VICTORY CLEAN ENERGY, INC.

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.

material agreement

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.

business combination

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.

business combination

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.

business combination

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.

business combination

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.

debt financing

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.

asset acquisition disposition

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.

capital raising announcement

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.

asset acquisition disposition

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).

capital raising announcement

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.

business combination

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.

capital raising announcement

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.

debt financing

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.

debt financing

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.

debt financing

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.

debt financing

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.

material agreement termination

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.

material agreement

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.

debt financing

This amendment covers agreements signed February 26, 2015 (amended March 3) with Lucas Energy ahead of the proposed combination. Victory agreed to lend Lucas up to $2 million ($250,000 drawn February 26, 2015, secured by 1,100,655 pledged Lucas shares, maturing February 26, 2016). In return Lucas assigned rights to seven wells to a Aurora subsidiary, which keeps them even if the deal fails. Victory also gave Lucas's senior lender, Louise H. Rogers, a $250,000 contingent note at 18% interest, payable if the deal ends or the well funding requirements are not met. The amendment itself was filed to mark the filing as merger solicitation material and add required disclosures, and it says a registration statement and proxy will be filed.

capital raising announcement

On February 4, 2015 Victory announced a letter of intent for a proposed business combination with Lucas Energy, Inc. The filing gives no terms, price or share exchange details, only that a press release (not included in the text provided) was issued. This is a new, non-binding proposal and would change what shareholders own if completed.

business combination

On September 23, 2014 Aurora and TELA mutually terminated the Fairway purchase agreement, so the second closing (the ~$3.3 million balance) will not happen because of title impairment issues found in due diligence. Only the first closing stands: a 10% working interest and 7.5% net revenue interest in about 2,180 gross acres in Glasscock and Howard Counties, against the 4,530 acres first planned. No penalties or payments were due, and the press release says Aurora keeps a 10% interest in the Taree 193-1 well with no closing date set. This scales back the acquisition announced in July 2014.

material agreement termination

On June 30, 2014 Aurora (50% Victory, 50% Navitus) agreed to buy a 10% interest in oil and gas assets of the Fairway Project in the Permian Basin from TELA Garwood Limited, LP for about $5.8 million. About $2.5 million was paid at the first closing on June 30 for a 10% working interest in the Darwin, BOA and Wagga Wagga leases and other leases; the remaining ~$3.3 million is due at a second closing planned for about July 31, 2014, subject to lease conveyances and customary conditions. The company's press release says the deal adds about 64 BOE per day and about 40 drilling locations. This is the first acquisition after the June 2014 Glasscock sale; the filing does not say how it is funded.

asset acquisition disposition

On June 5, 2014 Aurora sold its leasehold interests in about 640 gross (128 net) mineral acres in Glasscock County, Texas to an unrelated buyer for about $4 million in cash gross to Aurora, under an agreement dated April 30, 2014. Aurora has customary post-closing indemnification obligations. The filing does not say how the proceeds will be used or what share goes to Victory.

asset acquisition disposition

On February 20, 2014 Aurora (50% Victory, 50% Navitus) signed a revolving credit agreement with Texas Capital Bank for up to $25M, but the initial borrowing base is only $1.45M and $868,000 was drawn on February 22. It matures February 20, 2017, is secured on the oil and gas properties and the Aurora interests, and is guaranteed by Victory and Navitus. Navitus is raising $10M from private investors to put into Aurora in tranches (up to $15M under the partnership agreement), with a 10% preferred distribution for five years and one warrant on Victory stock per dollar invested. The filing also puts shares outstanding at about 27.56M held by about 1,430 holders, with 47.5M common shares authorized. This ends the company's debt-free position of March 2012, though the debt sits at Aurora with a Victory guarantee, and Navitus funding is described as being raised, not yet delivered.

capital raising announcement

On November 20, 2013 Victory dismissed Marcum LLP and re-engaged Weaver and Tidwell, which it had dismissed in August 2012. Marcum's 2011 and 2012 reports carried a going-concern paragraph, there were no disagreements, and Marcum had advised of internal-control weaknesses; the filing gave no reason for the switch.

auditor change

WilsonMorgan resigned on June 27, 2013, saying it no longer wanted to provide audit services as part of its strategic plan and was merging with a third party (Marcum LLP, completed July 1, 2013). The 2012 10-K had still not been filed, and the restatement is still pending. Management also reports two material weaknesses in internal controls, including a lack of segregation of duties.

auditor change

On March 25, 2013 Victory said its 2011 10-K and the 2012 quarterly reports (March, June, September) should no longer be relied on, because Navitus's 50% non-controlling interest in Aurora was not shown on the face of the financial statements. The company will restate in its 2012 10-K and estimates that total assets, liabilities and equity will not change, but that net loss per share will improve. This is the same issue Weaver raised in 2012, which the company had resisted then.

financial restatement

On August 3, 2012 Victory dismissed Weaver and Tidwell, only about six weeks after hiring it, and re-engaged WilsonMorgan. The company says Weaver disagreed with it over showing Navitus's non-controlling interest in the financial statements, and the company dismissed Weaver because it feared missing its SEC filing deadline. Weaver's letter says Aurora (50% owned) was reported at 100% of earnings, losses and equity, which it believes does not comply with accounting rules, and that its dismissal resulted from this disagreement. This reverses the June 2012 change and opens an accounting-presentation dispute over the Aurora partnership with Navitus.

auditor change

The debenture private placement that began Sept 15, 2010 closed on Jan 31, 2012 having raised $5,777,275 in principal, $1,830,000 of it in January 2012. All remaining debenture holders agreed to convert to common shares effective Feb 29, 2012, so the company states it has no debt on its balance sheet as of March 1, 2012. Debt converted in 2011 and 2012 totaled $6,024,509 including interest. This resolves the convertible debenture thread, and the shares replace the debt as dilution. The press release also mentions a 50:1 reverse split, a new CFO and a new CEO, Kenneth Hill.

material agreement

On Dec 6, 2011 (effective Oct 1, 2011) Victory signed a second amended agreement for the Aurora Energy Partners partnership, bringing in The Navitus Energy Group in place of James Capital Consulting and James Capital Energy. Victory's share of Aurora profits and losses rises from 15% to 50%, with Navitus holding the other 50%. Navitus may, at its option, provide up to $15,000,000 of funding, which carries a 10% preferred return and warrants or convertible debenture terms, so it is not committed money. Several 2007 agreements, including the Fund Agreement and the Zamber letter agreement, were terminated without penalty. Director Ronald Zamber is a member of both James Capital entities, and director Dave McCall's firm is counsel to both Victory and Navitus.

asset acquisition disposition

Under an agreement dated Dec 31, 2010, Visionary Investments, whose sole member is director and major stockholder Ronald Zamber, swapped $497,000 of unsecured notes plus $55,275 of interest for a $552,275 10% secured convertible debenture due Sept 30, 2013. It converts at $0.005 per share into 110,455,000 shares, which would be a large dilution for current holders. It uses the same terms as the ongoing debenture offering.

capital raising announcement

On Jan 19, 2011 Victory sold six units for $60,000 to one accredited investor. Each unit was a $10,000 10% convertible debenture (due Sept 30, 2013) plus a warrant for 10,000 shares at $0.005. The debentures convert at $0.005 per share. This is part of an ongoing 75-unit offering (45.5 sold so far, ending by March 31, 2011 unless extended). With about 136.7 million shares outstanding, full conversion and exercise of this investor's securities would lift the total to 148,779,608, which dilutes existing holders.

capital raising announcement

Victory's audit committee dismissed Hein & Associates on Jan 17, 2011 and hired Wilson Morgan, LLP. Hein, hired in March 2009, never began any audit or review work, and the filing reports no disagreements. The 2009 and 2010 financial statements had not been filed with the SEC.

auditor change

Victory signed a one-year option for $25,000 to acquire an oil and gas lease on a mineral interest on Padre Island, Texas, from Santiago Resources and other parties. The press release describes a roughly 1,000-acre tract with three shut-in gas wells, and a planned 100% working interest and 75% net revenue interest if the lease is taken. Some optionors are tied to The McCall Firm, which is Victory's Texas legal counsel and is prosecuting litigation for it. The option is not yet an acquisition, and the press release cites the Adams-Baggett gas wells in Ozona, Texas as existing production.

material agreement

Former CEO Jon Fullenkamp resigned from his posts under a May 15, 2009 separation agreement. The debt owed to him was cut from $1,014,000 to $500,000, to be repaid on a schedule, and he receives 10,000,000 shares owed under his 2005 employment agreement plus 1,000,000 shares in place of preferred stock that could not validly be issued. Director Ronald Zamber gets a five-year proxy to vote Fullenkamp's shares, and Fullenkamp must cooperate with a board committee investigation into matters the CFO raised on April 28, 2009. Robert Miranda now signs as CEO.

material agreement

Now called Victory Energy Corporation, the company carried out a 25-for-1 reverse stock split effective Nov 10, 2006: every 25 old shares became one new share. Options, warrants and convertible notes were adjusted proportionately, and fractional shares were rounded up. Shareholders hold fewer shares after the split; the filing does not say what it does to the value of their holdings.

security holder rights change

The company also dropped the March 2005 Union Media News deal, saying it had not received all the due diligence information and the deal was not in shareholders' interest, with no termination penalties. It said its new direction is oil and natural gas exploration and development in the United States and Canada, completing the exit from the 2005 non-energy acquisitions.

material agreement termination

The company ended the Feb 2005 Universal Power Vehicles share-exchange deal because its due diligence concerns were not satisfied, saying the deal was not in shareholders' best interest and no termination penalties would apply. It said it would now concentrate on oil and natural gas exploration and development, a turn away from the 2005 technology acquisitions.

material agreement termination

On March 10, 2005 the company signed a second share-exchange deal, to acquire Union Media News Corporation from its sole shareholder Jim Boardman in return for 20% of the common stock of its subsidiary Victory Communication Services, Inc. Closing was expected within about two weeks. The filing text oddly says it acquires the stock of 'UPV' rather than UNM, which appears to be a copy error from the earlier filing (inference).

material agreement

Now named Victory Capital Holdings (formerly New Environmental Technologies), the company signed a deal on Feb 21, 2005 to buy all of Universal Power Vehicles, an electric-vehicle and lightweight-alloy technology developer owned by Howard Foote. In return Foote would receive 20% of the common stock of Victory Energy, Inc., a wholly-owned subsidiary. Closing depended on conditions and was expected within about two weeks. This continues the 2003 plan to buy assets outside oil and gas.

material agreement

New Environmental Technologies Corporation (the company that later became Victory) changed hands in April 2003. Harold Gregg became interim CEO, David and Corie Merrell resigned, and the largest shareholder, Chiricahua Investments, agreed to sell 2,002,895 shares to IPIC, Inc. for $211,302.50, while other sellers agreed to sell 276,182 shares to CTSO, Inc. for $63,697.50. The company said it would now seek income-producing assets in technology, real estate and entertainment, with a possible name change and extra capital needs to be advised by officers.

asset acquisition disposition