Hertz Energy Inc. (CSE: HZ) (OTCQB: HZLIF) announced that Coloured Ties Capital Inc. (TSXV: TIE) has agreed to participate in the company's previously announced non-brokered private placement of up to $1,607,400.

Coloured Ties currently holds 1,176,300 common shares of Hertz Energy, representing approximately 6.21% of the company's issued and outstanding common shares. The firm has agreed to subscribe for up to 2,777,777 HD Units at $0.18 per unit, for gross proceeds of up to $500,000.

If the offering is completed as announced, Coloured Ties is expected to hold 3,954,077 common shares, representing approximately 14.96% of Hertz Energy's issued and outstanding common shares on a non-diluted basis and approximately 23.05% on a partially diluted basis. The offering is not expected to result in a change of control.

The transaction constitutes a related party transaction under Multilateral Instrument 61-101. Kal Malhi, chief executive officer and director of Hertz Energy, also serves as chief executive officer and director of Coloured Ties, and beneficially owns approximately 25.6% of Coloured Ties' outstanding common shares. Malhi and his spouse together beneficially own or control more than 50% of Coloured Ties' outstanding shares. Malhi declared his interest and abstained from voting on the approval of Coloured Ties' participation.

The company is relying on exemptions from formal valuation and minority shareholder approval requirements under MI 61-101, citing that neither the fair market value of securities to be issued nor the consideration to be paid exceeds 25% of the company's market capitalization.

Completion of the offering remains subject to regulatory approvals, including final approval from the Canadian Securities Exchange. All securities issued will be subject to a statutory hold period expiring four months and one day from the date of issuance.