RE: Buyers29 Apr 2026 19:58
Four cautionary notes in the MD and A
As at December 31, 2025 the Company has a working capital of $1,823,335
and
During 2025, the Company became the financial operator of the Tapir block and it is now responsible for incurring in expenditures for the joint operation, which is represented by the increase in accounts payable and accrued liabilities. Payment of these obligations is funded by the Company’s own resources and cash calls received from its partners.
and
Letters of Credit
At December 31, 2025, the Company had obligations under Letters of Credit (“LC’s”) outstanding totaling $3.6 million to guarantee work commitments on exploration blocks and other contractual commitments. In the event the Company fails
to secure the renewal of the letters of credit underlying the ANH guarantees, the ANH could decide to cancel the underlying exploration and production contract, as applicable.
AND
In January 2025, intensified combats between ELN and FARC dissidents related to
territorial and drug trafficking control, increased exponentially homicide and internal displacement in the northeastern Catatumbo region resulting in a humanitarian crisis. President Gustavo Petro declared an internal state of emergency in the affected northeastern Catatumbo region and suspended peace negotiations with ELN.
This state of emergency enabled the Executive to issue legislative decrees including special and temporary taxes, all of which are being reviewed by the Constitutional Court. The Colombian government's biggest challenge is perceived to be ensuring
that the negotiations lead to a long-lasting peace and that demobilized members of the FARC and ELN rejoin civilian life, rather than regrouping in criminal bands. Continuing attempts to reduce or prevent guerrilla activity may not be successful
and guerrilla activity may disrupt the Company’s operations in the future. The Company may not be able to establish or maintain the safety of its operations and personnel in Colombia and this violence may affect its operations in the future.
Continued or heightened security concerns in Colombia could also result in a significant loss to Arrow and/or costs exceeding current expectations.
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