CALGARY, ALBERTA--(Marketwired - May 6, 2014) - Canadian Quantum Energy Corporation
("Canadian Quantum" or the "Company") (TSX VENTURE:CQM) announced today that, further to its press release dated April 25, 2014, pursuant to the investment agreement (the "Investment Agreement") with Lang International Holdings Limited, a company registered in the British Virgin Islands (""Lang"), and Douglas Brett, the President and Chief Executive Officer of the Company, Lang has provided a short term loan (the "Lang Loan") to the Company in the amount of $350,000. The Lang Loan is evidenced by a promissory note and secured against the personal property of the Company. The Lang Loan will be repaid on the earlier of the closing of the previously announced proposed private placement offering of common shares of the Company ("Common Shares") for gross proceeds of $1,275,000 (the "Equity Private Placement"), or the deadline to file final documentation with the TSX Venture Exchange with respect to the Equity Private Placement, but in any event no later than May 30, 2014 (the "Maturity Date"), and does not bear interest prior to the Maturity Date, provided that if any amount of the Lang Loan is unpaid following the Maturity Date, it will bear interest at a rate of 12% per annum. In that regard, the parties amended the Investment Agreement to extend the deadline for the Lang Loan, the Debt Settlement and the Brett Loan (both as described below) from May 2, 2014 to May 6, 2014. The completion of the Lang Loan, the Debt Settlement and the Brett Loan is subject to final approval of the TSX Venture Exchange.
As set forth in the Investment Agreement, a company controlled by Mr. Brett, the President and Chief Executive Officer of the Company, settled the total amount of its outstanding unsecured demand loan in the amount of $226,150.12, including accrued interest, into 2,261,501 Common Shares at a price of $0.10 per Common Share (the "Debt Settlement"). The Common Shares issued in connection with the Debt Settlement are subject to a four month hold period that expires on September 7, 2014. In addition, Mr. Brett has converted the total amount of his outstanding accrued salary up to March 31, 2014, in the amount of $235,000 into a loan (the "Brett Loan"), that is evidenced by a promissory note and secured against the personal property of the Company, and upon the issuance of the previously announced series 1 debentures, will also be secured against substantially all of the Company's interest in the Alexander project. The promissory note issued to Mr. Brett is due on September 30, 2015 and bears interest at a rate of 12% per annum.
Canadian Quantum has determined that exemptions from the various requirements of the TSX Venture Exchange Policy 5.9 and Multilateral Instrument 61-101 are available for the issuance of the promissory note and Common Shares to Mr. Brett and the company controlled by Mr. Brett (Formal Valuation - Issuer Not Listed on Specified Markets; Minority Approval - Fair Market Value Not More Than 25% of Market Capitalization).
As a company controlled by Mr. Brett, the President, Chief Executive Officer and a director of Canadian Quantum, acquired 2,261,501 Common Shares under the Debt Settlement, Mr. Brett will own or control 9,718,922 Common Shares or approximately 28.03% of the total issued and outstanding Common Shares and options to acquire 1,000,000 Common Shares. Assuming the exercise of such options, Mr. Brett would own or control 10,718,922 or approximately 30.05% of the total issued and outstanding Common Shares of Canadian Quantum. The purchase of the Common Shares by the company controlled by Mr. Brett was made for investment purposes. Mr. Brett may increase or decrease his investment in Canadian Quantum depending on market conditions or any other relevant factors.
About Canadian Quantum
Canadian Quantum is actively pursuing oil and gas opportunities in Western Canada and continues to hold various interests in approximately 174,000 gross acres covered by four permits in the St. Lawrence Lowlands, Quebec Utica Shale Play.
Neither the 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.
This press release contains certain statements which constitute forward-looking statements or information ("forward-looking statements"), including statements regarding Canadian Quantum's business, the Investment Agreement and the proposed transactions. Such forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond Canadian Quantum's control, including the ability of Canadian Quantum to satisfy the conditions to completion of the proposed transactions, the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, operational risks in exploration and development, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and the ability to access sufficient capital from internal and external sources. Although Canadian Quantum believes that the expectations in its forward-looking statements are reasonable, they are based on factors and assumptions concerning future events which may prove to be inaccurate. Those factors and assumptions are based upon currently available information. Such statements are subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in the forward looking information. As such, readers are cautioned not to place undue reliance on the forward looking information, as no assurance can be provided as to future results, levels of activity or achievements. The forward-looking statements contained in this document are made as of the date of this document and, except as required by applicable law, Canadian Quantum does not undertake any obligation to publicly update or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this document are expressly qualified by this cautionary statement.