UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q  
☒     Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended   June 30, 2016
☐     Transition Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from __________ to __________
Commission File Number:     000-52690
ROCKDALE RESOURCES CORPORATION
(Exact name of registrant as specified in its charter)
Colorado
86-1061005
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
 
 
710 N Post Oak, Suite 512
Houston, Texas
77024
(Address of principal executive offices)
(Zip Code)
(832-941-0011)
(Issuer’s telephone number, including area code)
Indicate by check mark whether the registrant: (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the issuer was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.  Yes  ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).  Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check one).
Large accelerated filer
☐
Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting company
☒
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ☐    No  ☒
State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 47,794,422 shares of common stock as of August 23, 2016. 
TABLE OF CONTENTS
Part I        Financial Information
 
 
 
 
Item 1.
3
 
 
 
Item 2.
13
 
 
 
Item 3.
18
 
 
 
Item 4.
18
 
 
 
Part II      Other Information
 
 
 
 
Item 1.
19
 
 
 
Item 1A.
19
 
 
 
Item 2.
19
 
 
 
Item 3.
20
 
 
 
Item 4.
20
 
 
 
Item 5.
21
 
 
 
Item 6.
21
 
 
 
22
 
 
 
23

 
PART I
Item 1.   Financial Statements
ROCKDALE RESOURCES CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
 
 
June 30,
2016
   
December 31,
2015
 
ASSETS
           
Current assets
           
  Cash
 
$
21,508
   
$
3,091
 
  Accounts receivable
   
117,295
     
48,633
 
  Inventory
   
113,531
     
-
 
  Other current assets
   
26,512
     
31,049
 
    Total current assets
   
278,846
     
82,773
 
 
               
Property & equipment
               
  Oil and gas, on the basis of full cost accounting
               
  Evaluated properties
   
4,558,286
     
4,733,853
 
  Furniture, equipment & software
   
120,056
     
108,234
 
Less accumulated depreciation
   
(1,080,845
)
   
(1,045,644
)
Net property and equipment
   
3,597,497
     
3,796,443
 
 
               
Other Assets
               
  Intangible assets
   
49,886
         
  Note receivable
   
316,800
     
316,800
 
 
               
Total Assets
 
$
4,243,029
   
$
4,196,016
 
 
               
  LIABILITIES & STOCKHOLDERS EQUITY
               
 
               
Current liabilities
               
  Accounts payable
 
$
384,637
   
$
169,564
 
  Accrued liabilities
   
192,000
     
130,582
 
  Convertible debt – related party, net of discount of 40,557 and 171,573
   
509,443
     
378,427
 
  Current maturities of installment notes payable
   
26,186
     
21,144
 
  Note Payable to Affiliates
   
63,000
     
192,875
 
  Deferred rent
   
2,816
     
2,816
 
    Total current liabilities
   
1,178,082
     
895,408
 
 
    -          
  Asset retirement obligations
   
226,361
     
213,328
 
  Installment note payable
   
-
     
6,652
 
    Total Liabilities
   
1,404,443
     
1,115,388
 
 
               
Stockholders’ Equity
               
  Preferred stock, $0.10 par value, 1,000,000 shares authorized;
   No shares issued & outstanding
   
-
     
-
 
  Common stock, $.001 par value; 150,000,000 shares authorized;
   47,094,442 and 42,839,958 shares issued and outstanding
   
47,094
     
42,840
 
  Additional paid in capital
   
9,588,134
     
9,129,629
 
  Accumulated deficit
   
(6,796,642
)
   
(6,091,841
)
    Total Stockholders’ Equity
   
2,838,586
     
3,080,628
 
 
               
Total Liabilities and Stockholders’ Equity
 
$
4,243,029
   
$
4,196,016
 

The accompanying notes are an integral part of these unaudited consolidated financial statements.
 
3
ROCKDALE RESOURCES CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
 
 
Three Months Ended
June 30, 2016
   
Three Months Ended
June 30, 2015
   
Six Months Ended
June 30, 2016
   
Six Months Ended
June 30, 2015
 
Oil and gas sales
                       
  Oil and gas sales
 
$
34,294
   
$
67,633
   
$
57,293
   
$
128,159
 
  Equipment sales
   
18,000
     
-
     
198,000
     
-
 
    Total Revenue
   
52,294
     
67,633
     
255,293
     
128,159
 
                                 
Operating expenses
                               
  Lease operating expense
   
62,902
     
77,183
     
107,803
     
134,054
 
  Cost of equipment sold
   
3,030
     
-
     
33,330
         
  Production tax
   
1,679
     
3,121
     
2,772
     
5,917
 
  General and administrative expenses
   
292,620
     
103,326
     
631,102
     
243,482
 
  Depreciation, depletion and amortization
   
17,669
     
27,016
     
35,201
     
59,210
 
  Impairment of Oil & Gas Properties
   
-
     
668,073
     
-
     
668,073
 
  Asset retirement obligation accretion
   
6,605
     
-
     
13,033
     
-
 
Total operating expenses
   
384,505
     
878,719
     
823,241
     
1,110,736
 
                                 
Loss from operations
   
(332,211
)
   
(811,086
)
   
(567,948
)
   
(982,577
)
                                 
Other Income (expenses)
                               
  Interest (expense)
   
(84,400
)
   
(42,757
)
   
(157,476
)
   
(88,030
)
   Other income
   
15,457
     
5,000
     
34,959
     
8,484
 
  Loss on conveyance of PORRI warrants
   
(1,705
)
           
(14,336
)
       
  Loss on conversion of debt
   
-
     
(69,107
)
   
-
     
(69,107
)
                                 
Net loss
 
$
(402,859
)
 
$
(917,950
)
 
$
(704,801
)
 
$
(1,131,230
)
 
                               
Loss per share
(Basic and fully diluted)
 
$
(0.01
)
 
$
(0.05
)
 
$
(0.02
)
 
$
(0.06
)
 
                               
Weighted average number of common shares outstanding
   
45,747,169
     
19,723,482
     
44,634,222
     
19,470,832
 

The accompanying notes are an integral part of these unaudited consolidated financial statements.
 
4

ROCKDALE RESOURCES CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)  

 
 
Six Months Ended
June 30, 2016
   
Six Months Ended
June 30, 2015
 
Cash Flows from Operating Activities
           
Net loss
 
$
(704,801
)
 
$
(1,131,230
)
Adjustment to reconcile net loss to net cash provided
by/(used in) operating activities:
 
Depreciation and amortization
   
35,201
     
59,210
 
Accretion of debt discount
   
134,467
     
62,405
 
Impairment of Oil & Gas Properties
   
-
     
668,073
 
Loss on Conveyance of PORRI warrants
   
14,336
     
69,107
 
ARO accretion
   
13,033
     
-
 
Stock-based compensation expense - employees
   
138,097
     
33,778
 
Changes in operating assets and liabilities
               
Accounts receivable
   
(68,662
)
   
(2,335
)
Inventory
   
33,330
     
-
 
Other assets
   
4,537
     
7,647
 
Accounts payable
   
257,073
     
39,220
 
Accrued liabilities
   
61,418
     
1,147
 
Net cash flows from operating activities
   
(81,971
)
   
(192,978
)
 
               
Cash Flows from Investing Activities
               
    Cash acquired from investment in Askarii
   
114
     
-
 
    Proceeds from sale of property and equipment
   
30,000
     
4,525
 
Purchase of fixed asset
   
(13,116
)
   
-
 
Cash flows from investing activities
   
16,998
     
4,525
 
 
               
Cash Flows from Financing Activities
               
Payments of shareholder advances
   
(81,000
)
   
-
 
Proceeds from shareholder advances
   
118,000
     
60,000
 
    Proceeds from issuance of common stock
   
48,000
     
140,000
 
Payments on notes payable
   
(1,610
)
   
(7, 867
)
Cash flows from financing activities
   
83,390
     
192,133
 
 
               
Net change in cash and cash equivalents
   
18,417
     
3,680
 
 
               
Cash and cash equivalents
               
Beginning of period
   
3,091
     
24,688
 
 
               
End of period
 
$
21,508
   
$
28,368
 
                 
SUPPLEMENTAL DISCLOSURES
               
  Interest Paid
   
16,453
     
8,716
 
NON-CASH INVESTING AND FINANCIAL DISCLOSURES
               
  Purchase of Askarii
   
50,000
     
-
 
  Payment of affiliated note payable through share issuance
   
146,875
     
-
 
  Settlement of accrued accounts payable through share issuance
   
42,000
     
-
 
  Transfer to Askarii inventory
   
146,861
     
-
 
  Shares issued in payment of shareholder advance
   
20,000
     
-
 
  Warrants issued with debt
   
3,451
     
-
 
  Conversion of debt
   
-
     
60,000
 
The accompanying notes are an integral part of these unaudited consolidated financial statements.

ROCKDALE RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2016
(Unaudited)

NOTE 1. ORGANIZATION AND BASIS OF PRESENTATION:

Rockdale Resources Corporation (“we”, “us”, “Rockdale” and the “Company”) an oil and gas exploration, development, and production company.  The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”).

Basis of Presentation

The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s latest Annual Report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the results of operations for the interim periods presented have been reflected herein. The results of operations for such interim periods are not necessarily indicative of operations for a full year. Notes to the consolidated financial statements which would substantially duplicate the disclosure contained in the audited financial statements for the most recent fiscal year, 2015, as reported in Form 10-K, have been omitted.

The consolidated financial statements include the accounts of the Company and it’s wholly-owned subsidiary, Askarii Resources, LLC (“Askarii”). Our subsidiary operates in the oil field services industry, providing equipment and services to various oil field related Companies. All significant intercompany transactions are eliminated in the consolidation process. Since the single subsidiary is wholly-owned, all non intercompany balances are included in the consolidated financial statement balances.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A summary of the significant accounting policies applied in the preparation of the accompanying unaudited consolidated financial statements follows.

Management Estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Inventories - Inventories are stated at the lower of cost or market and are valued using the specific identification method. The Company performs a periodic review of the inventory and if it is determined that if any has become obsolete, an inventory reserve is recorded.

Intangible Assets - Our intangible assets are subject to amortization and are amortized using the straight-line method over their estimated period of benefit. Intangible assets acquired as part of a business combination are capitalized at their acquisition-date fair value.  

Equipment sales - Revenues from the sale of oil and gas related equipment are recognized at the time of sale, when the significant risks and rewards of ownership have been transferred to the buyer and the recovery of the consideration is probable.

Recent Accounting Pronouncements

The Company has evaluated all the recent accounting pronouncements through the filing date and believes that none of them will have a material effect on the Company.


ROCKDALE RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2016
(Unaudited)

NOTE 3. GOING CONCERN
 
The Company has suffered recurring losses from operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.  The Company plans to generate profits by reworking its existing oil or gas wells and drilling additional wells, as needed.  The Company will need to raise funds through either the sale of its securities, issuance of corporate bonds, joint venture agreements and/or bank financing to accomplish its goals.   The Company does not have any commitments or arrangements from any person to provide the Company with any additional capital, at this time.   If additional financing is not available when needed, the Company may need to cease operations.   The Company may not be successful in raising the capital needed to drill and/or rework existing oil wells.  Any additional wells that the Company may drill may be non-productive.  Management believes that actions presently being taken to secure additional funding for the reworking of its existing infrastructure will provide the opportunity for the Company to continue as a going concern.  Since the Company has an oil producing asset, its goal is to increase the production rate by optimizing its current infrastructure.    The accompanying financial statements have been prepared assuming the Company will continue as a going concern; no adjustments to the financial statements have been made to account for this uncertainty.

NOTE 4. NOTES PAYABLE – RELATED PARTY
 
On June 30, 2016, the maturity date of the $350,000 and $200,000 Convertible Secured Promissory Notes (the “Notes”) between the Company and Rick Wilber (“Holder”) were extended to December 31, 2016. If at any time prior to December 31, 2016, the Company pays the Holder $500,000 on the Notes (together with all accrued interest), the Company will receive a $50,000 discount on the total principal amount of $550,000 outstanding under the Notes. If the Notes are fully paid by the Company, the Company will issue new warrants for the purchase of 500,000 shares of stock at an exercise price of $0.15 per share that will expire five (5) years from the grant date (and the old warrants will be extinguished). If payment is not made before December 31, 2016, no discount is allowed.
 
During the six months ended June 30, 2016 and 2015 the company amortized $131,016 and $62,405, respectively, of debt discount to interest expense. At June 30, 2016 the remaining unamortized debt discount is $40,557.

NOTE 5. EQUITY

Preferred Stock – 1,000,000 shares authorized, none issued or outstanding.

Common Stock –

On February 1, 2016, the Company acquired 100% of the issued and outstanding shares in Askarii Resources, a private Texas based oil & gas service company. The Company acquired Askarii by issuing one million restricted common shares. Based on the current market value of the Rockdale stock at $0.05 per share, the aggregate value of the transaction is $50,000. There were minimal tangible assets purchased from Askarii. The final purchase price allocation is as follows: trademarks $10,000, internet/website $5,000, customer lists $10,000 and customer relationships $25,000.

On February 10, 2016, a shareholder provided an advance of $20,000 in order to temporarily fund the Company’s working capital needs.  On April 1, 2016, in order to compensate the shareholder, the Company granted 285,714 shares in order to pay off the debt in full.  The valuation of the grant was $20,000, based on 285,714 shares valued at $0.07 per share on April 1, 2016.

On March 11, 2016, the Board of Directors granted (3) contract employees 700,000 shares of the Company’s restricted common stock for settlement of outstanding payables. The shares were issued at current market price of $0.06 per share on March 11, 2016, at a value of $42,000.

As a result of the 2015 Annual Meeting of our Stockholders, held on April14, 2016, the shareholders voted to increase the total number of authorized shares of common stock to 150,000,000.


ROCKDALE RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2016
(Unaudited)
 
On May 2, 2016, the Company paid off its outstanding Promissory Note to Blue Sky NM (“BSNM”) for $146,875.  This Note was created when the 15% working interest in the Twin Lakes field was purchased earlier in the year.  The payoff was made by issuing 1,468,750 shares of Company common stock.  Based on the market value of the stock on May 2, 2016 of $0.10, the value of the transaction was $146,875 and resulted in no gain or loss.  In addition, a cash payment of $4,869 was made to pay off the remaining outstanding interest.
 
During the six months ended June 30, 2016, the company expensed $17,000 of stock based compensation (for CEO) related to restricted stock awards. The remaining value to be expensed on these awards is $42,500 at June 30, 2016.

Summary information regarding common stock warrants granted and outstanding as of and for the six months ended June 30, 2016, is as follows:

 
 
Warrants
   
Weighted Average
Exercise Price
   
Aggregate
intrinsic value
   
Weighted average remaining contractual life (years)
 
Outstanding at year ended December 31, 2015
   
11,910,111
   
$
0.33
   
$
-
     
3.52
 
Granted
   
3,080,000
     
0.08
     
-
     
2.25
 
Exercised
   
-
     
-
     
-
     
-
 
Expired
   
-
     
-
     
-
     
-
 
Outstanding at quarter ended June 30, 2016
   
14,990,111
   
$
0.28
   
$
-
     
3.26
 

NOTE 6. COMMITMENTS AND CONTINGENCIES

The Company, as a lessee of oil and gas properties, is subject to various federal, state and local laws and regulations relating to discharge of materials into, and protection of, the environment. These laws and regulations may, among other things, impose liability on the Company for the cost of pollution clean-up resulting from operations and subject the Company to liability for pollution damages. In some instances, the Company may be directed to suspend or cease operations in the affected area.  The Company is not aware of any environmental claims existing as of June 30, 2016, which have not been provided for, or covered by insurance or which may have a material impact on its financial position or results of operations. There can be no assurance, however, that current regulatory requirements will not change, or past noncompliance with environmental laws will not be discovered on the Company’s properties.

Office Lease – As of June 30, 2016, the Company has one annually renewable office lease in Houston at a cost of $1,650 per month.

NOTE 7. RELATED PARTY

Transactions with related parties and affiliates

Beginning February 1, 2016, the Company sponsored the SUDS 1% Term Overriding Royalty Interest (“ORRI”) offering on behalf of the SUDS field to raise $300,000 to purchase and install pump jacks for twenty two (22) previously drilled wells at the field. Under the terms of the Rockdale offering, investors received 1% of the gross revenue from the field monthly, based on their investment of $20,000 until such time they receive a cumulative revenue amount of $30,000. With each unit purchased, a warrant to purchase 10,000 shares of Company’s common stock was granted with an exercise price of $0.10 per share, and an expiration date of February 28, 2019. At the end of the second quarter, the $300,000 offering had been received which resulted in the granting of warrants to purchase 150,000 shares of common stock. The following affiliated investors each purchased one (1) unit: Joel Oppenheim, Zel C Khan, Lee Lytton, Paul Deputy and Leo Womack. Included in that purchase each accredited investor received 10,000 warrants to purchase an additional 10,000 shares of common stock. The fair value of all these SUDS related warrants (affiliated and non affiliated) was $14,336 and was based on a $0.06 per share valuation, volatility of 235%, a discount rate of 1.09%, over a 3 year term. In addition, to properly account for Rockdale’s 10% working interest owner in the SUDS field, $30,000 of the $300,000 raise was offset against the full cost pool of Property & Equipment.

ROCKDALE RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2016
(Unaudited)

The pump jacks related to the ORRI offering were to be purchased from Askarii Resources at a market price of $10,000 per unit for a total of $220,000. Equipment sales for the six months ended June 30, 2016 is 198,000 which is $22,000 less than the gross sales. The net revenue of $22,000 represents Rockdale’s working interest that is eliminated in the consolidation process.  Rockdale had previously purchased the surplus units as part of the Twin Lakes San Andres Unit (‘TLSAU”) acquisition before transferring them to Askarii at cost. For the six months ended, Askarii booked a profit of $164,670 on the sale of twenty two (22) pump jacks to the other owners of the SUDs properties who are related parties.
On March 11, 2016, the Board of Directors granted Leo B. Womack, the Chairman of the Board of Directors of the Company an option to purchase 1,000,000 shares of the Company’s common stock at an exercise price of $0.06 per share, which vests immediately, and is exercisable for 36 months thereafter. The Board also granted Lee Lytton and Joel Oppenheim, members of the Board of Directors each an option to purchase 500,000 shares of the Company’s common stock at an exercise price of $0.06 per share, which vest immediately, and are exercisable for 36 months thereafter. The fair value of the options granted on March 11, 2016 is $115,045 and was based on a $0.06 valuation, volatility of 235%, a discount rate of 1.09% and a 3 year term. The total amount of the options was expensed in 2016. These warrants are subject to a clawback provision which would be ratably invoked if a director did not complete his 2016 service term.
 
On May 31, 2016, the Company issued 8 units or 800,000 shares to the current CFO as part of the September 1, 2015 private offering.  The shares were issued at a price of $0.06 per share and included warrants to purchase an additional 800,000 shares of common stock at a price of $0.10 cents per share at any time prior to August 5, 2018.  This represented the final sale under this offering.

During the six months ended June 30, 2016, shareholders advanced an additional $118,000 while also being paid back $41,000 along with $20,000 being converted as described in Note 5. This resulted in an increase of $17,500 in borrowings through shareholders. This increased the shareholder advance liability from $46,000 at December 31, 2015 to $63,000 at June 30, 2016 which is included under Note payable to affiliates.  . In connection with these loans the company granted 50,000 warrants to purchase 50,000 shares of common stock at a price of $0.09. The fair value of these warrants was $3,451, based on a $0.09 price per share valuation, volatility of 284%, a discount rate of 0.87% and a 3 year term was amortized to interest expense as part of debt discount in the six months ended.
On November 4, 2015 the Company executed a Promissory Note for $146,875 related to the TLSAU acquisition. The note was due on December 31, 2015 and accrues at a rate of 10% per annum and the repayment of the note is secured by 1,000,000 shares of restricted stock of the Company. The Company exercised its one time right for a 6 month extension of the maturity date of the note by issuing BSNM 500,000 additional shares of restricted Company stock. On May 2, 2016, this note was converted into 500,000 shares of common stock at a price of $0.075 cents per share at a value of $37,500.
On June 24, 2016, the Company purchased a 2007 Toyota Tundra vehicle for $10,265 from Jovian Petroleum Corporation.  It is being used for field operations.  During July 2016, payments of $7,000 were made against the outstanding balance.  There was no promissory note created for the remaining outstanding balance of $3,264, and both parties agreed for the balance to be paid when funds become available.  The truck’s estimated useful life is 5 years.
In association with Mr. Zel C. Khan’s employment agreement dated September 23, 2015, the Company issued one warrant to purchase one share of the Company’s restricted stock at an exercise price of $0.20 per share for each dollar of Mr. Khan’s deferred gross salary for the six months ended 2016. Mr. Khan’s total accrued salary at June 30, 2016 was $80,000.  The Company granted warrants to purchase 80,000 shares of common shares for the six months ended 2016. The warrants have a term of 36 months from the June 30, 2016, the date of grant. The fair value of these warrants was $4,210, based on a $0.07 price per share valuation, volatility of 235%, a discount rate of 1.09% and a 3 year term.


ROCKDALE RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2016
(Unaudited)

NOTE 8. BUSINESS SEGMENTS

We are a diversified oil and gas company with operations in two segments:

Oil and Gas Exploration and Production – which includes exploration, development, and production of current and potential oil and gas properties.

Oil field services – which includes selling oil field related equipment and providing various oil field related services to the oil and gas industry.
 
 
 
 
Three Months Ended
June 30, 2016
   
Three Months Ended
June 30, 2015
   
Six Months Ended
June 30, 2016
   
Six Months Ended
June 30, 2015
 
Revenues
                       
  Oil & Gas
 
$
34,294
   
$
67,633
   
$
57,293
   
$
128,159
 
  Oil field services
   
18,000
     
-
     
198,000
     
-
 
                                 
Net Income (Loss)
                               
  Oil & Gas
   
(417,829
)
   
(917,950
)
   
(869,471
)
   
(1,131,230
)
  Oil field services
   
14,970
     
-
     
164,670
     
-
 
                                 
 
   
June 30, 2016
   
December 31, 2015
                 
Assets
                               
  Oil & Gas
   
4,129,498
     
4,196,016
                 
  Oil field services
   
113,531
     
-
                 
                                 
Accounts Receivable
                               
  Oil & Gas
   
117,295
     
48,633
                 
  Oil field services
 
$
-
   
$
-
    $       $    
                                 

All segment expenses were incurred by the Oil & Gas segment except the cost of equipment sold of $33,330 which was incurred in the six months ended June 30, 2016.

NOTE 9. SUBSEQUENT EVENTS

During July and August 2016, two directors and the CFO provided loans of $130,000 (Leo Womack $20,000, Joel Oppenheim $10,000 and Paul Deputy $100,000) in order to temporarily fund the Company’s working capital needs. The loans pay a 10% annual interest and mature in 90 days.  To compensate the directors and CFO, the Company granted one warrant to purchase one share of common stock to the shareholder for each dollar advanced, and agreed to pay interest of 10% on all balances outstanding. The exercise price of each warrant is $0.077 per share and they expire three (3) years from their grant date. A total of 130,000 warrants were granted.


ROCKDALE RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2016
(Unaudited)

On July 8, 2016, the Company purchased a workover/service rig for $80,000.  A portion of the purchase was funded through $60,000 of loans (Lee Lytton $10,000, Leo Womack $10,000, Joel Oppenheim $10,000, Quinten Beasley $10,000, Paul Deputy $10,000 and one shareholder for $10,000) that accrue a 10% annual interest and mature in 90 days.  In addition, each of the six (6) noteholders were granted warrants to purchase 10,000 shares of our common stock with an exercise price of $0.09 and an expiration term of 3 years.  The remaining $20,000 was funded through the Company’s operating account.

On August 13, Joel Oppenheim was granted 37,500 warrants in exchange for providing a bank access to various personal assets in order to collateralize the Company’s letters of credit.  The exercise price of each warrant is $0.06 per share and they expire three (3) years from their grant date.

On August 17, 2016 Paul M. Deputy was appointed Chief Financial Officer (“CFO”) of the Company and entered into an employment agreement with the Company effective July 1, 2016 to serve as Chief Financial Officer for an initial term of twelve (12) months (automatically renewable thereafter for additional one year terms).  The agreement provides that the Company will pay Mr. Deputy $140,000 per year.  The Company granted Mr. Deputy options to purchase 550,000 shares of the Company’s restricted common stock at an exercise price of $0.077 per share and have a term of three (3) years beginning July 1, 2016.
Mr. Deputy’s compensation for the first 90 days of the contract period will be deferred with the Board having the option to, (a) authorize payment at that time or (b) elect to defer payment until the closing of the financing in exchange for granting Mr. Deputy a warrant to purchase Rockdale  shares equal to the amount of salary deferred at a price equal to the closing price of the stock on the day of the Board meeting or (c) issue shares of common stock based on a strike price equal to the closing price of the company’s shares on the previous day.

On August 17, 2016 the Board of Directors granted two employees 200,000 shares of the Company’s restricted common stock from the 2015 Stock Incentive Plan.  The shares were issued at current market price of $0.077 per share on August 17, 2016 at a value of $15,400.
On August 17, 2016 the Board of Directors granted the CFO  500,000 shares of the Company’s restricted common stock for settlement of outstanding payables.  The shares were issued at current market price of $0.077 per share on August 17, 2016 at a value of $38,500.  The remaining payable after the granting of shares was $26,500.
 
On August 17, 2016 the Board of Directors granted Joel Oppenheim options to purchase 300,000 shares of the Company’s restricted common stock at an exercise price of $0.077 per share and have a term of three (3) years beginning August 17, 2016 at a value of $23,100.
 
 
FORWARD LOOKING STATEMENTS

This report contains statements which, to the extent that they do not recite historical fact, constitute forward-looking statements. These statements can be identified by the fact that they do not relate strictly to historical or current facts and may include the words “may,” “will,” “could,” “should,” “would,” “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan” or other words or expressions of similar meaning. We have based these forward-looking statements on our current expectations about future events. The forward-looking statements include statements that reflect management’s beliefs, plans, objectives, goals, expectations, anticipations and intentions with respect to our financial condition, results of operations, future performance and business, including statements relating to our business strategy and our current and future development plans.

The potential risks and uncertainties that could cause our actual financial condition, results of operations and future performance to differ materially from those expressed or implied in this report include:

●
 The sale prices of crude oil;
●
 The amount of production from oil wells in which we have an interest;
●
 Lease operating expenses;
●
 International conflict or acts of terrorism;
●
 General economic conditions; and
●
 Other factors disclosed in this report.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Many factors discussed in this report, some of which are beyond our control, will be important in determining our future performance. Consequently, actual results may differ materially from those that might be anticipated from the forward-looking statements. In light of these and other uncertainties, you should not regard the inclusion of a forward-looking statement in this report as a representation by us that our plans and objectives will be achieved, and you should not place undue reliance on such forward-looking statements. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

You should read the matters described in “Risk Factors” and the other cautionary statements made in this report as being applicable to all related forward-looking statements wherever they appear in this report.  We cannot assure you that the forward-looking statements in this report will prove to be accurate and therefore prospective investors are encouraged not to place undue reliance on forward-looking statements. Other than as required by law, we undertake no obligation to update or revise these forward-looking statements, even though our situation may change in the future.

Please see the “Glossary of Oil and Gas Terms” on page 11 of our most recent Form 10-K, for a list of abbreviations and definitions used throughout this report.

This information should be read in conjunction with the interim unaudited financial statements and the notes thereto included in this Quarterly Report on Form 10-Q, and the unaudited financial statements and notes thereto and Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended December 31, 2015.

Certain capitalized terms used below and otherwise defined below, have the meanings given to such terms in the footnotes to our consolidated financial statements included above under “Part I - Financial Information” - “Item 1. Financial Statements”.

Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations Background

We were incorporated in Colorado on January 16, 2002.

We planned to sell custom framed artwork, art accessories, and interior design consulting. However, we generated only limited revenue since inception and have been inactive since 2008.

In February 2012 we decided it would be in the best interests of our shareholders to no longer pursue our original business plan and, in April 2012 we became active in the exploration and development of oil and gas properties.

On May 4, 2012 we amended our articles of incorporation and changed our name to Rockdale Resources Corporation. (1)

Plan of Operation

Since 2015, we have established a clearly defined strategy to acquire, enhance and redevelop high-quality, resource in place assets. Focused on acquisitions in the southwest United States while actively pursuing our strategy to offer low-cost operational solutions in established Oil and Gas regions. We believe our mix of assets-oil-in-place conventional plays, low-risk resource plays and the redevelopment of our late-stage plays is a solid foundation for continued growth and future revenue growth.

Our strategy is to acquire low risk, conventionally producing oil fields. This strategy allows us to incorporate new technology to minimize risk and maximize the recoverability of existing reservoirs. This approach allows us to minimize the environmental impact caused by exploratory development.

Our activities will primarily be dependent upon available financing.

Oil and gas leases are considered real property.  Title to properties which we may acquire will be subject to landowner’s royalties, overriding royalties, carried working and other similar interests and contractual arrangements customary in the oil and gas industry, to liens for current taxes not yet due, liens for amounts owing to persons operating wells, and other encumbrances.  As is customary in the industry, in the case of undeveloped properties little investigation of record title will be made at the time of acquisition (other than a preliminary review of local records).  However, drilling title opinions may be obtained before commencement of drilling operations.
 

(1)
As a result of the 2015 Annual Meeting of our Stockholders held on April 14, 2016, the shareholders approved, among other things, a Plan of Conversion, pursuant to which our corporate jurisdiction was to be changed from the State of Colorado to the State of Texas by means of a process called a “Conversion” and our name was to be changed to “Petrolia Energy Corporation”. In connection therewith, on June 15, 2016 the Company filed a Certificate of Conversion with the Texas Secretary of State, affecting the Conversion and the name change, and including a Certificate of Formation as a converted Texas Corporation. Notwithstanding Texas’s filing of the Conversion and Certificate of Formation, a Statement of Conversion has not yet been filed with the State of Colorado, and as such, and because FINRA and Depository Trust Company (DTC) have advised us that they will not recognize the Conversion or name change, or update such related information in the marketplace, until we become current in our periodic filings with the Securities and Exchange Commission and they have a chance to review and approve such transactions, we are taking the position that the Conversion and name change are not legally effective. We plan to file the Statement of Conversion with the State of Colorado shortly after this filing and work to have FINRA and DTC reflect such transactions with the OTC Markets shortly thereafter.


Minerva-Rockdale Field
 
The Minerva-Rockdale Field, which is located approximately 30 miles Northeast of Austin, Texas, was first discovered in 1921 and is approximately 50 square miles in size. The main producing formation for this field is the Upper Cretaceous Navarro Group of sands and shale’s. The Navarro is typically subdivided into several producing zones from the uppermost “A” and “B” sands to the lower “C” and “D” sands. The “B” sand is the primary producing zone. These sands are commonly fine grained and poorly sorted and were deposited close to a shoreline during a cycle of marine regression.

In April 2013, the Company entered into a lease pertaining to a 423 acre tract in Milam County, Texas, which is adjacent to the Company’s original 200 acre lease.  The Company issued 500,000 shares of its common stock as consideration for a 100% working interest (75% net revenue interest) in such lease.

In August 2013, we became an oil and gas operator and took over the operation of 100% of our wells.  As such, we terminated our relationship with RTO Operating, LLC for the day-to-day operations and monitoring of our wells. During 2014, the Company continued to operate its own lease. During the fourth quarter of 2014, the Company hired Jovian Petroleum Corporation (Jovian) to survey the operations and well performance at the Noack field. Their report identified paraffin buildup problems in the well bores and gathering lines as the main production issue for the Company to overcome. In December 2014, the Company signed an operating agreement with Jovian to assume full operational responsibility for the Noack field under a fixed fee agreement of $10,000 per month for full operating field services. On March 1, 2015, the Company hired Zel C. Khan, our current CEO and director, who is the largest stockholder of Jovian, as well as several former employees of Jovian Petroleum. This allowed for the fixed fee agreement with Jovian to end.

During the period from our inception to December 31, 2011, we did not drill any oil or gas wells.  During the year-ended December 31, 2012 we drilled and completed six (6) oil wells and during 2013 the Company drilled and completed three (3) wells of which one (1) was converted to an injection well. During 2014 the Company drilled seven (7) new wells. Six (6) of the wells were completed, five (5) wells produced, one (1) did not produce and one (1) well was not completed. During 2015, the Company had fourteen (14) wells producing with one (1) injection well and one (1) well remaining offline.

Also, one of the existing non-producing wells was worked over and was converted to a producing well in 2014.

Slick Unit Dutcher Sands (“SUDS”) Field

The SUDS oilfield consists of 2,600 acres located in Creek County, Oklahoma and carries a 7.8% net revenue interest (NRI). The first oil producer was completed in 1918 by Standard Oil of Ohio (“Sohio”), which at that time was owned by John D. Rockefeller. By 1959, approximately 14,000,000 barrels of oil had been recovered at an average well depth of 3,100 feet and over 100 wells in production. Through a series of events, the infrastructure had deteriorated and the field suffered a lot of neglect. Since 2011, Jovian has invested an estimated $1.6 million into the restoration of the field; rebuilding the infrastructure and putting wells back in production. To date, 18 wells have been worked over and 9 are fully operational with considerable reserves remaining.

The Company acquired a 10% working interest in the SUDS field on September 23, 2015, in exchange for 10,586,805 shares of restricted common stock. Based on the then current market value of our common stock, $0.068 per share, the price paid was $719,903 or $4.77 dollars per barrel of oil (Bbl). Through this transaction, the Company increased its reserve base by approximately 151,000 Bbls of (1P) proven reserves. Concurrently with the purchase, Jovian agreed to assign to Rockdale all rights to be the operator of the SUDS unit under a standard operating agreement.

Twin Lakes San Andres Unit (“TLSAU”) Field

TLSAU is 45 miles from Roswell, Chavez County, New Mexico and consists of 4,864 acres with 130 wells. The last independent reserve report prepared by MKM Engineering on December 31, 2015, reflects approximately 3.4 million barrels of proven oil reserves remaining for the 100% working interest.

On November 4, 2015, the Company acquired a 15% net working interest in the TLSAU field (the “Net Working Interest”) and all operating equipment on the field. Through this transaction, the Company increased its reserve base by approximately 384,800 Bbls of (1P) proven reserves. The Company was assigned all rights to be the operator of the TLSAU field under a standard operating agreement. The total purchase price for the acquisition of the Net Working Interest and equipment rights was $196,875 or $0.52 dollars per barrel of oil (Bbl) and was paid to Blue Sky NM, Inc (“BSNM”). The Company paid $50,000 in cash and gave BSNM a promissory note in the amount of $146,875. The $50,000 was paid by the CEO for the benefit of the Company and recorded as a shareholder advance. On November 5, 2015, the $50,000 advance was converted to 800,000 shares at $0.06 per share which included 800,000 warrants. In addition, a $1.3 million face value BSNM note was purchased for $316,800 (6,000,000 shares or 0.0528 per share). With the inclusion of the note, the price per barrel would be $1.33 dollars per barrel of oil (Bbl).
 
As of June 30, 2016, the Company has sixteen wells drilled and completed, of which thirteen wells are currently online and producing at a rate of approximately 30 bbls of oil and 64bbls of water per day.

Askarii Resources, LLC

Askarii Resources, LLC (“Askarii), the Company’s wholly-owned subsidiary, has a significant history with major oil companies providing services both onshore and offshore as well with regulatory agencies in Texas, Oklahoma, and New Mexico. Through Askarii the Company will engage in the oil field service business as well as the leasing of field related heavy equipment.

Results of Operations/Liquidity and Capital Resources

Revenues & Costs – Three months ended June 30, 2016 & 2015

Revenues
 
Our oil and gas revenue reported for the quarter ended June 30, 2016 was $34,294, a decrease of $33,339 from the prior year’s quarter revenue of $67,633. Our decreased revenue for the quarter ended June 30, 2016 as compared with the prior year’s quarter is due to the decrease in oil prices and a number of Noack wells requiring paraffin wax treatment during the period. Our equipment sales for the quarter ended June 30, 2016 were $18,000, an increase of the same amount from the prior year’s quarter revenue of $0.0.  This was because 2016 was the first year for the Company to have equipment sales (see Note 7 to the financial statements included herein for additional details of the sale). This increase was due to Askarii’s sale of 2 pump jacks during this period.

Operating Expenses

Operating expenses decreased to $384,504 for the quarter ended June 30, 2016 from $878,719 for the quarter ended June 30, 2015. Our major expenses for the quarter ended June 30, 2016 were professional services of $117,432, stock based compensation (directors) of $34,342, and salaries and wages of $77,209, all included in general and administrative expenses. In comparison, major operating expenses for the quarter ended June 30, 2015 were impairment of oil & gas properties of $668,073, lease operating expense of $77,000, accounting expense of $30,000, legal and professional fees of $41,000 and management fees of $60,000, all included in general and administrative expenses.

Our lease operating expenses decreased from $77,183 for the quarter ended June 30, 2015 to $62,902 for the quarter ended June 30, 2016, due to closer oversight and more efficient operating procedures.

Other Income/Expenses
 
Other income/(expense) was ($70,648) for the quarter ended June 30, 2016 compared to other expense of ($106,864) for the quarter ended June 30, 2015. The relative decrease was primarily due to higher loss on conversion of debt in 2015 compared to 2016,  In addition, the full year expensing of Directors warrants in fourth quarter of 2015.  In 2016, the expensing of Director’s warrants was in the first quarter of 2016.

Net Loss

Net loss for the quarter ended June 30, 2016 was $402,859 compared to a net loss of $917,950 for the quarter ended June 30, 2015 due to the factors described above.

Revenues & Costs – Six months ended June 30, 2016 & 2015

Revenues
 
Our oil and gas revenue reported for the six months ended June 30, 2016 was $57,293, a decrease of $70,866 from the prior year’s six month’s ended June 30, 2015, revenue of $128,159. Our decreased revenue for the six months ended June, 30, 2016 as compared with the prior period is due to the decrease in oil prices and a number of Noack wells requiring paraffin wax treatment during the period. Our equipment sales for the six months ended June 30, 2016 were $198,000, an increase of the same amount from the prior six month’s revenue of $0.0.  This is because 2016 was the first year for the Company to have equipment sales (see Note 7 to the financial statements included herein for additional details of the sale). This increase was due to Askarii’s sale of 22 pump jacks during the period.

Operating Expenses

Operating expenses increased to $823,241 for the six months ended June 30, 2016 from $1,110,736 for the six months ended June 30, 2015. Our major expenses for the six months ended June 30, 2016 were professional services of $196,097, stock based compensation (directors) of $134,467, and salaries and wages of $158,523, all included in general and administrative expenses. In comparison, major operating expenses for the six months ended June 30, 2015 were impairment of oil & gas properties $668,073, lease operating expense of $134,034, wages and stock compensation of $33,778, legal and professional fees of $56,275 and management fees of $60,000, all included in general and administrative expenses.
Our lease operating expenses decreased from $134,054 for the six months ended June 30, 2015 to $107,803 for the six months ended June 30, 2016, due to closer oversight and more efficient operating procedures.

Other Income/Expenses

Other income/(expense) was ($136,853) for the six months ended June 30, 2016 compared to other expense of ($157,137) for the six months ended June 30, 2015. The decrease was primarily due to a decrease in loss on conversion of debt from prior year and increased consulting/administrative income in the current year.

Net Loss

Net loss for the six months ended June 30, 2016 was $742,283 compared to a net loss of $1,131,230 for the six months ended June 30, 2015 due to the factors described above.

Liquidity and Capital Resources

Our sources and (uses) of funds for the Six months ended June 30, 2016 were:

Cash provided (used) in operations
 
$
(81,971
)
Cash received from sale of oil and gas properties
   
30,114
 
Capital expenditures on fixed assets
   
13,116
 
         
Proceeds from shareholder and affiliate advances
   
118,000
 
Payment of affiliate advances
   
(81,000
)
Proceeds from issuance of common stock
   
48,000
 
Payments on notes payable
   
(1,610
)
 
Overview of Cash Flow Activities:

Net cash provided / (used by) operating activities was $(81,972) and ($192,978) for the six months ended June 30, 2016 and 2015, respectively. The change was due primarily to a increased working capital requirements, due to newly acquired fields with higher cumulative lease operating expenses. This was partially offset by a decrease in cash expended for general and administrative expenses as well as a delay in the accounts payable cycle (increased days outstanding).

Net cash provided by investing activities was $16,998 and $4,525 for the six months ended June 30, 2016 and 2015 respectively. The increase was due to the sale of oil and gas conveyances related to the SUDS ORRI.


Net cash provided by financing activities was $83,390 and $192,133 for the six months ended June 30, 2016 and 2015, respectively. The decrease from 2015 to 2016 was due to fewer proceeds provided though shareholder advances and greater payments back to on previously outstanding shareholders advances.

As of June 30, 2016, we had total current assets of $278,846 and total assets in the amount of $4,243,029. Our total current liabilities as of June 30, 2016 were $1,178,082. We had negative working capital of $899,236 as of June 30, 2016. Our material asset balances are made up of oil & gas properties and related equipment. Our most significant liabilities include a related party notes, asset retirement obligation (ARO) and accruals for professional services. One related party note ($550,000) is with Rick Wilber (see Note 4 of the financial statements included herein for further details). Additionally, there is $63,000 of shareholder advances outstanding that are temporarily funding working capital shortfalls.
During the year ended June 30, 2014, the Company raised $780,000 through the sale of 2,600,111 shares to investors as part of a private placement, detailed on Form 8-K filed on February 14, 2014. The shares were all purchased at a price of $0.30 per share and included warrants. The purchasers included David Baker and Leo Womack both of whom were Directors at the time.
During the year ended December 31, 2015, we raised $140,000 through a private placement offering with warrants authorized by the Board on March 23, 2015. We also raised $162,000 through a private placement offering with warrants, as reported on Form 8-K filed November 9, 2015.

From January 1, 2016 to the date of this filing we raised $48,000 through the sale of 8 units, each with a price of $6,000 per unit, each consisting of 100,000 shares of stock and warrants to purchase 100,000 shares of common stock.  This represented the final sale under this offering.

The Company continues to operate at a negative cash flow of approximately $50,000 per month and our Auditors have raised a going concern issue in their latest audit report. Management is pursuing several initiatives to secure funding to increase production at both the SUDS and Twin Lakes fields which together with an increase in the price of crude oil may allow the Company to become cash flow positive, funding permitting, which may not be available on favorable terms, if at all. The total amount required by the Company to accomplish this objective is approximately $250,000, however, in the event we are unable to raise additional funding, these initiatives may not actually occur.

The Company has suffered recurring losses from operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. We plan to generate profits by drilling productive oil or gas wells. However, we will need to raise additional funds to drill new wells through the sale of our securities, through loans from third parties or from third parties willing to pay our share of drilling and completing the wells. We do not have any commitments or arrangements from any person to provide us with any additional capital. If additional financing is not available when needed, we may need to cease operations. There can be no assurance that we will be successful in raising the capital needed to drill oil or gas wells nor that any such additional financing will be available to us on acceptable terms or at all. Any wells which we may drill may not be productive of oil or gas. Management believes that actions presently being taken to obtain additional funding provide the opportunity for the Company to continue as a going concern.  The accompanying financial statements have been prepared assuming the Company will continue as a going concern; no adjustments to the financial statements have been made to account for this uncertainty.

Critical Accounting Policies and New Accounting Pronouncements

See Note 2 to the financial statements included as part of our Annual Report on Form 10-K, for the year ended December 31, 2015, filed with the Securities and Exchange Commission on June 17, 2016 for a description of our critical accounting policies and the potential impact of the adoption of any new accounting pronouncements.

Item 3.   Quantitative and Qualitative Disclosures about Market Risk

Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).

Item 4.   Controls and Procedures.

(a)  We maintain a system of controls and procedures designed to ensure that information required to be disclosed in reports filed or submitted under the Securities Exchange Act of 1934, as amended (“1934 Act”), is recorded, processed, summarized and reported within time periods specified in the SEC’s rules and forms and to ensure that information required to be disclosed by us in the reports that we file or submit under the 1934 Act is accumulated and communicated to our management, including our Principal Executive and Financial Officer, as appropriate to allow timely decisions regarding required disclosure.  As of June 30, 2016, our Principal Executive and Financial Officer evaluated the effectiveness of the design and operation of our disclosure controls and procedures.  Based on that evaluation, our Principal Executive and Financial Officer concluded that our disclosure controls and procedures were effective.

(b)   Changes in Internal Controls .  There were no changes in our internal controls over financial reporting during the quarter ended June 30, 2016 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
 
 

PART II: OTHER INFORMATION

Item 1.  Legal Proceedings. 

We are periodically named in legal actions arising from normal business activities. We evaluate the merits of these actions and, if we determine that an unfavorable outcome is probable and can be reasonably estimated, we will establish the necessary reserves. We are not currently involved in legal proceedings that could reasonably be expected to have a material adverse effect on our business, prospects, financial condition or results of operations. We may become involved in material legal proceedings in the future.

Item 1A.  Risk Factors.

There have been no material changes from the risk factors previously disclosed in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, filed with the Commission on June 17, 2016, under the heading “Risk Factors”, and investors should review the risks provided in the Form 10-K, prior to making an investment in the Company. The business, financial condition and operating results of the Company can be affected by a number of factors, whether currently known or unknown, including but not limited to those described in the Form 10-K for the year ended December 31, 2015, under “Risk Factors”, any one or more of which could, directly or indirectly, cause the Company’s actual financial condition and operating results to vary materially from past, or from anticipated future, financial condition and operating results. Any of these factors, in whole or in part, could materially and adversely affect the Company’s business, financial condition, operating results and stock price.

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

Use of Proceeds from Sale of Registered Securities 

On February 10, 2016, a shareholder provided an advance of $20,000 in order to temporarily fund the Company’s working capital needs. On April 1, 2016, in order to compensate the shareholder, the Company granted 285,714 shares in order to pay off the debt in full.

On May 2, 2016, the Company paid off its outstanding Promissory Note to Blue Sky NM (“BSNM”) for $146,875. This Note was created when the 15% working interest in the Twin Lakes field was purchased earlier in the year. The payoff was made by issuing 1,468,750 shares of Company stock.

On November 4, 2015 the Company executed a Promissory Note for $146,875 related to the TLSAU acquisition. The note was due on December 31, 2015 and accrues at a rate of 10% per annum and the repayment of the note is secured by 1,000,000 shares of restricted stock of the Company. The Company exercised its one time right for a 6 month extension of the maturity date of the note by issuing BSNM 500,000 additional shares of restricted Company stock. As of June 30, 2016 the balance was included under Note payable to affiliates. On May 2, 2016, this note was converted into 500,000 shares of common stock at a price of $0.075 cents per share at a value of $37,500.
 
On May 31, 2016, the Company issued 8 units or 800,000 shares to the current CFO as part of the September 1, 2015 private offering.  The shares were issued at a price of $0.06 per share and included warrants to purchase an additional 800,000 shares of common stock at a price of $0.10 cents per share at any time prior to August 5, 2018.  This represented the final sale under this offering.

Under the 2015 employment agreement with Zel C Khan serving as CEO, Mr. Khan agrees to defer receiving his salary until such time as the Company is cash flow positive. Mr. Khan’s total accrued salary at June 30, 2016 was $80,000. The Company agreed to issue one warrant to purchase one share of the Company’s restricted common stock at an exercise price of $0.20 per share for each dollar of Mr. Khan’s deferred gross salary. At June 30, 2016, 40,000 additional warrants were granted related to the gross salary deferral for the second quarter.
 
During the six months ended June 30, 2016, the company expensed $17,000 of stock based compensation related to restricted stock awards. The remaining value to be expensed on these awards is $42,500 at June 30, 2016.
 
During July 2016, certain shareholders provided advances in order to temporarily fund the Company’s working capital needs. A total of $100,000 was funded. To compensate the shareholders, the Company granted one (1) warrant for each dollar advanced, as well as paying interest of 10% on all balances outstanding. The exercise price of each warrant is $0.09 per share and they expire three (3) years from their grant date. A total of 100,000 warrants were granted.

During July 2016, a shareholder provided an advance of $50,000 in order to temporarily fund the Company’s working capital needs. To compensate the shareholder, the Company granted one warrant to purchase one share of common stock to the shareholder for each dollar advanced, and agreed to pay interest of 10% on all balances outstanding. The exercise price of each warrant is $0.09 per share and they expire three (3) years from their grant date. A total of 50,000 warrants were granted and in the event they are exercised in full, an aggregate of 50,000 shares of common stock would be due to the shareholder.

On July 8, 2016, the Company purchased a workover/service rig for $80,000.  A portion of the purchase was funded through $60,000 of short term shareholder loans (six shareholders) that accrue 10% annual interest and mature in 90 days.  In addition, each of the six (6) noteholders were granted warrants to purchase 1,000 shares of our common stock with an exercise price of $0.09 and an expiration term of 3 years.  The remaining $20,000 was funded through the Company’s operating account.

On August 17, 2016 the Board of Directors granted two employees 200,000 shares of the Company’s restricted common stock from the 2015 Stock Incentive Plan.  The shares were issued at current market price of $0.077 per share on August 17, 2016 at a value of $15,400.

On August 17, 2016 the Board of Directors granted the CFO 500,000 shares of the Company’s restricted common stock for the settlement of outstanding payables.  The shares were issued at current market price of $0.077 per share on August 17, 2016 at a value of $38,500.  The remaining payable after granting the shares was $26,500.

On August 17, 2016, Paul M. Deputy was appointed as Chief Financial Officer of the Company and entered into an employment agreement with the Company effective July 1, 2016, to serve as Chief Financial Officer, for an initial term of twelve (12) months (automatically renewable thereafter for additional one year terms).  The agreement provides that the Company will pay Mr. Deputy $140,000 per year.  The Company granted Mr. Deputy options to purchase 550,000 shares of the Company’s restricted common stock which will be exercisable at an exercise price of $0.077 per share and have a term of three (3) years, beginning July 1, 2016. In the event the options are converted in full, Mr. Deputy would be due 250,000 shares of common stock.
On August 17, 2016 the Board of Directors granted Joel Oppenheim options to purchase 300,000 shares of the Company’s restricted common stock at an exercise price of $0.077 per share and have a term of three (3) years beginning August 17, 2016 at a value of $23,100.

We claim an exemption from registration pursuant to Section 4(a)(2) and/or Rule 506 of Regulation D of the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder in connection with the sales, grants and issuances described above. With respect to the transactions described above, no general solicitation was made either by us or by any person acting on our behalf. The transactions were privately negotiated, and did not involve any kind of public solicitation. No underwriters or agents were involved in the foregoing issuances and we paid no underwriting discounts or commissions. The securities sold are subject to transfer restrictions, and the certificates evidencing the securities contain an appropriate legend stating that such securities have not been registered under the Securities Act and may not be offered or sold absent registration or pursuant to an exemption therefrom. The recipient was an “accredited investor”. 

Use of Proceeds From Sale of Registered Securities
 
None.

Issuer Purchases of Equity Securities 

None. 
 
Item 3.  Defaults Upon Senior Securities 

None.

Item 4.  Mine Safety Disclosures. 
 
Not Applicable.  

Item 5.  Other Information.

On August 17, 2016, Paul M. Deputy was appointed as Chief Financial Officer of the Company and entered into an employment agreement with the Company effective July 1, 2016, to serve as Chief Financial Officer, for an initial term of twelve (12) months (automatically renewable thereafter for additional one year terms).  The agreement provides that the Company will pay Mr. Deputy $140,000 per year.  The Company will also grant Mr. Deputy options to purchase 550,000 shares of the Company’s restricted common stock which will be exercisable at an exercise price of $0.077 per share and have a term of three (3) years, beginning July 1, 2016.
 
Paul Deputy (age 56) is currently a CPA in good standing in Texas and has been for over 24 years.  Mr. Deputy was most recently the CFO at Haverhill Chemical, LLC where he was responsible for corporate accounting and IT.  Before that, Mr. Deputy was the Director of Financial Reporting at Mariner Energy, Inc. (a publically traded E&P company) which included the oversight and preparations of financial statements and all related public filings (10K & 10Q).  Additionally, he served as their Director of Compliance and Internal Development and was responsible for ensuring controls procedures met or exceeded SOX standards. He previously worked as a financial expert at Highland Oil & Gas (a private E&P company) assisting them in their merger/acquisition projects.  His assistance focused on the building and maintenance of their data room, which included the review of well logs, reserves and other production related historical reports. At Texmark Chemicals, a company that processes DCPD (a petroleum product used to manufacture resins) he prepared IC-DISC tax returns.  Mr. Deputy was also the Manager of Internal Audit at Highmount Exploration and Production (a publically traded E&P company).  Mr. Deputy currently serves on the Board of Directors as the financial expert of M4 Network, an independent Christian church.  Mr. Deputy earned a Bachelor of Business Administration in Management from the University of Texas at Austin in 1987 and a Masters in Professional Accounting from the University of Texas at Austin in 1992.  Mr. Deputy’s initial accounting training was with Deloitte & Touche in their audit department.  Mr. Deputy is also a member of the AICPA.

Item 6.  Exhibits

  See the Exhibit Index following the signature page to this Quarterly Report on Form 10-Q for a list of exhibits filed or furnished with this report, which Exhibit Index is incorporated herein by reference. 
 

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.
 
 
ROCKDALE RESOURCES CORPORATION
 
 
 
 
 
August 23, 2016
By:
/s/ Zel C. Khan
 
 
 
Zel C. Khan
 
 
 
Chief Executive Officer
 
 
 
(Principal Executive Officer)
 
 
  EXHIBITS INDEX
 
3.1
Texas Certificate of Conversion   (filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2016, filed with the Commission on July 28, 2016 (File Number 000-52690) and incorporated by reference herein.
   
10.1*
   
10.2*
   
10.3*
   
31.1 *
   
31.2 *
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (CFO).
 
 
32.1 **
Certification pursuant to Section 906 of the Sarbanes-Oxley Act (CEO).
   
32.2 **
Certification pursuant to Section 906 of the Sarbanes-Oxley Act (CFO).
 
 
101.INS
XBRL Instance Document
 
 
101.SCH
XBRL Taxonomy Extension Schema Document
 
 
101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document
 
 
101.DEF
XBRL Taxonomy Extension Definition Linkbase Document
 
 
101.LAB
XBRL Taxonomy Extension Label Linkbase Document
 
 
101.PRE
XBRL Taxonomy Presentation Linkbase Document
 
 
*.
Filed herewith
 
 
 
 
**.
Furnished herewith
 
 
 
 
23
EXHIBIT 10.1
 
EXECUTIVE EMPLOYMENT AGREEMENT


This EXECUTIVE EMPLOYMENT AGREEMENT (this “ Agreement ”) is made as of July  1, 2016  by  and  between  Rockdale  Resources  Corporation,  a Colorado  corporation (the “ Company ”), and Paul Deputy (the “ Executive ”).  The  Company and  the Executive are sometimes hereinafter referred to individually as a “ Party ”   and together as “ Parties ”.
 
WHEREAS, the Executive has substantial business knowledge and expertise in the conduct of Accounting for a public entity and the Company desires to retain the knowledge, expertise and experience of the Executive to assist in the financial operations of the Company;
 
WHEREAS, the foregoing recitals are incorporated into the covenants of this Agreement as if set forth herein at length.

NOW THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto, intending to be legally bound, agree as follows:

1.  Employment;  Term .  The Company will employ the Executive,  and the Executive  hereby accepts employment with the Company, upon the terms and conditions set forth in this Agreement for the period beginning on the Effective Date and, unless  sooner  terminated  as provided in Section 5 hereof, ending on the twelfth twenty four (12) month anniversary of the Effective Date (the “ Initial Term ”). At the expiration of the Initial Term, this Agreement will automatically renew for successive additional terms  of  one  (I)  year  (each  a  “R ene wal  Term”  and, together  with the  Initial  Term, the  “ Employment Period ”).
 
2. Position and Duties.
 
(a) During the Employment Period, the Executive will serve as the Chief Financial Officer of the Company and will have the normal duties, responsibilities and authority of this office, subject to the power of the Board to expand or limit such duties, responsibilities and authority.
 
(b) During the Employment Period, the Executive will report directly to  the Board and will devote his best efforts  and his  full business time  and  attention  (save and  except  for permitted vacation periods and reasonable periods of  illness  or  other  incapacity.  The  Executive will act in the best interest of  the  Company  and  will  perform  his  duties,  responsibilities and functions on behalf of the Company hereunder to the best of his abilities in a diligent, trustworthy,  businesslike  and  efficient manner.

3. Compensation .
 
(a) During the Employment Period, the Executive’s base salary will be One Hundred Forty Thousand and No/100 Dollars ($140,000) per annum (as adjusted from time to time, the “ Base Salary ”). The Executive’s Base Salary will be paid  by the  Company not less  than monthly in accordance with the Company’s regular payroll practices, as the same may be reasonably adjusted by the Company from time to time.
(b) All amounts payable to the Executive hereunder will be subject to all required withholding by the Company.
 
(c) A one-time grant of warrants to purchase 550,000 shares of the Company’s common stock (the “Shares”), effective July 1, 2016, which Shares will bear the appropriate restrictive legend as recommended by the Company’s securities counsel. The warrants will be exercisable for a three year period   beginning  July  1, 2016 at a strike price of $.077 cents.
 
(d) Deferred Compensation: Compensation for the first 90 days of the contract period will be deferred with the Board having the option to, (a) authorize payment at that time or (b) elect to defer payment until the closing of the Bridge Loan Financing in exchange for issuing a warrant to purchase Rockdale shares equal to the amount of salary deferred at a price equal to the closing price of the stock on the day of the Board meeting or (c) issue shares of common stock based on a strike price equal to the closing price of the company’s shares on the previous day.
 
4. Benefits . In addition to the Base Salary and other compensation provided for in Section 3 above, the Executive will be entitled to the following benefits during the Employment Period:
 
(a) The Executive will be entitled to three (3) weeks of vacation for the twelve (12) month period within the Employment Period, during which time his compensation shall be paid in full, and such holidays and other nonworking days as are consistent with the policies of the Company for employees generally. Such vacation shall be taken in the reasonable judgment of the Executive.
 
(b) The Executive will be entitled to participate in the Company’s health and welfare benefit programs for which other employees of the Company are generally eligible, subject to any eligibility requirements of such plans and programs.
 
(c) The Company will reimburse the Executive for all reasonable expenses incurred by him in the course of performing his duties and responsibilities under this Agreement which are consistent with the Company’s policies in effect from time to time with respect to travel, entertaimnent and other business expenses, subject to the Company’s requirements with respect to reporting and documentation of such expenses. Expense reports will be reviewed by the CEO.

5. Termination .
 
(a) Notwithstanding Section 1 of this Agreement, the Executive’s  employment with the Company and the Employment Period will end on the earlier of (i) the Executive’s death or mental or physical disability or incapacity (as determined by a physician selected  by  the  Company  in  its  good  faith  judgment),   (ii)  the  Executive’s  resignation  or  (iii) termination by the Company at any time with or without Cause (as defined below). Except as otherwise provided herein, any termination of the Employment Period by the Company or by the Executive will be effective as specified in a written notice from the terminating Party to the other Party.
 
(b) If, during the Employment Period, the Executive’s employment with the Company is terminated pursuant to Section 5(a) above, or is terminated by the Company with Cause, then the Executive will only be entitled to receive his Base Salary through the date of termination and will not be entitled to any other salary, bonus, severance, compensation or benefits from the Company or any of its Affiliates thereafter, other than those expressly required under applicable law (such as the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“ COBRA ”)). In such case Executive agrees to return proportional warrants of the 250,000 share warrant grant relative to the unexpired portion of the initial employment period at time of termination.
(c) If (i) the Executive’s employment with the Company is terminated by the Company without Cause during the Initial Term, (ii) the Executive executes a general  release  in favor of the Company and its Affiliates in form and substance  satisfactory to the  Company  and  such release becomes effective and is not revoked,  and  (iii) the  Executive  complies  with  the  terms of this Agreement, then the Executive will be entitled to receive, for the remainder of the  Initial Term, (A) an amount equal to two (2) months of of his Base  Salary.  The  severance  payments payable to the Executive pursuant to this clause (c) of this  Section will  be paid  at the  time and in the manner set forth in Section 3 hereof. The severance payments payable to the Executive pursuant to this clause (c) of this Section will be paid at the time and in the manner set forth in Section 3 hereof. Notwithstanding anything to the contrary, all  severance  payments pursuant to this Section 5(c) will end if and when Executive commences new employment or substantial self-employment
 
(d) Except as otherwise expressly provided herein, all of the  Executive’s rights to salary, bonuses, fringe benefits, severance and other compensation hereunder or under any policy or program of the Company which accrue or become payable on or after the termination of the Employment Period will cease upon such termination other than those expressly required under applicable law (such as COBRA).
 
(e) For purposes  of this  Agreement,  “ Cause ” will  mean  (i) the  commission  of a felony or other crime involving moral turpitude or the commission of any other act or omission involving misappropriation,  dishonesty,  unethical  business  conduct,  disloyalty,  fraud  or  breach of fiduciary duty, (ii) reporting to work under  the  influence  of  alcohol,  (iii) the  use  of  illegal drugs (whether or not at the workplace) or other  conduct,  even  if not  in  conjunction  with  his duties hereunder, which could reasonably  be expected to, or which  does, cause the Company  or  any of its Affiliates public disgrace or disrepute or economic harm,  (iv)  repeated  failure  to  perform duties as reasonably directed by the Board,  (v) gross negligence  or willful  misconduct  with respect to the Company or its Affiliates or in the performance of the Executive’s duties hereunder, (vi) obtaining any personal profit not thoroughly disclosed  to  and  approved  by  the Board in connection with any transaction entered  into by, or on behalf  of, the Company  or any of its Affiliates, (vii) violating any of the terms of the Company’s or its Affiliates’ rules or policies applicable to Executive which, if curable, is not cured  to  the  Board’s  reasonable  satisfaction  within fifteen ( 15) days after written notice thereof to the Executive,  or any other material  breach  of this Agreement or any other agreement between the Executive and the Company or any of its Affiliates which, if curable, is not cured to the Board’s reasonable satisfaction within fifteen (15)  days after written  notice thereof to the Executive.
 
6. Confidential Information . The Executive recognizes and acknowledges that the continued  success of the Company and its Affiliates depends upon the use and protection  of  a large body of confidential and proprietary information and that the Executive will have access to certain Confidential Information of the Company and its Affiliates and Persons with which the Company and its Affiliates do business, and  that  such  Confidential  Information  constitutes valuable, special and unique property of the Company, its Affiliates and such other Persons. “ Confidential Information ” will be interpreted to include all information  of  any  sort  (whether merely remembered or embodied in a tangible or intangible form) that is (i) related  to  the  Company’s or its Affiliates’  (including  their  predecessors)  current  or  potential  business  and  (ii) not generally or publicly known. Confidential Information includes, without limitation, the information, observations and data obtained by  the Executive  while  employed  by  the  Company and its Affiliates (or any  of  their  predecessors)  concerning  the  business  or  affairs  of  the Company or any  of  its Affiliates,  including  information  concerning  acquisition  opportunities  in or reasonably related to the Company’s or its Affiliates’ business or industry, the identities of the current, former or prospective employees, suppliers and customers of  the  Company  or  its  Affiliates, development,  transition  and  transformation  plans,  methodologies  and  methods  of doing business, strategic, marketing and expansion plans, financial  and business  plans,  financial data, pricing information, employee  lists  and  telephone  numbers,  locations  of  sales representatives, new and existing customer or supplier programs and services, customer terms, customer service and integration processes, requirements  and costs of providing  service,  support and equipment. The Executive agrees that he will use the Confidential Information  only  as  necessary and only in connection with the performance of his duties hereunder.  The Executive  agrees that he will not disclose to any unauthorized Person or use for  his  own  or  any  other purposes (except as described in the  immediately  preceding  sentence)  any  Confidential Information without the prior written consent of the Board, unless and to the extent that (a) the Confidential Information becomes generally known to  and  available  for use by the public  other than as a result of the Executive’s acts or omissions or (b) the Executive is ordered by a court of competent jurisdiction to disclose Confidential  Information,  provided  that  in  such  circumstance the Executive must (i) provide prompt written notice of such order to the Company and  (ii)  cooperate with the Company  when revealing  such Confidential  Information  to  such court.
7. Return of Company Property . The Executive acknowledges and agrees that all notes, records, reports, sketches, plans, unpublished memoranda or other documents, whether in paper, electronic or other form (and all copies thereof), held by the Executive concerning any information relating to the business of the Company or any of its Affiliates, whether confidential or not, are the property of the Company. The Executive will deliver to the Company at the termination or expiration of the Employment Period, or at any other time the Company may request, all such equipment, files, property, memoranda, notes, plans, records, reports, computer tapes, printouts and software and other documents and data (and all electronic, paper or other copies thereof) belonging to the Company or any of its Affiliates which includes, but is not limited to, any materials that contain, embody or relate to the Confidential Information, Work Product (as defined in Section 8 below) or the business of the Company or any of its Affiliates, which he may then possess or have under his control. The Executive will take  any and  all actions reasonably deemed necessary or appropriate by the Company from time to time in its sole discretion to ensure the continued confidentiality and protection of the Confidential Information. The Executive will notify the Company promptly and in writing of any circumstances of which the Executive has knowledge relating to any possession or use of any Confidential Information by any Person other than those authorized by the terms of this Agreement.
 
8. Executive’s Representations . The Executive hereby  represents  and warrants  to the Company that (i) he has entered into this Agreement of his own free will for no consideration other than as referred to herein, (ii) the execution, delivery and performance of this Agreement by the Executive does not and will not conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which the Executive is a party or by which the Executive is bound, (iii) the Executive is not a party to or bound by any employment, non-competition, confidentiality or other similar agreement with any other Person. (except as contemplated by the Purchase Agreement) and (iv) upon the execution and delivery of this Agreement by the Company, this Agreement will be the valid and binding obligation of the Executive, enforceable in accordance with its terms. The Executive has had the opportunity to consult with independent legal counsel regarding the Executive’s rights and obligations under this Agreement and that the Executive fully understands the terms and conditions contained herein. Executive agrees to immediately notify the Company of any fact or circumstance that occurs or is discovered during the Employment Period which alone or with the passage of time and/or the combination with other reasonably anticipated factors render or could reasonably render any of these representations and warranties to be untrue or that might otherwise adversely affect the goodwill of the Company.

9. Definitions .

“ Affiliate ” means, with regard to any Person, (a) any other Person, directly or indirectly, controlled by, under common control of or with, or controlling such Person, (b) any other Person, directly or indirectly, in which such Person holds, of record or beneficially, five percent (5%) or more of the equity or voting securities, (c) any other Person that holds, of record or beneficially, five percent (5%) or more of the equity or voting securities of such Person, (d) any other Person that, through contract, relationship or otherwise, exerts a substantial influence on the management of such Person’s affairs, (e) any other Person that, through contract, relationship or otherwise, is influenced substantially in the management of their affairs by such Person, or (f) any director, officer, partner or individual holding a similar position in respect of such Person.
 
“ Applicable Area ” means the United States.

“ Board ” means the Board of Directors of the Company.

“ Business ” means the actual and intended businesses of the Company and its Affiliates during the Employment Period and as of the date the Executive’s employment with the Company terminates for any reason. As of the date hereof, the Business of the Company is oil and gas exploration, development and production.

“ Customer ” means any Person who:

(a)
purchased products or services from the Company or any Affiliate during the three (3) years prior to the date of termination of the Executive’s employment; or

(b)
was called upon or solicited by the Company or any Affiliate during such three (3) year period if the Executive had direct or indirect contact  with  such  Person  as an  employee  of the  Company  or any Affiliate or learned or became aware of such Person during his employment with the Company or any Affiliate.
 
“ Person ” means any natural person, corporation, general partnership, limited partnership, limited liability company or partnership, proprietorship, other business organization, trust, union,  association  or governmental  or regulatory  entities, department,  agency  or authority.

“ Subsidiary ” means any corporation, limited liability company, partnership or other entity of which a Person, directly or indirectly, holds a majority of the voting stock or voting power, or a majority of the capital, profits or other economic interests therein, or has an option to acquire any such interest.
 
10. Survival.   Sections  5  through  26  will  survive  and  continue  in  full force m accordance with their terms notwithstanding the termination of the Employment Period.
 
11. Notices . All notices, requests, demands and other communications required or permitted hereunder shall be in writing and sent to the address set  forth  below,  and  shall  be deemed to have been duly given (A) one business day after being delivered by hand, (B) five business days after being  mailed  first class, certified return receipt requested  with postage  paid  or (C) one business day after being couriered by overnight receipted courier service:
 
Notices  to the Executive :
 
Paul Deputy
 
                                                                     
                                                                     
                                                                     
 
 
Notices to the Company :
 
Rockdale Resources Corporation
Attn: Board of Directors
 
                                                                     
                                                                     
                                                                     
 
 
Attorney At Law 2464 Bering Drive
Houston,·Texas  77057
281-989-0099

Notwithstanding anything in this Agreement to the contrary, if actual written notice is received, regardless of the means of transmittal, such notice shall be deemed to be acceptable and effective as proper notice under this Section 13.
12. Severability . If any provision in this Agreement shall be found by a court, referee or authority of competent jurisdiction to be invalid, illegal or unenforceable, such provision shall be construed and enforced as if it had been narrowly drawn so as not to be invalid, illegal or unenforceable, and the validity, legality and enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired, and if any provision in this Agreement is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances.
 
13. Entire Agreement and Amendment . This Agreement, the Purchase Agreement  and the documents referenced herein and therein contain the entire agreement of the parties with regarding to the subject matter set forth herein, and supersede any and all prior negotiations and agreements between the parties, written or oral, with respect to the subject matter set forth  herein. This Agreement may be amended, modified and/or supplemented by the parties at any time, but only by an instrument in writing signed by the party or parties to be bound.
 
14. Counterparts . This Agreement may be executed in separate counterparts (including by facsimile and electronic signature pages), each of which is deemed to be an  original and all of which taken together constitute one and the same agreement. Copies of signatures shall be deemed to be fully enforceable and legally binding original signatures.
 
15. No Construction Against Drafter . Each of the parties to this Agreement has been represented by counsel who has each been involved in the drafting of this Agreement or has had an opportunity to have input into the drafting of this Agreement. Accordingly, this Agreement shall not be construed either against or in favor of any party based upon that party’s role in drafting this Agreement, and any rule of construction to the effect that any ambignities are to be resolved against the drafting party shall not be employed in the interpretation or construction of this Agreement.
 
16. Binding Effect; Assignment . This Agreement shall be binding on, and shall inure to the benefit of, the parties hereto and their respective successors and assigns, and no other Person shall acquire or have any rights under or by virtue of this Agreement. No party  may assign any right or obligation under this Agreement without the prior written consent of the other party; provided, however, that the Company may assign, without the prior written consent of Executive, its rights and obligations under this Agreement to its Affiliates and/or in connection with the sale of substantially all of the assets or any of the equity of the Company.
 
17. Governing Law . This Agreement shall be interpreted, construed and enforced in accordance with the laws of the State of Texas, without giving effect to any conflicts of laws principles that would require the application of the laws of any other jurisdiction.
 
18. Business Days . If any time period for giving notice or taking action hereunder expires on a day which is a Saturday, Sunday or legal holiday in the state in which the Company’s chief-executive office is located, the time period shall automatically be extended to the business day immediately following such Saturday, Sunday or legal holiday.
 
19. Withholding . The Company and its Affiliates will be entitled to deduct or  withhold from any amounts owing to the Executive any federal, state, local or foreign withholding taxes, excise tax, or employment taxes (“ Taxes ”) imposed with respect to the Executive’s  compensation  or other payments  from the Company  or any  of its Affiliates  or the
Executive’s ownership interest in the Company or any of its Affiliates (including, without limitation, wages, bonuses, dividends, the receipt or exercise of equity options and/or the receipt or vesting of restricted equity). In the event the Company or any of its Affiliates does not make such deductions or withholdings, the Executive will indemnify and hold harmless the Company and its Affiliates for any amounts paid with respect to any such Taxes.
 
20. Corporate Opportunities . During the Employment Period, the Executive will submit to the Board all business, commercial and investment opportunities or offers presented to the Executive or of which the Executive becomes aware which relate to the Business of the Company or its Affiliates as such Business of the Company or its Affiliates exists at any time during the Employment Period (“ Corporate Opportunities ”). During the Employment Period, unless approved by the Board, the Executive will not accept or pursue, directly or indirectly, any Corporate Opportunities on the Executive’s own behalf.
 
21. Assistance in Proceedings . During the Employment Period and for six (6) months thereafter, the Executive will cooperate with the Company and its Affiliates in any internal investigation or administrative, regulatory or judicial proceeding as reasonably requested by the Company or any Affiliate (including, without limitation, the Executive being available to the Company and its Affiliates upon reasonable notice for interviews and factual investigations, appearing at the Company’s or any Affiliate’s request to give testimony  without  requiring service of a subpoena or other legal process, volunteering to the Company and its Affiliates all pertinent information and turning over to the Company and its Affiliates all relevant documents which are or may come into the Executive’s possession, all at times and on schedules that are reasonably consistent with the Executive’s other permitted activities and commitments). In the event the Company or any Affiliate requires the Executive’s cooperation in accordance with this Section 23, the Company will pay the Executive a reasonable per diem as determined by the Board and reimburse the Executive for reasonable expenses incurred in connection therewith (including lodging and meals, upon submission ofreceipts).
 
22. Waiver . The failure of a party to insist upon strict adherence to any term of this Agreement on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement. Any waiver must be in writing. Any waiver by any party of a breach of any provision of this Agreement shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Agreement.
 
23. CONSENT TO JURISDICTION; SERVICE OF PROCESS . EACH PARTY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE FEDERAL COURTS LOCATED IN THE STATE OF TEXAS (OR IF SUCH FEDERAL COURTS  SHALL NOT HAVE JURISDICTION, THEN THE STATE COURTS LOCATED IN THE STATE OF TEXAS) IN CONNECTION WITH ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND AGREE NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE, OR OTHERWISE IN ANY SUCH SUIT, ACTION OR PROCEEDING THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER OR THAT THIS AGREEMENT OR THE SUBJECT MATTER MAY NOT BE ENFORCED BY SUCH COURTS.
 
 
24. WAIVER OF JURY TRIAL . EACH OF THE PARTIES KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING OR STATEMENTS (WHETHER VERBAL OR WRITTEN) RELATING TO THE FOREGOING. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES TO ENTER INTO THIS AGREEMENT.

*   *   *   *   *
 
 
IN WITNESS WHEREOF, the Parties hereto have executed this Executive Employment Agreement as of the date first written above.

 
COMPANY :
 
Rockdale Resources Corporation,
A Colorado Corporation
 
By:
 
Name: Zel C Khan
Title: President


By:                                                                           
 
Name:                                                                      
 
Title:                                                                        


 
EXECUTVE:
EXHIBIT 10.2

THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE OR CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR REGISTERED OR QUALIFIED UNDER ANY APPLICABLE STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND REGISTRATION OR QUALIFICATION UNDER ANY APPLICABLE STATE SECURITIES LAWS OR (B) AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION AND QUALIFICATION ARE NOT REQUIRED PURSUANT TO AN EXEMPTION UNDER SUCH ACT AND SECURITIES LAWS.
 
Warrant No. 2016-37
Date: August 17, 2016
 
ROCKDALE RESOURCES CORPORATION
WARRANT TO PURCHASE COMMON STOCK
 
This Warrant to Purchase Common Stock (this "Warrant - ) is issued to Melton Horwitz, a resident of Texas, by Rockdale Resources Corporation, a Colorado corporation (the "Company"). The Holder acknowledges that this Warrant is issued pursuant to the Board Resolution dated August 17, 2016.  The warrant was included in the Rockdale Resources Corporation CFO signing bonus (August 17, 2016) between the Holder and the Company.
 
1.   Purchase of Shares. Subject to the terms and conditions of this Warrant, the Holder is entitled, upon surrender of this Warrant at the principal office of the Company (or at such other place as the Company shall notify the Holder in writing), to purchase from the Company 450,000 shares of the Company's Common Stock, $0.001 par value per share (the "Shares"), subject to adjustment pursuant to Section 8.
 
2.   Purchase Price. The purchase price for the Shares shall be $0.077 per share of Common Stock, subject to adjustment pursuant to Section 8 (such price, as adjusted from time to time, is herein referred to as the "Exercise Price").
 
3.   Exercise Period. This Warrant shall be exercisable, in whole or in part, during the term commencing on the date of this Warrant and ending at 5:00 p.m. on August 17, 2019; provided, however, that in the event of (a) the closing of the Company's sale or transfer of all or substantially all of its assets, or (b) the closing of the acquisition of the Company by another entity by means of merger, consolidation or other transaction or series of related transactions, resulting in the exchange of the outstanding shares of the Company's capital stock such that the shareholders of the Company prior to such transaction own, directly or indirectly, less than 50% of the voting power of the surviving entity, this Warrant shall, on the date of such event, no longer be exercisable and become null and void. In the event of a proposed transaction of the kind described above, the Company shall notify the Holder of the Warrant at least 30 days prior to the consummation of such event or transaction.
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4.   Method of Exercise. While this Warrant remains outstanding and exercisable in accordance with Section 3, the Holder may exercise, in whole or in part, the purchase rights evidenced by this Warrant. Such exercise shall be effected by:
 
(a)   the surrender of the Warrant, together with a duly executed copy of the form of subscription attached hereto, to the Secretary of the Company at its principal offices; and
 
(b)   the payment to the Company of an amount equal to the aggregate Exercise Price for the number of Shares being purchased.
 
5.   Certificates for Shares. Upon the exercise of the purchase rights evidenced by this Warrant, one or more certificates for the number of Shares so purchased shall be issued as soon as practicable thereafter, and in any event within 30 days of the delivery of the subscription notice.
 
6.   Issuance of Shares. Except as otherwise provided herein, the Company covenants that the Shares, when issued pursuant to the exercise of this Warrant, will be duly and validly issued, fully paid and non-assessable and free from all taxes, liens and charges with respect to the issuance thereof.
 
7.   Adjustment of Exercise Price and Number of Shares. The number of Shares purchasable upon exercise of this Warrant and the Exercise Price shall be subject to adjustment from time to time as follows:
 
(a)   Subdivisions, Combinations and Other Issuances. If the Company shall at any time prior to the expiration of this Warrant subdivide its Common Stock, by split-up or otherwise, or combine its Common Stock, or issue additional shares of its Common Stock as a dividend with respect to any shares of its Common Stock, the number of Shares issuable on the exercise of this Warrant shall forthwith be proportionately increased in the case of a subdivision stock dividend, or proportionately decreased in the case of a combination. Appropriate adjustments shall also be made to the Exercise Price payable per Share, but the aggregate Exercise Price payable for the total number of Shares purchasable under this Warrant (as adjusted) shall remain the same. Any adjustment under this Section 8(a) shall become effective at the close of business on the date the subdivision or combination becomes effective, or as of the record date of such dividend, or in the event that no record date is fixed, upon the making of such dividend.
 
(b)   Reclassification, Reorganization, and Consolidation. In case of any reclassification, capital reorganization, or change in the capital stock of the Company (other than as a result of a subdivision, combination or stock dividend provided for in Section 8(a)), then, as a condition of such reclassification, reorganization or change, lawful provision shall be made, and duly executed documents evidencing the same from the Company or its successor shall be delivered to the Holder, so that the Holder shall have the right at any time prior to the expiration of this Warrant to purchase, at a total price equal to that payable upon the exercise of this Warrant, the kind and amount of shares of stock and other securities or property receivable in connection with such reclassification, reorganization or change by a holder of the same number and type of securities as were purchasable as Shares by the Holder immediately prior to such reclassification, reorganization or change. In any such case, appropriate provisions shall be made with respect to the rights and interest of the Holder so that the provisions hereof shall thereafter be applicable with respect to any shares of stock or other securities or property deliverable upon exercise hereof, and appropriate adjustments shall be made to the Exercise Price per Share payable hereunder, provided the aggregate Exercise Price shall remain the same.
 
(c)   Notice of Adjustment. When any adjustment is required to be made in the
number or kind of shares purchasable upon exercise of this Warrant, or in the Exercise Price, the Company shall promptly notify the Holder of such event and of the number of Shares or other securities or property thereafter purchasable upon exercise of this Warrant.
2
8.   No Fractional Shares or Scrip. No fractional Shares or scrip representing fractional Shares shall be issued upon the exercise of this Warrant, but in lieu of such fractional Shares the Company shall make a cash payment therefor on the basis of the Bid Price then in effect.
 
9.   No Shareholder Rights. Prior to exercise of this Warrant, the Holder shall not be entitled to any rights of a shareholder with respect to the Shares, including without limitation, the right to vote such Shares, receive dividends or other distributions thereon, exercise preemptive rights or be notified of shareholder meetings, and the Holder shall not be entitled to any notice or other communication concerning the business or affairs of the Company.
 
10.   Successors and Assigns. Subject to the restrictions on transfer described in Section 12 below, the rights and obligations of the Company and the Holder shall be binding on and benefit the successors, assigns, heirs, administrators, and transferees of the parties.
 
11.   Transfer of this Warrant or any Shares Issued on Conversion Hereof The Holder shall not sell, assign, pledge, transfer or otherwise dispose of or encumber this Warrant or any Shares issued on conversion hereof (collectively, the "Securities"), except (i) pursuant to an effective registration statement under the Securities Act of 1933, as amended (the "Securities  Act"), or (ii) pursuant to an available exemption from registration under the Securities Act and applicable state securities laws and, if requested by the Company, upon delivery by the Holder of an opinion of counsel satisfactory to the Company to the effect that the proposed transfer is exempt from registration under the Securities Act and applicable state securities laws. Any transfer or purported transfer of the Securities in violation of this Section 12 shall be voidable by the Company. The Company shall not register any transfer of the Securities in violation of this Section 12. The Company may, and may instruct any transfer agent for the Company, to place such stop transfer orders as may be required on the transfer books of the Company in order to ensure compliance with the provisions of this Section 12.
 
12.   Amendments and Waivers. Any term of this Warrant may be amended and the observance of any term of this Warrant may be waived (either generally or in a particular instance and either retroactively or prospectively), with the written consent of the Company and the Holder. Any waiver or amendment effected in accordance with this Section 13 shall be binding upon the Holder of any Shares purchased under this Warrant at the time outstanding (including securities into which such Shares have been converted), each future holder of all such Shares and the Company.
 
13.   Restrictions. By acceptance hereof, the Holder acknowledges that the Shares acquired upon the exercise of this Warrant have restrictions upon their resale imposed by state and federal securities laws.
 
14.   Governing Law. This Warrant, and all related matters, whether in contracts or tort, in law or in equity, or otherwise, shall be governed by the laws of the State of Texas, without regard to choice of law or conflict of law principles that direct the application of the laws of a different state.
 
15.   Venue. All disputes and controversies arising out of or in connection with this Warrant shall be resolved exclusively by the state and federal courts located in Harris County, Texas, and each party hereto agrees to submit to the jurisdiction of said courts and agrees that venue shall lie exclusively with such courts.
 
16.   Waiver of Jury Trial. THE COMPANY AND THE HOLDER EACH HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS WARRANT.
 
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[Signature Page Follows]
 
 
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This Warrant is issued effective as of the date first set forth above.
 
ROCKDALE RESOURCES CORPORATION, a Colorado corporation
 
By: /s/ Lee Lytton                              
 
Name: Lee Lytton
 
Title: Secretary
 
 
 
 
EXHIBIT 10.3

AMENDMENT
TO ROCKDALE RESOURCES CORPORATION
CONVERTIBLE  SECURED  PROMISSORY NOTES

This Amendment to Rockdale Resources Corporation Convertible Secured Promissory Notes (the "Amendment") is entered by and between Rockdale Resources Corporation, a Colorado corporation (the "Company") and Rick Wilber ("Holder"), effective as of June 3, 2016 (the "Effective Date").

WHEREAS, The Companies shareholders have approved resolutions at the Shareholders meeting held on April 14, 2016 changing then domicile of the Company from Colorado to Texas and the name of the Company to Petrolia Energy Corporation. These changes in no way affect the assets or liabilities of the Company and specifically the liabilities noted herein.

WHEREAS, the Company and Holder previously signed and entered into a Convertible Secured Promissory Note on June 17, 2013, in the original principal amount of $350,000.00; and

WHEREAS, the Company and Holder previously signed and entered into an Amended and Restated Convertible Secured Promissory Note on December 30, 2013, in the  original  principal amount of $200,000.00;

WHEREAS, the HOLDER is the current owner and holder of the above described two (2) promissory notes (collectively, herein called the "Notes"); and

WHEREAS, pursuant to Paragraph 6.3 of the Notes, the Company and the Holder desire to amend the terms of the Notes.

NOW THEREFORE, for value received, the Company and the Holder hereby mutually agree to amend the Notes, as more particularly set forth below:

The maturity date of both Notes is and shall be extended to December 31, 2016.

The Company shall make the interest payments scheduled on Paragraph 1 of each of the Notes during the term of the Notes.

If at any time prior to December 31, 2016, the Company pays to Holder the principal amount of $500,000.00 on the Notes (together with  all accrued interest), the Company shall automatically receive a $50,000.00 discount on the principal amount, thereby automatically reducing the principal amount of the Notes from $550,000.00 to $500,000.00.

If  the  Notes  are fully paid by  the Company, all existing warrants currently attached, relating or pertaining in any manner whatsoever to the Notes to which the Holder is entitled will automatical1y be extinguished , and  the Company will issue new warrants to the Holder to provide for the purchase of 500,000 shares of stock at $.15 cents per share at any time for  the  following  five  (5)  years from date of issuance of the new warrants.

 
If the Company fails to pay to the Holder the principal amount of $500,000.00 prior to December 31, 2016, this amendment shall be null and void, and the original  terms of the original Notes shall be reinstated, meaning  both Notes will be  past  due and bear interest at the default rate provided in the Notes and the Holder  shall be  entitled to the warrants provided for in the Note.  Additionally. The Holder shall be entitled to receive the new warrants for 500,000 shares provided for in Paragraph 4., above.

This Amendment embodies the entire agreement between   the   Company and the Holder with respect to the amendment of the Notes. In the event of any conflict   or inconsistency  between  the provisions of the Notes and this Amendment, the provisions of this Amendment shall control and govern.

Except as specifically modified and amended herein, all  of  the terms, provisions, requirements and specifications contained in the Notes are and shall remain in full force and effect.

Except as otherwise expressly provided herein, the parties do not intend to, and the execution of this Amendment shall  not,  in  any manner whatsoever impair the Notes, the purpose of this Amendment being simply  to  amend  and ratify the Agreement , as hereby  ended and ratified,  and to confirm and carry forward  the Agreement,  as hereby  amended, in full force and effect.

This Amendment may be executed in counterparts, but  all counterparts shall constitute  one and the same document.  Electronic or facsimile signatures on this Amendment shall be accepted  and deemed valid for all purposes as if an original signed signature.


IN WITNESS WHEREOF, the Company and the Holder have executed this Amendment, effective as of the Effective Date, defined above.

 
COMPANY:
 
                                                                                        
 
 
 
ROCKDALE RESOURCES CORPORATION
 

By:                                                                                          
Name:
 
Title:



EXHIBIT 31.1
CERTIFICATIONS

I, Zel C. Khan, certify that;

1.           I have reviewed this Quarterly Report on Form 10-Q of Rockdale Resources Corporation;

2.           Based on my knowledge, this report, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.           Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.           I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)           Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)           Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)           Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)           Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.           I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)           All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)           Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

August 23, 2016
By:
/s/ Zel C. Khan
 
 
 
Zel C. Khan,
 
 
Chief Executive Officer
 
 
(Principal Executive Officer)
 
EXHIBIT 31.2
CERTIFICATION

I, Paul M. Deputy, certify that;

1.           I have reviewed this Quarterly Report on Form 10-Q of Rockdale Resources Corporation;

2.           Based on my knowledge, this report, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.           Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.           I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)           Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)           Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)           Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)           Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.           I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)           All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)           Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

August 23, 2016
By:
/s/ Paul M. Deputy
 
 
 
Paul M. Deputy,
 
 
Chief Financial Officer
 
 
(Principal Financial/Accounting Officer)
EXHIBIT 32.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO  
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO  
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Rockdale Resources Corporation (the “Company”) on Form 10-Q for the quarter ending June 30, 2016 as filed with the Securities and Exchange Commission (the “Report”), Zel C. Khan, the Principal Executive Officer of the Company hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)     The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)     The information contained in the Report fairly presents, in all material respects the financial condition and results of operations of the Company.

August 23, 2016
By:
/s/ Zel C. Khan
 
 
 
Zel C. Khan,
 
 
Chief Executive Officer
 
 
(Principal Executive Officer)
EXHIBIT 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO  
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO  
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Rockdale Resources Corporation (the “Company”) on Form 10-Q for the quarter ending June 30, 2016 as filed with the Securities and Exchange Commission (the “Report”), Paul M. Deputy, the Principal Financial/Accounting Officer of the Company hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)     The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)     The information contained in the Report fairly presents, in all material respects the financial condition and results of operations of the Company.

August 23, 2016
By:
/s/ Paul M. Deputy
 
 
 
Paul M. Deputy,
 
 
Chief Financial Officer
 
 
(Principal Financial/Accounting Officer)