Blacksteel Energy Inc.
TSX VENTURE : BEY

August 04, 2017 16:35 ET

Blacksteel Energy Inc. Announces Securities Exchange Agreement With Teric Power Ltd.

CALGARY, ALBERTA--(Marketwired - Aug. 4, 2017) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S. WIRE SERVICES

Blacksteel Energy Inc. (TSX VENTURE:BEY) ("Blacksteel" or the "Corporation") is pleased to announce that it has completed a securities exchange transaction with TERIC Power Ltd. ("TERIC") as part of a settlement for a failed transaction between the parties.

Blacksteel and TERIC entered into a letter agreement dated June 22, 2015, amended by an amending agreement dated July 31, 2015, that contemplated a proposed transaction whereby Blacksteel would acquire TERIC, such transaction considered to be a reverse takeover under the policies of the TSX Venture Exchange (the "Proposed Transaction"). Full details of the Proposed Transaction are set forth in Blacksteel's press releases issued on July 30, 2015 and November 18, 2015. In connection with the Proposed Transaction, the Corporation advanced the sum of $610,000.00 to TERIC in advance of the closing of the Proposed Transaction (the "Advance").

In contemplation of the Proposed Transaction, Blacksteel completed a private placement (the "Offering") consisting of units ("Units"), at a price of $0.15 per Unit, and convertible debentures ("Debentures"). Each Unit comprised of one common share of the Corporation (the "Common Share") and one half of one Common Share purchase warrant. Full details of the Offering are set forth in Blacksteel's press release issued on April 7, 2016. Pursuant to the Offering, Blacksteel issued a total of $235,000 of Debentures and $158,800 of Units to a group of TERIC president's list investors (the "Investors").

On September 30, 2016, Blacksteel announced that it would not proceed with the Proposed Transaction. Blacksteel and TERIC thereafter entered into a settlement agreement, dated effective October 1, 2016 (the "Settlement Agreement") whereby, amongst other things:

  1. the Investors would exchange the Debentures and the Units (the Debentures and Units, together, the "Blacksteel Securities") for common shares of TERIC; and

  2. TERIC would transfer the Blacksteel Securities to the Corporation for cancellation in full satisfaction of the Advance, together with all accrued interest thereon (the "TERIC Debt").

In order to comply with applicable securities legislation, and to complete the transactions contemplated by the Settlement Agreement, Blacksteel agreed to collectively loan to its directors, Chris Scase, Eugene Chen and Les Treitz (the "Blacksteel Directors") $235,000 (the "Loans"). The Loans are evidenced by each of the Blacksteel Directors issuing a promissory note in favour of the Corporation, on substantially the same terms and conditions that attach to the Debentures.

Concurrent with the issuance of the Loans, the Blacksteel Directors acquired $235,000.00 (the "TERIC Exchange Debt") of the TERIC Debt, pursuant to a debt assignment agreement (the "Debt Assignment Agreement"), and immediately thereafter purchased $235,000.00 in Debentures from TERIC in exchange for the transfer of the TERIC Exchange Debt (the "Debenture Exchange"). The Debenture Exchange occurred pursuant to an exchange agreement among the Blacksteel Directors and TERIC (the "Debenture Exchange Agreement").

Blacksteel then repurchased the Common Shares from TERIC (the "Share Exchange") in exchange for the assignment of the remainder of the TERIC Debt not apportioned to the Blacksteel Directors under the Debt Assignment Agreement (the "Share Exchange"). The Share Exchange occurred pursuant to an exchange agreement between Blacksteel and TERIC (the "Share Exchange Agreement").

As part of the completion of the Debenture Exchange and the Share Exchange, TERIC and Blacksteel released each other from all debts and obligations, including the TERIC Debt, in connection with the Proposed Transaction.

The participation of the Blacksteel Directors in the Debenture Exchange Agreement constitutes a "related party transaction" as defined under National Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("NI 61-101"). However, such participation was exempt from the valuation and minority shareholder approval requirements of NI 61-101 based on the fact that neither the fair market value of the Debenture Exchange Agreement, nor the consideration paid by such persons, exceeds 25% of the Corporation's market capitalization. Furthermore, neither the Corporation nor the related parties have knowledge of any material information concerning the Corporation or its securities that has not been generally disclosed.

About Blacksteel Energy Inc.

Blacksteel is a junior oil and gas company involved in the exploration, exploitation, development and production of petroleum and natural gas resources.

Forward-Looking Information Cautionary Statement: This document contains forward-looking statements regarding the business and operations of Blacksteel. All statements other than statements of historical fact contained herein are forward-looking statements under applicable securities laws. In particular, statements as to the Corporation's anticipated transactions are forward-looking statements. These forward looking-statements are based upon various assumptions. The Corporation's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the plans, intentions or expectations anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefit the Corporation will derive there from. All subsequent forward-looking statements, whether written or oral, attributable to the Corporation or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and the Corporation does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release

Not for distribution to U.S. Newswire Services or for dissemination in the United States of America. Any failure to comply with this restriction may constitute a violation of U.S. Securities Laws.

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