Mr. Alex Blyumkin reports

PETROTEQ ENERGY INC. ANNOUNCES ISSUANCE OF NEW CONVERTIBLE NOTE

Petroteq Energy Inc. has issued a convertible secured note to an arm's-length lender for an aggregate principal amount of $565,000 (U.S.) including a 10-per-cent original issue discount. The note bears interest at a rate of 5 per cent per annum, is payable quarterly and matures on Oct. 31, 2018. At the option of the lender, the purchase price of the note ($508,500 (U.S.)) is convertible into units of the company at a conversion price of 29 U.S. cents (38 Canadian cents) per unit. Each unit would consist of one common share in the capital of the company and one common share purchase warrant of the company. Each warrant would entitle the lender to acquire one common share of the company at an exercise price of 31.5 U.S. cents per common share until Aug. 31, 2022. The company has granted a security interest to the holder under a general security agreement covering all of the assets of the company. All securities issued pursuant to the financing will be subject to a four-month hold period. The net proceeds will be used by the company for working capital requirements. The financing is subject to final approval of the exchange.

Concurrent with closing, the company repaid the outstanding principal amount of $400,000 (U.S.) plus accrued and unpaid interest on the convertible secured note issued by the company to the lender on April 8, 2016.

About Petroteq Energy Inc.

Petroteq is engaged in the development and implementation of its proprietary, environmentally friendly heavy oil processing and extraction technologies. The company is currently focused on oil and gas exploration and production on mineral leases located in southwest Texas held by Accord GR Energy Inc. (46 per cent of which is owned by the company), developing its oil sands resources and in expanding production capacity at its Asphalt Ridge heavy oil extraction facility located near Vernal, Utah.

We seek Safe Harbor.