Item 4.02 Failure to Use Previously Published Financial Statements or Related Audit Report or Interim Review Completed.
1. The previously published financial statements of the Company (the “periodic financial statements”) contained in the following periodic reports should no longer be relied upon:
(a) the annual reports of the Company (each, an “Annual Report”) on Form 10-K for the years ended
(b) Amendment n ° 1 to the annual report for the financial year ended
(c) the Company’s quarterly reports on Form 10-Q for the periods ended
2.the unaudited condensed consolidated financial statements of the Company for the three and six months ended
(a) The company’s registration statement (the “Registration Statement”) on Form 10 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), filed on
(b) Amendment n ° 1 to the registration declaration, filed on
(c) Amendment n ° 2 to the Declaration of Registration, filed on
The Board of Directors endorsed the conclusions of the Audit Committee.
The Company had issued a guaranteed note dated
The note had been issued pursuant to the terms of a settlement agreement between the parties dated
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In response to a request from staff at
The Company intends to file restatements to its periodic financial statements, and to amend and restate other information in the relevant periodic reports, as appropriate. Restatements may have an impact on the losses of the Company previously disclosed in the periodic financial statements, and related information and the MD&A and analysis of financial condition and results of operations. In this regard, the Audit Committee intends to retain the services of legal counsel to undertake a review of the Settlement Agreement, the Note and the Security Agreement to determine if they are enforceable (and, in particular, whether the Guarantee Agreement properly allocated the right, title and interest of the Company in the oil and gas leases as personal property, and whether any security allegedly granted under the security agreement have been completed under applicable law), and whether the related liability should be classified as an actual or contingent liability.
The Company will not be able to file its quarterly report on Form 10-Q (and associated certifications) for the period ended.
The Audit Committee has discussed with Hay & Watson, Chartered Professional Accountants, the Company’s registered independent public accounting firm, the matters disclosed in this report. Hay & Watson has received a copy of the disclosures made herein and has had an opportunity, on or before the day of filing of this 8-K, to review such disclosures and provide us with a letter indicating whether they agree. or not with these disclosures. A copy of the letter from Hay & Watson is attached hereto as Exhibit 7.01, and which is incorporated herein by reference.
Management assesses the effect of the restatements on the Company’s internal control over financial reporting and on its disclosure controls and procedures. The Company expects to report one or more material weaknesses after completing its investigation into the cause of these restatements. A material weakness is an deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement in a company’s annual or interim financial statements exists. is not avoided or detected in a timely manner. The existence of one or more material weaknesses prevents management from concluding that a company’s disclosure controls and procedures and internal control over financial reporting are effective. In addition, the Audit Committee, the Board of Directors and management have started to assess the appropriate corrective actions. The Company’s remediation plans and changes to internal control over financial reporting will be disclosed in its future periodic filings.
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Article 8.01 Other events
The Company will inform the staff of the
If an MCTO is issued, during the period of default and until filing of documents, the Company intends to “comply with the provisions of the ‘Alternative Disclosure Guidelines’ set out in NP 12-203, including the “Requirement to file bi-weekly status reports in the form of press releases containing prescribed update information.” There is no guarantee that an MCTO will be issued. Until the Company has filed the Documents, members of the management of the Company and other insiders are subject to an insider trading blackout in accordance with its internal policy on insider trading and declaration. The Company confirms that, other than as disclosed in previous press releases and material change reports, there has been no material business development since filing with the CSA on
The Company is not currently the subject of any insolvency proceedings. If the Company provides information “to any of its creditors during the period in which it is in default of filing documents, the Company confirms” that it will also file material change reports on SEDAR containing the required information, and that it will file regular reports with the
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Item 9.01 Financial statements and supporting documents
7.01 Letter of non-confidence from Hay & Watson in accordance with section 4.02 (b) of the form
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