Each one in plain English, with the numbers worked through for a shareholder.
21 Aug 2024material agreement● NeutralMajor
On August 20, 2024, Victory signed agreements (effective April 7, 2024) with Proton Power for an exclusive, royalty-free perpetual license to make hydrogen from biomass, excluding diesel-compatible fuels and graphene. Victory must pay $100,000,000 within five years, with weekly payments of $86,000 until $25,000,000 is paid (reducible to no less than $50,000 until November 15, 2024, with the difference due by December 15, 2024). It also gets 50% of certain Proton graphene revenues. The filing does not say how Victory will fund this. Chairman Headrick had earlier given Victory a non-exclusive license to the same technology and says he has no stake in Proton.
On June 27, 2024, Victory hired Astra Audit & Advisory to audit 2024 and dismissed Accell, which had been engaged only in January 2024. Accell's reports for 2022 and 2023 had no adverse opinion but included a going-concern warning and noted material weaknesses in internal controls; the filing reports no disagreements. This is the second auditor change in about five months.
Victory dismissed its auditor Weaver and Tidwell on January 29, 2024, and had engaged Accell Audit and Compliance on January 26, 2024 to audit fiscal 2023. The filing reports no disagreements or reportable events with Weaver. It follows the January merger closing; the filing does not state a reason for the change. Financial statements of H2EG are to follow in a later amendment.
The H2EG merger closed on January 1, 2024, making H2EG a wholly owned subsidiary and shifting control: H2EG holders own about 81% of Victory's common stock. Zamber, Grenley and Salas resigned from the board; Headrick (Executive Chairman), McGinley (CEO) and Goulden joined, and DeLeon stayed as a director but stepped down as CEO. Victory also agreed with Flagstaff International to sell 67,797 Series E preferred shares for $4,000,000, paid in 16 monthly $250,000 installments starting February 1, 2024. This resolves the merger thread; the filing says the Common Financing raised about $1,212,000.
Victory disclosed Amendment No. 1 to the H2EG merger agreement (December 1, 2023). Changes: H2EG holders get 243,000,000 shares at closing and 175,822,708 after an authorized-share increase; VPEG gets 7,866,034 shares and 43,095,923 pre-funded warrants for its notes; the Series D preferred holder's 8,333 shares are cancelled for 3,961,539 pre-funded warrants; Pro-Tech now goes to Pro-Tech Holdings, LLC instead of VPEG if affiliate Flagstaff commits to buy $4,000,000 of new preferred stock; the private placement shrinks from the $5,000,000 target (at $0.059 per share) to $1,212,000; and authorized shares are to be raised to at least 1,170,318,154. This revises the earlier plan to give Pro-Tech to VPEG.
Victory told shareholders that a majority of its board will change when the H2 Energy Group merger closes (no vote needed). The July 2023 deal was amended on December 1, 2023: H2EG holders get 418,822,708 Victory shares (243,000,000 at closing, 175,822,708 after authorized shares are increased) and will own 81% at closing, up from the 'at least 70%' first announced. VPEG will convert its note into 7,866,034 shares plus 43,095,923 pre-funded warrants, and Victory expects to raise about $1,212,000 in a private placement plus $4,000,000 of preferred stock within 16 months. Existing holders are heavily diluted.
On July 25, 2023, Victory signed a merger agreement with H2 Energy Group, a green hydrogen company; H2EG will become a wholly owned subsidiary, and its shareholders will receive at least 70% of Victory's shares after the merger (final ratio to be set before closing, expected Q4 2023, subject to due diligence and consents). Existing shareholders would be left with 30% or less of the company. Within 30 days of closing Victory also agrees to transfer Pro-Tech Hardbanding (bought in 2018) to affiliate VPEG in exchange for converting certain convertible notes VPEG holds. This is a major change of direction away from oilfield technology.
On Oct 30, 2020, Victory and VPEG raised the limit of the April 2018 VPEG loan facility from $2,000,000 to up to $3,000,000, to cover a further $585,000 advanced since Jan 1, 2020 and working capital needs. The filing says the balance was $1,978,900 at Dec 31, 2019 (including $78,500 of discount). The note is secured on all company assets and VPEG can convert at $0.75 per share after maturity, receiving a matching five-year $0.75 warrant. The company is borrowing more from VPEG, which could mean more dilution if converted.
On Oct 21, 2019, Victory and Kodak signed a second extension of the $375,000 note, moving maturity from Sept 30 to Dec 30, 2019 and raising interest from 15% (increased from 10% in the July 2019 extension) to 17.5%. Victory must pay $125,000 of principal by Oct 31 and another $125,000 by Nov 29, 2019, the rest by Dec 30, plus about $11,059 prepaid interest, $12,500 diligence fees and $27,500 monitoring and extension fees; late fees of $5,000 per week and $25,000 liquidated damages if not paid in full by Dec 30 apply. The loan is getting more expensive with each extension and now has principal repayments required.
On Sept 6, 2019, Victory signed a five-year Supply and Services Agreement with Liquidmetal Coatings Enterprises (LMC) to buy metal powders, wire and Armacor/Liquidmetal coating materials, at prices no higher than LMC's lowest price to any buyer. It is the supply contract anticipated in the Aug 2017 Armacor Victory Ventures sublicense, and renews yearly while that license is in effect. The filing gives no purchase volumes or dollar amounts.
Victory had already used its option to push the $375,000 Kodak note (used to fund the Pro-Tech purchase) from Mar 31 to June 30, 2019. On July 11, 2019 it agreed with Kodak to extend maturity again, to Sept 30, 2019, paying $14,062.50 interest for Q3 2019 and a $14,062.50 extension fee. The note was not repaid at its extended maturity, so the debt continues to be rolled over at added cost.
The company amended its Aug 2018 report on the Pro-Tech purchase, saying it has decided the acquisition is not 'significant' under SEC rules, so the financial statements it had planned to file are not required. It removes Item 2.01 from the original report. The deal itself is unchanged; this is a filing-requirement correction, not a change in terms.
2 Aug 2018asset acquisition disposition● NeutralMajor
On July 31, 2018, Victory (now named Victory Oilfield Tech) bought 100% of Pro-Tech Hardbanding Services, an Oklahoma company, from Stewart Matheson for $1,600,000. Payment is a mix: $150,000 deposit released, $350,000 cash, about $118,000 of life insurance policy beneficiary changes, 11,000 Victory shares, $300,000 on day 60 (only to the extent receivables exist), and $700,000 in eight $87,500 quarterly installments from Oct 31, 2018 to July 31, 2020 (due immediately on a change of control). To fund it, Victory borrowed $375,000 from Kodak Brothers Real Estate Cash Flow Fund on a 10% secured convertible note maturing Mar 31, 2019 (extendable to June 30, 2019 for a $9,375 fee), with a five-year warrant for 375,000 shares at $0.75; the note converts at $0.75 or the lower price in the ongoing $5M private placement. Kodak's lien on Victory's assets ranks equal with VPEG's, and the Seller holds a first lien on Pro-Tech's assets and shares. This is a new business for Victory after the Aurora exit, and it adds debt secured on its assets; the filing does not say what Pro-Tech earns.
On Apr 10, 2018, three deals were signed. (1) Armacor Victory Ventures (AVV), which had paid only $255,000 of a $5,000,000 commitment, will have its 800,000 Series B preferred cancelled and receive 20,000,000 common shares; AVV must try to help a proposed $5M private placement at $0.75 per share with 50% warrant coverage and invest at least $500,000 in it. (2) The VPEG debt of $1,410,200 (on $1,282,000 lent) is settled for 1,880,267 common shares and 1,880,267 five-year warrants at $0.75. (3) A new VPEG facility lets VPEG, at its sole discretion, lend up to $2,000,000 through secured convertible notes with a 10% discount, convertible at $0.75 or lower. Debt is converted to equity, which dilutes existing holders, and the company still depends on VPEG and the unfinished private placement for working capital.
On Jan 17, 2018, the VPEG note was amended a second time. Maturity becomes five business days after VPEG demands payment, VPEG may lend more on the same terms, and if VPEG converts after maturity it receives a five-year warrant at $1.52 per share for as many shares as it converts. It confirms the 1-for-38 reverse split took effect Nov 24, 2017. The debt is now payable on demand and carries a new warrant feature that could dilute shareholders.
19 Dec 2017asset acquisition disposition● NeutralMajor
The Aurora divestiture closed Dec 13, 2017. Victory transferred its 50% Aurora interest to Navitus and issued 166,549,134 pre-split shares to it. Both sides signed a mutual release, though Navitus did not release obligations tied to stock, options or warrants held by Navitus, its partners or affiliates. This completes the transaction put to shareholders in the Sept proxy and ends Victory's role in the Aurora partnership; the filing does not address the Texas Capital Bank facility.
The Aug 21, 2017 secured convertible note to Visionary Private Equity Group I (VPEG), originally a $500,000 loan, was amended on Oct 11, 2017. The loan rises to $565,000, the note principal to $621,500 (including a $56,500 discount), and maturity moves to Nov 30, 2017. The note is secured by all company assets and convertible at $0.04 per share, so VPEG's funding is growing and its due date is pushed back.
The company amended the Aurora divestiture so that Navitus receives 166,549,134 shares (4,382,872 after the planned 1-for-38 reverse split) at closing, with demand registration rights and a lock-up agreement. In exchange for its 50% Aurora stake, Victory is released from its obligations to Navitus, including returning investors' deferred capital and interest. For existing shareholders this means a large share issuance (dilution). The filing also reports new bylaws, a new code of ethics, and newly created audit and compensation committees (Zamber, Herrera and Eilertsen, the last subject to election).
The company filed a preliminary proxy for a Nov 14, 2017 special meeting. Shareholders are asked to vote on: raising authorized common shares from 47,500,000 to 300,000,000 (and preferred from 2,500,000 to 10,000,000) with a 1-for-38 reverse split; handing its Aurora Energy Partners interests to Navitus under an Aug 21, 2017 divestiture agreement; a 2017 Equity Incentive Plan; electing seven directors; and adjournment. The board recommends FOR on all. This is the formal vote on the Aurora/Navitus relationship that has run since 2011.
7 Feb 2017capital raising announcement● NeutralMajor
Victory raised $320,000 on February 3, 2017 from Visionary Private Equity Group I, LP through a 12% unsecured note due at the earlier of six months or completion of a material business combination. The investor also received a five-year warrant for 5,203,252 shares at $0.0923 per share, which would dilute existing holders if exercised, and registration rights. The filing says the proceeds were used to settle the TELA Garwood lawsuit, so this funds the December 2016 settlement and avoids the $500,000 judgment.
Effective December 9, 2016 Victory and Aurora settled TELA Garwood's lawsuit over the 2014 Fairway purchase agreement. Aurora must pay $320,000 to TELA by February 1, 2017, after which claims and counterclaims are dismissed; if not paid, TELA can enforce an agreed judgment of $500,000 plus interest against Aurora and Victory jointly. This follows the termination of the Fairway second closing in September 2014.
On December 5, 2016 Aurora signed a new forbearance agreement with Texas Capital Bank, under which the bank will not enforce its rights until February 20, 2017 (the credit agreement's maturity date). It covers a long list of continuing defaults: unpaid interest and monthly payments dating back to June 2015, a deficiency now stated as $360,000, missing financial statements and failed covenant tests through September 30, 2016. The condition is that Aurora pays at least $20,000 each week. This continues the bank problem from 2015, which remains unresolved.
On March 22, 2016 Victory settled the Oz Gas Corporation lawsuit in Crockett County, Texas. Oz keeps $14,000 already seized by a judgment receiver, and Victory will pay $140,000 more in $7,500 monthly installments from April 15, 2016. If Victory misses payments, Oz can restart litigation and collection against it.
Effective November 21, 2015 Aurora, Victory and Trilogy Operating settled Trilogy's lawsuit in Howard County, Texas. Aurora assigns its interests in four wells (Wagga Wagga #2, Homar #1, Ballarat '185' #1 and BOA North #5) effective May 1, 2014, and both sides release claims tied to those wells. Victory says it will book a $637,000 non-cash gain in Q4 2015 and has not previously reported production or reserves for these wells.
Effective August 26, 2015, Texas Capital Bank agreed to hold off enforcing its rights against Aurora until August 31, 2015 over several existing defaults, including the unpaid $300,000 deficiency flagged in April, missed interest and monthly payments, late financial statements and missed EBITDAX and current-ratio covenants. The hold-off depends on Aurora paying at least $260,000 by August 31 and delivering title information on the Penn Virginia properties within 15 days of August 21. This shows the April borrowing-base problem was not repaid by May 13 as Aurora had intended, and it ends in days unless more is agreed.
On July 16, 2015 Victory and Rogers amended the June settlement: the amount owed rose from $253,750 to $258,125, plus $22,500 of Rogers's attorney fees. Victory had not paid by the July 15 deadline, so it was in default and default interest of $129.0625 per day applies; no payments had been made as of the filing. The escrowed Lucas property rights and shares (now 44,069 shares after a Lucas reverse split) go back to Lucas if Victory has not paid in full by August 27, 2015. This continues the Rogers thread negatively, with the payment missed.
30 June 2015material agreement termination● NeutralMajor
On June 24, 2015 Victory settled the failed Lucas Energy deal with three agreements (Lucas, lender Louise H. Rogers, and Earthstone/Oak Valley). Victory keeps five Penn Virginia well-bores, gets Lucas's rights in a further property in the same field, and gets about 1.1 million Lucas shares in place of the $600,000 it had advanced (the filing says $600,000 was advanced, versus $250,000 drawn per earlier filings). The $250,000 contingent note to Rogers is cancelled in exchange for a $253,750 payment due by July 15, 2015, and the extra property and shares are held in escrow until Victory pays. Victory also assigns two Karnes County wells (per the press release, Boggs Unit No. 1H and 2H) to Earthstone/Oak Valley. This resolves the Lucas settlement and contingent-note threads.
On May 11, 2015 Victory terminated its non-binding letter of intent to merge with Lucas Energy, and said it will lend Lucas no further money under the February 2015 loan agreement. The companies are negotiating a mutual settlement. This ends the proposed combination announced in February 2015; the filing does not say what happens to the $250,000 already lent, the pledged shares, or the contingent note to Lucas's lender, which stay open.
Victory filed a presentation it planned to give on April 20, 2015 at the IPAA OGIS Conference in New York, marked as merger-related soliciting material for the Lucas deal. The text provided contains no figures or new terms; the presentation itself is only an exhibit.
On April 13, 2015 Texas Capital Bank cut Aurora's borrowing base from $800,000 to $500,000, leaving loans $300,000 above the limit, with a $10,000 monthly reduction starting June 1, 2015 and a 200 basis point interest rate increase while the shortfall exists. The filing attributes the drop in reserve value to lower commodity prices and the June 2014 sale of leasehold properties (the 'Lightnin' Assets') for about $4,000,000. Aurora says it intends to repay the $300,000 by May 13. This is the borrowing base redetermination flagged in earlier filings, and it came out negatively.
