Paleo Resources Announces Proposed Shares for Debt Transaction

March 10, 2021 8:18 PM EST

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CALGARY, Alberta, March 10, 2021 (GLOBE NEWSWIRE) -- Paleo Resources, Inc. (“Paleo” or the “Corporation”) (TSX-V: PRE, OTCQB: PRIEF) announced today that the entire amount of the existing loan from Energy Reserve Capital, LLC to the Corporation’s wholly-owned subsidiary, Paleo Resources (USA), Inc. has been assigned to Roger S. Braugh, Jr., a director and officer of Paleo, and Chris Pettit & Associates PC, controlled by Christopher J. Pettit, a director of Paleo, as trustee of a Trust, in the aggregate amount, including principal and interest, of US$2,283,661.67 (CDN$2,885,863.25 at an assumed exchange rate of CDN$1.2637 to US$1.00), as to 50% to each, subject to approval of the TSX Venture Exchange. For further information regarding the loan, please refer to the Corporation’s news releases ‎dated September 24, 2018, December 17, 2018, June 5, 2019, July 25, 2019 and June 16, 2020.

Paleo also announced that it intends to settle the outstanding principal amount of the indebtedness, excluding interest, in the aggregate amount of US$2,096,618.63 (CDN$2,649,496.96 at an assumed exchange rate of CDN$1.2637 to US$1.00) now owing to Roger S. Braugh, Jr. (“Braugh”), a director and officer of Paleo, and Chris Pettit & Associates PC, controlled by Christopher J. Pettit, a director of Paleo, as trustee of a Trust (the “Trust”), following the above noted assignment, through the issuance of an aggregate of 132,474,848 common shares of the Corporation at a deemed price of CDN$0.02 per share (the “Debt Settlement”), subject to approval of the TSX Venture Exchange. The common shares issued in connection with the Debt Settlement will be subject to a hold period of four months from the date of closing.

As a result of the Debt Settlement, Braugh will hold a total of 134,978,138 common shares and the Trust will hold a total of 121,463,138 common shares, representing 30.29% and 27.25%, respectively, of the total issued and outstanding common shares of the Corporation.

As noted above, Roger S. Braugh, Jr. is a director and officer of Paleo and Christopher J. Pettit, is a director of Paleo and, accordingly, the Debt Settlement is a related party transaction for the purposes of TSX Venture Exchange Policy 5.9 and Multilateral Instrument 61-101 (the “Related Party Policies”).‎ Paleo ‎has determined that exemptions from the various requirements of the Related Party Policies are available in connection with the Debt Settlement (Formal ‎Valuation - Issuer Not Listed on Specified Markets; Minority Approval - Financial Hardship).‎

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

Paleo Resources, Inc. is an oil and natural gas and mineral exploration company headquartered in Calgary, Alberta, with executive offices in Houston, Texas. The Corporation's common shares are listed on the TSX Venture Exchange under the trading symbol "PRE" and on the OTCQB as "PRIEF".

For further information please contact:

Roger S. Braugh, Jr.Interim Chief Executive Officer and Chairman of the Board Email:

Paleo Resources, Inc.716 S. Frio St. Suite 201San Antonio, Texas 78207Telephone: 254-699-0975

Forward Looking Statements

This news release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. All statements, other than statements of historical fact, included herein are forward-looking information. Generally, forward-looking information may be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "proposed", "is expected", "budgets", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases, or by the use of words or phrases which state that certain actions, events or results may, could, would, or might occur or be achieved. In particular, this news release contains forward-looking information regarding the assignment of the loan, the Debt Settlement, and the business of Paleo. There can be no assurance that such forward-looking information will prove to be accurate, and actual results and future events could differ materially from those anticipated in such forward-looking information. This forward-looking information reflects Paleo's current beliefs and is based on information currently available to Paleo and on assumptions Paleo believes are reasonable. These assumptions include, but are not limited to: the underlying value of Paleo’s common shares, TSX Venture Exchange approval of the assignment of the loan and the Debt Settlement, Paleo's current and initial understanding and analysis of its projects ‎and the exploration required for such projects; the ‎costs of exploration and drilling on Paleo's projects; Paleo's general ‎and administrative costs remaining constant; and the ‎market acceptance of Paleo's business strategy‎.

Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Paleo to be materially different from those expressed or implied by such forward-looking information. Such risks and other factors may include, but are not limited to: volatility in market prices for oil and natural gas; constraints on sour gas production; the availability of commodity markets and third party equipment, infrastructure and services; liabilities inherent in oil and natural gas operations; uncertainties associated with estimating oil and natural gas reserves; geological, technical, drilling and processing availability, upsets or problems; general business, economic, competitive, political and social uncertainties; general capital market conditions and market prices for securities; delay or failure to receive board or regulatory approvals; the actual results of future operations; competition; changes in legislation, including environmental legislation, affecting Paleo; the timing and availability of external financing on acceptable terms; and lack of qualified, skilled labour or loss of key individuals. A description of additional assumptions used to develop such forward-looking information and a description of additional risk factors that may cause actual results to differ materially from forward-looking information can be found in Paleo's disclosure documents on the SEDAR website at Although Paleo has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. Readers are cautioned that the foregoing list of factors is not exhaustive. Readers are further cautioned not to place undue reliance on forward-looking information as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Forward-looking information contained in this news release is expressly qualified by this cautionary statement. The forward-looking information contained in this news release represents the expectations of Paleo as of the date of this news release and, accordingly, is subject to change after such date. However, Paleo expressly disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable securities law.

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Source: Paleo Resources, Inc.

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