Marksmen Energy Inc. Faces Filing Delays
CALGARY, ALBERTA – Marksmen Energy Inc. (TSX-V: MAH) recently announced a significant delay in filing its annual financial statements for the fiscal year ending December 31, 2024. This delay affects essential documents such as management's discussion and analysis, coupled with the necessary certifications from the chief executive officer (CEO) and chief financial officer (CFO) of the company.
Reasons for the Delay
The primary reason behind the postponed filing is the company's struggle to secure capital amidst challenging market conditions. The uncertainty in raising funds for 2024 and the first quarter of 2025 has led to an unforeseen hold-up in obtaining necessary financial resources to finalize the audit process efficiently. Fortunately, on April 24, 2025, Marksmen received the funds that it required for its external auditor, paving the way for the completion of the audit.
Engagement with Auditors
Engagements with MNP LLP, the appointed audit firm, are in full swing to address the completion of the annual filings. The company is working diligently, aiming to submit these documents no later than June 15, 2025, allowing stakeholders to remain informed and updated regarding the financial standing of Marksmen.
Management Cease Trade Order
As part of its compliance strategy, Marksmen intends to issue a default announcement as stipulated by National Policy 12-203. This process includes an application for a management cease trade order (MCTO) from the Alberta Securities Commission. Should the MCTO be granted, it would temporarily restrict trading activities for the CEO and CFO concerning the company's securities until all filings have been appropriately submitted on SEDAR.
Future Trading Implications
The MCTO would not influence the trading capabilities of the remaining shareholders or stakeholders unrelated to the CEO and CFO. The company remains transparent about its status and has confirmed that no legal insolvency proceedings are currently ongoing, reinforcing its commitment to regulatory compliance and shareholder information continuity.
Funding through a Promissory Note
To bolster its financial position and navigate the challenges posed by the delay, Marksmen Energy Inc. has secured an unsecured loan totaling CAD$250,000 from Conex Services Inc. This financial agreement is formalized through a promissory note dated April 24, 2025, wherein the amount will accrue interest at 15% annually and is set to mature on December 31, 2025.
Understanding the Related Party Transaction
It's important to note that Conex Services Inc. is wholly owned by Glenn Walsh, an insider holding over 10% of the company's shares. Due to this relationship, the agreement is categorized as a related party transaction under Multilateral Instrument 61-101, necessitating adherence to specific rules concerning minority shareholder protection.
Outlook and Transparency
The promissory note is viewed as a strategic move intended to prevent any adverse impact on voting interests since it does not entail conversion into shares of Marksmen. Additionally, the board of directors has thoroughly reviewed and approved the transaction ensuring compliance with applicable regulatory measures, thereby exempting it from certain formal requirements laid out in MI 61-101.
Maintaining Open Communications
Moving forward, the company has committed to releasing biweekly updates as part of its strategy to keep shareholders informed during this period of default. These updates will include further details and developments pertaining to the annual filings, fostering transparency and building trust with investors.
Frequently Asked Questions
Why is Marksmen Energy delaying its annual financial statements?
The delay is primarily due to difficulties in raising capital, which affected the company's ability to pay its auditor, thus postponing the completion of the required financial audits.
What is the company's expected timeline for filing?
Marksmen Energy is aiming to file its financial statements by June 15, 2025, after resolving funding issues with their auditors.
What is a management cease trade order (MCTO)?
An MCTO is a regulatory measure that restricts trading by company executives until certain filings are made, ensuring compliance with securities regulations.
How does the promissory note affect investor relations?
The promissory note does not impact voting interests, as it is a loan and not convertible to shares, reinforcing the company's commitment to protecting shareholder rights.
Will Marksmen Energy provide regular updates during the default period?
Yes, Marksmen is committed to issuing biweekly updates to keep shareholders informed on their status during the default period.
