UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~November~~ 30May 31, ~~2018~~2019

o [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission File No. 000-52645

FORTEM RESOURCES INC.

(Exact name of registrant as specified in its charter)

Nevada		20-4119257
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Suite 820, 906 12th Avenue S.W.

Calgary, Alberta, Canada T2R 1K7

(Address of principal executive offices) (Zip Code)

(403) 241-8912

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

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

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

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

Large accelerated filer o[ ] Accelerated filer þ[X] Non-accelerated filer o[ ] Smaller reporting company þ[X] Emerging growth company o[ ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o[ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o [ ] No þ [X]

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date: As As of ~~January~~October 915, 2019, there were 122,~~071~~571,156 shares of common stock, ~~par value $0.001,~~ outstanding.

Table of Contents

PART I - FINANCIAL INFORMATION 1 ITEM 1. FINANCIAL STATEMENTS 1 ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 1816 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 2826 ITEM 4. CONTROLS AND PROCEDURES 2826 PART II - OTHER INFORMATION 2927 ITEM 1. LEGAL PROCEEDINGS 2927 ITEM 1A. RISK FACTORS 2927 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 3635 ITEM 3. DEFAULTS UPON SENIOR SECURITIES 3635 ITEM 4. MINE SAFETY DISCLOSURES 3635 ITEM 5. OTHER INFORMATION 3635 ITEM 6. EXHIBITS 3736 SIGNATURES 4039

~~iii~~ii

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~NOVEMBER~~MAY 3031, ~~2018~~2019

CONSOLIDATED CONDENSED INTERIM BALANCE SHEETS

CONSOLIDATED CONDENSED INTERIM BALANCE SHEETS	2

CONSOLIDATED CONDENSED INTERIM STATEMENTS OF OPERATIONS	3

CONSOLIDATED CONDENSED INTERIM STATEMENTS OF CASH FLOWS	4

CONSOLIDATED CONDENSED INTERIM STATEMENTS OF STOCKHOLDERS’ EQUITY	5

NOTES TO CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS	6

~~CONSOLIDATED CONDENSED INTERIM STATEMENTS OF OPERATIONS~~1

~~CONSOLIDATED~~FORTEM RESOURCES ~~CONDENSED INTERIM STATEMENTS OF CASH FLOWS~~INC.

CONSOLIDATED CONDENSED INTERIM ~~STATEMENTS~~BALANCE ~~OF STOCKHOLDERS’ EQUITY~~SHEETS

~~NOTES~~(Expressed in TOUS ~~CONSOLIDATED~~dollars ~~CONDENSED~~- ~~INTERIM FINANCIAL STATEMENTS~~unaudited)

	May 31, 2019			February 28, 2019
	$			$
ASSETS
Current assets
Cash		63,866			35,171
Receivables		10,965			12,221
Prepaid expense and deposit (Note 8)		82,055			69,753
Due from related parties (Note 8)		70,605			12,516
Total current assets		227,491			129,661

Deposit (Note 5)		42,553			43,498
Equipment (Note 4)		50,199			51,090
Investment in Asia Pacific Mining Ltd. (Note 3)		1,500,000			1,500,000
Deferred acquisition costs (Note 13)		304,945			229,994
Right to the acquisition of mineral exploration project (Note 6)		1			1
Oil and gas properties, full cost method (Note 5)		141,029,523			140,881,572
Total assets		143,154,712			142,835,816

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities
Accounts payable and accrued liabilities (Note 7)		1,207,149			1,172,602
Due to related parties (Note 8)		40,354			40,354
Related party loan payable (Note 8)		57,261			57,261
Note payable (Note 9)		19,942			19,942
Total current liabilities		1,324,706			1,290,159

Long term notes payable (Note 10)		1,074,041			500,000
Asset retirement obligation (Note 11)		29,889			29,272
Deferred tax liabilities		16,215,677			16,215,677
Total liabilities		18,644,313			18,035,108

Stockholders’ equity
Share capital (Note 12)
Authorized:
750,000,000 common shares, par value $0.001 per share
Issued and outstanding:
122,571,156 common shares (122,071,156 at February 28, 2019)		122,570			122,070
Additional paid in capital		160,719,464			160,533,964
Obligation to issue shares (Note 5)		3,600,000			3,600,000
Accumulated other comprehensive loss		(383,257	)		(383,257	)
Accumulated deficit		(39,548,378	)		(39,072,069	)
Total stockholders’ equity		124,510,399			124,800,708
Total stockholders’ equity and liabilities		143,154,712			142,835,816

FORTEM RESOURCES INC.
CONSOLIDATED CONDENSED INTERIM BALANCE SHEETS
(Expressed in US dollars - Unaudited)
		November 30, 2018	February 28, 2018
		$	$
ASSETS
Current assets
	Cash	60,070	176,895
	Receivable	11,915	9,681
	Prepaid expenses (Note 9)	121,761	35,806
	Loan receivable (Notes 3 and 9)	106,150	97,422
	Due from related parties (Note 9)	162,387	-
Total current assets		462,283	319,804
Non-current assets
	Deposit (Note 6)	42,846	43,961
	Equipment (Note 5)	51,981	54,654
	Investment in Asia Pacific Mining Ltd. (Note 4)	1,500,000	1,500,000
	Deferred acquisition costs (Note 15)	229,994	-
	Right to the acquisition of mineral exploration project (Note 7)	1	1
	Oil and gas properties, full cost method (Note 6)	5,604,848	2,631,354
Total assets		7,891,953	4,549,774
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
	Accounts payable and accrued liabilities (Note 8)	860,946	731,639
	Due to related parties (Note 9)	223,731	445,912
	Related party loan payable (Note 9)	57,261	555,753
	Note payable (Note 10)	19,942	19,942
	Advance payable (Note 11)	-	4,058
Total current liabilities		1,161,880	1,757,304
Non-current liabilities
Advance payable (Note 11)		100,000	-
Asset retirement obligation (Note 12)		28,979	28,352
Total liabilities		1,290,859	1,785,656
Stockholders' equity
	Share capital (Note 13)
	Authorized:
	750,000,000 common shares, par value $0.001 per share
	Issued and outstanding:
	120,771,156 common shares (117,872,458 at February 28, 2018)	122,070	117,873
	Additional paid in capital	22,564,879	17,879,597
	Share subscriptions receivable	-	(200,000)
	Accumulated other comprehensive loss	(383,257)	(383,257)
	Accumulated deficit	(15,702,598)	(14,650,095)
Total stockholders’ equity		6,601,094	2,764,118
Total liabilities and stockholders’ equity		7,891,953	4,549,774

Nature and Continuance of Operations (Note 1), Subsequent Events (Note 16)

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

FORTEM RESOURCES INC.
CONSOLIDATED CONDENSED INTERIM STATEMENTS OF OPERATIONS
(Expressed in US dollars - Unaudited)
		For the three months ended November 30,		For the nine months ended November 30,
		2018	2017	2018	2017
		$	$	$	$
General and administrative expenses
	Accretion of asset retirement obligation (Note 12)	685	649	2,062	1,886
	Consulting	75,578	899,940	356,601	937,730
	Depreciation (Note 5)	891	891	2,673	2,587
	Investor relation	26,197	4,034	35,134	17,318
	Management fees	90,000	30,000	210,000	120,690
	Office, travel and general	74,070	108,948	231,783	245,392
	Professional fees	92,293	103,705	229,657	324,486
Loss from operations		(359,714)	(1,148,167)	(1,067,910)	(1,650,089)
	Foreign exchange gain (loss)	(9,053)	(4,168)	(2,412)	15,281
	Gain on settlement of debt (Note 11)	-	-	4,058	13,599
	Interest income (Note 3)	1,879	94	15,292	575
	Interest expense	-	(12,908)	(1,531)	(27,566)
	Loss on fair value adjustment of derivative financial liabilities (Note 14)	-	-	-	(6,325,077)
		(7,174)	(16,982)	15,407	(6,323,188)
Loss and comprehensive loss		(366,888)	(1,165,149)	(1,052,503)	(7,973,277)
Basic and diluted loss per share		(0.00)	(0.01)	(0.01)	(0.08)
Weighted average number of basic and diluted
common shares outstanding		121,362,365	116,575,577	120,074,036	102,404,033

FORTEM RESOURCES INC.

~~The~~CONSOLIDATED CONDENSED ~~accompanying~~INTERIM ~~notes~~STATEMENTS ~~are~~OF ~~an integral part of these consolidated condensed interim financial statements~~OPERATIONS

3(Expressed in US dollars - unaudited)

FORTEM RESOURCES INC.
		For the three months ended May 31,
CONSOLIDATED CONDENSED INTERIM STATEMENTS OF CASH FLOWS
		2019			2018
(Expressed in US dollars - Unaudited)
		$			$
				For the nine months ended November 30,
General and administrative expenses
				2018	2017
Accretion of asset retirement obligation (Note 11)			736			692
				$	$
Consulting			17,885			144,863
Cash flows used in operating activities
Depreciation (Note 4)			891			891
	Loss for the period			(1,052,503)	(7,973,277)
Investor relation			2,830			4,785
	Non-cash items
Management fees			90,000			30,000
		Accretion of asset retirement obligation		2,062	1,886
Office, travel and general			225,930			54,761
		Depreciation		2,673	2,587
Professional fees			113,607			60,482
		Gain on settlement of debt		(4,058)	(13,599)
Loss from operations			(451,879	)		(296,474	)
		Loss on fair value adjustment of derivative financial liabilities		-	6,325,077
Foreign exchange gain (loss)			1,250			(1,339	)
		Interest income accrued		(15,291)	(575)
Gain on settlement of debt (Note 7)			27,227			4,058
		Interest expense		1,508	27,123
Interest income			212			10,699
		Consulting fees		-	800,000
Interest expense			(53,119	)		(1,534	)
		Unrealized foreign exchange		6,243	(39,846)
			(24,430	)		11,884
	Changes in non-cash working capital items
Loss and comprehensive loss for the period			(476,309	)		(284,590	)
		Receivable		(2,234)	15,624
Basic and diluted loss per share			(0.00	)		(0.00	)
		Prepaid expenses		(85,955)	(15,974)
Weighted average number of basic and diluted common shares outstanding			122,538,547			118,978,677
		Accounts payable and accrued liabilities		219,307	230,928
		Cash used in operating activities		(928,248)	(640,046)
Cash flows used in investing activities
	Deposit on oil and gas properties			-	(9,431)
	Investments			-	(1,500,000)
	Expenditures on oil and gas properties			(473,494)	(638,081)
	Deferred acquisition costs			(229,994)	-
	Loan receivable			-	(99,135)
		Cash used in investing activities		(703,488)	(2,246,647)
Cash flows from financing activities
	Issuance of share capital, net of issuance costs			1,250,000	1,915,001
	Proceeds from warrants exercised			909,479	-
	Proceeds from options exercised			30,000	-
	Finders' fees			-	(95,200)
	Share subscription receivable			200,000	-
	Advances payable			100,000	30,000
	Net proceeds from (repaid to) related parties			(974,568)	678,774
		Cash provided by financing activities		1,514,911	2,528,575
Change in cash				(116,825)	(358,118)
Cash, beginning of period				176,895	459,481
Cash, end of period				60,070	101,363
Non-cash transactions
	Obligation to issue shares on oil and gas properties			-	968,171
	Common stock issued for oil and gas properties			2,500,000	60,000
	Advance payable for oil and gas properties			-	60,000

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

FORTEM RESOURCES INC.
CONSOLIDATED CONDENSED INTERIM STATEMENTS OF STOCKHOLDERS' EQUITY
(Expressed in US dollars - Unaudited)
					Deficit
					Accumulated	Accumulated
	Share Capital		Additional	Share	During	Other	Total
	Number		Paid In	Subscriptions	Development	Comprehensive	Stockholders'
	of Shares	Amount	Capital	Receivable	Stage	Income (Loss)	Equity
		$	$	$	$	$	$
Balance, February 28, 2018	117,872,458	117,873	17,879,597	(200,000)	(14,650,095)	(383,257)	2,764,118
Common stock issued for cash	25,000	25	49,975	-	-	-	50,000
Warrants exercised	1,273,698	1,272	508,207	200,000	-	-	709,479
Loss for the period	-	-	-	-	(284,590)	-	(284,590)
Balance, May 31, 2018	119,171,156	119,170	18,437,779	-	(14,934,685)	(383,257)	3,239,007
Common stock issued for cash	600,000	600	1,199,400	-	-	-	1,200,000
Warrants exercised	1,000,000	1,000	399,000	-	-	-	400,000
Loss for the period	-	-	-	-	(401,025)	-	(401,025)
Balance, August 31, 2018	120,771,156	120,770	20,036,179	-	(15,335,710)	(383,257)	4,437,982
Common stock issued for oil and gas properties	1,000,000	1,000	2,499,000	-	-	-	2,500,000
Options exercised	300,000	300	29,700	-	-	-	30,000
Loss for the period	-	-	-	-	(366,888)	-	(366,888)
Balance, November 30, 2018	122,071,156	122,070	22,564,879	-	(15,702,598)	(383,257)	6,601,094

FORTEM RESOURCES INC.

~~The~~CONSOLIDATED CONDENSED ~~accompanying~~INTERIM ~~notes~~STATEMENTS ~~are~~OF anCASH ~~integral part of these consolidated condensed interim financial statements~~FLOWS

5(Expressed in US dollars - Unaudited)

FORTEM RESOURCES INC.

	For the three months ended May 31,
	2019			2018
	$			$
Cash flows used in operating activities
Loss for the period		(476,309	)		(284,590	)
Non-cash items
Accretion of asset retirement obligation		736			692
Depreciation		891			891
Gain on settlement of debt		(27,227	)		(4,058	)
Interest income accrued		212			(10,699	)
Interest expense		53,119			1,507
Accrued management fees		30,000			30,000
Unrealized foreign exchange		614			2,609
Changes in non-cash working capital items
Receivable		1,256			(570	)
Prepaid expenses and deposit		(12,302	)		(2,660	)
Accounts payable and accrued liabilities		(15,322	)		122,425
Cash used in operating activities		(444,332	)		(144,453	)

Cash flows used in investing activities
Expenditures on oil and gas properties		(109,933	)		(129,797	)
Loan receivable		-			(9,275	)
Deferred acquisition costs		(74,951	)		-
Cash used in investing activities		(184,884	)		(139,072	)

Cash flows from financing activities
Issuance of share capital, net of issuance costs		-			50,000
Proceeds from warrants exercised, net of issuance costs		186,000			509,479
Share subscription receivable		-			200,000
Long term notes payable		560,000			-
Net proceeds from (repaid to) related parties		(88,089	)		(639,233	)
Cash provided by financing activities		657,911			120,246

Change in cash		28,695			(163,279	)
Cash, beginning of period		35,171			176,895
Cash, end of period		63,866			13,616

Non-cash transactions
Oil and gas properties expenditures in accounts payable		326,085			138,166

~~NOTES~~The accompanying TOnotes ~~CONSOLIDATED~~are ~~CONDENSED~~an ~~INTERIM~~integral ~~FINANCIAL~~part ~~STATEMENTS~~of these consolidated condensed interim financial statements

~~For the three and nine months ended November 30, 2018~~4

~~(Expressed~~FORTEM RESOURCES ~~in US dollars – Unaudited)~~INC.

1.CONSOLIDATED CONDENSED INTERIM STATEMENTS OF STOCKHOLDERS’ EQUITY

~~NATURE~~(Expressed in ~~AND~~US ~~CONTINUANCE~~dollars OF- ~~OPERATIONS~~Unaudited)

Fortem Resources Inc. (the “Company”) was incorporated in the State of Nevada on July 9, 2004. The Company focuses its business efforts on the acquisition, exploration, and development of oil and gas properties.

													Accumulated
	Share Capital				Additional			Obligation					Other			Total
	Number				Paid In			To Issue					Comprehensive			Stockholders’
	of Shares		Amount		Capital			Shares		Deficit			Loss			Equity
			$		$			$		$			$			$
Balance, February 28, 2019		122,071,156		122,070		160,533,964			3,600,000		(39,072,069	)		(383,257	)		124,800,708

Warrants exercised		500,000		500		199,500			-		-			-			200,000
Share issue costs		-		-		(14,000	)		-		-			-			(14,000	)
Loss for the period		-		-		-			-		(476,309	)		-			(476,309	)
Balance, May 31, 2019		122,571,156		122,570		160,719,464			3,600,000		(39,548,378	)		(383,257	)		124,510,399

The accompanying ~~consolidated~~notes ~~condensed~~are ~~interim~~an ~~financial~~integral ~~statements~~part ~~have been prepared assuming the Company will continue as a going concern. As~~ of ~~November~~these ~~30,~~consolidated ~~2018,~~condensed ~~the~~interim ~~Company~~financial ~~has not achieved profitable operations, has incurred losses in developing its business, and further losses are anticipated. The Company has an accumulated deficit of $15,702,598.~~statements

The Company’s ability to continue as a going concern is dependent upon its ability to obtain the necessary financing to meet its obligations and pay its liabilities when they come due. To date, the Company has funded operations through the issuance of capital stock and debt. Management plans to continue raising additional funds through equity or debt financings and loans from directors. There is no certainty that further funding will be available as needed. These factors raise substantial doubt about the ability of the Company to continue operating as a going concern. The ability of the Company to continue its operations as a going concern is dependent upon its ability to raise sufficient new capital to fund its operating commitments and ongoing losses and ultimately on generating profitable operations. The consolidated condensed interim financial statements do not include any adjustments to be recorded to assets or liabilities that might be necessary should the Company be unable to continue as a going concern.5

2FORTEM RESOURCES INC.

~~SUMMARY~~NOTES TO OFCONSOLIDATED ~~SIGNIFICANT~~CONDENSED ~~ACCOUNTING~~INTERIM ~~POLICIES~~FINANCIAL STATEMENTS

~~Basis~~For the ofthree ~~Presentation~~months ended May 31, 2019

~~The unaudited consolidated condensed interim financial statements of the Company have been prepared in accordance with United States Generally Accepted Accounting Principles~~ (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”). They do not include all information and footnotes required by GAAP for complete financial statements. However, except as disclosed herein, there have been no material changes Expressed in ~~the~~US ~~information~~dollars ~~disclosed~~– in the notes to the financial statements from the year ended February 28, 2018 included in the Company’s Annual Report on Form 10-K filed with the SEC. The unaudited consolidated condensed interim financial statements should be read in conjunction with those financial statements included in the 10-K report. In the opinion of management, all adjustments considered necessary for fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the nine months ended November 30, 2018 are not necessarily indicative of the results that may be expected for the year ending February 28, 2019.Unaudited)

~~Basis~~1. NATURE ofAND ~~consolidation~~CONTINUANCE OF OPERATIONS

~~These~~Fortem Resources ~~consolidated~~Inc. ~~condensed~~(the ~~interim~~“Company”) ~~financial~~was ~~statements~~incorporated ~~include~~in the ~~accounts~~State of ~~the~~Nevada ~~Company~~on ~~and~~July ~~its~~9, ~~wholly~~2004. ~~owned~~The ~~subsidiaries,~~Company ~~Colony~~focuses ~~Energy,~~its ~~LLC,~~business efforts ~~(“Colony”)~~on ~~Black~~the ~~Dragon Energy~~acquisition, ~~LLC~~exploration, ~~(“Black Dragon”) Rolling Rock Resources, LLC (“Rolling Rock”)~~ and ~~City~~development of ~~Gold,~~oil ~~LLC (“City of Gold”). All significant intercompany accounts~~ and ~~transactions~~gas ~~between the Company and its subsidiaries have been eliminated upon consolidation~~properties.

~~Basic~~The accompanying consolidated condensed interim financial statements have been prepared assuming the Company will continue as a going concern. As of May 31, 2019, the Company has not achieved profitable operations, has incurred losses in developing its business, and ~~Diluted~~further ~~Income~~losses ~~(Loss)~~are ~~per~~anticipated. ~~Share~~The Company has an accumulated deficit of $39,548,378.

~~Basic~~The Company’s ~~earnings~~ability orto ~~loss~~continue ~~per~~as ~~share~~a ~~(“EPS”)~~going concern is ~~computed~~dependent byupon ~~dividing~~its ~~net~~ability ~~income~~to ~~(loss)~~obtain ~~available~~the necessary financing to ~~common~~meet its ~~stockholders~~obligations byand ~~the~~pay ~~weighted~~its ~~average~~liabilities ~~number~~when ofthey ~~common~~come ~~shares~~due. ~~outstanding~~To ~~for~~date, the ~~period~~Company has funded operations through the issuance of capital stock and debt. ~~Diluted~~Management ~~EPS~~plans to continue raising additional funds through equity or debt financings and loans from directors. There is ~~computed~~no bycertainty ~~dividing~~that ~~net~~further ~~income~~funding ~~(loss)~~will bybe available as needed. These factors raise substantial doubt about the ~~weighted-average~~ability of ~~all~~the ~~potentially~~Company ~~dilutive~~to ~~shares~~continue operating as a going concern. The ability of the ~~common~~Company ~~stock~~to ~~that~~continue ~~were~~its ~~outstanding~~operations ~~during~~as a ~~the~~going ~~years~~concern ~~presented~~is dependent upon its ability to raise sufficient new capital to fund its operating commitments and ongoing losses and ultimately on generating profitable operations. ~~There~~The ~~were~~consolidated ~~2,750,000~~condensed ~~(February~~interim ~~28,~~financial ~~2018~~statements -do ~~5,323,698)~~not ~~potentially~~include ~~dilutive~~any adjustments ~~securities~~to ~~excluded~~be ~~from~~recorded ~~the~~to ~~calculation~~assets ofor ~~diluted~~liabilities ~~loss~~that ~~per~~might ~~share~~be asnecessary ~~their~~should ~~effect~~the ~~would~~Company be ~~anti-dilutive.~~unable to continue as a going concern.

62. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

~~FORTEM~~Basis of ~~RESOURCES INC.~~Presentation

~~NOTES~~The unaudited TOconsolidated ~~CONSOLIDATED~~condensed ~~CONDENSED~~interim ~~INTERIM~~financial ~~FINANCIAL~~statements ~~STATEMENTS~~of the Company have been prepared in accordance with United States Generally Accepted Accounting Principles (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”). They do not include all information and footnotes required by GAAP for complete financial statements. However, except as disclosed herein, there have been no material changes in the information disclosed in the notes to the financial statements from the year ended February 28, 2019 included in the Company’s Annual Report on Form 10-K filed with the SEC. The unaudited consolidated condensed interim financial statements should be read in conjunction with those financial statements included in the 10-K report. In the opinion of management, all adjustments considered necessary for fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the three months ended May 31, 2019 are not necessarily indicative of the results that may be expected for the year ending February 28, 2020.

~~For~~Basis of ~~the three and nine months ended November 30, 2018~~Consolidation

These consolidated condensed interim financial statements include the accounts of the Company and its wholly owned subsidiaries, Colony Energy, LLC, (~~Expressed~~“Colony”) inBlack USDragon ~~dollars~~Energy, –LLC, ~~Unaudited~~(“Black Dragon”) Rolling Rock Resources, LLC (“Rolling Rock”) and City of Gold, LLC (“City of Gold”). All significant intercompany accounts and transactions between the Company and its subsidiaries have been eliminated upon consolidation.

2.Basic and Diluted Loss per Share

~~SUMMARY~~Basic earnings OFor ~~SIGNIFICANT~~loss ~~ACCOUNTING~~per ~~POLICIES~~share (~~continued~~“EPS”) is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted EPS is computed by dividing net income (loss) by the weighted-average of all potentially dilutive shares of the common stock that were outstanding during the years presented. There were 2,250,000 (February 28, 2018 - 5,323,698) potentially dilutive securities excluded from the calculation of diluted loss per share as their effect would be anti-dilutive.

~~Basic and Diluted Income (Loss) per Share (continued)~~6

~~The~~FORTEM RESOURCES treasury stock method is used in calculating diluted EPS for potentially dilutive stock options and share purchase warrants, which assumes that any proceeds received from the exercise of in-the-money stock options and share purchase warrants, would be used to purchase common shares at the average market price for the periodINC.

~~Recent~~NOTES TO ~~Accounting~~CONSOLIDATED ~~Pronouncements~~CONDENSED INTERIM FINANCIAL STATEMENTS

~~Other recent accounting pronouncements issued by~~ For the ~~Financial~~three ~~Accounting~~months ~~Standards~~ended ~~Board~~May ~~(“FASB”) (including its Emerging Issues Task Force)~~31, the American Institute of Certified Public Accountants, and the SEC did not, or are not believed by management to, have a material impact on the Company's present or future financial position, results of operations or cash flows.2019

3.(Expressed in US dollars – Unaudited)

~~LOAN~~2. SUMMARY ~~RECEIVABLE~~OF SIGNIFICANT ACCOUNTING POLICIES (continued)

~~During~~Basic and ~~the~~Diluted ~~year~~Loss ~~ended~~per ~~February~~Share ~~28, 2018, the Company advanced unsecured loans of $99,135~~ (~~AUD125,000~~continued) ~~to a company related by virtue of a common officer. The loans bear interest at 10% per annum. The total amount receivable at November 30, 2018, including accrued interest is $106,150.~~

4The treasury stock method is used in calculating diluted EPS for potentially dilutive stock options and share purchase warrants, which assumes that any proceeds received from the exercise of in-the-money stock options and share purchase warrants, would be used to purchase common shares at the average market price for the period.

~~INVESTMENT~~Use of ~~IN ASIA PACIFIC MINING LTD.~~Estimates

InThe preparation ~~April~~of ~~2017,~~financial astatements ~~binding~~in ~~financing~~conformity with US GAAP requires management to make estimates and ~~option~~assumptions ~~agreement~~that (affect the ~~“Agreement”)~~reported ~~was~~amounts ~~assigned~~of toassets and liabilities and disclosure of contingent assets and liabilities at the ~~Company~~date ~~where~~of the ~~Company~~financial statements ~~subscribed~~and athe ~~total~~reported amounts of ~~2,930,259~~revenues ~~units~~and inexpenses during the ~~capital~~reporting ofperiod. ~~Asia~~The ~~Pacific~~Company ~~Mining~~regularly ~~Limited~~evaluates ~~(“Asia~~estimates and ~~Pacific”)~~assumptions. atThe aCompany ~~total~~bases ~~cost~~its ofestimates $1and assumptions on current facts,~~500,000,~~ ~~which~~historical ~~represents~~experience ~~approximately~~and ~~7.5%~~various ofother ~~the~~factors it ~~issued~~believes ~~and~~to ~~outstanding~~be ~~shares~~reasonable ofunder ~~Asia~~the ~~Pacific~~circumstances, ~~immediately~~the ~~after~~results of which form the ~~financing.~~basis ~~Asia~~for ~~Pacific~~making isjudgments aabout ~~private~~the ~~company~~carrying values ~~registered~~of inassets ~~Hong~~and ~~Kong~~liabilities and the ~~principal~~accrual ~~activities~~ of ~~Asia~~costs ~~Pacific~~and ~~are~~expenses ~~exploration~~that ~~and~~are ~~mining~~not inreadily ~~Myanmar~~apparent ~~and~~from ~~investment~~other ~~holding~~sources. ~~Each~~The ~~unit~~actual results ~~consisted~~experienced ofby ~~one~~the ~~common~~Company ~~share~~may ~~and~~differ ~~one~~materially ~~share~~and ~~purchase~~adversely ~~warrant~~from ~~which~~the ~~will~~Company’s ~~entitle~~estimates. To the ~~holder~~extent ofthere are ~~each~~material ~~warrant~~differences tobetween ~~acquire~~the anestimates ~~additional~~and ~~share~~the ofactual ~~Asia~~results, ~~Pacific~~future atresults anof ~~exercise~~operations ~~price~~will ofbe $0affected.~~5119~~ ~~per~~The ~~share~~most significant ~~during~~estimates ~~the~~with ~~term~~regard ~~equal~~ to ~~the~~these ~~greater~~financial ofstatements ~~two~~relate ~~years~~to ~~from~~carrying ~~the~~values ~~closing~~ of ~~additional~~oil ~~financing~~and ofgas ~~Asia~~properties ~~Pacific~~and ~~according~~investments, the assumptions used to ~~the~~record ~~terms~~asset ofretirement obligations, the ~~Agreement~~assumptions orused 18to ~~months~~determine ~~from~~ the ~~receipts~~fair value of ~~all~~derivative ~~necessary~~financial assets ~~permits~~and toliabilities, ~~carry~~and ~~out~~valuation ~~the~~of ~~exploration~~share-based ~~program~~payments.

5.Recent Accounting Pronouncements

~~EQUIPMENT~~Other recent accounting pronouncements issued by the Financial Accounting Standards Board (“FASB”) (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the SEC did not, or are not believed by management to, have a material impact on the Company’s present or future financial position, results of operations or cash flows.

	Oil and gas equipment
	$
Cost:
At February 28, 2018 and November 30, 2018	71,284
Depreciation:
At February 28, 2018	16,630
Charge for the period	2,673
At November 30, 2018	19,303
Net book value:
At February 28, 2018	54,654
At November 30, 2018	51,981

3. INVESTMENT IN ASIA PACIFIC MINING LTD.

In April 2017, a binding financing and option agreement (the “Agreement”) was assigned to the Company where the Company subscribed a total of 2,930,259 units in the capital of Asia Pacific Mining Limited (“Asia Pacific”) at a total cost of $1,500,000, which represents approximately 7.5% of the issued and outstanding shares of Asia Pacific immediately after the financing. Asia Pacific is a private company registered in Hong Kong and the principal activities of Asia Pacific are exploration and mining in Myanmar (Note 6) and investment holding. Each unit consisted of one common share and one share purchase warrant which will entitle the holder of each warrant to acquire an additional share of Asia Pacific at an exercise price of $0.5119 per share during the term equal to the greater of two years from the closing of additional financing of Asia Pacific according to the terms of the Agreement or 18 months from the receipts of all necessary permits to carry out the exploration program. The shares and warrants have been recorded at cost as further disclosed in Note 14.

~~FORTEM RESOURCES INC.~~7

~~NOTES~~FORTEM RESOURCES ~~TO CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS~~INC.

~~For~~NOTES TO ~~the~~CONSOLIDATED ~~three~~CONDENSED ~~and~~INTERIM ~~nine~~FINANCIAL ~~months ended November 30, 2018~~STATEMENTS

~~(Expressed~~For the inthree USmonths ~~dollars~~ended –May ~~Unaudited)~~31, 2019

6.(Expressed in US dollars – Unaudited)

~~OIL~~4. EQUIPMENT ~~AND GAS PROPERTIES, UNPROVED~~

	Compeer	Godin	Black Dragon	Rolling Rock	Total
		Oil and gas equipment
	$	$	$	$	$
Balance, February 28, 2018	693,503	146,165	827,247	964,439	2,631,354
Cost:
Acquisition	-	2,500,000	100,000	100,000	2,700,000
At February 28, 2019 and May 31, 2019			71,284
Exploration	8,323	17,633	82,794	164,744	273,494
Depreciation:
Balance, November 30, 2018	701,826	2,663,798	1,010,041	1,229,183	5,604,848
At February 28, 2019			20,194
Charge for the period			891
At May 31, 2019			21,085
Net book value:
At February 28, 2019			51,090
At May 31, 2019			50,199

~~Compeer~~5. OIL ~~Property~~AND GAS PROPERTIES, FULL COST METHOD

The Compeer Property is located in Alberta, Canada. The Company has $42,846 (February 28, 2018 - $43,961) in bonds held with the Alberta Energy Regulator for its oil and gas properties.

	Canada				US
	Compeer		Godin		Black Dragon		Rolling Rock		Total
	$		$		$		$		$
Balance, February 28, 2019		720,060		60,373,011		39,260,344		40,528,157		140,881,572

Acquisition		-		-		25,000		25,000		50,000
Exploration		6,704		45,982		23,685		21,580		97,951

Balance, May 31, 2019		726,764		60,418,993		39,309,029		40,574,737		141,029,523

~~Godin~~ Compeer Property

OnThe Compeer ~~March~~Property ~~31,~~is ~~2017,~~located ~~the~~in ~~Company entered into a petroleum~~Alberta, ~~natural~~Canada. ~~gas~~The ~~and~~Company ~~general~~has ~~rights~~$42,553 ~~conveyance~~(February ~~agreement~~28, to2019 ~~acquire~~- a$43,498) ~~100% interest~~ in ~~and~~bonds toheld ~~certain~~with ~~petroleum,~~the ~~natural~~Alberta Energy ~~gas~~Regulator ~~and~~for ~~general~~its ~~rights,~~oil ~~including Alberta Crown Petroleum~~ and ~~Oil~~gas ~~Leases in the Godin area of Northern Alberta~~properties.

~~In addition, the vendor is entitled to receive certain milestone payments from the Company in the aggregate amount up to $210,000 as follows:~~Godin Property

i)On March 31, 2017, the Company entered into a petroleum, natural gas and general rights conveyance agreement to acquire a 100% interest in and to certain petroleum, natural gas and general rights, including Alberta Crown Petroleum and Oil Leases in the Godin area of Northern Alberta.

~~$30~~In addition,~~000~~ onthe orvendor ~~before~~is ~~June~~entitled ~~29,~~to ~~2017~~receive ~~(settled~~certain ~~with~~milestone payments from the ~~issuance~~Company ofin ~~shares);~~the aggregate amount up to $210,000 as follows:

i) $30,000 on or before June 29, 2017 (settled with the issuance of shares during fiscal 2018); ii) $30,000 on or before September 27, 2017 (settled with the issuance of shares during fiscal 2018); and iii) $150,000 upon the rig release of the second well drilled by the Company in the oil and gas assets described above. This amount will be recorded when the criteria has been met.

~~$30,000~~If the onCompany orfails ~~before~~to ~~September~~make 27timely payment of any of the milestone payments, ~~2017~~and ~~(settled~~does ~~with~~not remedy such failure within 30 days of receipt of written notice from the ~~issuance~~vendor, the vendor may elect either of ~~shares);~~the ~~and~~following:

iii)

	a.	Have Colony re-convey the assets to one of the project vendors; or
	b.	Receive 250,000 common shares of the Company (subject to the availability of a registration exemption).

~~$150,000 upon the rig release of the second well drilled by the Company in the oil and gas assets described above. This amount will be recorded when the criteria has been met.~~ 8

IfFORTEM RESOURCES ~~the Company fails to make timely payment of any of the milestone payments, the vendor sole recourse will be a claim for debt against the Company for an amount equal to the missed milestone payment~~INC. In November 2017, the Company issued 30,000 shares at a value of $60,000 to settle the milestone payments of $60,000. As part of the consideration for the acquisition of Colony in fiscal 2018, the Company agreed to issue an additional 3,000,000 shares, with 1,000,000 shares to be issued to one of the vendors in April 2018, 2019, and 2020. During the nine months ended November 30, 2018, the Company issued 1,000,000 shares at a value of $2,500,000 to the vendor.

8NOTES TO CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

~~FORTEM~~For the ~~RESOURCES~~three ~~INC.~~months ended May 31, 2019

~~NOTES~~(Expressed in TOUS ~~CONSOLIDATED~~dollars ~~CONDENSED~~– ~~INTERIM FINANCIAL STATEMENTS~~Unaudited)

~~For~~5. OIL ~~the~~AND ~~three~~GAS ~~and~~PROPERTIES, ~~nine~~FULL ~~months~~COST ~~ended~~METHOD ~~November 30, 2018~~(continued)

~~(Expressed~~Godin Property ~~in US dollars – Unaudited~~(continued)

6As at May 31, 2019, the Company is obligated to issue 2,000,000 common shares to one of the vendors of Colony which holds rights in the Godin property.

~~OIL~~Black Dragon ~~AND GAS PROPERTIES, UNPROVED (continued)~~Property

In March 2017, the Company entered into a purchase and sale agreement (the “Black Dragon PSA”), subsequently amended, to acquire a 75% working interest in and to certain leases, hydrocarbons, wells, agreements, equipment, surface rights agreements and assignable permits at an 80% net revenue interest located in the Moenkopi formation of the Carbon and Emery Counties, Utah (the “Black Dragon Property”). In August 2017 and May 2019, the Company entered into an amendment to the Black Dragon PSA (the “Black Dragon Amendment”), which amended the terms of the Black Dragon PSA. Under the Black Dragon Amendment, the Company is required to pay the vendor cash consideration totaling $3,900,000 (the “Black Dragon Cash Consideration”) based upon the following schedule:

In March 2017, the Company entered into a purchase and sale agreement (the “Black Dragon PSA”), subsequently amended, to acquire a 75% working interest in and to certain leases, hydrocarbons, wells, agreements, equipment, surface rights agreements and assignable permits at an 80% net revenue interest located in the Moenkopi formation of the Carbon and Emery Counties, Utah (the “Black Dragon Property”). In August 2017, the Company entered into an amendment to the Black Dragon PSA (the “Black Dragon Amendment”), which amended the terms of the Black Dragon PSA. Under the Black Dragon Amendment, the Company is required to pay the vendor cash consideration totaling $3.9 million (the “Black Dragon Cash Consideration”) based upon the following schedule:

	●	$100,000 as a non-refundable deposit within 10 business days of closing (paid);

	●	the balance of the Black Dragon Cash Consideration by payment to the vendor of an amount equal to 12.5% of any funds received by the Company from any equity, debt or convertible financing thereof (each, a “Financing”) upon the closing of each Financing until such amount is paid. In addition: (a) the first $1,500,000 raised by the Company will be exempt from a 12.5% payment to the vendor if such amount is received prior to the Company’s listing on a stock exchange; and (b) the full Black Dragon Cash Consideration is required to be paid in full no later than May 1, 2020 regardless of the amount of funds paid in connection with one or more Financings.

·In addition to revising the Black Dragon Cash Consideration as set out above, the Company has agreed to: (a) issue 250,000 common shares of the Company to the vendor on or prior to September 1, 2017 (issued at a value of $625,000); and (b) pay the vendor an additional $25,000 every sixty days commencing September 1, 2017 ($275,000 paid) until such time as the Black Dragon Cash Consideration is paid in full. Furthermore, as part of the May 2019 amendment, the Company is required to issue 300,000 shares of the Company to the vendor.

~~$100~~Within 10 business days after the later of the Company paying the Black Dragon Cash Consideration in full or the Company meeting in full its carry obligation,~~000~~ asthe avendor ~~non-refundable~~will ~~deposit~~convey ~~within~~to 10the ~~business~~Company ~~days~~an undivided 75% of ~~closing~~the ~~(paid);~~Vendor’s right, title and interest in and to the assets, at an 80% Net Revenue Interest in the assets.

·Carry Obligation

As per the ~~balance~~terms of the Black Dragon ~~Cash~~PSA, ~~Consideration~~and byin ~~payment~~addition to the ~~vendor~~Black ofDragon anCash ~~amount~~Consideration, ~~equal~~the Company is required to ~~25%~~pay all ofcosts ~~any~~and ~~funds~~expenses ~~received~~incurred byon the ~~Company~~assets ~~from~~with respect to any ~~equity~~and all exploration, ~~debt~~development orand ~~convertible~~production ~~financing~~during ~~thereof~~the ~~(each,~~carry period. aThe “~~Financing~~Carry Period”) ~~upon~~continues until the ~~closing~~later of ~~each~~either ~~Financing~~(i) ~~until~~the ~~such~~date ~~amount~~that isthe ~~paid. In~~Company ~~addition:~~pays the full Black Dragon Cash Consideration set out above or (aii) the ~~first~~date ~~$1.5~~that ~~million~~the ~~raised~~Company bypays all costs and expenses for the ~~Company~~drilling, ~~will~~logging, betesting and ~~exempt~~completion ~~from~~of two new wells, each well with a ~~25%~~horizontal ~~payment~~leg toextending at least 2,000 feet in the ~~vendor~~target ifzone ~~such~~within ~~amount~~the Moenkopi formation (the “Two Obligation Wells”). The Company is ~~received~~required ~~prior~~to drill to ~~the~~completion ~~Company’s~~or ~~listing~~cause onto abe ~~stock~~drilled ~~exchange;~~to completion (or plugging and (babandonment) the ~~full~~Two ~~Black~~Obligation ~~Dragon~~Wells ~~Cash~~on ~~Consideration~~or isbefore ~~required~~May 1, 2020, failing which, the Company’s right to beearn any ~~paid~~assignment in ~~full~~and noto ~~later~~the ~~than~~assets ~~December~~will ~~31,~~terminate ~~2018~~immediately. ~~regardless~~For ofeach vertical well drilled to 200 feet below the ~~amount~~top of ~~funds~~the Kaibab ~~paid~~formation inthrough ~~connection~~completion ~~with~~(or ~~one~~plugging or ~~more~~abandonment) ~~Financings. This~~within ~~change~~a ~~modified~~Federal Unit, the ~~original~~obligation ~~requirement~~deadline will be amended to ~~pay~~the ~~US$900,000~~later onof (i) the current obligation deadline or ~~before~~(ii) ~~September~~6 1,months ~~2017,~~from ~~US$900,000~~the ondate orthe ~~before~~rig ~~March~~that 1,drilled ~~2018~~such ~~and~~vertical ~~US$800,000~~well onto total ordepth ~~before~~has ~~October~~been 1,removed ~~2019~~from ~~(as~~the ~~amended)~~wellsite.

has agreed to: (a) issue 250,000 common shares of the Company to the vendor on or prior to September 1, 2017 (issued at a value of $500,000); and (b) pay the vendor an additional $25,000 every sixty days commencing September 1, 2017 ($200,000 paid) until such time as the Black Dragon Cash Consideration is paid in full.9

AsFORTEM RESOURCES an added incentive for early payment of the Black Dragon Cash Consideration, such sum will be reduced by $100,000 for each calendar month it is paid in full prior to December 31, 2018 for a maximum discount of 12 months or $1INC.~~2 million.~~

~~Within~~NOTES TO 10CONSOLIDATED ~~business~~CONDENSED ~~days~~INTERIM ~~after~~FINANCIAL the later of the Company paying the Black Dragon Cash Consideration in full or the Company meeting in full its carry obligation, the vendor will convey to the Company an undivided 75% of the Vendor’s right, title and interest in and to the assets, at an 80% Net Revenue Interest in the assets.STATEMENTS

~~On August 16, 2018,~~ For the ~~Company~~three ~~entered~~months ~~into~~ended aMay ~~third amendment to purchase and sale agreement (the “Black Dragon Third Amendment”)~~31, which amended the terms of the Black Dragon PSA. The Black Dragon Third Amendment has the effect of postponing the balance of the Black Dragon Cash Consideration relating to the Black Dragon Property under the Black Dragon PSA from September 1, 2018 to October 1, 2019.

9(Expressed in US dollars – Unaudited)

~~FORTEM~~5. OIL ~~RESOURCES~~AND ~~INC.~~GAS PROPERTIES, FULL COST METHOD (continued)

~~NOTES~~Rolling Rock ~~TO CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS~~Property

~~For~~In March 2017, the ~~three~~Company entered into a purchase and ~~nine~~sale ~~months~~agreement ~~ended~~(the ~~November~~“Rolling 30Rock PSA”), ~~2018~~subsequently amended, to acquire a 75% working interest in and to certain leases, hydrocarbons, wells, agreements, equipment, surface rights agreements and assignable permits at an 80% net revenue interest located in the Mancos formation in the Southern Uinta Basin, Utah (the “Rolling Rock Property”). In August 2017 and May 2019, the Company entered into an amendment to the Rolling Rock PSA (the “Rolling Rock Amendment”), which amended the terms of the Rolling Rock PSA. Under the Rolling Rock Amendment, the Company is required to pay the vendor cash consideration totaling $5,400,000 (the “Rolling Rock Cash Consideration”) based upon the following schedule:

● $100,000 as a non-refundable deposit within 10 business days of closing (~~Expressed~~paid); ● the balance of the Rolling Rock Cash Consideration by cash payment to the vendor of an amount equal to 12.5% of any funds received by the Company from any Financing upon the closing of each Financing until such amount is paid. In addition: (a) the first $1,500,000 raised by the Company will be exempt from a 12.5% payment to the vendor if such amount is received prior to the Company’s listing on a stock exchange; and (b) the full Rolling Rock Cash Consideration is required to be paid in USfull ~~dollars~~no –later ~~Unaudited~~than May 1, 2020 regardless of the amount of funds paid in connection with one or more Financings; and ● after payment of the Rolling Rock Cash Consideration, an additional payment of $300,000 (the “Workover Funds”) to the vendor which is payable by an amount equal to 12.5% of any funds received by the Company from any Financing until the Workover Funds are paid in full.

6In addition to revising the Rolling Rock Cash Consideration as set out above, the Company has agreed to: (a) cause the Company to issue 250,000 common shares of the Company to the vendor on or prior to September 1, 2017 (issued at a value of $625,000); and (b) pay the vendor an additional $25,000 every sixty days commencing September 1, 2017 ($275,000 paid) until such time as the Rolling Rock Cash Consideration and the Workover Funds are paid in full. Furthermore, as part of the May 2019 amendment, the Company is required to issue 300,000 shares of the Company to the vendor.

~~OIL~~Within 10 ~~AND~~business ~~GAS~~days ~~PROPERTIES~~after the later of the Company paying the Rolling Rock Cash Consideration in full or the Company meeting in full its carry obligation, ~~UNPROVED~~the vendor agrees to convey to the Company an undivided 75% of the vendor’s right, title and interest in and to the Leases, or a 80% net revenue interest in the Leases. Notwithstanding this transfer, within 10 business days after the later of payment of $300,000 on or before May 1, 2020 (~~continued~~which amount is in addition to the deposit and included in the Rolling Rock Cash Consideration set out above) and the replacement of the vendor’s bonds on or before July 1, 2019, the vendor agrees to convey to the Company an undivided 25% of the vendor’s right, title and interest in and to the Cisco Dome leases and related assets. However, if the Company fails to timely meet any of its obligations under the Rolling Rock PSA, after having taken assignment of the Cisco Dome leases and assets, then, if the vendor elects in its sole discretion, the Company is required to reassign the Cisco Dome leases and assets to the vendor without any additional encumbrances.

~~Black Dragon Property (continued)~~10

~~Carry~~FORTEM RESOURCES ~~Obligation~~INC.

AsNOTES TO ~~per~~CONSOLIDATED ~~the~~CONDENSED ~~terms~~INTERIM ofFINANCIAL the Black Dragon PSA, and in addition to the Black Dragon Cash Consideration, the Company is required to pay all costs and expenses incurred on the assets with respect to any and all exploration, development and production during the carry period. The “Carry Period” continues until the later of either (i) the date that the Company pays the full Black Dragon Cash Consideration set out above or (ii) the date that the Company pays all costs and expenses for the drilling, logging, testing and completion of two new wells, each well with a horizontal leg extending at least 2,000 feet in the target zone within the Moenkopi formation (the “Two Obligation Wells”). The Company is required to drill to completion or cause to be drilled to completion (or plugging and abandonment) the Two Obligation Wells on or before February 28, 2019, failing which, the Company’s right to earn any assignment in and to the assets will terminate immediately. For each vertical well drilled to 200 feet below the top of the Kaibab formation through completion (or plugging or abandonment) within a Federal Unit, the obligation deadline will be amended to the later of (i) the current obligation deadline or (ii) 6 months from the date the rig that drilled such vertical well to total depth has been removed from the wellsite.STATEMENTS

~~Rolling~~For the ~~Rock~~three ~~Property~~months ended May 31, 2019

~~In March 2017, the Company entered into a purchase and sale agreement~~ (~~the “Rolling Rock PSA”), subsequently amended, to acquire a 50% working interest~~ Expressed in ~~and~~US todollars ~~certain~~– leases, hydrocarbons, wells, agreements, equipment, surface rights agreements and assignable permits at an 80% net revenue interest located in the Mancos formation in the Southern Uinta Basin, Utah (the “Rolling Rock Property”Unaudited). In August 2017, the Company entered into an amendment to the Rolling Rock PSA (the “Rolling Rock Amendment”), which amended the terms of the Rolling Rock PSA. Under the Rolling Rock Amendment, the Company is required to pay the vendor cash consideration totaling $3.6 million (the “Rolling Rock Cash Consideration”) based upon the following schedule:

·5. OIL AND GAS PROPERTIES, FULL COST METHOD (continued)

~~$100,000~~Rolling Rock asProperty ~~a non-refundable deposit within 10 business days of closing~~ (~~paid~~continued);

·Carry Obligation

As per the ~~balance~~terms of the Rolling Rock PSA, and in addition to the Rolling Rock Cash Consideration, bythe ~~cash~~Company ~~payment~~is required to ~~the~~pay all ~~vendor~~costs ofand anexpenses ~~amount~~incurred ~~equal~~on the Leases with respect to ~~25%~~any and all exploration, development and production during the carry period. The “Carry Period” continues until the later of ~~any~~either ~~funds~~(i) ~~received~~the bydate that the Company ~~from~~pays ~~any~~the ~~Financing~~full ~~upon~~Rolling Rock Cash Consideration set out above or (ii) the ~~closing~~date that the Company pays all costs and expenses for the drilling, logging, testing and completion of three new wells in each ~~Financing~~of ~~until~~the ~~such~~three ~~amount~~Federal isUnits, ~~paid. In~~each ~~addition:~~well (with a) ~~the~~horizontal ~~first~~leg $extending at least 1.5,000 ~~million~~feet ~~raised~~in bythe target zone within the Mancos formation (the “Three Obligation Wells”). The Company ~~will~~is berequired to ~~exempt~~drill ~~from~~to acompletion ~~25%~~or ~~payment~~cause to be drilled to completion (or plugging and abandonment) the ~~vendor~~Three ifObligation ~~such~~Wells ~~amount~~on isor ~~received~~before May ~~prior~~1, to2020, failing which, the Company’s ~~listing~~right onto aearn ~~stock~~any ~~exchange;~~assignment in and ~~(b)~~to the ~~full~~Leases ~~Rolling~~will ~~Rock~~terminate ~~Cash~~immediately. For ~~Consideration~~each isvertical ~~required~~well drilled to bethe ~~paid~~top inof ~~full~~the noDakota ~~later~~formation ~~than~~through ~~October~~completion 1(or plugging or abandonment) within a Federal Unit, ~~2019~~the ~~regardless~~obligation ofdeadline will be amended to the ~~amount~~later of ~~funds~~(i) ~~paid~~the incurrent ~~connection~~obligation ~~with~~deadline ~~one~~ or ~~more~~(ii) ~~Financings;~~6 ~~and~~months from the date the rig that drilled such vertical well to total depth has been removed from the wellsite.

·The obligation well in the Grand Mancos Unit will be a vertical well drilled to a depth sufficient to test the Granite Walsh formation within such Federal Unit. For this well, completion (or plugging and abandonment) is expected to take place no later than 2 months after the rig that drilled to total depth has been removed from the wellsite and for a period of 6 months after completion of this obligation well (or plugging and abandonment), and the Company will have the exclusive option to purchase an additional 25% of the vendor’s right, title and interest in and to the leases with respect to the Granite Walsh formation within the boundary of the Grand Mancos Unit for an additional payment of $10,000,000.

~~after~~6. RIGHTS ~~payment~~TO ofTHE ~~the~~ACQUISITION ~~Rolling~~OF ~~Rock~~MINERAL ~~Cash~~EXPLORATION Consideration, an additional payment of $300,000 (the “Workover Funds”) to the vendor which is payable by an amount equal to 25% of any funds received by the Company from any Financing until the Workover Funds are paid in full.PROJECT

In connection ~~addition~~ to ~~revising~~ the ~~Rolling~~acquisition ~~Rock~~of ~~Cash~~City ~~Consideration~~of asGold, ~~set~~LLC ~~out~~in ~~above~~fiscal 2018, the Company ~~has~~owns ~~agreed to: (a) cause~~ the ~~Company~~right to ~~issue~~an ~~250,000~~option ~~common~~agreement. ~~shares~~Under of the option ~~Company~~agreement, to the ~~vendor~~vendors onhave oragreed ~~prior~~ to ~~September~~grant 1,to ~~2017~~the ~~(issued~~Company atan aoption ~~value~~(the ~~of $500,000~~“Option”); ~~and~~to ~~(b)~~purchase ~~pay~~100% of the ownership ~~vendor~~interest anin ~~additional~~a ~~$25,000~~wholly ~~every~~owned ~~sixty~~subsidiary ~~days~~of ~~commencing~~Asia ~~September~~Pacific 1,(Note ~~2017~~3) (~~$200,000~~the ~~paid~~“Project Subsidiary”) ~~until~~which, ~~such~~in ~~time~~turn, owns as100% of the ~~Rolling~~rights ~~Rock~~to ~~Cash~~the ~~Consideration~~City ~~and~~of ~~the~~Gold ~~Workover~~mineral ~~Funds~~exploration ~~are~~project ~~paid~~located in ~~full~~Myanmar.

10The Company will be granted the Option upon satisfaction of the following:

~~FORTEM~~● ~~RESOURCES~~Subscription ~~INC~~of 976,753 units of Asia Pacific for a purchase price of $500,000 on or prior to March 2, 2017 (completed); ● Subscription of 976,753 units of Asia Pacific for a purchase price of $500,000 on or prior to March 16, 2017 (completed); ● Subscription of 976,753 units of Asia Pacific for a purchase price of $500,000 on or prior to April 28, 2017 (completed); and ● Subscription of 2,930,261 units of Asia Pacific for a purchase price of $1,500,000 (the “Final Funding Tranche”), due within 60 days of issuance of an exploration license for the City of Gold Project by the Government of Myanmar.

~~NOTES~~Upon the TOclosing ~~CONSOLIDATED~~of ~~CONDENSED~~the ~~INTERIM~~Final ~~FINANCIAL~~Funding ~~STATEMENTS~~Tranche, the Company will have earned the Option.

~~For the three and nine months ended November 30, 2018~~11

~~(Expressed~~FORTEM RESOURCES ~~in US dollars – Unaudited)~~INC.

6.NOTES TO CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

~~OIL~~For the ~~AND~~three ~~GAS~~months ~~PROPERTIES,~~ended ~~UNPROVED~~May ~~(continued)~~31, 2019

~~Rolling~~(Expressed in ~~Rock~~US ~~Property~~dollars ~~(continued~~– Unaudited)

As6. RIGHTS anTO ~~added~~THE ~~incentive~~ACQUISITION ~~for~~OF ~~early~~MINERAL ~~payment~~EXPLORATION ofPROJECT ~~the Rolling Rock Cash Consideration, such sum will be reduced by $100,000 for each calendar month it is paid in full prior to December 31, 2018 for a maximum discount of 12 months or $1.2 million.~~(continued)

~~Within~~Once it 10has ~~business~~exercised ~~days after~~ the ~~later~~Option, of the Company ~~paying~~may, ~~the~~at ~~Rolling~~its ~~Rock~~discretion, ~~Cash~~require ~~Consideration~~Asia inPacific ~~full~~to ortransfer the ~~Company~~Project ~~meeting~~Subsidiary into ~~full~~another Canadian ~~its~~publicly ~~carry~~listed ~~obligation,~~company ~~the vendor agrees~~ to ~~convey~~be toselected by the Company an(“Acquisition ~~undivided~~Co”) ~~50%~~(if of the ~~vendor’s~~Project ~~right,~~Subsidiary ~~title~~is ~~and~~not transferred ~~interest~~to inanother ~~and~~Canadian topublicly ~~the~~listed ~~Leases~~company, orAcquisition aCo ~~80%~~means ~~net~~the ~~revenue~~Company) ~~interest~~for inan ~~the~~exercise ~~Leases.~~price ~~Notwithstanding~~consisting ~~this transfer~~of $7,000,000 ~~within~~in 10cash ~~business~~and ~~days~~thirty ~~after~~percent of the ~~later~~issued ofand ~~payment~~outstanding share capital of ~~$300,000~~Acquisition onCo or(calculated ~~before~~on ~~September~~a 1fully diluted basis, ~~2017~~excluding ~~(which~~up ~~amount~~to is10% in ~~addition~~stock tooptions, ~~the~~but ~~deposit~~including ~~and~~shares ~~included~~Acquisition Co may have issued in order to raise the ~~Rolling~~exercise price ~~Rock~~of ~~Cash~~$7,000,000 ~~Consideration~~and ~~set~~an ~~out~~additional ~~above~~$5,000,000 in working capital). ~~and~~Half of the ~~replacement~~cash portion of the ~~vendor’s~~exercise ~~bonds~~price onmust orbe ~~before~~paid upon ~~September~~exercise 1,of ~~2017,~~ the ~~vendor~~Option; ~~agrees~~the tobalance ~~convey~~is to ~~the~~be ~~Company~~paid anon ~~undivided~~the ~~50%~~first anniversary of the ~~vendor’s~~exercise ~~right, title~~ and ~~interest~~is ~~in and~~ to ~~the~~be ~~Cisco~~evidenced ~~Dome~~by ~~leases~~a ~~and~~one-year secured ~~related~~term ~~assets~~note. ~~However,~~Although if the Company ~~fails~~has tothe ~~timely~~right ~~meet~~to ~~any~~select ofAcquisition ~~its~~Co., ~~obligations~~it ~~under~~must ~~the~~select ~~Rolling~~a ~~Rock~~Canadian ~~PSA,~~publicly ~~after~~listed ~~having~~company that ~~taken~~meets ~~assignment~~certain ofcriteria ~~the~~– ~~Cisco~~at ~~Dome~~exercise ~~leases~~of ~~and~~the ~~assets~~Option, ~~then,~~Acquisition ifCo ~~the~~must ~~vendor~~have ~~elects~~less inthan ~~its~~$100,000 ~~sole~~in ~~discretion~~liabilities and $5,000,000 ~~the~~or ~~Company~~more isin ~~required~~working tocapital ~~reassign~~and ~~the~~Asia ~~Cisco~~Pacific ~~Dome~~will ~~leases~~have ~~and~~the ~~assets~~right to ~~the~~nominate ~~vendor~~30% ~~without~~of ~~any~~its ~~additional encumbrances~~directors.

~~On August 16, 2018, the Company entered into a fourth amendment to purchase and sale agreement (the “Rolling Rock Fourth Amendment”), which amended the terms of Rolling Rock PSA~~7. ACCOUNTS ~~The~~PAYABLE ~~Rolling~~AND ~~Rock~~ACCRUED ~~Fourth Amendment has the effect of postponing the balance of the Rolling Rock Cash Consideration relating to the Rolling Rock Property under the Rolling Rock PSA until October 1, 2019.~~LIABILITIES

Carry Obligation

	May 31, 2019		February 28, 2019
	$		$
Accounts payable		1,091,406		1,093,329
Accrued liabilities		115,743		79,274

		1,207,149		1,172,603

~~As per~~ During the ~~terms~~three ofmonths ~~the~~ended ~~Rolling~~May ~~Rock PSA~~31, ~~and in addition to the Rolling Rock Cash Consideration~~2019, the Company isentered ~~required~~into toa ~~pay~~settlement ~~all costs~~ and ~~expenses~~release ~~incurred~~agreement onto ~~the~~settle ~~Leases~~certain ~~with~~balances ~~respect~~ owing to ~~any~~a ~~and~~vendor ~~all exploration, development and production during the carry period. The “Carry Period” continues until the later~~ of ~~either (i)~~ the ~~date that the~~ Company. ~~pays~~As the full Rolling Rock Cash Consideration set out above or (ii) the date that the Company pays all costs and expenses for the drilling, logging, testing and completion of three new wells in each of the three Federal Units, each well with a ~~horizontal leg extending at least 1~~result,~~000~~ ~~feet in~~ the ~~target zone within the Mancos formation (the “Three Obligation Wells”). The~~ Company isrecorded ~~required~~a togain ~~drill to completion or cause to be drilled to completion (or plugging and abandonment) the Three Obligation Wells~~ on orsettlement ~~before February 28, 2019, failing which, the Company’s right to earn any assignment in and to the Leases will terminate immediately. For each vertical well drilled to the top~~ of ~~the~~debt ~~Dakota formation through completion (or plugging or abandonment) within a Federal Unit, the obligation deadline will be amended to the later~~ of ~~(i) the current obligation deadline or (ii) 6 months from the date the rig that drilled such vertical well to total depth has been removed from the wellsite~~$27,227.

~~The obligation well in the Grand Mancos Unit will be a vertical well drilled to a depth sufficient to test the Granite Walsh formation within such Federal Unit~~8. RELATED ~~For~~PARTY this well, completion (or plugging and abandonment) is expected to take place no later than 2 months after the rig that drilled to total depth has been removed from the wellsite and for a period of 6 months after completion of this obligation well (or plugging and abandonment), and the Company will have the exclusive option to purchase an additional 25% of the vendor’s right, title and interest in and to the leases with respect to the Granite Walsh formation within the boundary of the Grand Mancos Unit for an additional payment of $10 million. TRANSACTIONS

11Due to/from related parties consist of the following:

FORTEM RESOURCES INC.

	May 31, 2019		February 28, 2019
	$		$
Due from a company controlled by a director		70,605		12,516
Due to directors and officers of the Company		40,354		40,354

~~NOTES~~As at TOMay ~~CONSOLIDATED~~31, ~~CONDENSED~~2019, ~~INTERIM~~the ~~FINANCIAL~~Company ~~STATEMENTS~~made prepayments of $35,000 (February 28, 2018 - $30,000) to an officer and director of the Company for future management fees, pursuant to a consulting agreement, which is included in prepaid expenses.

~~For~~As at May 31, 2019, the ~~three~~Company ~~and~~has ~~nine~~an ~~months~~accrued ~~ended~~interest ~~November~~balance 30of $57,261 ~~2018~~(February 28, 2019 - $57,261) in note obligations owing to a company with a common director.

~~(Expressed~~Amounts due into/from USrelated ~~dollars~~parties –are ~~Unaudited)~~unsecured with no specific terms of repayment.

79. NOTE PAYABLE

~~RIGHTS~~As at TOMay ~~THE~~31, ~~ACQUISITION~~2019, OFthe ~~MINERAL~~Company ~~EXPLORATION~~had ~~PROJECT~~$19,942 (February 28, 2019 - $19,942) in short term note obligations. The note payable is unsecured, non-interest bearing and payable upon demand.

~~In connection to the acquisition of City of Gold, LLC in fiscal 2018, the Company owns the right to an option agreement~~10. LONG ~~Under~~TERM ~~the~~NOTES option agreement, the vendors have agreed to grant to the Company an option (the “Option”) to purchase 100% of the ownership interest in a wholly owned subsidiary of Asia Pacific (the “Project Subsidiary”) which, in turn, owns 100% of the rights to the City of Gold mineral exploration project located in Myanmar.PAYABLE

~~The~~As at May 31, 2019, the Company ~~will~~had be$1,074,041 ~~granted~~(February ~~the~~28, ~~Option~~2019 ~~upon~~- ~~satisfaction~~$500,000) in long term notes obligations due to various third parties. The notes payable are unsecured, bearing interest of ~~the~~10% ~~following:~~per annum and due from August 2020 to November 2020.

·12

~~Subscription~~FORTEM RESOURCES ~~of 976,753 units of Asia Pacific for a purchase price of $500,000 on or prior to March 2, 2017 (completed);~~INC.

·NOTES TO CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

~~Subscription~~For the ofthree ~~976,753~~months ~~units~~ended ofMay ~~Asia Pacific for a purchase price of $500~~31,~~000~~ ~~on or prior to March 16, 2017 (completed);~~2019

·(Expressed in US dollars – Unaudited)

~~Subscription~~11. ASSET ofRETIREMENT ~~976,753 units of Asia Pacific for a purchase price of $500,000 on or prior to April 28, 2017 (completed); and~~OBLIGATION

·The Company’s asset retirement obligation relates to the Compeer Property. The asset retirement obligation was estimated based on the Company’s understanding of its requirements to reclaim currently disturbed areas. Significant reclamation and closure activities include land rehabilitation, water, removal of building and well facilities and tailings reclamation. The undiscounted estimate of this liability was $37,590 (February 28, 2018 - $39,035) reflecting payments commencing in 2024. This estimate was adjusted for an inflation rate of 2.00% and then discounted at a rate of 10.00% for a net present value of $29,889 (February 28, 2019 - $29,272) as at May 31, 2019.

Subscription of 2,930,261 units of Asia Pacific for a purchase price of $1,500,000 (the “Final Funding Tranche”), due within 60 days of issuance of an exploration license for the City of Gold Project by the Government of Myanmar.

	$
Balance, February 28, 2018		28,352
Foreign exchange adjustment		(1,816	)
Accretion expense		2,736
Balance, February 28, 2019		29,272
Foreign exchange adjustment		(119	)
Accretion expense		736
Balance, May 31, 2019		29,889

~~Upon the closing of the Final Funding Tranche, the Company will have earned the Option~~12. SHARE CAPITAL

~~Once it has exercised the Option, the~~ The Company may, at its discretion, require Asia Pacific to transfer the Project Subsidiary to another Canadian publicly listed company to be selected by the Company (“Acquisition Co”) (if the Project Subsidiary is not transferred to another Canadian publicly listed company, Acquisition Co means the Company) for an exercise price consisting of $7,000,000 in cash and thirty percent of the issued ~~and~~common ~~outstanding share capital of Acquisition Co (calculated on a fully diluted basis, excluding up to 10% in stock options, but including~~ shares ~~Acquisition~~as Co may have issued in order to raise the exercise price of $7,000,000 and an additional $5,000,000 in working capital). Half of the cash portion of the exercise price must be paid upon exercise of the Option; the balance is to be paid on the first anniversary of the exercise and is to be evidenced by a one-year secured term note. Although the Company has the right to select Acquisition Co., it must select a Canadian publicly listed company that meets certain criteria – at exercise of the Option, Acquisition Co must have less than $100,000 in liabilities and $5,000,000 or more in working capital and Asia Pacific will have the right to nominate 30% of its directors.follows:

8.Three months ended May 31, 2019

~~ACCOUNTS~~In March ~~PAYABLE~~2019, ~~AND~~the ~~ACCRUED~~Company ~~LIABILITIES~~issued 500,000 shares in relation to the exercise of 500,000 warrants for total proceeds of $200,000.

	November 30, 2018	February 28, 2018
	$	$
Accounts payable	822,718	652,270
Accrued liabilities	38,228	79,369
	860,946	731,639

The Company paid a total of $14,000 in finder’s fees in connection with the equity financing.

12Year ended February 28, 2019

~~FORTEM~~In March ~~RESOURCES~~2018, ~~INC~~the Company issued 1,273,698 shares in relation to the exercise of 1,273,698 warrants for total proceeds of $509,479.

~~NOTES~~In July TO2018, ~~CONSOLIDATED~~the ~~CONDENSED~~Company ~~INTERIM~~issued ~~FINANCIAL~~1,000,000 ~~STATEMENTS~~shares in relation to the exercise of 1,000,000 warrants for total proceeds of $400,000.

~~For~~In October 2018, the ~~three~~Company ~~and~~issued ~~nine~~1,000,000 ~~months~~shares ~~ended~~recorded ~~November~~at 30a value of $1,800,000 ~~2018~~in connection to obligation to issue shares in connection to the acquisition of Colony.

~~(Expressed~~In November 2018, the Company issued 300,000 shares in USrelation ~~dollars~~to –the ~~Unaudited)~~exercise of 300,000 options for total proceeds of $30,000.

9During the year ended February 28, 2019, the Company issued 625,000 common shares for total gross proceeds of $1,250,000 pursuant to a private placement.

~~RELATED PARTY TRANSACTIONS~~13

~~Due~~FORTEM RESOURCES ~~to/from related parties consist of the following:~~INC.

	November 30, 2018	February 28, 2018
	$	$
Loan receivable (Note 3)	106,150	-
Due from a company controlled by a director	162,387	-
Due to directors and officers of the Company	223,731	445,912

NOTES TO CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

~~As at November 30, 2018,~~ For the ~~Company~~three ~~made~~months ~~prepayments~~ended ofMay ~~$90~~31,~~000~~ ~~(February 28, 2018 - $nil) to an officer and director of the Company for future management fees, pursuant to a consulting agreement, which is included in prepaid expenses.~~2019

~~As at November 30, 2018, the Company had $nil~~ (~~February 28, 2018 - $500,000)~~ Expressed in ~~note~~US ~~obligations~~dollars ~~owing~~– to a company with a common director. The note payable was unsecured, with an interest of 10% per annum and due on or before January 18, 2019. In March 2018, the Company repaid the principal balance of $500,000 owed on this note. As at November 30, 2018, the Company has an accrued interest balance of $57,261. Unaudited)

~~Amounts due to/from related parties are unsecured with no specific terms of repayment~~12. SHARE CAPITAL (continued)

~~10.~~Warrants

~~NOTE~~Below is ~~PAYABLE~~a summary of the common share purchase warrant transactions:

As at November 30, 2018, the Company had $19,942 (February 28, 2018 - $19,942) in short term note obligations. The note payable is unsecured, non-interest bearing and payable upon demand.

	Number of Warrants			Weighted Average Exercise Price per Warrant
				$
Outstanding at February 28, 2018		3,023,698			0.40
Exercised		(2,273,698	)		0.40
Outstanding at February 28, 2019		750,000			0.40
Exercised		(500,000	)		0.40
Outstanding at May 31, 2019		250,000			0.40

~~11.~~A summary of the common share purchase warrants outstanding and exercisable at May 31, 2019 is as follows:

ADVANCE PAYABLE

Exercise Price			Number Outstanding		Expiry Date
$
	0.40	*		250,000	September 22, 2019

As* Warrants atexpiry ~~November~~date ~~30,~~postponed ~~2018, the Company had $nil (February 28, 2018 - $4,058)~~ due to atrading third party. The advance payable was unsecured, non-interest bearing and payable upon demand. During the nine months end November 30, 2018, the advance payable was forgiven and the Company recorded a gain of settlement of debt of $4,058.blackout

~~During~~The weighted ~~the~~average ~~nine~~exercise ~~months~~price ~~ended~~is ~~November 30, 2018, the Company received an advance of~~ $~~100,000 (C$130,000)~~0.40 Asand atweighted ~~November~~average ~~30,~~life ~~2018,~~of the ~~Company~~warrants ~~had~~is ~~$100,000 (February 28, 2018 - $nil) due to a third party~~0.31 ~~The long term advance payable was unsecured, with an interest of 10% per annum and due on or before May 24, 2020~~year.

~~12.~~Stock Options

~~ASSET~~The Company’s ~~RETIREMENT~~Stock ~~OBLIGATION~~Option Plan allows a maximum 9,777,115 shares to be reserved for issuance under the plan. Options granted under the plan may not have a term exceeding 10 years and vesting provisions are at the discretion of the Board of Directors.

~~The~~Below is Company’s asset retirement obligation relates to the Compeer Property. The asset retirement obligation was estimated based on the Company’s understanding of its requirements to reclaim currently disturbed areas. Significant reclamation and closure activities include land rehabilitation, water, removal of building and well facilities and tailings reclamation. The undiscounted estimate of this liability was $37,590 (February 28, 2018 - $39,035) reflecting payments commencing in 2024. This estimate was adjusted for an inflation rate of 2.00% and then discounted at a ~~rate~~summary of ~~10.00%~~the ~~for~~common ashare ~~net~~purchase ~~present~~warrant ~~value of $28,979 (February 28, 2018 - $28,352) as at November 30, 2018.~~ transactions:

13.

	Number of Outstanding and Exercisable Options			Weighted Average Exercise Price per Options
				$
Outstanding at February 28, 2018		2,300,000			0.10
Exercised		(300,000	)		0.10
Outstanding at February 28, 2019 and May 31, 2019		2,000,000			0.10

~~SHARE~~A summary ~~CAPITAL~~of the stock options outstanding and exercisable at May 31, 2019 is as follows:

The Company issued common shares as follows:

Exercise Price		Number Outstanding and Exercisable		Expiry Date	Aggregate Intrinsic Value
$					$
	0.10		2,000,000	November 3, 2020		3,100,000

~~Nine~~As at ~~months~~May ~~ended~~31, ~~November 30~~2019, ~~2018~~the remaining contractual life of the stock options outstanding was 1.43 years.

InThe aggregate ~~March~~intrinsic ~~2018,~~value in the ~~Company~~proceeding ~~issued~~table ~~1,273,698~~represents ~~shares~~the intotal ~~relation~~intrinsic tovalue, based on the ~~exercise~~Company’s closing stock price of $1~~,273,698~~.65 ~~warrants~~per ~~for~~share ~~total~~as ~~proceeds~~ of ~~$509~~May 31,~~479.~~ 2019.

~~In July 2018, the Company issued 1,000,000 shares in relation to the exercise of 1,000,000 warrants for total proceeds of $400,000.~~ 14

13FORTEM RESOURCES INC.

~~FORTEM~~NOTES TO ~~RESOURCES~~CONSOLIDATED ~~INC.~~CONDENSED INTERIM FINANCIAL STATEMENTS

~~NOTES~~For the TOthree ~~CONSOLIDATED~~months ~~CONDENSED~~ended ~~INTERIM~~May ~~FINANCIAL~~31, ~~STATEMENTS~~2019

~~For~~(Expressed in ~~the~~US ~~three~~dollars ~~and~~– ~~nine months ended November 30, 2018~~Unaudited)

~~(Expressed~~13. PROPOSED ~~in US dollars – Unaudited)~~TRANSACTION

13In September 2018, the Company entered into an asset purchase agreement (the “Agreement”) with a major Canadian oil and gas company to purchase a 100% working interest in three oil leases in north central Alberta, Canada (the “Transaction”).

~~SHARE~~As consideration ~~CAPITAL~~for the oil leases, the Company has agreed to pay a purchase price of C$3,000,000 plus applicable taxes, $152,306 (~~continued~~C$200,000) of which was paid as an initial deposit upon the execution of the Agreement. Subsequent to May 31, 2019, the Company and the vendor entered into various extension agreements whereby the closing date of the Transaction was extended to a date on or before November 19, 2019 and a total deposit of $379,894 (C$500,000) was paid.

~~Nine~~14. FINANCIAL ~~months~~INSTRUMENTS ~~ended~~AND ~~November~~FAIR ~~30,~~VALUE ~~2018 (continued)~~MEASUREMENT

InThe estimated ~~October~~fair ~~2018,~~values ~~the~~for ~~Company~~financial ~~issued~~instruments ~~1,000,000~~are ~~shares~~determined ~~recorded~~based aton arelevant market information. These estimates involve uncertainties and cannot be determined with precision. The estimated fair value of $2cash,~~500~~ receivable,~~000~~ deposit, due from related parties, investment in ~~connection~~Asia Pacific Mining Ltd, accounts payable and accrued liabilities, due to related parties, related party loan payable and note payable approximate their carrying value due to the ~~acquisition~~short-term nature of ~~Colony~~those ~~(Note 6)~~instruments.

InASC 820 ~~November~~establishes ~~2018,~~a fair value hierarchy based on the ~~Company~~level ~~issued~~of ~~300~~independent,~~000~~ ~~shares~~objective inevidence ~~relation~~surrounding the inputs used to measure fair value. A financial instrument’s categorization within the ~~exercise~~fair ofvalue ~~300,000~~hierarchy ~~options~~is ~~for~~based ~~total~~upon ~~proceeds~~the lowest level of ~~$30,000~~input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:

~~During~~Level 1 ~~the~~– ~~nine~~Quoted ~~months~~prices ~~ended~~in ~~November~~active ~~30,~~markets ~~2018, the Company issued 625,000 common shares~~ for ~~total~~identical ~~gross~~assets ~~proceeds~~or ~~of $1,250,000 pursuant to a private placement.~~ liabilities;

~~Year~~Level 2 ~~ended~~– ~~February~~Inputs ~~28,~~other ~~2018~~than quoted prices included within Level 1 that are either directly or indirectly observable; and

InLevel 3 ~~April~~– ~~2017,~~Unobservable ~~the~~inputs ~~Company~~that ~~issued~~are ~~21,000,000~~supported ~~shares~~by ~~recorded~~little ator ~~their~~no ~~par~~market ~~value~~activity, oftherefor ~~$21,000~~requiring inan ~~connection~~entity to develop its own assumptions about the ~~acquisition~~assumption ofthat ~~Colony~~market participants would use in pricing.

InThe Company ~~April~~had ~~2017~~certain level 3 assets required to be recorded at fair value on a recurring basis in accordance with US GAAP as at May 31, ~~the~~2019. ~~Company~~As ~~issued~~at 20May 31,~~000~~ 2019,~~000~~ the Company’s Level 3 assets consist of shares ~~recorded~~and warrants of a private company (Note 3). The resulting level 3 assets have no active market and are required to be measured at their ~~par~~fair value each reporting period based on information that is unobservable. As at May 31, 2019, the fair value of the level 3 assets was equal to $201,500,000 inwith their ~~connection~~fair tovalue based on the ~~acquisition~~price ofpaid ~~Black~~to ~~Dragon~~acquire the investment.

~~In April 2017, the Company issued 20,000,000 shares recorded at their par value of $20,000 in connection to the acquisition of Rolling Rock~~15. SEGMENTED INFORMATION

InThe Company ~~May~~has ~~2017,~~one ~~the~~operating ~~Company issued 15~~segment,~~000,000~~ ~~shares~~being ~~recorded~~the atacquisition ~~their~~and ~~par~~exploration ~~value~~ of ~~$15,000~~oil inand ~~connection~~gas toproperties. ~~the~~Geographic ~~acquisition~~information ofis as ~~City of Gold.~~follows:

In September 2017, the Company issued 250,000 shares with a fair value of $500,000 in connection to the Black Dragon property (Note 3).

	As at May 31, 2019
	Canada		US		Total
	$		$		$
Deposit		42,553		-		42,553
Equipment		50,199		-		50,199
Oil and gas properties, full cost method		61,145,757		79,883,766		141,029,523
		61,238,509		79,883,766		141,122,275

In September 2017, the Company issued 250,000 shares with a fair value of $500,000 in connection to the Rolling Rock property (Note 3).

	As at February 28, 2019
	Canada		US		Total
	$		$		$
Deposit		43,498		-		43,498
Property and equipment		51,090		-		51,090
Oil and gas properties, full cost method		61,093,071		79,788,501		140,881,572
		61,187,659		79,788,501		140,976,160

~~In November 2017, the Company issued 30,000 shares with a fair value of $60,000 to settle an advance payable of $60,000 in connection to the Godin property (Note 6)~~16. SUBSEQUENT EVENTS

a) In ~~December~~July ~~2017~~2019, the Company ~~issued~~received ~~400,000 shares with~~ a ~~fair~~loan ~~value~~ of $~~800~~275,000 ~~for~~from ~~consulting~~a ~~services~~third party. InThe ~~addition,~~loan ~~the~~was ~~Company issued 7~~unsecured,~~760~~ ~~shares~~ with aan ~~fair~~interest ~~value~~rate of ~~$15,632~~10% toper ~~settle~~annum ~~accounts~~and payable ofin ~~$15,632.~~18 months.

In December 2017, the Company issued 800,000 shares in relation to the exercise of 800,000 warrants for total proceeds of $480,000. As at February 28, 2018, $200,000 are recorded as share subscriptions receivable and received by the Company in March 2018.15

~~During the year ended February 28, 2018, the Company issued~~ Item 2~~,597,142 common shares for total gross proceeds of $1,805,000 pursuant to private placements~~. ~~The Company paid a total of $105,200 in finder~~Management’s ~~fees~~Discussion inand ~~connection~~Analysis ~~with~~of ~~the~~Financial ~~private~~Condition ~~placements~~and Results of ~~equity financings.~~ Operations

14Forward Looking Statements

~~FORTEM~~This quarterly ~~RESOURCES~~report ~~INC~~on Form 10-Q contains forward-looking statements. Forward-looking statements are projections in respect of future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. Forward-looking statements made in this Form 10-Q include statements about:

~~NOTES~~● TOour ~~CONSOLIDATED~~beliefs ~~CONDENSED~~regarding ~~INTERIM~~the ~~FINANCIAL~~future ~~STATEMENTS~~of our competitors; ● our future capital expenditures; ● our future exploration programs and results; and ● our expectation that we will be able to raise capital when we need it.

~~For~~Assumptions in ~~the~~respect ~~three~~of ~~and~~forward-looking ~~nine~~statements ~~months~~have ~~ended~~been ~~November~~made 30regarding, ~~2018~~among other things:

~~(Expressed~~● volatility in USmarket ~~dollars~~prices –for ~~Unaudited)~~oil and natural gas; ● volatility in exchange rates; ● liabilities inherent in oil and natural gas operations; ● changes or fluctuations in production levels; ● unexpected adverse weather conditions; ● stock market volatility and market valuation of our common shares; ● uncertainties associated with estimating oil and natural gas reserves; ● competition for, among other things, capital, acquisitions of reserves, undeveloped lands and skilled personnel; ● incorrect assessments of the value of exploration and development programs; ● geological, technical, drilling, production and processing problems; ● changes in legislation, including changes in tax laws, royalty rates and incentive programs relating to the oil and natural gas industry; and ● our ability to raise capital.

13These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors” and the risks set out below, any of which may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These risks include, by way of example and not in limitation:

~~SHARE~~● ~~CAPITAL~~we ~~(continued)~~may be unable to raise sufficient funds to execute our business plan; ● we have a limited operating history; ● we are dependent on a small management team; ● we may be unable to manage any growth; ● market conditions or operation impediments may hinder our access to natural gas and oil markets or delay our production; ● risks inherent in the oil and gas industry; ● competition for, among other things, capital and skilled personnel; and ● other factors discussed under the section entitled “Risk Factors”,

~~Warrants~~any of which may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

~~Below~~While these isforward-looking astatements ~~summary~~and any assumptions upon which they are based are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Except as required by applicable law, including the ~~common~~securities ~~share~~laws ~~purchase~~of ~~warrant~~the ~~transactions:~~United States and Canada, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

	Number of Warrants	Weighted Average Exercise Price per Warrant
		$
Outstanding at February 28, 2017	3,823,698	0.44
Exercised	(800,000)	0.60
Outstanding at February 28, 2018	3,023,698	0.40
Exercised	(2,273,698)	0.40
Outstanding at November 30, 2018	750,000	0.40

AOur financial ~~summary~~statements ofare ~~the~~stated ~~common~~in ~~share~~United ~~purchase~~States ~~warrants~~Dollars ~~outstanding~~(US$) unless otherwise stated and ~~exercisable~~are atprepared ~~November~~in ~~30,~~accordance ~~2018~~with isUnited States asGenerally ~~follows:~~Accepted Accounting Principles.

Exercise Price	Number Outstanding	Expiry Date
$
0.40	500,000	March 9, 2019
0.40	250,000	September 22, 2019
	750,000

In this quarterly report, unless otherwise specified, all references to “common shares” refer to the common shares in our capital stock.

~~The~~As used ~~weighted~~in ~~average~~this ~~exercise~~quarterly ~~price~~report ison ~~$0.40~~Form ~~and~~10-Q, ~~weighted~~the ~~average~~terms ~~life~~“we”, of“us” ~~the~~“our”, ~~warrants~~“Company” and is“Fortem” ~~0.45~~mean ~~years~~our company, Fortem Resources Inc.

~~Stock Options~~Recent Developments

~~The~~Effective at ~~Company’s~~the ~~Stock~~opening ~~Option~~on ~~Plan~~August ~~allows~~23, ~~a maximum 9~~2018,~~777,115~~ shares toof beour ~~reserved~~common ~~for~~stock ~~issuance~~were ~~under~~approved ~~the~~for ~~plan.~~trading ~~Options~~on ~~granted under~~ the ~~plan~~TSX ~~may~~Venture ~~not~~Exchange ~~have~~in aCanada under ~~term~~the ~~exceeding~~symbol 10“FTM”. ~~years~~We ~~and~~were ~~vesting~~approved ~~provisions~~for ~~are~~listing atas ~~the~~a ~~discretion~~Tier of2 ~~the~~Oil ~~Board~~and ofGas ~~Directors~~Reserves Issuer.

~~Below~~On August is23, 2018, we appointed Konstantine Vatskalis, Sandra Perry, William Via and Brett Matich as directors of the Company and Robert DaCunha resigned as a ~~summary~~director of the ~~common~~Company. ~~share~~The ~~purchase~~Company’s ~~warrant~~board ~~transactions:~~of directors was comprised of Marc Bruner, Michael Caetano, Konstantine Vatskalis, Sandra Perry, William Via and Brett Matich.

	Number of Outstanding and Exercisable Options	Weighted Average Exercise Price per Options
		$
Outstanding at February 28, 2017 and 2018	2,300,000	0.10
Exercised	(300,000)	0.10
Outstanding at November 30, 2018	2,000,000	0.10

On September 21, 2018, we dismissed Dale Matheson Carr-Hilton LaBonte LLP (“DMCL”) as our company’s independent registered public accounting firm and appointed Davidson & Company LLP (“Davidson”) as our company’s independent registered public accounting firm. The dismissal of DMCL and appointment of Davidson were approved by our company’s board of directors.

15On September 26, 2018, we entered into an asset purchase agreement (the “Agreement”) with a major Canadian oil and gas company to purchase a 100% working interest in three heavy oil leases (the “Oil Leases”) covering a total of 20,719 hectares (51,200 acres) of heavy oil in north central Alberta (the “Transaction”). The rights to the Oil Leases, cover heavy oil of 12-16 API located near the top of the Viking formation to the base of the Woodbend Group.

~~FORTEM~~The acquisition ~~RESOURCES~~of ~~INC~~the Oil Leases complements the Company’s existing land holdings of 12,800 acres directly adjacent to and to the south of the Oil Leases. Upon completion of the Transaction, we will own over 62,000 acres of which 48,000 is contiguous land containing extensive heavy oil deposits within the main producing horizon, the Wabiskaw formation, along with a secondary horizon, namely the McMurray formation.

~~NOTES~~As consideration TOfor ~~CONSOLIDATED~~the ~~CONDENSED~~Oil ~~INTERIM~~Leases, ~~FINANCIAL~~we ~~STATEMENTS~~agreed to pay a purchase price of CDN$3,000,000 plus applicable GST, CDN$200,000 of which was paid as an initial deposit upon the execution of the Agreement. The closing of the Transaction was expected to occur on November 15, 2018 with an option to extend the closing date 60 days upon payment of an additional deposit of CDN$100,000. In November 2018, the Company exercised the option and extended the closing of the Transaction to January 14, 2019 with a payment of CDN$100,000. In December 2018, March, June, and September 2019, the Company and the vendor entered into extension agreements whereby the closing date of the Transaction was extended to a date on or before November 19, 2019 and the deposit increased by an additional CDN$200,000 which was paid. We anticipate that the transaction will constitute an Exempt Transaction in accordance with the policies of the TSX Venture Exchange. The Agreement was entered into on September 26, 2018 but is effective as of August 1, 2018.

~~For~~In addition to the ~~three~~Oil ~~and~~Leases, ~~nine~~upon ~~months~~closing ~~ended~~of ~~November~~the 30Transaction, ~~2018~~we will also obtain all rights, titles and interests to certain wells and facilities (as set out in the Agreement) located on the Oil Leases. The expiry dates for the three Oil Leases are as follows:

~~(Expressed~~● inSeptember US29, ~~dollars~~2028; –● ~~Unaudited)~~January 26, 2029; and ● March 9, 2029

13On July 2, 2019, Sandra Perry resigned as a director of the Company.

~~SHARE CAPITAL (continued)~~17

~~Stock~~On September ~~Options~~23, 2019, the Company entered into a non-binding term sheet with an arm’s length party (~~continued~~the “Farmee”), pursuant to which the parties agreed to farm-out a portion of the Rolling Rock Property, and to establish a joint venture, subject to the entry of a definitive transaction agreement. Pursuant to the term sheet, the Farmee will commit up to $15,000,000 (the “Commitment Amount”) in up to ten tranches (each, a “Tranche”) in exchange for a 100% operating interest in certain wells located on the Rolling Rock Property (the “Operating Interest”). Upon full payout of the Commitment Amount, the Company will be entitled to a 20% interest in the income generated from the Farmee’s activities, which interest shall be increased to 25% following a 2.0x return of capital of the Farmee’s investment (the “Carry Structure”). The Operating Interest will be conveyed to the Farmee upon the execution of the Definitive Agreement for the Obligation Tranche and upon affirmative election by the Farmee to proceed with any Subsequent Tranche.

A subsidiary ~~summary~~of the Farmee, in collaboration with the Company and Rolling Rock, is anticipated to be the operator upon formation of the ~~stock~~joint ~~options~~venture ~~outstanding~~in regards to the participating wells. All costs related to the wellbores subsequent to re-entry, including plugging and ~~exercisable~~abandonment costs, will be borne in proportion to the carry structure at ~~November~~the 30time of commencement of wellbore operations. No additional midstream fees are to be charged by the Company, ~~2018~~Rolling isRock, any related party or affiliate thereof to the Farmee that are in excess of, or including a margin on top of the necessary operating expenses incurred to gather, compress, process, dehydrate, treat, and/or transport gas to sale. The joint venture and all gas produced as ~~follows:~~a direct result of the Farmee, the Company and Rolling Rock’s activities will have primary service that takes precedent over any third party gas produce from the subject wells.

Exercise Price	Number Outstanding and Exercisable	Expiry Date	Aggregate Intrinsic Value
$			$
0.10	2,000,000	November 3, 2020	4,640,000

The Oil Leases

AsWe have atcommenced ~~November~~the 30consultation process with the Alberta Energy Regulator (AER) and other Alberta government agencies, ~~2018~~along with Bigstone Cree Nation, a First Nations band party to Treaty Eight and other interested stakeholders. Accordingly, participation in the ~~remaining~~consultation ~~contractual~~process ~~life~~is a pre-requisite to commencing operations on the Oil Leases. Assuming closing of the ~~stock~~Transaction, we ~~options~~hope ~~outstanding~~to ~~was~~commence ~~1.93~~initial ~~years~~drilling and work in the second quarter of 2019, once the consultation process has been completed.

~~The~~Compeer Oil ~~aggregate~~and ~~intrinsic~~Gas ~~value in the proceeding table represents the total intrinsic value, based on the Company’s closing stock price of $2.42 per share as of November 30, 2018.~~Operations

14As of May 31, 2019, we have incurred $726,764 in exploration costs to drill, complete and equip the Test Well. We also recorded $29,889 in asset retirement obligations related to the future plugging and abandonment of the Test Well.

~~DERIVATIVE~~As at ~~FINANCIAL~~October ~~LIABILITIES~~15, -2019, ~~WARRANTS~~it is too early to provide stabilized production forecasts.

Balance, February 28, 2017		$ 2,590,477
Fair value adjustment		6,325,077
Reallocation of derivative liability to equity upon the change in functional currency		(8,915,554)
Balance, February 28, 2018 and November 30, 2018		$ -

Future Development Costs for Compeer

15During fiscal 2019/2020, we plan to focus on the exploration and drilling of the Farmout Lands, identify and complete additional asset acquisition(s), and pursue joint venture agreements with third parties to explore for oil and gas in Canada and the United States.

~~PROPOSED TRANSACTION~~Colony Energy

InOn April ~~September~~7, ~~2018~~2017, ~~the~~we ~~Company~~ entered into anand ~~asset~~closed ~~purchase~~two ~~agreement~~Membership (Interest Purchase Agreements with three vendors to acquire all the membership interests of Colony Energy, LLC (“~~Agreement~~Colony Energy”), ~~with~~ a ~~major~~Nevada ~~Canadian~~limited ~~oil~~liability ~~and gas~~ company. toColony ~~purchase~~Energy holds a 100% ~~working~~ interest in ~~three~~and ~~Oil~~to ~~Leases~~certain ~~(the~~petroleum, “natural gas and general rights, including Alberta Crown Petroleum and Oil Leases”), in ~~north~~20 contiguous ~~central~~sections ~~Alberta~~totaling 12,960 ~~Canada~~acres (located in the ~~“Transaction”).~~Godin area of northern Alberta.

~~As consideration for the Oil Leases, the~~ The Company ~~has~~intends ~~agreed~~ to ~~pay~~develop ~~a purchase price of C$3,000,000 plus applicable taxes, $152,306 (C$200,000) of which was paid as an initial deposit upon~~ the ~~execution~~Godin ofProject ~~the~~in ~~Agreement.~~three Inphases ~~November~~beginning ~~2018,~~with ~~the~~a ~~Company~~four ~~exercised~~well ~~the option and extended the closing of the Transaction to January 14~~vertical, ~~2019~~followed ~~with~~by a ~~payment~~four ofsection anpad development ~~additional deposit~~ of ~~$77,688~~10 ~~(C$100,000).~~wells Inper ~~December~~pad/per ~~2018,~~section. ~~the~~Phase ~~Company~~3 ~~and~~is ~~the~~intended ~~vendor~~to ~~entered~~be ~~into an extension agreement and~~ the ~~closing~~full ~~date~~development of ~~the~~20 ~~Transaction was extended to a date on or before March 15, 2019~~sections.

16In consideration for the acquisition of Colony Energy, we issued an aggregate of 21,000,000 shares of our common stock to the three vendors on the closing date and agreed to issue an additional 3,000,000 shares on a post-closing basis with 1,000,000 shares to be issued to one of the vendors on the first (issued), second and third anniversaries of the closing date.

~~FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENT~~18

~~The~~Colony Energy ~~estimated~~is ~~fair~~a ~~values~~party ~~for~~to ~~financial~~a ~~instruments~~Petroleum, ~~are~~Natural ~~determined~~Gas ~~based~~and onGeneral ~~relevant~~Rights ~~market~~Conveyance ~~information.~~dated ~~These~~as ~~estimates~~of ~~involve~~March ~~uncertainties~~31, 2017 with an arm’s length vendor and ~~cannot~~the beprincipal ~~determined~~shareholder ~~with~~thereof, ~~precision. The~~pursuant ~~estimated~~to ~~fair~~which ~~value~~the ofvendor ~~cash,~~is ~~receivable,~~entitled ~~loan~~to ~~receivable,~~receive ~~due~~certain ~~from~~milestone ~~related~~payments ~~parties,~~from Colony ~~investment~~Energy in ~~Asia~~the ~~Pacific~~aggregate ~~Mining~~amount ~~Ltd~~of up to $210,000 ~~accounts~~as ~~payable~~partial consideration for the original purchase of the oil and ~~accrued~~gas assets ~~liabilities,~~described ~~due~~above. Pursuant to ~~related~~a ~~parties,~~Milestone ~~related~~Payment ~~party~~Addendum ~~loan~~dated ~~payable~~April 7, ~~advance~~2017, ~~payable~~we agreed that if Colony Energy fails to make timely payment of any milestone payment and ~~note~~does ~~payable~~not ~~approximate~~remedy ~~their~~such ~~carrying~~failure ~~value~~within ~~due~~30 days after receipt of written notice from the vendor, the vendor may elect to: (i) have Colony Energy re-convey the ~~short~~purchased assets to the vendor; or (ii) receive 250,000 shares of our common stock, with such re-~~term~~conveyance ~~nature~~or issuance of ~~those~~shares ~~instruments.~~to be in full and final satisfaction of all obligations to make any further milestone payment.

16Black Dragon

~~FORTEM~~On April ~~RESOURCES~~12 ~~INC~~2017, we entered into and closed a Membership Interest Purchase Agreement (the “Black Dragon MPA”) with two vendors to acquire all membership interest of Black Dragon Energy, LLC (“Black Dragon”), a Nevada limited liability company. Black Dragon has the right to acquire a 75% working interest in and to certain leases, hydrocarbons, wells, agreements, equipment, surface rights agreements and assignable permits totaling approximately 165,000 acres (258 sections) at an 80% net revenue interest located in the Moenkopi formation of the Carbon and Emery Counties, Utah.

~~NOTES~~In consideration TOfor ~~CONSOLIDATED~~the ~~CONDENSED~~acquisition ~~INTERIM~~of ~~FINANCIAL~~Black ~~STATEMENTS~~Dragon, we issued an aggregate of 20,000,000 shares of our common stock to the two vendors on the closing date and paid $100,000 prior to the closing as a non-refundable deposit.

~~For~~Black Dragon’s sole asset consists of the ~~three~~rights and ~~nine~~obligations ~~months~~arising ~~ended~~from ~~November~~a 30Purchase and Sale Agreement dated effective March 1, ~~2018~~2017 (the “Black Dragon PSA”) between an arm’s length vendor and Black Dragon.

On August 17, 2017, we entered into a first amendment to purchase and sale agreement (~~Expressed~~the “Black Dragon Amendment”), which amended the terms of the Black Dragon PSA. The Black Dragon Amendment had the effect of postponing certain payments relating to the Moenkopi Formation under the Black Dragon PSA until December 31, 2018 while providing for the flexibility of earlier payments in USthe ~~dollars~~discretion –of ~~Unaudited)~~our Company. In consideration for the postponement of such payments, we have agreed to certain additional interim payments and stock consideration as set forth below.

16Under the Black Dragon Amendment, we agreed to pay the vendor cash consideration totaling $3.9 million (the “Black Dragon Cash Consideration”) rather than the original US$2.7 million based upon the following revised payment schedule:

FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENT (continued)

	●	$100,000 as a non-refundable deposit within 10 business days of closing (completed and unchanged); and

	●	the balance of the Black Dragon Cash Consideration by payment to the vendor of an amount equal to 12.5% of any funds received by our Company from any equity, debt or convertible financing thereof (each, a “Financing”) upon the closing of each Financing until such amount is paid. Notwithstanding the foregoing: (a) the first US$1.5 million raised by our Company will be exempt from a 12.5% payment to the vendor if such amount is received prior to our listing on a stock exchange; and (b) the full Black Dragon Cash Consideration is required to be paid in full no later than December 31, 2018 (later extended to the Black Dragon Payment Deadline as described below) regardless of the amount of funds paid in connection with one or more Financings. This change modified the original requirement to pay $900,000 on or before September 1, 2017, $900,000 on or before March 1, 2018 and $800,000 on or before September 1, 2018.

~~ASC~~In addition ~~820~~to ~~establishes~~revising athe ~~fair~~Black ~~value~~Dragon ~~hierarchy~~Cash ~~based~~Consideration onas ~~the~~set ~~level~~out ~~of independent~~above, ~~objective~~we ~~evidence~~have ~~surrounding~~agreed ~~the inputs used~~ to: ~~measure~~(a) ~~fair~~issue ~~value.~~250,000 Acommon ~~financial~~shares of ~~instrument’s~~the ~~categorization~~Company ~~within~~to the ~~fair~~vendor ~~value~~on ~~hierarchy~~or isprior ~~based~~to ~~upon~~September ~~the~~1, ~~lowest~~2017 ~~level~~(issued ofon ~~input~~September ~~that~~1, is2017); ~~significant~~and to(b) pay the ~~fair~~vendor ~~value~~an ~~measurement.~~additional $25,000 ~~ASC~~every ~~820~~sixty ~~prioritizes~~days ~~the~~commencing ~~inputs~~September ~~into~~1, ~~three~~2017 ~~levels~~until ~~that~~such ~~may~~time beas ~~used~~the toBlack ~~measure~~Dragon ~~fair~~Cash ~~value:~~Consideration is paid in full.

~~Level~~On May 28, 2018, we entered into a second amendment to purchase and sale agreement (the “Black Dragon Second Amendment”), which amended the terms of the Black Dragon PSA. The Black Dragon Second Amendment has the effect of postponing certain payments relating to the Moenkopi formation under the Black Dragon PSA until August 1, –2019, ~~Quoted~~provided ~~prices~~that, inif ~~active~~the ~~markets~~shares ~~for~~of ~~identical~~common ~~assets~~stock of our company were not listed on the TSX Venture Exchange on or ~~liabilities;~~before August 1, 2018, the payment deadline was to remain December 31, 2018.

~~Level~~On August 216, –2018, ~~Inputs~~but ~~other~~effective ~~than~~as ~~quoted~~of ~~prices~~March ~~included~~1, ~~within~~2017, ~~Level~~we 1entered ~~that~~into ~~are~~a ~~either~~third ~~directly~~amendment orto ~~indirectly~~purchase ~~observable;~~ and sale agreement (the “Black Dragon Third Amendment”), which amended the terms of the Black Dragon PSA. The Black Dragon Third Amendment has the effect of postponing certain payments relating to the Moenkopi formation under the Black Dragon PSA until October 1, 2019.

Level 3 – Unobservable inputs that are supported by little or no market activity, there for requiring an entity to develop its own assumptions about the assumption that market participants would use in pricing.19

~~The~~On May ~~Company~~16, ~~had~~2019, ~~certain~~but ~~level~~effective ~~3 assets required to be recorded at fair value on a recurring basis in accordance with US GAAP~~ as atof ~~November~~March 301, ~~2018. As at November 30~~2017, ~~2018,~~we ~~the~~entered ~~Company’s~~into ~~Level 3 assets consist of shares and warrants of~~ a ~~private~~fourth ~~company.~~amendment ~~The~~to ~~resulting~~purchase ~~level 3 assets have no active market~~ and ~~are~~sale ~~required~~agreement to(the be“Black Dragon ~~measured~~Fourth ~~at their fair value each reporting period based on information that is unobservable. As at November 30~~Amendment”), ~~2018,~~which amended the ~~fair~~terms ~~value~~ of the ~~level~~Black 3Dragon ~~assets~~PSA. ~~was~~The ~~equal~~Black toDragon ~~$1,500,000~~Fourth ~~with~~Amendment ~~their~~has ~~fair value based on~~ the ~~price paid to acquire the investment.~~ effect of:

17● postponing payment of the remaining US$3.8 million owed under the Black Dragon PSA relating to the Moenkopi Formation until receipt of the proceeds of one or more financings by the Company, in which case the Company must pay 12.5% of the proceeds of each financing close until payment in full; ● extending the outside date of full payment of the remaining US$3.8 million to May 1, 2020 (the “Black Dragon Payment Deadline”); ● extending the “Obligation Deadline” for drilling obligations to May 1, 2020; ● requiring the Company to re-enter and perform workover operations reasonably aimed at cleaning out the bore of the Wellington Flats Well and restoring that well to production on or prior to May 1, 2020; and ● extending the deadline for bond replacement to July 1, 2019.

~~SEGMENTED~~In consideration ~~INFORMATION~~of the various extensions provided for under the Black Dragon Fourth Amendment, the Company has agreed to issue 300,000 common shares to the vendor at a deemed price of $1.50 per common share.

~~The Company has one operating segment, being the acquisition and exploration of oil and gas properties. Geographic information is as follows:~~Carry Obligation

	As at November 30, 2018
	Canada	US	Total
	$	$	$
Deposit	42,846	-	42,846
Equipment	51,981	-	51,981
Oil and gas properties, unproved	3,365,624	2,239,224	5,604,848
	3,460,451	2,239,224	5,699,675

Under the Black Dragon PSA, and in addition to the cash consideration, Black Dragon has agreed to pay all costs and expenses incurred on the assets with respect to any and all exploration, development and production during the carry period. The “Carry Period” continues until the later of either (i) the date that Black Dragon pays the full cash consideration set out above or (ii) the date that Black Dragon pays all costs and expenses for the drilling, logging, testing and completion two new wells, each well with a horizontal leg extending at least 2,000’ in the target zone within the Moenkopi formation (the “Two Obligation Wells”). Black Dragon is required to drill to completion or cause to be drilled to completion (or plugging and abandonment) the Two Obligation Wells on or before May 1, 2020, failing which, Black Dragon’s right to earn any assignment in and to the assets will terminate immediately. For each vertical well drilled to 200 feet below the top of the Kaibab formation through completion (or plugging or abandonment) within a Federal Unit, the obligation deadline will be amended to the later of (i) the current obligation deadline or (ii) 6 months from the date the rig that drilled such vertical well to total depth has been removed from the wellsite.

	As at February 28, 2018
	Canada	US	Total
	$	$	$
Deposit	43,961	-	43,961
Property and equipment	54,654	-	54,654
Oil and gas properties, unproved	839,668	1,791,686	2,631,354
	938,283	1,791,686	2,729,969

Within 10 business days after the later of Black Dragon paying the cash consideration in full or Black Dragon meeting in full its carry obligation, the vendor will convey to Black Dragon an undivided 75% of the Vendor’s right, title and interest in and to the assets, at an 80% Net Revenue Interest in the assets as further described in the Black Dragon PSA.

17On August 24, 2017, our company indirectly acquired a 75% interest in additional oil and gas leases in the Moenkopi formation covering a total of 3,852.41 acres. The leases were also acquired at the SITLA auction (the “State of Utah School and Institutional Trust Lands Administration”) and are in the region covered by an Area of Mutual Interest defined under the Black Dragon PSA, which incorporates a form of joint operating agreement that will govern the joint ownership of the newly acquired leases.

~~Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations~~Rolling Rock

~~Forward~~On April ~~Looking~~17, ~~Statements~~2017, we entered into and closed a Membership Interest Purchase Agreement with two vendors to acquire 100% membership interest of Rolling Rock Resources, LLC (“Rolling Rock”), a Nevada limited liability company. Rolling Rock has the right to acquire a 50% working interest in and to certain leases, hydrocarbons, wells, agreements, equipment, surface rights agreements and assignable permits totaling approximately 101,888 acres (160 sections) at an 80% net revenue interest located in the Mancos formation in the Southern Uinta Basin, Utah.

~~This~~In consideration ~~quarterly~~for ~~report~~the onacquisition ~~Form 10-Q contains forward-looking statements. Forward-looking statements are projections in respect~~ of ~~future~~Rolling ~~events or our future financial performance. In some cases~~Rock, ~~you~~we ~~can~~issued ~~identify~~an ~~forward-looking~~aggregate ~~statements~~of ~~by terminology such as “may”~~20, ~~“should”~~000,000 ~~“expects”,~~shares ~~“plans”,~~of ~~“anticipates”,~~our ~~“believes”,~~common ~~“estimates”,~~stock ~~“predicts”,~~to ~~“potential”~~the ortwo vendors ~~“continue”~~on or the ~~negative~~closing ofdate ~~these~~and ~~terms~~paid or$100,000 ~~other~~prior ~~comparable~~to ~~terminology.~~the ~~Forward-looking~~closing ~~statements~~as ~~made~~a ~~in this Form 10~~non-Qrefundable ~~include statements about:~~ deposit.

·20

~~our~~Rolling Rock’s ~~beliefs~~sole ~~regarding~~asset consists of the ~~future~~rights and obligations arising from a Purchase and Sale Agreement dated effective March 1, 2017, as amended (together, the “Rolling Rock PSA”), between an arm’s length vendor and Rolling Rock. Upon the satisfaction of ~~our~~the ~~competitors;~~payments and obligations by Rolling Rock as set out below, the vendor has agreed to convey certain leases and related assets (the “Leases”) to Rolling Rock. The Leases include certain leases, hydrocarbons, wells, agreements, equipment, surface rights agreements and assignable permits all as further set out in the Rolling Rock PSA.

·On August 17, 2017, we entered into a second amendment to purchase and sale agreement (the “Rolling Rock Amendment”), which amended the terms of the Rolling Rock PSA.

The Rolling Rock Amendment had the effect of postponing certain payments relating to the Mancos formation under the Rolling Rock PSA until December 31, 2018 while providing for the flexibility of earlier payments in the discretion of our ~~future~~Company. ~~capital~~In ~~expenditures;~~consideration for the postponement of such payments, Rolling Rock agreed to certain additional interim payments and stock consideration as set forth below.

·Under the Rolling Rock Amendment, Rolling Rock has agreed to pay the vendor cash consideration totaling $3.6 million (the “Rolling Rock Cash Consideration”) rather than the original $2.4 million based upon the following revised payment schedule:

● $100,000 as a non-refundable deposit within 5 business days of closing (completed and unchanged); ● the balance of the Rolling Rock Cash Consideration by payment to the vendor of an amount equal to 12.5% of any funds received by our ~~future~~Company ~~exploration~~from ~~programs~~any Financing upon the closing of each Financing until such amount is paid. Notwithstanding the foregoing: (a) the first $1.5 million raised by our Company will be exempt from a 12.5% payment to the vendor if such amount is received prior to our listing on a stock exchange; and ~~results~~(b) the full Rolling Rock Cash Consideration is required to be paid in full no later than December 31, 2018 (later extended to the Rolling Rock Payment Deadline as described below) regardless of the amount of funds paid in connection with one or more Financings. This change modified the original requirement to pay $1.3 million on or before September 1, 2017, $500,000 on or before March 1, 2018 and $500,000 on or before September 1, 2018; and ● after payment of the Rolling Rock Cash Consideration, an additional payment of $300,000 (the “Workover Funds”) to the vendor which is payable by an amount equal to 12.5% of any funds received by our company from any Financing until the Workover Funds are paid in full.

·In addition to revising the Rolling Rock Cash Consideration as set out above, we have agreed to: (a) issue 250,000 common shares of the Company to the vendor on or prior to September 1, 2017 (issued on September 1, 2017); and (b) pay the vendor an additional $25,000 every sixty days commencing September 1, 2017 until such time as the Rolling Rock Cash Consideration and the Workover Funds are paid in full.

~~our~~On May ~~expectation~~28, ~~that~~2018, we ~~will~~entered beinto ~~able~~a third amendment to ~~raise~~purchase ~~capital~~and ~~when~~sale weagreement ~~need~~(the it“Rolling Rock Third Amendment”), which amended the terms of the Rolling Rock PSA. The Rolling Rock Third Amendment had the effect of postponing certain payments relating to the Mancos formation under the Rolling Rock PSA until August 1, 2019, provided that, if the shares of common stock of our company were not listed on the TSX Venture Exchange on or before August 1, 2018, the payment deadline was to remain December 31, 2018.

~~Assumptions~~On August in16, ~~respect~~2018, but effective as of ~~forward-looking~~March ~~statements~~1, ~~have~~2017, ~~been~~we ~~made~~entered ~~regarding~~into a fourth amendment to purchase and sale agreement (the “Rolling Rock Fourth Amendment”), ~~among~~which ~~other~~amended ~~things:~~the terms of the Rolling Rock PSA. The Rolling Rock Fourth Amendment has the effect of postponing certain payments relating to the Mancos formation under the Rolling Rock PSA until October 1, 2019.

·21

~~volatility~~On May in16, ~~market~~2019, ~~prices~~but ~~for~~effective ~~oil~~as of March 1, 2017, we entered into a fifth amendment to purchase and ~~natural~~sale ~~gas;~~agreement (the “Rolling Rock Fifth Amendment”), which amended the terms of the Rolling Rock PSA. The Rolling Rock Fifth Amendment has the effect of:

·● increasing the percentage interest of all right, title and interest in and to the leases to be acquired by Rolling Rock from the vendor under the Rolling Rock PSA from 50% to 75%; ● postponing payment of the remaining US$5.3 million owed under the Rolling Rock PSA relating to the Mancos Formation until receipt of the proceeds of one or more financings by the Company, in which case the Company must pay 12.5% of the proceeds of each financing close until payment in full; ● extending payment of an additional US$300,000 as the Workover Funds on or before May 1, 2020 (which Workover Funds are separate from and in addition to the cash consideration of US$5.3 million); ● extending the outside date of full payment of the remaining US$5.3 million to May 1, 2020 (the “Rolling Rock Payment Deadline”); ● extending the “Obligation Deadline” for drilling obligations to May 31, 2020; and ● extending the deadline for bond replacement to July 1, 2019.

~~volatility~~In consideration inof ~~exchange~~the ~~rates;~~various extensions provided for under the Rolling Rock Fifth Amendment, the Company has agreed to issue 300,000 common shares to the vendor at a deemed price of $1.50 per common share.

·Carry Obligation

~~liabilities~~Under the ~~inherent~~Rolling Rock PSA, and in ~~oil~~addition to the cash consideration, Rolling Rock has agreed to pay all costs and ~~natural~~expenses ~~gas~~incurred on ~~operations;~~the Leases with respect to any and all exploration, development and production during the carry period. The “Carry Period” continues until the later of either (i) the date that Rolling Rock pays the full cash consideration set out above or (ii) the date that Rolling Rock pays all costs and expenses for the drilling, logging, testing and completion of three new wells in each of the three Federal Units, each well with a horizontal leg extending at least 1,000’ in the target zone within the Mancos formation (the “Three Obligation Wells”). Rolling Rock is required to drill to completion or cause to be drilled to completion (or plugging and abandonment) the Three Obligation Wells on or before May 1, 2020, failing which, Rolling Rock’s right to earn any assignment in and to the Leases will terminate immediately. For each vertical well drilled to the top of the Dakota formation through completion (or plugging or abandonment) within a Federal Unit, the obligation deadline will be amended to the later of (i) the current obligation deadline or (ii) 6 months from the date the rig that drilled such vertical well to total depth has been removed from the wellsite.

·The obligation well in the Grand Mancos Unit will be a vertical well drilled to a depth sufficient to test the Granite Walsh formation within such Federal Unit. For this well, completion (or plugging and abandonment) is expected to take place no later than 2 months after the rig that drilled to total depth has been removed from the wellsite and for a period of 6 months after completion of this obligation well (or plugging and abandonment), and Rolling Rock will have the exclusive option to purchase an additional 25% of the vendor’s right, title and interest in and to the leases with respect to the Granite Walsh formation within the boundary of the Grand Mancos Unit for an additional payment of $10 million.

~~changes~~Within 10 business days after the later of Rolling Rock paying the cash consideration in full or ~~fluctuations~~Rolling Rock meeting in ~~production~~full ~~levels;~~its carry obligation, the vendor agreed to convey to Rolling Rock an undivided 75% of the vendor’s right, title and interest in and to the Leases, or a 80% net revenue interest in the Leases as further described in the Rolling Rock PSA. Notwithstanding this transfer, within 10 business days after the later of payment of $300,000 on or before May 1, 2020 (which amount is in addition to the deposit and included in the cash consideration set out above) and the replacement of the vendor’s bonds on or before July 1, 2019, the vendor agreed to convey to Rolling Rock an undivided 75% of the vendor’s right, title and interest in and to the Cisco Dome leases and related assets as further set out in the Rolling Rock PSA. However, if Rolling Rock fails to timely meet any of its obligations under the Rolling Rock PSA, after having taken assignment of the Cisco Dome leases and assets, then, if the vendor elects in its sole discretion, Rolling Rock is required to reassign the Cisco Dome leases and assets to the vendor without any additional encumbrances.

·22

~~unexpected~~On August ~~adverse~~24, ~~weather~~2017, ~~conditions;~~our company indirectly acquired an undivided 75% interest in additional oil and gas leases in the Mancos formation covering a total of 2,313.09 acres. The leases were acquired at a SITLA auction. Pursuant to the Rolling Rock PSA, the parties have agreed to enter into a joint operating agreement covering the new leases, which are outside the AMI (Area of Mutual Interest) of their original joint venture lease holdings.

·Based on a separate transaction, our company and the vendor have acquired an additional 5,174 acres in the Mancos formation and hold a 50/50 partnership, which is part of the AMI and its original agreement.

~~stock market volatility and market valuation~~ City of ~~our common shares;~~ Gold

·On May 17, 2017, we acquired 100% of the membership interest in City of Gold, LLC, a Nevada limited liability company, from two Nevada limited liability companies pursuant to a Membership Interest Purchase Agreement dated as of May 17, 2017. The Membership Interest Purchase Agreement provides for a total purchase price consisting of an aggregate of 30,000,000 common shares in the capital of our company. 15,000,000 of these shares were issued at closing (7,500,000 to each transferor); the other 15,000,000 shares are to be issued within ten Business Days after City of Gold, LLC earns the Option (as defined below).

~~uncertainties~~City of ~~associated~~Gold, LLC’s sole asset consists of 2,930,259 common shares and 2,930,259 share purchase warrants in the capital of Asia Pacific Mining Limited (“Asia Pacific”) and its rights under a binding financing and option agreement (the “Option Agreement”) with ~~estimating~~Asia ~~oil~~Pacific and ~~natural~~an ~~gas~~individual ~~reserves;~~named Nyi Nyi Lwin. City of Gold, LLC’s only liabilities consist of three demand notes for an aggregate of $1,500,000.

·Under the Option Agreement, Asia Pacific and Nyi Nyi Lwin have agreed to grant to City of Gold, LLC the option (the “Option”) to purchase 100% of the ownership interest in a wholly-owned subsidiary of Asia Pacific (the “Project Subsidiary”) which, in turn, owns 100% of the rights to the City of Gold mineral exploration project located in Myanmar which covers an area of approximately 465 square kilometers in close proximity to hydropower, water, and infrastructure to accommodate exploration and development of the property (the “City of Gold Project”). City of Gold, LLC will be granted the Option upon satisfaction of the following:

~~competition~~● Subscription of 976,753 units of Asia Pacific for a purchase price of $500,000 ~~among~~on ~~other~~or ~~things~~prior to March 2, ~~capital~~2017 (completed); ● Subscription of 976,753 ~~acquisitions~~units of ~~reserves~~Asia Pacific for a purchase price of $500,000 ~~undeveloped~~on ~~lands~~or ~~and~~prior ~~skilled~~to ~~personnel~~March 16, 2017 (completed); ● Subscription of 976,753 units of Asia Pacific for a purchase price of $500,000 on or prior to April 28, 2017 (completed); and ● Subscription of 2,930,261 units of Asia Pacific for a purchase price of $1,500,000 (the “Final Funding Tranche”), due within 60 days of issuance of an exploration license for the City of Gold Project by the Government of Myanmar (the “License”).

·Each share purchase warrant is exercisable for a term equal to the greater of two years from the closing of the Final Funding Tranche or 18 months from the issuance of the License at an exercise price of $0.51 for the first year and $1.02 for the second year. Asia Pacific utilized $500,000 of the initial three tranches towards an exploration program of the City of Gold Project. Asia Pacific is required to use all proceeds for the Final Funding Tranche towards exploration of the Project Subsidiary’s mining interests, including no less than $500,000 towards drilling the City of Gold Project (the “Drilling Program”). Upon the closing of the Final Funding Tranche, City of Gold, LLC will have earned the Option. We anticipate that the normal course of receiving the License will take longer than 12 months. As a result, we do not anticipate commencing the Drilling Program or incurring additional expenses related to the project within the next 12 month period. We anticipate holding our interest in the City of Gold Project for the long term. If circumstances warrant, we intend to exercise the Option by transferring the City of Gold Project into a subsidiary (“Spinco”) with the aim of completing a “spin-off” transaction of its anticipated 70% interest in Spinco under the plan of arrangement provisions in accordance with applicable securities and corporate laws in order to realize a benefit for our company and/or our stockholders.

~~incorrect assessments of the value of exploration and development programs;~~ 23

·Once City of Gold, LLC has earned the Option, it will have the right to exercise the Option for a period of 120 days from completion of the Drilling Program, which City of Gold, LLC can extend for an additional 120 days if it can demonstrate that all conditions to exercise of the Option are complete other than approval from the applicable stock exchange upon which the shares of Spinco are to be listed. To exercise the Option, Asia Pacific has agreed to transfer the Project Subsidiary to Spinco for an exercise price consisting of $7,000,000 in cash and 30% of the issued and outstanding share capital of Spinco (calculated on a fully diluted basis, excluding up to 10% in stock options, but including shares Spinco may have issued in order to raise the exercise price of $7,000,000 and an additional $5,000,000 in working capital). Half of the cash portion of the exercise price must be paid upon exercise of the Option; the balance is to be paid on the first anniversary of the exercise and is to be evidenced by a one-year secured term note. Although City of Gold, LLC has the right to select Spinco, Spinco must meet the following criteria: at exercise of the Option, Spinco must have less than $100,000 in liabilities and $5,000,000 or more in working capital and Asia Pacific will have the right to nominate 30% of its directors. Although we currently anticipate that the exercise of the Option will be structured as a “spin-off” transaction, we have the flexibility under the Option Agreement to structure the transaction in other ways provided the conditions to exercise are met. However, we anticipate that such a structure will result in the most efficient way to monetize our interest in the City of Gold Project at this time.

~~geological,~~Results of ~~technical,~~Operations ~~drilling, production and processing problems;~~

·The following summary of our results of operations should be read in conjunction with our unaudited financial statements for the three month periods ended May 31, 2019 and 2018 which are included herein:

changes in legislation, including changes in tax laws, royalty rates and incentive programs relating to the oil and natural gas industry; and

	For the three months ended
	May 31, 2019			May 31, 2018
Oil and gas sales	$	-		$	-
Expenses	$	451,879		$	296,474
Net loss	$	(476,309	)	$	(284,590	)

·Revenues

~~our~~During the ~~ability~~three tomonth ~~raise~~period ~~capital~~ended May 31, 2019, we did not generate any revenue (May 31, 2018 - $nil).

These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors” and the risks set out below, any of which may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These risks include, by way of example and not in limitation: Expenses

·Expenses increased during the three month period ended May 31, 2019 to $451,879 as compared to $296,474 during the three month period ended May 31, 2018.

weThe table ~~may~~below bedetails ~~unable~~the tochanges ~~raise~~in ~~sufficient~~major ~~funds~~expenditures for the three months ended May 31, 2019 as compared to ~~execute~~the ~~our~~corresponding three ~~business~~months ~~plan;~~ended May 31, 2018:

Expenses	Increase / Decrease in Expenses	Explanation for Change
Consulting fees	Decrease of $126,978	Decrease in the current period as more consulting fees related to the oil and gas properties in Canada and US in the comparative period of 2017.

Management fees	Increase of $60,000	Increase due to management fees paid to the CEO beginning August 2018.

Office, travel and general expenses	Increase of $171,169	Increase due to more corporate activities, marketing, and travel expenses for site visits and marketing.

Professional fees	Increase of 53,125	Increase in the current period as more professional services were used for corporate filings, accounting, and professional services.

~~we have a limited operating history;~~24

·Liquidity and Capital Resources

~~we are dependent on a small management team;~~Working Capital

	May 31, 2019			February 28, 2019
Current Assets	$	227,491		$	129,661
Current Liabilities	$	1,324,706		$	1,290,159
Working Capital (Deficiency)	$	(1,097,215	)	$	(1,160,498	)

weWe had ~~may~~cash beof ~~unable~~$63,866 and a working capital deficiency of $1,097,215 as of May 31, 2019 compared to ~~manage~~cash ~~any~~of ~~growth;~~$35,171 and working capital deficiency of $1,160,498 as of February 28, 2019.

·We anticipate general and administrative expense, excluding impairment of oil and gas property, if any, will be higher than fiscal 2019 during the remainder of fiscal 2020. In connection with oil and gas operations and the listing on TSX Venture Exchange, we increased the number of directors. As a result, we estimate our general and administrative expense will be higher in fiscal 2020.

~~market~~Our company’s ~~conditions~~cash orwill ~~operation~~not ~~impediments~~be ~~may~~sufficient ~~hinder~~to meet our ~~access~~working capital requirements for the next twelve month period. Our company plans to ~~natural~~raise ~~gas~~the capital required to satisfy our immediate short-term needs and ~~oil~~additional ~~markets~~capital orrequired ~~delay~~to meet our ~~production;~~estimated funding requirements for the next twelve months primarily through the issuance of our equity securities. There is no assurance that our company will be able to obtain further funds required for our continued working capital requirements. The ability of our company to meet our financial liabilities and commitments is primarily dependent upon the continued financial support of our directors and shareholders, the continued issuance of equity to new shareholders, and our ability to achieve and maintain profitable operations.

·There is substantial doubt about our ability to continue as a going concern as the continuation of our business is dependent upon obtaining further long-term financing, successful exploration of our property interests, the identification of reserves sufficient enough to warrant development, successful development of our property interests and, finally, achieving a profitable level of operations. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

~~risks~~Due to ~~inherent~~the uncertainty of our ability to meet our current operating and capital expenses, in their report on our audited financial statements for the ~~oil~~year ~~and~~ended ~~gas~~February ~~industry;~~28, 2019, our independent auditors included an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern. Our statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors.

·Cash Flows

competition for, among other things, capital and skilled personnel; and

	Three months ended May 31, 2019			Three months ended May 31, 2018
Net Cash Used in Operating Activities	$	(444,332	)	$	(144,453	)
Net Cash Used in Investing Activities	$	(184,884	)	$	(139,072	)
Net Cash Provided by Financing Activities	$	657,911		$	120,246
Net change in Cash	$	28,695		$	(163,279	)

·Cash Used in Operating Activities

~~other~~Our cash ~~factors~~used ~~discussed~~in ~~under~~operating activities for the ~~section~~three ~~entitled~~months ~~“Risk~~ended ~~Factors”~~May 31, 2019, compared to our cash used in operating activities for the three months ended May 31, 2018, increased by $299,879, primarily due to increase in general and administrative expenses and deposits paid for the Oil Leases in the current period.

any of which may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.25

~~While~~Cash Used ~~these forward-looking statements and any assumptions upon which they are based are made~~ in ~~good~~Investing faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Except as required by applicable law, including the securities laws of the United States and Canada, we do not intend to update any of the forward-looking statements to conform these statements to actual results.Activities

18Our cash used in investing activities for the three months ended May 31, 2019, compared to our cash used in investing activities for the three months ended May 31, 2018, increased by $45,812 due to investment in Asia Pacific and higher expenditures on oil and gas properties in the current period.

~~Our~~Cash Provided ~~financial~~by ~~statements~~Financing ~~are stated in United States Dollars (US$) unless otherwise stated and are prepared in accordance with United States Generally Accepted Accounting Principles.~~Activities

InOur cash ~~this~~provided ~~quarterly~~by ~~report,~~financing ~~unless~~activities ~~otherwise~~for ~~specified~~the three months ended May 31, ~~all~~2019, ~~references~~compared to ~~“common~~our ~~shares”~~cash ~~refer~~provided toby financing activities for the ~~common~~three ~~shares~~months ended May 31, 2018, increased by $537,665, primarily notes payable in ~~our~~the ~~capital~~current ~~stock~~period.

~~As used in this quarterly report on Form 10-Q, the terms “we”, “us” “our”, “Company” and “Fortem” mean our company, Fortem Resources Inc.~~Contractual Obligations

~~Recent~~Our future ~~Developments~~contractual obligations as of May 31, 2019 consisted of the following:

Effective at the opening on August 23, 2018, shares of our common stock were approved for trading on the TSX Venture Exchange in Canada under the symbol “FTM”. We have been approved for listing as a Tier 2 Oil and Gas Reserves Issuer.

	Payments due by period
Contractual Obligations	Total		Less than 1 Year		1-3 Years		3-5 Years		More than 5 Years
Note payable	$	19,942	$	19,942		-		-		-
Long term notes payable	$	1,074,041	$	-		1,074,041		-		-

~~On August 23~~Outstanding Shares, ~~2018~~Options, weWarrants appointed Kon Vatskalis, Sandra Perry, William Via and Brett Matich as directors of the Company and Robert DaCunha resigned as a director of the Company. The Company’s board of directors is currently comprised of Marc Bruner, Michael Caetano, Kon Vatskalis, Sandra Perry, William Via and Brett Matich.

OnAs of ~~September~~October 2115, ~~2018~~2019, we ~~dismissed~~have ~~Dale~~122,571,156 ~~Matheson~~shares ~~Carr-Hilton~~of ~~LaBonte~~common ~~LLP~~stock ~~(“DMCL”)~~outstanding, as2,000,000 ~~our~~stock ~~company’s~~options ~~independent~~outstanding ~~registered public accounting firm~~ and ~~appointed~~250,000 ~~Davidson & Company LLP (“Davidson”) as our company’s independent registered public accounting firm~~warrants outstanding. ~~The dismissal of DMCL and appointment of Davidson were approved by our company’s board of directors.~~

On September 26, 2018, we entered into an asset purchase agreement (the “Agreement”) with a major Canadian oil and gas company to purchase a 100% working interest in three heavy oil leases (the “Oil Leases”) covering a total of 20,719 hectares (51,200 acres) of heavy oil in north central Alberta (the “Transaction”). The rights to the Oil Leases, cover heavy oil of 12Off-16Balance Sheet ~~API located near the top of the Viking formation to the base of the Woodbend Group.~~ Arrangements

~~The~~We have ~~acquisition~~no ofoff-balance ~~the~~sheet ~~Oil~~arrangements ~~Leases~~that ~~complements~~have ~~the~~or ~~Company’s~~are ~~existing~~reasonably ~~land~~likely ~~holdings of 12,800 acres directly adjacent~~ to ~~and~~have toa ~~the~~current ~~south~~or offuture ~~the~~effect ~~Oil~~on ~~Leases. Upon~~our ~~completion of the Transaction~~financial condition, wechanges ~~will~~in ~~own~~financial ~~over 62~~condition,~~000~~ ~~acres~~revenues ofor ~~which 48~~expenses,~~000~~ isresults ~~contiguous~~of ~~land containing extensive heavy oil deposits within the main producing horizon~~operations, ~~the Wabiskaw formation~~liquidity, ~~along~~capital ~~with~~expenditures aor ~~secondary~~capital resources ~~horizon,~~that ~~namely~~is ~~the~~material ~~McMurray~~to ~~formation~~our stockholders.

As consideration for the Oil Leases, we have agreed to pay a purchase price of CDN$3,000,000 plus applicable GST, CDN$200,000 of which was paid as an initial deposit upon the execution of the Agreement. The closing of the Transaction was expected to occur on November 15, 2018 with an option to extend the closing date 60 days upon payment of an additional deposit of CDN$100,000. In November 2018, the Company exercised the option and extended the closing of the Transaction to January 14, 2019 with a payment of CDN$100,000. On December 17, 2018, the Company and the vendor entered into an extension agreement and the closing date of the Transaction was extended to a date on or before March 15, 2019. We anticipate that the transaction will constitute an Exempt Transaction in accordance with the policies of the TSX Venture Exchange. The Agreement was entered into on September 26, 2018 but is effective as of August 1, 2018.Going Concern

InOur interim ~~addition~~financial tostatements and information for the ~~Oil~~period ~~Leases~~ended May 31, ~~upon~~2019, ~~closing~~have ofbeen ~~the~~prepared ~~Transaction,~~by weour ~~will~~management ~~also~~on ~~obtain~~a ~~all~~going concern ~~rights~~basis, ~~titles~~which ~~and~~contemplates ~~interests~~the torealization ~~certain~~of ~~wells~~assets and ~~facilities~~the ~~(as~~settlement ~~set~~of ~~out~~liabilities and commitments in the ~~Agreement)~~normal ~~located~~course of onbusiness. We have generated no significant revenues to date and have incurred a net loss of $476,309 during the ~~Oil~~three ~~Leases~~month period ended May 31, 2019, and an accumulated deficit of $39,548,378 from inception. ~~The~~These ~~expiry~~factors ~~dates~~raise ~~for~~substantial doubt about the ~~three~~ability ~~Oil~~of ~~Leases~~the ~~are~~Company to continue operating as ~~follows:~~a going concern. We cannot provide any assurance that we will ultimately achieve profitable operations or become cash flow positive, or raise additional funds through the sale of debt and/or equity.

·Item 3. Quantitative and Qualitative Disclosures About Market Risk

~~September 29, 2028~~Not applicable.

·Item 4. Controls and Procedures

~~January~~Disclosure Controls ~~26,~~and ~~2029~~Procedures

·We maintain “disclosure controls and procedures”, as that term is defined in Rule 13a-15(e), promulgated by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our company’s reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

~~March~~As required 9by paragraph (b) of Rules 13a-15 under the Securities Exchange Act of 1934, ~~2029~~our management, with the participation of our principal executive officer and our principal financial officer, evaluated our company’s disclosure controls and procedures as of the end of the period covered by this quarterly report on Form 10-Q. Based on this evaluation, our management concluded that as of the end of the period covered by this quarterly report on Form 10-Q our disclosure controls and procedures were not effective. The ineffectiveness of our disclosure controls and procedures was due to the material weaknesses in our internal control over financial reporting disclosed in our annual report on Form 10-K for the fiscal year ended February 28, 2019, filed on October 15, 2019.

~~The~~Changes in ~~Oil~~internal ~~Leases~~control over financial reporting

WeThere were ~~have~~no ~~commenced~~changes ~~the~~in ~~consultation~~our ~~process~~internal ~~with~~control ~~the~~over ~~Alberta~~financial ~~Energy~~reporting ~~Regulator~~during ~~(AER)~~the ~~and~~fiscal ~~other~~quarter ~~Alberta~~ended ~~government~~May ~~agencies~~31, ~~along~~2019 ~~with~~that ~~Bigstone~~have ~~Cree Nation~~materially affected, aor ~~First~~are ~~Nations~~reasonably ~~band~~likely ~~party~~ to ~~Treaty~~materially ~~Eight~~affect ~~and~~our ~~other~~internal ~~interested~~control ~~stakeholders.~~over ~~Accordingly,~~financial ~~participation in the consultation process is a pre-requisite to commencing operations on the Oil Leases~~reporting. ~~Assuming closing of the Transaction, we hope to commence initial drilling and work in the second quarter of 2019, once the consultation process has been completed.~~

1926

~~Compeer~~PART II ~~Oil~~- ~~and~~OTHER ~~Gas Operations~~INFORMATION

~~As of November 30, 2018, we have incurred $701,826 in exploration costs to drill, complete and equip the Test Well~~Item 1. WeLegal ~~also recorded $28,979 in asset retirement obligations related to the future plugging and abandonment of the Test Well.~~ Proceedings

AsOther than atas ~~January~~disclosed 9below, ~~2019,~~we itknow isof ~~too~~no ~~early~~material pending legal proceedings to ~~provide~~which ~~stabilized~~our ~~production~~company ~~forecasts~~is a party or of which any of our properties is the subject. In addition, we do not know of any such proceedings contemplated by any governmental authorities.

~~Future~~We know ~~Development~~of ~~Costs~~no ~~for~~material ~~Compeer~~proceedings in which any of our directors, officers or affiliates, or any registered or beneficial stockholder is a party adverse to our company or has a material interest adverse to our company.

~~During~~We were ~~fiscal~~subject ~~2019/20, we plan~~ to ~~focus on~~ the ~~exploration~~following and drilling of the farmout lands, identify and complete additional asset acquisition(s), and pursue joint venture agreements with third parties to explore for oil and gas in Canada and the United States. claims:

Colony Energy

Court/Registry

Date Instituted

Principal Parties

Description of Claim

Court of Queen’s Bench of Alberta

July 23, 2013

Plaintiff: Baker Hughes Canada Company; Defendant: Fortem Resources Inc., also known as Big Lake Energy Ltd.

A Statement of Claim was filed July 23, 2013, whereby the Plaintiff is suing the Defendant for the sum of CAD$281,267 representing the amount owing for oil-field services and equipment, including cementing and fishing products and services provided by the Plaintiff.

In December 2015, the Company reached a settlement agreement for a total of $149,784 (CAD$200,000) in eight equal monthly installments of $18,723 (CAD$25,000) starting February 1, 2016. Upon receipt of the final installment, the vendor agreed to discontinue the claim and provide a release to the Company. The Company only made one installment payment of CAD$25,000 applied against the original claim and the settlement agreement was defaulted. As a result, there was a balance owing of CAD$256,267 as at May 31, 2019.

On April 7, 2017, we entered into and closed two Membership Interest Purchase Agreements with three arm’s length vendors to acquire all the membership interests of Colony Energy, LLC (“Colony Energy”), a Nevada limited liability companyItem 1A. ~~Colony~~Risk Energy holds a 100% interest in and to certain petroleum, natural gas and general rights, including Alberta Crown Petroleum and Oil Leases, in 20 contiguous sections totaling 12,960 acres located in the Godin area of northern Alberta.Factors

~~The~~An investment ~~Company~~in ~~intends~~our tocommon ~~develop~~stock involves a number of very significant risks. You should carefully consider the ~~Godin~~following ~~Project~~risks and uncertainties in ~~three~~addition ~~phases~~to ~~beginning~~other ~~with~~information ain ~~four~~this ~~well~~quarterly ~~vertical,~~report ~~followed~~in byevaluating aour ~~four~~company ~~section~~and ~~pad~~our ~~development~~business ofbefore purchasing 10shares ~~wells~~of ~~per~~our ~~pad/per~~common ~~section~~stock. ~~Phase~~Our 3business, isoperating ~~intended~~results toand financial condition could be seriously harmed as a result of the ~~full~~occurrence ~~development~~of any of 20the ~~sections~~following risks. You could lose all or part of your investment due to any of these risks. You should invest in our common stock only if you can afford to lose your entire investment.

In consideration for the acquisition of Colony Energy, we issued an aggregate of 21,000,000 shares of our common stock to the three vendors on the closing date and agreed to issue an additional 3,000,000 shares on a post-closing basis with 1,000,000 shares to be issued to one of the vendors on the first, second and third anniversaries of the closing date. During the nine months ended November 30, 2018, the Company issued 1,000,000 shares, which were to be issued on the first anniversary of the closing date, at a value of $2,500,000 to the vendor.27

~~Colony~~Risks Related ~~Energy is a party~~ to aOur Petroleum, Natural Gas and General Rights Conveyance dated as of March 31, 2017 with an arm’s length vendor and the principal shareholder thereof, pursuant to which the vendor is entitled to receive certain milestone payments from Colony Energy in the aggregate amount of up to $210,000 as partial consideration for the original purchase of the oil and gas assets described above. Pursuant to a Milestone Payment Addendum dated April 7, 2017, we agreed that if Colony Energy fails to make timely payment of any milestone payment and does not remedy such failure within 30 days after receipt of written notice from the vendor, the vendor may elect to: (i) have Colony Energy re-convey the purchased assets to the vendor; or (ii) receive 250,000 shares of our common stock, with such re-conveyance or issuance of shares to be in full and final satisfaction of all obligations to make any further milestone payment.Company

~~Black~~We have ~~Dragon~~a history of losses and this trend may continue and may negatively impact our ability to achieve our business objectives.

OnWe have ~~April~~experienced 12net ~~2017,~~losses wesince ~~entered~~inception, ~~into~~ and ~~closed~~expect ato ~~Membership~~continue ~~Interest~~to ~~Purchase~~incur ~~Agreement~~substantial (losses for the ~~“Black Dragon MPA”)~~ ~~with~~foreseeable ~~two~~future. ~~arm’s~~Our accumulated ~~length~~deficit ~~vendors~~was to$39,548,378 ~~acquire~~as ~~all~~at ~~membership~~May ~~interest~~31, of2019. ~~Black~~We ~~Dragon~~may ~~Energy,~~not ~~LLC~~be ~~(“Black Dragon”),~~able ato ~~Nevada~~generate ~~limited~~significant ~~liability~~revenues ~~company~~in the future. ~~Black~~As a ~~Dragon~~result, ~~has~~our ~~the~~management ~~right~~expects our business to ~~acquire~~continue ato ~~75%~~experience ~~working~~negative ~~interest~~cash inflow ~~and~~for tothe ~~certain~~foreseeable ~~leases~~future and cannot predict when, ~~hydrocarbons~~if ever, ~~wells~~our business might become profitable. We will need to raise additional funds, ~~agreements~~and such funds may not be available on commercially acceptable terms, ~~equipment~~if at all. If we are unable to raise funds on acceptable terms, ~~surface~~we ~~rights~~may ~~agreements~~not ~~and~~be ~~assignable~~able to ~~permits~~execute ~~totaling~~our ~~approximately~~business ~~165~~plan,~~000~~ ~~acres~~take ~~(258~~advantage ~~sections)~~of atfuture anopportunities, ~~80%~~or ~~net~~respond ~~revenue~~to ~~interest~~competitive ~~located~~pressures inor ~~the~~unanticipated ~~Moenkopi~~requirements. This ~~formation~~may ofseriously ~~the~~harm ~~Carbon~~our business, financial condition and ~~Emery~~results ~~Counties,~~of ~~Utah~~operations.

InWe have ~~consideration~~a ~~for~~limited ~~the~~operating ~~acquisition of Black Dragon~~history, wewhich ~~issued~~may anhinder ~~aggregate of 20,000,000 shares of~~ our ~~common~~ability ~~stock~~ to ~~the~~successfully ~~two~~meet ~~vendors~~our ~~on the closing date and paid $100,000 prior to the closing as a non-refundable deposit~~objectives.

~~Black~~We have ~~Dragon’s~~a ~~sole~~limited ~~asset~~operating ~~consists~~history upon which to base an evaluation of ~~the~~our ~~rights~~current business and ~~obligations~~future ~~arising~~prospects. ~~from~~We do not have an established history of operating producing properties or locating and developing properties that have oil and gas reserves. As a ~~Purchase~~result, the revenue and ~~Sale~~income ~~Agreement~~potential ~~dated~~of ~~effective~~our ~~March~~business 1is unproven. In addition, ~~2017~~because ~~(the~~of ~~“Black~~our ~~Dragon~~limited ~~PSA”)~~operating ~~between~~history, we anhave ~~arm’s~~limited ~~length~~insight ~~vendor~~into trends that may emerge and ~~Black~~affect ~~Dragon~~our business. Errors may be made in predicting and reacting to relevant business trends and we will be subject to the risks, uncertainties and difficulties frequently encountered by early-stage companies in evolving markets. We may not be able to successfully address any or all of these risks and uncertainties. Failure to adequately do so could cause our business, results of operations and financial condition to suffer.

20Our operations and proposed exploration activities will require significant capital expenditures for which we may not have sufficient funding and if we do obtain additional financing, our existing shareholders may suffer substantial dilution.

OnWe intend ~~August~~to ~~17,~~make ~~2017,~~capital weexpenditures ~~entered~~far ~~into~~in aexcess ~~first~~of ~~amendment~~our existing capital resources to ~~purchase~~develop, acquire and ~~sale~~explore ~~agreement~~oil ~~(the~~and ~~“Black~~gas properties. ~~Dragon~~We ~~Amendment”),~~intend ~~which~~to ~~amended~~rely ~~the~~on ~~terms~~funds from operations and external sources of ~~the~~financing ~~Black~~to ~~Dragon~~meet ~~PSA.~~our ~~The~~capital ~~Black~~requirements ~~Dragon~~to ~~Amendment~~continue acquiring, ~~had~~exploring ~~the~~and ~~effect~~developing ofoil ~~postponing~~and ~~certain~~gas ~~payments~~properties ~~relating~~and to ~~the~~otherwise ~~Moenkopi~~implement ~~Formation~~our ~~under~~business ~~the~~plan. ~~Black~~We ~~Dragon~~plan ~~PSA~~to ~~until~~obtain ~~December~~additional funding 31through the debt and equity markets, ~~2018~~but ~~while~~we ~~providing~~can ~~for~~offer ~~the~~no ~~flexibility~~assurance ofthat ~~earlier~~we ~~payments~~will inbe ~~the~~able ~~discretion~~to ofobtain ~~our~~additional ~~Company. In~~funding ~~consideration~~when it ~~for~~is ~~the~~required ~~postponement~~or ofthat ~~such~~it ~~payments~~will be available to us on commercially acceptable terms, weif ~~have~~at ~~agreed~~all. toIn ~~certain~~addition, any additional ~~interim~~equity financing ~~payments~~may ~~and~~involve ~~stock~~substantial ~~consideration~~dilution asto ~~set~~our ~~forth~~then ~~below~~existing shareholders.

~~Under~~The successful ~~the~~implementation ~~Black~~of ~~Dragon~~our ~~Amendment,~~business weplan ~~agreed~~is subject to ~~pay~~risks ~~the~~inherent ~~vendor~~in ~~cash consideration totaling $3.9 million (~~the ~~“Black~~oil ~~Dragon~~and ~~Cash~~gas ~~Consideration”)~~business, ~~rather~~which ~~than~~if ~~the~~not ~~original~~adequately managed, ~~US$2.7~~could ~~million~~result ~~based~~in ~~upon~~additional ~~the following revised payment schedule:~~losses.

·Our oil and gas operations are subject to the economic risks typically associated with exploration and development activities, including the necessity of making significant expenditures to locate and acquire properties and to drill exploratory wells. In addition, the availability of drilling rigs and the cost and timing of drilling, completing and, if warranted, operating wells is often uncertain. In conducting exploration and development activities, the presence of unanticipated pressure or irregularities in formations, miscalculations or accidents may cause our exploration, development and, if warranted, production activities to be unsuccessful. This could result in a total loss of our investment in a particular well. If exploration efforts are unsuccessful in establishing proved reserves and exploration activities cease, the amounts accumulated as unproved costs will be charged against earnings as impairments.

~~$100~~In addition,~~000~~ asmarket conditions or the unavailability of satisfactory oil and gas transportation arrangements may hinder our access to oil and gas markets and delay our production. The availability of a ~~non-refundable~~ready ~~deposit~~market ~~within~~for 5our ~~business~~prospective ~~days~~oil and gas production depends on a number of ~~closing~~factors, ~~(completed~~including the demand for and ~~unchanged);~~supply of oil and gas and the proximity of reserves to pipelines and other facilities. Our ability to market such production depends in substantial part on the availability and capacity of gathering systems, pipelines and processing facilities, in most cases owned and operated by third parties. Our failure to obtain such services on acceptable terms could materially harm our business. We may be required to shut in wells for lack of a market or a significant reduction in the price of oil or gas or because of inadequacy or unavailability of pipelines or gathering system capacity. If that occurs, we would be unable to realize revenue from those wells until arrangements are made to deliver such production to market.

·28

~~the~~Our future ~~balance~~performance ofis ~~the~~dependent ~~Black Dragon Cash Consideration by payment to the vendor of an amount equal to 25% of any funds received by our Company from any equity, debt or convertible financing thereof (each, a “Financing”)~~ upon ~~the closing of each Financing until such amount is paid. Notwithstanding the foregoing: (a) the first US$1.5 million raised by~~ our ~~Company~~ability ~~will be exempt from a 25% payment~~ to ~~the~~identify, ~~vendor~~acquire ifand ~~such~~develop ~~amount~~oil ~~is received prior to our listing on a stock exchange;~~ and ~~(b)~~gas ~~the full Black Dragon Cash Consideration is required to be paid in full no later than December 31~~properties, ~~2018 (later extended to~~ the ~~Black~~failure ~~Dragon Payment Deadline as described below) regardless~~ of ~~the~~which could ~~amount~~result ~~of funds paid~~ in ~~connection~~under ~~with~~use ~~one~~of orcapital ~~more Financings. This change modified the original requirement to pay $900,000 on or before September 1, 2017, $900,000 on or before March 1, 2018~~ and ~~$800,000 on or before September 1, 2018~~losses.

InOur future ~~addition~~performance depends upon our ability to ~~revising~~identify, ~~the~~acquire ~~Black~~and ~~Dragon~~develop ~~Cash~~additional ~~Consideration~~oil asand ~~set~~gas ~~out~~reserves ~~above,~~that weare ~~have~~economically recoverable. ~~agreed~~Our success will depend upon our ability to: ~~(a)~~acquire ~~issue~~working ~~250~~and revenue interests in properties upon which oil and gas reserves are ultimately discovered in commercial quantities,~~000~~ ~~common~~and ~~shares~~our ofability ~~the~~to ~~Company~~develop prospects that contain proven oil and gas reserves to the ~~vendor~~point onof orproduction. ~~prior~~Without tosuccessful ~~September~~acquisition 1and exploration activities, ~~2017~~we ~~(issued~~will onnot ~~September~~be 1,able ~~2017);~~to develop additional oil and ~~(b)~~gas ~~pay~~reserves ~~the~~or ~~vendor~~generate anrevenues. We cannot provide you with any assurance that we will be able to identify and acquire additional ~~$25,000~~oil ~~every~~and ~~sixty~~gas ~~days~~reserves ~~commencing~~on ~~September~~acceptable 1terms, ~~2017~~or ~~until~~that ~~such~~oil ~~time~~and asgas ~~the~~deposits ~~Black~~will ~~Dragon~~be ~~Cash~~discovered ~~Consideration~~in issufficient quantities ~~paid~~to inenable ~~full~~us to recover our exploration and development costs or sustain our business.

AsThe successful anacquisition ~~added~~and ~~incentive~~development ~~for~~of ~~early~~oil ~~payment~~and gas properties requires an assessment of ~~the~~recoverable ~~Black~~reserves, ~~Dragon~~future ~~Cash~~oil ~~Consideration~~and gas prices and operating costs, ~~such~~potential ~~sum~~environmental ~~will~~and beother ~~reduced~~liabilities, byand ~~$100~~other factors. Such assessments are necessarily inexact and their accuracy inherently uncertain. In addition,~~000~~ ~~for~~no ~~each~~assurance ~~calendar~~can ~~month~~be itgiven isthat ~~paid~~our exploration and development activities will result in ~~full~~the ~~prior~~discovery toof ~~December~~additional 31reserves. Our operations may be curtailed, ~~2018~~delayed ~~for~~or cancelled as a ~~maximum~~result ~~discount~~of lack of 12adequate ~~months~~capital and other factors, such as lack of availability of rigs and other equipment, title problems, weather, compliance with governmental regulations or $1price controls, mechanical difficulties, or unusual or unexpected formations, pressures and or work interruptions.2 ~~million~~In addition, the costs of exploitation and development may materially exceed our initial estimates.

OnWe have ~~May 28, 2018, we entered into~~ a ~~second~~very ~~amendment~~small tomanagement ~~purchase~~team and ~~sale agreement (~~the ~~“Black~~loss ~~Dragon Second Amendment”), which amended the terms~~ of ~~the~~any ~~Black~~member ~~Dragon PSA. The Black Dragon Second Amendment has the effect~~ of ~~postponing~~our ~~certain~~team ~~payments~~may ~~relating~~prevent tous ~~the~~from ~~Moenkopi~~implementing ~~formation under the Black Dragon PSA until August 1, 2019, provided that, if the shares of common stock of~~ our ~~company~~business ~~were~~plan ~~not~~in a ~~listed~~timely ~~on the TSX Venture Exchange on or before August 1, 2018, the payment deadline was to remain December 31, 2018~~manner.

OnWe have ~~August~~three ~~16,~~executive ~~2018,~~officers ~~but~~and ~~effective~~a aslimited number of ~~March~~additional 1,consultants ~~2017,~~upon ~~the~~whom ~~Company~~our ~~entered~~success ~~into~~largely adepends. ~~third~~We ~~amendment~~do tonot maintain ~~purchase~~key ~~and~~person ~~sale~~life ~~agreement~~insurance ~~(the~~policies ~~“Black~~on ~~Dragon~~our ~~Third~~executive ~~Amendment”),~~officers ~~which~~or ~~amended~~consultants, the ~~terms~~loss of ~~the~~which ~~Black~~could ~~Dragon~~seriously ~~PSA.~~harm ~~The~~our business, ~~Black~~financial ~~Dragon~~condition ~~Third~~and ~~Amendment~~results ~~has~~of ~~the~~operations. ~~effect~~In ofsuch ~~postponing~~an ~~certain~~event, ~~payments~~we ~~relating~~may not be able to ~~the~~recruit ~~Moenkopi~~personnel ~~formation~~to ~~under~~replace our ~~the~~executive ~~Black~~officers ~~Dragon~~or ~~PSA~~consultants ~~until~~in ~~October~~a 1timely manner, ~~2019~~or ~~(the~~at ~~“Black~~all, ~~Dragon~~on ~~Payment~~acceptable ~~Deadline”)~~terms.

~~Carry~~Future growth ~~Obligation~~could strain our personnel and infrastructure resources, and if we are unable to implement appropriate controls and procedures to manage our growth, we may not be able to successfully implement our business plan.

~~Under~~We may ~~the~~experience ~~Black~~rapid ~~Dragon~~growth ~~PSA, and~~ in ~~addition~~our ~~to the cash consideration~~operations, ~~Black~~which ~~Dragon~~will ~~has~~place ~~agreed~~a tosignificant ~~pay~~strain ~~all costs and expenses incurred~~ on ~~the~~our ~~assets~~management, ~~with respect to any and all exploration~~administrative, ~~development~~ operational and ~~production~~financial ~~during the carry period~~infrastructure. ~~The~~Our ~~“Carry~~future ~~Period”~~success ~~continues~~will ~~until~~depend the later of either (i) the date that Black Dragon pays the full cash consideration set out above or (ii) the date that Black Dragon pays all costs and expenses for the drilling, logging, testing and completion two new wells, each well with a horizontal leg extending at least 2,000’ in ~~the~~part ~~target~~upon ~~zone within~~ the ~~Moenkopi~~ability ~~formation~~of ~~(the~~our ~~“Two~~management ~~Obligation Wells”). Black Dragon is required~~ to ~~drill~~manage togrowth ~~completion~~effectively. This ormay ~~cause~~require tous ~~be drilled~~ to ~~completion~~hire ~~(or plugging~~ and ~~abandonment)~~train ~~the~~additional ~~Two~~personnel ~~Obligation~~to ~~Wells~~manage onour orexpanding ~~before~~operations. ~~February~~In 28addition, ~~2019,~~we ~~failing~~must ~~which,~~continue ~~Black~~to improve ~~Dragon’s~~our ~~right~~operational, tofinancial ~~earn~~and ~~any~~management ~~assignment~~controls in and toour ~~the~~reporting ~~assets~~systems ~~will~~and ~~terminate immediately~~procedures. ~~For~~If ~~each~~we ~~vertical~~fail ~~well drilled~~ to ~~200~~successfully manage ~~feet~~our ~~below the top of the Kaibab formation through completion (or plugging or abandonment) within a Federal Unit~~growth, ~~the~~we ~~obligation~~may ~~deadline will~~ be ~~amended~~unable to ~~the~~execute ~~later~~upon ofour ~~(i)~~business ~~the current obligation deadline or (ii) 6 months from the date the rig that drilled such vertical well to total depth has been removed from the wellsite~~plan.

~~Within~~Market conditions ~~10 business days after the later of Black Dragon paying the cash consideration in full~~ or ~~Black~~operation ~~Dragon~~impediments ~~meeting~~may inhinder ~~full~~our ~~its~~access ~~carry obligation, the vendor will convey~~ to ~~Black~~natural ~~Dragon~~gas ~~an undivided 75% of the Vendor’s right, title~~ and ~~interest~~oil inmarkets ~~and~~or todelay ~~the~~our ~~assets, at an 80% Net Revenue Interest in the assets as further described in the Black Dragon PSA~~production.

21The marketability of production from our properties depends in part upon the availability, proximity and capacity of pipelines, natural gas gathering systems and processing facilities. This dependence is heightened where this infrastructure is less developed. Therefore, if drilling results are positive in certain areas of our oil and gas properties, a new gathering system would need to be built to handle the potential volume of gas produced. We might be required to shut in wells, at least temporarily, for lack of a market or because of the inadequacy or unavailability of transportation facilities. If that were to occur, we would be unable to realize revenue from those wells until arrangements were made to deliver production to market.

OnOur ability ~~August~~to ~~24,~~produce ~~2017,~~and ~~our~~market ~~company~~natural ~~indirectly acquired a 75% interest in additional oil and~~ gas ~~leases in the Moenkopi formation covering a total of 3,852.41 acres. The leases were also acquired at the SITLA auction (the “State of Utah School~~ and ~~Institutional~~oil ~~Trust~~is ~~Lands~~affected ~~Administration”)~~ and ~~are~~also inmay ~~the~~be ~~region~~harmed ~~covered~~ by ~~an Area of Mutual Interest defined under the Black Dragon PSA, which incorporates a form of joint operating agreement that will govern the joint ownership of the newly acquired leases.~~:

~~Rolling~~● ~~Rock~~the lack of pipeline transmission facilities or carrying capacity; ● government regulation of natural gas and oil production; ● government transportation, tax and energy policies; ● changes in supply and demand; and ● general economic conditions.

On April 17, 2017, we entered into and closed a Membership Interest Purchase Agreement with two arm’s length vendors to acquire 100% membership interest of Rolling Rock Resources, LLC (“Rolling Rock”), a Nevada limited liability company. Rolling Rock has the right to acquire a 50% working interest in and to certain leases, hydrocarbons, wells, agreements, equipment, surface rights agreements and assignable permits totaling approximately 101,888 acres (160 sections) at an 80% net revenue interest located in the Mancos formation in the Southern Uinta Basin, Utah.29

InWe might ~~consideration~~incur ~~for~~additional ~~the~~debt ~~acquisition~~in oforder ~~Rolling~~to ~~Rock,~~fund weour ~~issued~~exploration anand ~~aggregate~~development ~~of 20~~activities,~~000,000~~ ~~shares~~which ofwould ~~our~~continue ~~common stock~~ to ~~the~~reduce ~~two~~our ~~vendors~~financial flexibility onand ~~the~~could ~~closing~~have ~~date~~a ~~and~~material ~~paid~~adverse ~~$100,000~~effect ~~prior~~on toour ~~the~~business, ~~closing~~financial ascondition aor ~~non-refundable~~results ~~deposit.~~of operations.

~~Rolling~~If we ~~Rock’s~~incur ~~sole~~indebtedness, ~~asset~~the ~~consists~~ability ofto ~~the~~meet ~~rights~~our ~~and~~debt obligations ~~arising~~and ~~from~~reduce aour ~~Purchase~~level ~~and~~of ~~Sale~~indebtedness ~~Agreement~~depends ~~dated~~on ~~effective~~future ~~March~~performance. General 1,economic ~~2017~~conditions, asoil ~~amended~~and ~~(together,~~gas ~~the~~prices ~~“Rolling~~and ~~Rock PSA”)~~financial, ~~between~~business anand ~~arm’s~~other ~~length~~factors ~~vendor~~affect our operations and ~~Rolling~~future ~~Rock~~performance. Many ~~Upon~~of ~~the~~these ~~satisfaction~~factors ofare beyond our control. We cannot assure you that we will be able to generate sufficient cash flow to pay the ~~payments~~interest ~~and~~on ~~obligations~~our bycurrent ~~Rolling~~or ~~Rock~~future asdebt ~~set~~or ~~out~~that ~~below~~future working capital, ~~the~~borrowings ~~vendor~~or ~~has~~equity ~~agreed~~financing will be available to pay ~~convey~~or ~~certain~~refinance ~~leases~~such ~~and~~debt. ~~related~~Factors ~~assets~~that ~~(the~~will ~~“Leases”)~~affect our ability to ~~Rolling~~raise ~~Rock.~~cash ~~The~~through ~~Leases~~an offering of our capital stock or a refinancing of our debt include ~~certain~~financial ~~leases,~~market ~~hydrocarbons~~conditions, ~~wells,~~the ~~agreements,~~value ~~equipment,~~of ~~surface~~our ~~rights~~assets ~~agreements~~and performance at the time we need capital. We cannot assure you that we will have sufficient funds to make such payments. If we do not have sufficient funds and ~~assignable~~are ~~permits~~otherwise ~~all~~unable to asnegotiate ~~further~~renewals ~~set~~of ~~out~~our inborrowings ~~the~~or ~~Rolling~~arrange ~~Rock~~new ~~PSA~~financing, we might have to sell significant assets. Any such sale could have a material adverse effect on our business and financial results.

OnOur properties ~~August~~and/or ~~17,~~future ~~2017~~properties might not produce, and we ~~entered~~might ~~into~~not abe ~~second~~able ~~amendment~~ to ~~purchase~~determine ~~and~~reserve ~~sale~~potential, ~~agreement~~identify (liabilities associated with the ~~“Rolling~~properties ~~Rock~~or ~~Amendment”),~~obtain ~~which~~protection ~~amended~~from ~~the~~sellers ~~terms~~against ofthem, ~~the~~which ~~Rolling~~could ~~Rock~~cause ~~PSA~~us to incur losses.

~~The~~Although we ~~Rolling~~have ~~Rock~~reviewed ~~Amendment~~and ~~had~~evaluated ~~the~~our ~~effect~~properties ofin ~~postponing~~a ~~certain~~manner ~~payments~~consistent ~~relating~~with toindustry ~~the~~practices, ~~Mancos~~such ~~formation~~review ~~under~~and ~~the~~evaluation ~~Rolling~~might not ~~Rock~~necessarily ~~PSA~~reveal ~~until~~all ~~December~~existing ~~31,~~or ~~2018~~potential ~~while~~problems. ~~providing~~This is also true for ~~the~~any ~~flexibility~~future ofacquisitions ~~earlier~~made ~~payments~~by inus. ~~the~~Inspections may ~~discretion~~not ofalways ~~our~~be ~~Company. In~~performed ~~consideration~~on ~~for~~every ~~the~~well, ~~postponement~~and ofenvironmental problems, such ~~payments~~as groundwater contamination, ~~Rolling~~are ~~Rock~~not ~~agreed~~necessarily observable even when an inspection is undertaken. Even when problems are identified, a seller may be unwilling or unable to ~~certain~~provide effective ~~additional~~contractual ~~interim~~protection ~~payments~~against all or part of those problems, and ~~stock~~we ~~consideration~~may asassume ~~set~~environmental ~~forth~~and ~~below~~other risks and liabilities in connection with the acquired properties.

~~Under~~If we ~~the~~or ~~Rolling~~our ~~Rock~~operators ~~Amendment,~~fail ~~Rolling Rock has agreed~~ to ~~pay~~maintain ~~the~~adequate ~~vendor~~insurance, ~~cash~~our ~~consideration~~business ~~totaling~~could ~~$3.6~~be ~~million~~materially ~~(the “Rolling~~and ~~Rock~~adversely ~~Cash Consideration”) rather than the original $2~~affected.~~4 million based upon the following revised payment schedule:~~

·Our operations are subject to risks inherent in the oil and gas industry, such as blowouts, cratering, explosions, uncontrollable flows of oil, gas or well fluids, fires, pollution, earthquakes and other environmental risks. These risks could result in substantial losses due to injury and loss of life, severe damage to and destruction of property and equipment, pollution and other environmental damage, and suspension of operations. We could be liable for environmental damages caused by previous property owners. As a result, substantial liabilities to third parties or governmental entities may be incurred, the payment of which could have a material adverse effect on our financial condition and results of operations.

~~$100,000~~Any prospective asdrilling contractor or operator which we hire will be required to maintain insurance of various types to cover our operations with policy limits and retention liability customary in the industry. We also have acquired our own insurance coverage for such prospects. The occurrence of a ~~non-refundable~~significant ~~deposit~~adverse ~~within~~event 5on ~~business~~such ~~days~~prospects that is not fully covered by insurance could result in the loss of ~~closing~~all ~~(completed~~or part of our investment in a particular prospect which could have a material adverse effect on our financial condition and ~~unchanged);~~results of operations.

·The oil and gas industry is highly competitive, and we may not have sufficient resources to compete effectively.

~~the~~The oil ~~balance~~and ofgas ~~the~~industry ~~Rolling~~is ~~Rock~~highly ~~Cash~~competitive. ~~Consideration~~We bycompete ~~payment~~with tooil ~~the~~and ~~vendor~~natural ofgas ancompanies ~~amount~~and ~~equal~~other toindividual ~~25%~~producers and operators, many of ~~any~~which ~~funds~~have ~~received~~longer byoperating ~~our~~histories ~~Company~~and ~~from~~substantially ~~any~~greater ~~Financing~~financial ~~upon~~and ~~the~~other ~~closing~~resources ofthan ~~each~~we ~~Financing~~do, ~~until~~as ~~such~~well ~~amount~~as iscompanies in ~~paid. Notwithstanding~~other ~~the~~industries ~~foregoing:~~supplying ~~(a)~~energy, ~~the~~fuel ~~first~~and $1other needs to consumers.5 ~~million~~Our ~~raised~~larger competitors, by ~~our~~reason ~~Company~~of ~~will~~their besize ~~exempt~~and ~~from~~relative financial strength, can more easily access capital markets than we can and may enjoy a ~~25%~~competitive ~~payment~~advantage toin the ~~vendor~~recruitment of ifqualified ~~such~~personnel. ~~amount~~They ismay ~~received~~be ~~prior~~able to ~~our~~absorb ~~listing~~the onburden aof ~~stock~~any ~~exchange;~~changes in laws and ~~(b)~~regulation in the ~~full~~jurisdictions ~~Rolling~~in ~~Rock~~which we ~~Cash~~do ~~Consideration~~business isand ~~required~~handle tolonger beperiods ~~paid~~of inreduced ~~full~~prices nofor ~~later~~oil and gas more easily than ~~December~~we ~~31,~~can. ~~2018~~Our ~~(later~~competitors ~~extended~~may be able to ~~the~~pay ~~Rolling~~more ~~Rock~~for ~~Payment~~oil ~~Deadline~~and asgas ~~described~~leases ~~below)~~and ~~regardless~~properties ofand ~~the~~may ~~amount~~be ofable ~~funds~~to ~~paid~~define, inevaluate, ~~connection~~bid ~~with~~for ~~one~~and orpurchase ~~more~~a ~~Financings~~greater number of leases and properties than we can. ~~This~~ ~~change~~Further, ~~modified~~these ~~the~~companies ~~original~~may ~~requirement~~enjoy technological advantages and may be able to ~~pay~~implement $1new technologies more rapidly than we can.3 ~~million~~Our onability orto ~~before~~acquire ~~September~~additional 1,properties ~~2017,~~in ~~$500,000~~the onfuture orwill ~~before~~depend ~~March~~upon 1,our ~~2018~~ability to ~~and~~conduct ~~$500~~efficient operations,~~000~~ onevaluate orand ~~before~~select ~~September~~suitable 1properties, ~~2018;~~implement advanced technologies and consummate transactions in a highly competitive environment.

·30

~~after~~Complying with ~~payment~~environmental ofand ~~the~~other ~~Rolling~~government ~~Rock~~regulations ~~Cash~~could ~~Consideration,~~be ancostly ~~additional~~and ~~payment~~could ofnegatively ~~$300,000~~impact ~~(the “Workover Funds”) to the vendor which is payable by an amount equal to 25% of any funds received by~~ our ~~company from any Financing until the Workover Funds are paid in full~~production.

InOur business ~~addition~~is togoverned ~~revising~~by ~~the~~numerous ~~Rolling~~laws ~~Rock~~and ~~Cash~~regulations ~~Consideration~~at asvarious ~~set~~levels ~~out~~of ~~above,~~government. weThese ~~have~~laws ~~agreed~~and ~~to:~~regulations ~~(a)~~govern ~~issue~~the ~~250,000~~operation and ~~common~~maintenance ~~shares~~ of ~~the~~our ~~Company~~facilities, to the ~~vendor~~discharge onof ormaterials ~~prior~~into tothe ~~September~~environment 1,and ~~2017~~other ~~(issued~~environmental onprotection ~~September~~issues. Such 1,laws ~~2017);~~ and ~~(b)~~regulations ~~pay~~may, ~~the~~among ~~vendor~~other anpotential ~~additional $25~~consequences,~~000~~ ~~every~~require ~~sixty~~that ~~days~~we ~~commencing~~acquire ~~September~~permits 1,before ~~2017~~commencing ~~until~~drilling and ~~such~~restrict ~~time as~~ the ~~Rolling~~substances ~~Rock~~that ~~Cash~~can ~~Consideration~~be ~~and~~released into the ~~Workover~~environment ~~Funds~~with ~~are~~drilling ~~paid~~and inproduction ~~full~~activities.

22Under these laws and regulations, we could be liable for personal injury, clean-up costs and other environmental and property damages, as well as administrative, civil and criminal penalties. Prior to commencement of drilling operations, we may secure limited insurance coverage for sudden and accidental environmental damages as well as environmental damage that occurs over time. However, we do not believe that insurance coverage for the full potential liability of environmental damages is available at a reasonable cost. Accordingly, we could be liable, or could be required to cease production on properties, if environmental damage occurs.

AsThe costs anof ~~added~~complying ~~incentive~~with ~~for~~environmental ~~early~~laws ~~payment~~and ofregulations in the ~~Rolling~~future ~~Rock~~may ~~Cash~~harm ~~Consideration~~our business. Furthermore, ~~such~~future ~~sum~~changes ~~will~~in environmental belaws ~~reduced~~and byregulations ~~$100,000~~could ~~for~~result ~~each~~in ~~calendar~~stricter ~~month~~standards itand isenforcement, ~~paid~~larger infines ~~full~~and ~~prior~~liability, toand ~~December~~increased capital 31expenditures and operating costs, ~~2018~~any ~~for~~of which could have a ~~maximum~~material ~~discount~~adverse ofeffect 12on ~~months~~our financial condition or ~~$1.2~~results of ~~million~~operations.

OnShortages of ~~May 28~~rigs, ~~2018~~equipment, wesupplies ~~entered into a third amendment to purchase~~ and ~~sale~~personnel ~~agreement~~could ~~(the~~delay ~~“Rolling~~or ~~Rock~~otherwise ~~Third~~adversely ~~Amendment”),~~affect ~~which~~our ~~amended~~cost ~~the terms~~ of ~~the~~operations ~~Rolling~~or ~~Rock~~our ~~PSA.~~ability ~~The~~to operate ~~Rolling~~according ~~Rock Third Amendment had the effect of postponing certain payments relating~~ to ~~the Mancos formation under the Rolling Rock PSA until August 1, 2019, provided that, if the shares of common stock of~~ our ~~company~~business ~~were not listed on the TSX Venture Exchange on or before August 1, 2018, the payment deadline was to remain December 31, 2018~~plans.

OnIf drilling ~~August~~activity 16increases in Alberta, ~~2018~~Canada, ~~but~~Utah ~~effective~~or asthe ofUnited ~~March~~States 1generally, ~~2017~~a shortage of drilling and completion rigs, field ~~the~~equipment ~~Company~~and ~~entered~~qualified ~~into~~personnel acould ~~fourth~~develop. ~~amendment~~The todemand ~~purchase~~for and ~~sale~~wage ~~agreement~~rates ~~(the~~of ~~“Rolling~~qualified ~~Rock~~drilling ~~Fourth~~rig ~~Amendment”),~~crews ~~which~~generally rise ~~amended~~in response to the ~~terms~~increasing number of ~~Rolling~~active ~~Rock~~rigs ~~PSA.~~in ~~The~~service ~~Rolling~~and ~~Rock~~could ~~Fourth~~increase ~~Amendment~~sharply ~~has~~in the ~~effect~~event of ~~postponing~~a ~~certain~~shortage. ~~payments~~Shortages of ~~relating~~drilling toand ~~the~~completion ~~Mancos~~rigs, ~~formation~~field ~~under~~equipment ~~the~~or ~~Rolling~~qualified ~~Rock~~personnel ~~PSA~~could ~~until~~delay, ~~October~~restrict 1or curtail our exploration and development operations, ~~2019~~which ~~(the~~could ~~“Rolling~~in ~~Rock~~turn ~~Payment~~harm ~~Deadline”)~~our operating results.

~~Carry~~We will ~~Obligation~~be required to replace, maintain or expand our reserves in order to prevent our reserves and production from declining, which would adversely affect cash flows and income.

~~Under the Rolling Rock PSA~~In general, ~~and~~production infrom ~~addition~~natural togas ~~the cash consideration, Rolling Rock has agreed to pay all costs~~ and ~~expenses~~oil ~~incurred~~properties ondeclines ~~the~~over ~~Leases~~time ~~with~~as ~~respect~~reserves toare ~~any and all exploration~~depleted, ~~development~~with ~~and production during~~ the ~~carry~~rate ~~period. The “Carry Period” continues until the later~~ of ~~either~~decline depending ~~(i)~~on ~~the~~reservoir ~~date~~characteristics. ~~that~~If ~~Rolling~~we ~~Rock~~are ~~pays~~not ~~the~~successful ~~full~~in ~~cash~~our ~~consideration~~exploration ~~set out above or (ii) the date that Rolling Rock pays all costs~~ and ~~expenses~~development ~~for the drilling~~activities, ~~logging,~~our ~~testing~~proved ~~and~~reserves will ~~completion~~decline ofas ~~three~~reserves ~~new~~are ~~wells in each of the three Federal Units, each well with a horizontal leg extending at least 1,000’ in the target zone within the Mancos formation (the “Three Obligation Wells”)~~produced. ~~Rolling~~Our ~~Rock~~future isnatural ~~required~~gas ~~to drill to completion or cause to be drilled to completion (or plugging~~ and ~~abandonment)~~oil ~~the~~production ~~Three~~is ~~Obligation~~highly ~~Wells~~dependent onupon orour ~~before~~ability ~~February 28, 2019, failing which, Rolling Rock’s right~~ to earn any assignment in and to the Leases will terminate immediately. For each vertical well drilled to the top of the Dakota formation through completion (or plugging or abandonment) within a Federal Uniteconomically find, ~~the~~develop ~~obligation deadline will be amended to the later of (i) the current obligation deadline~~ or ~~(ii)~~acquire 6reserves ~~months~~in ~~from~~commercial ~~the date the rig that drilled such vertical well to total depth has been removed from the wellsite~~quantities.

~~The obligation well in~~ To the ~~Grand~~extent ~~Mancos~~cash ~~Unit~~flow ~~will~~from beoperations ais ~~vertical~~reduced, ~~well~~either ~~drilled~~by to a ~~depth~~decrease ~~sufficient~~in toprevailing ~~test~~prices ~~the~~for ~~Granite~~natural ~~Walsh~~gas ~~formation~~and ~~within~~oil, ~~such~~or ~~Federal~~an ~~Unit.~~increase in ~~For~~exploration ~~this~~and ~~well~~development costs, ~~completion (or plugging~~ and ~~abandonment)~~external issources ~~expected~~of tocapital ~~take~~become ~~place~~limited noor ~~later~~unavailable, ~~than~~our 2ability ~~months~~to ~~after~~make the ~~rig~~necessary capital ~~that~~investment ~~drilled~~ to ~~total~~maintain ~~depth~~or ~~has~~expand ~~been~~our ~~removed~~asset ~~from~~base ~~the wellsite and for a period~~ of 6natural ~~months~~gas ~~after~~and ~~completion~~oil ofreserves ~~this~~would ~~obligation~~be ~~well~~impaired. ~~(or~~Even ~~plugging~~with ~~and~~sufficient available ~~abandonment)~~capital, ~~and~~our ~~Rolling~~future ~~Rock~~exploration ~~will~~and ~~have~~development ~~the~~activities ~~exclusive~~may ~~option~~not toresult ~~purchase~~in an additional ~~25%~~proved ~~of the vendor’s right~~reserves, ~~title~~ and ~~interest~~we inmight not ~~and~~be toable ~~the leases with respect~~ to ~~the~~drill ~~Granite~~productive ~~Walsh~~wells ~~formation~~at ~~within~~acceptable ~~the boundary of the Grand Mancos Unit for an additional payment of $10 million~~costs.

Within 10 business days after the later of Rolling Rock paying the cash consideration in full or Rolling Rock meeting in full its carry obligation, the vendor agreed to convey to Rolling Rock an undivided 50% of the vendor’s right, title and interest in and to the Leases, or a 80% net revenue interest in the Leases as further described in the Rolling Rock PSA. Notwithstanding this transfer, within 10 business days after the later of payment of $300,000 on or before September 1, 2017 (which amount is in addition to the deposit and included in the cash consideration set out above) and the replacement of the vendor’s bonds on or before September 1, 2017, the vendor agreed to convey to Rolling Rock an undivided 50% of the vendor’s right, title and interest in and to the Cisco Dome leases and related assets as further set out in the Rolling Rock PSA. However, if Rolling Rock fails to timely meet any of its obligations under the Rolling Rock PSA, after having taken assignment of the Cisco Dome leases and assets, then, if the vendor elects in its sole discretion, Rolling Rock is required to reassign the Cisco Dome leases and assets to the vendor without any additional encumbrances.31

~~On August 24, 2017, our company indirectly acquired an undivided 75% interest in additional~~ The oil and gas ~~leases~~exploration inand ~~the~~production ~~Mancos~~industry ~~formation~~historically ~~covering~~is a ~~total~~cyclical ofindustry ~~2,313.09~~and ~~acres. The~~market ~~leases~~fluctuations ~~were~~in ~~acquired at a SITLA auction. Pursuant to~~ the ~~Rolling~~prices ~~Rock PSA, the parties have agreed to enter into a joint operating agreement covering the new leases, which are outside the AMI (Area~~ of ~~Mutual~~oil and ~~Interest)~~gas ofcould ~~their~~adversely ~~original~~affect ~~joint~~our ~~venture lease holdings~~business.

~~Based~~Prices for onoil ~~a separate transaction, our company~~ and ~~the~~gas ~~vendor~~tend ~~have~~to ~~acquired~~fluctuate ansignificantly ~~additional 5,174 acres~~ in ~~the~~response ~~Mancos~~to ~~formation~~factors ~~and~~beyond ~~hold~~our acontrol. ~~50/50~~These ~~partnership,~~factors ~~which is part of the AMI and its original agreement.~~ include:

23● weather conditions; ● economic conditions, including demand for petroleum-based products; ● actions by OPEC, the Organization of Petroleum Exporting Countries; ● political instability in the Middle East and other major oil and gas producing regions; ● governmental regulations, both domestic and foreign; ● domestic and foreign tax policy; ● the pace adopted by foreign governments for the exploration, development, and production of their national reserves; ● the price of foreign imports of oil and gas; ● the cost of exploring for, producing and delivering oil and gas; ● the discovery rate of new oil and gas reserves; ● the rate of decline of existing and new oil and gas reserves; ● available pipeline and other oil and gas transportation capacity; ● the ability of oil and gas companies to raise capital; ● the overall supply and demand for oil and gas; and ● the availability of alternate fuel sources.

~~City~~Changes in commodity prices may significantly affect our capital resources, liquidity and expected operating results. Price changes will directly affect revenues and can indirectly impact expected production by changing the amount of ~~Gold~~funds available to reinvest in exploration and development activities. Reductions in oil and gas prices not only reduce revenues and profits, but could also reduce the quantities of reserves that are commercially recoverable. Significant declines in prices could result in non-cash charges to earnings due to impairment.

~~On May 17, 2017, we acquired 100% of the membership interest~~ Changes in ~~City~~commodity ofprices ~~Gold,~~may ~~LLC,~~also asignificantly ~~Nevada~~affect ~~limited~~our ~~liability~~ability ~~company, from two Nevada limited liability companies pursuant~~ to aestimate ~~Membership~~the ~~Interest~~value ~~Purchase~~of ~~Agreement~~producing ~~dated~~properties asfor ofacquisition ~~May~~and divestiture ~~17,~~and ~~2017.~~often ~~The~~cause ~~Membership~~disruption ~~Interest~~in ~~Purchase~~the ~~Agreement~~market ~~provides~~ for aoil ~~total~~and ~~purchase~~gas ~~price~~producing ~~consisting~~properties, ofas anbuyers ~~aggregate~~and ofsellers ~~30,000,000~~have ~~common~~difficulty agreeing ~~shares~~on in the ~~capital~~value of ~~our~~the ~~company~~properties. ~~15,000,000~~Price ofvolatility ~~these~~also ~~shares~~makes ~~were~~it ~~issued~~difficult atto ~~closing~~budget ~~(7,500,000~~for toand ~~each~~project ~~transferor);~~ the ~~other~~return ~~15,000,000~~on ~~shares~~acquisitions and ~~are~~the toexploration beand ~~issued~~development ~~within~~of ~~ten~~projects. ~~Business~~We ~~Days~~expect ~~after~~that ~~City~~commodity ofprices ~~Gold,~~will ~~LLC~~continue ~~earns~~to ~~the~~fluctuate ~~Option~~significantly ~~(as~~in ~~defined below)~~the future.

~~City~~Our ability ofto ~~Gold,~~produce ~~LLC’s~~oil ~~sole~~and ~~asset~~gas ~~consists~~from ofour ~~2,930,259~~properties ~~common~~may ~~shares~~be ~~and~~adversely ~~2,930,259~~affected ~~share~~by ~~purchase~~a ~~warrants~~number inof ~~the~~factors ~~capital~~outside of ~~Asia~~our ~~Pacific~~control ~~Mining~~which may ~~Limited~~result ~~(“Asia~~in ~~Pacific”) and its rights under~~ a ~~binding~~material ~~financing~~adverse ~~and~~effect ~~option~~on ~~agreement~~our ~~(the “Option Agreement”) with Asia Pacific and an individual named Nyi Nyi Lwin. City of Gold~~business, ~~LLC’s~~financial ~~only~~condition ~~liabilities~~or ~~consist~~results of ~~three demand notes for an aggregate of $1,500,000~~operations.

~~Under~~The business ~~the~~of ~~Option~~exploring ~~Agreement,~~for ~~Asia~~and ~~Pacific~~producing oil and ~~Nyi~~gas ~~Nyi~~involves ~~Lwin~~a ~~have~~substantial ~~agreed~~risk toof ~~grant~~investment toloss. ~~City~~Drilling ofoil ~~Gold,~~and ~~LLC~~gas wells involves the ~~option~~risk (that the ~~“Option”)~~wells tomay ~~purchase~~be ~~100%~~unproductive ofor that, although productive, the ~~ownership~~wells ~~interest~~may not produce oil or gas in aeconomic quantities. ~~wholly-owned~~Other ~~subsidiary~~hazards, ofsuch ~~Asia~~as ~~Pacific~~unusual ~~(the “Project Subsidiary”)~~or ~~which~~unexpected geological formations, inpressures, ~~turn~~fires, ~~owns~~blowouts, ~~100%~~loss of ~~the~~circulation of ~~rights~~drilling tofluids ~~the~~or ~~City~~other conditions may substantially delay or prevent completion of ~~Gold~~any ~~mineral~~well. ~~exploration~~Adverse ~~project~~weather ~~located~~conditions incan also ~~Myanmar~~hinder ~~which~~drilling ~~covers~~operations. anA ~~area~~productive ofwell ~~approximately~~may ~~465~~become ~~square~~uneconomic ~~kilometers~~if inwater ~~close~~or ~~proximity~~other todeleterious ~~hydropower~~substances are encountered that impair or prevent the production of oil or gas from the well. In addition, production from any well may be unmarketable if it is impregnated with water, ~~and~~or ~~infrastructure~~other todeleterious ~~accommodate~~substances. ~~exploration~~There can be no assurance that oil and ~~development~~gas ofwill ~~the~~be ~~property~~produced (from the ~~“City~~properties ofin ~~Gold~~which ~~Project”)~~we have interests. ~~City~~ ofIn ~~Gold~~addition, ~~LLC~~the ~~will~~marketability of oil and gas that may be ~~granted~~acquired or discovered may be influenced by numerous factors beyond our control. These factors include the ~~Option~~proximity ~~upon~~and ~~satisfaction~~capacity of ~~the~~oil ~~following:~~and gas, gathering systems, pipelines and processing equipment, market fluctuations in oil and gas prices, taxes, royalties, land tenure, allowable production and environmental protection. We cannot predict how these factors may affect our business.

·32

~~Subscription~~We may ofbe ~~976,753~~unable ~~units~~to ofretain ~~Asia~~our ~~Pacific~~leases ~~for~~and aworking ~~purchase~~interests ~~price~~in ofour ~~$500~~leases,~~000~~ onwhich orwould ~~prior~~result toin ~~March~~significant 2,financial ~~2017~~losses ~~(completed);~~to our company.

·Our properties are held under oil and gas leases. If we fail to meet the specific requirements of each lease, such lease may terminate or expire. We cannot assure you that any of the obligations required to maintain each lease will be met. The termination or expiration of our leases may harm our business. Our property interests will terminate unless we fulfill certain obligations under the terms of our leases and other agreements related to such properties. If we are unable to satisfy these conditions on a timely basis, we may lose our rights in these properties. The termination of our interests in these properties may harm our business. In addition, we will need significant funds to meet capital requirements for the exploration activities that we intend to conduct on our properties.

~~Subscription~~Our Godin ofproject ~~976,753~~is ~~units~~complex ofundertakings ~~Asia~~and ~~Pacific~~may ~~for~~not abe ~~purchase~~completed ~~price~~at ofour ~~$500,000~~estimated oncost or ~~prior~~at toall. ~~March 16, 2017 (completed);~~

·We, through our wholly owned subsidiary Colony Energy, LLC, holds a 100% interest in and to certain petroleum, natural gas and general rights, including Alberta Crown Petroleum and Oil Leases, in 20 contiguous sections totaling 12,960 acres located in the Godin area of northern Alberta. The Godin project is complex, subject to extensive governmental regulation and will require significant additional financing. There can be no assurance that the necessary governmental approvals will be granted or that such financing could be obtained on commercially reasonable terms or at all, or that if one or more of these projects are completed that they will be successful or that we realize a return on our investment.

~~Subscription~~Risks Related ~~of 976,753 units of Asia Pacific for a purchase price of $500,000 on or prior~~ to ~~April~~Our ~~28,~~Common ~~2017 (completed); and~~Stock

·A decline in the price of our common stock could affect our ability to raise further working capital and adversely impact our ability to continue operations.

~~Subscription~~A prolonged ofdecline ~~2,930,261~~in ~~units~~the price of ~~Asia~~our ~~Pacific~~common ~~for~~stock could result in a ~~purchase~~reduction ~~price~~in the liquidity of ~~$1,500,000~~our ~~(the~~common ~~“Final~~stock ~~Funding~~and ~~Tranche”),~~a ~~due~~reduction in ~~within~~our 60ability ~~days~~to raise capital. Because a significant portion of ~~issuance~~our operations have been and will be financed through the sale of anequity ~~exploration~~securities, ~~license~~a ~~for~~decline in the ~~City~~price of ~~Gold~~our ~~Project~~common bystock could be especially detrimental to our liquidity and our operations. Such reductions may force us to reallocate funds from other planned uses and may have a significant negative effect on our business plan and operations, including our ability to develop new properties and continue our current operations. If our stock price declines, we can offer no assurance that we will be able to raise additional capital or generate funds from operations sufficient to meet our obligations. If we are unable to raise sufficient capital in the ~~Government~~future, ofwe ~~Myanmar~~may (not be able to have the ~~“License”).~~resources to continue our normal operations.

~~Each~~The market ~~share~~price ~~purchase warrant is exercisable~~ for aour ~~term~~common ~~equal~~stock tomay ~~the~~also ~~greater~~be ofaffected ~~two~~by ~~years~~our ~~from~~ability ~~the~~to ~~closing~~meet ~~of the Final Funding Tranche~~ or 18exceed ~~months~~expectations ~~from the issuance~~ of ~~the~~analysts ~~License~~or ~~at an exercise price of $0~~investors.51 Any ~~for~~failure ~~the first year and $1.02 for the second year. Asia Pacific utilized $500,000 of the initial three tranches towards an exploration program of the City of Gold Project. Asia Pacific is required~~ to ~~use~~meet ~~all~~these ~~proceeds for the Final Funding Tranche towards exploration of the Project Subsidiary’s mining interests~~expectations, ~~including~~even noif ~~less than $500~~minor,~~000~~ ~~towards~~may ~~drilling the City of Gold Project (the “Drilling Program”). Upon the closing of the Final Funding Tranche, City of Gold, LLC will~~ have ~~earned the Option. We anticipate that the normal course of receiving the License will take longer than 12 months. As~~ a ~~result,~~material weadverse doeffect ~~not~~on ~~anticipate commencing~~ the ~~Drilling~~market ~~Program~~price ~~or incurring additional expenses related to the project within the next 12 month period. We anticipate holding our interest in the City~~ of Gold Project for the long term. If circumstances warrant, we intend to exercise the Option by transferring the City of Gold Project into a subsidiary (“Spinco”) with the aim of completing a “spin-off” transaction of its anticipated 70% interest in Spinco under the plan of arrangement provisions in accordance with applicable securities and corporate laws in order to realize a benefit for our ~~company~~common ~~and/or our stockholders~~stock.

24If we issue additional shares in the future, it will result in the dilution of our existing shareholders.

~~Once~~Our articles ~~City~~ of ~~Gold~~incorporation, ~~LLC~~as ~~has earned the Option~~amended, itauthorize ~~will have~~ the ~~right~~issuance ~~to exercise the Option for a period~~ of ~~120~~up ~~days from completion of the Drilling Program, which City of Gold, LLC can extend for an additional 120 days if it can demonstrate that all conditions~~ to ~~exercise of the Option are complete other than approval from the applicable stock exchange upon which the shares of Spinco are to be listed. To exercise the Option~~750, ~~Asia Pacific has agreed to transfer the Project Subsidiary to Spinco for an exercise price consisting of $7,~~000,000 inshares ~~cash and 30%~~ of ~~the~~common ~~issued~~stock ~~and~~with ~~outstanding share capital of Spinco (calculated on~~ a ~~fully~~par ~~diluted~~value ~~basis, excluding up to 10% in stock options, but including shares Spinco may have issued in order to raise the exercise price~~ of $~~7,000,000 and an additional $5,000,000 in working capital)~~0. ~~Half~~001. ofOur ~~the~~board ~~cash portion~~ of ~~the~~directors ~~exercise~~may ~~price~~choose ~~must be paid upon exercise of the Option; the balance is~~ to beissue ~~paid~~some onor ~~the~~all ~~first anniversary~~ of ~~the~~such ~~exercise~~shares ~~and is~~ to beacquire ~~evidenced by a~~ one~~-year~~ ~~secured~~or ~~term~~more ~~note.~~businesses ~~Although~~or ~~City of Gold, LLC has the right~~ to ~~select~~provide additional ~~Spinco,~~financing ~~Spinco~~in ~~must meet~~ the ~~following~~future. ~~criteria:~~The atissuance ~~exercise~~ of ~~the~~any ~~Option,~~such ~~Spinco~~shares ~~must~~will ~~have~~result ~~less than $100,000~~ in ~~liabilities~~a ~~and~~reduction ~~$5,000,000~~of orthe ~~more~~book invalue ~~working capital~~ and ~~Asia~~market ~~Pacific~~price of ~~will have~~ the ~~right~~outstanding toshares ~~nominate 30%~~ of ~~its~~our ~~directors~~common stock. ~~Although~~If we ~~currently~~issue ~~anticipate~~any ~~that~~such ~~the~~additional ~~exercise~~shares, ofsuch ~~the~~issuance ~~Option~~ will because ~~structured as~~ a ~~“spin-off”~~reduction ~~transaction, we have~~ in the ~~flexibility~~proportionate ~~under~~ownership ~~the~~and ~~Option~~voting ~~Agreement~~power toof ~~structure~~all ~~the~~current ~~transaction in other ways provided the conditions to exercise are met~~shareholders. ~~However~~ Further, ~~we anticipate that~~ such aissuance ~~structure~~may ~~will~~ result in ~~the~~a ~~most~~change ~~efficient~~of ~~way~~control of ~~to monetize~~ our ~~interest in the City of Gold Project at this time~~corporation.

~~Results of Operations~~ 33

~~The following summary~~ Trading of our ~~results~~stock ofmay ~~operations should~~ be ~~read~~restricted inby ~~conjunction~~the ~~with~~Securities ~~our~~Exchange ~~unaudited~~Commission’s ~~financial~~penny ~~statements~~stock ~~for~~regulations, ~~the~~which ~~three~~may ~~and~~limit ~~nine~~a ~~month~~stockholder’s ability ~~periods~~to ~~ended~~buy ~~November 30, 2018~~ and ~~2017~~sell ~~which~~our ~~are included herein:~~stock.

		For the three months ended				For the nine months ended
		November 30, 2018		November 30, 2017		November 30, 2018		November 30, 2017
Oil and gas sales	$	-	$	-	$	-	$	-
Expenses	$	359,714	$	1,148,167	$	1,067,910	$	1,650,089
Net loss	$	(366,888)	$	(1,165,149)	$	(1,052,503)	$	(7,973,277)

The Securities and Exchange Commission has adopted regulations which generally define “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors”. The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the Securities and Exchange Commission, which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account.

~~Revenues~~The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.

~~During~~The Financial ~~the~~Industry ~~nine~~Regulatory ~~month~~Authority, ~~period~~or ~~ended~~FINRA, ~~November~~has ~~30,~~adopted ~~2018,~~sales wepractice ~~did~~requirements ~~not~~which ~~generate~~may ~~any~~also ~~revenue~~limit ~~(November~~a ~~30,~~stockholder’s ability ~~2017~~to -buy ~~$nil)~~and sell our stock.

~~Expenses~~In addition to the “penny stock” rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.

~~Expenses~~Our common ~~decreased~~stock ~~during~~is ~~the~~illiquid ~~three~~and ~~month~~the ~~period~~price ~~ended~~of ~~November~~our ~~30,~~common ~~2018~~stock tomay ~~$359,714~~be asnegatively ~~compared~~impacted toby ~~$1,148,167~~factors ~~during~~which ~~the~~are ~~three~~unrelated ~~month~~to ~~period~~our ~~ended November 30, 2017~~operations.

~~The~~Our common ~~table~~stock ~~below~~currently ~~details~~trades on a limited basis on OTCQB operated by the ~~changes~~OTC Markets Group and TSX Venture Exchange. Trading of our stock through OTCQB and TSX Venture Exchange is frequently thin and highly volatile. There is no assurance that a sufficient market will develop in ~~major~~our ~~expenditures~~stock, in which case it could be difficult for ~~the~~shareholders ~~three~~to ~~months~~sell ~~ended~~their ~~November~~stock. 30The market price of our common stock could fluctuate substantially due to a variety of factors, ~~2018~~including asmarket ~~compared~~perception of our ability to achieve our planned growth, quarterly operating results of our competitors, trading volume in our common stock, changes in general conditions in the ~~corresponding~~economy ~~three~~and ~~months~~the ~~ended~~financial ~~November~~markets 30or other developments affecting our competitors or us. In addition, ~~2017:~~the stock market is subject to extreme price and volume fluctuations. This volatility has had a significant effect on the market price of securities issued by many companies for reasons unrelated to their operating performance and could have the same effect on our common stock.

Expenses	Increase / Decrease in Expenses	Explanation for Change
Consulting fees	Decrease of $824,362	Decrease in the current period as more consulting fees related to the oil and gas properties in Canada and US in the comparative period of 2017.
Management fees	Increase of $60,000	Increase due to management fees paid to the CEO beginning August 2018.
Office, travel and general expenses	Decrease of $34,878	Decrease due to less corporate activities, and less travel expenses for site visits and marketing.
Professional fees	Decrease of $11,412	Decrease in the current period as more professional services were used for corporate filings, accounting, and professional services for the acquisitions in the prior period.

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

~~Expenses~~Since the ~~decreased~~beginning ~~during~~of the ~~nine~~three month period ended ~~November~~May 3031, ~~2018~~2019, towe ~~$1,067,910~~have asnot ~~compared~~sold toany ~~$1,650,089~~equity ~~during~~securities that were not registered under the ~~nine~~Securities ~~month~~Act ~~period~~of ~~ended~~1933 ~~November~~that 30were not previously reported in an annual report on Form 10-K, ~~2017~~in a quarterly report on Form 10-Q or in a current report on Form 8-K.

~~The~~Item 3. ~~table~~Defaults ~~below~~Upon ~~details~~Senior ~~the changes in major expenditures for the nine months ended November 30, 2018 as compared to the corresponding nine months ended November 30, 2017:~~ Securities

Expenses	Increase / Decrease in Expenses	Explanation for Change
Consulting fees	Decrease of $581,129	Decrease in the current period as more consulting fees related to the oil and gas properties in Canada and US in the comparative period of 2017.
Management fees	Increase of $89,310	Increase due to management fees and signing bonus to the CEO beginning August 2018.
Office, travel and general expenses	Decrease of $13,609	Decrease due to less corporate activities and less travel expenses for site visits and marketing.
Professional fees	Decrease of $94,829	Decrease in the current period as more professional services were used for corporate filings, accounting, and professional services for the acquisitions in the prior period.

None.

~~For the nine month period ended November 30, 2017, we recorded a loss on the fair value adjustment of derivative financial liability of $6,325,077~~Item 4. ~~The~~Mine ~~derivative~~Safety ~~liability consists of the fair value of share purchase warrants that were issued in unit private placements that have an exercise price in a currency other than the functional currency of our company.~~ Disclosures

~~Beginning on August 31, 2017, we changed our functional currency to US dollars for accounting purposes~~Not applicable. As a result, we reallocated the fair value of the derivative liability to equity in the amount of $8,915,554 on September 1, 2017 and recorded no further gain/loss on the fair value adjustment of derivative financial liability.

~~Liquidity~~Item 5. ~~and~~Other ~~Capital Resources~~ Information

~~Working Capital~~None.

	November 30, 2018	February 28, 2018
Current Assets	$ 462,283	$ 319,804
Current Liabilities	$ 1,161,880	$ 1,757,304
Working Capital (Deficiency)	$ (699,597)	$ (1,437,500)

~~We had cash of $60,070 and a working capital deficiency of $699,597 as of November 30, 2018 compared to cash of $176,895 and working capital deficiency of $1,437,500 as of February 28, 2018~~Item 6. Exhibits

We anticipate general and administrative expense, excluding impairment of oil and gas property, if any, will be higher than fiscal 2018 during the remainder of fiscal 2019. In connection with oil and gas operations and the listing on TSX Venture Exchange, we increased the number of directors. As a result, we estimate our general and administrative expense will be higher in fiscal 2019.

No.		Description
3.1		Articles of Incorporation (incorporated by reference from our registration statement on Form SB-2 filed on December 1, 2006)
3.2		Corporate Bylaws (incorporated by reference from our registration statement on Form SB-2 filed on December 1, 2006)
3.3		Certificate of Change (incorporated by reference from our current report on Form 8-K filed on October 22, 2007)
3.4		Certificate of Amendment (incorporated by reference from our current report on Form 8-K filed on February 15, 2008)
3.5		Articles of Merger dated effective March 30, 2017 (incorporated by reference from our current report on Form 8-K filed on March 30, 2017)
3.6		Amended and Restated Bylaws (incorporated by reference from our current report on Form 8-K filed on January 7, 2019)
10.1		Farmout Agreement, Compeer Area with Harvest Operations Corp. effective February 21, 2012 (incorporated by reference from our annual report on Form 10-K filed on May 29, 2012)
10.2		Debt Settlement Agreement dated October 16, 2014, amongst the Company, Professional Trading S.A. and Stockbridge Resources Corp. (incorporated by reference from our current report on Form 8-K filed on October 20, 2014)
10.3		Employment Agreement dated April 23, 2015 with Kent Edney (incorporated by reference from our current report on Form 8-K filed on May 5, 2015)
10.4		Stock Option Agreement dated November 3, 2015 with Michael Caetano (incorporated by reference from our current report on Form 8-K filed on November 6, 2015)
10.5		Stock Option Agreement dated November 3, 2015 with Robert DaCunha (incorporated by reference from our current report on Form 8-K filed on November 6, 2015)
10.6		Stock Option Agreement dated November 3, 2015 with Robert Madzej (incorporated by reference from our current report on Form 8-K filed on November 6, 2015)
10.7		Debt Settlement Agreement dated April 11, 2016 with Apex Energy Consultants Inc. (incorporated by reference from our current report on Form 8-K filed on May 19, 2016)
10.8		Debt Settlement Agreement dated April 11, 2016 with Chamonix Canada Inc. (incorporated by reference from our current report on Form 8-K filed on May 19, 2016)
10.9		Debt Settlement Agreement dated January 13, 2017 with Precision Asset Consulting Executives Inc. (incorporated by reference from our current report on Form 8-K filed on February 3, 2017)
10.10		Debt Settlement Agreement dated January 13, 2017 with Seahawk Capital Corp. (incorporated by reference from our current report on Form 8-K filed on February 3, 2017)
10.11		Debt Settlement Agreement dated January 13, 2017 with CNK Enterprises Inc. (incorporated by reference from our current report on Form 8-K filed on February 3, 2017)
10.12		Debt Settlement Agreement dated January 30, 2017 with 2232985 Ontario Inc. (incorporated by reference from our current report on Form 8-K filed on February 3, 2017)
10.13		Membership Interest Purchase Agreement dated April 7, 2017 with Blue Phoenix Energy, LLC and Pacific Petroleum, LLC (incorporated by reference from our current report on Form 8-K filed on April 12, 2017)
10.14		Membership Interest Purchase Agreement dated April 7, 2017 with Grassy Butte Energy LLC (incorporated by reference from our current report on Form 8-K filed on April 12, 2017)
10.15		Milestone Payment Addendum dated April 7, 2016 with Grassy Butte Energy, Ltd. and Grassy Butte, LLC (incorporated by reference from our current report on Form 8-K filed on April 12, 2017)
10.16		Membership Interest Purchase Agreement dated April 12, 2017 with Blue Phoenix Energy, LLC and Pacific Petroleum, LLC (incorporated by reference from our quarterly report on Form 10-Q filed on October 17, 2017)

Our company’s cash will not be sufficient to meet our working capital requirements for the next twelve month period. Our company plans to raise the capital required to satisfy our immediate short-term needs and additional capital required to meet our estimated funding requirements for the next twelve months primarily through the issuance of our equity securities. There is no assurance that our company will be able to obtain further funds required for our continued working capital requirements. The ability of our company to meet our financial liabilities and commitments is primarily dependent upon the continued financial support of our directors and shareholders, the continued issuance of equity to new shareholders, and our ability to achieve and maintain profitable operations.36

10.17		Membership Interest Purchase Agreement dated April 17, 2017 with MAB Resources Holdings LLC and JM Magna Holdings LLC (incorporated by reference from our current report on Form 8-K filed on April 21, 2017)
10.18		Membership Interest Purchase Agreement dated May 17, 2017 with MAB Resources Holdings LLC and JM Magna Holdings LLC (incorporated by reference from our current report on Form 8-K filed on May 24, 2017)
10.19		First Amendment to Purchase and Sale Agreement dated August 17, 2017, 2017 but effective as of March 1, 2017 between Black Dragon Energy, LLC and WEM Dragon, LLC (incorporated by reference from our current report on Form 8-K filed on August 23, 2017)
10.20		Ratification of Purchase and Sale dated August 17, 2017 but effective as of March 1, 2017 between Fortem Resources Inc. and WEM Dragon, LLC (incorporated by reference from our current report on Form 8-K filed on August 23, 2017)
10.21		Second Amendment to Purchase and Sale Agreement dated August 17, 2017, 2017 but effective as of March 1, 2017 between Rolling Rock Resources, LLC and Rockies Standard Oil Company, LLC (incorporated by reference from our current report on Form 8-K filed on August 23, 2017)
10.22		Ratification of Purchase and Sale dated August 17, 2017 but effective as of March 1, 2017 between Fortem Resources Inc. and Rockies Standard Oil Company, LLC (incorporated by reference from our current report on Form 8-K filed on August 23, 2017)
10.23		Agreement Re: April 2017 SITLA Auction dated April 18, 2017 between Rolling Rock Resources, LLC and Rockies Standard Oil Company LLC (incorporated by reference from our current report on Form 8-K filed on August 24, 2017)
10.24		Debt Conversion Agreement dated November 2, 2017 with Grassy Butte Energy Ltd. (incorporated by reference from our current report on Form 8-K filed on November 9, 2017)
10.25		Debt Conversion Agreement dated December 19, 2017 with LPD Ltd. (incorporated by reference from our current report on Form 8-K filed on December 22, 2017)
10.26		Second Amendment to Purchase and Sale Agreement dated effective as of March 1, 2017 between Black Dragon Energy, LLC and WEM Dragon, LLC (incorporated by reference from our current report on Form 8-K filed on June 15, 2018)
10.27		Ratification of Purchase and Sale dated effective as of March 1, 2017 between Fortem Resources Inc. and WEM Dragon, LLC (incorporated by reference from our current report on Form 8-K filed on June 15, 2018)
10.28		Third Amendment to Purchase and Sale Agreement dated effective as of March 1, 2017 between Rolling Rock Resources, LLC and Rockies Standard Oil Company, LLC (incorporated by reference from our current report on Form 8-K filed on June 15, 2018)
10.29		Ratification of Purchase and Sale Agreement dated March 1, 2017 between Rockies Standard Oil Company, LLC and the Company (incorporated by reference from our current report on Form 8-K filed on June 15, 2018)
10.30		Third Amendment to Purchase and Sale Agreement dated effective as of March 1, 2017 between Black Dragon Energy, LLC and WEM Dragon, LLC (incorporated by reference from our current report on Form 8-K filed on August 17, 2018)
10.31		Ratification of Purchase and Sale dated effective as of March 1, 2017 between Fortem Resources Inc. and WEM Dragon, LLC (incorporated by reference from our current report on Form 8-K filed on August 17, 2018)
10.32		Fourth Amendment to Purchase and Sale Agreement dated effective as of March 1, 2017 between Rolling Rock Resources, LLC and Rockies Standard Oil Company, LLC (incorporated by reference from our current report on Form 8-K filed on August 17, 2018)
10.33		Ratification of Purchase and Sale Agreement dated March 1, 2017 between Rockies Standard Oil Company, LLC and the Company (incorporated by reference from our current report on Form 8-K filed on August 17, 2018)
10.34		2018 Stock Option Plan (incorporated by reference from our current report on Form 8-K filed on August 24, 2018)
10.35		Asset Sale Agreement (incorporated by reference from our current report on Form 8-K filed on October 2, 2018)
10.36		Extension Letter Agreement (incorporated by reference from our current report on Form 8-K filed on December 17, 2018)
10.37		Broadcast Advertising with USA Radio (incorporated by reference from our current report on Form 8-K filed on February 8, 2019)
10.38		Investor Relations Agreement (incorporated by reference from our current report on Form 8-K filed on March 15, 2019)

There is substantial doubt about our ability to continue as a going concern as the continuation of our business is dependent upon obtaining further long-term financing, successful exploration of our property interests, the identification of reserves sufficient enough to warrant development, successful development of our property interests and, finally, achieving a profitable level of operations. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.37

Due to the uncertainty of our ability to meet our current operating and capital expenses, in their report on our audited financial statements for the year ended February 28, 2018, our independent auditors included an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern. Our statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors.

10.39		Fourth Amendment to Purchase and Sale Agreement dated effective as of March 1, 2017 between Black Dragon Energy, LLC and WEM Dragon, LLC (incorporated by reference from our current report on Form 8-K filed on May 29, 2019)
10.40		Ratification of Purchase and Sale dated effective as of March 1, 2017 between Fortem Resources Inc. and WEM Dragon, LLC (incorporated by reference from our current report on Form 8-K filed on May 29, 2019)
10.41		Fifth Amendment to Purchase and Sale Agreement dated effective as of March 1, 2017 between Rolling Rock Resources, LLC and Rockies Standard Oil Company, LLC (incorporated by reference from our current report on Form 8-K filed on May 29, 2019)
10.42		Ratification of Purchase and Sale Agreement dated March 1, 2017 between Rockies Standard Oil Company, LLC and the Company (incorporated by reference from our current report on Form 8-K filed on May 29, 2019)
10.43		Social Media Services Contract (incorporated by reference from our current report on Form 8-K filed on May 31, 2019
10.44		Extension Letter Agreement (incorporated by reference from our current report on Form 8-K filed on May 31, 2019)
10.45		Consulting Agreement with Atlanta Capital Partners (incorporated by reference from our current report on Form 8-K filed on June 17, 2019)
10.46		Statement of Work & Contract with AMW Public Relations (incorporated by reference from our current report on Form 8-K filed on June 17, 2019)
10.47		Extension Letter Agreement (incorporated by reference from our current report on Form 8-K filed on September 25, 2019)
10.48		Non-Binding Preliminary Indication of Interest (incorporated by reference from our current report on Form 8-K filed on September 25, 2019)
14.1*		Code of Ethics and Business Conduct
16.1		Letter from Dale Matheson Carr-Hilton LaBonte LLP dated September 21, 2018 (incorporated by reference from our current report on Form 8-K filed on September 24, 2018)
21.1		Subsidiaries of Fortem Resources Inc. Colony Energy, LLC, a Nevada limited liability company Black Dragon Energy, LLC, a Nevada limited liability company Rolling Rock Resources, LLC, a Nevada limited liability company City of Gold, LLC, a Nevada limited liability company
31.1*		Certification of Marc A. Bruner Pursuant to Section 302 of the Sarbanes-Oxley Act Of 2002
31.2*		Certification of Robert DaCunha Pursuant to Section 302 of the Sarbanes-Oxley Act Of 2002
32.1*		Certification of Marc A. Bruner Pursuant to Section 906 of the Sarbanes-Oxley Act Of 2002
32.2*		Certification of Robert DaCunha Pursuant to Section 906 of the Sarbanes-Oxley Act Of 2002
99.1		Audit Committee Charter (incorporated by reference from our annual report on Form 10-K/A filed on July 11, 2018)
101.INS*		XBRL INSTANCE DOCUMENT
101.SCH*		XBRL TAXONOMY EXTENSION SCHEMA
101.CAL*		XBRL TAXONOMY EXTENSION CALCULATION LINKBASE
101.DEF*		XBRL TAXONOMY EXTENSION DEFINITION LINKBASE
101.LAB*		XBRL TAXONOMY EXTENSION LABEL LINKBASE
101.PRE*		XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE

~~Cash~~* Filed ~~Flows~~herewith.

	Nine months ended November 30, 2018	Nine months ended November 30, 2017
Net Cash Used in Operating Activities	$ (928,248)	$ (640,046)
Net Cash Used in Investing Activities	$ (703,488)	$ (2,246,647)
Net Cash Provided by Financing Activities	$ 1,514,911	$ 2,528,575
Net change in Cash	$ (116,825)	$ (358,118)

~~Cash Used in Operating Activities~~SIGNATURES

~~Our~~Pursuant to ~~cash used in operating activities for~~ the ~~nine~~requirements ~~months~~of ~~ended~~Section ~~November~~13 ~~30,~~or ~~2018,~~15(d) ~~compared~~of ~~to our cash used in operating activities for~~ the ~~nine~~Securities ~~months~~Exchange ~~ended~~Act ~~November~~of 301934, ~~2017,~~the ~~increased~~registrant byhas ~~$288,202,~~duly ~~primarily~~caused ~~due~~this report to ~~increase~~be insigned ~~general~~on ~~and~~its ~~administrative~~behalf ~~expenses~~by ~~and deposits paid for~~ the ~~Oil~~undersigned, ~~Leases~~thereunto induly ~~the current period~~authorized.

~~Cash~~FORTEM ~~Used~~RESOURCES inINC. ~~Investing~~By ~~Activities~~/s/ Marc A. Bruner Marc A. Bruner Chief Executive Officer, President, Chairman and Director (Principal Executive Officer)

~~Our~~Date: October ~~cash used in investing activities for the nine months ended November 30~~18, 2018, compared to our cash used in investing activities for the nine months ended November 30, 2017, decreased by $1,543,159 due to investment in Asia Pacific and higher expenditures on oil and gas properties in the prior period.2019

~~Cash~~Pursuant to ~~Provided~~the requirements of the Securities Exchange Act of 1934, this report has been signed below by ~~Financing~~the ~~Activities~~following persons on behalf of the registrant and in the capacities and on the dates indicated.

~~Our~~By ~~cash~~/s/ ~~provided~~Marc byA. ~~financing~~Bruner ~~activities~~Marc ~~for~~A. ~~the~~Bruner ~~nine~~Chief ~~months~~Executive ~~ended November 30~~Officer, ~~2018~~President, ~~compared~~Chairman toand ~~our~~Director ~~cash~~(Principal ~~provided~~Executive ~~by financing activities for the nine months ended November 30, 2017, decreased by $1,031,664, primarily due to repayment to related parties in the current period.~~Officer)

~~Contractual~~Date: October ~~Obligations~~18, 2019

~~Our~~By ~~future~~/s/ ~~contractual~~Robert ~~obligations~~DaCunha asRobert ofDaCunha ~~November~~Chief ~~30,~~Financial ~~2018~~Officer ~~consisted~~(Principal ofFinancial ~~the~~Officer ~~following:~~and Principal Accounting Officer)

	Payments due by period
Contractual Obligations	Total			Less than 1 Year			1-3 Years		3-5 Years		More than 5 Years
Note payable		$	19,942		$	19,942		-		-		-
Advance payable		$	100,000		$	100,000		-		-		-

Date: October 18, 2019

~~Outstanding~~By ~~Shares~~/s/ Michael Caetano Michael Caetano Chief Operating Officer, ~~Options~~Secretary, ~~Warrants~~Treasurer and Director

AsDate: October ~~of January 9~~18, 2019~~, we had 122,071,156 shares of common stock, 2,000,000 stock options and 750,000 warrants outstanding.~~

27By /s/ Konstantine Vatskalis Konstantine Vatskalis Director

~~Off-Balance~~Date: October ~~Sheet~~18, ~~Arrangements~~2019

WeBy ~~have~~/s/ noWilliam ~~off-balance~~Via ~~sheet~~William ~~arrangements~~Via that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to our stockholders.Director

~~Going~~Date: October ~~Concern~~18, 2019

~~Our~~By ~~interim~~/s/ ~~financial~~Brett ~~statements~~Matich ~~and~~Brett ~~information~~Matich for the period ended November 30, 2018, have been prepared by our management on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. We have generated no significant revenues to date and have incurred a net loss of $1,052,503 during the nine month period ended November 30, 2018, and an accumulated deficit of $15,702,598 from inception. These factors raise substantial doubt about the ability of the Company to continue operating as a going concern. We cannot provide any assurance that we will ultimately achieve profitable operations or become cash flow positive, or raise additional funds through the sale of debt and/or equity.Director

~~Item~~Date: October 3.18, ~~Quantitative and Qualitative Disclosures About Market Risk~~2019

~~Not applicable.~~39

Item 4. Controls and Procedures

Disclosure Controls and Procedures

We maintain “disclosure controls and procedures”, as that term is defined in Rule 13a-15(e), promulgated by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our company’s reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

As required by paragraph (b) of Rules 13a-15 under the Securities Exchange Act of 1934, our management, with the participation of our principal executive officer and our principal financial officer, evaluated our company’s disclosure controls and procedures as of the end of the period covered by this quarterly report on Form 10-Q. Based on this evaluation, our management concluded that as of the end of the period covered by this quarterly report on Form 10-Q our disclosure controls and procedures were not effective. The ineffectiveness of our disclosure controls and procedures was due to the material weaknesses in our internal control over financial reporting disclosed in our annual report on Form 10-K for the fiscal year ended February 28, 2018, filed on June 28, 2018, as amended on July 11, 2018.

Changes in internal control over financial reporting

There were no changes in our internal control over financial reporting during the fiscal quarter ended November 30, 2018 that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

Other than as disclosed below, we know of no material pending legal proceedings to which our company is a party or of which any of our properties is the subject. In addition, we do not know of any such proceedings contemplated by any governmental authorities.

We know of no material proceedings in which any of our directors, officers or affiliates, or any registered or beneficial stockholder is a party adverse to our company or has a material interest adverse to our company.

We were subject to the following claims:

Court/Registry	Date Instituted	Principal Parties	Description of Claim
Court of Queen's Bench of Alberta	July 23, 2013	Plaintiff: Baker Hughes Canada Company; Defendant: Fortem Resources Inc., also known as Big Lake Energy Ltd.	A Statement of Claim was filed July 23, 2013, whereby the Plaintiff is suing the Defendant for the sum of CAD$281,267 representing the amount owing for oil-field services and equipment, including cementing and fishing products and services provided by the Plaintiff. In December 2015, the Company reached a settlement agreement for a total of $149,784 (CAD$200,000) in eight equal monthly installments of $18,723 (CAD$25,000) starting February 1, 2016. Upon receipt of the final installment, the vendor agreed to discontinue the claim and provide a release to the Company. The Company only made one installment payment of CAD$25,000 applied against the original claim and the settlement agreement was defaulted. As a result, there was a balance owing of CAD$256,267 as at November 30, 2018.

Item 1A. Risk Factors

An investment in our common stock involves a number of very significant risks. You should carefully consider the following risks and uncertainties in addition to other information in this quarterly report in evaluating our company and our business before purchasing shares of our common stock. Our business, operating results and financial condition could be seriously harmed as a result of the occurrence of any of the following risks. You could lose all or part of your investment due to any of these risks. You should invest in our common stock only if you can afford to lose your entire investment.

Risks Related to Our Company

We have a history of losses and this trend may continue and may negatively impact our ability to achieve our business objectives.

We have experienced net losses since inception, and expect to continue to incur substantial losses for the foreseeable future. Our accumulated deficit was $15,702,598 as at November 30, 2018. We may not be able to generate significant revenues in the future. As a result, our management expects our business to continue to experience negative cash flow for the foreseeable future and cannot predict when, if ever, our business might become profitable. We will need to raise additional funds, and such funds may not be available on commercially acceptable terms, if at all. If we are unable to raise funds on acceptable terms, we may not be able to execute our business plan, take advantage of future opportunities, or respond to competitive pressures or unanticipated requirements. This may seriously harm our business, financial condition and results of operations.

We have a limited operating history, which may hinder our ability to successfully meet our objectives.

We have a limited operating history upon which to base an evaluation of our current business and future prospects. We do not have an established history of operating producing properties or locating and developing properties that have oil and gas reserves. As a result, the revenue and income potential of our business is unproven. In addition, because of our limited operating history, we have limited insight into trends that may emerge and affect our business. Errors may be made in predicting and reacting to relevant business trends and we will be subject to the risks, uncertainties and difficulties frequently encountered by early-stage companies in evolving markets. We may not be able to successfully address any or all of these risks and uncertainties. Failure to adequately do so could cause our business, results of operations and financial condition to suffer.

Our operations and proposed exploration activities will require significant capital expenditures for which we may not have sufficient funding and if we do obtain additional financing, our existing shareholders may suffer substantial dilution.

We intend to make capital expenditures far in excess of our existing capital resources to develop, acquire and explore oil and gas properties. We intend to rely on funds from operations and external sources of financing to meet our capital requirements to continue acquiring, exploring and developing oil and gas properties and to otherwise implement our business plan. We plan to obtain additional funding through the debt and equity markets, but we can offer no assurance that we will be able to obtain additional funding when it is required or that it will be available to us on commercially acceptable terms, if at all. In addition, any additional equity financing may involve substantial dilution to our then existing shareholders.

The successful implementation of our business plan is subject to risks inherent in the oil and gas business, which if not adequately managed, could result in additional losses.

Our oil and gas operations are subject to the economic risks typically associated with exploration and development activities, including the necessity of making significant expenditures to locate and acquire properties and to drill exploratory wells. In addition, the availability of drilling rigs and the cost and timing of drilling, completing and, if warranted, operating wells is often uncertain. In conducting exploration and development activities, the presence of unanticipated pressure or irregularities in formations, miscalculations or accidents may cause our exploration, development and, if warranted, production activities to be unsuccessful. This could result in a total loss of our investment in a particular well. If exploration efforts are unsuccessful in establishing proved reserves and exploration activities cease, the amounts accumulated as unproved costs will be charged against earnings as impairments.

In addition, market conditions or the unavailability of satisfactory oil and gas transportation arrangements may hinder our access to oil and gas markets and delay our production. The availability of a ready market for our prospective oil and gas production depends on a number of factors, including the demand for and supply of oil and gas and the proximity of reserves to pipelines and other facilities. Our ability to market such production depends in substantial part on the availability and capacity of gathering systems, pipelines and processing facilities, in most cases owned and operated by third parties. Our failure to obtain such services on acceptable terms could materially harm our business. We may be required to shut in wells for lack of a market or a significant reduction in the price of oil or gas or because of inadequacy or unavailability of pipelines or gathering system capacity. If that occurs, we would be unable to realize revenue from those wells until arrangements are made to deliver such production to market.

Our future performance is dependent upon our ability to identify, acquire and develop oil and gas properties, the failure of which could result in under use of capital and losses.

Our future performance depends upon our ability to identify, acquire and develop additional oil and gas reserves that are economically recoverable. Our success will depend upon our ability to acquire working and revenue interests in properties upon which oil and gas reserves are ultimately discovered in commercial quantities, and our ability to develop prospects that contain proven oil and gas reserves to the point of production. Without successful acquisition and exploration activities, we will not be able to develop additional oil and gas reserves or generate revenues. We cannot provide you with any assurance that we will be able to identify and acquire additional oil and gas reserves on acceptable terms, or that oil and gas deposits will be discovered in sufficient quantities to enable us to recover our exploration and development costs or sustain our business.

The successful acquisition and development of oil and gas properties requires an assessment of recoverable reserves, future oil and gas prices and operating costs, potential environmental and other liabilities, and other factors. Such assessments are necessarily inexact and their accuracy inherently uncertain. In addition, no assurance can be given that our exploration and development activities will result in the discovery of additional reserves. Our operations may be curtailed, delayed or cancelled as a result of lack of adequate capital and other factors, such as lack of availability of rigs and other equipment, title problems, weather, compliance with governmental regulations or price controls, mechanical difficulties, or unusual or unexpected formations, pressures and or work interruptions. In addition, the costs of exploitation and development may materially exceed our initial estimates.

We have a very small management team and the loss of any member of our team may prevent us from implementing our business plan in a timely manner.

We have three executive officers and a limited number of additional consultants upon whom our success largely depends. We do not maintain key person life insurance policies on our executive officers or consultants, the loss of which could seriously harm our business, financial condition and results of operations. In such an event, we may not be able to recruit personnel to replace our executive officers or consultants in a timely manner, or at all, on acceptable terms.

Future growth could strain our personnel and infrastructure resources, and if we are unable to implement appropriate controls and procedures to manage our growth, we may not be able to successfully implement our business plan.

We may experience rapid growth in our operations, which will place a significant strain on our management, administrative, operational and financial infrastructure. Our future success will depend in part upon the ability of our management to manage growth effectively. This may require us to hire and train additional personnel to manage our expanding operations. In addition, we must continue to improve our operational, financial and management controls and our reporting systems and procedures. If we fail to successfully manage our growth, we may be unable to execute upon our business plan.

Market conditions or operation impediments may hinder our access to natural gas and oil markets or delay our production.

The marketability of production from our properties depends in part upon the availability, proximity and capacity of pipelines, natural gas gathering systems and processing facilities. This dependence is heightened where this infrastructure is less developed. Therefore, if drilling results are positive in certain areas of our oil and gas properties, a new gathering system would need to be built to handle the potential volume of gas produced. We might be required to shut in wells, at least temporarily, for lack of a market or because of the inadequacy or unavailability of transportation facilities. If that were to occur, we would be unable to realize revenue from those wells until arrangements were made to deliver production to market.

Our ability to produce and market natural gas and oil is affected and also may be harmed by:

the lack of pipeline transmission facilities or carrying capacity;

government regulation of natural gas and oil production;

government transportation, tax and energy policies;

changes in supply and demand; and

general economic conditions.

We might incur additional debt in order to fund our exploration and development activities, which would continue to reduce our financial flexibility and could have a material adverse effect on our business, financial condition or results of operations.

If we incur indebtedness, the ability to meet our debt obligations and reduce our level of indebtedness depends on future performance. General economic conditions, oil and gas prices and financial, business and other factors affect our operations and future performance. Many of these factors are beyond our control. We cannot assure you that we will be able to generate sufficient cash flow to pay the interest on our current or future debt or that future working capital, borrowings or equity financing will be available to pay or refinance such debt. Factors that will affect our ability to raise cash through an offering of our capital stock or a refinancing of our debt include financial market conditions, the value of our assets and performance at the time we need capital. We cannot assure you that we will have sufficient funds to make such payments. If we do not have sufficient funds and are otherwise unable to negotiate renewals of our borrowings or arrange new financing, we might have to sell significant assets. Any such sale could have a material adverse effect on our business and financial results.

Our properties and/or future properties might not produce, and we might not be able to determine reserve potential, identify liabilities associated with the properties or obtain protection from sellers against them, which could cause us to incur losses.

Although we have reviewed and evaluated our properties in a manner consistent with industry practices, such review and evaluation might not necessarily reveal all existing or potential problems. This is also true for any future acquisitions made by us. Inspections may not always be performed on every well, and environmental problems, such as groundwater contamination, are not necessarily observable even when an inspection is undertaken. Even when problems are identified, a seller may be unwilling or unable to provide effective contractual protection against all or part of those problems, and we may assume environmental and other risks and liabilities in connection with the acquired properties.

If we or our operators fail to maintain adequate insurance, our business could be materially and adversely affected.

Our operations are subject to risks inherent in the oil and gas industry, such as blowouts, cratering, explosions, uncontrollable flows of oil, gas or well fluids, fires, pollution, earthquakes and other environmental risks. These risks could result in substantial losses due to injury and loss of life, severe damage to and destruction of property and equipment, pollution and other environmental damage, and suspension of operations. We could be liable for environmental damages caused by previous property owners. As a result, substantial liabilities to third parties or governmental entities may be incurred, the payment of which could have a material adverse effect on our financial condition and results of operations.

Any prospective drilling contractor or operator which we hire will be required to maintain insurance of various types to cover our operations with policy limits and retention liability customary in the industry. We also have acquired our own insurance coverage for such prospects. The occurrence of a significant adverse event on such prospects that is not fully covered by insurance could result in the loss of all or part of our investment in a particular prospect which could have a material adverse effect on our financial condition and results of operations.

The oil and gas industry is highly competitive, and we may not have sufficient resources to compete effectively.

The oil and gas industry is highly competitive. We compete with oil and natural gas companies and other individual producers and operators, many of which have longer operating histories and substantially greater financial and other resources than we do, as well as companies in other industries supplying energy, fuel and other needs to consumers. Our larger competitors, by reason of their size and relative financial strength, can more easily access capital markets than we can and may enjoy a competitive advantage in the recruitment of qualified personnel. They may be able to absorb the burden of any changes in laws and regulation in the jurisdictions in which we do business and handle longer periods of reduced prices for oil and gas more easily than we can. Our competitors may be able to pay more for oil and gas leases and properties and may be able to define, evaluate, bid for and purchase a greater number of leases and properties than we can. Further, these companies may enjoy technological advantages and may be able to implement new technologies more rapidly than we can. Our ability to acquire additional properties in the future will depend upon our ability to conduct efficient operations, evaluate and select suitable properties, implement advanced technologies and consummate transactions in a highly competitive environment.

Complying with environmental and other government regulations could be costly and could negatively impact our production.

Our business is governed by numerous laws and regulations at various levels of government. These laws and regulations govern the operation and maintenance of our facilities, the discharge of materials into the environment and other environmental protection issues. Such laws and regulations may, among other potential consequences, require that we acquire permits before commencing drilling and restrict the substances that can be released into the environment with drilling and production activities.

Under these laws and regulations, we could be liable for personal injury, clean-up costs and other environmental and property damages, as well as administrative, civil and criminal penalties. Prior to commencement of drilling operations, we may secure limited insurance coverage for sudden and accidental environmental damages as well as environmental damage that occurs over time. However, we do not believe that insurance coverage for the full potential liability of environmental damages is available at a reasonable cost. Accordingly, we could be liable, or could be required to cease production on properties, if environmental damage occurs.

The costs of complying with environmental laws and regulations in the future may harm our business. Furthermore, future changes in environmental laws and regulations could result in stricter standards and enforcement, larger fines and liability, and increased capital expenditures and operating costs, any of which could have a material adverse effect on our financial condition or results of operations.

Shortages of rigs, equipment, supplies and personnel could delay or otherwise adversely affect our cost of operations or our ability to operate according to our business plans.

If drilling activity increases in Alberta, Canada, Utah or the United States generally, a shortage of drilling and completion rigs, field equipment and qualified personnel could develop. The demand for and wage rates of qualified drilling rig crews generally rise in response to the increasing number of active rigs in service and could increase sharply in the event of a shortage. Shortages of drilling and completion rigs, field equipment or qualified personnel could delay, restrict or curtail our exploration and development operations, which could in turn harm our operating results.

We will be required to replace, maintain or expand our reserves in order to prevent our reserves and production from declining, which would adversely affect cash flows and income.

In general, production from natural gas and oil properties declines over time as reserves are depleted, with the rate of decline depending on reservoir characteristics. If we are not successful in our exploration and development activities, our proved reserves will decline as reserves are produced. Our future natural gas and oil production is highly dependent upon our ability to economically find, develop or acquire reserves in commercial quantities.

To the extent cash flow from operations is reduced, either by a decrease in prevailing prices for natural gas and oil, or an increase in exploration and development costs, and external sources of capital become limited or unavailable, our ability to make the necessary capital investment to maintain or expand our asset base of natural gas and oil reserves would be impaired. Even with sufficient available capital, our future exploration and development activities may not result in additional proved reserves, and we might not be able to drill productive wells at acceptable costs.

The oil and gas exploration and production industry historically is a cyclical industry and market fluctuations in the prices of oil and gas could adversely affect our business.

Prices for oil and gas tend to fluctuate significantly in response to factors beyond our control. These factors include:

weather conditions;

economic conditions, including demand for petroleum-based products;

actions by OPEC, the Organization of Petroleum Exporting Countries;

political instability in the Middle East and other major oil and gas producing regions;

governmental regulations, both domestic and foreign;

domestic and foreign tax policy;

the pace adopted by foreign governments for the exploration, development, and production of their national reserves;

the price of foreign imports of oil and gas;

the cost of exploring for, producing and delivering oil and gas;

the discovery rate of new oil and gas reserves;

the rate of decline of existing and new oil and gas reserves;

available pipeline and other oil and gas transportation capacity;

the ability of oil and gas companies to raise capital;

the overall supply and demand for oil and gas; and

the availability of alternate fuel sources.

Changes in commodity prices may significantly affect our capital resources, liquidity and expected operating results. Price changes will directly affect revenues and can indirectly impact expected production by changing the amount of funds available to reinvest in exploration and development activities. Reductions in oil and gas prices not only reduce revenues and profits, but could also reduce the quantities of reserves that are commercially recoverable. Significant declines in prices could result in non-cash charges to earnings due to impairment.

Changes in commodity prices may also significantly affect our ability to estimate the value of producing properties for acquisition and divestiture and often cause disruption in the market for oil and gas producing properties, as buyers and sellers have difficulty agreeing on the value of the properties. Price volatility also makes it difficult to budget for and project the return on acquisitions and the exploration and development of projects. We expect that commodity prices will continue to fluctuate significantly in the future.

Our ability to produce oil and gas from our properties may be adversely affected by a number of factors outside of our control which may result in a material adverse effect on our business, financial condition or results of operations.

The business of exploring for and producing oil and gas involves a substantial risk of investment loss. Drilling oil and gas wells involves the risk that the wells may be unproductive or that, although productive, the wells may not produce oil or gas in economic quantities. Other hazards, such as unusual or unexpected geological formations, pressures, fires, blowouts, loss of circulation of drilling fluids or other conditions may substantially delay or prevent completion of any well. Adverse weather conditions can also hinder drilling operations. A productive well may become uneconomic if water or other deleterious substances are encountered that impair or prevent the production of oil or gas from the well. In addition, production from any well may be unmarketable if it is impregnated with water or other deleterious substances. There can be no assurance that oil and gas will be produced from the properties in which we have interests. In addition, the marketability of oil and gas that may be acquired or discovered may be influenced by numerous factors beyond our control. These factors include the proximity and capacity of oil and gas, gathering systems, pipelines and processing equipment, market fluctuations in oil and gas prices, taxes, royalties, land tenure, allowable production and environmental protection. We cannot predict how these factors may affect our business.

We may be unable to retain our leases and working interests in our leases, which would result in significant financial losses to our company.

Our properties are held under oil and gas leases. If we fail to meet the specific requirements of each lease, such lease may terminate or expire. We cannot assure you that any of the obligations required to maintain each lease will be met. The termination or expiration of our leases may harm our business. Our property interests will terminate unless we fulfill certain obligations under the terms of our leases and other agreements related to such properties. If we are unable to satisfy these conditions on a timely basis, we may lose our rights in these properties. The termination of our interests in these properties may harm our business. In addition, we will need significant funds to meet capital requirements for the exploration activities that we intend to conduct on our properties.

Our Godin project is complex undertakings and may not be completed at our estimated cost or at all.

We, through our wholly owned subsidiary Colony Energy, LLC, holds a 100% interest in and to certain petroleum, natural gas and general rights, including Alberta Crown Petroleum and Oil Leases, in 20 contiguous sections totaling 12,960 acres located in the Godin area of northern Alberta. The Godin project is complex, subject to extensive governmental regulation and will require significant additional financing. There can be no assurance that the necessary governmental approvals will be granted or that such financing could be obtained on commercially reasonable terms or at all, or that if one or more of these projects are completed that they will be successful or that we realize a return on our investment.

Risks Related to Our Common Stock

A decline in the price of our common stock could affect our ability to raise further working capital and adversely impact our ability to continue operations.

A prolonged decline in the price of our common stock could result in a reduction in the liquidity of our common stock and a reduction in our ability to raise capital. Because a significant portion of our operations have been and will be financed through the sale of equity securities, a decline in the price of our common stock could be especially detrimental to our liquidity and our operations. Such reductions may force us to reallocate funds from other planned uses and may have a significant negative effect on our business plan and operations, including our ability to develop new properties and continue our current operations. If our stock price declines, we can offer no assurance that we will be able to raise additional capital or generate funds from operations sufficient to meet our obligations. If we are unable to raise sufficient capital in the future, we may not be able to have the resources to continue our normal operations.

The market price for our common stock may also be affected by our ability to meet or exceed expectations of analysts or investors. Any failure to meet these expectations, even if minor, may have a material adverse effect on the market price of our common stock.

If we issue additional shares in the future, it will result in the dilution of our existing shareholders.

Our articles of incorporation, as amended, authorize the issuance of up to 750,000,000 shares of common stock with a par value of $0.001. Our board of directors may choose to issue some or all of such shares to acquire one or more businesses or to provide additional financing in the future. The issuance of any such shares will result in a reduction of the book value and market price of the outstanding shares of our common stock. If we issue any such additional shares, such issuance will cause a reduction in the proportionate ownership and voting power of all current shareholders. Further, such issuance may result in a change of control of our corporation.

Trading of our stock may be restricted by the Securities Exchange Commission’s penny stock regulations, which may limit a stockholder’s ability to buy and sell our stock.

The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.

The Financial Industry Regulatory Authority, or FINRA, has adopted sales practice requirements which may also limit a stockholder’s ability to buy and sell our stock.

In addition to the “penny stock” rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.

Our common stock is illiquid and the price of our common stock may be negatively impacted by factors which are unrelated to our operations.

Our common stock currently trades on a limited basis on OTCQB operated by the OTC Markets Group and TSX Venture Exchange. Trading of our stock through OTCQB and TSX Venture Exchange is frequently thin and highly volatile. There is no assurance that a sufficient market will develop in our stock, in which case it could be difficult for shareholders to sell their stock. The market price of our common stock could fluctuate substantially due to a variety of factors, including market perception of our ability to achieve our planned growth, quarterly operating results of our competitors, trading volume in our common stock, changes in general conditions in the economy and the financial markets or other developments affecting our competitors or us. In addition, the stock market is subject to extreme price and volume fluctuations. This volatility has had a significant effect on the market price of securities issued by many companies for reasons unrelated to their operating performance and could have the same effect on our common stock.

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

Since the beginning of the three month period ended November 30, 2018, we have not sold any equity securities that were not registered under the Securities Act of 1933 that were not previously reported in an annual report on Form 10-K, in a quarterly report on Form 10-Q or in a current report on Form 8-K.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

No.	Description
3.1	Articles of Incorporation (incorporated by reference from our registration statement on Form SB-2 filed on December 1, 2006)
3.2	Corporate Bylaws (incorporated by reference from our registration statement on Form SB-2 filed on December 1, 2006)
3.3	Certificate of Change (incorporated by reference from our current report on Form 8-K filed on October 22, 2007)
3.4	Certificate of Amendment (incorporated by reference from our current report on Form 8-K filed on February 15, 2008)
3.5	Articles of Merger dated effective March 30, 2017 (incorporated by reference from our current report on Form 8-K filed on March 30, 2017)
3.6	Amended and Restated Bylaws (incorporated by reference from our current report on Form 8-K filed on January 7, 2019)
10.1	Farmout Agreement, Compeer Area with Harvest Operations Corp. effective February 21, 2012 (incorporated by reference from our annual report on Form 10-K filed on May 29, 2012)
10.2	Debt Settlement Agreement dated October 16, 2014, amongst the Company, Professional Trading S.A. and Stockbridge Resources Corp. (incorporated by reference from our current report on Form 8-K filed on October 20, 2014)
10.3	Employment Agreement dated April 23, 2015 with Kent Edney (incorporated by reference from our current report on Form 8-K filed on May 5, 2015)
10.4	Stock Option Agreement dated November 3, 2015 with Michael Caetano (incorporated by reference from our current report on Form 8-K filed on November 6, 2015)
10.5	Stock Option Agreement dated November 3, 2015 with Robert DaCunha (incorporated by reference from our current report on Form 8-K filed on November 6, 2015)
10.6	Stock Option Agreement dated November 3, 2015 with Robert Madzej (incorporated by reference from our current report on Form 8-K filed on November 6, 2015)
10.7	Debt Settlement Agreement dated April 11, 2016 with Apex Energy Consultants Inc. (incorporated by reference from our current report on Form 8-K filed on May 19, 2016)
10.8	Debt Settlement Agreement dated April 11, 2016 with Chamonix Canada Inc. (incorporated by reference from our current report on Form 8-K filed on May 19, 2016)
10.9	Debt Settlement Agreement dated January 13, 2017 with Precision Asset Consulting Executives Inc. (incorporated by reference from our current report on Form 8-K filed on February 3, 2017)
10.10	Debt Settlement Agreement dated January 13, 2017 with Seahawk Capital Corp. (incorporated by reference from our current report on Form 8-K filed on February 3, 2017)
10.11	Debt Settlement Agreement dated January 13, 2017 with CNK Enterprises Inc. (incorporated by reference from our current report on Form 8-K filed on February 3, 2017)
10.12	Debt Settlement Agreement dated January 30, 2017 with 2232985 Ontario Inc. (incorporated by reference from our current report on Form 8-K filed on February 3, 2017)
10.13	Membership Interest Purchase Agreement dated April 7, 2017 with Blue Phoenix Energy, LLC and Pacific Petroleum, LLC (incorporated by reference from our current report on Form 8-K filed on April 12, 2017)
10.14	Membership Interest Purchase Agreement dated April 7, 2017 with Grassy Butte Energy LLC (incorporated by reference from our current report on Form 8-K filed on April 12, 2017)
10.15	Milestone Payment Addendum dated April 7, 2016 with Grassy Butte Energy, Ltd. and Grassy Butte, LLC (incorporated by reference from our current report on Form 8-K filed on April 12, 2017)
10.16	Membership Interest Purchase Agreement dated April 12, 2017 with Blue Phoenix Energy, LLC and Pacific Petroleum, LLC (incorporated by reference from our quarterly report on Form 10-Q filed on October 17, 2017)

10.17	Membership Interest Purchase Agreement dated April 17, 2017 with MAB Resources Holdings LLC and JM Magna Holdings LLC (incorporated by reference from our current report on Form 8-K filed on April 21, 2017)
10.18	Membership Interest Purchase Agreement dated May 17, 2017 with MAB Resources Holdings LLC and JM Magna Holdings LLC (incorporated by reference from our current report on Form 8-K filed on May 24, 2017)
10.19	First Amendment to Purchase and Sale Agreement dated August 17, 2017, 2017 but effective as of March 1, 2017 between Black Dragon Energy, LLC and WEM Dragon, LLC (incorporated by reference from our current report on Form 8-K filed on August 23, 2017)
10.20	Ratification of Purchase and Sale dated August 17, 2017 but effective as of March 1, 2017 between Fortem Resources Inc. and WEM Dragon, LLC (incorporated by reference from our current report on Form 8-K filed on August 23, 2017)
10.21	Second Amendment to Purchase and Sale Agreement dated August 17, 2017, 2017 but effective as of March 1, 2017 between Rolling Rock Resources, LLC and Rockies Standard Oil Company, LLC (incorporated by reference from our current report on Form 8-K filed on August 23, 2017)
10.22	Ratification of Purchase and Sale dated August 17, 2017 but effective as of March 1, 2017 between Fortem Resources Inc. and Rockies Standard Oil Company, LLC (incorporated by reference from our current report on Form 8-K filed on August 23, 2017)
10.23	Agreement Re: April 2017 SITLA Auction dated April 18, 2017 between Rolling Rock Resources, LLC and Rockies Standard Oil Company LLC (incorporated by reference from our current report on Form 8-K filed on August 24, 2017)
10.24	Debt Conversion Agreement dated November 2, 2017 with Grassy Butte Energy Ltd. (incorporated by reference from our current report on Form 8-K filed on November 9, 2017)
10.25	Debt Conversion Agreement dated December 19, 2017 with LPD Ltd. (incorporated by reference from our current report on Form 8-K filed on December 22, 2017)
10.26	Second Amendment to Purchase and Sale Agreement dated effective as of March 1, 2017 between Black Dragon Energy, LLC and WEM Dragon, LLC (incorporated by reference from our current report on Form 8-K filed on June 15, 2018)
10.27	Ratification of Purchase and Sale dated effective as of March 1, 2017 between Fortem Resources Inc. and WEM Dragon, LLC (incorporated by reference from our current report on Form 8-K filed on June 15, 2018)
10.28	Third Amendment to Purchase and Sale Agreement dated effective as of March 1, 2017 between Rolling Rock Resources, LLC and Rockies Standard Oil Company, LLC (incorporated by reference from our current report on Form 8-K filed on June 15, 2018)
10.29	Ratification of Purchase and Sale Agreement dated March 1, 2017 between Rockies Standard Oil Company, LLC and the Company (incorporated by reference from our current report on Form 8-K filed on June 15, 2018)
10.30	Third Amendment to Purchase and Sale Agreement dated effective as of March 1, 2017 between Black Dragon Energy, LLC and WEM Dragon, LLC (incorporated by reference from our current report on Form 8-K filed on August 17, 2018)
10.31	Ratification of Purchase and Sale dated effective as of March 1, 2017 between Fortem Resources Inc. and WEM Dragon, LLC (incorporated by reference from our current report on Form 8-K filed on August 17, 2018)
10.32	Fourth Amendment to Purchase and Sale Agreement dated effective as of March 1, 2017 between Rolling Rock Resources, LLC and Rockies Standard Oil Company, LLC (incorporated by reference from our current report on Form 8-K filed on August 17, 2018)
10.33	Ratification of Purchase and Sale Agreement dated March 1, 2017 between Rockies Standard Oil Company, LLC and the Company (incorporated by reference from our current report on Form 8-K filed on August 17, 2018)
10.34	2018 Stock Option Plan (incorporated by reference from our current report on Form 8-K filed on August 24, 2018)
10.35	Asset Sale Agreement (incorporated by reference from our current report on Form 8-K filed on October 2, 2018)
10.36	Extension Letter Agreement (incorporated by reference from our current report on Form 8-K filed on December 17, 2018)

31.1*	Certification of Marc A. Bruner Pursuant to Section 302 of the Sarbanes-Oxley Act Of 2002
31.2*	Certification of Robert DaCunha Pursuant to Section 302 of the Sarbanes-Oxley Act Of 2002
32.1*	Certification of Marc A. Bruner Pursuant to Section 906 of the Sarbanes-Oxley Act Of 2002
32.2*	Certification of Robert DaCunha Pursuant to Section 906 of the Sarbanes-Oxley Act Of 2002
99.1	Audit Committee Charter (incorporated by reference from our annual report on Form 10-K/A filed on July 11, 2018)
101.INS*	XBRL INSTANCE DOCUMENT
101.SCH*	XBRL TAXONOMY EXTENSION SCHEMA
101.CAL*	XBRL TAXONOMY EXTENSION CALCULATION LINKBASE
101.DEF*	XBRL TAXONOMY EXTENSION DEFINITION LINKBASE
101.LAB*	XBRL TAXONOMY EXTENSION LABEL LINKBASE
101.PRE*	XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE

* Filed herewith.

SIGNATURES

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

FORTEM RESOURCES INC.

By /s/ Marc A. Bruner

Marc A. Bruner

Chief Executive Officer, President, Chairman and Director

(Principal Executive Officer)

Date: January 9, 2019

By /s/ Robert Da Cunha

Robert Da Cunha

Chief Financial Officer

(Principal Financial Officer and Principal Accounting Officer)

Date: January 9, 2019

Filing Compare · Fortem Resources Inc.