Petro-Victory extends $1.7M (U.S.) loan from 579 Max

Executive Summary

• Petro-Victory Energy Corp. has extended the maturity of a $1.7 million U.S. secured note from 579 Max Ltd. by 24 months, moving the due date from March 31, 2026, to March 31, 2028.
• As consideration for the extension, the company granted the lender 600,000 warrants to purchase common shares at an exercise price of $0.68 per share, expiring on March 31, 2028.
• The company intends to settle approximately $500,000 U.S. of outstanding debt (including debt owed to the same lender) by issuing up to 980,392 common shares at a deemed price of $0.68 per share.

Key Details

• Note Extension: The term of the $1.7 million U.S. secured financing from 579 Max Ltd. was extended by 24 months.
• New Maturity Date: March 31, 2028 (previously March 31, 2026).
• Interest Rate: 14% per annum, payable quarterly.
• Warrant Issuance for Extension:
  • Quantity: 600,000 warrants.
  • Exercise Price: $0.68 per common share.
  • Expiration: March 31, 2028.
  • Note: Concurrently, 600,000 previously issued bonus warrants expired.
• Shares-for-Debt Transaction:
  • Target Debt Amount: Up to approximately $500,000 U.S. owed to certain directors and arm's-length creditors.
  • Shares to be Issued: Up to 980,392 common shares.
  • Deemed Price: $0.68 per common share.
  • Hold Period: Four months and one day from the date of issuance.
• Regulatory Status: Both the warrant issuance and the shares-for-debt transaction are subject to TSX Venture Exchange (TSX-V) approval.
• Related Party Disclosure: The transactions constitute related-party transactions under Multilateral Instrument 61-101, as T. Lynn Bryant (a director) is a principal of the lender (579 Max Ltd.).
• Exemptions: The company relied on exemptions from formal valuation and minority shareholder approval requirements under MI 61-101, as the fair market value of the consideration involving related parties does not exceed $2.5 million.