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Petroteq (OTC:PQEFF) chairman puts $1M into company

Tony Zerucha

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Petroteq Energy (TSXV:PQE) (OTC:PQEFF) director and executive chairman Alex Blyumkin has exercised 2,222,222 common shares of the company at US$0.45 per share for gross proceeds of US$1,000,000. The net proceeds will be used by the Company for use on its extraction technology in Utah and for working capital.

“The continuing progress of our company in the expansion of our Utah oil sands facility, combined with our business development strategies, have been encouraging and, in my view, merit further investment in the company,” Mr. Blyumkin said. 

Petroteq has agreed to complete a shares for debt transaction, pursuant to which it will issue 1,000,000 common shares in satisfaction of US$500,000 of indebtedness currently owed to an arm’s length service provider. The company determined to satisfy the indebtedness with common shares in order to preserve its cash for use on its extraction technology in Asphalt Ridge, Utah and for working capital. It also issued 135,135 corporate units at US$0.37 per unit, with each unit consisting of one common share of the company and one share purchase warrant, with each entitling the holder to acquire an additional common share at US$0.37 per share for 12 months. 

The company also announces the closing of (i) the subscription by CEO David Sealock for 62,500 common shares at US$0.40 per share for gross proceeds of US$25,000; the subscriptions by three arm’s length subscribers for 7,242,424 common shares at US$0.33 per share for gross proceeds of US$2,390,000; and shares for debt transactions, pursuant to which it issued an aggregate of 550,241 common shares in satisfaction of US$238,000 of indebtedness owed to three arm’s length service providers, previously announced on Feb. 13, 2019.

The subscription by Mr. Blyumkin is a “related party transaction” as defined under Multilateral Instrument 61-101 (“MI 61-101”). The transaction is exempt from the formal valuation approval requirements of MI 61-101 since no Petroteq securities are listed on a prescribed stock exchange. The proposed transaction is exempt from the minority shareholder approval requirements of MI 61-101 since, at the time the transaction was agreed to, neither the fair market value of the transaction nor the fair market value of the consideration for the transaction, insofar as it involves interested parties, exceeded 25 percent of the company’s market capitalization.

All shares issued pursuant to the transaction are subject to director and TSX Venture Exchange approval and will be subject to a four-month hold period. 

Tony Zerucha

Tony Zerucha is an alternative finance journalist with more than seven years experience in the space. The author of more than 1,000 articles, Tony was named LendIt's 2018 Journalist of the Year.

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