % . On three of its oil sands lease blocks in the Reno area, the Company sold 100 % of its interest to an unrelated third party and retained a 2 . 5 % overriding royalty on all petroleum substances produced from those oil sands lease blocks . On those three oil sands lease blocks, the unrelated third party has taken over 100 % of the annual lease fees .
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On June 11 , 2020 , the Company sold the shallower oil sands rights on five of its oil sands leases in the Cadotte Central area to an unrelated third party, but retained the deeper oil sands rights, including the Debolt - Elkton formations . The Company also retained a 2 . 5 % overriding royalty on all petroleum substances produced from those oil sands lease blocks . The Company will continue to pay annual lease fees on those two oil sands lease blocks, but at a rate of 50 % , and the third party will pay the other 50 % . Throughout 2020 , the Company chose to not renew their remaining oil sands leases due to the economic conditions in the Alberta heavy oil sector . All the Company’s lease interests in the Peace River area are subject to royalties payable to the government of the Province of Alberta . The royalty is calculated using a revenue - less - cost formula . In years prior to the recovery of the project’s capital investment, the royalty is 1 % of gross revenue . Once the project costs have been recovered, the royalty is the greater of 1 % of gross revenue or 25 % of net revenue . The Company completed drilling four exploratory wells during the fiscal year ended December 31 , 2007 . Since then, the Company completed several third - party technical reports on its oil sands leases including a prefeasibility study and developed an oil sands exploration program, which it was not able to execute on due to weak conditions in the heavy oil sector . NOTE 8 . ASSET RETIREMENT OBLIGATIONS During 2007 , the Company drilled four wells on its Peace River Property . Total future asset retirement obligations were estimated by management based on the Company’s working interest in its wells and facilities, estimated costs to remediate, reclaim and abandon the wells and facilities and the estimated timing of the costs to be incurred in future periods . The Company estimated the net present value of its total asset retirement obligations to be approximately $ 214 , 960 , based on an undiscounted total future liability of $ 225 , 229 (CDN $ 293 , 000 ) . In 2022 , the Company transferred its rights and interest in two of the three wells to an unrelated third party, who has assumed all reclamation obligations related to these wells . As a result, the Asset Retirement Obligation has been reduced to reflect the estimated liability for the remaining well of $ 71 , 975 . Reclamation expenses for the remaining well are expected to be incurred between 2023 and 2030 . The Company used a credit adjusted discount rate of 10 % per annum and an inflation rate of 2 % to calculate the present value of the asset retirement obligation . Accretion expense of $ 0 and $ 5 , 433 for the three months ended March 31 , 2023 and 2022 , respectively, has been recorded in the Statements of Operations and Comprehensive Income (Loss) . However, the Company is currently in the process of carrying out abandonment and remediation of its well through the federally funded Site Rehabilitation Program . As a result, the actual Asset Retirement Obligation costs on this well could be substantially lower than its current value but the actual amount cannot be reasonably estimated at this time . NOTE 9 . RELATED PARTY TRANSACTIONS Related party transactions not disclosed elsewhere in these financial statements include: Deferred Revenue - Royalty Agreement The Company has negotiated a royalty agreement with a related party by common CEO and director . In exchange for a non - refundable payment of $ 300 , 000 , the Company intends to provide a royalty stream to this related party based on the gross production of Vanadium Oxide (“Vanadium”) from the company’s the oil sands leases . For each barrel of bitumen produced from the specified oil sands until March 21 , 2039 , or upon termination of mining, whichever is earlier, the Company will pay a royalty equal to 25 grams of Vanadium per barrel of bitumen produced, multiplied by the price of Vanadium Pentoxide 98 % min in - warehouse Rotterdam published on the last business day of the month in which the gross production of bitumen occurred . The $ 300 , 000 is recorded as deferred revenue and will be recognized at such time as the Company begins to produce Vanadium . Notes payable to related party
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In December 2015 , the Company borrowed $ 6 , 553 ( $ 9 , 000 Canadian) under a note agreement with related parties . The lenders were related parties through an immediate family relationship with officers or directors of the Company and a common director . The note payable bore interest at the Bank of Canada Prime rate plus 1 % . The Company could repay the loan and outstanding interest thereon by giving notice to the lender 15 days prior to the anticipated repayment . At March 31 , 2023 , the effective interest rate on these notes payable was 7 . 70 % . The balance of note payable, including interest, to related parties at March 31 , 2022 and December 31 , 2021 was $ 8 , 736 and $ 8 , 584 , respectively . The Company recognized interest expense of $ 125 and $ 63 for the three months ended March 31 , 2023 , and 2022 , respectively, in its Statements of Operations and Comprehensive Income (Loss) . In 2021 , the Company borrowed $ 72 , 000 under a note agreement with a related party . The note payable was repaid in 2022 and bore interest at 10 % per annum . The note was convertible into restricted common shares at $ 0 . 01 per share or the most recent 30 - day volume - weighted moving average of the published share price, discounted by 40 % , whichever is higher . Due to the variability of the conversion rate, an embedded derivative was identified . The Company recorded the fair value of the derivatives as of the inception date of the convertible note, which was determined to be $ 127 , 049 . The initial fair value of the embedded debt derivative was allocated as a debt discount up to the face value of the note ( $ 72 , 000 ), with the remaining $ 55 , 049 recognized as a loss on issuance of convertible note . The debt discount was amortized until its repayment and amortization expense of $ 0 and $ 9 , 000 was recognized for the three months ended March 31 , 2023 and 2022 , respectively . The balance of the note payable is $ 0 at March 31 , 2023 and December 31 , 2022 . The Company recognized interest expense of $ 0 and $ 1 , 656 for the three months ended March 31 , 2023 and 2022 , respectively, in its Statements of Operations and Comprehensive Income (Loss) . Consulting fees Mr . Newton is the President and a member of the Board of Directors of the Company . Mr . Newton does not bill the Company for his services as President ; however, he has a service agreement with the Company . Pursuant to this agreement, the Company recognized consulting expenses of $ 59 , 586 and $ 0 for the three months ended March 31 , 2023 and 2022 , respectively . Dr . Michael Ranger is a member of the Board of Directors of the Company . Dr . Ranger does not receive compensation for his services as a member of the board ; however, he has a service agreement with the Company, including consulting time and expense reimbursement . Pursuant to this agreement, the Company recognized no consulting expenses for the three months ended March 31 , 2023 , and 2022 , respectively . NOTE 10. COMMITMENTS AND CONTINGENCIES In the ordinary course of business, we may be exposed to claims and threatened litigation, and use various methods to resolve these matters in a manner that we believe serves the best interest of our shareholders and other constituents . When a loss is probable, we disclose the amount of probable loss, or disclose a range of reasonably possible losses if they are material and we are able to estimate such a range . If we cannot provide an estimate, we explain the factors that prevent us from doing so . We believe the recorded reserves in our consolidated financial statements are adequate in light of the probable and estimable liabilities . We do not presently believe that any claims or litigation will be material to our results of operations, cash flows, or financial condition . Environmental Matters The Company is engaged in oil and gas exploration and may become subject to certain liabilities as they relate to environmental cleanup of sites or other environmental restoration procedures as they relate to the exploration of oil and gas . Should it be determined that a liability exists with respect to any environmental clean - up or restoration, the liability to cure such a violation could fall upon the Company . No claim has been made, nor is the Company aware of any liability, which it may have, as it relates to any environmental clean - up, restoration or the violation of any rules or regulations relating thereto . Liabilities for expenditures are recorded when environmental assessment and/or remediation is probable, and the costs can be reasonably estimated . NOTE 11. SUBSEQUENT EVENTS
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In accordance with SFAS 165 (ASC 855 - 10 ) management has performed an evaluation of subsequent events through the date that the financial statements were available to be issued and has determined that it does not have any material subsequent events to disclose in these financial statements .
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Exhibit 99.26
Strata Power Corporation Interim MD&A – Quarterly Highlights For the Three Months ended March 31, 2023 Management’s Discussion and Analysis of Financial Condition and Results of Operations Management’s Discussion and Analysis of Financial Condition ("MD&A") and Results of Operations should be read in conjunction with the accompanying unaudited financial statements. The financial statements are presented in United States dollars and have been prepared in accordance with accounting principles generally accepted in the United States, referred to as US GAAP. Certain statements contained in the MD&A constitute forward - looking statements. Such forward - looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward - looking statements. Readers are cautioned not to place undue reliance on these forward - looking statements which speak only as of the date the financial statements were made and readers are advised to consider such forward - looking statements in light of the risks set forth both below and in the Company’s most recent annual report. RESULTS OF OPERATIONS Three months ended March 31, 2023 compared to three months ended March 31, 2022. For the three months ended March 31, 2023, the Company had a net loss from operations of $36,894 compared to a net income of $98,622 for the three months ended March 31, 2021, a change of $135,516. The primary reasons for the decreased net income are an increase in consulting expense and the change in the fair value of derivative liabilities. For the three months ended March 31, 2023, the Company recorded a gain in the change in fair value of derivative liability of $7,931. This compares to a gain recognized for the three months ended March 31, 2021 of $83,604. This item is a non - cash item and was recorded in accordance with ASC 850 - 40 - 15. This guidance requires entities to evaluate whether an equity - linked financial instrument (or embedded feature) is indexed to its own stock by assessing the instrument’s contingent exercise provisions and settlement provisions. Instruments not indexed to their own stock fail to meet the scope exception of Accounting for Derivative Instruments and Hedging Activities, ASC 815 - 10 - 15 - 74(a), and should be classified as a liability and marked - to - market. REVENUES Pursuant to the Purchase and Sale Agreement with an unrelated third party, the Company has a 2 . 5 % gross overriding royalty on all petroleum substances produced from three oil sands leases located in the southeast portion of the Peace River oil sands area, that were sold in May, 2019 . For the three months ended March 31 , 2023 and 2022 , the Company earned royalties of $ 42 , 822 and $ 44 , 639 , respectively . DISCONTINUED OPERATIONS There was no discontinued operations activity in 2023 or 2022. INTEREST AND OTHER INCOME (EXPENSE) Included in other income (expense) for the three months ended March 31 2023 is a foreign exchange gain of $657. This compares to a foreign exchange loss of $1,895 for the three months ended March 31, 2022.
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Liquidity and Capital Resources As of March 31 , 2023 , we had $ 56 , 884 in cash, a decrease of $ 24 , 021 from December 31 , 2022 . Management estimates that the Company will require approximately $ 115 , 000 to fund planned operations for the next twelve months . Therefore, current cash on hand is not sufficient to fund planned operations for 2023 . Our policy is to pay all operational expenses when due, provided that the vendor, in the normal course of business, has satisfied all necessary conditions for payment . Net cash used in operating activities during the three months ended March 31 , 2023 was $ 22 , 794 , compared to net cash provided by operating activities of $ 21 , 388 for the same period in the prior year . The decrease in cash provided by operating activities was the increased consulting expenses . Cash used in investing activities for the three months ended March 31 , 2022 and 2021 was $ 1 , 085 and $ 127 , respectively, resulting primarily from the change in the reclamation deposits . Net cash used in financing activities for the three months ended March 31 , 2023 and 2022 was $ 0 and $ 13 , 376 , respectively . For March 31 , 2022 , the financing activities consisted of the repayment of convertible debt . We are an exploration stage company with limited operating history, which raises substantial doubt as to our ability to successfully develop profitable business operations and makes an investment in our common shares very risky . We have no long - term debt . We believe that our available cash may not be sufficient to fund our working capital requirements to maintain, explore and develop our property interests for the next twelve months . If capital is not available to fund future operations, we will not be able to pursue our business plan and operations would come to a halt and our common shares could be nearly worthless . We will require substantial additional capital to participate in the development of our properties which have not had any production of oil or natural gas as well as for acquisition and/or development of other producing properties . Because we currently do not have any cash flow from operations, we need to raise additional capital, which may be in the form of loans from current shareholders and/or from private equity offerings . Our ability to access capital will depend on our success in participating in properties that are successful in exploring for and producing oil and gas at profitable prices . It will also be dependent upon the status of the capital markets at the time such capital is sought . Should sufficient capital not be available, the development of our business plan could be delayed and, accordingly, the implementation of our business strategy would be adversely affected . In such event it would not be likely that investors would obtain a profitable return on their investments or a return of their investments at all . We anticipate that we will incur the following expenditures through our current fiscal year : $15,000 in connection with property lease payments and follow up analysis on the Company’s oil sands properties $175,000 for operating expenses, including working capital, consulting fees, general and administrative, professional, legal and accounting expenses. In 2023 , our capital requirements will mostly be associated with the maintenance of our lease payments to the Crown and general and administrative expenses . Going forward we expect the short - term and long - term funding of our oil and gas operations to be financed primarily through equity issuance in the form of private placements and the exercise of warrants . In addition, we continue to work with potential partners to discuss funding arrangements which would facilitate furtherance of our property interests . We cannot be certain that any required additional financing will be available on terms favorable to us as the risky nature of this enterprise and lack of tangible assets places debt financing beyond the credit - worthiness required by most banks or typical investors of corporate debt until such time as the economic viability of our oil sands properties can be demonstrated . If additional funds are raised by the issuance of our equity securities, existing stockholders will experience dilution of their ownership interest . If adequate funds are not available or not available on acceptable terms, we may be unable to continue, fund expansion, pursue further development or respond to competitive pressures . Our financing prospects must be considered in light of the risks, expenses and difficulties frequently encountered in establishing a business in the oil and natural gas industries . We have yet to generate substantial revenues from
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operations . There is nothing at this time on which to base an assumption that our business operations will prove to be successful or that we will be able to operate profitably . Our future operating results will depend on many factors, including : our ability to raise adequate working capital success of our exploration and development demand for natural gas and oil the level of our competition our ability to attract and maintain key management and employees and our ability to efficiently explore, develop and produce sufficient quantities of marketable natural gas or oil in a highly competitive and speculative environment while maintaining quality and controlling costs Volatility of oil and gas prices and markets could make it more difficult for us to achieve profitability and less likely for investors in our common shares to receive a return on their investment . Our ability to achieve profitability is substantially dependent on prevailing prices for natural gas and oil . The amounts and price obtainable for any oil and gas production that we achieve will be affected by market factors beyond our control . If these factors are not favorable over time to our financial interests, it is likely that owners of our common shares could lose their investments . Such factors include : worldwide or regional demand for energy, which is affected by economic conditions the domestic and foreign supply of natural gas and oil weather conditions domestic and foreign governmental regulations political conditions in natural gas and oil producing regions the ability of members of the Organization of Petroleum Exporting Countries to agree upon and maintain oil prices and production levels the price and availability of other fuels. Additionally, due to worldwide economic uncertainty, the availability and cost of funds for production and other expenses have become increasingly difficult, if not impossible, to project . These changes and events may materially affect our financial performance .
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Exhibit 99.27
FORM 52 - 109F2 CERTIFICATION OF INTERIM FILINGS - FULL CERTIFICATE I, Trevor Newton, Chief Executive Officer of Strata Power Corporation Inc., certify the following: 1. Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Strata Power Corporation Inc. (the “issuer”) for the interim period ended March 31, 2023. 2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings. 3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings. 4. Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52 - 109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer. 5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings a. designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that i. material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and ii. information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and b. designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP. 1. Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. 2. N/A 3. N/A 6 . Reporting changes in ICFR : The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on January 1 , 2023 and ended on March 31 , 2023 that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR . 1/2
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Date: May 15, 2023 (signed) "Trevor Newton" Trevor Newton Chief Executive Officer
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Exhibit 99.28
FORM 52 - 109F2 CERTIFICATION OF INTERIM FILINGS - FULL CERTIFICATE I, Trevor Newton, Chief Financial Officer of Strata Power Corporation, certify the following: 1. Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Strata Power Corporation (the “issuer”) for the interim period ended March 31, 2023. 2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings. 3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings. 4. Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52 - 109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer. 5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings a. designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that i. material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and ii. information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and b. designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP. 1. Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. 2. N/A 3. N/A 6 . Reporting changes in ICFR : The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on January 1 , 2023 and ended on March 31 , 2023 that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR . 1/2
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Date: May 15, 2023 (signed) "Trevor Newton" Trevor Newton Chief Financial Officer
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Exhibit 99.29
Strata Power Corporation (An Exploration Stage Company) FINANCIAL STATEMENTS For the Six Months ended June 30, 2023 and 2022 (unaudited) (Stated in US Dollars)
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STRATA POWER CORPORATION BALANCE SHEETS (Expressed in US Dollars) (Unaudited) June 30, 2023 December 31, 2022 ASSETS Current assets Cash $ 64,237 $ 80,905 GST receivables 14,345 9,330 Royalty receivables 21,241 39,578 Prepaid expenses 12,092 10,697 Total current assets 111,915 140,510 Reclamation deposits 100,214 95,968 Total assets $ 212,129 $ 236,478 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities Accounts payable and accrued liabilities $ 33,356 $ 34,264 Accounts payable and accrued liabilities - related party 18,047 15,956 Notes payable, net of debt discount 9,053 8,584 Derivative liabilities 8,854 14,690 Total current liabilities 69,310 73,494 Deferred revenue - royalty agreement (Note 9) 300,000 300,000 Asset retirement obligation 73,736 71,975 Total long - term liabilities 373,736 371,975 Total liabilities 443,046 445,469 Commitments and Contingencies – – Stockholders' equity (deficit) Preferred stock: no par value, unlimited shares authorized and none issued – – Common stock: no par value, unlimited shares authorized; 20,085,119 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively – – Additional paid - in capital 23,404,083 23,404,083 Common shares to be issued 5,000 5,000 Accumulated deficit (23,236,869) (23,214,872 ) Accumulated other comprehensive income (loss) (403,131) (403,202 ) (208,991 ) $ 236,478 Total stockholders' equity (deficit) (230,917 ) Total liabilities and stockholders' equity (deficit) $ 212,129 The accompanying notes are an integral part of these financial statements.
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STRATA POWER CORPORATION STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Expressed in US Dollars) (Unaudited) For the Six Months Ended June 30, For the Three Months Ended June 30, 2022 $229,691 2023 $98,460 2022 $185,052 2023 $55,638 Operating Income: Royalty income 30,580 19,240 21,916 - Operating Expenses: Professional fees 395 363 270 225 Office and sundry - 98,597 - 35,200 Consulting fees (375) 1,774 525 600 Transfer agent fees 10,711 - 5,278 - Accretion expense 9,962 10,686 6,148 5,458 Oil & gas properties expense $51.273 130,660 $34,137 41,483 Total operating expenses 378 1,858 251 774 Other income (expense): Interest income (51,000) - (42,000) - Amortization of debt discount (2,689) (340) (971) (129) Interest expense, related party 875 2,684 2,769 2,027 Foreign exchange gain (loss) 192,919 6,001 109,325 (1,930) Change in fair value of derivative liability $140,493 10,203 $69,374 742 Total other income (expense) 318,911 (21,997) 220,289 14,897 Net income (loss) 736 71 1,111 187 Other comprehensive income (loss) Foreign currency translation adjustment $319,647 $(21,926) $221,400 $15,084 Comprehensive income (loss) $0.02 $0.00 $0.01 $0.00 Income per common share Basic $0.02 $0.00 $0.01 $0.00 Diluted Weighted average number of shares outstanding: 20,085,119 20,085,119 20,085,119 20,085,119 Basic 20,085,119 20,085,119 20,085,119 20,085,119 Diluted The accompanying notes are an integral part of these financial statements.
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STRATA POWER CORPORATION STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) (Expressed in US Dollars) (Unaudited) Common Stock Additional Paid - in Shares Capital Common Shares to be Issued Accumulated Accumulated Other Comprehensive Total Stockholders' Deficit Income (Loss) Equity (Deficit) $ (590,754) $ (405,930) $ (23,593,907) 5,000 $ 23,404,083 $ 20,085,119 Balance March 31, 2022 221,400 1,111 220,289 – – – Net income and comprehensive income $ (369,354) $ (404,819) $ (23,373,618) 5,000 $ 23,404,083 $ 20,085,119 Balance June 30, 2022 $ (689,001) $ (405,555) $ (23,692,529) 5,000 $ 23,404,083 $ 20,085,119 Balance December 31, 2021 319,647 736 318,911 – – – Net income and comprehensive income $ (369,354) $ (404,819) $ (23,373,618) 5,000 $ 23,404,083 $ 20,085,119 Balance June 30, 2022 $ (246,001) $ (403,318) $ (23,251,766) 5,000 $ 23,404,083 $ 20,085,119 Balance March 31, 2023 15,084 187 14,897 – – – Net income and comprehensive income $ (230,917) $ (403,131) $ (23,236,869) 5,000 $ 23,404,083 $ 20,085,119 Balance June 30, 2023 (208,991) $ (403,202) $ (23,214,872) $ 5,000 23,404,083 $ $ 20,085,119 Balance December 31, 2022 (21,926) 71 (21,997) – – – Net loss and comprehensive income (230,917) $ (403,131) $ (23,236,869) $ 5,000 23,404,083 $ $ 20,085,119 Balance June 30, 2023 The accompanying notes are an integral part of these financial statements.
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STRATA POWER CORPORATION STATEMENTS OF CASH FLOWS (Expressed in US Dollars) (Unaudited) For the six months ending June 30, 2022 2023 Cash flows from operating activities: $ 318,911 $ (21,997) Net income (loss) Adjustments to reconcile net loss to net cash used in operating activities 2,689 254 Accrued interest 10,711 - Accretion expense 51,000 - Amortization of debt discount (192,930) (6,001) Change in fair value of derivative liability Change in assets and liabilities 48 (5,015) GST receivable (58,552) 18,337 Royalty receivable (9,003) (1,395) Prepaid expenses 14,507 (908) Accounts payable (11,523) 2,091 Accounts payable – related party 125,858 (14,634) Net cash provided by (used in) operating activities Cash flows from investing activities: (378) (1,858) Reclamation Deposits (378) (1,858) Net provided used in investing activities Cash flows from financing activities: 700 - Proceeds from issuance of convertible note (78,909) - Repayment of convertible note (78,209) - Net cash used in financing activities (2,373) (176) Foreign exchange effect on cash 44,898 (16,668) Net increase (decrease) in cash 7,696 80,905 Cash, beginning balance $ 52,594 $ 64,237 Cash, ending balance Supplemental disclosure of cash paid for: $ – $ – Interest $ – $ – Income taxes The accompanying notes are an integral part of these financial statements.
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STRATA POWER CORPORATION Notes to the Financial Statements NOTE 1. NATURE OF BUSINESS Strata Power Corporation (the “Company”) is currently engaged in the acquisition, exploration and, if warranted, feasible development of heavy oil projects in the Peace River oil sands region in Northern Alberta, Canada . The Company was incorporated under the laws of the State of Nevada on November 18 , 1998 and commenced operations in January 1999 . The Company completed its initial public offering in February 2000 . On April 22 , 2003 , the Company filed a registration statement to effect a continuation of our corporate jurisdiction from the State of Nevada to Canada on Form S - 4 with the United States Securities and Exchange Commission (SEC) . The Form S - 4 was declared effective on or about July 7 , 2004 . The Company is presently incorporated under the Canada Business Corporations Act . On December 27 , 2018 , the Company filed a Certificate of Amendment with Corporations Canada changing its name from Strata Oil & Gas Inc . to Strata Power Corporation . As of June 30 , 2023 , the Company has a 50 % interest in 7 oil sands leases, totaling 8 , 704 hectares, all located in the Peace River oil sands area . In addition, the Company has a royalty interest in 10 oil sands leases and owns 1 non - producing well . NOTE 2. ABILITY TO CONTINUE AS A GOING CONCERN As shown in the accompanying financial statements, the Company has realized minimal revenue from its present operations . During the six months ended June 30 , 2023 , the Company had a net loss of $ 21 , 997 , primarily due to consulting fees and professional fees . The Company had cash flows used in operations of $ 14 , 634 and it is possible that the Company will incur negative operating cash flows in the foreseeable future . The Company has an accumulated deficit of $ 23 , 236 , 869 at June 30 , 2023 . These conditions raise substantial doubt regarding the Company’s ability to continue as a going concern . The financial statements have been prepared on a going concern basis, which contemplates realization of assets and liquidation of liabilities in the ordinary course of business . The Company's ability to continue as a going concern is dependent on its ability to develop its oil and gas properties and ultimately achieve profitable operations, and to generate sufficient cash flow from financing and operations to meet its obligations as they become payable . The Company expects that it will need approximately $ 200 , 000 to fund its operations during the next twelve months, which will include minimum annual property lease payments, expected exploration expenditures for permitting and drilling, as well as operating expenses . Management has plans to seek additional capital through a private placement of its common stock . Although there are no assurances that management’s plans will be realized, management believes that the Company will be able obtain sufficient capital to continue operations in the next 12 months . Accordingly, no adjustment relating to the recoverability and classification of recorded asset amounts and the classification of liabilities has been made to the accompanying financial statements in anticipation of the Company not being able to continue as a going concern . NOTE 3. SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) . Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate so as to make the information presented not misleading .
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Risks and Uncertainties The Company is subject to additional risks and uncertainties due to the COVID - 19 pandemic, although the extent of the impact on the Company’s business is uncertain and difficult to predict. The Company considered the impact of COVID - 19 on the assumptions and estimates used and determined that there has been no material impact on the Company’s year - to - date results of operations. The Company cannot reasonably estimate with any degree of certainty the future impact COVID - 19 may have on the Company’s results of operations, financial position and liquidity. Volatility of oil prices could make it more difficult for the Company to achieve profitability, as the Company’s royalty revenues are substantially dependent on prevailing prices for oil. The amounts and price obtainable for any oil production will be affected by market factors beyond the Company’s control. Management’s Estimates and Assumptions The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the balance sheet date, and revenues and expenses for the period then ended . Management believes that all applicable estimates and adjustments are appropriate . Actual results could differ significantly from those estimates . Concentration of Revenue For the six months ended June 30 , 2023 and 2022 , the Company had a concentration of revenue related to a single royalty contract, accounting for 100 % of total revenue . The loss of this contract would have a material adverse effect on future operating results . As of June 30 , 2023 and December 31 , 2022 , 100 % of royalty receivables related to this contract . Oil and Gas Property Payments and Exploration Costs All costs incurred in the acquisition, exploration and development of natural gas and oil interests are capitalized as incurred . Capitalized costs associated with proven properties are amortized using the units - of - production method over the estimated life of the probable reserve . Capitalized costs associated with unproved properties are excluded from the amortization calculations and assessed, at least annually, to determine if impairment has occurred, until such time as those costs are proven . Impairment amounts are immediately expensed and no costs have been capitalized through June 30 , 2023 . Cash and Cash Equivalents The Company considers all highly liquid investments purchased with a maturity of 90 days or less to be cash equivalents . The Company maintains cash and cash equivalent balances with financial institutions that may exceed federally insured limits . There were no cash equivalent balances for the years ended June 30 , 2023 or December 31 , 2022 . GST Receivables Goods and Services Tax (GST) receivables are presented net of an allowance for doubtful accounts . Receivables consist of goods and services input tax credits . The allowance for doubtful accounts on GST receivables was $ nil at June 30 , 2023 and December 31 , 2022 . Impairment of Long - lived Assets In accordance with ASC 360 , Property, Plant and Equipment, long lived assets such as equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable . Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset . If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying
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amount of the asset exceeds the fair value of the asset . Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount of fair value less costs to sell and are no longer depreciated . The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet . Asset Retirement Obligations In accordance with ASC 410 , Asset Retirement and Environmental Obligations, the fair value of an asset retirement cost, and corresponding liability, should be recorded as part of the cost of the related long - lived asset and subsequently allocated to expense using a systematic and rational method . The Company has recorded an asset retirement obligation at June 30 , 2023 and December 31 , 2022 (Note 8 ) to reflect its legal obligations related to future abandonment of its oil and gas interests using estimated expected cash flow associated with the obligation and discounting the amount using a credit - adjusted, risk - free interest rate . At least annually, the Company will reassess the obligation to determine whether a change in any estimated obligation is necessary . The Company will evaluate whether there are indicators that suggest the estimated cash flows underlying the obligation have materially changed . Should those indicators suggest the estimated obligation has materially changed the Company will accordingly update its assessment . The liability accretes until the Company settles the obligation . Income Taxes The Company follows the asset and liability method of accounting for income taxes whereby deferred tax assets and liabilities are recognized for the future tax consequences of differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases . If it is determined that the realization of the future tax benefit is not more likely than not, the Company establishes a valuation allowance . Foreign Exchange Translation The Company's functional currency is the Canadian dollar but reports its financial statements in US dollars . The Company translates its Canadian dollar balances to US dollars in the following manner : Assets and liabilities have been translated using the rate of exchange at the balance sheet date . Equity transactions and results of operations have been translated at historical rates . Translation gains or losses resulting from the changes in the exchange rates are accumulated as other comprehensive income or loss in a separate component of stockholders' equity . All amounts included in the accompanying financial statements and footnotes are stated in U.S. dollars. Derivative Financial Instruments The Company reviews the terms of its equity instruments and other financing arrangements to determine whether there are embedded derivative instruments that are required to be accounted for separately as a derivative financial instrument . Also, in connection with the issuance of financing instruments, the Company has issued freestanding warrants that are accounted for as derivative instrument liabilities because they are exercisable in a currency other than the functional currency of the Company and thus do not meet the “fixed - for - fixed” criteria of ASC 815 - 40 - 15 . The warrants are exercisable in United States dollars and the Company’s functional currency is the Canadian dollar . Derivative financial instruments are initially measured at their fair value . For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re - valued at each reporting date, with changes in the fair value reported as charges or credits to income . For derivative financial instruments, the Company uses the Black - Scholes option pricing model to value the derivative instruments . Any exercise or cancellation of an equity instrument which meets the classification of a derivative financial instrument is trued - up to fair value at that date and the fair value of the exercised instrument is then reclassified from liability to additional paid in capital . The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period . If reclassification is required, the fair value of the derivative instrument, as of the determination date, is reclassified . Any previous charges or credits to income for changes in the
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fair value of the derivative instrument are not reversed . Derivative instrument liabilities are classified in the balance sheet as current or non - current based on whether or not net - cash settlement of the derivative instrument could be required within 12 months of the balance sheet date . Stock Based Compensation In accordance with ASC 718 , “Compensation – Stock Compensation” (“ASC 718 ”), which was adopted as of January 1 , 2019 , the Company measures all employee stock - based compensation awards using a fair value method on the date of grant and recognizes such expense in its financial statements over the requisite service period . The Company uses the Black - Scholes pricing model to determine the fair value of stock - based compensation awards on the date of grant . The Black - Scholes pricing model requires management to make assumptions regarding option lives, expected volatility, and risk - free interest rates . The Company accounts for non - employee stock - based awards in accordance with the provision of ASC 505 , “Equity Based Payments to Non - Employees” (“ASC 505 ”), which requires that such equity instruments are recorded at their fair value on the measurement date . The measurement of stock - based compensation is subject to periodic adjustment as the underlying equity instruments vest . The Company uses the Black - Scholes pricing model to determine the fair value of stock - based compensation awards . The Black - Scholes pricing model requires management to make assumptions regarding option lives, expected volatility, and risk - free interest rates . The Company uses historical data to estimate option exercise, forfeiture and employee termination within the valuation model . For non - employees, the expected term of the options approximates the full term of the options . The risk - free interest rate is based on a treasury instrument whose term is consistent with the expected term of the stock options . The Company has not paid and does not anticipate paying dividends on its common stock ; therefore, the expected dividend yield is assumed to be zero . In addition, accounting standard requires companies to utilize an estimated forfeiture rate when calculating the expense for the reporting period . Based on its best estimate, management applied the estimated forfeiture rate of nil in determining the expense recorded in the accompanying Statements of Operations and Comprehensive Income (Loss) . Expected volatilities are calculated using the historical volatility of the Company’s stock . When applicable, the Company will use historical data to estimate option exercise, forfeiture and employees’ termination within the valuation model . For non - employees, the expected term of the options approximates the full term of the options . Earnings (Loss) Per Share of Common Stock Basic earnings (loss) per share of common stock is computed by dividing net income (loss) available to common shareholders by the weighted - average number of common shares outstanding for the period . Diluted earnings per share of common stock reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company . Dilutive potential common shares are calculated in accordance with the treasury stock method, which assumes that proceeds from the exercise of all warrants and options are used to repurchase common stock at market value . The number of shares remaining after the proceeds are exhausted represents the potentially dilutive effect of the securities . For the six months ended June 30 , 2023 and 2022 , all of the outstanding options and warrants had an exercise price above the average stock price for year - end period . Accordingly, all of the potentially dilutive shares were excluded from the computation of diluted shares outstanding as they would have had an anti - dilutive impact on the Company’s income (loss) from continuing operations . Fair Value of Financial Instruments The book values of GST receivables, notes receivable, accounts payable and accrued expenses approximate their respective fair values due to the short - term nature of these instruments . The fair value hierarchy under GAAP distinguishes between assumptions based on market data (observable inputs) and an entity’s own assumptions (unobservable inputs) . The hierarchy consists of three levels : Level one - Quoted market prices in active markets for identical assets or liabilities; Level two - Inputs other than level one inputs that are either directly or indirectly observable; and
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Level three - Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use. Determining which category an asset or liability falls within the hierarchy requires significant judgment . Hierarchy disclosures are evaluated at each balance sheet date . Liabilities measured at fair value are summarized as follows as of : Fair Value Measurement at June 30, 2023 Using Fair Value Measurement at December 31, 2022 Using Total Level 3 Total Level 3 $ 14,690 $ 14,690 $ 8,854 $ 8,854 Derivative liabilities 71,975 71,975 73,736 73,736 Asset Retirement Obligation (see Note 8) In 2021 , the Company issued a convertible note in which the conversion rate was variable . As a result, a derivative liability was recorded (see Note 9 ) . In addition, the Company has warrants with a strike price currency different than the functional currency as has recorded a derivative liability associated with that . The Company measures and reports the fair value liability for these derivative liabilities on a recurring basis . The fair value liabilities have been recorded as determined utilizing the Black - Scholes option pricing model . A slight change in an unobservable input like historical volatility could have a significant impact on the fair value measurement of the derivative liabilities . See Note 6 “Derivative Liabilities” for further discussion of the inputs used in determining the fair value . Revenue Recognition The Company has adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 606 , Revenue from Contracts with Customers (“ASC 606 ”), which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers . The Company receives a royalty from an unrelated party of 2 . 5 % on all petroleum substances produced from three oil sands leases located in the southeast portion of the Peace River oil sands area that were sold in May 2019 (see Note 4 ) and recognizes revenue at the time petroleum is sold . The Company’s revenue recognition policy standards include the following elements under ASU 606 : 1. Identify the contract with the customer . The contract is documented in the Purchase and Sale Agreement dated 5 / 14 / 2019 . 2. Identify the performance obligations in the contract . The performance obligation in the contract required Strata to relinquish its interest in three oil sands located in the southeast portion of the Peace River oil sands area . 3. Determine the transaction price . The transaction price was C $ 60 , 000 in exchange for 2 . 5 % gross overriding royalty of the petroleum substances produced from the three oil sands leases, in exchange for a 100 % interest in the three oil sands leases . 4. Allocate the transaction price to the performance obligations in the contract . The Company only has one performance obligation, the transfer of the rights to the three oil sands leases, which has already been fulfilled . 5. Recognize revenue when (or as) the entity satisfies a performance obligation . The C $ 60 , 000 was recognized as a sale of the shallower oil sands rights in 2019 , resulting in a gain from the disposition of the leases . The 2 . 5 % petroleum royalties are recognized as revenue in the period that the other party produces and sells petroleum from the oil sands leases, which began in September 2021 . The royalties that have been received to date have been highly variable, as the amounts are dependent upon the monthly production, the demand of the buyers, the spot price of petroleum, etc . As such, management has determined that the revenue recognition shall be treated as variable consideration as defined in ASC 606 . Variable consideration should only be recognized to the extent that it is probable that a significant reversal of revenue will not occur when the uncertainty associated with the variable consideration is subsequently resolved . Given the fact that royalties to date have been highly variable with a great degree of uncertainty, and any attempts to estimate future revenue would likely result in a significant reversal of revenue, royalty revenue will be recognized when payments and settlement statements are received, in the period for which the petroleum was produced .
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It is at that time that any uncertainty related to royalty payments is resolved. The Company applied ASC 606 using the modified retrospective method applied to contracts not yet completed as of the date of adoption. Comprehensive Income (Loss) Comprehensive income (loss) is defined to include all changes in equity except those resulting from investments by owners and distributions to owners . The Company's items of other comprehensive income (loss) are foreign currency translation adjustments . Related Party Transactions A related party is generally defined as (i) any person who holds 10 % or more of the Company’s securities and their immediate families, (ii) the Company’s management, (iii) an entity or person who directly or indirectly controls, is controlled by or is under common control and/or management with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company . A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties . New Accounting Pronouncements In August 2020 , the FASB issued ASU 2020 - 06 , Debt - Debt with Conversion and Other Options (Subtopic 470 - 20 ) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815 - 40 ) : Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020 - 06 ”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity . This ASU ( 1 ) simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470 - 20 , Debt : Debt with Conversion and Other Options, that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock ; ( 2 ) revises the scope exception from derivative accounting in ASC 815 - 40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification ; and ( 3 ) revises the guidance in ASC 260 , Earnings Per Share, to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if - converted method . In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares . For SEC filers, excluding smaller reporting companies, ASU 2020 - 06 is effective for fiscal years beginning after December 15 , 2021 including interim periods within those fiscal years . Early adoption is permitted, but no earlier than fiscal years beginning after December 15 , 2020 . For all other entities, ASU 2020 - 06 is effective for fiscal years beginning after December 15 , 2023 , including interim periods within those fiscal years . Entities should adopt the guidance as of the beginning of the fiscal year of adoption and cannot adopt the guidance in an interim reporting period . The Company is currently evaluating the impact that ASU 2020 - 06 may have on its consolidated financial statements and related disclosures . The Company has implemented all new accounting pronouncements that are in effect . These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations . NOTE 4 . ROYALTY INTEREST Pursuant to the Purchase and Sale Agreement with an unrelated third party dated May 2019 , in which the Company sold three oil sands leases located in the southeast portion of the Peace River oil sands area, the Company has a 2 . 5 % gross overriding royalty on all petroleum substances produced from the leases . For the six months ended June 30 , 2023 and 2022 , the Company earned royalties of $ 98 , 460 and $ 229 , 691 , respectively . NOTE 5 . PETROSTEAM LICENSE On March 20 , 2019 , the Company entered into an exclusive license agreement with PetroSteam LLC to obtain an exclusive right to deploy patented and field - tested proprietary technologies utilizing steam generation applied to bitumen and heavy oil recovery in the Provinces of Alberta and Saskatchewan . In exchange, the Company issued
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2 , 991 , 400 restricted common shares . In addition, the Company agreed, subject to certain qualifications and milestones being met, to purchase steam generation equipment from PetroSteam totaling $ 12 , 500 , 000 to be used on its bitumen/heavy - oil projects . In 2021 , the PetroSteam license was cancelled by both parties and the value of the license agreement was recognized as a license fee expense . NOTE 6 . DERIVATIVE LIABILITIES Derivative liabilities consist of common stock warrants with an exercise price in a different currency than the Company’s functional currency . In addition, the Company identified embedded derivatives related to a convertible promissory note issued in 2021 (see Note 9 ) . These embedded derivatives include certain conversion features . The derivative liabilities are accounted for as separate liabilities measured at their respective fair values as follows : Derivative liabilities associated with: Convertible Total Note Warrants $ 210,929 $ 170,495 $ 40,434 Balance, December 31, 2021 (195,252) (170,495) (24,757) Change in fair value of derivative liabilities (987) - (987) Foreign exchange effect on derivative liability 14,690 - 14,690 Balance, December 31, 2022 (6,026)) - (6,026) Change in fair value of derivative liabilities 190 - 190 Foreign exchange effect on derivative liability $ 8,854 $$ - $ 8,854 Balance, June 30, 2023 The fair value of the derivative liabilities has been determined using the Black - Scholes option pricing model using the following range of assumptions: December 31, 2022 June 30, 2023 322.4% 371.9% Volatility 0.41 to 9.99 years 9.11 to 9.92 years Expected life 3.27% - 4.06% 3.26% - 4.58% Risk - free interest rate 0.00% 0.00% Dividend yield NOTE 7. OIL AND GAS PROPERTIES During the period June 2006 through January 2007 , the Company acquired the rights to multiple oil sands leases within the Peace River area of Alberta, Canada (the “Peace River Properties”) . The leases were granted by the Province of Alberta . All the leases were for a 15 - year term, required minimum annual lease payments, and granted the Company the right to explore and develop oil sands on the respective leases . On February 22 , 2016 , the Company acquired an additional 45 oil sands leases by entering into two purchase and sale agreements . The oil sands leases represented 39 , 680 hectares ( 98 , 051 acres) in the Peace River area of Alberta . One of the purchase / sale agreements was with a related party . On May 14 , 2019 , the Company sold the shallower oil sands rights on two of its oil sands lease blocks in the Cadotte East area to an unrelated third party, but retained the deeper oil sands rights, including the Debolt - Elkton formations . The Company also retained a 2 . 5 % overriding royalty on all petroleum substances produced from the shallower oil sands rights on those two lease blocks . The Company will continue to pay annual lease fees on those two oil sands lease blocks, but at a rate of 50 % , and the unrelated third party will pay the other 50 % . On three of its oil sands lease blocks in the Reno area, the Company sold 100 % of its interest to an unrelated third party and retained a 2 . 5 % overriding royalty on all petroleum substances produced from those oil sands lease blocks . On those three oil sands lease blocks, the unrelated third party has taken over 100 % of the annual lease fees .
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On June 11 , 2020 , the Company sold the shallower oil sands rights on five of its oil sands leases in the Cadotte Central area to an unrelated third party, but retained the deeper oil sands rights, including the Debolt - Elkton formations . The Company also retained a 2 . 5 % overriding royalty on all petroleum substances produced from those oil sands lease blocks . The Company will continue to pay annual lease fees on those two oil sands lease blocks, but at a rate of 50 % , and the third party will pay the other 50 % . Throughout 2020 , the Company chose to not renew their remaining oil sands leases due to the economic conditions in the Alberta heavy oil sector . All the Company’s lease interests in the Peace River area are subject to royalties payable to the government of the Province of Alberta . The royalty is calculated using a revenue - less - cost formula . In years prior to the recovery of the project’s capital investment, the royalty is 1 % of gross revenue . Once the project costs have been recovered, the royalty is the greater of 1 % of gross revenue or 25 % of net revenue . The Company completed drilling four exploratory wells during the fiscal year ended December 31 , 2007 . Since then, the Company completed several third - party technical reports on its oil sands leases including a prefeasibility study and developed an oil sands exploration program, which it was not able to execute on due to weak conditions in the heavy oil sector . NOTE 8 . ASSET RETIREMENT OBLIGATIONS During 2007 , the Company drilled four wells on its Peace River Property . Total future asset retirement obligations were estimated by management based on the Company’s working interest in its wells and facilities, estimated costs to remediate, reclaim and abandon the wells and facilities and the estimated timing of the costs to be incurred in future periods . The Company estimated the net present value of its total asset retirement obligations to be approximately $ 214 , 960 , based on an undiscounted total future liability of $ 225 , 229 (CDN $ 293 , 000 ) . In 2022 , the Company transferred its rights and interest in two of the three wells to an unrelated third party, who has assumed all reclamation obligations related to these wells . As a result, the Asset Retirement Obligation has been reduced to reflect the estimated liability for the remaining well of $ 73 , 736 . Reclamation expenses for the remaining well are expected to be incurred between 2023 and 2030 . The Company used a credit adjusted discount rate of 10 % per annum and an inflation rate of 2 % to calculate the present value of the asset retirement obligation . Accretion expense of $ 0 and $ 10 , 711 for the six months ended June 30 , 2023 and 2022 , respectively, has been recorded in the Statements of Operations and Comprehensive Income (Loss) . However, the Company is currently in the process of carrying out abandonment and remediation of its well through the federally funded Site Rehabilitation Program . As a result, the actual Asset Retirement Obligation costs on this well could be substantially lower than its current value but the actual amount cannot be reasonably estimated at this time . NOTE 9 . RELATED PARTY TRANSACTIONS Related party transactions not disclosed elsewhere in these financial statements include: Deferred Revenue - Royalty Agreement The Company has negotiated a royalty agreement with a related party by common CEO and director . In exchange for a non - refundable payment of $ 300 , 000 , the Company intends to provide a royalty stream to this related party based on the gross production of Vanadium Oxide (“Vanadium”) from the company’s oil sands leases . For each barrel of bitumen produced from the specified oil sands until March 21 , 2039 , or upon termination of mining, whichever is earlier, the Company will pay a royalty equal to 25 grams of Vanadium per barrel of bitumen produced, multiplied by the price of Vanadium Pentoxide 98 % min in - warehouse Rotterdam published on the last business day of the month in which the gross production of bitumen occurred . The $ 300 , 000 is recorded as deferred revenue and will be recognized at such time as the Company begins to produce Vanadium . Notes payable to related party
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In December 2015 , the Company borrowed $ 6 , 553 ( $ 9 , 000 Canadian) under a note agreement with related parties . The lenders were related parties through an immediate family relationship with officers or directors of the Company and a common director . The note payable bore interest at the Bank of Canada Prime rate plus 1 % . The Company could repay the loan and outstanding interest thereon by giving notice to the lender 15 days prior to the anticipated repayment . At June 30 , 2023 , the effective interest rate on these notes payable was 7 . 95 % . The balance of note payable, including interest, to related parties at June 30 , 2022 and December 31 , 2021 was $ 9 , 053 and $ 8 , 584 , respectively . The Company recognized interest expense of $ 340 and $ 2 , 689 for the six months ended June 30 , 2023 , and 2022 , respectively, in its Statements of Operations and Comprehensive Income (Loss) . In 2021 , the Company borrowed $ 72 , 000 under a note agreement with a related party . The note payable was repaid in 2022 and bore interest at 10 % per annum . The note was convertible into restricted common shares at $ 0 . 01 per share or the most recent 30 - day volume - weighted moving average of the published share price, discounted by 40 % , whichever is higher . Due to the variability of the conversion rate, an embedded derivative was identified . The Company recorded the fair value of the derivatives as of the inception date of the convertible note, which was determined to be $ 127 , 049 . The initial fair value of the embedded debt derivative was allocated as a debt discount up to the face value of the note ( $ 72 , 000 ), with the remaining $ 55 , 049 recognized as a loss on issuance of convertible note . The debt discount was amortized until its repayment and amortization expense of $ 0 and $ 51 , 000 was recognized for the six months ended June 30 , 2023 and 2022 , respectively . The balance of the note payable is $ 0 at June 30 , 2023 and December 31 , 2022 . The Company recognized interest expense of $ 0 and $ 2 , 550 for the six months ended June 30 , 2023 and 2022 , respectively, in its Statements of Operations and Comprehensive Income (Loss) . Consulting fees Mr . Newton is the President and a member of the Board of Directors of the Company . Mr . Newton does not bill the Company for his services as President ; however, he has a service agreement with the Company . Pursuant to this agreement, the Company recognized consulting expenses of $ 94 , 243 and $ 0 for the six months ended June 30 , 2023 and 2022 , respectively . Dr . Michael Ranger is a member of the Board of Directors of the Company . Dr . Ranger does not receive compensation for his services as a member of the board ; however, he has a service agreement with the Company, including consulting time and expense reimbursement . Pursuant to this agreement, the Company recognized no consulting expenses for the six months ended June 30 , 2023 , and 2022 , respectively . NOTE 10. COMMITMENTS AND CONTINGENCIES In the ordinary course of business, we may be exposed to claims and threatened litigation, and use various methods to resolve these matters in a manner that we believe serves the best interest of our shareholders and other constituents . When a loss is probable, we disclose the amount of probable loss, or disclose a range of reasonably possible losses if they are material and we are able to estimate such a range . If we cannot provide an estimate, we explain the factors that prevent us from doing so . We believe the recorded reserves in our consolidated financial statements are adequate in light of the probable and estimable liabilities . We do not presently believe that any claims or litigation will be material to our results of operations, cash flows, or financial condition . Environmental Matters The Company is engaged in oil and gas exploration and may become subject to certain liabilities as they relate to environmental cleanup of sites or other environmental restoration procedures as they relate to the exploration of oil and gas . Should it be determined that a liability exists with respect to any environmental clean - up or restoration, the liability to cure such a violation could fall upon the Company . No claim has been made, nor is the Company aware of any liability, which it may have, as it relates to any environmental clean - up, restoration or the violation of any rules or regulations relating thereto . Liabilities for expenditures are recorded when environmental assessment and/or remediation is probable, and the costs can be reasonably estimated . NOTE 11. SUBSEQUENT EVENTS
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In accordance with SFAS 165 (ASC 855 - 10 ) management has performed an evaluation of subsequent events through the date that the financial statements were available to be issued and has determined that it does not have any material subsequent events to disclose in these financial statements .
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Exhibit 99.30
Strata Power Corporation Interim MD&A – Quarterly Highlights For the Six Months ended June 30, 2023 Management’s Discussion and Analysis of Financial Condition and Results of Operations Management’s Discussion and Analysis of Financial Condition ("MD&A") and Results of Operations should be read in conjunction with the accompanying unaudited financial statements. The financial statements are presented in United States dollars and have been prepared in accordance with accounting principles generally accepted in the United States, referred to as US GAAP. Certain statements contained in the MD&A constitute forward - looking statements. Such forward - looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward - looking statements. Readers are cautioned not to place undue reliance on these forward - looking statements which speak only as of the date the financial statements were made and readers are advised to consider such forward - looking statements in light of the risks set forth both below and in the Company’s most recent annual report. RESULTS OF OPERATIONS Six months ended June 30, 2023 compared to six months ended June 30, 2022. For the six months ended June, 2023, the Company had a net loss from operations of $21,997 compared to a net income of $318,911 for the six months ended June 30, 2023, a change of $340,908. The primary reasons for the decreased net income are a decrease in royalty income, an increase in consulting expense and the change in the fair value of derivative liabilities. For the six months ended June 30, 2023 and 2022, the Company recorded a gain in the change in fair value of derivative liability of $6,001 and $192,919, respectively. This item is a non - cash item and was recorded in accordance with ASC 850 - 40 - 15. This guidance requires entities to evaluate whether an equity - linked financial instrument (or embedded feature) is indexed to its own stock by assessing the instrument’s contingent exercise provisions and settlement provisions. Instruments not indexed to their own stock fail to meet the scope exception of Accounting for Derivative Instruments and Hedging Activities, ASC 815 - 10 - 15 - 74(a), and should be classified as a liability and marked - to - market. REVENUES Pursuant to the Purchase and Sale Agreement with an unrelated third party, the Company has a 2 . 5 % gross overriding royalty on all petroleum substances produced from three oil sands leases located in the southeast portion of the Peace River oil sands area, that were sold in May, 2019 . For the six months ended June 30 , 2023 and 2022 , the Company earned royalties of $ 98 , 460 and $ 229 , 691 , respectively . DISCONTINUED OPERATIONS There was no discontinued operations activity in 2023 or 2022. INTEREST AND OTHER INCOME (EXPENSE) Included in other income (expense) for the six months ended June 30 , 2023 and 2022 is a foreign exchange gain of $ 2 , 684 and 875 , respectively . For the six months ended June 30 , 2023 and 2022 , other income (expense) included amortization of debt discount of $ 0 and $ 51 , 000 , respectively . In addition, for the six months ended June 30 , 2023 and 2022 , there was income of $ 6 , 001 and $ 192 , 919 from the change in fair value of derivative liability .
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Liquidity and Capital Resources As of June 30 , 2023 , we had $ 64 , 237 in cash, a decrease of $ 16 , 668 from December 31 , 2022 . Management estimates that the Company will require approximately $ 200 , 000 to fund planned operations for the next twelve months . Therefore, current cash on hand is not sufficient to fund planned operations for 2023 . Our policy is to pay all operational expenses when due, provided that the vendor, in the normal course of business, has satisfied all necessary conditions for payment . Net cash used in operating activities during the six months ended June 30 , 2023 was $ 14 , 634 , compared to net cash provided by operating activities of $ 125 , 858 for the same period in the prior year . The decrease in cash provided by operating activities was the decrease in royalty income and the increased consulting expenses, offset by the change in the fair value of derivative liabilities . Cash used in investing activities for the six months ended June 30 , 2023 and 2022 was $ 1 , 858 and $ 378 , respectively, resulting primarily from the change in the reclamation deposits . Net cash used in financing activities for the six months ended June 30 , 2023 and 2022 was $ 0 and $ 78 , 209 , respectively . For June 30 , 2022 , the financing activities consisted of the repayment of convertible debt . We are an exploration stage company with limited operating history, which raises substantial doubt as to our ability to successfully develop profitable business operations and makes an investment in our common shares very risky . We have no long - term debt . We believe that our available cash may not be sufficient to fund our working capital requirements to maintain, explore and develop our property interests for the next twelve months . If capital is not available to fund future operations, we will not be able to pursue our business plan and operations would come to a halt and our common shares could be nearly worthless . We will require substantial additional capital to participate in the development of our properties which have not had any production of oil or natural gas as well as for acquisition and/or development of other producing properties . Because we currently do not have any cash flow from operations, we need to raise additional capital, which may be in the form of loans from current shareholders and/or from private equity offerings . Our ability to access capital will depend on our success in participating in properties that are successful in exploring for and producing oil and gas at profitable prices . It will also be dependent upon the status of the capital markets at the time such capital is sought . Should sufficient capital not be available, the development of our business plan could be delayed and, accordingly, the implementation of our business strategy would be adversely affected . In such event it would not be likely that investors would obtain a profitable return on their investments or a return of their investments at all . We anticipate that we will incur the following expenditures through our current fiscal year : $15,000 in connection with property lease payments and follow up analysis on the Company’s oil sands properties $175,000 for operating expenses, including working capital, consulting fees, general and administrative, professional, legal and accounting expenses In 2023 , our capital requirements will mostly be associated with the maintenance of our lease payments to the Crown and general and administrative expenses . Going forward we expect the short - term and long - term funding of our oil and gas operations to be financed primarily through royalty income, equity issuance in the form of private placements and the exercise of warrants . In addition, we continue to work with potential partners to discuss funding arrangements which would facilitate furtherance of our property interests . We cannot be certain that any required additional financing will be available on terms favorable to us as the risky nature of this enterprise and lack of tangible assets places debt financing beyond the credit - worthiness required by most banks or typical investors of corporate debt until such time as the economic viability of our oil sands properties can be demonstrated . If additional funds are raised by the issuance of our equity securities, existing stockholders will experience dilution of their ownership interest . If adequate funds are not available or not available on acceptable terms, we may be unable to continue, fund expansion, pursue further development or respond to competitive pressures .
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Our financing prospects must be considered in light of the risks, expenses and difficulties frequently encountered in establishing a business in the oil and natural gas industries . We have yet to generate substantial revenues from operations . There is nothing at this time on which to base an assumption that our business operations will prove to be successful or that we will be able to operate profitably . Our future operating results will depend on many factors, including : our ability to raise adequate working capital success of our exploration and development demand for natural gas and oil the level of our competition our ability to attract and maintain key management and employees and our ability to efficiently explore, develop and produce sufficient quantities of marketable natural gas or oil in a highly competitive and speculative environment while maintaining quality and controlling costs Volatility of oil and gas prices and markets could make it more difficult for us to achieve profitability and less likely for investors in our common shares to receive a return on their investment . Our ability to achieve profitability is substantially dependent on prevailing prices for natural gas and oil . The amounts and price obtainable for any oil and gas production that we achieve will be affected by market factors beyond our control . If these factors are not favorable over time to our financial interests, it is likely that owners of our common shares could lose their investments . Such factors include : worldwide or regional demand for energy, which is affected by economic conditions the domestic and foreign supply of natural gas and oil weather conditions domestic and foreign governmental regulations political conditions in natural gas and oil producing regions the ability of members of the Organization of Petroleum Exporting Countries to agree upon and maintain oil prices and production levels the price and availability of other fuels Additionally, due to worldwide economic uncertainty, the availability and cost of funds for production and other expenses have become increasingly difficult, if not impossible, to project . These changes and events may materially affect our financial performance .
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Exhibit 99.31
FORM 52 - 109F2 CERTIFICATION OF INTERIM FILINGS - FULL CERTIFICATE I, Trevor Newton, Chief Executive Officer of Strata Power Corporation Inc., certify the following: 1. Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Strata Power Corporation Inc. (the “issuer”) for the interim period ended June 30, 2023. 2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings. 3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings. 4. Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52 - 109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer. 5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings a. designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that i. material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and ii. information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and b. designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP. 1. Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. 2. N/A 3. N/A 6 . Reporting changes in ICFR : The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on April 1 , 2023 and ended on June 30 , 2023 that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR . 1/2
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Date: August 15, 2023 (signed) "Trevor Newton" Trevor Newton Chief Executive Officer
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Exhibit 99.32
FORM 52 - 109F2 CERTIFICATION OF INTERIM FILINGS - FULL CERTIFICATE I, Trevor Newton, Chief Financial Officer of Strata Power Corporation, certify the following: 1. Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Strata Power Corporation (the “issuer”) for the interim period ended June 30, 2023. 2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings. 3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings. 4. Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52 - 109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer. 5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings a. designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that i. material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and ii. information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and b. designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP. 1. Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. 2. N/A 3. N/A 6 . Reporting changes in ICFR : The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on April 1 , 2023 and ended on June 30 , 2023 that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR . 1/2
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Date: August 15, 2023 (signed) "Trevor Newton" Trevor Newton Chief Financial Officer
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Exhibit 99.33
Strata Power Corporation (An Exploration Stage Company) FINANCIAL STATEMENTS For the Nine Months ended September 30, 2023 and 2022 (unaudited) (Stated in US Dollars)
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STRATA POWER CORPORATION BALANCE SHEETS (Expressed in US Dollars) (Unaudited) ) ) ) December 31, 2022 September 30, 2023 ASSETS Current assets 80,905 $ 12,549 $ Cash 9,330 17,985 GST receivables 39,578 40,607 Royalty receivables 10,697 10,865 Prepaid expenses 140,510 82,006 Total current assets 95,968 99,334 Reclamation deposits 236,478 $ 181,340 $ Total assets LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities 34,264 $ 32,648 $ Accounts payable and accrued liabilities 15,956 17,864 Accounts payable and accrued liabilities - related party 8,584 8,959 Notes payable, net of debt discount 14,690 8,286 Derivative liabilities 73,494 67,757 Total current liabilities 300,000 300,000 Deferred revenue - royalty agreement (Note 9) 71,975 71,864 Asset retirement obligation 371,975 371,864 Total long - term liabilities 445,469 439,621 Total liabilities – – Commitments and Contingencies Stockholders' equity (deficit) – – Preferred stock: no par value, unlimited shares authorized and none issued – – Common stock: no par value, unlimited shares authorized; 20,085,119 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively 23,404,083 23,404,083 Additional paid - in capital 5,000 5,000 Common shares to be issued (23,214,872 ) (23,264,307 Accumulated deficit (403,202 ) (403,057 Accumulated other comprehensive income (loss) (208,991 ) (258,281 Total stockholders' equity (deficit) 236,478 $ 181,340 $ Total liabilities and stockholders' equity (deficit) The accompanying notes are an integral part of these financial statements.
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STRATA POWER CORPORATION STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Expressed in US Dollars) (Unaudited) For the Nine Months Ended September 30, For the Three Months Ended September 30, 2022 2023 2022 2023 Operating Income: $321,683 $159,043 $91,992 $60,582 Royalty income Operating Expenses: 30,687 19,240 107 - Professional fees 513 642 119 279 Office and sundry 72,593 180,097 72,593 81,500 Consulting fees 75 2,374 450 600 Transfer agent fees 15,621 - 4,910 - Accretion expense 14,963 17,351 5,001 6,665 Oil & gas properties expense 134,452 219,704 83,180 89,044 Total operating expenses Other income (expense): 715 3,522 336 1,664 Interest income (51,000) - - - Amortization of debt discount (2,787) (477) (97) (137) Interest expense, related party 4,069 1,836 3,196 (847) Foreign exchange gain (loss) 181,937 6,345 (10,992) 344 Change in fair value of derivative liability 132,935 11,226 (7,557) 1,024 Total other income (expense) 320,166 (49,435) 1,255 (27,438) Net income (loss) Other comprehensive income (loss) 2,961 145 2,225 74 Foreign currency translation adjustment $323,127 $(49,290) $3,480 $(27,364) Comprehensive income (loss) Income per common share $0.02 $0.00 $0.00 $0.00 Basic $0.02 $0.00 $0.00 $0.00 Diluted Weighted average number of shares outstanding: 20,085,119 20,085,119 20,085,119 20,085,119 Basic 20,085,119 20,085,119 20,085,119 20,085,119 Diluted The accompanying notes are an integral part of these financial statements.
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STRATA POWER CORPORATION STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) (Expressed in US Dollars) (Unaudited) Total Stockholders' Equity (Deficit) Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Common Shares to be Issued Additional Paid - in Capital Common Stock Shares (369,354) $ (404,819) $ (23,373,618) $ 5,000 $ 23,404,083 $ 20,085,119 Balance June 30, 2022 (8,073) 820 (8,893) – – – Net income and comprehensive income (365,874) $ (402,594) $ (23,372,363) $ 5,000 $ 23,404,083 $ 20,085,119 Balance September 30, 2022 (689,001) $ (405,555) $ (23,692,529) $ 5,000 $ 23,404,083 $ 20,085,119 Balance December 31, 2021 323,127 2,961 320,166 – – – Net income and comprehensive income (365,874) $ (402,594) $ (23,372,363) $ 5,000 $ 23,404,083 $ 20,085,119 Balance September 30, 2022 (230,917) $ (403,131) $ (23,236,869) $ 5,000 $ 23,404,083 $ 20,085,119 Balance June 30, 2023 (27,364) 74 (27,438) – – – Net income and comprehensive income (258,281) $ (403,057) $ (23,264,307) $ 5,000 $ 23,404,083 $ 20,085,119 Balance September 30, 2023 (208,991) $ (403,202) $ (23,214,872) $ 5,000 $ 23,404,083 $ 20,085,119 Balance December 31, 2022 (49,290) 145 (49,435) – – – Net loss and comprehensive income (258,281) $ (403,057) $ (23,264,307) $ 5,000 $ 23,404,083 $ 20,085,119 Balance September 30, 2023 The accompanying notes are an integral part of these financial statements.
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STRATA POWER CORPORATION STATEMENTS OF CASH FLOWS (Expressed in US Dollars) (Unaudited) For the nine months ending September 30, 2022 2023 Cash flows from operating activities: 320,166 $ (49,435) $ Net income (loss) Adjustments to reconcile net loss to net cash used in operating activities 2,787 391 Accrued interest 15,621 - Accretion expense 51,000 - Amortization of debt discount (181,938) (6,345) Change in fair value of derivative liability Change in assets and liabilities (2,346) (8,655) GST receivable (10,508) (1,028) Royalty receivable (7,322) (170) Prepaid expenses (10,653) (1,614) Accounts payable (21,907) 1,906 Accounts payable – related party 154,900 (64,950) Net cash used in operating activities Cash flows from investing activities: (714) (3,522) Reclamation Deposits (714) (3,522) Net provided used in investing activities Cash flows from financing activities: - Proceeds from issuance of convertible note (78,209) - Repayment of convertible note (78,209) - Net cash used in financing activities (10,201) 116 Foreign exchange effect on cash 65,776 (68,356) Net increase (decrease) in cash 7,696 80,905 Cash, beginning balance 73,472 $ 12,549 $ Cash, ending balance Supplemental disclosure of cash paid for: – $ – $ Interest – $ – $ Income taxes The accompanying notes are an integral part of these financial statements.
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STRATA POWER CORPORATION Notes to the Financial Statements NOTE 1. NATURE OF BUSINESS Strata Power Corporation (the “Company”) is currently engaged in the acquisition, exploration and, if warranted, feasible development of heavy oil projects in the Peace River oil sands region in Northern Alberta, Canada . The Company was incorporated under the laws of the State of Nevada on November 18 , 1998 and commenced operations in January 1999 . The Company completed its initial public offering in February 2000 . On April 22 , 2003 , the Company filed a registration statement to effect a continuation of our corporate jurisdiction from the State of Nevada to Canada on Form S - 4 with the United States Securities and Exchange Commission (SEC) . The Form S - 4 was declared effective on or about July 7 , 2004 . The Company is presently incorporated under the Canada Business Corporations Act . On December 27 , 2018 , the Company filed a Certificate of Amendment with Corporations Canada changing its name from Strata Oil & Gas Inc . to Strata Power Corporation . As of September 30 , 2023 , the Company has a 50 % interest in 7 oil sands leases, totaling 8 , 704 hectares, all located in the Peace River oil sands area . In addition, the Company has a royalty interest in 10 oil sands leases and owns 1 non - producing well . NOTE 2. ABILITY TO CONTINUE AS A GOING CONCERN As shown in the accompanying financial statements, the Company has realized minimal revenue from its present operations . During the nine months ended September 30 , 2023 , the Company had a net loss of $ 49 , 435 , primarily due to consulting fees and professional fees . The Company had cash flows used in operations of $ 64 , 950 and it is possible that the Company will incur negative operating cash flows in the foreseeable future . The Company has an accumulated deficit of $ 23 , 264 , 307 at September 30 , 2023 . These conditions raise substantial doubt regarding the Company’s ability to continue as a going concern . The financial statements have been prepared on a going concern basis, which contemplates realization of assets and liquidation of liabilities in the ordinary course of business . The Company's ability to continue as a going concern is dependent on its ability to develop its oil and gas properties and ultimately achieve profitable operations, and to generate sufficient cash flow from financing and operations to meet its obligations as they become payable . The Company expects that it will need approximately $ 200 , 000 to fund its operations during the next twelve months, which will include minimum annual property lease payments, expected exploration expenditures for permitting and drilling, as well as operating expenses . Management has plans to seek additional capital through a private placement of its common stock . Although there are no assurances that management’s plans will be realized, management believes that the Company will be able obtain sufficient capital to continue operations in the next 12 months . Accordingly, no adjustment relating to the recoverability and classification of recorded asset amounts and the classification of liabilities has been made to the accompanying financial statements in anticipation of the Company not being able to continue as a going concern . NOTE 3. SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) . Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate so as to make the information presented not misleading .
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Risks and Uncertainties The Company is subject to additional risks and uncertainties due to the COVID - 19 pandemic, although the extent of the impact on the Company’s business is uncertain and difficult to predict. The Company considered the impact of COVID - 19 on the assumptions and estimates used and determined that there has been no material impact on the Company’s year - to - date results of operations. The Company cannot reasonably estimate with any degree of certainty the future impact COVID - 19 may have on the Company’s results of operations, financial position and liquidity. Volatility of oil prices could make it more difficult for the Company to achieve profitability, as the Company’s royalty revenues are substantially dependent on prevailing prices for oil. The amounts and price obtainable for any oil production will be affected by market factors beyond the Company’s control. Management’s Estimates and Assumptions The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the balance sheet date, and revenues and expenses for the period then ended . Management believes that all applicable estimates and adjustments are appropriate . Actual results could differ significantly from those estimates . Concentration of Revenue For the nine months ended September 30 , 2023 and 2022 , the Company had a concentration of revenue related to a single royalty contract, accounting for 100 % of total revenue . The loss of this contract would have a material adverse effect on future operating results . As of September 30 , 2023 and December 31 , 2022 , 100 % of royalty receivables related to this contract . Oil and Gas Property Payments and Exploration Costs All costs incurred in the acquisition, exploration and development of natural gas and oil interests are capitalized as incurred . Capitalized costs associated with proven properties are amortized using the units - of - production method over the estimated life of the probable reserve . Capitalized costs associated with unproved properties are excluded from the amortization calculations and assessed, at least annually, to determine if impairment has occurred, until such time as those costs are proven . Impairment amounts are immediately expensed and no costs have been capitalized through September 30 , 2023 . Cash and Cash Equivalents The Company considers all highly liquid investments purchased with a maturity of 90 days or less to be cash equivalents . The Company maintains cash and cash equivalent balances with financial institutions that may exceed federally insured limits . There were no cash equivalent balances for the years ended September 30 , 2023 or December 31 , 2022 . GST Receivables Goods and Services Tax (GST) receivables are presented net of an allowance for doubtful accounts . Receivables consist of goods and services input tax credits . The allowance for doubtful accounts on GST receivables was $ nil at September 30 , 2023 and December 31 , 2022 . Impairment of Long - lived Assets In accordance with ASC 360 , Property, Plant and Equipment, long lived assets such as equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable . Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset . If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying
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amount of the asset exceeds the fair value of the asset . Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount of fair value less costs to sell and are no longer depreciated . The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet . Asset Retirement Obligations In accordance with ASC 410 , Asset Retirement and Environmental Obligations, the fair value of an asset retirement cost, and corresponding liability, should be recorded as part of the cost of the related long - lived asset and subsequently allocated to expense using a systematic and rational method . The Company has recorded an asset retirement obligation at September 30 , 2023 and December 31 , 2022 (Note 8 ) to reflect its legal obligations related to future abandonment of its oil and gas interests using estimated expected cash flow associated with the obligation and discounting the amount using a credit - adjusted, risk - free interest rate . At least annually, the Company will reassess the obligation to determine whether a change in any estimated obligation is necessary . The Company will evaluate whether there are indicators that suggest the estimated cash flows underlying the obligation have materially changed . Should those indicators suggest the estimated obligation has materially changed the Company will accordingly update its assessment . The liability accretes until the Company settles the obligation . Income Taxes The Company follows the asset and liability method of accounting for income taxes whereby deferred tax assets and liabilities are recognized for the future tax consequences of differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases . If it is determined that the realization of the future tax benefit is not more likely than not, the Company establishes a valuation allowance . Foreign Exchange Translation The Company's functional currency is the Canadian dollar but reports its financial statements in US dollars . The Company translates its Canadian dollar balances to US dollars in the following manner : Assets and liabilities have been translated using the rate of exchange at the balance sheet date . Equity transactions and results of operations have been translated at historical rates . Translation gains or losses resulting from the changes in the exchange rates are accumulated as other comprehensive income or loss in a separate component of stockholders' equity . All amounts included in the accompanying financial statements and footnotes are stated in U.S. dollars. Derivative Financial Instruments The Company reviews the terms of its equity instruments and other financing arrangements to determine whether there are embedded derivative instruments that are required to be accounted for separately as a derivative financial instrument . Also, in connection with the issuance of financing instruments, the Company has issued freestanding warrants that are accounted for as derivative instrument liabilities because they are exercisable in a currency other than the functional currency of the Company and thus do not meet the “fixed - for - fixed” criteria of ASC 815 - 40 - 15 . The warrants are exercisable in United States dollars and the Company’s functional currency is the Canadian dollar . Derivative financial instruments are initially measured at their fair value . For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re - valued at each reporting date, with changes in the fair value reported as charges or credits to income . For derivative financial instruments, the Company uses the Black - Scholes option pricing model to value the derivative instruments . Any exercise or cancellation of an equity instrument which meets the classification of a derivative financial instrument is trued - up to fair value at that date and the fair value of the exercised instrument is then reclassified from liability to additional paid in capital . The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period . If reclassification is required, the fair value of the derivative instrument, as of the determination date, is reclassified . Any previous charges or credits to income for changes in the
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fair value of the derivative instrument are not reversed . Derivative instrument liabilities are classified in the balance sheet as current or non - current based on whether or not net - cash settlement of the derivative instrument could be required within 12 months of the balance sheet date . Stock Based Compensation In accordance with ASC 718 , “Compensation – Stock Compensation” (“ASC 718 ”), which was adopted as of January 1 , 2019 , the Company measures all employee stock - based compensation awards using a fair value method on the date of grant and recognizes such expense in its financial statements over the requisite service period . The Company uses the Black - Scholes pricing model to determine the fair value of stock - based compensation awards on the date of grant . The Black - Scholes pricing model requires management to make assumptions regarding option lives, expected volatility, and risk - free interest rates . The Company accounts for non - employee stock - based awards in accordance with the provision of ASC 505 , “Equity Based Payments to Non - Employees” (“ASC 505 ”), which requires that such equity instruments are recorded at their fair value on the measurement date . The measurement of stock - based compensation is subject to periodic adjustment as the underlying equity instruments vest . The Company uses the Black - Scholes pricing model to determine the fair value of stock - based compensation awards . The Black - Scholes pricing model requires management to make assumptions regarding option lives, expected volatility, and risk - free interest rates . The Company uses historical data to estimate option exercise, forfeiture and employee termination within the valuation model . For non - employees, the expected term of the options approximates the full term of the options . The risk - free interest rate is based on a treasury instrument whose term is consistent with the expected term of the stock options . The Company has not paid and does not anticipate paying dividends on its common stock ; therefore, the expected dividend yield is assumed to be zero . In addition, accounting standard requires companies to utilize an estimated forfeiture rate when calculating the expense for the reporting period . Based on its best estimate, management applied the estimated forfeiture rate of nil in determining the expense recorded in the accompanying Statements of Operations and Comprehensive Income (Loss) . Expected volatilities are calculated using the historical volatility of the Company’s stock . When applicable, the Company will use historical data to estimate option exercise, forfeiture and employees’ termination within the valuation model . For non - employees, the expected term of the options approximates the full term of the options . Earnings (Loss) Per Share of Common Stock Basic earnings (loss) per share of common stock is computed by dividing net income (loss) available to common shareholders by the weighted - average number of common shares outstanding for the period . Diluted earnings per share of common stock reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company . Dilutive potential common shares are calculated in accordance with the treasury stock method, which assumes that proceeds from the exercise of all warrants and options are used to repurchase common stock at market value . The number of shares remaining after the proceeds are exhausted represents the potentially dilutive effect of the securities . For the nine months ended September 30 , 2023 and 2022 , all of the outstanding options and warrants had an exercise price above the average stock price for year - end period . Accordingly, all of the potentially dilutive shares were excluded from the computation of diluted shares outstanding as they would have had an anti - dilutive impact on the Company’s income (loss) from continuing operations . Fair Value of Financial Instruments The book values of GST receivables, notes receivable, accounts payable and accrued expenses approximate their respective fair values due to the short - term nature of these instruments . The fair value hierarchy under GAAP distinguishes between assumptions based on market data (observable inputs) and an entity’s own assumptions (unobservable inputs) . The hierarchy consists of three levels : Level one - Quoted market prices in active markets for identical assets or liabilities; Level two - Inputs other than level one inputs that are either directly or indirectly observable; and
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Level three - Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use. Determining which category an asset or liability falls within the hierarchy requires significant judgment . Hierarchy disclosures are evaluated at each balance sheet date . Liabilities measured at fair value are summarized as follows as of : Fair Value Measurement at Fair Value Measurement at December 31, 2022 September 30, 2023 Using Using Total Level 3 Total Level 3 14,690 $ 14,690 $ 8,286 $ 8,286 $ Derivative liabilities 71,975 71,975 71,864 71,864 Asset Retirement Obligation (see Note 8) In 2021 , the Company issued a convertible note in which the conversion rate was variable . As a result, a derivative liability was recorded (see Note 9 ) . In addition, the Company has warrants with a strike price currency different than the functional currency as has recorded a derivative liability associated with that . The Company measures and reports the fair value liability for these derivative liabilities on a recurring basis . The fair value liabilities have been recorded as determined utilizing the Black - Scholes option pricing model . A slight change in an unobservable input like historical volatility could have a significant impact on the fair value measurement of the derivative liabilities . See Note 6 “Derivative Liabilities” for further discussion of the inputs used in determining the fair value . Revenue Recognition The Company has adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 606 , Revenue from Contracts with Customers (“ASC 606 ”), which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers . The Company receives a royalty from an unrelated party of 2 . 5 % on all petroleum substances produced from three oil sands leases located in the southeast portion of the Peace River oil sands area that were sold in May 2019 (see Note 4 ) and recognizes revenue at the time petroleum is sold . The Company’s revenue recognition policy standards include the following elements under ASU 606 : Identify the contract with the customer. The contract is documented in the Purchase and Sale Agreement dated 5/14/2019. 1. Identify the performance obligations in the contract. The performance obligation in the contract required Strata to relinquish its interest in three oil sands located in the southeast portion of the Peace River oil sands area. 2. Determine the transaction price. The transaction price was C$60,000 in exchange for 2.5% gross overriding royalty of the petroleum substances produced from the three oil sands leases, in exchange for a 100% interest in the three oil sands leases. 3. Allocate the transaction price to the performance obligations in the contract. The Company only has one performance obligation, the transfer of the rights to the three oil sands leases, which has already been fulfilled. 4. Recognize revenue when (or as) the entity satisfies a performance obligation . The C $ 60 , 000 was recognized as a sale of the shallower oil sands rights in 2019 , resulting in a gain from the disposition of the leases . The 2 . 5 % petroleum royalties are recognized as revenue in the period that the other party produces and sells petroleum from the oil sands leases, which began in September 2021 . The royalties that have been received to date have been highly variable, as the amounts are dependent upon the monthly production, the demand of the buyers, the spot price of petroleum, etc . As such, management has determined that the revenue recognition shall be treated as variable consideration as defined in ASC 606 . Variable consideration should only be recognized to the extent that it is probable that a significant reversal of revenue will not occur when the uncertainty associated with the variable consideration is subsequently resolved . Given the fact that royalties to date have been highly variable with a great degree of uncertainty, and any attempts to estimate future revenue would likely result in a significant reversal of revenue, royalty revenue will be recognized when payments and settlement statements are received, in the period for which the petroleum was produced . 5.
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It is at that time that any uncertainty related to royalty payments is resolved. The Company applied ASC 606 using the modified retrospective method applied to contracts not yet completed as of the date of adoption. Comprehensive Income (Loss) Comprehensive income (loss) is defined to include all changes in equity except those resulting from investments by owners and distributions to owners . The Company's items of other comprehensive income (loss) are foreign currency translation adjustments . Related Party Transactions A related party is generally defined as (i) any person who holds 10 % or more of the Company’s securities and their immediate families, (ii) the Company’s management, (iii) an entity or person who directly or indirectly controls, is controlled by or is under common control and/or management with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company . A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties . New Accounting Pronouncements In August 2020 , the FASB issued ASU 2020 - 06 , Debt - Debt with Conversion and Other Options (Subtopic 470 - 20 ) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815 - 40 ) : Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020 - 06 ”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity . This ASU ( 1 ) simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470 - 20 , Debt : Debt with Conversion and Other Options, that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock ; ( 2 ) revises the scope exception from derivative accounting in ASC 815 - 40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification ; and ( 3 ) revises the guidance in ASC 260 , Earnings Per Share, to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if - converted method . In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares . For SEC filers, excluding smaller reporting companies, ASU 2020 - 06 is effective for fiscal years beginning after December 15 , 2021 including interim periods within those fiscal years . Early adoption is permitted, but no earlier than fiscal years beginning after December 15 , 2020 . For all other entities, ASU 2020 - 06 is effective for fiscal years beginning after December 15 , 2023 , including interim periods within those fiscal years . Entities should adopt the guidance as of the beginning of the fiscal year of adoption and cannot adopt the guidance in an interim reporting period . The Company is currently evaluating the impact that ASU 2020 - 06 may have on its consolidated financial statements and related disclosures . The Company has implemented all new accounting pronouncements that are in effect . These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations . NOTE 4 . ROYALTY INTEREST Pursuant to the Purchase and Sale Agreement with an unrelated third party dated May 2019 , in which the Company sold three oil sands leases located in the southeast portion of the Peace River oil sands area, the Company has a 2 . 5 % gross overriding royalty on all petroleum substances produced from the leases . For the nine months ended September 30 , 2023 and 2022 , the Company earned royalties of $ 159 , 043 and $ 321 , 683 , respectively . NOTE 5 . PETROSTEAM LICENSE On March 20 , 2019 , the Company entered into an exclusive license agreement with PetroSteam LLC to obtain an exclusive right to deploy patented and field - tested proprietary technologies utilizing steam generation applied to bitumen and heavy oil recovery in the Provinces of Alberta and Saskatchewan . In exchange, the Company issued
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2 , 991 , 400 restricted common shares . In addition, the Company agreed, subject to certain qualifications and milestones being met, to purchase steam generation equipment from PetroSteam totaling $ 12 , 500 , 000 to be used on its bitumen/heavy - oil projects . In 2021 , the PetroSteam license was cancelled by both parties and the value of the license agreement was recognized as a license fee expense . NOTE 6 . DERIVATIVE LIABILITIES Derivative liabilities consist of common stock warrants with an exercise price in a different currency than the Company’s functional currency . In addition, the Company identified embedded derivatives related to a convertible promissory note issued in 2021 (see Note 9 ) . These embedded derivatives include certain conversion features . The derivative liabilities are accounted for as separate liabilities measured at their respective fair values as follows : ) ) ) Derivative liabilities associated with: Total Convertible Note Warrants 210,929 $ 170,495 $ 40,434 $ Balance, December 31, 2021 (195,252 ) (170,495 ) (24,757 Change in fair value of derivative liabilities (987 - ) (987 Foreign exchange effect on derivative liability 14,690 - 14,690 Balance, December 31, 2022 (6,370 - ) (6,370 Change in fair value of derivative liabilities (34) - ) (34 Foreign exchange effect on derivative liability 8,286 $ - $ 8,286 $ Balance, September 30, 2023 The fair value of the derivative liabilities has been determined using the Black - Scholes option pricing model using the following range of assumptions: December 31, 2022 September 30, 2023 322.4% 353.8% Volatility 0.41 to 9.99 years 0.38 to 9.67 years Expected life 3.27% - 4.06% 4.03% - 4.87% Risk - free interest rate 0.00% 0.00% Dividend yield NOTE 7 . OIL AND GAS PROPERTIES During the period June 2006 through January 2007 , the Company acquired the rights to multiple oil sands leases within the Peace River area of Alberta, Canada (the “Peace River Properties”) . The leases were granted by the Province of Alberta . All the leases were for a 15 - year term, required minimum annual lease payments, and granted the Company the right to explore and develop oil sands on the respective leases . On February 22 , 2016 , the Company acquired an additional 45 oil sands leases by entering into two purchase and sale agreements . The oil sands leases represented 39 , 680 hectares ( 98 , 051 acres) in the Peace River area of Alberta . One of the purchase / sale agreements was with a related party . On May 14 , 2019 , the Company sold the shallower oil sands rights on two of its oil sands lease blocks in the Cadotte East area to an unrelated third party, but retained the deeper oil sands rights, including the Debolt - Elkton formations . The Company also retained a 2 . 5 % overriding royalty on all petroleum substances produced from the shallower oil sands rights on those two lease blocks . The Company will continue to pay annual lease fees on those two oil sands lease blocks, but at a rate of 50 % , and the unrelated third party will pay the other 50 % . On three of its oil sands lease blocks in the Reno area, the Company sold 100 % of its interest to an unrelated third party and retained a 2 . 5 % overriding royalty on all petroleum substances produced from those oil sands lease blocks . On those three oil sands lease blocks, the unrelated third party has taken over 100 % of the annual lease fees .
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On June 11 , 2020 , the Company sold the shallower oil sands rights on five of its oil sands leases in the Cadotte Central area to an unrelated third party, but retained the deeper oil sands rights, including the Debolt - Elkton formations . The Company also retained a 2 . 5 % overriding royalty on all petroleum substances produced from those oil sands lease blocks . The Company will continue to pay annual lease fees on those two oil sands lease blocks, but at a rate of 50 % , and the third party will pay the other 50 % . Throughout 2020 , the Company chose to not renew their remaining oil sands leases due to the economic conditions in the Alberta heavy oil sector . All the Company’s lease interests in the Peace River area are subject to royalties payable to the government of the Province of Alberta . The royalty is calculated using a revenue - less - cost formula . In years prior to the recovery of the project’s capital investment, the royalty is 1 % of gross revenue . Once the project costs have been recovered, the royalty is the greater of 1 % of gross revenue or 25 % of net revenue . The Company completed drilling four exploratory wells during the fiscal year ended December 31 , 2007 . Since then, the Company completed several third - party technical reports on its oil sands leases including a prefeasibility study and developed an oil sands exploration program, which it was not able to execute on due to weak conditions in the heavy oil sector . NOTE 8 . ASSET RETIREMENT OBLIGATIONS During 2007 , the Company drilled four wells on its Peace River Property . Total future asset retirement obligations were estimated by management based on the Company’s working interest in its wells and facilities, estimated costs to remediate, reclaim and abandon the wells and facilities and the estimated timing of the costs to be incurred in future periods . The Company estimated the net present value of its total asset retirement obligations to be approximately $ 214 , 960 , based on an undiscounted total future liability of $ 225 , 229 (CDN $ 293 , 000 ) . In 2022 , the Company transferred it s rights and interest in two of the three wells to an unrelated third party, who has assumed all reclamation obligations related to these wells . As a result, the Asset Retirement Obligation has been reduced to reflect the estimated liability for the remaining well of $ 71 , 864 . Reclamation expenses for the remaining well are expected to be incurred between 2023 and 2030 . The Company used a credit adjusted discount rate of 10 % per annum and an inflation rate of 2 % to calculate the present value of the asset retirement obligation . Accretion expense of $ 0 and $ 15 , 621 for the nine months ended September 30 , 2023 and 2022 , respectively, has been recorded in the Statements of Operations and Comprehensive Income (Loss) . However, the Company is currently in the process of carrying out abandonment and remediation of its well through the federally funded Site Rehabilitation Program . As a result, the actual Asset Retirement Obligation costs on this well could be substantially lower than its current value but the actual amount cannot be reasonably estimated at this time . NOTE 9 . RELATED PARTY TRANSACTIONS Related party transactions not disclosed elsewhere in these financial statements include: Deferred Revenue - Royalty Agreement The Company has negotiated a royalty agreement with a related party by common CEO and director . In exchange for a non - refundable payment of $ 300 , 000 , the Company intends to provide a royalty stream to this related party based on the gross production of Vanadium Oxide (“Vanadium”) from the company’s oil sands leases . For each barrel of bitumen produced from the specified oil sands until March 21 , 2039 , or upon termination of mining, whichever is earlier, the Company will pay a royalty equal to 25 grams of Vanadium per barrel of bitumen produced, multiplied by the price of Vanadium Pentoxide 98 % min in - warehouse Rotterdam published on the last business day of the month in which the gross production of bitumen occurred . The $ 300 , 000 is recorded as deferred revenue and will be recognized at such time as the Company begins to produce Vanadium . Notes payable to related party
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In December 2015 , the Company borrowed $ 6 , 553 ( $ 9 , 000 Canadian) under a note agreement with related parties . The lenders were related parties through an immediate family relationship with officers or directors of the Company and a common director . The note payable bore interest at the Bank of Canada Prime rate plus 1 % . The Company could repay the loan and outstanding interest thereon by giving notice to the lender 15 days prior to the anticipated repayment . At September 30 , 2023 , the effective interest rate on these notes payable was 8 . 2 % . The balance of note payable, including interest, to related parties at September 30 , 2022 and December 31 , 2021 was $ 8 , 959 and $ 8 , 584 , respectively . The Company recognized interest expense of $ 391 and $ 232 for the nine months ended September 30 , 2023 , and 2022 , respectively, in its Statements of Operations and Comprehensive Income (Loss) . In 2021 , the Company borrowed $ 72 , 000 under a note agreement with a related party . The note payable was repaid in 2022 and bore interest at 10 % per annum . The note was convertible into restricted common shares at $ 0 . 01 per share or the most recent 30 - day volume - weighted moving average of the published share price, discounted by 40 % , whichever is higher . Due to the variability of the conversion rate, an embedded derivative was identified . The Company recorded the fair value of the derivatives as of the inception date of the convertible note, which was determined to be $ 127 , 049 . The initial fair value of the embedded debt derivative was allocated as a debt discount up to the face value of the note ( $ 72 , 000 ), with the remaining $ 55 , 049 recognized as a loss on issuance of convertible note . The debt discount was amortized until its repayment and amortization expense of $ 0 and $ 51 , 000 was recognized for the nine months ended September 30 , 2023 and 2022 , respectively . The balance of the note payable is $ 0 at September 30 , 2023 and December 31 , 2022 . The Company recognized interest expense of $ 0 and $ 2 , 550 for the nine months ended September 30 , 2023 and 2022 , respectively, in its Statements of Operations and Comprehensive Income (Loss) . Consulting fees Mr . Newton is the President and a member of the Board of Directors of the Company . Mr . Newton does not bill the Company for his services as President ; however, he has a service agreement with the Company . Pursuant to this agreement, the Company recognized consulting expenses of $ 185 , 007 and $ 75 , 341 for the nine months ended September 30 , 2023 and 2022 , respectively . Dr . Michael Ranger i s a member of the Board of Directors of the Company . Dr . Ranger does not receive compensation for his services as a member of the board ; however, he has a service agreement with the Company, including consulting time and expense reimbursement . Pursuant to this agreement, the Company recognized no consulting expenses for the nine months ended September 30 , 2023 , and 2022 , respectively . NOTE 10 . COMMITMENTS AND CONTINGENCIES In the ordinary course of business, we may be exposed to claims and threatened litigation, and use various methods to resolve these matters in a manner that we believe serves the best interest of our shareholders and other constituents . When a loss is probable, we disclose the amount of probable loss, or disclose a range of reasonably possible losses if they are material and we are able to estimate such a range . If we cannot provide an estimate, we explain the factors that prevent us from doing so . We believe the recorded reserves in our consolidated financial statements are adequate in light of the probable and estimable liabilities . We do not presently believe that any claims or litigation will be material to our results of operations, cash flows, or financial condition . Environmental Matters The Company is engaged in oil and gas exploration and may become subject to certain liabilities as they relate to environmental cleanup of sites or other environmental restoration procedures as they relate to the exploration of oil and gas . Should it be determined that a liability exists with respect to any environmental clean - up or restoration, the liability to cure such a violation could fall upon the Company . No claim has been made, nor is the Company aware of any liability, which it may have, as it relates to any environmental clean - up, restoration or the violation of any rules or regulations relating thereto . Liabilities for expenditures are recorded when environmental assessment and/or remediation is probable, and the costs can be reasonably estimated . NOTE 11 . SUBSEQUENT EVENTS
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In accordance with SFAS 165 (ASC 855 - 10 ) management has performed an evaluation of subsequent events through the date that the financial statements were available to be issued and has determined that it does not have any material subsequent events to disclose in these financial statements, other than the following :
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Exhibit 99.34
Strata Power Corporation Interim MD&A – Quarterly Highlights For the Nine Months ended September 30, 2023 Management’s Discussion and Analysis of Financial Condition and Results of Operations Management’s Discussion and Analysis of Financial Condition ("MD&A") and Results of Operations should be read in conjunction with the accompanying unaudited financial statements. The financial statements are presented in United States dollars and have been prepared in accordance with accounting principles generally accepted in the United States, referred to as US GAAP. Certain statements contained in the MD&A constitute forward - looking statements. Such forward - looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward - looking statements. Readers are cautioned not to place undue reliance on these forward - looking statements which speak only as of the date the financial statements were made and readers are advised to consider such forward - looking statements in light of the risks set forth both below and in the Company’s most recent annual report. RESULTS OF OPERATIONS Nine months ended September 30, 2023 compared to nine months ended September 30, 2022. For the nine months ended September, 2023, the Company had a net loss from operations of $49,435 compared to a net income of $320,166 for the nine months ended September 30, 2023, a change of $369,601. The primary reasons for the decreased net income are a decrease in royalty income, an increase in consulting expense and the change in the fair value of derivative liabilities. For the nine months ended September 30, 2023 and 2022, the Company recorded a gain in the change in fair value of derivative liability of $6,345 and $181,937 respectively. This item is a non - cash item and was recorded in accordance with ASC 850 - 40 - 15. This guidance requires entities to evaluate whether an equity - linked financial instrument (or embedded feature) is indexed to its own stock by assessing the instrument’s contingent exercise provisions and settlement provisions. Instruments not indexed to their own stock fail to meet the scope exception of Accounting for Derivative Instruments and Hedging Activities, ASC 815 - 10 - 15 - 74(a), and should be classified as a liability and marked - to - market. REVENUES Pursuant to the Purchase and Sale Agreement with an unrelated third party, the Company has a 2 . 5 % gross overriding royalty on all petroleum substances produced from three oil sands leases located in the southeast portion of the Peace River oil sands area, that were sold in May, 2019 . For the nine months ended September 30 , 2023 and 2022 , the Company earned royalties of $ 159 , 043 and $ 321 , 683 , respectively . DISCONTINUED OPERATIONS There was no discontinued operations activity in 2023 or 2022. INTEREST AND OTHER INCOME (EXPENSE) Included in other income (expense) for the nine months ended September 30 , 2023 and 2022 is a foreign exchange gain of $ 1 , 836 and 4 , 069 , respectively . For the nine months ended September 30 , 2023 and 2022 , other income (expense) included amortization of debt discount of $ 0 and $ 51 , 000 , respectively . In addition, for the nine months ended September 30 , 2023 and 2022 , there was income of $ 6 , 345 and $ 181 , 937 from the change in fair value of derivative liability .
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Liquidity and Capital Resources As of September 30 , 2023 , we had $ 12 , 549 in cash, a decrease of $ 68 , 356 from December 31 , 2022 . Management estimates that the Company will require approximately $ 200 , 000 to fund planned operations for the next twelve months . Therefore, current cash on hand is not sufficient to fund planned operations for 2023 . Our policy is to pay all operational expenses when due, provided that the vendor, in the normal course of business, has satisfied all necessary conditions for payment . Net cash used in operating activities during the nine months ended September 30 , 2023 was $ 64 , 950 , compared to net cash provided by operating activities of $ 154 , 900 for the same period in the prior year . The decrease in cash provided by operating activities was the decrease in royalty income and the increased consulting expenses, offset by the change in the fair value of derivative liabilities . Cash used in investing activities for the nine months ended September 30 , 2023 and 2022 was $ 3 , 522 and $ 714 , respectively, resulting primarily from the change in the reclamation deposits . Net cash used in financing activities for the nine months ended September 30 , 2023 and 2022 was $ 0 and $ 78 , 209 , respectively . For September 30 , 2022 , the financing activities consisted of the repayment of convertible debt . We are an exploration stage company with limited operating history, which raises substantial doubt as to our ability to successfully develop profitable business operations and makes an investment in our common shares very risky . We have no long - term debt . We believe that our available cash may not be sufficient to fund our working capital requirements to maintain, explore and develop our property interests for the next twelve months . If capital is not available to fund future operations, we will not be able to pursue our business plan and operations would come to a halt and our common shares could be nearly worthless . We will require substantial additional capital to participate in the development of our properties which have not had any production of oil or natural gas as well as for acquisition and/or development of other producing properties . Because we currently have limited cash flow from operations, we need to raise additional capital, which may be in the form of loans from current shareholders and/or from private equity offerings . Our ability to access capital will depend on our success in participating in properties that are successful in exploring for and producing oil and gas at profitable prices . It will also be dependent upon the status of the capital markets at the time such capital is sought . Should sufficient capital not be available, the development of our business plan could be delayed and, accordingly, the implementation of our business strategy would be adversely affected . In such event it would not be likely that investors would obtain a profitable return on their investments or a return of their investments at all . We anticipate that we will incur the following expenditures through our current fiscal year : $15,000 in connection with property lease payments and follow up analysis on the Company’s oil sands properties $175,000 for operating expenses, including working capital, consulting fees, general and administrative, professional, legal and accounting expenses In 2023 , our capital requirements will mostly be associated with the maintenance of our lease payments to the Crown and general and administrative expenses . Going forward we expect the short - term and long - term funding of our oil and gas operations to be financed primarily through royalty income, equity issuance in the form of private placements and the exercise of warrants . In addition, we continue to work with potential partners to discuss funding arrangements which would facilitate furtherance of our property interests . We cannot be certain that any required additional financing will be available on terms favorable to us as the risky nature of this enterprise and lack of tangible assets places debt financing beyond the credit - worthiness required by most banks or typical investors of corporate debt until such time as the economic viability of our oil sands properties can be demonstrated . If additional funds are raised by the issuance of our equity securities, existing stockholders will experience dilution of their ownership interest . If adequate funds are not available or not available on acceptable terms, we may be unable to continue, fund expansion, pursue further development or respond to competitive pressures .
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Our financing prospects must be considered in light of the risks, expenses and difficulties frequently encountered in establishing a business in the oil and natural gas industries . We have yet to generate substantial revenues from operations . There is nothing at this time on which to base an assumption that our business operations will prove to be successful or that we will be able to operate profitably . Our future operating results will depend on many factors, including : our ability to raise adequate working capital success of our exploration and development demand for natural gas and oil the level of our competition our ability to attract and maintain key management and employees and our ability to efficiently explore, develop and produce sufficient quantities of marketable natural gas or oil in a highly competitive and speculative environment while maintaining quality and controlling costs Volatility of oil and gas prices and markets could make it more difficult for us to achieve profitability and less likely for investors in our common shares to receive a return on their investment . Our ability to achieve profitability is substantially dependent on prevailing prices for natural gas and oil . The amounts and price obtainable for any oil and gas production that we achieve will be affected by market factors beyond our control . If these factors are not favorable over time to our financial interests, it is likely that owners of our common shares could lose their investments . Such factors include : worldwide or regional demand for energy, which is affected by economic conditions the domestic and foreign supply of natural gas and oil weather conditions domestic and foreign governmental regulations political conditions in natural gas and oil producing regions the ability of members of the Organization of Petroleum Exporting Countries to agree upon and maintain oil prices and production levels the price and availability of other fuels Additionally, due to worldwide economic uncertainty, the availability and cost of funds for production and other expenses have become increasingly difficult, if not impossible, to project . These changes and events may materially affect our financial performance .
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Exhibit 99.35
FORM 52 - 109F2 CERTIFICATION OF INTERIM FILINGS - FULL CERTIFICATE I, Trevor Newton, Chief Executive Officer of Strata Power Corporation Inc., certify the following: 1. Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Strata Power Corporation Inc. (the “issuer”) for the interim period ended September 30, 2023. 2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings. 3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings. 4. Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52 - 109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer. 5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings a. designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that i. material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and ii. information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and b. designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP. 1. Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. 2. N/A 3. N/A 6 . Reporting changes in ICFR : The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on July 1 , 2023 and ended on September 30 , 2023 that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR . 1/2
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Date: November 15, 2023 (signed) "Trevor Newton" Trevor Newton Chief Executive Officer
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Exhibit 99.36
FORM 52 - 109F2 CERTIFICATION OF INTERIM FILINGS - FULL CERTIFICATE I, Trevor Newton, Chief Financial Officer of Strata Power Corporation, certify the following: 1. Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Strata Power Corporation (the “issuer”) for the interim period ended September 30, 2023. 2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings. 3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings. 4. Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52 - 109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer. 5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings a. designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that i. material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and ii. information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and b. designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP. 1. Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. 2. N/A 3. N/A 6 . Reporting changes in ICFR : The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on July 1 , 2023 and ended on September 30 , 2023 that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR . 1/2
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Date: Novembert 15, 2023 (signed) "Trevor Newton" Trevor Newton Chief Financial Officer
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Exhibit 99.37
STRATA POWER CORPORATION (" Strata " or the " Corporation ") FORM NI 51 - 101F1 STATEMENT OF RESERVES DATA AND OTHER OIL AND GAS INFORMATION For fiscal year ended December 31, 2020 (This is the form referred to in item 1 of National Instrument 51 - 101 Standards of Disclosure for Oil and Gas Activities ("NI 51 - 101"). Terms for which a meaning is given in NI 51 - 101 have the same meaning in this Form 51 - 101F1.) TABLE OF CONTENTS DATE OF STATEMENT DISCLOSURE OF RESERVES DATA PRICING ASSUMPTIONS RECONCILIATION OF CHANGES IN RESERVES Page 1 Page 1 None – not included None – not included ADDITIONAL INFORMATION RELATING TO RESERVES DATA None – not included PART 1 PART 2 PART 3 PART 4 PART 5 PART 6 OTHER OIL AND GAS INFORMATION Page 1 Form 51 - 101F2 Report on Reserves Data by Independent Qualified Reserves Evaluator or Auditor Report of Management and Directors on Oil and Gas Disclosure Not required – no reserves Form 51 - 101F3 Filed separately PART 1 DATE OF STATEMENT Relevant Dates 1. The preparation date of the information provided in this statement is: May 4, 2021. 2. The effective date of the information provided in this statement is as of the Corporation's most recently completed fiscal year ended: December 31, 2020. PART 2 DISCLOSURE OF RESERVES DATA As of December 31, 2020, Strata did not have any reserves or production on any of its properties. Accordingly, Strata did not have any future net revenue related to reserves as of December 31, 2020. PART 6 OTHER OIL AND GAS INFORMATION Oil and Gas Properties The Company currently has interests in oil sands properties located in the Peace River area of Northern Alberta, Canada. The Company is currently engaged in the exploration and development of heavy oil and bitumen properties . The Company’s oil sands interests are unproven and there is no assurance that a commercially viable oil or gas deposit exists on any of its properties . Further evaluation will be required on each property before a final evaluation as to the economics and legal feasibility of the property is determined . The Company currently has an interest in 7 oil sands leases, totaling 8,704 hectares, all located in the Peace River oil sands area, and owns 3 non - producing wells.
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PEACE RIVER OIL SANDS LEASES The Company has an interest in 7 oil sands leases totaling 8 , 704 hectares with the Province of Alberta in the Peace River oil sands region of Alberta, Canada (the “Peace River Properties”) which were acquired through a public auction process and through private transactions . All leases have an initial term of 15 years, as follows : Annual Payments CDN Land Area (HA) Number of Leases Lease Start Date $15,232 4,352 3 2006 – 50% interest $7,616 4,352 4 2007 – 50% interest $22,848 8,704 7 TOTAL Location The Peace River Properties are located in the Peace River oil sands region in Alberta approximately 40 to 50 kilometers away from the town of Peace River, in the Cadotte Lake area. Peace River Projects The Peace River properties (hereinafter referred to as the “Cadotte Leases”) are comprised of 7 oil sands leases with the Government of the Province of Alberta, Canada . All of the leases are for an initial 15 - year term (and may then be converted to non - expiring leases) and require minimum annual lease payments to the Crown . Each lease grants the Company the right to explore for, develop and produce hydrocarbons from the geological formations described in each lease . Regional Geology The Peace River Cretaceous clastic reservoir consists of a complex stratigraphy similar in nature to the Athabasca Deposit to the east . These are thought to comprise estuarine systems where the best reservoirs are contained in tidal inlet and barrier sands . Secondary reservoir targets may be tidal delta, bayhead delta, tidal channel, and tidal flat sands . The Peace River Carboniferous reservoir consists of platform sediments with relatively few reef building organisms . Structurally, the Peace River strata dip to the southwest and the elevation of the bitumen - bearing interval lies between 50 and 100 meters below sea level or at a depth of between 680 to 790 meters below the surface . Property Geology (Cadotte Leases) Strata has focused its efforts on the bitumen and heavy oil resources contained in the Debolt/Elkton carbonate Carboniferous Formation and the Bluesky/Gething clastic Cretaceous Formation in the Cadotte area . The nature of the geology of the carbonate sequence in the Cadotte area has a significant influence on the distribution of the bitumen resource . The principal reference source for this section is the Alberta Research Council’s publication, “Geological Atlas of the Western Canada Sedimentary Basin” . The sequence that hosts the bitumen deposits is the Rundle Group of Lower Carboniferous age . The Rundle Group in this area includes three stratigraphic units which, in ascending order, are the Pekisko, Shunda and Debolt Formations . From place - to - place the Debolt Formation may also include another distinct unit, the Elkton Member . In the Cadotte area, the Elkton Member is usually present, as long as the overlying unconformity with the Cretaceous sequence has not eroded the entire Debolt Formation sequence . Although there are many intervals that are bitumen enriched in the Rundle sequence in the Cadotte area, the principal enrichment zones occur in the Elkton Member, the upper half of the Debolt but usually not right at the top of the formation and, to a lesser extent, in the Shunda Formation . The high - grade zones of enrichment are those that occur in the Elkton Member and the Debolt Formation . A Cretaceous clastic sequence that includes the Gething and Bluesky Formations at the base, unconformably overlies the Carboniferous rocks in this area . All the beds dip gently to the west with those lying below the unconformity having a somewhat greater dip than those above it . This causes the sequence below the unconformity to be eroded to a greater degree to the east and to be less complete, compared with the west . These westerly dips may be the result of post - depositional tectonic events and may not reflect the original orientation of the accumulation of sediment . The Carboniferous sequence of the Rundle assemblage is believed to have accumulated as a result of a series of prograding events that developed in a southerly to southwesterly direction .
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The Carboniferous sequence mainly includes platform sediments that show generally shallower - water characteristics up - section . In a basinward direction the depositional facies proceed from beach and lagoonal environments through shoals of the shelf margin to marine basin muds . The lithologies that result include high energy siliciclastics of the beach environment, through various types of carbonates on the platform and its slope to shale in the deep marine environment . There even appear to be beds present that have the character of unconsolidated coarse sediments . Several transgressive events therefore resulted in the accumulation of clastic sediments interbedded with carbonate units . The carbonate units included relatively few reef building organisms and thus there was little tendency for irregular geological bodies such as reefs to form in this sequence in this area . From one well to the next the regular nature of the deposition that took place at this time is apparent and it is relatively easy to show the correlation that exists between the same units in adjacent wells in the target area . This feature of regular bed continuity is in strong contrast to the variability of the clastic units of the overlying Cretaceous sequence as seen in the Athabasca region . It is also noteworthy that the bitumen enrichment is strongly influenced by the bedded nature and continuity of the sediments . It is readily possible in many cases to show the same details of the enriched sequence in adjacent wells even when they are spaced a kilometer or more apart . This has a strong impact on the selection of data separation distances for the classification of resources ; in this sequence an equivalent assurance of existence is achieved with much wider spacing of wells than that used in the classification of bitumen resources for the Cretaceous surface mineable oil sands deposits near Fort McMurray in the Athabasca region of Alberta . Previous Work During the winter drill season of 2006 – 2007 , Strata drilled four wells on the Cadotte leases . Three of these wells were within the Cadotte Central Target Area and one was east of the Cadotte Central Target Area . Three wells were drilled with cores in the Cadotte Central Target Area, two of which were cased allowing for production testing with the ability to re - enter these wells for future testing . The other well was abandoned due to drilling fluid losses during drilling which did not allow the well to be cased for testing in the future . The fourth well drilled in the eastern location was cored and cased . The cores of all of these wells were tested and examined in a laboratory in Calgary . The results of these tests were that cold production was not viable . However, the results indicated that the bitumen would flow at approximately 85 ƒ C . These results will allow the Company to explore different means of extraction in addition to steam . Former leaseholders have drilled wells on and around the Company’s Cadotte lease area . Geophysical well logs are of variable quality but generally consist of a full suite of tools to evaluate the potential reservoirs . With respect to available drilling data, the leases of the Cadotte area are drilled at an average spacing of one well per section . However, not all the existing wells were drilled to investigate the sequence located on the Company’s Cadotte leases . The effective average spacing with wells that have penetrated the Carboniferous sequence is approximately 0 . 8 wells per section . This spacing is from twenty - three wells on or immediately adjacent to the leases . There are an additional two hundred nineteen wells in the surrounding area, the data from which has also been referenced and inspected by the Company to assist with its evaluation of the Cadotte leases . 15 However, the quality of the data from the wells of different vintage is quite variable . Several of the wells were drilled in the 1950 ’s . The drilling records and logs for these wells are sometimes poor or absent or they may be less complete than those of more recently drilled wells . A database search was done to identify higher quality data which was restricted to wells drilled since 1970 and this, plus the new Strata wells was used as the primary reference data . A total of eighteen wells of this vintage are located on or immediately adjacent to the Cadotte lease blocks . The well log data from these wells is the primary source of information on the leases available for Strata’s evaluations but this is supplemented by high quality data from a further thirty - nine more distant wells in the area .
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In the United States, registrants, including foreign private issuers like us, are required to disclose proved reserves using the standards contained in Rule 4 - 10 (a) of the United States Securities and Exchange Commission’s (“SEC”) Regulation S - X . The Company has no proved reserves at this time . Cadotte Central The Company completed the drilling of its first four wells in the winter drilling season of 2006 – 2007 , and engaged Norwest Corporation (”Norwest”) of Calgary, Alberta Canada to assist Strata with the planning and undertaking of its exploration of the Cadotte leases . Subsequently, Strata completed the following technical reports relating to these leases : Evaluation of In - Place Bitumen Resources – Cadotte Central Leases (August 16, 2007) [Norwest] Preliminary Feasibility Study of the Cadotte Central Leases (February 29, 2008) [Norwest Questa] Pilot Projects: Carbonate - Hosted Bitumen Deposits in Alberta (July 17, 2008 [Norwest] Cadotte Central Resource Reclassification (Upgrade) (April 28, 2010) [Norwest] Evaluation of Bitumen Resources Cadotte Central and West Leases (May 10, 2013) [Norwest] These studies were designed to comply with the requirements of National Instrument 51 - 101 and the resource classification scheme and criteria elaborated in Volume 1 , of the Canadian Oil and Gas Evaluation Handbook (“COGEH”) at the time they were authored . However since that time, COGEH standards have been modified and therefore Strata is no longer permitted to publicize the contents of these reports under Canadian Securities Regulations . Subsequent to these studies, Strata completed additional analyses including a study entitled “Debolt Core Description and Interpretation” by Dr . Hans G . Machel, and also a seismic study by Norwest entitled “Seismic Study of Cadotte Leases” . The latter study utilized existing well and seismic data and focused on different physical properties and technical aspects related to the identification of pools and fields . The initial interpretation of the geological structure resulted in the identification of cold production targets which were then validated by seismic data . The Company's technical team subsequently identified multiple drilling locations in order to test the extent to which the Bluesky Formation has the fluid properties which permit the use of primary production methods . In late 2014 , Strata commenced initial planning and permitting activities needed to develop a drill program and continue exploration . The Company engaged specialized third - party service provider(s) to assist with the development of a drill program which included the submission of an Oil Sands Exploration plan, the ("OSE") to the Crown . Elements of an OSE application include, but are not limited to, mapping and locating services, sensitive areas, wildlife zones, historical work in the area, site access, environmental services, exploration operations detail, and stake holder consultation and project management services . The OSE program approval was received in February 2015 granting the Company two years from the date of issue to conduct its exploration program . Due to the oil market, the Company has not carried out its drilling program . In 2018, Strata completed the following technical report relating to a portion of its oil sands leases: Evaluation of Bitumen Resources, Cadotte Lease Blocks (November 19, 2018) [Gustavson Associates] This study was prepared according to National Instrument 51 - 101 and the resource classification scheme and criteria elaborated in the Canadian Oil and Gas Evaluation Handbook (COGEH v . 2 - section 2 . 5 . 5 , p . 2 - 71 ) . Planned Work by the Company for 2020 When adequate funding can be assembled, Strata intends to proceed with its exploration program . The Company expects the short and long - term funding of our oil and gas operations to be financed as in the past through equity in the form of private placements and warrant exercises . Tax Horizons
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Strata’s management does not expect that the Corporation will be taxable in the next two to three years. Costs Incurred The following table summarizes certain costs (irrespective of whether such costs were capitalized or recorded as an expense) incurred by the Corporation during the most recently completed financial year. Year Ended December 31, 2020 (USD) Peace River $ 38,068 Property acquisition and lease payments 0 Exploration costs 0 Development costs $ 38,068 Total expenditures
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Exhibit 99.38
Exhibit 99.39
STRATA POWER CORPORATION (" Strata " or the " Corporation ") FORM NI 51 - 101F1 STATEMENT OF RESERVES DATA AND OTHER OIL AND GAS INFORMATION For fiscal year ended December 31, 2021 (This is the form referred to in item 1 of National Instrument 51 - 101 Standards of Disclosure for Oil and Gas Activities ("NI 51 - 101"). Terms for which a meaning is given in NI 51 - 101 have the same meaning in this Form 51 - 101F1.) TABLE OF CONTENTS PART 1 PART 2 DATE OF STATEMENT DISCLOSURE OF RESERVES DATA PRICING ASSUMPTIONS RECONCILIATION OF CHANGES IN RESERVES Page 1 Page 1 None – not included None – not included ADDITIONAL INFORMATION RELATING TO RESERVES DATA None – not included PART 3 PART 4 PART 5 PART 6 OTHER OIL AND GAS INFORMATION Page 1 Form 51 - 101F2 Report on Reserves Data by Independent Qualified Reserves Evaluator or Auditor Report of Management and Directors on Oil and Gas Disclosure Not required – no reserves Form 51 - 101F3 Filed separately PART 1 DATE OF STATEMENT Relevant Dates 1. The preparation date of the information provided in this statement is: May 1, 2022. 2. The effective date of the information provided in this statement is as of the Corporation's most recently completed fiscal year ended: December 31, 2021. PART 2 DISCLOSURE OF RESERVES DATA As of December 31 , 2021 , Strata did not have any reserves or production on any of its properties . Accordingly, Strata did not have any future net revenue related to reserves as of December 31 , 2021 . PART 6 OTHER OIL AND GAS INFORMATION Oil and Gas Properties The Company currently has interests in oil sands properties located in the Peace River area of Northern Alberta, Canada . The Company is currently engaged in the exploration and development of heavy oil and bitumen properties . The Company’s oil sands interests are unproven and there is no assurance that a commercially viable oil or gas deposit exists on any of its properties . Further evaluation will be required on each property before a final evaluation as to the economics and legal feasibility of the property is determined . The Company currently has an interest in 7 oil sands leases, totaling 8 , 704 hectares and a royalty interest in 10 oil sands leases, all located in the Peace River oil sands area . The Company also owns 3 non - producing wells .
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PEACE RIVER OIL SANDS LEASES The Company has an interest in 7 oil sands leases totaling 8 , 704 hectares with the Province of Alberta in the Peace River oil sands region of Alberta, Canada (the “Peace River Properties”) which were acquired through a public auction process and through private transactions . All of the leases were for an initial term of 15 years . The 7 leases that the Company continues to hold a partial interest in have now been converted to non - expiring leases, subject to minimum annual lease payments being made to the Crown . Each lease grants the Company the right to explore for, develop and produce hydrocarbons from the geological formations described in each lease . Annual Payments CDN Land Area (HA) Number of Leases Lease Start Date $6,720 4,352 3 2006 – 50% interest $7,616 4,352 4 2007 – 50% interest $14,336 8,704 7 TOTAL Location The Peace River Properties are located in the Peace River oil sands region in Alberta approximately 40 to 50 kilometers away from the town of Peace River. Peace River Projects The Peace River properties (hereinafter referred to as the “Cadotte Leases”) are comprised of 7 oil sands leases with the Government of the Province of Alberta, Canada . All of the leases were for an initial 15 - year term and have been converted to non - expiring leases and require minimum annual lease payments to the Crown . Each lease grants the Company the right to explore for, develop and produce hydrocarbons from the geological formations described in each lease . Regional Geology The Peace River Cretaceous clastic reservoir consists of a complex stratigraphy similar in nature to the Athabasca Deposit to the east . These are thought to comprise estuarine systems where the best reservoirs are contained in tidal inlet and barrier sands . Secondary reservoir targets may be tidal delta, bayhead delta, tidal channel, and tidal flat sands . The Peace River Carboniferous reservoir consists of platform sediments with relatively few reef building organisms . Structurally, the Peace River strata dip to the southwest and the elevation of the bitumen - bearing interval lies between 50 and 100 meters below sea level or at a depth of between 680 to 790 meters below the surface . Property Geology (Cadotte Leases) Strata has focused its efforts on the bitumen and heavy oil resources contained in the Debolt/Elkton carbonate Carboniferous Formation and the Bluesky/Gething clastic Cretaceous Formation in the Cadotte area . The nature of the geology of the carbonate sequence in the Cadotte area has a significant influence on the distribution of the bitumen resource . The principal reference source for this section is the Alberta Research Council’s publication, “Geological Atlas of the Western Canada Sedimentary Basin” . The sequence that hosts the bitumen deposits is the Rundle Group of Lower Carboniferous age . The Rundle Group in this area includes three stratigraphic units which, in ascending order, are the Pekisko, Shunda and Debolt Formations . From place - to - place the Debolt Formation may also include another distinct unit, the Elkton Member . In the Cadotte area, the Elkton Member is usually present, as long as the overlying unconformity with the Cretaceous sequence has not eroded the entire Debolt Formation sequence . Although there are many intervals that are bitumen enriched in the Rundle sequence in the Cadotte area, the principal enrichment zones occur in the Elkton Member, the upper half of the Debolt but usually not right at the top of the formation and, to a lesser extent, in the Shunda Formation . The high - grade zones of enrichment are those that occur in the Elkton Member and the Debolt Formation . A Cretaceous clastic sequence that includes the Gething and Bluesky Formations at the base, unconformably overlies the Carboniferous rocks in this area . All the beds dip gently to the west with those lying below the unconformity having a somewhat greater dip than those above it . This causes the sequence below the unconformity to be eroded to a greater degree to the east and to be less complete, compared with the west . These westerly dips may be the result of post - depositional tectonic events and may not reflect the original orientation of the
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accumulation of sediment . The Carboniferous sequence of the Rundle assemblage is believed to have accumulated as a result of a series of prograding events that developed in a southerly to southwesterly direction . The Carboniferous sequence mainly includes platform sediments that show generally shallower - water characteristics up - section . In a basinward direction the depositional facies proceed from beach and lagoonal environments through shoals of the shelf margin to marine basin muds . The lithologies that result include high energy siliciclastics of the beach environment, through various types of carbonates on the platform and its slope to shale in the deep marine environment . There even appear to be beds present that have the character of unconsolidated coarse sediments . Several transgressive events therefore resulted in the accumulation of clastic sediments interbedded with carbonate units . The carbonate units included relatively few reef building organisms and thus there was little tendency for irregular geological bodies such as reefs to form in this sequence in this area . From one well to the next the regular nature of the deposition that took place at this time is apparent and it is relatively easy to show the correlation that exists between the same units in adjacent wells in the target area . This feature of regular bed continuity is in strong contrast to the variability of the clastic units of the overlying Cretaceous sequence as seen in the Athabasca region . It is also noteworthy that the bitumen enrichment is strongly influenced by the bedded nature and continuity of the sediments . It is readily possible in many cases to show the same details of the enriched sequence in adjacent wells even when they are spaced a kilometer or more apart . This has a strong impact on the selection of data separation distances for the classification of resources ; in this sequence an equivalent assurance of existence is achieved with much wider spacing of wells than that used in the classification of bitumen resources for the Cretaceous surface mineable oil sands deposits near Fort McMurray in the Athabasca region of Alberta . Previous Work During the winter drill season of 2006 – 2007 , Strata drilled four wells on the Cadotte leases . Three of these wells were within the Cadotte Central Target Area and one was east of the Cadotte Central Target Area . Three wells were drilled with cores in the Cadotte Central Target Area, two of which were cased allowing for production testing with the ability to re - enter these wells for future testing . The other well was abandoned due to drilling fluid losses during drilling which did not allow the well to be cased for testing in the future . The fourth well drilled in the eastern location was cored and cased . The cores of all of these wells were tested and examined in a laboratory in Calgary . The results of these tests were that cold production was not viable . However, the results indicated that the bitumen would flow at approximately 85 ƒ C . These results will allow the Company to explore different means of extraction in addition to steam . Former leaseholders have drilled wells on and around the Company’s Cadotte lease area . Geophysical well logs are of variable quality but generally consist of a full suite of tools to evaluate the potential reservoirs . With respect to available drilling data, the leases of the Cadotte area are drilled at an average spacing of one well per section . However, not all the existing wells were drilled to investigate the sequence located on the Company’s Cadotte leases . The effective average spacing with wells that have penetrated the Carboniferous sequence is approximately 0 . 8 wells per section . This spacing is from twenty - three wells on or immediately adjacent to the leases . There are an additional two hundred nineteen wells in the surrounding area, the data from which has also been referenced and inspected by the Company to assist with its evaluation of the Cadotte leases . However, the quality of the data from the wells of different vintage is quite variable . Several of the wells were drilled in the 1950 ’s . The drilling records and logs for these wells are sometimes poor or absent or they may be less complete than those of more recently drilled wells . A database search was done to identify higher quality data which was restricted to wells drilled since 1970 and this, plus the new Strata wells was used as the primary reference data . A total of eighteen wells of this vintage are located on or immediately adjacent to the Cadotte lease blocks . The well log data from these wells is the primary source of information on the leases available for Strata’s evaluations but this is supplemented by high quality data from a further thirty - nine more distant wells in the area . In the United States, registrants, including foreign private issuers like us, are required to disclose proved reserves using the standards contained in Rule 4 - 10 (a) of the United States Securities and Exchange Commission’s (“SEC”) Regulation S - X . The Company has no proved reserves at this time .
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Cadotte Central The Company completed the drilling of its first four wells in the winter drilling season of 2006 – 2007 , and engaged Norwest Corporation (”Norwest”) of Calgary, Alberta Canada to assist Strata with the planning and undertaking of its exploration of the Cadotte leases . Subsequently, Strata completed the following technical reports relating to these leases : Evaluation of In - Place Bitumen Resources – Cadotte Central Leases (August 16, 2007) [Norwest] Preliminary Feasibility Study of the Cadotte Central Leases (February 29, 2008) [Norwest Questa] Pilot Projects: Carbonate - Hosted Bitumen Deposits in Alberta (July 17, 2008 [Norwest] Cadotte Central Resource Reclassification (Upgrade) (April 28, 2010) [Norwest] Evaluation of Bitumen Resources Cadotte Central and West Leases (May 10, 2013) [Norwest] These studies were designed to comply with the requirements of National Instrument 51 - 101 and the resource classification scheme and criteria elaborated in Volume 1 , of the Canadian Oil and Gas Evaluation Handbook (“COGEH”) at the time they were authored . However since that time, COGEH standards have been modified and therefore Strata is no longer permitted to publicize the contents of these reports under Canadian Securities Regulations . Subsequent to these studies, Strata completed additional analyses including a study entitled “Debolt Core Description and Interpretation” by Dr . Hans G . Machel, and also a seismic study by Norwest entitled “Seismic Study of Cadotte Leases” . The latter study utilized existing well and seismic data and focused on different physical properties and technical aspects related to the identification of pools and fields . The initial interpretation of the geological structure resulted in the identification of cold production targets which were then validated by seismic data . The Company's technical team subsequently identified multiple drilling locations in order to test the extent to which the Bluesky Formation has the fluid properties which permit the use of primary production methods . In late 2014 , Strata commenced initial planning and permitting activities needed to develop a drill program and continue exploration . The Company engaged specialized third - party service provider(s) to assist with the development of a drill program which included the submission of an Oil Sands Exploration plan, the ("OSE") to the Crown . Elements of an OSE application include, but are not limited to, mapping and locating services, sensitive areas, wildlife zones, historical work in the area, site access, environmental services, exploration operations detail, and stake holder consultation and project management services . The OSE program approval was received in February 2015 granting the Company two years from the date of issue to conduct its exploration program . Due to the oil market, the Company did not carry out its drilling program . In 2018, Strata completed the following technical report relating to a portion of its oil sands leases: Evaluation of Bitumen Resources, Cadotte Lease Blocks (November 19, 2018) [Gustavson Associates] This study was prepared according to National Instrument 51 - 101 and the resource classification scheme and criteria elaborated in the Canadian Oil and Gas Evaluation Handbook (COGEH v . 2 - section 2 . 5 . 5 , p . 2 - 71 ) . Planned Work by the Company for 2022 When adequate funding can be assembled, Strata intends to proceed with further evaluation of heavy oil and bitumen opportunities in Alberta . The Company expects the short and long - term funding of our oil and gas operations to be financed as in the past through equity in the form of private placements and warrant exercises, in addition to a convertible note from a related party . Tax Horizons
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Strata’s management does not expect that the Corporation will be taxable in the next two to three years. Costs Incurred The following table summarizes certain costs (irrespective of whether such costs were capitalized or recorded as an expense) incurred by the Corporation during the most recently completed financial year. Year Ended December 31, 2021 (USD) Peace River $ 11,088 Property acquisition and lease payments 0 Exploration costs 0 Development costs $ 11,088 Total expenditures
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Exhibit 99.40
Exhibit 99.41
STRATA POWER CORPORATION (" Strata " or the " Corporation ") FORM NI 51 - 101F1 STATEMENT OF RESERVES DATA AND OTHER OIL AND GAS INFORMATION For fiscal year ended December 31, 2022 (This is the form referred to in item 1 of National Instrument 51 - 101 Standards of Disclosure for Oil and Gas Activities ("NI 51 - 101"). Terms for which a meaning is given in NI 51 - 101 have the same meaning in this Form 51 - 101F1.) TABLE OF CONTENTS PART 1 PART 2 DATE OF STATEMENT DISCLOSURE OF RESERVES DATA PRICING ASSUMPTIONS RECONCILIATION OF CHANGES IN RESERVES Page 1 Page 1 None – not included None – not included ADDITIONAL INFORMATION RELATING TO RESERVES DATA None – not included PART 3 PART 4 PART 5 PART 6 OTHER OIL AND GAS INFORMATION Page 1 Form 51 - 101F2 Report on Reserves Data by Independent Qualified Reserves Evaluator or Auditor Report of Management and Directors on Oil and Gas Disclosure Not required – no reserves Form 51 - 101F3 Filed separately PART 1 DATE OF STATEMENT Relevant Dates 1. The preparation date of the information provided in this statement is: March 23, 2023. 2. The effective date of the information provided in this statement is as of the Corporation's most recently completed fiscal year ended: December 31, 2022. PART 2 DISCLOSURE OF RESERVES DATA As of December 31 , 2022 , Strata did not have any reserves or production on any of its properties . Accordingly, Strata did not have any future net revenue related to reserves as of December 31 , 2022 . PART 6 OTHER OIL AND GAS INFORMATION Oil and Gas Properties The Company currently has interests in oil sands properties located in the Peace River area of Northern Alberta, Canada . The Company is currently engaged in the exploration and development of heavy oil and bitumen properties . The Company’s oil sands interests are unproven and there is no assurance that a commercially viable oil or gas deposit exists on any of its properties . Further evaluation will be required on each property before a final evaluation as to the economics and legal feasibility of the property is determined . The Company currently has an interest in 7 oil sands leases, totaling 8 , 704 hectares and a royalty interest in 10 oil sands leases, all located in the Peace River oil sands area . The Company also owns 1 non - producing well .
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PEACE RIVER OIL SANDS LEASES The Company has an interest in 7 oil sands leases totaling 8 , 704 hectares with the Province of Alberta in the Peace River oil sands region of Alberta, Canada (the “Peace River Properties”) which were acquired through a public auction process and through private transactions . All of the leases were for an initial term of 15 years . The 7 leases that the Company continues to hold a partial interest in have now been converted to non - expiring leases, subject to minimum annual lease payments being made to the Crown . Each lease grants the Company the right to explore for, develop and produce hydrocarbons from the geological formations described in each lease . Annual Payments CDN Land Area (HA) Number of Leases Lease Start Date $14,144 4,352 3 2006 – 50% interest $14,144 4,352 4 2007 – 50% interest $28,288 8,704 7 TOTAL Location The Peace River Properties are located in the Peace River oil sands region in Alberta approximately 40 to 50 kilometers away from the town of Peace River. Peace River Projects The Peace River properties (hereinafter referred to as the “Cadotte Leases”) are comprised of 7 oil sands leases with the Government of the Province of Alberta, Canada . All of the leases were for an initial 15 - year term and have been converted to non - expiring leases and require minimum annual lease payments to the Crown . Each lease grants the lessee the right to explore for, develop and produce hydrocarbons from the geological formations described in each lease . Regional Geology The Peace River Cretaceous clastic reservoir consists of a complex stratigraphy similar in nature to the Athabasca Deposit to the east . These are thought to comprise estuarine systems where the best reservoirs are contained in tidal inlet and barrier sands . Secondary reservoir targets may be tidal delta, bayhead delta, tidal channel, and tidal flat sands . The Peace River Carboniferous reservoir consists of platform sediments with relatively few reef building organisms . Structurally, the Peace River strata dip to the southwest and the elevation of the bitumen - bearing interval lies between 50 and 100 meters below sea level or at a depth of between 680 to 790 meters below the surface . Property Geology (Cadotte Leases) Strata has focused its efforts on the bitumen and heavy oil resources contained in the Debolt/Elkton carbonate Carboniferous Formation and the Bluesky/Gething clastic Cretaceous Formation in the Cadotte area . The nature of the geology of the carbonate sequence in the Cadotte area has a significant influence on the distribution of the bitumen resource . The principal reference source for this section is the Alberta Research Council’s publication, “Geological Atlas of the Western Canada Sedimentary Basin” . The sequence that hosts the bitumen deposits is the Rundle Group of Lower Carboniferous age . The Rundle Group in this area includes three stratigraphic units which, in ascending order, are the Pekisko, Shunda and Debolt Formations . From place - to - place the Debolt Formation may also include another distinct unit, the Elkton Member . In the Cadotte area, the Elkton Member is usually present, as long as the overlying unconformity with the Cretaceous sequence has not eroded the entire Debolt Formation sequence . Although there are many intervals that are bitumen enriched in the Rundle sequence in the Cadotte area, the principal enrichment zones occur in the Elkton Member, the upper half of the Debolt but usually not right at the top of the formation and, to a lesser extent, in the Shunda Formation . The high - grade zones of enrichment are those that occur in the Elkton Member and the Debolt Formation . A Cretaceous clastic sequence that includes the Gething and Bluesky Formations at the base, unconformably overlies the Carboniferous rocks in this area . All the beds dip gently to the west with those lying below the unconformity having a somewhat greater dip than those above it . This causes the sequence below the unconformity to be eroded to a greater degree to the east and to be less complete, compared with the west . These westerly dips may be the result of post - depositional tectonic events and may not reflect the original orientation of the
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accumulation of sediment . The Carboniferous sequence of the Rundle assemblage is believed to have accumulated as a result of a series of prograding events that developed in a southerly to southwesterly direction . The Carboniferous sequence mainly includes platform sediments that show generally shallower - water characteristics up - section . In a basinward direction the depositional facies proceed from beach and lagoonal environments through shoals of the shelf margin to marine basin muds . The lithologies that result include high energy siliciclastics of the beach environment, through various types of carbonates on the platform and its slope to shale in the deep marine environment . There even appear to be beds present that have the character of unconsolidated coarse sediments . Several transgressive events therefore resulted in the accumulation of clastic sediments interbedded with carbonate units . The carbonate units included relatively few reef building organisms and thus there was little tendency for irregular geological bodies such as reefs to form in this sequence in this area . From one well to the next the regular nature of the deposition that took place at this time is apparent and it is relatively easy to show the correlation that exists between the same units in adjacent wells in the target area . This feature of regular bed continuity is in strong contrast to the variability of the clastic units of the overlying Cretaceous sequence as seen in the Athabasca region . It is also noteworthy that the bitumen enrichment is strongly influenced by the bedded nature and continuity of the sediments . It is readily possible in many cases to show the same details of the enriched sequence in adjacent wells even when they are spaced a kilometer or more apart . This has a strong impact on the selection of data separation distances for the classification of resources ; in this sequence an equivalent assurance of existence is achieved with much wider spacing of wells than that used in the classification of bitumen resources for the Cretaceous surface mineable oil sands deposits near Fort McMurray in the Athabasca region of Alberta . Previous Work During the winter drill season of 2006 – 2007 , Strata drilled four wells on the Cadotte leases . Three of these wells were within the Cadotte Central Target Area and one was east of the Cadotte Central Target Area . Three wells were drilled with cores in the Cadotte Central Target Area, two of which were cased allowing for production testing with the ability to re - enter these wells for future testing . The other well was abandoned due to drilling fluid losses during drilling which did not allow the well to be cased for testing in the future . The fourth well drilled in the eastern location was cored and cased . The cores of all of these wells were tested and examined in a laboratory in Calgary . The results of these tests were that cold production was not viable . However, the results indicated that the bitumen would flow at approximately 85 ƒ C . These results will allow the Company to explore different means of extraction in addition to steam . Former leaseholders have drilled wells on and around the Company’s Cadotte lease area . Geophysical well logs are of variable quality but generally consist of a full suite of tools to evaluate the potential reservoirs . With respect to available drilling data, the leases of the Cadotte area are drilled at an average spacing of one well per section . However, not all the existing wells were drilled to investigate the sequence located on the Company’s Cadotte leases . The effective average spacing with wells that have penetrated the Carboniferous sequence is approximately 0 . 8 wells per section . This spacing is from twenty - three wells on or immediately adjacent to the leases . There are an additional two hundred nineteen wells in the surrounding area, the data from which has also been referenced and inspected by the Company to assist with its evaluation of the Cadotte leases . However, the quality of the data from the wells of different vintage is quite variable . Several of the wells were drilled in the 1950 ’s . The drilling records and logs for these wells are sometimes poor or absent or they may be less complete than those of more recently drilled wells . A database search was done to identify higher quality data which was restricted to wells drilled since 1970 and this, plus the new Strata wells was used as the primary reference data . A total of eighteen wells of this vintage are located on or immediately adjacent to the Cadotte lease blocks . The well log data from these wells is the primary source of information on the leases available for Strata’s evaluations but this is supplemented by high quality data from a further thirty - nine more distant wells in the area . In the United States, registrants, including foreign private issuers like us, are required to disclose proved reserves using the standards contained in Rule 4 - 10 (a) of the United States Securities and Exchange Commission’s (“SEC”) Regulation S - X . The Company has no proved reserves at this time .
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Cadotte Central The Company completed the drilling of its first four wells in the winter drilling season of 2006 – 2007 , and engaged Norwest Corporation (”Norwest”) of Calgary, Alberta Canada to assist Strata with the planning and undertaking of its exploration of the Cadotte leases . Subsequently, Strata completed the following technical reports relating to these leases : Evaluation of In - Place Bitumen Resources – Cadotte Central Leases (August 16, 2007) [Norwest] Preliminary Feasibility Study of the Cadotte Central Leases (February 29, 2008) [Norwest Questa] Pilot Projects: Carbonate - Hosted Bitumen Deposits in Alberta (July 17, 2008 [Norwest] Cadotte Central Resource Reclassification (Upgrade) (April 28, 2010) [Norwest] Evaluation of Bitumen Resources Cadotte Central and West Leases (May 10, 2013) [Norwest] These studies were designed to comply with the requirements of National Instrument 51 - 101 and the resource classification scheme and criteria elaborated in Volume 1 , of the Canadian Oil and Gas Evaluation Handbook (“COGEH”) at the time they were authored . However since that time, COGEH standards have been modified and therefore Strata is no longer permitted to publicize the contents of these reports under Canadian Securities Regulations . Subsequent to these studies, Strata completed additional analyses including a study entitled “Debolt Core Description and Interpretation” by Dr . Hans G . Machel, and also a seismic study by Norwest entitled “Seismic Study of Cadotte Leases” . The latter study utilized existing well and seismic data and focused on different physical properties and technical aspects related to the identification of pools and fields . The initial interpretation of the geological structure resulted in the identification of cold production targets which were then validated by seismic data . The Company's technical team subsequently identified multiple drilling locations in order to test the extent to which the Bluesky Formation has the fluid properties which permit the use of primary production methods . In late 2014 , Strata commenced initial planning and permitting activities needed to develop a drill program and continue exploration . The Company engaged specialized third - party service provider(s) to assist with the development of a drill program which included the submission of an Oil Sands Exploration plan, the ("OSE") to the Crown . Elements of an OSE application include, but are not limited to, mapping and locating services, sensitive areas, wildlife zones, historical work in the area, site access, environmental services, exploration operations detail, and stake holder consultation and project management services . The OSE program approval was received in February 2015 granting the Company two years from the date of issue to conduct its exploration program . Due to the oil market, the Company did not carry out its drilling program . In 2018, Strata completed the following technical report relating to a portion of its oil sands leases: Evaluation of Bitumen Resources, Cadotte Lease Blocks (November 19, 2018) [Gustavson Associates] This study was prepared according to National Instrument 51 - 101 and the resource classification scheme and criteria elaborated in the Canadian Oil and Gas Evaluation Handbook (COGEH v . 2 - section 2 . 5 . 5 , p . 2 - 71 ) . Planned Work by the Company for 2023 When adequate funding can be assembled, Strata intends to proceed with further evaluation of heavy oil and bitumen opportunities in Alberta . The Company expects the short and long - term funding of our oil and gas operations to be financed as in the past through existing revenue and equity in the form of private placements and warrant exercises . Tax Horizons
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Strata’s management does not expect that the Corporation will be taxable in the next two to three years. Costs Incurred The following table summarizes certain costs (irrespective of whether such costs were capitalized or recorded as an expense) incurred by the Corporation during the most recently completed financial year. Year Ended December 31, 2022 (USD) Peace River $ 22,262 Property acquisition and lease payments 0 Exploration costs 0 Development costs $ 22,262 Total expenditures
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Exhibit 99.42
