Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.
On
1. the Company's previously-issued financial statements (the "Periodic Financial Statements") contained in the following periodic reports should no longer be relied upon:
(a) the Company's annual reports (each, an "Annual Report") on Form 10-K for the
financial years ended
(b) Amendment No. 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 Company's previously-issued unaudited condensed consolidated financial
statements for the three and six months ended
(a) 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 No. 1 to the Registration Statement, filed on
(c) Amendment No. 2 to the Registration Statement, filed on
The Board of Directors has concurred with the conclusions of the Audit Committee.
The Company had issued a secured promissory 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
The Company intends to file restatements of its Periodic Financial Statements, and to amend and restate other disclosure in the affected periodic reports as appropriate. The restatements may have an impact on the Company's losses previously disclosed in the Periodic Financial Statements, and related disclosures and Management's Discussion, and Analysis of Financial Condition and Results of Operations. In that connection, the Audit Committee intends to engage legal counsel to undertake a review of the Settlement Agreement, the Note and the Security Agreement with the view to determining whether they are enforceable (and, in particular, whether the Security Agreement has properly charged the Company's right, title and interest in the Oil and Gas Leases as personal property, and whether any security interests purportedly granted pursuant to the Security Agreement have been perfected under applicable law), and whether the related liability should be classified as an actual or contingent liability.
The Company will be unable to file its quarterly report on Form 10-Q (and
related certifications) for the period ended
The Audit Committee discussed with Hay & Watson, Chartered Professional Accountants, the Company's independent registered public accounting firm, the matters disclosed in this Current Report. Hay & Watson was provided with a copy of the disclosures made herein and was given the opportunity, no later than the day of the filing of this 8-K, to review these disclosures and provide us with a letter stating whether or not they agree 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 is assessing the effect of the restatements on the Company's internal control over financial reporting and its disclosure controls and procedures. The Company expects to report one or more material weaknesses following completion of its investigation of the cause of these restatements. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company's annual or interim financial statements will not be prevented or detected on a timely basis. The existence of one or more material weaknesses precludes a conclusion by management 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 begun evaluating appropriate remediation 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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Item 8.01 Other Events
The Company will inform staff of the
If a MCTO is issued, during the period of default and until filing of the
Documents, the Company intends to ?satisfy the provisions of the "alternative
information guidelines" as set out in NP 12-203, including the ?requirement to
file bi-weekly status reports in the form of press releases containing
prescribed updating ?information. There can be no assurance that a MCTO will be
issued.? Until the ?Company has filed the Documents, members of the Company's
management and other insiders are ?subject to an insider trading black-out as
per its internal Insider Trading and Reporting Policy. The Company ?confirms
that, other than as disclosed in prior press releases and material change
reports, there have been no ?material business developments since the filing
with the CSA on
The Company is not currently subject to any insolvency proceedings. If the
Company provides any information ?to any of its creditors during the period in
which it is in default of filing the Documents, the Company confirms ?that it
will also file material change reports on SEDAR containing such information as
is required, and that it will file current reports with the
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Item 9.01 Financial Statements and Exhibits
(d) Exhibits
7.01 Non-reliance letter from Hay & Watson pursuant to Item 4.02(b) of Form
8-K, dated
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