GOING CONCERN Note from KPMG AEI added a going concern note to its annual report:
Uncertainties as to the Company’s ability to continue as a going concern exist due to:
-A $15 million scheduled repayment of the supplemental facility on May 26, 2016. The Company does not currently have sufficient funds to repay this amount;
-There is uncertainty as to the determination of the borrowing base that will be provided by the lenders in May 2016;
-There is risk that the Company will not be able to comply with the financial covenant in 2016.
Compliance is impacted by the undrawn debt which is at risk. In the event the Company has a covenant violation, this would represent an event of default under the credit facility which could result in all outstanding amounts being payable on demand; and
-The Company is required to expend $2.1 million in 2016 on qualifying expenditures by December 31, 2016 to satisfy the requirements of the flow-through share issuance completed in 2015.
As a result of the above matters, there is a material uncertainty as to the Company’s ability to continue as a going concern.