Item 3.02 Unregistered Sales of Equity Securities.
1. Alex Blyumkin, the Executive Chairman and Interim Chief Executive Officer of the Company, has executed a subscription agreement dated July 20, 2020, pursuant to which he has irrevocably agreed to purchase 15,000,000 common shares in the capital of the Company at a subscription price of US$0.04 per share, for aggregate gross proceeds of US$600,000. The subscription price represents a 20% premium to the market price of the Company's common shares on the TSXV. The subscription remains subject to TSXV approval. Upon receipt of TSXV approval, the shares will be issued in reliance on the exemptions from the registration requirements of the U.S. Securities Act provided by section 4(a)(2) thereof and/or Rule 506(b) of Regulation D thereunder, and similar exemptions under applicable state securities laws. The shares will be issued as "restricted securities" (as defined in Rule 144 under the U.S. Securities Act). In addition, such shares will be subject to a Canadian four-month hold period.
2. The Company and Valkor Engineering have entered into a shares-for-debt agreement dated July 20, 2020, pursuant to which Valkor Engineering has agreed accept 45,000,000 common shares of the Company, to be issued at a deemed price of US$0.04 per share, in satisfaction of US$1,800,000 of debt for engineering services previously rendered to the Company by Valkor Engineering. The transaction remains subject to TSXV approval. Upon receipt of TSXV approval, the shares will be issued in reliance on the exemptions from the registration requirements of the U.S. Securities Act provided by section 4(a)(2) thereof and/or Rule 506(b) of Regulation D thereunder, and similar exemptions under applicable state securities laws. The shares will be issued as "restricted securities" (as defined in Rule 144 under the U.S. Securities Act). In addition, such shares will be subject to a Canadian four-month hold period.
3. The Company, its indirect wholly-owned subsidiary Petroteq Oil Recovery, LLC ("Petroteq OSR"), and Beverly Pacific Holdings, Inc. ("Beverley"), have entered into a Debt Conversion Agreement dated July 20, 2020, pursuant to which Beverley has agreed to accept 6,099,785 common shares of the Company, to be issued at a deemed price of US$0.04 per share, in satisfaction of US$243,991 of debt (including accrued and unpaid interest) owning by Petroteq OSR to Beverley under a promissory note dated August 20, 2018. The transaction remains subject to TSXV approval. Upon receipt of TSXV approval, the shares will be issued in reliance on the exemptions from the registration requirements of the U.S. Securities Act provided by section 4(a)(2) thereof and/or Rule 506(b) of Regulation D thereunder, and similar exemptions under applicable state securities laws. The shares will be issued as "restricted securities" (as defined in Rule 144 under the U.S. Securities Act). In addition, such shares will be subject to a Canadian four-month hold period.
4. The Company, Petroteq OSR, and Alex Blyumkin, the Company's Executive Chairman and Interim Chief Executive Officer, have entered into a Debt Conversion Agreement dated July 20, 2020, pursuant to which Mr. Blyumkin has agreed to accept 2,356,374 common shares of the Company, to be issued at a deemed price of US$0.04 per share, in satisfaction of approximately US$94,254 of debt (including accrued and unpaid interest) owning by Petroteq OSR to Mr. Blyumkin under a promissory note dated August 31, 2018. The transaction remains subject to TSXV approval. Upon receipt of TSXV approval, the shares will be issued in reliance on the exemptions from the registration requirements of the U.S. Securities Act provided by section 4(a)(2) thereof and/or Rule 506(b) of Regulation D thereunder, and similar exemptions under applicable state securities laws. The shares will be issued as "restricted securities" (as defined in Rule 144 under the U.S. Securities Act). In addition, such shares will be subject to a Canadian four-month hold period.
5. The Company and an arm's length service provider have entered into a shares-for-debt agreement dated March 2, 2020, pursuant to which the service provider has agreed accept 300,000 common shares of the Company, to be issued at a deemed price of US$0.10 per share, in satisfaction of US$30,000 of debt for services previously rendered to the Company. The transaction remains subject to TSXV approval. Upon receipt of TSXV approval, the shares will be issued in reliance on the exemptions from the registration requirements of the U.S. Securities Act provided by section 4(a)(2) thereof and/or Rule 506(b) of Regulation D thereunder, and similar exemptions under applicable state securities laws. Closing must take place on or before August 15, 2020. The shares will be issued as "restricted securities" (as defined in Rule 144 under the U.S. Securities Act). In addition, such shares will be subject to a Canadian four-month hold period.