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EX-23.1 - EXHIBIT 23.1 - Oilsands Quest Inc | exhibit23-1.htm |
EX-23.2 - EXHIBIT 23.2 - Oilsands Quest Inc | exhibit23-2.htm |
As
filed with the Securities and Exchange Commission on November 4,
2009
Registration
No. 333-162023
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Amendment
No. 1 to
FORM
S-1
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
OILSANDS
QUEST INC.
(Exact
name of registrant as specified in its charter)
Colorado
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1311
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98-0461154
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(State
or other jurisdiction of incorporation or organization)
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(Primary
Standard Industrial Classification Code Number)
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(I.R.S.
Employer Identification Number)
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800, 326 – 11th Avenue
SW
Calgary, Alberta, Canada T2R
0C5
(403) 263-1623
(Address, including zip code,
and telephone number, including area code,
of
registrant’s principal executive offices)
Garth Wong
Chief Financial
Officer
Oilsands Quest
Inc.
800, 326 – 11th Avenue
SW
Calgary, Alberta, Canada T2R
0C5
(403) 263-1623
(Name, address, including zip
code, and telephone number, including area code,
of
agent for service)
Copies
to:
Andrew
J. Foley, Esq.
Paul,
Weiss, Rifkind, Wharton & Garrison LLP
1285
Avenue of the Americas
New York,
New York 10019-6064
(212)
373-3000
Approximate date of commencement of
proposed sale to public: From time to time after this
Registration Statement becomes effective.
If any of
the securities being registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the
following box: þ
If this
Form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. o
If this
Form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act Registration
Statement number of the earlier effective Registration Statement for the same
offering. o
If this
Form is a post-effective amendment filed pursuant to Rule 462(d) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.
Large
Accelerated Filer o
|
Accelerated
Filer þ
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Non-accelerated
filer o
(Do
not check if a smaller reporting company)
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Smaller
reporting company o
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The
Registrant hereby amends this Registration Statement on such date or dates as
may be necessary to delay its effective date until the Registrant shall file a
further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
The
information in this prospectus is not complete and may be changed. We may not
sell these securities until the registration statement filed with the Securities
and Exchange Commission is effective. This prospectus is not an offer to sell
these securities and it is not soliciting an offer to buy these securities in
any jurisdiction where the offer or sale is not permitted.
Subject
to completion, dated November 4, 2009
Base
Shelf Prospectus
99,598,673
SHARES OF
COMMON STOCK
This
prospectus relates to: (i) up to 6,325,000 shares of common stock issuable from
time to time upon the exercise of warrants of the Company previously issued in
December 2007 (the “2007 Warrants”) and (ii) up to 17,537,500 shares of common
stock issuable from time to time upon the exercise of warrants of the Company
previously issued in May 2009 (the “2009 Warrants”). The 2007
Warrants entitle the purchaser to purchase one share of common stock for a price
of US$6.75 at any time on or prior to December 5, 2009 and the 2009 Warrants
entitle the purchaser to purchase one share of common stock for a price of
US$1.10 at any time on or prior to May 12, 2011.
In
addition, this prospectus relates to the resale by the selling shareholders
described herein of up to 75,736,173 shares of our common stock issued or to be
issued upon the exchange of exchangeable shares (the "Exchangeable Shares")
in Oilsands Quest Sask Inc. ("OQI Sask"), the Company's wholly owned
subsidiary. The Exchangeable Shares were issued by OQI Sask as part of the
reorganization on August 14, 2006, and are exchangeable at any time on a
one-for-one basis, at the option of the holder, for shares of the Company’s
common stock.
The
actual number of shares of common stock offered by the selling shareholders in
this prospectus, and included in the registration statement of which this
prospectus is a part, includes such additional number of shares of common stock
as may be issued or issuable upon exercise of the 2007 Warrants, the 2009
Warrants or the Exchangeable Shares by reason of any stock split, stock dividend
or similar transaction involving the common stock, in accordance with
Rule 416 under the Securities Act of 1933 (the “Securities
Act”).
The
selling shareholders may sell securities from time to time in the principal
market on which the securities are traded at the prevailing market price or in
negotiated transactions. The selling shareholders may be deemed
underwriters of the securities which they are offering. We will pay
the expenses of registering these securities.
Our
common stock is registered under Section 12(b) of the Securities Exchange
Act of 1934 (the “Exchange Act”) and is listed on the NYSE AMEX under the symbol
“BQI”. The last reported sales price per share of our common stock as reported
by the NYSE AMEX on September 18, 2009 was $1.19. The 2007 Warrants
and the 2009 Warrants are also listed on the NYSE AMEX.
You
should carefully read this prospectus, together with the documents incorporated
by reference, before you invest. Investing in our securities involves a high
degree of risk. See “Risk
Factors” beginning on page 10.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or determined if this prospectus is
truthful or complete. Any representation to the contrary is a criminal
offense.
The date
of this prospectus is ______________, 2009.
2
TABLE
OF CONTENTS
ii
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1
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5
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5
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6
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10
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17
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17
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23
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26
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28
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29
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3
ABOUT
THIS PROSPECTUS
This
prospectus is part of a “shelf” registration statement that we filed with the
SEC.
This
prospectus relates to: (i) up to an aggregate 23,862,500 shares of common stock
issuable from time to time upon the exercise of the 2007 Warrants and the 2009
Warrants, and (ii) the resale by the selling shareholders described herein of up
to 75,736,173 shares of our common stock issued or to be issued upon the
exchange of the Exchangeable Shares. Before investing in any
securities, you should carefully read this prospectus and any free writing
prospectus prepared by or on behalf of us, together with the documents we have
incorporated by reference in this prospectus described under the heading
“Documents Incorporated by Reference.” You should also review the
additional information described under the heading “Where You Can Find More
Information.”
You
should only rely on the information contained in or incorporated by reference
into this prospectus. We have not authorized any other person to provide you
with different information. If anyone provides you with different or
inconsistent information, you should not rely on it. We are not making an offer
to sell these securities in any jurisdiction where the offer or sale is not
permitted. You should assume that the information appearing in this prospectus,
and any free writing prospectus, or the documents incorporated by reference
herein or therein, prepared by or on behalf of us is accurate only as of the
date such information is presented. Our business, financial condition, plan of
operations and prospects may have subsequently changed.
When we
use the terms “Oilsands Quest,” the “Company,” “we,” “us,” “our,” or “OQI,” we
are referring to Oilsands Quest Inc. and its subsidiaries, unless the context
otherwise requires.
4
PROSPECTUS
SUMMARY
This
summary highlights information contained or incorporated by reference in this
prospectus. This summary does not contain all of the information that you should
consider before deciding to invest in the securities. You should read this
entire prospectus carefully, including the financial data and related notes,
risk factors and other information incorporated by reference in this
prospectus.
Oilsands
Quest Inc.
Background
We are a
Colorado corporation formed on April 3, 1998 as Uranium Power Corporation. On
November 2, 2004 we changed our name to CanWest Petroleum Corporation. On
October 31, 2006 we changed our name to Oilsands Quest Inc.
The
Company operates through its subsidiary corporations and conducts limited joint
venture activities directly. Our primary operating subsidiary is Oilsands Quest
Sask Inc. (“OQI Sask”), an Alberta corporation. OQI Sask was established as an
operating subsidiary of the Company primarily to explore for and develop oil
sands deposits in the provinces of Saskatchewan and Alberta. We currently own
100% of the issued and outstanding voting common shares of OQI Sask following
the acquisition of the noncontrolling (minority) interest of OQI Sask on August
14, 2006. Following this acquisition, our Board of Directors was reorganized and
the executive team of OQI Sask was appointed as the Company’s executive
team.
In
addition to OQI Sask, we also have the following wholly-owned
subsidiaries:
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—
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Township
Petroleum Corporation (“Township”), an Alberta corporation. Township owns
an oil sands lease in the Province of Alberta acquired in 2005, referred
to as the Eagles Nest, and is currently developing plans for exploring the
oil sands potential on the lease.
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—
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Western
Petrochemicals Corp. (“WPC”), an Alberta corporation. WPC formerly owned
certain rights relating to exploration for oil shale, referred to as the
Pasquia Hills Oil Shale, and is currently
inactive.
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—
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Stripper
Energy Services Inc. (“Stripper”), acquired in 2007 and currently a wholly
owned subsidiary of OQI Sask.
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—
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1291329
Alberta Ltd., incorporated in 2007 to own assets related to camp
facilities and equipment.
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—
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Oilsands
Quest Technology Inc., incorporated in 2007 to assess technologies related
to bitumen and shale oil extraction and to ensure any proprietary
information created from the development of our prospects can be
commercially exploited. Since incorporation, this subsidiary has been
focused on assessing technologies related to the extraction of bitumen and
planning research for the development technologies applicable for the
extraction of resources from its
lands.
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5
Strategy
Our
strategy is to focus on business opportunities in the oil and gas sector and in
particular the oil sands and oil shale sectors in Western Canada with the
objective of maximizing value on a per share basis. We will execute our strategy
by:
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—
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Selectively identifying and
acquiring key targets in the oil sands and oil shale sectors. We
have amassed one of the largest contiguous land positions in the oil sands
industry in Canada along with a significant oil shale land position in
Saskatchewan. We have an undivided, 100% interest in each of the permits,
licenses and leases held.
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Exploring and delineating
resources on our lands. Our operating teams have conducted
extensive exploration programs, consisting of drilling 424 exploration and
delineation wells, conducting 2,080 kilometres of 2-D and 3-D seismic
surveys, and other exploration activities resulting in the Axe Lake and
Raven Ridge Discoveries and the identification of multiple other oil sands
prospects. We manage and operate all of our
activities.
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Exploiting the oil sands
resources identified. We are focused on the commercialization of
our reservoirs and are in the process of conducting a
comprehensive reservoir test program at Axe Lake to determine the optimal
recovery processes that will be utilized to produce bitumen from our
reservoirs. Our development strategy includes evaluating alternative
recovery processes and joint venture partners on specific projects to
optimize economic recovery and to accelerate the development of such
projects in a timely and responsible
manner.
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—
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Separate the mineral assets of
the company. Our intent is to reorganize the Pasquia Hills oil
shales held by Oilsands Quest, so that these interests will form a
distinct and separate business. The Company is considering
establishing a subsidiary and separating the assets for the purpose of
creating a separate business.
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Our
business plan is to focus on the exploration, delineation and exploitation of
bitumen resources on our oil sands exploration permits, licenses and lease
located in the provinces of Saskatchewan and Alberta. In the present market we
also view our oil shale prospects as having significant long-term potential
value.
Operating
Results
We have
generated no revenue. We have used significant funds in operations, and expect
this trend to continue for the foreseeable future. There is no assurance that we
can generate net income, increase revenues or successfully explore and exploit
our properties.
Our
Corporate Information
Our
principal offices are located at 800, 326 – 11th Avenue SW, Calgary, Alberta,
Canada T2R 0C5, and our telephone number is (403) 263-1623. Our website is
www.oilsandsquest.com. Our website is not a part of this
prospectus.
6
The
Offering
Securities
Offering
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This
prospectus relates to: (i) up to an aggregate 23,862,500 shares of common
stock issuable from time to time upon the exercise of the 2007 Warrants
and the 2009 Warrants, and (ii) the resale by the selling shareholders
described herein of up to 75,736,173 shares of our common stock
issued or to be issued upon the exchange of the Exchangeable
Shares. See the “Plan of Distribution” section of this
prospectus for additional information concerning the manner in which our
securities may be offered.
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Common
Stock
Outstanding
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As
of September 18, 2009, 277,884,511 shares of our common stock were issued
and outstanding (excluding 48,870,917 shares of our common stock reserved
for issuance upon exercise of outstanding options under option plans and
warrants, and 1,388,567 shares of common stock reserved for issuance on
settlement of debt of a former subsidiary). In addition,
pursuant to our Reorganization Agreement with OQI Sask dated August 14,
2006, we are required to issue up to 76,504,304 shares of our common stock
for all of the exchangeable shares of OQI Sask (the “OQI Sask Exchangeable
Shares”) (including warrants and options to acquire) issued at closing. As
of September 18, 2009, 38,996,938 OQI Sask Exchangeable Shares have
already been exchanged for shares of our common stock, 768,131 OQI Sask
options were forfeited and up to an additional 36,739,235 OQI Sask
Exchangeable Shares may be exchanged for shares of our common
stock.
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NYSE
AMEX
Symbol
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Our
common stock is listed on the NYSE AMEX under the symbol
“BQI”.
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Use
of
Proceeds
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We
will not receive any proceeds from the resale of securities by the selling
shareholders.
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Dividends
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We
have never declared or paid any dividends or distributions on our common
stock. We anticipate that for the foreseeable future all earnings will be
retained for use in our business and no cash dividends will be paid to
shareholders. Any payment of cash dividends in the future on our common
stock will be dependent upon our financial condition, results of
operations, current and anticipated cash requirements, plans for
expansion, as well as other factors that the Board of Directors deems
relevant.
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Risk
Factors
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Investing
in our securities involves a high degree of risk. See “Risk Factors”
beginning on page 10.
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7
DOCUMENTS
INCORPORATED BY REFERENCE
The SEC
allows us to “incorporate by reference” the information in documents we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus. These documents provide a significant
amount of information about us. We incorporate by reference the documents listed
below:
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·
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Our
Annual Report on Form 10-K for the fiscal year ended April 30, 2009
(filed July 30, 2009).
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·
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Our
Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2009
(filed September 9, 2009).
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·
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Our
Current Reports on Form 8-K reporting events of (filing date in
parentheses):
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September 10, 2009 |
(September
10, 2009)
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August 25, 2009 |
(August
27, 2009)
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July
30, 2009
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(August
4, 2009)
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July 14, 2009 |
(July
17, 2009; amended on July 28, 2009)
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July 6, 2009 |
(July
10, 2009)
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May 1, 2009 |
(May
1, 2009)
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·
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Our
Definitive Proxy Statement on Schedule 14A (those portions incorporated by
reference into our Form 10-K only) filed on August 28,
2009.
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The
description of our common stock set forth in our Registration Statement on
Form 10-SB (filed October 14, 1999), as amended by Form 8-A (filed
March 13, 2006 and August 23,
2006).
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The above
information incorporated by reference has also been filed with the securities
regulatory authorities in each of the provinces of Canada except
Quйbec.
We will
provide to each person to whom a prospectus is delivered a copy of any or all of
the reports or documents that have been incorporated by reference in this
prospectus but not delivered with the prospectus. You may request a
copy of these filings or a copy of any or all of the documents referred to above
which have been incorporated in this prospectus by reference, at no cost, by
writing the following individual at the Corporation or calling the following
individual of the Corporation at the following address and telephone
number:
Vice
President, Legal
Oilsands
Quest Inc.
800, 326
– 11th Avenue
SW
Calgary,
Alberta, Canada T2R 0C5
Telephone
No.: (403) 263-1623
Facsimile
No.: (403) 263-9812
Copies of
these reports and documents are also available on our website at
http://www.oilsandsquest.com. Our website is not a part of this
prospectus.
WHERE
YOU CAN FIND MORE INFORMATION
We have
filed with the SEC a “shelf” registration statement on Form S-1
under the Securities Act relating to the securities that may be
offered by this prospectus. This prospectus is a part of that registration
statement, but does not contain all of the information in the registration
statement. We have omitted parts of the registration statement in accordance
with the rules and regulations of the SEC. For more detail about us and any
securities that may be offered by this prospectus, you may examine the
registration statement on Form S-1 and the exhibits filed with or
incorporated by reference into the registration statement at the locations
listed below.
8
We file
annual, quarterly and periodic reports, proxy statements and other information
with the SEC. You may read and copy any document we file with the SEC at the
SEC’s Public Reference Room at 100 F Street, N.E., Washington, DC
20549 by calling the SEC at 1-800-SEC-0330. The SEC also maintains a website
that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the SEC at
http://www.sec.gov. We also file reports and other
information with the securities regulatory authorities in each of the provinces
of Canada except Quйbec. These documents are electronically available at
http://www.sedar.com.
NOTE
OF CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus includes certain statements that may be deemed to be “forward-looking
statements” within the meaning of applicable securities laws. All statements,
other than statements of historical facts, included in this prospectus that
address activities, events or developments that our management expects, believes
or anticipates will or may occur in the future are forward-looking statements.
Such forward-looking statements include discussion of such matters
as:
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the
amount and nature of future capital, development and exploration
expenditures;
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the
timing of exploration activities;
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·
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business
strategies and development of our business plan and drilling programs;
and
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potential
reservoir recovery optimization
processes.
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Forward-looking
statements are statements other than relating to historical fact and are
frequently characterized by words such as “plan”, “expect”, “project”, “intend”,
“believe”, “anticipate”, “estimate”, “potential”, “prospective” and other
similar words or statements that certain events or conditions “may” “will” or
“could” occur. Forward-looking statements such as references to Oilsands Quest’s
drilling program, geophysical programs, reservoir field testing and analysis
program, preliminary engineering and economic assessment program for a first
commercial project, and the timing of such programs are based on the opinions
and estimates of management and the Company’s independent evaluators at the date
the statements are made, and are subject to a variety of risks and uncertainties
and other factors that could cause actual events or results to differ materially
from those anticipated in the forward-looking statements, which include but are
not limited to risks inherent in the oil sands industry, regulatory and economic
risks, lack of infrastructure in the region in which the Company’s resources are
located and risks associated with the Company’s ability to implement its
business plan. The Company’s views about the restatement, its remediation of a
material weakness in its controls, its financial condition, performance and
other matters also constitute “forward-looking statements”. These
forward-looking statements are subject to risks and uncertainties including, but
not limited to, the results and effect of the Company’s review of its accounting
practices, potential delisting of our common stock on the NYSE Amex or cease
trade orders by regulatory authorities; potential claims and proceedings
relating to the adjustments to the Company’s financial statements or its
accounting practices, including shareholder litigation and action by the SEC or
other governmental agencies which could result in civil or criminal sanctions
against the Company and/or certain of its current or former officers, directors
and/or employees; and negative tax or other implications for the Company
resulting from the accounting adjustments and other factors detailed from time
to time in the Company’s filings under the Exchange Act. Many of these risks and
uncertainties are beyond the control of the Company. The Company undertakes no
obligation to update forward-looking statements if circumstances or management’s
estimates or opinions should change, except as required by law. The reader is
cautioned not to place undue reliance on forward-looking
statements.
The risks
and uncertainties set forth above are not exhaustive. Readers should
refer to our Annual Report on Form 10-K and other documents incorporated by
reference in this prospectus, which are available at www.sec.gov and at
www.sedar.com for a detailed discussion of these risks and uncertainties and
details regarding the location and extent of our land holdings.
9
RISK
FACTORS
An
investment in our securities has a high degree of risk. Before you invest you
should carefully consider the risks and uncertainties described below and the
other information in our Form 10-K for the fiscal year ended April 30,
2009. If any of the following risks actually occur, our business, operating
results and financial condition could be harmed and the value of our stock could
go down. This means you could lose all or a part of your investment in our
securities.
RISKS
RELATED TO OUR BUSINESS
If
we fail to maintain effective internal control over financial reporting in
accordance with Section 404 of the Sarbanes-Oxley Act of 2002, the price of our
common shares may be reduced.
We are
required to maintain effective internal control over financial reporting under
the Sarbanes-Oxley Act of 2002 and related regulations. Any material weakness in
our internal control over financial reporting that needs to be addressed,
disclosure of management’s assessment of our internal control over financial
reporting, or disclosure of our public accounting firm’s report on internal
control over financial reporting that reports a material weakness in our
internal control over financial reporting may reduce the price of our common
shares.
In
connection with the audit of our consolidated financial statements for the year
ended April 30, 2009, we and our independent registered public accounting firm
identified deficiencies in our internal control over financial reporting that
were “material weaknesses” as defined by standards established by the Public
Company Accounting Oversight Board. The deficiencies related to our accounting
for the August 2006 acquisition of a noncontrolling interest of OQI Sask which
together with our 64.08% interest resulted in a 100% interest in OQI Sask. We
have restated our financial statements for the period ended April 30, 2008 and
the interim periods from July 31, 2008 through January 31, 2009 to correct the
accounting treatment for this acquisition. However, we cannot assure
you that our remediation of our internal control over financial reporting
relating to the identified material weakness will re-establish the effectiveness
of our internal control over financial reporting or that we will not be subject
to material weaknesses in the future.
The
restatement of our consolidated financial statements may result in litigation
and government enforcement actions.
We have
restated our consolidated financial statements and other financial information
for the years ended April 30, 2008 and 2007 and the interim periods ended from
July 31, 2008 through January 31, 2009 primarily with respect to the accounting
treatment of our August 2006 acquisition of a noncontrolling interest (35.92%)
of OQI Sask which together with our 64.08% interest resulted in a 100% interest
in OQI Sask. The restatement of our prior financial statements may
expose us to risks associated with litigation, regulatory proceedings and
government enforcement actions, including the risk that the SEC may disagree
with the manner in which we have accounted for and reported the financial impact
of the restatement which could result in the Company having to further restate
its prior financial statements, amend prior filings with the SEC, or take other
actions not currently contemplated.
In
addition, securities class action litigation has often been brought against
companies who have been unable to provide current public information or who have
restated previously filed financial statements. Such litigation is
complex and could result in substantial costs, divert management’s attention and
resources, and harm our business, financial condition and results of
operations.
Due to Our History of Operating
Losses, We are Uncertain That We Will Be Able to Maintain Sufficient Cash to
Accomplish Our Business Objectives
The
consolidated financial statements have been prepared assuming that we will
continue as a going concern. During the fiscal years ended April 30, 2009 and
2008 we suffered net losses of $88,965,180 and $91,031,316, respectively. At
April 30, 2009, there was stockholders’ equity and working capital of
$357,095,332 and $27,141,625, respectively. There is no assurance that we can
generate net income, increase revenues or successfully explore and exploit our
properties.
10
Significant
amounts of capital will be required to explore the permit lands in Saskatchewan
and Alberta, oil sands exploration licenses in Saskatchewan, the Eagles Nest
Prospect and the Pasquia Hills Oil Shale Prospect. The only source of future
funding presently available to us is through the sale of additional equity
capital and borrowing funds or selling a portion of our interest in our assets.
There is no assurance that any additional equity capital or borrowings required
will be obtainable on terms acceptable to us, if at all. Failure to obtain such
additional financing could result in delays or indefinite postponement of
further exploration and development of our projects. Equity financing, if
available, may result in substantial dilution to existing shareholders. Our
financial statements do not include any adjustments relating to the
recoverability and classification of assets or the amounts and classification of
liabilities that might be necessary should we become unsuccessful in
implementing these plans.
The
Impact of Disruptions in the Global Financial and Capital Markets on Our Ability
to Obtain Financing
The
global financial and capital markets have been experiencing extreme volatility
and disruption, including the failures of financial services companies and the
related liquidity crisis. Although we expect to meet our near term liquidity
needs with our working capital on hand, we will continue to need further funding
to achieve our business objectives. In the past, the issuance of equity
securities has been the major source of capital and liquidity for us. The
extraordinary conditions in the global financial and capital markets have
currently limited the availability of this funding. If the disruptions in the
global financial and capital markets continue, debt or equity financing may not
be available to us on acceptable terms, if at all. If we are unable to fund
future operations by way of financing, including public or private offerings of
equity or debt securities, our business, financial condition and results of
operations will be adversely impacted. Additionally, these factors,
as well as other related factors, may cause decreases in asset values that are
deemed to be other than temporary, which may result in impairment
losses.
Our Business Plan is Highly
Speculative and its Success Depends, in part, on Exploration Success on the Permit,
License and Lease Lands and the Development of Identified
Discoveries
Our
business plan is focused primarily on the exploration for and development of oil
sands deposits on our permitted, licensed and leased lands in the Provinces of
Saskatchewan and Alberta.
Exploration
itself is highly speculative. We are subject to all of the risks inherent in oil
sands exploration and development, including identification of commercial
projects, selection of optimal recovery processes for successful production,
operation and revenue uncertainties, market sizes, profitability, market demand,
commodity price fluctuations and the ability to raise further capital to fund
activities. There can be no assurance that we will be successful in overcoming
these risks.
Status
and Stage of Reservoir Test Program
The
reservoir test program is currently at the early stages of its planned
implementation schedule. There is a risk that the program will not be completed
on time or on budget or at all. Additionally, there is a risk that the program
may have delays, interruption of operations or increased costs due to many
factors, including, without limitation: breakdown or failure of equipment or
processes; construction performance falling below expected levels of output or
efficiency; design errors; challenges to, or inability to access in a timely or
economic fashion, the proprietary technology anticipated to be licensed for the
program; contractor or operator errors; non-performance by third-party
contractors; labour disputes, disruptions or declines in productivity; increases
in materials or labour costs; inability to attract sufficient numbers of
workers; delays in obtaining, or conditions imposed by, regulatory approvals;
changes in program scope; violation of permit requirements; disruption in the
supply of energy; transportation accidents, disruption or delays in availability
of transportation services or adverse weather conditions affecting
transportation; unforeseen site surface or subsurface conditions; and
catastrophic events such as fires, earthquakes, storms or
explosions.
11
Access
to Infrastructure
Production
from our lease, license, and permit lands will depend upon certain
infrastructure that does not currently exist in close proximity to where we
currently anticipate to locate our initial projects and such infrastructure, if
put in place, may be operated by others. Such infrastructure will include,
without limitation, the following: pipelines for the transportation of natural
gas and certain feedstock to our site and the transportation of bitumen and
other petroleum products we produce to upgrading facilities and markets for
sale; and electricity transmission and distribution systems for the provision of
electricity. The failure to have any of this infrastructure in place on economic
terms will negatively impact the operation of any potential commercial project
and will adversely affect the ability to convert our resources into
reserves.
Access
to Markets
By the
time we have a commercial project ready for start-up, it will likely have been
preceded by other projects which began development at an earlier time and are
more advanced in terms of production. As a result, preferred markets for our
products may have already been taken up or upgraders or refiners may lack
sufficient capacity to process our products in a timely or economic
fashion.
Location
of Discovery Areas
With the
exception of Eagles Nest, all of Oilsands Quest’s prospective areas are located
east of what has to date been considered the established bitumen resources that
are exploitable by in-situ production techniques in the Athabasca oil sands
area. Similar to some other bitumen accumulations within the
eastern portion of Alberta, the Axe Lake and Raven Ridge areas lack a distinct
overlying shale formation. The absence of this may preclude the use of certain
high-pressure in-situ recovery methods, but the quality of the reservoirs and
high bitumen saturations present at the Axe Lake and Raven Ridge areas provide
the potential for extraction using a number of recovery methods, re-configured
for our reservoirs. However, there can be no assurances that any such
recovery method will be successful in enabling us to recover significant volumes
of bitumen from our reservoirs. See “—Status and Stage of Reservoir
Test Program”.
Independent
Reviews
Although
third parties have prepared reviews, reports and projections relating to the
evaluation, viability and expected performance of our resources and plans for
development thereof, no assurance can be given that these reports, reviews and
projections and the assumptions on which they are based will, over time, prove
to be accurate.
Personnel
The
design, development and construction of the reservoir test program and any
subsequent pilot and commercial projects will require experienced executive and
management personnel and operational employees and contractors with expertise in
a wide range of areas. No assurance can be given that all of the required
personnel and contractors with the necessary expertise will be available. Should
other oil sands projects or expansions proceed in the same time frame as
Oilsands Quest programs and projects, we will have to compete with these other
projects and expansions for qualified personnel and such competition may result
in increases to compensation paid to such personnel or in a lack of qualified
personnel. Any inability of Oilsands Quest to attract and retain qualified
personnel may delay or interrupt the design, development and construction of,
and commencement of operations at, the reservoir test program and any subsequent
pilot and commercial projects. Sustained delays or interruptions could have a
material adverse effect on the financial condition of Oilsands
Quest.
12
THE
BUSINESS OF OIL SANDS EXPLORATION IS SUBJECT TO MANY RISKS
Nature
of Oil Sands Exploration and Development
Oil sands
exploration and development is very competitive and involves many risks that
even a combination of experience, knowledge and careful evaluation may not be
able to overcome. As with any petroleum property, there can be no assurance that
commercial deposits of bitumen will be produced from our permit lands in
Saskatchewan and Alberta, oil sands exploration licenses in Saskatchewan, or the
Eagles Nest Prospect and Pasquia Hills Oil Shale Prospect. Furthermore, the
marketability of any resource will be affected by numerous factors beyond our
control. These factors include, but are not limited to, market fluctuations of
prices, proximity and capacity of pipelines and processing equipment, equipment
and labour availability and government regulations (including, without
limitation, regulations relating to prices, taxes, royalties, land tenure,
allowable production, importing and exporting of oil and gas and environmental
protection). The extent of these factors cannot be accurately predicted, but the
combination of these factors may result in us not receiving an adequate return
on invested capital.
The
Viability of our Business Plan, Business Operations, and Future Operating
Results and Financial Condition are and will be Exposed to Fluctuating Prices
for Oil, Natural Gas, Oil Products and Chemicals.
Prices of
oil, natural gas, oil products and chemicals are affected by supply and demand,
which can fluctuate significantly. Factors that influence supply and
demand include operational issues, natural disasters, weather, political
instability, or conflicts, economic conditions and actions by major
oil-exporting countries. Price fluctuations can have a material
effect on our ability to raise capital and fund our exploration activities, our
potential future earnings, and our financial condition. For example,
in a low oil and gas price environment oil sands exploration and development may
not be financially viable or profitable. Prolonged periods of low oil
and gas prices, or rising costs, could result in our exploration projects being
delayed or cancelled, as well as in the impairment of certain
assets.
Reserves
and Resources
We have
not yet established any reserves. There are numerous uncertainties inherent in
estimating quantities of bitumen resources and reserves, including many factors
beyond our control, and no assurance can be given that the recovery of bitumen
will be realized. In general, estimates of resources and reserves are based upon
a number of factors and assumptions made as of the date on which the resources
and reserves estimates were determined, such as geological and engineering
estimates which have inherent uncertainties, the assumed effects of regulation
by governmental agencies and estimates of future commodity prices and operating
costs, all of which may vary considerably from estimated results. All such
estimates are, to some degree, uncertain and classifications of resources and
reserves are only attempts to define the degree of uncertainty involved. For
these reasons, estimates of reserves and resources, the classification of such
resources and reserves based on risk of recovery, prepared by different
engineers or by the same engineers at different times, may vary
substantially.
Investors
are cautioned not to assume that all or any part of a resource is economically
or legally extractable.
ENVIRONMENTAL
AND REGULATORY COMPLIANCE MAY IMPOSE SUBSTANTIAL COSTS ON US
Our
operations are or will be subject to stringent federal, provincial and local
laws and regulations relating to improving or maintaining environmental quality.
Environmental laws often require parties to pay for remedial action or to pay
damages regardless of fault. Environmental laws also often impose liability with
respect to divested or terminated operations, even if the operations were
terminated or divested many years ago.
Our
exploration activities and drilling programs are or will be subject to extensive
laws and regulations governing prospecting, development, production, exports,
taxes, labor standards, occupational health, waste disposal, protection and
remediation of the environment, protection of endangered and protected species,
operational safety, toxic substances and other matters. Exploration and drilling
is also subject to risks and liabilities associated with pollution of the
environment and disposal of waste products. Compliance with these laws and
regulations will impose substantial costs on us and will subject us to
significant potential liabilities. In addition, should there be
changes to existing laws or regulations, our competitive position within the oil
sands industry may be adversely affected, as many industry players have greater
resources than we do. The absence of a distinct overlying shale
formation on portions of our leases may make it more difficult or costly to
obtain regulatory approvals. There is no assurance that regulatory
approvals for development will be obtained at all.
13
Government
Regulations, Permits, Leases and Licenses
The
business of resource exploration and development is subject to substantial
regulation under Canadian provincial and federal laws relating to the
exploration for, and the development, upgrading, marketing, pricing, taxation,
and transportation of oil sands bitumen and related products and other matters.
Amendments to current laws and regulations governing operations and activities
of oil sands exploration and development operations could have a material
adverse impact on our business. In addition, there can be no assurance that
income tax laws, royalty regulations, environmental regulations and government
incentive programs related to the permits in Saskatchewan, oil sands exploration
licenses in Saskatchewan, the permits in Alberta, the Eagles Nest Prospect and
the Pasquia Hills Oil Shale Prospect and the oil sands industry generally, will
not be changed in a manner which may adversely affect our progress and cause
delays, or cause the inability to explore and develop, resulting in the
abandonment of these interests.
Permits,
leases, licenses and approvals are required from a variety of regulatory
authorities at various stages of exploration and development. There can be no
assurance that the various government permits, leases, licenses and approvals
sought will be granted in respect of our activities or, if granted, will not be
cancelled or will be renewed upon expiry. There is no assurance that such
permits, leases, licenses and approvals will not contain terms and provisions
which may adversely affect our exploration and development activities. Our
exploration permits in Saskatchewan do not give us the right to produce and will
require conversion to a lease prior to the expiry of the permits.
Certain First Nations and
Mйtis people have treaty and aboriginal rights, and claim aboriginal
title, in relation to our permit and lease lands in Alberta and Saskatchewan and
other lands that are potentially affected by our
activities. The Governments of Canada and Saskatchewan have a
duty to consult with those aboriginal people in relation to actions and
decisions which may impact those rights and claims and, in certain cases, have a
duty to accommodate their concerns. These duties have the potential
to adversely affect our ability to obtain permits, leases, licenses and other
approvals, or the terms of those approvals, which could adversely impact our
progress and ability to explore and develop.
Third
Party Liability and Environmental Liability
The
Company’s operations could result in liability for personal injuries, property
damage, oil spills, discharge of hazardous materials, remediation and clean-up
costs and other environmental damages. We could be liable for environmental
damages caused by previous owners. As a result, substantial liabilities to third
parties or governmental entities may be incurred, and the payment of such
liabilities could have a material adverse effect on our financial condition and
results of operations. The release of harmful substances in the
environment or other environmental damages caused by our activities
could result in us losing our operating and environmental permits. We currently
have a limited amount of insurance and, at such time as we commence additional
operations, we expect to obtain and maintain additional insurance coverage for
our operations, including limited coverage for sudden environmental damages, but
we do not believe that insurance coverage for environmental damage that occurs
over time is available at a reasonable cost. Moreover, we do not believe that
insurance coverage for the full potential liability that could be caused by
sudden environmental damages is available at a reasonable cost. Accordingly, we
may be subject to liability or may lose substantial portions of our properties
in the event of certain environmental damages. The Company could incur
substantial costs to comply with environmental laws and regulations which could
affect our ability to operate as planned.
Emissions
Regulations
Development
of our assets is expected to result in the emission of greenhouse gases (GHGs)
and other pollutants.
On April
26, 2007, the Government of Canada announced a Regulatory Framework for Air
Emissions and Other Measures to Reduce Air Emissions, or the “Framework”, which
outlines proposed new requirements governing the emission of GHGs and other
industrial air pollutants, including sulphur oxides, volatile organic compounds,
particulate matter and possibly additional sector-specific pollutants in
accordance with the Notice. The Framework introduces further, but not full,
detail on new GHG and industrial air pollutant limits and compliance mechanisms
that will apply to various industrial sectors, including oil sands extraction,
starting in 2010. The Framework proposes GHG emission-intensity reduction
targets of six percent per year from 2007 to 2010, followed by annual reductions
of two percent through 2015. On March 10, 2008, the Canadian Federal Government
elaborated on the Framework with the release of its “Turning the Corner” policy
document. It is contemplated that new regulations will take effect January 1,
2010. Draft regulations were expected to be available for public comment in the
Fall of 2008 but have not yet been released, and it's not known when they will
be released or implemented.
14
The
proposed regulatory framework provides that existing oil sands facilities in
operation by 2004 will be subject to an 18% emission intensity reduction
requirement commencing in 2010, with 2% additional annual reductions thereafter
until 2020. Facilities commissioned between 2004 to 2011 or facilities existing
prior to 2004 which between 2004 and 2011 have had a major expansion resulting
in an increase of 25% or more in physical capacity or which undergo a
significant change to processes will be exempt from the 2010 emissions intensity
reduction target of 18% but will have to report their emissions each
year. After their third year of operation they will be required to
reduce their emissions intensity by 2% annually from a baseline emissions
standard which is to be determined by reference to a sector-specific
cleaner-fuel standard. For oil sands facilities, it is contemplated that there
will be specific cleaner-fuel standards based on the use of natural gas for each
of mining, in situ and upgrading. However, an incentive to deploy carbon capture
and storage (CCS) has been included in the proposed regulatory framework. CCS is
where carbon dioxide is separated from a facility’s process or exhaust gas
emissions before they are emitted, transferred from the facility to a suitable
storage location, and injected into deep underground geological formations and
monitored to ensure they do not escape into the atmosphere. If a facility
commissioned between 2004 and 2011 is built such that it is able or ready to
undertake CCS, then it will be exempt from the cleaner-fuel standard until 2018
and it will only be required to reduce its emission-intensity by 2% per year
from its actual emissions. In-situ oil sands projects and oil sands upgraders
built after 2011 must have their GHG emissions profiles by 2018 equivalent to
that of facilities employing CCS technology. The proposed regulatory framework
further encourages widespread use of CCS by 2018 by crediting emitters that make
use of CCS technology for investments in pre-certified CCS projects up to 100%
of their regulatory obligations through 2017.
The
proposed compliance mechanisms include an emissions credit trading system for
GHGs and certain industrial air pollutants, and several options for companies to
choose among to meet GHG emission intensity reduction targets and encourage the
development of new emission reduction technologies, including the option of
making payments into a technology fund, an emissions and offset trading system,
limited credits for emission reductions created between 1992 and 2006, and
international emission credits under the clean development mechanism under the
Kyoto Protocol for up to 10% of each firm’s regulatory obligation.
On April
20, 2007, the Government of Alberta passed the Climate Change and Emissions
Management Amendment Act establishing a framework for GHG emission reductions
similar to the proposed federal Framework. The Specified Gas Emitters Regulation
created under the Act came into effect on July 1, 2007. The Specified Gas
Emitters Regulation requires facilities that emit more than 100,000 tonnes of
carbon dioxide equivalent annually to reduce their emission intensity starting
July 1, 2007 by 12 percent from 2003-2005 levels. New facilities in
operation less than eight years will be required to achieve these reductions
over the fourth to eighth years of operation. These obligations may be met by
in-house reductions, the purchase of certain emission reductions or offset
credits or a contribution of $15 per tonne of GHG emissions to a provincial
technology fund.
On May
11, 2009, the Government of Saskatchewan introduced in the Provincial
Legislature Bill
95: The Management and Reduction of Greenhouse Gases
Act. Bill 95 proposes a policy and regulatory framework for
reducing GHG emissions in Saskatchewan. The Bill proposes a new
provincial target for a 20% reduction in GHG emissions by 2020, which is
consistent with proposed federal target and different than the 32% reduction
previously proposed by the Government of Saskatchewan. The specific
GHG emission reduction requirements, and the industries required to meet those
reductions, as well as details on the methods by which reductions may be
achieved, are to be set by further regulations expected in the Fall of
2009.
15
Future
legislated GHG and industrial air pollutant emission reduction requirements and
emission intensity requirements, or GHG and industrial air pollutant emission
reduction or intensity requirements in future regulatory approvals, may require
the restriction or reduction of GHG and industrial air pollutant emissions or
emissions intensity from our future operations and facilities, payments to
technology funds or purchase of emission reductions or offset credits. The
reductions may not be technically or economically feasible for our operations
and the failure to meet such emission reduction or emission intensity reduction
requirements or other compliance mechanisms may materially adversely affect our
business and result in fines, penalties and the suspension of operations. As
well, equipment from suppliers which can meet future emission standards may not
be available on an economic basis and other compliance methods of reducing
emissions or emission intensity to levels required in the future may
significantly increase our operating costs or reduce output. Emission reductions
or offset credits may not be available for acquisition or may not be available
on an economic basis. There is also the risk that provincial or federal
governments, or both, could pass legislation which would tax such
emissions.
American
Climate Change Legislation Could Negatively Affect Markets for Crude and
Synthetic Crude Oil
Environmental
legislation regulating carbon fuel standards in jurisdictions that import crude
and synthetic crude oil in the United States could result in increased costs
and/or reduced revenue. For example, both California and the United
States federal governments have passed legislation which, in some circumstances,
considers the lifecycle greenhouse gas emissions of purchased fuel and which may
negatively affect our business, or require the purchase of emissions credits,
which may not be economically feasible.
Abandonment
and Reclamation Costs
We are
responsible for compliance with terms and conditions of environmental and
regulatory approvals and all laws and regulations regarding the abandonment of a
project and reclamation of its lands at the end of its economic life, which
abandonment and reclamation costs may be substantial. A breach of such
legislation and/or regulations may result in the issuance of remedial orders,
the suspension of approvals, the seizure of posted security or the imposition of
fines and penalties, including an order for cessation of operations at the site
until satisfactory remedies are made. All delineation wells are abandoned and
reclaimed immediately and these costs are included with our exploration costs
incurred. At April 30, 2009, we estimate the total undiscounted
inflation adjustment amount required to settle the asset retirement obligations
in respect of the Company’s wells and facilities is approximately $8.2 million.
This estimate includes the costs to reclaim the air strip, camp site, access
roads and reservoir test sites. However, since we have yet to determine the
commercial viability of the Axe Lake Discovery we cannot with certainty
determine a reasonable timeframe in which those costs will be incurred. This
estimate could change as the reclamation requirements will be a function of
regulatory regulations in place at the time. In the future we may
determine it prudent or be required by applicable laws or regulations to
establish and fund one or more reclamation funds to provide for payment of
future abandonment and reclamation costs.
Fiscal
Regime
Any
development of our resource assets will be directly affected by the royalty
regime applicable. The economic benefit of future capital expenditures for the
project is, in many cases, dependent on a satisfactory fiscal regime (royalties
and taxes). The Government of Saskatchewan receives royalties on production of
oil, gas and other minerals from lands in which it owns the relevant mineral
rights. The Government of Saskatchewan owns the relevant mineral rights on the
OQI Saskatchewan lands. The current royalty regime relating to bitumen
production in Saskatchewan provides for a royalty of 1% of gross bitumen revenue
is payable until the project has recovered specified allowed costs. Once such
allowed costs are recovered, a net royalty of 20% of operating income is
payable.
The
Government of Alberta receives royalties on production of natural resources from
lands in which it owns the mineral rights. On October 25, 2007, the Government
of Alberta announced a new royalty regime. The new regime introduced new
royalties for conventional oil, natural gas and bitumen that became effective
January 1, 2009 and are linked to commodity prices and production levels and
apply to both new and existing oil sands projects and conventional oil and gas
activities.
Currently,
in respect of oil sands projects in Alberta having regulatory approval, a
royalty of one percent of gross bitumen revenue is payable prior to the payout
of specified allowed costs, including certain exploration and development costs,
operating costs and a return allowance. Once such allowed costs have been
recovered, a royalty of the greater of: (a) one percent of gross bitumen
revenue; and (b) 25 percent of net bitumen revenue (calculated as being gross
bitumen revenue less operating costs and additional capital expenditures
incurred since payout (“net royalty”)) is levied.
16
Under the
new regime, the Government of Alberta increased its royalty share from oil sands
production by introducing price-sensitive formulas which are applied both before
and after specified allowed costs have been recovered. The gross royalty starts
at one percent of gross bitumen revenue and increases for every dollar that
world oil price, as reflected by the West Texas Intermediate (“WTI”) crude oil
price, is above CDN$120 per barrel or higher. The net royalty on oil sands
starts at 25 percent of net bitumen revenue and increases for every dollar the
WTI crude oil price is above CDN$55 per barrel to 40 percent when the WTI crude
oil price is CDN$120 per barrel or higher. Prior to the payout of specified
allowed costs, including certain exploration and development costs, operating
costs and a return allowance, the gross royalty is payable. Once such allowed
costs have been recovered, a royalty of the greater of: (a) the gross royalty
and (b) the net royalty is payable. The Government of Alberta has announced that
it intends to review and, if necessary, revise current rules and enforcement
procedures with a view to clearly defining what expenditures will qualify as
specified allowed costs.
The
implementation of the proposed changes to the royalty regime in Alberta is
subject to certain risks and uncertainties. The significant changes to the
royalty regime require new legislation, changes to existing legislation and
regulation and development of proprietary software to support the calculation
and collection of royalties. Additionally, certain proposed changes contemplate
further public and/or industry consultation. There may be modifications
introduced to the proposed royalty structure prior to the implementation
thereof.
There can
be no assurance that the Governments of Alberta or Saskatchewan or the
Government of Canada will not adopt a new fiscal regime or otherwise modify the
existing fiscal regime (royalties and taxes) governing oil sands producers in a
manner that could materially affect the financial prospects and results of
operations of oil sands developers and producers in Alberta and
Saskatchewan.
Title
Risks
None of
the exploration permits and exploration licenses in Saskatchewan and Alberta,
nor the Pasquia Hills Oil Shale Prospect permits has been converted to
development leases. In the event that we do not meet the regulated requirements
or development conditions to convert our permits or licenses to leases or obtain
an extension of such development requirements, our right to explore for bitumen
or oil shale, as applicable, may be lost. We are satisfied that we have good and
proper right, title and interest in and to the permits, licenses and leases that
we intend to exploit. However, we have not obtained title opinions on any of our
interests. Accordingly, ownership of the oil sands and oil shale exploration
rights could be subject to prior unregistered agreements or interests or
undetected claims or interests.
Aboriginal
peoples have claimed aboriginal title and rights to a substantial portion of
western Canada. Certain aboriginal peoples have filed a claim against the
Government of Canada, the Province of Alberta, certain governmental entities and
the regional municipality of Wood Buffalo (which includes the City of Fort
McMurray, Alberta) claiming, among other things, aboriginal title to large areas
of lands surrounding Fort McMurray. Certain Metis have filed an action for
aboriginal title and consequential relief in relation to a large portion of
northwest Saskatchewan, including our Saskatchewan lands. Various First Nations
and Metis groups have stated, and one First Nation has filed an action alleging,
that governments have not complied with their constitutionally mandated duty to
consult with and accommodate First Nations and Metis in relation to decisions
that enabled us to acquire and that enable us to develop our Saskatchewan and
Alberta lands. Additional claims of this kind have been and could be made in the
Provinces of Saskatchewan and Alberta. Certain of these claims, if successful,
could have a significant adverse effect on our ability to conduct our
business.
Operational
Hazards
Our
exploration and development activities are subject to the customary hazards of
operation in remote areas, such as fires and explosions. A casualty occurrence
might result in the loss of equipment or life, as well as injury, property
damage or other liability. While we maintain limited insurance to cover current
operations, our property and liability insurance may not be sufficient to cover
any such casualty occurrences or disruptions. Equipment failures could result in
damage to our facilities and liability to third parties against which we may not
be able to fully insure or may elect not to insure because of high premium costs
or for other reasons. Our operations could be interrupted by natural disasters
or other events beyond our control. Losses and liabilities arising from
uninsured or under-insured events could have a material adverse effect
on our business, our financial condition and results of
our operations.
17
Competitive
Risks
The
Canadian and international petroleum industry is highly competitive in all
aspects, including the exploration for, and the development of, new sources of
supply, the acquisition of oil interests and the distribution and marketing of
petroleum products. A number of competing companies are engaged in the oil sands
business and are actively exploring for and delineating their resource bases.
Some of our competitors have announced plans to begin production of synthetic
crude oil, or to expand existing operations. If these plans are affected, they
could materially increase the supply of synthetic crude oil and other competing
crude oil products in the marketplace and adversely affect plans for development
of our lands.
The
Loss of Current Management May Make It Difficult For Us to Operate
Investors
must rely upon the ability, expertise, judgment, discretion, integrity and good
faith of our management and directors. The Company’s success is dependent upon
its management and key personnel. We do not maintain key-man insurance for any
of our employees. The unexpected loss or departure of any of our key
officers and employees could be detrimental to our future success.
Fluctuations
in U.S. and Canadian Dollar Exchange Rates May Have a Material Adverse
Impact
Commodity
prices and costs related to the Company’s activities, if and when applicable,
will generally be based on a U.S. dollar market price. Fluctuations in the U.S.
and Canadian dollar exchange rate may cause a negative impact on revenue and
costs and could have a material adverse impact on the Company.
RISKS
RELATING TO OUR SECURITIES
We Have Numerous Outstanding
Options, Warrants and Commitments to Issue Shares, Which May Adversely Affect The Price
of Our Common Stock
As of
September 18, 2009, we have reserved 48,870,917 shares of our common stock for
issuance upon exercise of outstanding options under plans and warrants at prices
as low as $0.71 per share. The Company has also reserved 1,388,567 shares of
common stock to be issued on settlement of debt of a former subsidiary. Pursuant
to the Reorganization Agreement with OQI Sask dated August 14, 2006, the Company
is required to issue up to 76,504,304 shares of its common stock for all of the
OQI Sask Exchangeable Shares (including warrants and options to acquire OQI
Exchangeable Shares) issued upon the closing. As of September 18, 2009,
38,996,938 OQI Sask Exchangeable Shares have already been exchanged for shares
of our common stock, 768,131 OQI Sask options were forfeited and up to an
additional 36,739,235 OQI Sask Exchangeable Shares may be exchanged for common
stock. Any sale into the public market of our common stock purchased privately
at prices below the current market price could be expected to have a depressive
effect on the market price of our common stock.
Future
Sales of our Common Stock May Cause our Stock Price to Decline
Our stock
price may decline due to future sales of our shares or the perception that such
sales may occur. The Board of Directors of the Company has
discretion to determine the issue price and the terms of issue of shares of our
common stock. Such future issuances may be dilutive to
investors. Holders of shares of common stock have no preemptive
rights under our articles of incorporation to participate in any future
offerings of securities.
If we
issue additional shares of common stock in private financings under an exemption
from the registration requirements, then those shares will constitute
“restricted shares” as defined in Rule 144 under the Securities Act. The
restricted shares may only be sold if they are registered under the Securities
Act, or sold under Rule 144, or another exemption from registration under the
Securities Act.
18
Some of
our outstanding restricted shares of common stock are either eligible for sale
pursuant to Rule 144 or have been registered under the Securities Act for resale
by the holders. We are unable to estimate the amount, timing, or nature of
future sales of outstanding common stock. Sales of substantial amounts of our
common stock in the public market may cause the stock’s market price to
decline.
Dividend
Policy
The
Company did not declare or pay cash or other dividends on its common stock
during the past three fiscal years. Payment of dividends by the Company will
depend upon the Company’s financial condition, results of operations, capital
requirements and such other factors as the Board of Directors of the Company may
deem relevant.
Our
Stock Price Can Be Extremely Volatile
The
trading price of our common stock has been and could continue to be subject to
wide fluctuations in response to announcements of our business developments or
those of our competitors, world commodity prices, periodic updates on our
resource assessments, quarterly variations in operating results, and other
events or factors. In addition, stock markets have experienced extreme price
volatility in recent years. This volatility has had a substantial effect on the
market prices of companies, at times for reasons unrelated to their operating
performance. Such broad market fluctuations may adversely affect the price of
our common stock.
Issuance of Preferred Stock and Our
Anti-Takeover Provisions Could Delay or Prevent a Change in Control and May
Adversely Affect our Common Stock
We are
authorized to issue 10,000,000 shares of preferred stock which may be issued in
series from time to time with such designations, rights, preferences and
limitations as our Board of Directors may determine by resolution. The rights of
the holders of our common stock will be subject to and may be adversely affected
by the rights of the holders of any of our preferred stock that may be issued in
the future. Issuance of a new series of preferred stock, or providing desirable
flexibility in connection with possible acquisitions and other corporate
purposes, could make it more difficult for a third party to acquire, or
discourage a third party from acquiring our outstanding shares of common stock.
On October 30, 2006, the Company’s shareholders approved staggered terms for the
Board of Directors, which could make removal of the Board of Directors more
difficult for a third party. The Class A directors will serve until the annual
meeting in 2009, the Class B directors until the annual meeting in 2011, and the
Class C directors until the annual meeting in 2010, or each until their
successors are duly elected or appointed or until their earlier death,
resignation or removal. Each term for directors is three years. In addition to a
staggered board, our Board of Directors adopted a shareholders rights plan in
March 2006 and reserved 250,000 shares of Series A Junior Participating
Preferred Stock. This shareholders rights plan could have the effect of
discouraging, delaying or preventing an acquisition.
19
USE
OF PROCEEDS
We will
not receive any proceeds from the resale of securities by the selling
shareholders.
SELLING
SECURITY HOLDERS
The
following table sets forth the name of each person who is offering for
resale the shares of common stock by this prospectus, the number of
shares of common stock beneficially owned by each person, the number of shares
of common stock that may be sold in this offering and the number of shares of
common stock each person will own after the offering, assuming they sell all of
the shares offered. We will not receive any proceeds from the resale of the
common stock by the selling shareholders.
A
|
B
|
C
|
D
|
E
|
F
|
|||||||||||||||||||
Name
|
Outstanding
Shares Owned (1), (7), (8)
|
Shares
Underlying Exchangeable Shares (7)
|
Shares
Underlying Options and Warrants to Acquire Exchangeable
Shares
|
Total
Shares (Based on Columns A, B and C) Beneficially Owned Prior to Offering
(1), (7), (8)
|
Shares
Offered Hereby
(1)
|
Shares
Owned After Offering (1), (2)
|
||||||||||||||||||
944128
Alberta Ltd. (3)
|
1,234,500
|
0
|
0
|
1,234,500
|
1,234,500
|
0
|
||||||||||||||||||
Royce
Allen Baker
|
30,000
|
11,150
|
0
|
41,150
|
41,150
|
0
|
||||||||||||||||||
Derrick
G. Morris
|
932,253
|
0
|
0
|
932,253
|
932,253
|
0
|
||||||||||||||||||
805503
Alberta Ltd. (3)
|
32,920
|
0
|
0
|
32,920
|
32,920
|
0
|
||||||||||||||||||
878557
Alberta Ltd. (3)
|
9,876
|
0
|
0
|
9,876
|
9,876
|
0
|
||||||||||||||||||
Eric
Blakely
|
139,910
|
0
|
0
|
139,910
|
139,910
|
0
|
||||||||||||||||||
Gary
Nissen
|
12,345
|
0
|
0
|
12,345
|
12,345
|
0
|
||||||||||||||||||
Grant
Dennler
|
8,230
|
0
|
0
|
8,230
|
8,230
|
0
|
||||||||||||||||||
John
Rooney
|
54,318
|
0
|
0
|
54,318
|
54,318
|
0
|
||||||||||||||||||
Lawrence
Lee
|
14,403
|
0
|
0
|
14,403
|
14,403
|
0
|
||||||||||||||||||
Malcolm
Albery
|
50,000
|
361,500
|
0
|
411,500
|
411,500
|
0
|
||||||||||||||||||
Mike
Machalski
|
54,318
|
0
|
0
|
54,318
|
54,318
|
0
|
||||||||||||||||||
Rena
Nathanail
|
26,748
|
0
|
0
|
26,748
|
26,748
|
0
|
||||||||||||||||||
Ronald
Cawston
|
28,805
|
0
|
0
|
28,805
|
28,805
|
0
|
||||||||||||||||||
Victor
Choy
|
29,628
|
0
|
0
|
29,628
|
29,628
|
0
|
||||||||||||||||||
Woon
Chin Chee
|
102,875
|
0
|
0
|
102,875
|
102,875
|
0
|
||||||||||||||||||
Donna
Cheung
|
50,000
|
52,875
|
0
|
102,875
|
102,875
|
0
|
||||||||||||||||||
Robert
Robertshaw
|
82,300
|
0
|
0
|
82,300
|
82,300
|
0
|
||||||||||||||||||
Ben
J. Hadala
|
329,200
|
0
|
0
|
329,200
|
329,200
|
0
|
||||||||||||||||||
Jeffrey
A. Helper (4), (8)
|
125,750
|
130,000
|
246,900
|
502,650
|
452,650
|
50,000
|
||||||||||||||||||
Hoerich
Capital Inc. (3)
|
5,144
|
0
|
0
|
5,144
|
5,144
|
0
|
20
A
|
B
|
C
|
D
|
E
|
F
|
|||||||||||||||||||
Outstanding
Shares Owned (1), (7), (8)
|
Shares
Underlying Exchangeable Shares (7)
|
Shares
Underlying Options and Warrants to Acquire Exchangeable
Shares
|
Total
Shares (Based on Columns A, B and C) Beneficially Owned Prior to Offering
(1), (7), (8)
|
Shares
Offered Hereby (1)
|
Shares
Owned After Offering (1), (2)
|
|||||||||||||||||||
Jayvee
& Co. (3), (4), (5)
|
288,050
|
0
|
0
|
288,050
|
288,050
|
0
|
||||||||||||||||||
Ronald
D. Johnston
|
16,460
|
0
|
0
|
16,460
|
16,460
|
0
|
||||||||||||||||||
Keptar
Gold Corp. (3)
|
0
|
935,175
|
0
|
935,175
|
935,175
|
0
|
||||||||||||||||||
Michael
Mann
|
205,750
|
0
|
0
|
205,750
|
205,750
|
0
|
||||||||||||||||||
Calvin
Manz
|
720,545
|
0
|
0
|
720,545
|
720,545
|
0
|
||||||||||||||||||
Mibrea
Holdings, Inc. (6)
|
82,300
|
0
|
0
|
82,300
|
82,300
|
0
|
||||||||||||||||||
Susan
A. Milne
|
288,050
|
0
|
0
|
288,050
|
288,050
|
0
|
||||||||||||||||||
Thomas
Milne (4) (8)
|
675,050
|
411,500
|
1,851,750
|
2,938,300
|
2,469,000
|
469,300
|
||||||||||||||||||
1201112
Alberta Ltd. (3), (7)
|
94,645
|
0
|
0
|
94,645
|
94,645
|
0
|
||||||||||||||||||
267554
Alberta Ltd. (6), (7)
|
41,150
|
0
|
0
|
41,150
|
41,150
|
0
|
||||||||||||||||||
924849
Alberta Ltd. (6), (7)
|
32,920
|
0
|
0
|
32,920
|
32,920
|
0
|
||||||||||||||||||
957637
Alberta Ltd. (6), (7)
|
24,690
|
0
|
0
|
24,690
|
24,690
|
0
|
||||||||||||||||||
Brian
and Janet Cassie (7)
|
41,150
|
0
|
0
|
41,150
|
41,150
|
0
|
||||||||||||||||||
Brisil
Capitale Inc. (6) (7)
|
8,230
|
0
|
0
|
8,230
|
8,230
|
0
|
||||||||||||||||||
Bruce
Bowser (7)
|
6,584
|
0
|
0
|
6,584
|
6,584
|
0
|
||||||||||||||||||
Charles
Matson (7)
|
3,292
|
0
|
0
|
3,292
|
3,292
|
0
|
||||||||||||||||||
Charles
Tuchel (7)
|
329,200
|
0
|
0
|
329,200
|
329,200
|
0
|
||||||||||||||||||
Cougar
Assets Ltd. (6) (7)
|
41,150
|
0
|
0
|
41,150
|
41,150
|
0
|
||||||||||||||||||
Crossroads
Financial Corp. (6) (7)
|
2,386,700
|
0
|
0
|
2,386,700
|
2,386,700
|
0
|
||||||||||||||||||
David
Cross P.C. (6) (7)
|
65,840
|
0
|
0
|
65,840
|
65,840
|
0
|
||||||||||||||||||
David
Terry (7)
|
41,150
|
0
|
0
|
41,150
|
41,150
|
0
|
||||||||||||||||||
DC-Osadchuk
Holdings, Inc. (6) (7)
|
16,460
|
0
|
0
|
16,460
|
16,460
|
0
|
||||||||||||||||||
Elaine
Matson (7)
|
3,292
|
0
|
0
|
3,292
|
3,292
|
0
|
||||||||||||||||||
Eric
Galcher (7)
|
8,230
|
0
|
0
|
8,230
|
8,230
|
0
|
||||||||||||||||||
Evelyn
Wallace (7)
|
41,150
|
0
|
0
|
41,150
|
41,150
|
0
|
||||||||||||||||||
Gary
Gillett (7)
|
8,230
|
0
|
0
|
8,230
|
8,230
|
0
|
||||||||||||||||||
Gordon
Johnston (7)
|
144,848
|
0
|
0
|
144,848
|
144,848
|
0
|
||||||||||||||||||
Green
Eco Investments SA (6) (7)
|
246,900
|
0
|
0
|
246,900
|
246,900
|
0
|
||||||||||||||||||
Horacio
Guibelalde (7)
|
219,766
|
0
|
0
|
219,766
|
219,766
|
0
|
21
A
|
B
|
C
|
D
|
E
|
F
|
|||||||||||||||||||
Outstanding
Shares Owned (1), (7), (8)
|
Shares
Underlying Exchangeable Shares (7)
|
Shares
Underlying Options and Warrants to Acquire Exchangeable
Shares
|
Total
Shares (Based on Columns A, B and C) Beneficially Owned Prior to Offering
(1), (7), (8)
|
Shares
Offered Hereby (1)
|
Shares
Owned After Offering (1), (2)
|
|||||||||||||||||||
James
F. Hole, Jr. (7)
|
4,938
|
0
|
0
|
4,938
|
4,938
|
0
|
||||||||||||||||||
Jason
Clemett (7)
|
8,230
|
0
|
0
|
8,230
|
8,230
|
0
|
||||||||||||||||||
Jean
Lesourd (7)
|
16,460
|
0
|
0
|
16,460
|
16,460
|
0
|
||||||||||||||||||
Jeff
Shafer (7)
|
8,230
|
0
|
0
|
8,230
|
8,230
|
0
|
||||||||||||||||||
John
A. Bolter (7)
|
16,460
|
0
|
0
|
16,460
|
16,460
|
0
|
||||||||||||||||||
John
Cameron Bolter (7)
|
12,345
|
0
|
0
|
12,345
|
12,345
|
0
|
||||||||||||||||||
John
Hooks (7)
|
341,545
|
0
|
0
|
341,545
|
341,545
|
0
|
||||||||||||||||||
Julian
Smith (7)
|
8,230
|
0
|
0
|
8,230
|
8,230
|
0
|
||||||||||||||||||
Kamaldip
Jeerh (7)
|
16,460
|
0
|
0
|
16,460
|
16,460
|
0
|
||||||||||||||||||
Kenneth
and Dorothy Summach (7)
|
24,690
|
0
|
0
|
24,690
|
24,690
|
0
|
||||||||||||||||||
Kent
Racz (7)
|
8,230
|
0
|
0
|
8,230
|
8,230
|
0
|
||||||||||||||||||
Kerry
Tychonick (7)
|
12,345
|
0
|
0
|
12,345
|
12,345
|
0
|
||||||||||||||||||
Landmark
Sport Group (6) (7)
|
4,115
|
0
|
0
|
4,115
|
4,115
|
0
|
||||||||||||||||||
Lockhold
Consultants Ltd. (6) (7)
|
16,460
|
0
|
0
|
16,460
|
16,460
|
0
|
||||||||||||||||||
Lone
Mountain Resources Ltd. (6) (7)
|
8,230
|
0
|
0
|
8,230
|
8,230
|
0
|
||||||||||||||||||
Makow
Properties Corp. Ltd. (6) (7)
|
82,300
|
0
|
0
|
82,300
|
82,300
|
0
|
||||||||||||||||||
Mark
and Rose Zivot (7)
|
26,336
|
0
|
0
|
26,336
|
26,336
|
0
|
||||||||||||||||||
Melissa
and George Summach (7)
|
57,610
|
0
|
0
|
57,610
|
57,610
|
0
|
||||||||||||||||||
Michael
Henson (7)
|
312,740
|
0
|
0
|
312,740
|
312,740
|
0
|
||||||||||||||||||
Mike
Shaikh (7)
|
41,150
|
0
|
0
|
41,150
|
41,150
|
0
|
||||||||||||||||||
Mohawk
Capital Corp. (6) (7)
|
32,920
|
0
|
0
|
32,920
|
32,920
|
0
|
||||||||||||||||||
Oceanic
Greystone Securities Inc. (3) (7)
|
2,964,355
|
0
|
0
|
2,964,355
|
2,964,355
|
0
|
||||||||||||||||||
Remington
Capital Corp. (6) (7)
|
411,500
|
0
|
0
|
411,500
|
411,500
|
0
|
||||||||||||||||||
Richard
Dettbarn (7)
|
201,635
|
0
|
0
|
201,635
|
201,635
|
0
|
||||||||||||||||||
Richard
Pelletier (7)
|
246,900
|
0
|
0
|
246,900
|
246,900
|
0
|
||||||||||||||||||
Robert
Maxwell (7)
|
16,460
|
0
|
0
|
16,460
|
16,460
|
0
|
||||||||||||||||||
Ryan
Lambe (7)
|
2,469
|
0
|
0
|
2,469
|
2,469
|
0
|
||||||||||||||||||
Sohan
Jeerh (7)
|
94,645
|
0
|
0
|
94,645
|
94,645
|
0
|
22
A
|
B
|
C
|
D
|
E
|
F
|
|||||||||||||||||||
Outstanding
Shares Owned (1), (7), (8)
|
Shares
Underlying Exchangeable Shares (7)
|
Shares
Underlying Options and Warrants to Acquire Exchangeable
Shares
|
Total
Shares (Based on Columns A, B and C) Beneficially Owned Prior to Offering
(1), (7), (8)
|
Shares
Offered Hereby (1)
|
Shares
Owned After Offering (1), (2)
|
|||||||||||||||||||
Vangoor
Holdings Co. (6) (7)
|
8,230
|
0
|
0
|
8,230
|
8,230
|
0
|
||||||||||||||||||
William
Gillett (7)
|
6,584
|
0
|
0
|
6,584
|
6,584
|
0
|
||||||||||||||||||
Scotia
Capital Inc. (6)
|
0
|
3,086
|
0
|
3,086
|
3,086
|
0
|
||||||||||||||||||
Ernie
Antonchuk
|
60,000
|
63,450
|
0
|
123,450
|
123,450
|
0
|
||||||||||||||||||
Supreme
Pacific Holdings Inc. (3)
|
41,150
|
0
|
0
|
41,150
|
41,150
|
0
|
||||||||||||||||||
William
G. Timmins (4)
|
1,728,300
|
0
|
0
|
1,728,300
|
1,728,300
|
0
|
||||||||||||||||||
Erdal
Yildirim (4)
|
890,000
|
102,875
|
0
|
992,875
|
102,875
|
890,000
|
||||||||||||||||||
349150
Alberta Ltd. (6)
|
164,600
|
0
|
0
|
164,600
|
164,600
|
0
|
||||||||||||||||||
541588
Alberta Ltd. (3)
|
0
|
40,121
|
0
|
40,121
|
40,121
|
0
|
||||||||||||||||||
Sarah
Anderson
|
0
|
16,460
|
0
|
16,460
|
16,460
|
0
|
||||||||||||||||||
Grafton
L. Bertram
|
329,200
|
0
|
0
|
329,200
|
329,200
|
0
|
||||||||||||||||||
Brian
W. Lawrence Living Trust
|
164,600
|
0
|
0
|
164,600
|
164,600
|
0
|
||||||||||||||||||
Kade
Demuth
|
20,575
|
0
|
0
|
20,575
|
20,575
|
0
|
||||||||||||||||||
Henry
J. Dunfield
|
102,875
|
0
|
0
|
102,875
|
102,875
|
0
|
||||||||||||||||||
Gundyco
|
203,520
|
10,460
|
0
|
213,980
|
213,980
|
0
|
||||||||||||||||||
NBCN
Inc.
|
2,641,419
|
0
|
0
|
2,641,419
|
2,641,419
|
0
|
||||||||||||||||||
Angelo
L. Guido
|
0
|
70,778
|
0
|
70,778
|
70,778
|
0
|
||||||||||||||||||
Armando
Guido
|
0
|
132,503
|
0
|
132,503
|
132,503
|
0
|
||||||||||||||||||
Bentree
Investments Inc. (3)
|
205,750
|
0
|
0
|
205,750
|
205,750
|
0
|
||||||||||||||||||
Chen
Fong
|
411,500
|
0
|
0
|
411,500
|
411,500
|
0
|
||||||||||||||||||
Cliff
Du Fresne
|
0
|
263,360
|
0
|
263,360
|
263,360
|
0
|
||||||||||||||||||
Colin
Campbell
|
32,920
|
0
|
0
|
32,920
|
32,920
|
0
|
||||||||||||||||||
Dan
Bulbec
|
0
|
61,725
|
0
|
61,725
|
61,725
|
0
|
||||||||||||||||||
Danich
Investments Ltd. (6)
|
0
|
106,990
|
0
|
106,990
|
106,990
|
0
|
||||||||||||||||||
Edward
Burtynsky
|
102,875
|
0
|
0
|
102,875
|
102,875
|
0
|
||||||||||||||||||
Enzo
B. Minghella
|
41,150
|
0
|
0
|
41,150
|
41,150
|
0
|
||||||||||||||||||
Grant
Maglis
|
0
|
123,450
|
0
|
123,450
|
123,450
|
0
|
||||||||||||||||||
John
Holmlund
|
329,200
|
0
|
0
|
329,200
|
329,200
|
0
|
||||||||||||||||||
John
R. Barton
|
61,725
|
0
|
0
|
61,725
|
61,725
|
0
|
||||||||||||||||||
John
Savard
|
61,725
|
0
|
0
|
61,725
|
61,725
|
0
|
||||||||||||||||||
Kenneth
Lee
|
65,840
|
0
|
0
|
65,840
|
65,840
|
0
|
||||||||||||||||||
Stuart
O’Connor
|
0
|
106,990
|
0
|
106,990
|
106,990
|
0
|
||||||||||||||||||
Thompson
Contractors Inc. (6)
|
617,250
|
0
|
0
|
617,250
|
617,250
|
0
|
||||||||||||||||||
Wallace
Mitchell
|
61,725
|
0
|
0
|
61,725
|
61,725
|
0
|
||||||||||||||||||
Karim
Hirji (4) (8)
|
2,668,500
|
3,000,000
|
2,057,500
|
7,726,000
|
6,172,500
|
1,553,500
|
||||||||||||||||||
Christopher
H. Hopkins (4)
|
1,869,730
|
17,138,975
|
4,115,000
|
23,123,705
|
21,253,975
|
1,869,730
|
||||||||||||||||||
Edna
D. Hopkins
|
54,766
|
205,750
|
0
|
260,516
|
205,750
|
54,766
|
23
A
|
B
|
C
|
D
|
E
|
F
|
|||||||||||||||||||
Outstanding
Shares Owned (1), (7), (8)
|
Shares
Underlying Exchangeable Shares (7)
|
Shares
Underlying Options and Warrants to Acquire Exchangeable
Shares
|
Total
Shares (Based on Columns A, B and C) Beneficially Owned Prior to Offering
(1), (7), (8)
|
Shares
Offered Hereby (1)
|
Shares
Owned After Offering (1), (2)
|
|||||||||||||||||||
George
Nicholas Hopkins
|
0
|
24,690
|
0
|
24,690
|
24,690
|
0
|
||||||||||||||||||
Jessica
Yvonne Marie Hopkins
|
0
|
24,690
|
0
|
24,690
|
24,690
|
0
|
||||||||||||||||||
Sanovest
Holdings Ltd. (3)
|
123,450
|
0
|
0
|
123,450
|
123,450
|
0
|
||||||||||||||||||
Leslie
Kearney
|
0
|
102,875
|
0
|
102,875
|
102,875
|
0
|
||||||||||||||||||
Errin
Kimball (4)
|
2,880,500
|
0
|
960,169
|
3,840,668
|
3,840,669
|
0
|
||||||||||||||||||
John
Leder
|
1,354,897
|
0
|
0
|
1,354,897
|
1,354,897
|
0
|
||||||||||||||||||
Leder
Investments (6)
|
514,375
|
0
|
0
|
514,375
|
514,375
|
0
|
||||||||||||||||||
David
G. Mills
|
0
|
123,450
|
0
|
123,450
|
123,450
|
0
|
||||||||||||||||||
Christopher
Milne
|
0
|
16,460
|
0
|
16,460
|
16,460
|
0
|
||||||||||||||||||
Deesons
Investments Ltd. (3) (7)
|
703,805
|
0
|
0
|
703,805
|
703,805
|
0
|
||||||||||||||||||
F.
George Orr (4)
|
82,300
|
0
|
0
|
82,300
|
82,300
|
0
|
||||||||||||||||||
Ross
H. and Debra I. Pitman
|
257,157
|
1,088,953
|
0
|
1,346,140
|
1,346,140
|
0
|
||||||||||||||||||
Roytor
& Co., for the Acct. of T13155201, ref: Fund ID# H7D3
|
4,115,000
|
0
|
0
|
4,115,000
|
4,115,000
|
0
|
||||||||||||||||||
Roytor
& Co., for the Acct. of T13155201, ref: Fund ID# H6C7
|
2,880,500
|
0
|
0
|
2,880,500
|
2,880,500
|
0
|
||||||||||||||||||
Cecil
Paul Spring
|
0
|
164,600
|
0
|
164,600
|
164,600
|
0
|
||||||||||||||||||
Thompson
Bros. (Constr.) Ltd. (3)
|
411,500
|
0
|
0
|
411,500
|
411,500
|
0
|
||||||||||||||||||
West
Peak Ventures of Canada Ltd. (3), (4)
|
82,300
|
0
|
0
|
82,300
|
82,300
|
0
|
||||||||||||||||||
Jason
Wild
|
20,575
|
0
|
0
|
20,575
|
20,575
|
0
|
||||||||||||||||||
James
F. Wong
|
205,750
|
0
|
0
|
205,750
|
205,750
|
0
|
||||||||||||||||||
Joosten
Holdings Ltd. (6)
|
70,778
|
0
|
0
|
70,778
|
70,778
|
0
|
||||||||||||||||||
Heatherdale
Consulting Services (6), (7)
|
8,230
|
0
|
0
|
8,230
|
8,230
|
0
|
||||||||||||||||||
Amber
Tyndall (7)
|
2,469
|
0
|
0
|
2,469
|
2,469
|
0
|
||||||||||||||||||
David
J. Larocque P.C. (6) (7)
|
8,230
|
0
|
0
|
8,230
|
8,230
|
0
|
||||||||||||||||||
David
Sapunjis (7)
|
16,460
|
0
|
0
|
16,460
|
16,460
|
0
|
||||||||||||||||||
Hermine
Lazib (7)
|
8,230
|
0
|
0
|
8,230
|
8,230
|
0
|
||||||||||||||||||
Howard
Crone (7)
|
32,920
|
0
|
0
|
32,920
|
32,920
|
0
|
||||||||||||||||||
Jane
Pedersen (7)
|
16,460
|
0
|
0
|
16,460
|
16,460
|
0
|
||||||||||||||||||
Jerry
Segal (7)
|
8,230
|
0
|
0
|
8,230
|
8,230
|
0
|
24
A
|
B
|
C
|
D
|
E
|
F
|
|||||||||||||||||||
Outstanding
Shares Owned (1), (7), (8)
|
Shares
Underlying Exchangeable Shares (7)
|
Shares
Underlying Options and Warrants to Acquire Exchangeable
Shares
|
Total
Shares (Based on Columns A, B and C) Beneficially Owned Prior to Offering
(1), (7), (8)
|
Shares
Offered Hereby (1)
|
Shares
Owned After Offering (1), (2)
|
|||||||||||||||||||
John
Hickie P.C. (6) (7)
|
8,230
|
0
|
0
|
8,230
|
8,230
|
0
|
||||||||||||||||||
Kate
Finlay (7)
|
4,115
|
0
|
0
|
4,115
|
4,115
|
0
|
||||||||||||||||||
Keith
Laatsch P.C. (6) (7)
|
8,230
|
0
|
0
|
8,230
|
8,230
|
0
|
||||||||||||||||||
Leith
Pedersen (7)
|
63,371
|
0
|
0
|
63,371
|
63,371
|
0
|
||||||||||||||||||
Passar
Capital Corp. (6) (7)
|
82,300
|
0
|
0
|
82,300
|
82,300
|
0
|
||||||||||||||||||
RM
England P.C. (6) (7)
|
8,230
|
0
|
0
|
8,230
|
8,230
|
0
|
||||||||||||||||||
Tamlane
Holdings Ltd. (3) (7)
|
8,230
|
0
|
0
|
8,230
|
8,230
|
0
|
||||||||||||||||||
Tania
Lazib (7)
|
8,230
|
0
|
0
|
8,230
|
8,230
|
0
|
||||||||||||||||||
Techni
Trend Investments Ltd. (6) (7)
|
16,460
|
0
|
0
|
16,460
|
16,460
|
0
|
||||||||||||||||||
Donald
Padgett
|
740,700
|
0
|
0
|
740,700
|
740,700
|
0
|
||||||||||||||||||
Ronald
Phillips (4) (8)
|
1,271,750
|
0
|
0
|
1,271,750
|
823,000
|
448,750
|
||||||||||||||||||
W.
Scott Thompson (4)
|
883,464
|
0
|
2,057,500
|
2,940,964
|
2,057,500
|
883,464
|
||||||||||||||||||
Simon
Raven
|
375,000
|
123,450
|
411,500
|
909,950
|
534,950
|
375,000
|
||||||||||||||||||
Charles
Wallace
|
0
|
20,575
|
0
|
20,575
|
20,575
|
0
|
||||||||||||||||||
Majan
Management (6)
|
148,140
|
0
|
0
|
148,140
|
148,140
|
0
|
||||||||||||||||||
James
A. Malcolm
|
370,350
|
0
|
0
|
370,350
|
370,350
|
0
|
||||||||||||||||||
James
Carter
|
98,760
|
0
|
0
|
98,760
|
98,760
|
0
|
||||||||||||||||||
Charles
Kucey
|
238,670
|
0
|
0
|
238,670
|
238,670
|
0
|
||||||||||||||||||
Robert
A. McIntosh
|
74,070
|
0
|
0
|
74,070
|
74,070
|
0
|
||||||||||||||||||
TOTAL
|
45,591,448
|
25,038,916
|
11,700,319
|
82,330,683
|
75,736,173
|
6,594,510
|
(1) The
actual number of shares of common stock offered in this prospectus, and included
in the registration statement of which this prospectus is a part, includes such
additional number of shares of common stock as may be issued or issuable upon
exercise of the warrants by reason of any stock split, stock dividend or similar
transaction involving the common stock, in accordance with Rule 416 under the
Securities Act. The beneficial ownership of the common stock by the selling
shareholders set forth in the table is determined in accordance with Rule 13d-3
under the Securities Exchange Act of 1934, as amended, and the information is
not necessarily indicative of beneficial ownership for any other purpose. Under
such rule, beneficial ownership includes any shares as to which the selling
shareholder has sole or shared voting power or investment power and also any
shares, which the selling shareholder has the right to acquire within 60
days.
(2)
Assumes that all securities registered will be sold.
(3) The
natural person(s) who exercise voting and/or dispositive and investing powers
are the following individuals: 944128 Alberta Ltd. is controlled by Guy Bouvier;
805503 Alberta Ltd. is controlled by Marcus Perron; 878557 Alberta Ltd. is
controlled by Less Hornsby; Hoerich Capital Inc. is controlled by Woon Chin
Chee; Jayvee & Co. is controlled by Ken Kilgour of CIBC World Markets Inc.;
Keptar Gold Corp. is controlled by Barry Slusarchuk; 1201112 Alberta Ltd. is
controlled by Hank B. Swartout; Crossroads Financial Corp. is controlled by
Richard W. DeVries; Oceanic Greystone Securities Inc. is controlled by Richard
W. DeVries; Supreme Pacific Holdings Inc. is controlled by Merv Chia; 541588
Alberta Ltd. is controlled by Linda Terefenko; Bentree Investments Inc. is
controlled by Paul M. Worster and Robert G. Bentall; Sanovest Holdings Ltd. is
controlled by Tian Kusumoto, Tom Kusumoto and Hydri Kusumoto; Deesons
Investments Ltd. is controlled by Dayan Henson and Michael Henson; West Peak
Ventures of Canada Ltd. is controlled by Timothy Brock.
25
(4)
Relationships between selling shareholders and the Company are as follows:
Jayvee & Co. holds securities owned by CIBC World Markets Inc., a financial
advisor and placement agent for OQI Sask; Thomas Milne is a director of the
Company; William G. Timmins was a former director of the Company (resigned in
May 2006); Erdal Yildirim is Executive Vice President, Project Development of
the Company; Karim Hirji is the former Chief Financial Officer of the Company;
Christopher H. Hopkins is President and Chief Executive Officer of the Company;
Errin Kimball is the former Vice President, Exploration of the Company; George
F. Orr is a former consultant of the Company; Jefery Helper is the former
Corporate Secretary of OQI Sask Inc; West Peak Ventures of Canada Ltd. is a
party to the Triple 7 Joint Venture Agreement with the Company, dated June 2005;
Donald Padgett was a director of OQI Sask; Ronald Phillips is a director of the
Company; W. Scott Thompson is a director of the Company.
(5) Ben
J. Hadala with Woodstone Capital Inc., Ernie Antonchuk with Scotia McLeod and
Colin Campbell with CIBC Wood Gundy Inc. are registered broker-dealers. Jayvee
& Co. holds securities owned by CIBC World Markets, Inc., which is an
affiliate of CIBC World Markets Corp., a registered broker-dealer. CIBC World
Markets Inc. received warrants, as compensation for investment banking services.
All other selling shareholders (except as provided in footnote (6)) have
represented that they are not registered broker-dealers or an affiliate of a
registered broker-dealer.
(6) Based
on reasonable inquiry, we have never received disclosure with respect to the
following selling shareholders: Mibrea Holdings, Inc., 267554 Alberta Ltd.,
924849 Alberta Ltd., 957637 Alberta Ltd., Brisil Capitale Inc., Cougar Assets
Ltd., David Cross P.C., DC Osadchuk Holdings, Inc., Green Eco Investments SA,
Landmark Sport Group, Lockhold Consultants Ltd., Lone Mountain Resources Ltd.,
Makow Properties Corp. Ltd., Mohawk Capital Corp., Remington Capital Corp.,
Vangoor Holdings Co., Scotia Capital Inc., 349150 Alberta Ltd., Danich
Investments Ltd., Thompson Contractors Inc., Sanovest Holdings Ltd., Leder
Investments, Thompson Bros (Constr.) Ltd., Joosten Holdings, Ltd., Heatherdale
Consulting Services, David J. Larocque P.C., John Hickie P.C., Keith Laatsch
P.C., Passar Capital Corp., RM England P.C., Tamlane Holdings Ltd., Techni Trend
Investments Ltd., and Majan Management.
(7) The
Exchangeable Shares, or some of the Exchangeable Shares, have been exchanged for
shares of common stock, which are included in Column A, Outstanding Shares
Owned, and not in Column B, Shares Underlying Exchangeable Shares.
(8)
Includes 1,514,500 Exchangeable Shares that have been exchanged for shares of
common stock, which were subsequently sold.
26
PLAN OF
DISTRIBUTION
Each
selling stockholder of our securities and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their
securities on the trading market or any other stock exchange, market or trading
facility on which the securities are traded or in private transactions. These
sales may be at fixed or negotiated prices. A selling stockholder may use any
one or more of the following methods when selling securities:
|
·
|
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
|
|
·
|
block
trades in which the broker-dealer will attempt to sell the securities as
agent but may position and resell a portion of the block as principal to
facilitate the transaction;
|
|
·
|
purchases
by a broker-dealer as principal and resale by the broker-dealer for its
account;
|
|
·
|
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
|
·
|
privately
negotiated transactions;
|
|
·
|
settlement
of short sales entered into after the date of this
prospectus;
|
|
·
|
broker-dealers
may agree with the selling shareholders to sell a specified number of such
securities at a stipulated price per
share;
|
|
·
|
a
combination of any such methods of
sale;
|
|
·
|
through
the writing or settlement of options or other hedging transactions,
whether through an options exchange or otherwise;
or
|
|
·
|
any
other method permitted pursuant to applicable
law.
|
27
The
selling shareholders may also sell securities under Rule 144 under the
Securities Act, if available, rather than under this prospectus.
Broker-dealers
engaged by the selling shareholders may arrange for other brokers-dealers to
participate in sales. Broker-dealers may receive commissions or discounts from
the selling shareholders (or, if any broker-dealer acts as agent for the
purchaser of securities, from the purchaser) in amounts to be negotiated. We do
not expect these commissions and discounts relating to the sales of securities
by the selling stockholders to exceed what is customary in the types of
transactions involved.
In
connection with the sale of our securities, the selling shareholders may enter
into hedging transactions with broker-dealers or other financial institutions,
which may in turn engage in short sales of the securities in the course of
hedging the positions they assume. The selling shareholders may also sell our
securities short and deliver these securities to close out their short
positions, or loan or pledge the securities to broker-dealers that in turn may
sell these securities. The selling shareholders may also enter into option or
other transactions with broker-dealers or other financial institutions or the
creation of one or more derivative securities which require the delivery to such
broker-dealer or other financial institution of securities offered by this
prospectus, which securities such broker-dealer or other financial institution
may resell pursuant to this prospectus (as amended to reflect such transaction).
The selling shareholders and any broker-dealers or agents that are involved in
selling the securities may be deemed to be “underwriters” within the meaning of
the Securities Act in connection with such sales. In such event, any commissions
received by such broker-dealers or agents and any profit on the resale of the
securities purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act. We are not aware of any agreement or
understanding, directly or indirectly, between a selling shareholder and any
person to distribute the securities.
We are
required to pay certain fees and expenses incurred by our company incident to
the registration of the securities. We have agreed to indemnify the selling
shareholders against certain losses, claims, damages and liabilities, including
liabilities under the Securities Act.
The
resale securities will be sold only through registered or licensed brokers or
dealers if required under applicable state or provincial securities laws. In
addition, in certain states or provinces, the resale securities may not be sold
unless they have been registered or qualified for sale in the applicable state
or an exemption from the registration or qualification requirement is available
and is complied with.
Under
applicable rules and regulations under the Exchange Act, any person engaged in
the distribution of the resale securities may not simultaneously engage in
market making activities with respect to our securities for a period of two
business days prior to the commencement of the distribution. In addition, the
selling shareholders will be subject to applicable provisions of the Exchange
Act and the rules and regulations thereunder, including Regulation M, which
may limit the timing of purchases and sales of our securities by the selling
shareholders or any other person.
DESCRIPTION
OF CAPITAL STOCK
The
following summary description of our securities is not complete and is qualified
in its entirety by reference to our Articles of Incorporation and
Bylaws.
Common
Stock
Our
authorized capital stock consists of 750,000,000 shares of $.001 par value
common stock and 10,000,000 shares of $0.001 par value preferred stock, which we
may issue in one or more series as determined by our Board of
Directors.
28
As of
September 18, 2009, 277,884,511 of our common stock were issued and outstanding
(excluding 48,870,917 shares of our common stock reserved for issuance upon
exercise of outstanding options under option plans and warrants, and 1,388,567
shares of common stock reserved for issuance on settlement of debt of a former
subsidiary), and there were 238 holders of record of the our common stock
(excluding persons who hold our common stock in brokerage accounts and otherwise
in “street name”). In addition, pursuant to our Reorganization
Agreement with OQI Sask dated August 14, 2006, we are required to issue up to
76,504,304 shares of our common stock for all of the OQI Sask Exchangeable
Shares (including warrants and options to acquire) issued at
closing. As of September 18, 2009, 38,996,938 OQI Sask Exchangeable
Shares have already been exchanged for shares of our common stock, 768,131 OQI
Sask options were forfeited and up to an additional 36,739,235 OQI Sask
Exchangeable Shares may be exchanged for shares of our common
stock.
Each
holder of record of shares of our common stock is entitled to one vote for each
share held on all matters properly submitted to the shareholders for their vote.
Cumulative voting in the election of directors is not authorized by the Articles
of Incorporation.
Holders
of outstanding shares of our common stock are entitled to those dividends
declared by the Board of Directors out of legally available funds, and, in the
event of our liquidation, dissolution or winding up of our affairs, holders are
entitled to receive ratably our net assets available to the shareholders.
Holders of our outstanding common stock have no preemptive, conversion or
redemption rights. All of the issued and outstanding shares of our common stock
are, and all unissued shares of our common stock, when offered and sold will be,
duly authorized, validly issued, fully paid and nonassessable. To the extent
that additional shares of our common stock may be issued in the future, the
relative interests of the then existing shareholders may be
diluted.
We have
never declared or paid any dividends or distributions on our common stock. We
anticipate that for the foreseeable future all earnings will be retained for use
in our business and no cash dividends will be paid to shareholders. Any payment
of cash dividends in the future on our common stock will be dependent upon our
financial condition, results of operations, current and anticipated cash
requirements, plans for expansion, as well as other factors that the Board of
Directors deems relevant.
Preferred
Stock
Our Board
of Directors is authorized to issue from time to time, without shareholder
authorization, in one or more designated series, any or all of the authorized
but unissued shares of our preferred stock with such dividend, redemption,
conversion and exchange provisions as may be provided by the Board of Directors
with regard to such particular series. Any series of preferred stock may possess
voting, dividend, liquidation and redemption rights superior to those of our
common stock. The rights of the holders of our common stock will be subject to
and may be adversely affected by the rights of the holders of any of our
preferred stock that may be issued in the future. Issuance of a new series of
preferred stock, or providing desirable flexibility in connection with possible
acquisitions and other corporate purposes, could make it more difficult for a
third party to acquire, or discourage a third party from acquiring our
outstanding shares of common stock and make removal of the Board of Directors
more difficult.
Our Board
of Directors adopted a shareholders rights plan in March 2006 and reserved
250,000 shares of Series A Junior Participating Preferred Stock. At the
Company’s annual shareholders meeting held on October 30, 2006, the
shareholders adopted the shareholders rights plan. This shareholders rights plan
could have the effect of discouraging, delaying or preventing an
acquisition.
In
addition, the Company has designated one preferred share as Series B
Preferred Stock (the “Series B Preferred Share”), which is held by
Computershare Trust Company of Canada (“CTC”). The one Series B Preferred
Share represents a number of votes equal to the total outstanding Exchangeable
Shares on the applicable record date for the vote submitted to the Company’s
shareholders. The Exchangeable Shares were issued by OQI Sask as part of the
reorganization, and are exchangeable at any time on a one-for-one basis, at the
option of the holder, for shares of the Company’s common stock. An Exchangeable
Share of OQI Sask provides a holder with economic terms and voting rights which
are, as nearly as practicable, effectively equivalent to those of a share of the
Company’s common stock. CTC will vote the one Series B Preferred Share as
indicated by the individual holders of Exchangeable Shares of OQI
Sask.
29
LEGAL
MATTERS
Certain
legal matters relating to the validity of the common stock, the warrants, the
units and the subscription receipts to be offered in this prospectus will be
passed upon by Burns Figa & Will, P.C., Greenwood Village,
Colorado.
30
EXPERTS
The
consolidated financial statements of Oilsands Quest Inc. as of April 30, 2009
and 2008, and for each of the years in the two-year period ended April 30, 2009
and for the period from inception on April 3, 1998 to April 30, 2009, and
management’s assessment of the effectiveness of internal control over financial
reporting as of April 30, 2009 have been incorporated by reference herein and in
the registration statement in reliance upon the reports of KPMG LLP, independent
registered public accounting firm, incorporated by reference herein, and upon
the authority of said firm as experts in accounting and auditing.
The audit
report on the effectiveness of internal control over financial reporting as of
April 30, 2009, expresses an opinion that Oilsands Quest Inc. did not maintain
effective internal control over financial reporting as of April 30, 2009 because
of the effect of a material weakness on the achievement of the objectives of the
control criteria and contains an explanatory paragraph that states a material
weakness related to the Oilsands Quest Inc. not maintaining effective processes
and controls over the accounting for and reporting of complex and non-routine
transactions.
The
consolidated financial statements for the fiscal year ended April 30, 2007,
incorporated in this prospectus by reference, have been so incorporated in
reliance on the report of Pannell Kerr Forster, independent registered public
accounting firm, given on the authority of said firm as experts in auditing and
accounting.
31
99,598,673
SHARES OF
COMMON
STOCK
Prospectus
dated ______________, 2009
32
PART II
INFORMATION
NOT REQUIRED IN PROSPECTUS
ITEM
13.
|
OTHER
EXPENSES OF ISSUANCE AND
DISTRIBUTION.
|
The
following table sets forth an itemization of all estimated expenses, all of
which we will pay, in connection with the issuance and distribution of the
securities being registered hereby:
SEC
Registration Fee
|
$
|
33,318.67
|
(1)
|
|
Legal
Fees and Expenses
|
50,000
|
*
|
||
Accounting
Fees and Expenses
|
50,000
|
*
|
||
Printing
Expenses
|
25,000
|
*
|
||
Miscellaneous
|
5,000
|
*
|
||
TOTAL
|
163,318.67
|
*
|
||
(1)
|
In
accordance with Rule 457(p), the full amount of the registration fee is
offset by the registration fees previously paid by the registrant with
respect to securities of the registrant that were previously registered
but not issued.
|
*
|
Estimated.
|
ITEM
14.
|
INDEMNIFICATION
OF DIRECTORS AND OFFICERS.
|
Our
Articles of Incorporation, as amended, provide that to the fullest extent
permitted by Colorado law, our directors or officers shall not be personally
liable to us or our shareholders for damages for breach of such director’s or
officer’s fiduciary duty. The effect of this provision of our Articles of
Incorporation, as amended, is to eliminate our right and our shareholders’ right
(through shareholders’ derivative suits on behalf of our company) to recover
damages against a director or officer for breach of the fiduciary duty of care
as a director or officer (including breaches resulting from negligent or grossly
negligent behavior), except under certain situations defined by statute. We
believe that the indemnification provisions in our Articles of Incorporation, as
amended, are necessary to attract and retain qualified persons as directors and
officers.
In
addition to our Articles of Incorporation, the Company entered into indemnity
agreements with our officers and directors. The agreements are contractual
supplements to the corporate indemnity provisions of the Company’s Articles of
Incorporation. The material terms and conditions of the agreement are:
(a) the Company shall indemnify and advance expenses to the indemnitee
against claims if the indemnitee acted honestly and in good faith with a view to
the best interests of the Company, and, with respect to any criminal proceeding,
had no reasonable grounds to believe the indemnitee’s conduct was unlawful;
(b) a description of how the Company will determine if indemnification is
appropriate including the procedure for obtaining indemnification; (c) the
procedure to authorize advancing expenses; (d) the indemnitee’s rights
under the indemnity agreement will survive any merger or other consolidation;
and (e) the indemnitee will be entitled to attorney’s fees and
disbursements incurred in any suit against the Company for breach of the
agreement, if the indemnitee prevails in whole or in part in such a
suit.
Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers and controlling persons of us pursuant to the
foregoing provisions, or otherwise, we have been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by us of expenses incurred or paid by a director, officer or
controlling person of the Company in the successful defense of any action, suit
or proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, we will, unless in the opinion
of our counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
the Company is against public policy as expressed in the Securities Act and will
be governed by the final adjudication of such issue.
33
ITEM
15. RECENT SALES OF UNREGISTERED
SECURITIES
On
May 8, 2006, the Company issued (i) 267,432 shares of common stock to
investors pursuant to the conversion of convertible notes; and (ii) 574,345
shares of common stock to investors pursuant to the exercise of warrants. The
common stock was issued in reliance on the exemption from registration contained
in Section 3(a)(9) of the Securities Act of 1933 (the “Securities
Act”).
On
May 23, 2006, the Company issued (i) 14,895 shares of common stock
pursuant to the conversion of convertible notes at $0.40 per share; and
(ii) 13,980 shares of common stock pursuant to the exercise of
warrants at $0.55 per share. The common stock was issued in reliance on the
exemption from registration contained in Section 3(a)(9) of the Securities
Act.
On
May 29, 2006, the Company issued (i) 6,992 shares of common stock
pursuant to the conversion of convertible notes at $0.55 per share; and
(ii) 19,114 shares of common stock pursuant to the exercise of warrants at
$1.30 per share. The common stock was issued in reliance on the exemption from
registration contained in Section 3(a)(9) of the Securities
Act.
On July
6, 2006, the Company issued 5,668,100 shares of common stock (the “July
2006 Flow-Through Shares”) at a price of $6.60 Cdn per share for gross proceeds
of $37,409,460 Cdn. In connection with this offering, the Company
paid an aggregate of $2,057,520 Cdn in fees to a syndicate of
agents. The July 2006 Flow-Through Shares were sold to investors
in Canada pursuant to Regulation S under the Securities Act.
On
August 14, 2006, the Company issued 3,900,000 shares of common stock at a
price of $3.80 per share for gross proceeds of $14,820,000. No commissions were
paid in connection with this offering. The common stock was sold to Non-U.S.
persons pursuant to Regulation S under the Securities Act.
On
August 16, 2006, the Company issued 250,000 shares of its common stock at a
price of $3.80 per share for total gross proceeds of $950,000. The common stock
was sold to non-U.S. persons pursuant to Regulation S under the Securities
Act.
On
October 11, 2006, the Company issued 5,530,494 shares of common stock in
exchange for the same number of OQI Sask Exchangeable Shares. The shares were
issued in reliance on the exemption from registration contained in
Section 4(2) of the Securities Act.
On
November 30, 2006, the Company issued 4,300,315 shares of common stock in
exchange for the same number of OQI Sask Exchangeable Shares. The shares were
issued in reliance on the exemption from registration contained in
Section 4(2) of the Securities Act.
From
December 15, 2006 to January 1, 2007, the Company issued (i) 200,000 shares of
common stock at $1.50 per share and (ii) 300,000 shares of common stock at $1.70
per share to consultants pursuant to the exercise of stock
options. The common stock was issued in reliance on the exemption
from registration contained in Section 3(a)(9) of the Securities
Act.
From
January 9, 2007 to February 16, 2007, the Company issued an aggregate
of 644,459 shares of common stock to investors pursuant to the exercise of
warrants as follows: (i) 96,143 shares of common stock at $0.55 per share; (ii)
64,150 shares of common stock at $1.75 per share; and (iii) 484,166 shares of
common stock at $2.00 per share. The common stock was issued in
reliance on the exemption from registration contained in Sections 4(2) and
3(a)(9) of the Securities Act.
On
January 10, 2007, the Company issued 205,750 shares of common stock in
exchange for the same number of OQI Sask Exchangeable Shares. The shares were
issued in reliance on the exemption from registration contained in
Section 4(2) of the Securities Act.
On
January 15, 2007, the Company issued 1,111,050 shares of common stock to a
former director upon the exercise of options to acquire exchangeable shares
issued by our subsidiary and then their subsequent exchange into shares of the
Company’s common stock. The shares were issued in reliance on the exemption from
registration contained in Section 4(2) of the Securities Act.
34
On
January 15, 2007, the Company issued 82,300 shares of common stock in
exchange for the same number of OQI Sask Exchangeable Shares. The shares were
issued in reliance on the exemption from registration contained in
Section 4(2) of the Securities Act.
On
January 19, 2007, the Company issued 6,995,500 shares of common stock in
exchange for the same number of OQI Sask Exchangeable Shares. The shares were
issued in reliance on the exemption from registration contained in
Section 4(2) of the Securities Act.
On
January 26, 2007, the Company issued 1,716,098 shares of common stock in
exchange for the same number of OQI Sask Exchangeable Shares. The shares were
issued in reliance on the exemption from registration contained in
Section 4(2) of the Securities Act.
On
January 31, 2007, the Company issued 205,750 shares of common stock to a
former director upon the exercise of options to acquire exchangeable shares
issued by our subsidiary and then their subsequent exchange into shares of the
Company’s common stock. The shares were issued in reliance on the exemption from
registration contained in Section 4(2) of the Securities Act.
On
February 8, 2007, the Company issued 1,712,460 shares of common stock in
exchange for the same number of OQI Sask Exchangeable Shares. The shares were
issued in reliance on the exemption from registration contained in
Section 4(2) of the Securities Act.
On
February 12, 2007, the Company issued 347,430 shares of common stock in
exchange for the same number of OQI Sask Exchangeable Shares. The shares were
issued in reliance on the exemption from registration contained in
Section 4(2) of the Securities Act.
On
March 6, 2007, the Company issued 3,097,534 shares of common stock (the
“March 6, 2007 Flow-Through Shares”) at a price of $4.82 per share for gross
proceeds of $14,930,114. In connection with this offering, the Company paid an
aggregate of $746,506 in fees to the underwriters. The March 2007
Flow-Through Shares were sold to investors in Canada pursuant to
Regulation S under the Securities Act.
On
March 9, 2007, the Company issued 58,300 shares of common stock (the “March
9, 2007 Flow-Through Shares”) at a price of $4.82 per share for gross proceeds
of $281,006. In connection with this Offering, the Company paid an aggregate of
Cdn. $16,440 in fees to a syndicate of underwriters. The March 9, 2007
Flow-Through Shares were sold to investors in Canada pursuant to
Regulation S under the Securities Act.
On March
9, 2007, the Company issued 199,200 shares of common stock in exchange for the
same number of OQI Sask Exchangeable Shares. The shares were issued in reliance
on the exemption from registration contained in Section 4(2) of the
Securities Act.
On
March 12, 2007, the Company issued 205,750 shares of common stock to a
former director upon the exercise of options to acquire exchangeable shares
issued by our subsidiary and then their subsequent exchange into shares of the
Company’s common stock. The shares were issued in reliance on the exemption from
registration contained in Section 4(2) of the Securities Act.
On March
13, 2007, the Company issued 482,278 shares of common stock in exchange for the
same number of OQI Sask Exchangeable Shares. The shares were issued in reliance
on the exemption from registration contained in Section 4(2) of the
Securities Act.
On
March 16, 2007, the Company issued 1,000 shares of common stock to an
investor pursuant to the exercise of warrants exercisable at $1.75 per share.
The common stock was issued in reliance on the exemption from registration
contained in Section 4(2) of the Securities Act.
On March
21, 2007, the Company issued 2,781,329 shares of common stock in exchange for
the same number of OQI Sask Exchangeable Shares. The shares were issued in
reliance on the exemption from registration contained in Section 4(2) of
the Securities Act.
35
On
March 27, 2007, the Company issued 25,000 shares of common stock to
investors pursuant to the exercise of warrants exercisable at $2.00 per share
for 5,000 shares and $1.75 per share for 20,000 shares. The common stock was
issued in reliance on the exemption from registration contained in
Section 4(2) of the Securities Act.
On March
28, 2007, the Company issued 489,274 shares of common stock in exchange for the
same number of OQI Sask Exchangeable Shares. The shares were issued in reliance
on the exemption from registration contained in Section 4(2) of the
Securities Act.
On April
2, 2007, the Company issued 102,875 shares of common stock in exchange for the
same number of OQI Sask Exchangeable Shares. The shares were issued in reliance
on the exemption from registration contained in Section 4(2) of the
Securities Act.
On April
16, 2007, the Company issued 164,600 shares of common stock to a former director
upon the exercise of options to acquire exchangeable shares issued by our
subsidiary and then their subsequent exchange into shares of the Company’s
common stock. The shares were issued in reliance on the exemption from
registration contained in Section 4(2) of the Securities Act.
On April
18, 2007, the Company issued 10,000 shares of common stock in exchange for the
same number of OQI Sask Exchangeable Shares. The shares were issued in reliance
on the exemption from registration contained in Section 4(2) of the
Securities Act.
On April
26, 2007, the Company issued 823,000 shares of common stock in exchange for the
same number of OQI Sask Exchangeable Shares. The shares were issued in reliance
on the exemption from registration contained in Section 4(2) of the
Securities Act.
On April
30, 2007, the Company issued 771,562 shares of common stock in exchange for the
same number of OQI Sask Exchangeable Shares. The shares were issued in reliance
on the exemption from registration contained in Section 4(2) of the
Securities Act.
On May 1,
2007, the Company issued 1,211,050 shares of common stock in exchange for the
same number of OQI Sask Exchangeable Shares. The shares were issued in reliance
on the exemption from registration contained in Section 4(2) of the
Securities Act.
On
May 3, 2007, the Company issued 13,900,000 shares of common stock at a
price of $2.75 per share for gross proceeds of $38,225,000. In connection with
this offering, the Company paid an aggregate of $2,197,938 in fees to the
agents. The common stock was sold to investors in Canada pursuant to
Regulation S and to accredited investors pursuant to Regulation D
under the Securities Act
On
May 3, 2007, the Company issued 2,164,166 shares of common stock
(the “May 2007 Flow-Through Shares”) at a price of Cdn. $3.85 per share for
gross proceeds of Cdn. $8,332,039. In connection with the this offering, the
Company received an additional payment of Cdn. $3,873,857 from the underwriters.
The Company paid an aggregate of $610,295 in fees to the underwriters. The May
2007 Flow-Through Shares were sold to investors in Canada pursuant to
Regulation S under the Securities Act.
On
May 7, 2007, the Company issued 46,850 shares of common stock to an
investor pursuant to the exercise of warrants exercisable at $1.75 per share.
The common stock was issued in reliance on the exemption from registration
contained in Section 4(2) of the Securities Act.
On May
22, 2007, the Company issued 20,575 shares of common stock in exchange for the
same number of OQI Sask Exchangeable Shares. The shares were issued in reliance
on the exemption from registration contained in Section 4(2) of the
Securities Act.
On May
22, 2007, the Company issued 148,140 shares of common stock to a former director
upon the exercise of options to acquire exchangeable shares issued by our
subsidiary and then their subsequent exchange into shares of the Company’s
common stock. The shares were issued in reliance on the exemption from
registration contained in Section 4(2) of the Securities Act.
36
On
June 1, 2007, the Company issued 200,000 shares of common stock to an
investor pursuant to the exercise of warrants exercisable at $2.00 per share.
The common stock was issued in reliance on the exemption from registration
contained in Section 4(2) of the Securities Act.
On June
11, 2007, the Company issued 1,398,928 shares of common stock in exchange for
the same number of OQI Sask Exchangeable Shares. The shares were issued in
reliance on the exemption from registration contained in Section 4(2) of
the Securities Act.
On July
31, 2007, the Company issued 9,876 shares of common stock in exchange for the
same number of OQI Sask Exchangeable Shares. The shares were issued in reliance
on the exemption from registration contained in Section 4(2) of the
Securities Act.
On
July 31, 2007, the Company issued 24,700 shares of common stock to
investors upon the exercise of warrants. The shares were issued in reliance on
the exemption from registration contained in Section 4(2) and Rule 506 of
Regulation D of the Securities Act.
On
August 1, 2007, the Company issued 125,000 shares of common stock to
investors upon the exercise of warrants. The shares were issued in reliance on
the exemption from registration contained in Section 4(2) and Rule 506 of
Regulation D of the Securities Act.
On August
13, 2007, the Company issued 222,210 shares of common stock to a former director
upon the exercise of options to acquire exchangeable shares issued by our
subsidiary and then their subsequent exchange into shares of the Company’s
common stock. The shares were issued in reliance on the exemption from
registration contained in Section 4(2) of the Securities Act.
On
August 17, 2007, the Company issued 107,500 shares of common stock to
investors upon the exercise of warrants. The shares were issued in reliance on
the exemption from registration contained in Section 4(2) and Rule 506 of
Regulation D of the Securities Act.
On August
21, 2007, the Company issued 82,300 shares of common stock in exchange for the
same number of OQI Sask Exchangeable Shares. The shares were issued in reliance
on the exemption from registration contained in Section 4(2) of the
Securities Act.
On
August 27, 2007, the Company issued 716,500 shares of common stock to
investors upon the exercise of warrants. The shares were issued in reliance on
the exemption from registration contained in Section 4(2) and Rule 506 of
Regulation D of the Securities Act.
On
August 28, 2007, the Company issued 30,000 shares of common stock to
investors upon the exercise of warrants. The shares were issued in reliance on
the exemption from registration contained in Section 4(2) and Rule 506 of
Regulation D of the Securities Act.
On
August 29, 2007, the Company issued 100,000 shares of common stock to
investors upon the exercise of warrants. The shares were issued in reliance on
the exemption from registration contained in Section 4(2) and Rule 506 of
Regulation D of the Securities Act.
On
August 31, 2007, the Company issued 1,346,144 shares of common stock to
investors upon the exercise of warrants. The shares were issued in reliance on
the exemption from registration contained in Section 4(2) and Rule 506 of
Regulation D of the Securities Act.
37
On
August 31, 2007, the Company issued 62,500 shares of common stock to
investors upon the exercise of warrants. The shares were issued in reliance on
the exemption from registration contained in Section 4(2) and Rule 506 of
Regulation D of the Securities Act. No commissions or other remuneration
were paid for these issuances.
On
September 17, 2007, the Company issued 1,646,000 shares of common stock in
exchange for the same number of OQI Sask Exchangeable Shares. The shares were
issued in reliance on the exemption from registration contained in
Section 4(2) of the Securities Act.
On
September 21, 2007, the Company issued an aggregate of 750,000 shares of common
stock, with 250,000 shares being issued as partial consideration for the
acquisition of the rights of a joint venture partner, and 500,000 shares being
issued as partial consideration for the acquisition of a royalty. The shares
were issued in reliance on the exemption from registration contained in Section
4(2) and Rule 506 of Regulation D of the Securities Act. No commissions or
other remuneration were paid for this issuance.
On
September 19, 2007, the Company issued 8,740 shares of common stock to
investors upon the exercise of warrants. The shares were issued in reliance on
the exemption from registration contained in Section 4(2) and Rule 506 of
Regulation D of the Securities Act.
On
October 17, 2007, the Company issued 250,000 shares of common stock to an
investor upon the exercise of warrants. The shares were issued in reliance on
the exemption from registration contained in Section 4(2) and Rule 506 of
Regulation D of the Securities Act.
On
October 25, 2007, the Company issued 750,000 shares of common stock to
investors upon the exercise of warrants. The shares were issued in reliance on
the exemption from registration contained in Section 4(2) and Rule 506 of
Regulation D of the Securities Act.
On
November 5, 2007, the Company issued 20,575 shares of common stock in exchange
for the same number of OQI Sask Exchangeable Shares. The shares were issued in
reliance on the exemption from registration contained in Section 4(2) of
the Securities Act.
On
November 7, 2007, the Company issued 62,500 shares of common stock to an
investor upon the exercise of warrants. The shares were issued in reliance on
the exemption from registration contained in Section 4(2) and Rule 506 of
Regulation D of the Securities Act. No commissions or other remuneration
were paid for this issuance.
On
November 21, 2007, the Company issued 42,500 shares of common stock to
investors upon the exercise of warrants. The shares were issued in reliance on
the exemption from registration contained in Section 4(2) and Rule 506 of
Regulation D of the Securities Act. No commissions or other remuneration
were paid for these issuances.
On
November 21, 2007, the Company issued 123,450 shares of common stock to a former
director upon the exercise of options to acquire exchangeable shares issued by
our subsidiary and then their subsequent exchange into shares of the Company’s
common stock. The shares were issued in reliance on the exemption from
registration contained in Section 4(2) of the Securities Act.
On
December 10, 2007, the Company issued 4,356,666 shares of common stock to
investors upon the exercise of warrants. The shares were issued in reliance on
the exemption from registration contained in Section 4(2) and Rule 506
of Regulation D of the Securities Act.
38
On
December 12, 2007, the Company issued 626,416 shares of common stock to
investors upon the exercise of warrants. The shares were issued in reliance on
the exemption from registration contained in Section 4(2) and Rule 506
of Regulation D of the Securities Act.
On
December 18, 2007, the Company issued 411,500 shares of common stock to a
director upon the exercise of options to acquire exchangeable shares issued by
our subsidiary and then their subsequent exchange into shares of the Company’s
common stock. The shares were issued in reliance on the exemption from
registration contained in Section 4(2) of the Securities Act.
On
December 20, 2007, the Company issued 205,750 shares of common stock to a
director upon the exercise of options to acquire exchangeable shares issued by
our subsidiary and then their subsequent exchange into shares of the Company’s
common stock. These shares were issued in reliance on the exemption from
registration contained in Section 4(2) of the Securities Act.
On
December 21, 2007, the Company issued 410,000 shares of common stock in exchange
for the same number of OQI Sask Exchangeable Shares. The shares were issued in
reliance on the exemption from registration contained in Section 4(2) of
the Securities Act.
On
January 9, 2008, the Company issued 10,000 shares of common stock in exchange
for the same number of OQI Sask Exchangeable Shares. The shares were issued in
reliance on the exemption from registration contained in Section 4(2) of
the Securities Act.
On
January 25, 2008, the Company issued 129,200 shares of common stock in exchange
for the same number of OQI Sask Exchangeable Shares. The shares were issued in
reliance on the exemption from registration contained in Section 4(2) of
the Securities Act.
On
February 6, 2008, the Company issued 6,000 shares of common stock in exchange
for the same number of OQI Sask Exchangeable Shares. The shares were issued in
reliance on the exemption from registration contained in Section 4(2) of
the Securities Act.
On March
6, 2008, the Company issued 720,545 shares of common stock in exchange for the
same number of OQI Sask Exchangeable Shares. The shares were issued in reliance
on the exemption from registration contained in Section 4(2) of the
Securities Act.
On April
7, 2008, the Company issued 41,150 shares of common stock in exchange for the
same number of OQI Sask Exchangeable Shares. The shares were issued in reliance
on the exemption from registration contained in Section 4(2) of the
Securities Act.
On
May 23, 2008, the Company issued 12,976,761 shares of common stock at a
price of $4.20 per share for gross proceeds of $54,502,396. The
shares were pursuant to non-U.S. persons pursuant to Regulation S of the
Securities Act. The Company paid an aggregate of $1,225,120 in fees to the
underwriters.
On June
11, 2008, the Company issued 5,750 shares of common stock in exchange for the
same number of OQI Sask Exchangeable Shares. The shares were issued in reliance
on the exemption from registration contained in Section 4(2) of the
Securities Act.
On
June 16, 2008, the Company issued 82,300 shares of common stock to a former
director upon the exercise of options to acquire exchangeable shares issued by
our subsidiary and then their subsequent exchange into shares of the Company’s
common stock. These shares were issued in reliance on the exemption from
registration contained in Section 4(2) of the Securities Act.
39
On
June 17, 2008, the Company issued an aggregate of 640,000 shares of common
stock as partial consideration for the acquisition of the interests of the
remaining external joint venture partners related to our Eagles Nest Oil Sands
Lease. The common stock was issued to non-U.S. persons pursuant to
Regulation S under the Securities Act.
On
July 2, 2008, the Company issued 123,450 shares of common stock to a former
director upon the exercise of options to acquire exchangeable shares issued by
our subsidiary and then their subsequent exchange into shares of the Company’s
common stock. These shares were issued in reliance on the exemption from
registration contained in Section 4(2) of the Securities Act.
On July
2, 2008, the Company issued 238,050 shares of common stock in exchange for the
same number of OQI Sask Exchangeable Shares. The shares were issued in reliance
on the exemption from registration contained in Section 4(2) of the
Securities Act.
On
July 3, 2008, the Company issued 329,200 shares of common stock to
directors upon the exercise of options to acquire exchangeable shares issued by
our subsidiary and then their subsequent exchange into shares of the Company’s
common stock. These shares were issued in reliance on the exemption from
registration contained in Section 4(2) of the Securities Act.
On July
7, 2008 the Company issued 329,200 shares of common stock in exchange for the
same number of OQI Sask Exchangeable Shares. The shares were issued in reliance
on the exemption from registration contained in Section 4(2) of the
Securities Act.
On
July 15, 2008, the Company issued 82,300 shares of common stock to a
director upon the exercise of options to acquire exchangeable shares issued by
our subsidiary and then their subsequent exchange into shares of the Company’s
common stock. These shares were issued in reliance on the exemption from
registration contained in Section 4(2) of the Securities Act.
On
September 19, 2008, the Company issued 411,500 shares of common stock to an
officer upon the exercise of options to acquire exchangeable shares issued by
our subsidiary and then their subsequent exchange into shares of the Company’s
common stock. These shares were issued in reliance on the exemption from
registration contained in Section 4(2) of the Securities Act.
On
October 3, 2008, the Company issued 6,008,156 shares of common stock on a
flow-through basis (the “October 2008 Flow-Through Shares”) at a price of
CDN$3.675 per share for aggregate gross proceeds of CDN$22.1
million. The common stock was sold to non-U.S. persons pursuant to
Regulation S under the Securities Act.
Additionally,
on October 3, 2008, the Company issued 4,800,000 shares of common
stock on a flow-through basis to investors at a price of CDN$3.675 per share for
total gross proceeds to the Company of CDN$17.6 million. In connection with this
offering, the Company paid an aggregate of CDN$970,200 in fees to the
underwriters. The common stock was sold to non-U.S. persons pursuant
to Regulation S under the Securities Act.
On
October 3, 2008, the Company issued 108,019 shares of common stock in exchange
for the same number of OQI Sask Exchangeable Shares. The shares were issued in
reliance on the exemption from registration contained in Section 4(2) of
the Securities Act.
On
December 11, 2008, the Company issued 128,805 shares of common stock in exchange
for the same number of OQI Sask Exchangeable Shares. The shares were issued in
reliance on the exemption from registration contained in Section 4(2) of
the Securities Act.
On
January 4, 2009, the Company issued 164,600 shares of common stock in exchange
for the same number of OQI Sask Exchangeable Shares. The shares were issued in
reliance on the exemption from registration contained in Section 4(2) of
the Securities Act.
On March
16, 2009, the Company issued 1,234,500 shares of common stock in exchange for
the same number of OQI Sask Exchangeable Shares. The shares were issued in
reliance on the exemption from registration contained in Section 4(2) of
the Securities Act.
40
On August
19, 2009, the Company issued 705,000 shares of common stock in exchange for the
same number of OQI Sask Exchangeable Shares. The shares were issued in reliance
on the exemption from registration contained in Section 4(2) of the
Securities Act.
ITEM
16.
|
EXHIBITS
|
|
Exhibit
|
Description
|
|
3.1
|
Articles
of Incorporation.(1),(4),(6),(11), (16)
|
|
3.2
|
Bylaws.(17)
|
|
4.1
|
2005b
Stock Option Plan.(2)
|
|
4.2
|
2006
Stock Option Plan.(13)
|
|
4.3
|
Rights
Agreement, dated as of March 9, 2006, between the Company and
Computershare Investor Services, Inc., as Rights
Agent.(5)
|
4.4
|
Warrant
indenture between Oilsands Quest Inc. and Computershare Trust Company of
Canada dated December 5, 2007.(14)
|
|
4.5
|
Form
of Warrant, dated December 12, 2005.(3)
|
|
4.6
|
Warrant
Indenture dated May 12, 2009.(21)
|
|
4.7*
|
Form
of Warrant Indenture and Form of Warrant Certificate.
|
|
4.8*
|
Form
of Subscription Receipt Agreement.
|
|
5.1††
|
Opinion
of Burns Figa & Will, P.C.
|
|
10.1
|
Financing
Agreement with Oilsands Quest Sask, Inc., November 25,
2005.(3)
|
|
10.2
|
Subscription
Agreement with Dynamic Power Hedge Fund, dated December 12,
2005.(3)
|
|
10.3
|
Executive
Employment Agreement (Amended and Restated) with T. Murray Wilson, dated
September 22, 2006 and as amended effective August 1,
2007.(13)
|
|
10.4
|
Reorganization
Agreement, dated June 9, 2006.(7)
|
|
10.5
|
Voting
Exchange and Trust Agreement dated August 14, 2006.(8)
|
|
10.6
|
Exchangeable
Share Provisions.(8)
|
|
10.7
|
Support
Agreement dated August 14, 2006.(8)
|
|
10.8
|
Executive
Employment Agreement with Christopher Hopkins dated August 14,
2006.(8)
|
|
10.9
|
Executive
Employment Agreement with Erdal Yildirim, dated October 10,
2006.(10)
|
|
10.10
|
Form
of Indemnity Agreement.(9)
|
|
10.11
|
Subscription
Agreement for Flow-Through Shares, dated March 6,
2007.(13)
|
|
10.12
|
Amending
Agreement to Subscription Agreement for Flow-Through Shares, dated May 3,
2007.(13)
|
|
10.13
|
Subscription
Agreement between the Company and Subscribers, dated May 3,
2007.(13)
|
|
10.14
|
Underwriting
Agreement.(15)
|
|
10.15
|
Consulting
Services Agreement with Karim Hirji.(18)
|
|
10.16
|
Executive
Employment Agreement with Garth Wong.(19)
|
|
10.17
|
Agency
Agreement dated April 30, 2009.(20)
|
|
21.1
|
Subsidiaries
of the Registrant.(13)
|
|
23.1
|
Consent
of Pannell Kerr Forster, Independent Registered Public Accounting
Firm.
|
|
23.2†
|
Consent
of KPMG LLP, Independent Registered Public Accounting
Firm.
|
|
23.3††
|
Consent
of Burns Figa & Will, P.C. (included in Exhibit
5.1).
|
|
23.4††
|
Power
of Attorney
|
41
____________
†
|
Filed
herewith.
|
††
|
Previously
Filed
|
*
|
To
be filed by amendment.
|
(1)
|
Incorporated
by reference from Form 10-SB, filed October 14, 1999; and Form 8-K, filed
November 29, 2004.
|
(2)
|
Incorporated
by reference from Form SB-2 dated December 29,
2005.
|
(3)
|
Incorporated
by reference from Form 10-QSB dated March 22,
2006.
|
(4)
|
Incorporated
by reference from Form 10-QSB dated December 14,
2005.
|
(5)
|
Incorporated
by reference from Form 8-A dated March 13,
2006.
|
(6)
|
Incorporated
by reference from Form 8-K dated March 13,
2006.
|
(7)
|
Incorporated
by reference from Form 8-K dated June 14,
2006.
|
(8)
|
Incorporated
by reference from Form 8-K dated August 17,
2006.
|
(9)
|
Incorporated
by reference herein from Form 10-QSB filed March 15,
2007
|
(10)
|
Incorporated
by reference herein from Form 8-K dated October 12,
2006.
|
(11)
|
Incorporated
by reference herein from Form 10-QSB filed December 15,
2006.
|
(12)
|
Incorporated
by reference herein from Form 8-K filed August 21,
2006.
|
(13)
|
Incorporated
by reference herein from Form 10-KSB filed July 30,
2007.
|
(14)
|
Incorporated
by reference herein from Form 8-K filed December 5,
2007.
|
(15)
|
Incorporated
by reference herein from Form 10-K filed November 23,
2007.
|
(16)
|
Incorporated
by reference herein from Form 8-K filed October 21,
2008.
|
(17)
|
Incorporated
by reference herein from 10-K filed June 21,
2008.
|
(18)
|
Incorporated
by reference herein from 10-Q filed March 12,
2009.
|
(19)
|
Incorporated
by reference herein from Form 10-K filed July 30,
2009.
|
(20)
|
Incorporated
by reference herein from Form 8-K filed May 1,
2009.
|
(21)
|
Incorporated
by reference herein from Form 8-A filed May 12,
2009.
|
ITEM
17.
|
UNDERTAKINGS
|
(a) The
undersigned registrant hereby undertakes:
(1) To
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To
include any prospectus required by Section 10(a)(3) of the Securities Act
of 1933;
(ii) To
reflect in the prospectus any facts or events arising after the effective date
of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the “Calculation of Registration Fee”
table in the effective registration statement; and
(iii) To
include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to
such information in the registration statement;
42
(2) That,
for the purpose of determining any liability under the Securities Act of 1933,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
(4) That,
for the purpose of determining liability under the Securities Act of 1933 to any
purchaser:
(i)
Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be
deemed to be part of the registration statement as of the date the filed
prospectus was deemed part of and included in the registration statement;
and
(ii) Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or
(b)(7) as part of a registration statement in reliance on Rule 430B
relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for
the purpose of providing the information required by section 10(a) of the
Securities Act of 1933 shall be deemed to be part of and included in the
registration statement as of the earlier of the date such form of prospectus is
first used after effectiveness or the date of the first contract of sale of 314
securities in the offering described in the prospectus. As provided in
Rule 430B, for liability purposes of the issuer and any person that is at
that date an underwriter, such date shall be deemed to be a new effective date
of the registration statement relating to the securities in the registration
statement to which that prospectus relates, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no
statement made in a registration statement or prospectus that is part of the
registration statement or made in a document incorporated or deemed incorporated
by reference into the registration statement or prospectus that is part of the
registration statement will, as to a purchaser with a time of contract of sale
prior to such effective date, supersede or modify any statement that was made in
the registration statement or prospectus that was part of the registration
statement or made in any such document immediately prior to such effective
date.
(5) That,
for the purpose of determining liability of the registrant under the Securities
Act of 1933 to any purchaser in the initial distribution of the
securities:
The
undersigned registrant undertakes that in a primary offering of securities of
the undersigned registrant pursuant to this registration statement, regardless
of the underwriting method used to sell the securities to the purchaser, if the
securities are offered or sold to such purchaser by means of any of the
following communications, the undersigned registrant will be a seller to the
purchaser and will be considered to offer or sell such securities to
such purchaser:
(i)
Any preliminary prospectus or prospectus of the undersigned
registrant relating to the offering required to be filed pursuant to
Rule 424;
(ii)
Any free writing prospectus relating to the
offering prepared by or on behalf of the undersigned registrant or used or
referred to by the undersigned registrant;
(iii) The
portion of any other free writing prospectus relating to the offering containing
material information about the undersigned registrant or its securities provided
by or on behalf of the undersigned registrant; and
(iv) Any
other communication that is an offer in the offering made by the undersigned
registrant to the purchaser.
(b) The
undersigned registrant hereby undertakes to supplement the prospectus, after the
expiration of the subscription period, to set forth the results of the
subscription offer, the transactions by the underwriters during the subscription
period, the amount of unsubscribed securities to be purchased by the
underwriters, and the terms of any subsequent reoffering thereof. If any public
offering by the underwriters is to be made on terms differing from those set
forth on the cover page of the prospectus, a post-effective amendment will be
filed to set forth the terms of such offering.
43
(c) The
undersigned registrant hereby undertakes that, insofar as indemnification for
liabilities arising under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been advised that in the
opinion of the SEC such indemnification is against public policy as expressed in
the Securities Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, such registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
44
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant has duly
caused this Amendment No. 1 to its Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of Calgary,
Alberta, Canada on November 4, 2009.
OILSANDS
QUEST INC.
|
|||
By:
|
/s/
T. Murray Wilson
|
||
T.
Murray Wilson, Executive
Chairman
|
|||
By:
|
/s/
Christopher H. Hopkins
|
||
Christopher
H. Hopkins, President
and ChiefExecutive Officer
|
|||
By:
|
/s/
Garth Wong
|
||
Garth
Wong, ChiefFinancial
Officer
|
45
Pursuant
to the requirements of the Securities Act of 1933, this Registration Statement
has been signed by the following persons in the capacities indicated
on November 4, 2009.
/s/
T. Murray Wilson
|
Executive
Chairman and
|
||
T.
Murray Wilson
|
Director
|
||
/s/
Christopher H. Hopkins
|
President
and Chief Executive
|
||
Christopher
H. Hopkins
|
Officer
and Director (Principal Executive Officer)
|
||
/s/
Garth Wong
|
Chief
Financial Officer
|
||
Garth
Wong
|
(Principal
Financial Officer and Principal Accounting Officer)
|
||
*
|
Director
|
||
Ronald
Blakely
|
|||
*
|
Director
|
||
Brian
F. MacNeill
|
|||
*
|
Director
|
||
Thomas
Milne
|
|||
*
|
Director
|
||
Ronald
Phillips
|
|||
*
|
Director
|
||
John
Read
|
|||
*
|
Director
|
||
Gordon
Tallman
|
|||
*
|
Director
|
||
William
Scott Thompson
|
|||
*
|
Director
|
||
Pamela
Wallin
|
*By:
/s/Garth Wong
Attorney-in-Fact
46
EXHIBIT
INDEX
Exhibit
|
Description
|
|
3.1
|
Articles
of Incorporation.(1),(4),(6),(11), (16)
|
|
3.2
|
Bylaws.(17)
|
|
4.1
|
2005b
Stock Option Plan.(2)
|
|
4.2
|
2006
Stock Option Plan.(13)
|
|
4.3
|
Rights
Agreement, dated as of March 9, 2006, between the Company and
Computershare Investor Services, Inc., as Rights
Agent.(5)
|
|
4.4
|
Warrant
indenture between Oilsands Quest Inc. and Computershare Trust Company of
Canada dated December 5, 2007.(14)
|
|
4.5
|
Form
of Warrant, dated December 12, 2005.(3)
|
|
4.6
|
Warrant
Indenture dated May 12, 2009.(21)
|
|
4.7*
|
Form
of Warrant Indenture and Form of Warrant Certificate.
|
|
4.8*
|
Form
of Subscription Receipt Agreement.
|
|
5.1†
|
†
|
Opinion
of Burns Figa & Will, P.C.
|
10.1
|
Financing
Agreement with Oilsands Quest Sask, Inc., November 25,
2005.(3)
|
|
10.2
|
Subscription
Agreement with Dynamic Power Hedge Fund, dated December 12,
2005.(3)
|
|
10.3
|
Executive
Employment Agreement (Amended and Restated) with T. Murray Wilson, dated
September 22, 2006 and as amended effective August 1,
2007.(13)
|
|
10.4
|
Reorganization
Agreement, dated June 9, 2006.(7)
|
|
10.5
|
Voting
Exchange and Trust Agreement dated August 14, 2006.(8)
|
|
10.6
|
Exchangeable
Share Provisions.(8)
|
|
10.7
|
Support
Agreement dated August 14, 2006.(8)
|
|
10.8
|
Executive
Employment Agreement with Christopher Hopkins dated August 14,
2006.(8)
|
|
10.9
|
Executive
Employment Agreement with Erdal Yildirim, dated October 10,
2006.(10)
|
|
10.10
|
Form
of Indemnity Agreement.(9)
|
47
10.11
|
Subscription
Agreement for Flow-Through Shares, dated March 6,
2007.(13)
|
|
10.12
|
Amending
Agreement to Subscription Agreement for Flow-Through Shares, dated May 3,
2007.(13)
|
|
10.13
|
Subscription
Agreement between the Company and Subscribers, dated May 3,
2007.(13)
|
|
10.14
|
Underwriting
Agreement.(15)
|
|
10.15
|
Consulting
Services Agreement with Karim Hirji.(18)
|
|
10.16
|
Executive
Employment Agreement with Garth Wong.(19)
|
|
10.17
|
Agency
Agreement dated April 30, 2009.(20)
|
|
21.1
|
Subsidiaries
of the Registrant.(13)
|
|
23.1
|
† |
Consent
of Pannell Kerr Forster, Independent Registered Public Accounting
Firm.
|
23.2
|
† |
Consent
of KPMG LLP, Independent Registered Public Accounting
Firm.
|
23.3
|
†
|
Consent
of Burns Figa & Will, P.C. (included in Exhibit
5.1).
|
23.4
|
††
|
Power
of Attorney
|
____________
†
|
Filed
herewith.
|
††
|
Previously
filed.
|
*
|
To
be filed by amendment.
|
(1)
|
Incorporated
by reference from Form 10-SB, filed October 14, 1999; and Form 8-K, filed
November 29, 2004.
|
(2)
|
Incorporated
by reference from Form SB-2 dated December 29,
2005.
|
(3)
|
Incorporated
by reference from Form 10-QSB dated March 22,
2006.
|
(4)
|
Incorporated
by reference from Form 10-QSB dated December 14,
2005.
|
(5)
|
Incorporated
by reference from Form 8-A dated March 13,
2006.
|
(6)
|
Incorporated
by reference from Form 8-K dated March 13,
2006.
|
(7)
|
Incorporated
by reference from Form 8-K dated June 14,
2006.
|
(8)
|
Incorporated
by reference from Form 8-K dated August 17,
2006.
|
(9)
|
Incorporated
by reference herein from Form 10-QSB filed March 15,
2007
|
(10)
|
Incorporated
by reference herein from Form 8-K dated October 12,
2006.
|
(11)
|
Incorporated
by reference herein from Form 10-QSB filed December 15,
2006.
|
(12)
|
Incorporated
by reference herein from Form 8-K filed August 21,
2006.
|
(13)
|
Incorporated
by reference herein from Form 10-KSB filed July 30,
2007.
|
(14)
|
Incorporated
by reference herein from Form 8-K filed December 5,
2007.
|
(15)
|
Incorporated
by reference herein from Form 10-K filed November 23,
2007.
|
(16)
|
Incorporated
by reference herein from Form 8-K filed October 21,
2008.
|
(17)
|
Incorporated
by reference herein from 10-K filed June 21,
2008.
|
(18)
|
Incorporated
by reference herein from 10-Q filed March 12,
2009.
|
(19)
|
Incorporated
by reference herein from Form 10-K filed July 30,
2009.
|
(20)
|
Incorporated
by reference herein from Form 8-K filed May 1,
2009.
|
(21)
|
Incorporated
by reference herein from Form 8-A filed May 12,
2009.
|
48