Petroteq Announces New Financing, Amendment to Securities and Shares for Debt

SHERMAN OAKS, Calif., July 29, 2020 (GLOBE NEWSWIRE) -- Petroteq Energy Inc. (“Petroteq” or the “Company”) ‎‎(TSXV:PQE; ‎OTC:PQEFF; FSE:PQCF), an integrated oil ‎company focused on the development and implementation of its proprietary oil-‎extraction and remediation technologies, announces the receipt of an irrevocable subscription agreement from an arm’s length lender (the “Lender”) for a US$150,000 principal amount (including a 20% original ‎issue discount) convertible debenture, and warrants exercisable for up to ‎3,033,980‎ common shares ‎of the Company at US$0.0412 per share for 12 months. The debenture will have a term of 12 months and bear no annual interest. At the option of the holder the purchase price of the debenture (US$125,000) shall be convertible into ‎3,033,980 ‎common shares of the Company at US$0.0412 per share. The net proceeds of the above financing will be used by the Company on its ‎extraction technology in Asphalt Ridge, Utah, and for working capital.‎

Pursuant to an agreement between the Company and the Lender, the parties also intend to amend (i) a Convertible Debenture issued by the Company to the Lender on October 12, 2018, as amended on October 12, 2019, for principal amount of US$250,000 bearing interest at 10.0% per annum and payable on maturity (October 12, 2020) that is convertible at US$0.18 per share (the "250 Debenture"), (ii) a Convertible Debenture issued by the Company to the Lender on August 29, 2019 for principal amount of US$480,000 bearing interest at 3.3% per annum and payable on maturity (August 29, 2020) that had a purchase price of US$400,000 that is convertible at US$0.15 per share (the "480 Debenture"), (iii) a Warrant Certificate issued by the Company to the Lender on August 29, 2019 exercisable for up to 2,666,666 shares of the Company at US$0.15 per share until August 29, 2020 (the "480 Warrant"), and (iv) a Warrant Certificate issued by the Company to the Lender on September 20, 2019 exercisable for up to 1,111,111 shares of the Company at US$0.23 per share until September 20, 2021 (the "PP Warrant").

The 250 Debenture and the 480 Debenture (collectively, the “Debentures”) will be amended to amend the conversion price to US$0.0412, the maturity date to July 31, 2021 and the interest rate to 12% per annum (commencing August 29, 2021 in the case of the 480 Debenture).

The 480 Warrant and the PP Warrant will be amended to amend the exercise price to US$0.0412 and the expiry date to July 31, 2021. In addition, the PP Warrant will now include the expiry date acceleration provision contemplated in 3.3(a)(ii) of TSX Venture Exchange (the “Exchange”) Policy 4.1.