Petroteq Energy Inc., an integrated oil company focused on the development and implementation of its proprietary oil-extraction and remediation technologies, announces revised terms to a proposed arrangement with an existing arm’s length lender (the “Lender”) and its affiliate (the “Affiliate”), originally announced on September 3, 2020. Pursuant to guidance from the TSX Venture Exchange (the “Exchange”), the agreement between the parties is now as follows:
- the Lender has exercised existing warrants of the Company for gross proceeds to the Company of US$68,045.07 which is being used by the Company to pay accrued and unpaid interest on existing convertible debentures of the Company held by the Affiliate and the Lender;
- the Lender has executed an irrevocable subscription agreement wherein it has agreed to lend the Company US$250,000 in exchange for a US$300,000 principal amount (including an original issue discount of 20%) unsecured convertible debenture, and warrants exercisable for up to 4,545,454 common shares of the Company at US$0.055 per share for 15 months. The debenture will have a term of 15 months and bear interest at a rate of 7% per annum payable quarterly, and at the option of the Lender the purchase amount of the debenture (US$250,000) will be convertible into common shares of the Company at US$0.055 per share during the initial 12 months of the term and US$0.08 per share thereafter. The net proceeds of the debenture financing will be used by the Company for working capital;
- the conversion price of (i) the Convertible Debenture dated November 26, 2019 issued to the Affiliate, for principal amount of US$318,000 bearing interest at 10.0% per annum, payable quarterly that matures on November 26, 2023, that had a purchase price of US$265,000 and that is convertible at US$0.17 per share, (ii) the Convertible Debenture dated December 4, 2019 issued to the Affiliate, for principal amount of US$432,000 bearing interest at 10.0% per annum, payable quarterly that matures on December 4, 2023, that had a purchase price of US$360,000 and that is convertible at US$0.17 per share, will be amended to US$0.10, and (iii) the Convertible Debenture dated March 30, 2020 issued to the Affiliate, for principal amount of US$471,000 bearing interest at 10.0% per annum, payable quarterly that matures on March 30, 2024, that had a purchase price of US$392,500 and that is convertible at US$0.08 per share, will be amended to US$0.055 per share during the initial 12 months of the original term and US$0.08 thereafter; and
- the exercise price of (i) a Warrant Certificate issued by the Company to the Affiliate on November 26, 2019 exercisable for up to 1,558,730 shares of the Company at US$0.17 per share until November 26, 2023, (ii) a Warrant Certificate issued by the Company to the Affiliate on December 4, 2019 exercisable for up to 2,117,520 shares of the Company at US$0.17 per share until December 4, 2023, and (iii) a Warrant Certificate issued by the Company to the Affiliate on March 30, 2020 exercisable for up to 4,906,250 shares of the Company at US$0.15 per share until March 30, 2024, will be amended to US$0.055.
In addition, the Company intends to complete a shares for debt transaction, pursuant to which it will issue 363,636 common shares in satisfaction of US$20,000 of indebtedness currently owed to an arm’s length service provider. The Company (with the service provider’s consent) determined to satisfy the foregoing indebtedness with common shares in order to preserve the Company’s cash for use on its extraction technology in Asphalt Ridge, Utah, and for working capital.
The foregoing transactions are all subject to completion and execution of definitive agreements and all necessary approvals, including the approval of the Company’s board of directors and the approval of the Exchange. The securities issuable pursuant to the new financing and the shares for debt transactions will be issued in reliance on exemptions from the registration requirements of the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), and applicable state securities laws, and will be issued as “restricted securities” (as defined in Rule 144 under the U.S. Securities Act). In addition, the securities issuable pursuant to the new financing and the shares for debt transaction will be subject to a Canadian four-month hold period.
About Petroteq Energy Inc.
Petroteq is a fully integrated clean technology company focused on the development and implementation of a new proprietary technology for oil extraction. The Company has an environmentally safe and sustainable technology for the extraction and reclamation of heavy and bitumen from oil sands, oil shale deposits and shallow oil deposits. Petroteq is engaged in the development and implementation of its patented environmentally friendly heavy oil processing and extraction technologies. Petroteq is currently focused on developing its oil sands resources and expanding production capacity at its Asphalt Ridge soil remediation and heavy oil extraction processing facility located near Vernal, Utah.
For more information, visit www.Petroteq.energy.
CONTACT INFORMATION
Petroteq Energy Inc.
Alex Blyumkin
Executive Chairman
Tel: (800) 979-1897