Long post1 Feb 2023 21:04
'The Company does not currently have sufficient working capital for its present requirements and the Company believes that additional financing will be required by March 2023. With no assurance that further financing (by way of equity and/or debt) will be obtained, there is material uncertainty that casts significant doubt the Company's ability to continue as a going concern.'
This is not new in Art's prospectuses.
'Currently, the Company does not have material cash inflows and/or adequate financing to develop profitable operations. The Company is pursuing exploration projects and contracts that will require substantial additional financing before they are able to generate positive operating cash flows. Accordingly, the Company’s continued successful operations are dependent on its ability to obtain additional financing. There is no assurance that the Company will be able to obtain adequate financing in the future or that such financing will be obtained on terms advantageous to the Company. With no assurance that financing will be obtained in 2017, there is material uncertainty that may cast substantial doubt on the Business’ ability to continue as a going concern.'
There have been exactly the same risk warnings in his other prospectuses none have resulted in the company failing. Its a risk that has to be given in a prospectus.
Although the warning itself is nothing new the loss of the CFO at the same time is. A health reason that only significantly manifested itself at this absolutely critical juncture is pretty suspect in my book. Personally I think its reasonable to suspect everything has become pretty tight time wise in securing finance against incoming debt and the CFO may have walked under the pressure or alternatively there is nothing more he can do. Together with the CEO he bears responsibility for each of the negotiated debt steps that got us into this tight position so maybe his strategic financing skills needed to be dispensed with or indeed his negotiating skills for the JV/finance were not producing what the CEO wanted. Art's ego would have trampled all over his work if that was the case. The fact that he gave no leaving statement points towards possible tension between the two.
I'm unsure as to whether the warning above was included in the RNA's of the time as it was today.
No money to continue beyond March but a exceptionally large asset and ongoing JV being negotiated on it. The $8.1 million of debt service and a $2.9 million repayment of its senior credit facility when held against a 1billion barrell + asset would seem insignificant, perhaps that is why the company expects to secure a financing term sheet based on its 2022 year-end reserve report before the end of March. They may not meet their financial covenants pursuant to their Senior Credit Facility, they've been there before as well though haven't they.
A true announcement of where we are today. Possibly bust but I don't believe the company will be.
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