Each one in plain English, with the numbers worked through for a shareholder.
10 Jan 2022business combination● Neutral
Viston's second amendment to its tender filing only adds three exhibits: a January 10, 2022 press release, an email template to shareholders and a call script. The press release says the Petroteq board unanimously recommends acceptance, repeats the Haywood strategic review, notes no superior proposal has emerged, and reminds holders the offer is Cdn$0.74 cash, open until February 7, 2022. Offer terms are unchanged by this filing; this is Viston's account of the board's reasons.
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.
19 Nov 2021capital raising announcement● NeutralMajor
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.
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.
An amendment to the Viston tender offer filing that only adds two exhibits: a summary advertisement published in the Wall Street Journal on October 27, 2021 and the offer website content of that date. It changes no terms: the offer remains Cdn$0.74 per share, open until February 7, 2022. The advertisement notes the price is a 279.49% premium to the Cdn$0.195 close on August 6, 2021, before the cease trade order was announced and trading halted.
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.
Petroteq listed share and debt issuances from June to July 2021: warrant exercises (5,545,454 shares), conversions of the Nov 2020 and Jan 2021 notes into shares, debenture interest paid in shares at US$0.139, and 2,314,... director-fee shares issued at US$0.07 (578,480 each to Blyumkin, Bailey and Dennewald, 228,668 to Fuller). It also records the July closings: 17,874,996 units at US$0.12 (including Blyumkin's US$225,000 for 1,875,000 units), the US$3,000,000 and US$120,000 debentures, and a US$300,000 8% debenture subscription still awaiting TSXV approval. This confirms the dilution flagged earlier; the filing is a late disclosure of issuances already announced or partly seen in earlier filings.
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.
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.
14 July 2021capital raising announcement● NeutralMajor
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.
Petroteq agreed to issue 1,388,897 shares at a deemed US$0.139 to two lenders to settle US$193,057 of principal and interest on convertible debentures, subject to TSXV approval, which the company says preserves cash for Asphalt Ridge and working capital. It also closed the April-announced private placement, saying 2,666,665 shares at US$0.06 for US$130,000 (including 1,666,666 to Alex Blyumkin); the April 30 correction had said 2,166,665 shares, so this filing's share count appears to repeat the figure that was corrected. This continues the practice of paying debt with shares.
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.
This amends the April 9, 2021 filing to correct an error: the subscriptions were for 2,166,665 shares at US$0.06, not 2,666,665, with US$130,000 gross proceeds stated as correct. It confirms they were issued on April 28, 2021 after board and TSXV approval, including 1,666,666 shares to Alex Blyumkin for US$70,000 and 166,666 shares to an offshore investor. The rest of the filing repeats earlier disclosures; the company will not issue a corrective news release.
What it means for a shareholder
2.2m new shares at US$0.060 to raise about US$130,000. That's 0.509% dilution: every existing holder's slice gets 0.509% smaller. If you held US$1,000 of shares (16,667 at the issue price), your slice goes from 0.00393% to 0.00391% of the company. To keep it you'd need 85 more shares - about US$5 at the issue price.
