Vancouver, British Columbia--(Newsfile Corp. - August 26, 2022) - American Biofuels Inc. (TSXV: ABS.H) (the "Company") announces that it will be delayed in filing its audited annual financial statements and management discussion & analysis for the financial year ended April 30, 2022, and the CEO and CFO certificates, all as required by National Instrument 51-102 - Continuous Disclosure Obligations and National Instrument 52-109 - Certification of Disclosure in Issuers' Annual and Interim Filings (collectively, the "Documents").
The Company has commenced the annual audit and is working with its auditors; however, will not have the filings completed prior to the filing deadline. The Company is working diligently with the auditors to satisfy the audit requirements and it expects to the audited annual financial statements and management discussion & analysis and the filings for the Documents no later than September 26, 2022. Accordingly, the Company has informed the British Columbia Securities Commission (the "BCSC") of its anticipated delay in filing the Documents. Until the Company has filed the Documents, members of the Company's management and other insiders are subject to an insider trading black-out until such time as the Documents are filed. The Company is not currently subject to any insolvency proceedings.
Status of the Proposed Transaction - The Company and Paragon Processing LLC ("Paragon") had entered into a Business Combination Agreement (the "BCA") on July 30, 2019. Paragon being, a Colorado limited liability company engaged in the business of manufacturing and distributing industrial hemp products. Pursuant to the BCA, a special purpose vehicle ("Finco"), raised funds in a financing and had advanced funds to Paragon, and subsequently, the timeline of the of the BCA lapsed.
Both the Paragon receivable and the funds raised in the Finco financing have been recorded by the Company as at the year ended April 30, 2021, the most recent audited financial year end. As at April 30, 2021, the amounts recorded to Receivables include CAD$2,097,681 including interest, which was assessed and written down to $1, and Loans payable of CAD$2,436,122 including interest.
The Company has been advised that there have been restructuring activities within the members of Paragon. The Company has been in continuous communications with certain Paragon members regarding recovery of the advanced funds and/or restructuring of the BCA. In regards to recovery of the funds advanced to Paragon; the Company is determining its alternatives for recovery pursuant to the terms of the BCA. The outcome of all efforts has been lengthy and still pending due to reorganization within Paragon's management, operations and general pandemic related issues.
Pursuit of Alternative Projects and/or acquisition of an Alternative Business of Merit - Given the status of the Proposed Transaction above, the Company has made the strategic decision to pursue alternative projects and or acquisition of a businesses of merit that meet the criteria of a standalone project, but would also be complementary to the business of Paragon. The Company has reviewed multiple prospective target transactions and has devoted a significant amount interest in certain specific deals/prospective targets of interest that fits the Company's strategic objective.
On behalf of the Board of Directors,
American Biofuels Inc.
Chief Executive Officer
AMERICAN BIOFUELS INC.
Suite 303, 595 Howe Street
Vancouver, B.C. V5C 2T5
Phone: (604) 336-8617 Fax: (604) 718-2808
Cautionary Note Regarding Forward Looking Information
Certain information set out in this news release constitutes forward-looking information. Forward looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "intend", "could", "might", "should", "believe" and similar expressions. In particular, this news release contains forward-looking statements in respect of among other things, the filing of the Issuer Statements and the timing thereof. Forward-looking statements are based upon the opinions and expectations of management of the Company as at the effective date of such statements and, in certain cases, information provided or disseminated by third parties. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, and that information obtained from third party sources is reliable, they can give no assurance that those expectations will prove to have been correct. Readers are cautioned not to place undue reliance on forward-looking statements included in this document, as there can be no assurance that the plans, intentions or expectations upon which the forward-looking statements are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur, which may cause actual results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, among other things, risk factors set forth in the Company's most recent management's discussion and analysis under the heading "Risk and Uncertainties", a copy of which is filed on SEDAR at www.SEDAR.com, and readers are cautioned that the risk factors disclosed therein should not be construed as exhaustive. These statements are made as at the date hereof and unless otherwise required by law, the Company does not intend, or assume any obligation, to update these forward-looking statements.
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