AdvEn: a priming interim facility, and the rival lender's appeal

2815793 Alberta Ltd. started out as the chief executive's company. Questioned on August 18, Ingo Mueller, chief executive officer of AdvEn Inc. and AdvEn Industries Inc., agreed that he had incorporated it and been its first and sole director and registered shareholder. The grid note that 281, as the parties call it, took from both companies on May 19, 2026 allows advances of up to US$900,000; its schedule records eight advances totalling US$552,445 by June 21, secured over all personal property of both companies, intellectual property included, per the Questioning of Ingo Mueller, Aug. 18, 2026, pp. 9, 20, 55. The security was registered on July 9 by the companies' own counsel, according to a letter from 281's counsel appended to the Proposal Trustee's First Report, Aug. 13, 2026, App. "G".

Mr. Mueller's affidavit describes the note as issued "in respect of advances from 281 Alberta Ltd.," per the Affidavit of Ingo Mueller, Aug. 8, 2026, para. 30(c). Cross-examined, he disputed that 281 had made them: "It wasn't the entity that provided that capital. It was the individual contributors who sent that money directly to the company," per the Questioning of Ingo Mueller, Aug. 18, 2026, p. 10.

By early August, 281 was negotiating to become the companies' interim lender. Mr. Mueller testified that when the last draft from 281's side left his issues unresolved, he asked Jacques Demers and Mohsen Khorassani whether they would "step in on the terms that we have consistently put forth for 281"; he believed both men had been 281's directors "at some point," per the Questioning of Ingo Mueller, Aug. 18, 2026, pp. 23, 37, 40, 56. 2841034 Alberta Ltd. was incorporated on August 5, 2026 and signed an interim financing agreement with both companies two days later, per the Proposal Trustee's First Report, Aug. 13, 2026, Apps. "E", "G". On August 19, Justice Dunlop of the Court of King's Bench of Alberta approved borrowing from it and ranked its charge, behind only an administration charge and a directors' charge, ahead of every other security interest, 281's among them, per the Order (SISP & Stay Extension), Aug. 19, 2026, paras. 13, 19–20. On August 26, 281 and Secure Property Development & Investment PLC, or SPDI, appealed, per the Civil Notice of Appeal, filed Aug. 26, 2026, item 4.

A carbon plant in Nisku

AdvEn Industries was founded in 2011 by Dr. Weixing Chen, who was looking for ways to improve carbon precursors and cut the waste of conventional carbon manufacturing. The group's patented ASAC process converts refinery residues into activated carbon for supercapacitors, filtration and healthcare uses with about one-tenth the energy of coconut-shell carbon, and its ESAC process makes electrodes for energy storage devices without solvents. The business is pre-revenue, with four full-time employees and about eight contractors at a leased plant of about 36,800 square feet in Nisku, and it has received $11,164,229 from three government funding programs and from SR&ED and Alberta innovation employment grant credits, per the Affidavit of Ingo Mueller, Aug. 8, 2026, paras. 9–12, 15, 20.

Both companies filed notices of intention to make a proposal under s. 50.4(1) of the Bankruptcy and Insolvency Act on July 20, 2026, with Alvarez & Marsal Canada Inc. as proposal trustee, per the Proposal Trustee's First Report, Aug. 13, 2026, para. 1. They attribute the filing to the cost of reaching commercial scale: approximately $6.5 million spent on the plant since March 2021, approximately US$8,000,000 more needed "to address fundamental deficiencies in the design and operation of the plant," and matured debt they could not raise the capital to retire. At June 30, 2026 they reported consolidated assets of $11,140,302 against liabilities of $29,303,079, and in early June they owed $650,856 in wage arrears, per the Affidavit of Ingo Mueller, Aug. 8, 2026, paras. 25, 37, 45. Approximately $10,512,720 is owed under 10% senior secured convertible notes from 2021 and 2022 whose holders Mr. Mueller believes never registered their security. SPDI holds 2025 notes with €500,000 of principal, approximately $837,273, and Excelsior Management Limited a £450,000 note, approximately $858,145, each secured on personal property other than intellectual property, per the Affidavit of Ingo Mueller, Aug. 8, 2026, paras. 30–31, 33–34. Subject to the trustee's review of the security, the companies say only 281 is secured against the intellectual property, per the Bench Brief of the Applicants, Aug. 19, 2026, para. 30.

Three agreements for one facility

The August 7 agreement provides up to US$650,000 at 8%, repayable October 31, 2026, and requires the borrowers to "seek an order" giving the lender priority security, per the Proposal Trustee's First Report, Aug. 13, 2026, App. "E", ss. 1–3, 6. Mr. Mueller swore that the lender "represents the only realistic source of financing available to the Applicants at this time," per the Affidavit of Ingo Mueller, Aug. 8, 2026, para. 63. Cross-examined, he agreed that the agreement's borrowing schedule was blank, that 2841034 Alberta Ltd. had lent the companies nothing and that there was no history of loans between them, and said he could not speak to whether anything in the agreement obligated the lender to advance funds, per the Questioning of Ingo Mueller, Aug. 18, 2026, pp. 23–24, 26.

Alvarez & Marsal Canada Inc., the proposal trustee, supported the facility. Without it the companies would run out of cash by the final week of August, and a bankruptcy "could result in little to no recoveries to creditors due to the highly specialized nature of the Companies' manufacturing assets," per the Proposal Trustee's First Report, Aug. 13, 2026, paras. 43(c), (f). The trustee understood the lender's funding sources to be affiliated with existing secured creditors, reasoned that certain major stakeholders "would not be providing the Interim Financing Facility if they did not have confidence in Management," and wrote that the facility "does not appear to unduly prejudice any other creditors," while noting it had been copied that day on an objection from "another group of secured creditors," per the Proposal Trustee's First Report, Aug. 13, 2026, paras. 43(e), (g).

The objection came from Blue Rock Law LLP, for SPDI and for 281, which the letter calls "the DIP LenderCo." It opposed the application "in whole." 281 had "lost confidence in the management of the Applicants," the letter said, and the financing was not at arm's length: 2841034 Alberta Ltd.'s only directors were Mr. Khorassani and Mr. Demers, "each of whom was then a director" of 281, and its registered office and agent for service were those recorded on 281's incorporation, per the Proposal Trustee's First Report, Aug. 13, 2026, App. "G".

On August 17 the firm put an alternative to the trustee: US$800,000 from 281 at 7.5%, maturing November 30, 2026, with US$550,000 already in its trust account, a US$50,000 wire en route and a signed commitment letter for the remaining US$200,000, each advance subject to the trustee's confirmation against the filed cash-flow statement. 281's willingness to lend was "conditional on its having input into a revised SISP," and the letter asked for an adjournment of seven to ten days, citing "unresolved disputes" with the new lender's directors over its incorporation, per the Affidavit of Amanda Urban, Aug. 17, 2026, Ex. "A". The companies' bench brief answered that the offer's "slightly more favourable terms" came with an "enhanced SISP" left undefined, and that SPDI and 281 "have not filed any responding evidence," per the Bench Brief of the Applicants, Aug. 19, 2026, paras. 28, 32.