PETROTEQ ENERGY INC.

PETROTEQ ENERGY INC. deregistered its securities, ending its obligation to file reports with the SEC.

listing compliance notice

Petroteq's twelfth amendment to its response says Viston's offeror withdrew the offer, which had been due to expire on September 9, 2022. Tendered shares will be returned by Kingsdale as soon as practicable. The filing adds Petroteq's August 29, 2022 news release as an exhibit and confirms Petroteq's side of the withdrawal.

business combination

Viston's fifteenth amendment says the Cdn$0.74 cash offer was terminated on August 28, 2022 and no shares were bought. The offeror has told the depositary to return all tendered shares to shareholders. The press release says Viston withdrew after the CFIUS rejection, concluding that several conditions could not be satisfied by the September 9, 2022 expiry. This ends the takeover bid that ran since October 2021 and the clearance, extension and letter-agreement threads. Shareholders keep their shares and receive no offer payment.

business combination

Petroteq's eleventh amendment to its response to the Viston offer only adds its August 25, 2022 news release, which announces that CFIUS has rejected the joint notice for the pending offer. This is Petroteq's side of the rejection Viston reported on August 24. The filing contains nothing else.

business combination

Viston's fourteenth amendment adds an August 24, 2022 press release. The release says the US Treasury told Viston and its offeror that CFIUS has rejected the joint voluntary notice filed with Petroteq on May 16, 2022. This is the foreign-investment clearance that the Cdn$0.74 offer required, and it ends the 45-day review and investigation reported in July. The filing itself says nothing more about what happens to the offer.

business combination

Viston's twelfth amendment adds a July 8, 2022 press release saying the US Treasury notified Viston that the foreign-investment review body (CFIUS) is undertaking a 45-day investigation of the proposed acquisition. The visible text recaps the earlier declaration of January 6, the February 24 inability to clear it, and the notice filed jointly with Petroteq, but it is cut off before the investigation's dates. Clearance is a condition of the Cdn$0.74 offer, so the offer is not yet completed. The earlier-reported review end date of no later than July 7 has passed, and this release describes a further investigation period (the reason for the change is not in the visible text).

business combination

Viston's eleventh amendment reports a July 5, 2022 letter agreement between Viston, its offeror and Petroteq. While the offer is outstanding and the board's recommendation is unchanged, Petroteq agreed not to issue shares under the 2022 Equity Incentive Plan or carry out the share consolidation (if shareholders approve them at the meeting) without Viston's written consent. It must also involve Viston in hiring a new CEO and get Viston's consent before hiring one, and not give any employee change-of-control or severance terms without Viston's consent. A new CEO's contract must have no such payments and must require the CEO to resign if Viston asks after the offer completes. The list of commitments is cut off in the text, so further terms are not known. The filing also notes a June 29, 2022 second amendment to Viston's Uniexpress financing agreement, whose terms are not shown. This gives Viston more say over Petroteq's decisions while the Cdn$0.74 offer is pending, and builds on the CEO search and the Viston consultation promise reported earlier.

business combination

Viston's tenth amendment adds a Fourth Notice of Variation and Extension dated June 17, 2022, which further varies the Cdn$0.74 cash offer, adds new conditions and extends its expiry. The visible text is cut off before the new expiry date or the new conditions, so those are not known from this filing. It also adds a June 17 press release and a June 16, 2022 amendment to Viston's financing agreement with Uniexpress, whose terms are not shown. This follows Viston's earlier statement that it intended to extend past July 7 and to vary the capitalization condition (the new conditions may relate to that, an inference). The offer remains not completed.

business combination

Viston's ninth amendment adds a June 10, 2022 press release. It says Petroteq has a shareholder meeting set for July 21, 2022, trading resumed on the TSX Venture Exchange on May 27, 2022 (ending the halt in place since the August 2021 cease trade order, as the release describes it), a new CEO search was announced May 24, and a private placement of units for up to US$2.5 million was announced June 2. Petroteq told Viston it still supports the offer, directors' and management's shares remain tendered, and it will consult Viston on meeting business and the CEO search. Petroteq also said it needs cash for operations and will offer Viston first chance at any future financing. Viston says it intends to vary the 'No Change in Capitalization' condition; the full terms are cut off in the visible text. All of this is per Viston's release.

business combination

Viston's eighth amendment adds a May 25, 2022 press release saying the US Treasury told Viston's offeror the CFIUS notice was accepted and the 45-day review began May 24, 2022, ending no later than July 7, 2022. Viston says it currently intends to extend the Cdn$0.74 offer to a date after July 7 but has not set a new expiry. Clearance is a condition of the offer, so completion is not before July 7 at the earliest.

business combination

Viston's seventh amendment adds a May 18, 2022 press release saying a voluntary notice seeking clearance from the US foreign-investment review body (CFIUS) was formally submitted by Viston's offeror and Petroteq on May 16, 2022. This follows the February 24 news that CFIUS could not clear the earlier declaration filed January 6. The 45-day review period had not yet been confirmed as started, so the Cdn$0.74 cash offer still cannot complete until clearance is obtained. A condition that was not listed as cleared earlier is now the main open step.

business combination

Viston varied and extended its offer by notice dated February 1, 2022: some offer conditions were amended (the visible text does not say which), and the deadline moved from February 7 to 5:00 p.m. Toronto time on February 28, 2022. The price stays at Cdn$0.74 cash per share. Shares will not be taken up until more than 50% of shares held by others are tendered and other conditions are met or waived. The offer is still not completed.

business combination

Petroteq's board now recommends that shareholders accept the Viston Cdn$0.74 cash offer, per a Supplement dated December 29, 2021 to its Directors' Circular. This reverses the November position of making no recommendation. The filing points to a Haywood analysis and a section on reasons, but the reasons themselves are not given in the text of this filing. The supplement was to be mailed around January 4, 2022.

business combination

Petroteq reported five share issuances to lenders from converting debt: 4,545,454 and 5,263,157 shares on August 30, 2021 (US$250,000 each), 29,166,667 shares on September 21 (US$1,400,000, the debenture that was due September 30, 2021), and 11,727,273 and 41,000,000 shares on November 10 (US$645,000 and US$2,255,000 from the debenture originally US$3,300,000). Total new shares are about 91.7 million, which dilutes existing holders but removes about US$4.8 million of principal as owed debt. It continues the pattern of debt-for-share conversions seen earlier in 2021, and explains part of the rise in shares outstanding.

capital raising announcement

Petroteq's board filed its formal response to the Viston Cdn$0.74-per-share tender offer, attaching a Directors' Circular dated November 6, 2021. The filing says the board is 'not making a recommendation to shareholders at this time' (per the section heading it cites), so shareholders were left to decide without board guidance. It also states 593,326,548 shares were outstanding on November 5, 2021, up from about 564 million in the offer's fee table. The circular's contents (reasons, financial advisor, alternatives) are only referenced here, not given.

business combination

2869889 Ontario Inc., an indirect subsidiary of Switzerland's Viston United Swiss AG, launched a tender offer for all Petroteq common shares at Cdn$0.74 cash per share, open until 5:00 p.m. Toronto time on February 7, 2022 unless extended. It is conditional on more than 50% of shares (excluding the offeror's) being tendered, at least 50% plus one on a fully diluted basis, no material adverse effect and regulatory approvals. The filing's fee table values it at about US$469.8M and cites a Viston long-term debt financing agreement with Uniexpress Investment Holding Plc as an exhibit, and a confidentiality agreement with Petroteq effective September 17, 2021. This is a new buyout bid for shareholders, not yet completed.

business combination

Petroteq closed the financings announced on July 13: a US$3,000,000 10% secured convertible debenture (US$2,500,000 paid, after a 20% discount), maturing July 21, 2025, with 20,833,333 warrants, and a US$120,000 8% debenture (US$100,000 paid) maturing July 24, 2023 with 833,333 warrants, both convertible at US$0.12. The 17,874,996-unit equity raise (US$2,144,999.92) also closed, with cash commissions of US$237,999.99 and 5,785,415 dealer options at US$0.12. The security for the big debenture is not finalised; management expects it to be a P.R. Spring, Utah lease. The company also reports that its application for a management cease trade order is filed but undecided, and that counsel is still reviewing whether the Redline note and security are enforceable. This completes the July financing thread but adds debt and dilution.

debt financing

Petroteq's audit committee said past financial statements (10-Ks for fiscal 2019 and 2020 and several 10-Qs, including the February 2021 one filed April 20) can no longer be relied on, because a US$6,000,000 10% secured note to Redline Capital Management, dated December 27, 2018 and maturing December 27, 2020, was not disclosed. Executive Chairman Alex Blyumkin had concluded in early 2019 that the note was void and did not tell the board or the CFO; the SEC staff's request prompted the review. Redline has not sued to enforce it. Restatements are planned, counsel will review whether the note is enforceable and whether it is a real or contingent liability, and material weaknesses in controls are expected. The May 2021 quarterly report is delayed to around September 10, 2021, and the company will seek a management cease trade order from the Ontario Securities Commission, with an issuer cease trade order possible if filings are not made by July 30. This is a serious new problem and contradicts the earlier reported results.

financial restatement

Petroteq announced subscriptions for 17,874,996 units at US$0.12 (about US$2.14M), each with a share and a warrant at US$0.12, including US$225,000 from Alex Blyumkin for 1,875,000 units. It also announced new convertible debt: a US$3.0M 10% secured debenture (48 months, US$2.5M paid, with 20,833,333 warrants), a US$300,000 8% debenture with 2,500,000 warrants and a US$120,000 8% debenture with 833,333 warrants, all convertible at US$0.12. It plans to settle about US$700,000 owed to service providers with 5,833,333 shares at US$0.12. All of this is subject to definitive agreements, board and TSXV approval; the money is for Asphalt Ridge and working capital. This means more dilution and new debt.

capital raising announcement

Petroteq said the Asphalt Ridge plant restarted after Utah's oil and gas regulator (DOGM) ordered operations to stop on May 14, 2021 (a Cessation Order); one concern was processing of offsite ore not covered in the company's Notice of Intent. DOGM modified the order on May 25 so testing and processing can run until June 30, 2021, and continuing after that depends on an updated notice DOGM finds satisfactory. This interrupts the April restart, and the company now says its focus until now was data collection, not sustained commercial production. It says data gathering for the 5,000 bpd train design is nearly done and that a third-party engineering firm was engaged to review and certify the technology's commerciality (not yet done). No production figures are given.

production update

Petroteq completed the debenture deal announced on April 9, 2021 after TSXV approval: it issued 26,334,246 shares (deemed US$0.047) for US$1,227,066.43 of interest and penalties and 15,000,000 shares (US$0.04) for US$600,000 of principal. The remaining US$1,400,000 debenture now matures September 30, 2021 with conversion at US$0.048. Separately, the company says the Asphalt Ridge oil sands plant has restarted and is producing oil after extra equipment was installed; it plans to fine-tune it, possibly move to two shifts if conditions warrant, and is working on design for a 5,000 bpd production train. The restart follows the earlier-than-planned late-2020 targets, and no production figures are given; the improvement expectations are the company's, not yet shown.

capital raising announcement

Petroteq disclosed a run of share issues and debt changes for early 2021: US$445,000 raised from 7,416,666 shares at US$0.06, US$222,000 of new convertible debentures at US$0.0562, a lender converting US$400,000 of principal into 9,708,738 shares, and two debentures extended by a year (to October 19 and December 17, 2021) with warrants at US$0.0475. It also proposed a deal on the US$2,400,000 secured convertible debenture, which had matured on February 20, 2021: US$1,227,066.43 of interest and penalties to be paid in 26,334,246 shares and US$600,000 of principal in 15,000,000 shares at US$0.04, leaving US$1,400,000 with maturity moved to September 30, 2021 and conversion price cut from US$0.40 to US$0.048. Further subscriptions for US$130,000 include US$70,000 from Alex Blyumkin; all of this was still subject to board and TSXV approval. The company says it used shares to preserve cash. This continues the pattern of paying debts with shares, with more dilution. (The share count in the subscriptions was later corrected.)

capital raising announcement

Petroteq completed several share issues in November 2020 that had been waiting on TSXV approval: 1,416,666 shares at US$0.06 for US$85,000 of debt, 2,041,095 shares at US$0.073 for US$149,000 of debt, and 56,666,666 shares to the Valkor-related debt settlement (45,000,000 at US$0.04 and 11,666,666 at US$0.06), totalling 60,124,427 shares. It also announced a further 1,538,461 shares for US$60,000 owed to a service provider. Greenfield Energy LLC (a 50/50 venture of TomCo Energy and Valkor) signed a non-exclusive multi-site licence to use Petroteq's oil sands technology in return for US$1,500,000 already funded toward the Asphalt Ridge plant upgrade plus US$500,000 more due within 20 days; Petroteq keeps all technology and gets a 5% royalty on net revenue from any future Greenfield plants. The plant restart, previously targeted for late November, is now expected the week of November 30, 2020, with independent trials to follow; commerciality and the 10,000 bopd plant are still unproven. The new shares add dilution.

capital raising announcement

This reports the completion of several September 2020 deals. A lender closed a US$300,000 unsecured convertible debenture (US$250,000 proceeds) with warrants for up to 4,545,454 shares at US$0.055. Conversion prices on three older debentures and exercise prices on three warrants were cut to US$0.055. Share issues include 24,030,713 shares to settle US$1,321,689.22 of interest on the US$3.3 million debenture, whose conversion price fell from $1.00 to $0.055 and whose maturity moved from September 2019 to March 31, 2021, plus 2,161,892 shares for a US$118,904.11 debenture and two smaller debt swaps. Existing holders are diluted substantially and the conversion terms are much lower than before.

capital raising announcement

Petroteq agreed to give Valkor LLC (Valkor Engineering) 45,000,000 shares at US$0.04 to settle US$1.8 million of a US$2.5 million engineering debt, and Executive Chairman Alex Blyumkin agreed to buy 15,000,000 shares at US$0.04 for US$600,000. Smaller debt-for-share deals were also announced: 6,099,785 shares to Beverly Pacific Holdings (US$243,991), 2,356,374 shares to Blyumkin (about US$94,254 of loans) and 300,000 shares to a service provider (US$30,000). All are subject to TSX Venture Exchange approval. The Valkor shares would be 16.51% of the 272,596,058 shares outstanding after issue (227,596,058 today), so existing holders are diluted; it extends the company's pattern of paying debts in shares. The filing does not say what happens to the remaining US$700,000 owed to Valkor.

capital raising announcement

Petroteq issued a US$471,000 secured convertible debenture to Petroleum Capital Funding L.P. on March 30, 2020, raising US$392,500 after a discount. It is the third in a series with the November and December 2019 debentures (US$318,000 and US$432,000). It carries 10% interest and a 48-month term, is secured by a first lien on the bitumen reserves at Asphalt Ridge, and converts at US$0.08 per share (the earlier two convert at US$0.17).

debt financing

Petroteq said its Asphalt Ridge plant in Vernal, Utah restarted on February 19, 2020 after a January maintenance shutdown, and has since made about 1,900 barrels, averaging over 300 barrels a day. The company says at that rate, with costs of about $30-$32 a barrel, the plant is operating on a break-even basis. It also plans to issue 2,900,000 shares to settle $310,000 owed to seven service providers, subject to TSX Venture Exchange approval.

production update

Petroteq closed its purchase of an additional 50% of the operating rights to oil sands under federal leases in Utah (about 8,480 gross acres), completing the deal that began with the first 50% in April 2019 and giving it 100% of the operating rights. It paid US$13 million: US$1 million in cash and 30 million new shares at a deemed US$0.40 each. The attached press release also reports a US$300,000 unsecured convertible debenture from an arm's length lender (7% interest, 15 months, convertible at US$0.19, with warrants at US$0.24) and a planned issue of 838,714 shares to settle US$176,130 owed to a service provider.

asset acquisition disposition