2022-08-26 | TSXV:ABS.H | Press release

Vancouver, British Columbia–(Newsfile Corp. – August 26, 2022) – American Biofuels Inc. (TSXV: ABS.H) (the “Company”) announces that it will delay the filing of its annual audited financial statements and MD&A and Analysis for the year ended April 30, 2022, as well as the CEO and CFO certifications, all as required by National Instrument 51-102 Continuous Disclosure Obligations and Regulation 52-109 respecting Certification of Disclosure in Issuers’ Annual and Interim Filings (collectively, the “Documents”).

The Company has started the annual audit and is working with its auditors; however, filings will not be completed before the filing deadline. The Company is working diligently with the auditors to satisfy the audit requirements and expects the annual audited financial statements, MD&A and analysis of documents to be filed no later than September 26, 2022. Accordingly, the Company has notified the British Columbia Securities Commission (the “BCSC”) of its anticipated delay in filing the documents. Until the Company files the Materials, officers of the Company and other insiders are subject to a prohibition on insider trading pending the filing of the Materials. The Company is not currently subject to any insolvency proceedings.

Corporate update

Status of proposed transaction – The Company and Paragon Processing LLC (“Paragon”) entered into a business combination agreement (the “BCA”) on July 30, 2019. Paragon being a Colorado limited liability company engaged in the manufacture and distribution of hemp-based products. Pursuant to the BCA, a special purpose entity (“Finco”), raised funds in a financing and advanced funds to Paragon, and subsequently, the BCA’s deadline expired.

The Paragon receivable and the funds raised under the Finco financing were accounted for by the Company during the year ended April 30, 2021, the last audited year. As of April 30, 2021, amounts recorded in accounts receivable include CA$2,097,681 including interest, which has been valued and reduced to $1, and loans payable of CA$2,436,122 including interest.

The Company has been made aware that there has been restructuring activity among Paragon members. The Company has been in ongoing communication with certain Paragon members regarding the recovery of funds advanced and/or the restructuring of BCA. With respect to the recovery of funds advanced to Paragon; the Company determines its recovery alternatives in accordance with the terms of the BCA. The outcome of all efforts has been long and still pending due to Paragon’s management reorganization, operations and general pandemic issues.

Pursuit of alternative projects and/or acquisition of an alternative company of merit – Given the status of the transaction proposed above, the Company has made a strategic decision to pursue alternative projects and/or the acquisition of a business of merit that meets the criteria for a stand-alone project, but which would be also complementary to Paragon’s activity. The Company has reviewed several potential target transactions and has devoted a significant amount of interest to certain specific transactions/potential targets of interest which correspond to the strategic objective of the Company.

On behalf of the Board of Directors,

American Biofuels Inc.

“Ketura Nathe”

Chief executive officer


595 Howe Street, Suite 303

Vancouver, BC V5C 2T5

Phone: (604) 336-8617
Fax: (604) 718-2808

Caution Regarding Forward-Looking Information

Certain information contained in this press 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”, “could”, “should”, “believe” and similar expressions. In particular, this press release contains forward-looking statements regarding, among other things, the filing of issuer statements and the timing thereof. Forward-looking statements are based on the beliefs and expectations of the Company’s management as of the effective date of such statements and, in some cases, on information provided or disclosed by third parties. Although the Company believes that the expectations reflected in these forward-looking statements are based on reasonable assumptions and that information obtained from third-party sources is reliable, it cannot guarantee that these expectations will prove to be correct. Readers are cautioned not to place undue reliance on any forward-looking statements included herein, as there can be no assurance that the plans, intentions or expectations on which the forward-looking statements are based will occur. By their nature, forward-looking statements involve numerous known and unknown assumptions, risks and uncertainties that contribute to the possibility that predictions, forecasts, projections and other forward-looking statements will not occur, which may cause actual results to differ. future periods 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 others, the risk factors set forth in the Company’s most recent MD&A under the heading “Risks and Uncertainties”, a copy of which is filed on SEDAR at www.SEDAR.com , and readers are cautioned that the risk factors disclosed herein should not be construed as exhaustive. These statements are made as of the date hereof and, except as otherwise required by law, the Company neither intends nor undertakes any obligation to update these forward-looking statements.

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