Energy: American Patriot struggling to get its accounts in order after underwriter legal threat
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American Patriot Oil (ASX:AOW) is struggling to get its half-year accounts together, after saying two weeks ago it may have to bring in the lawyers over a dispute with the underwriter of a recent cap raise.
Audited accounts are expected “in the coming weeks”, but it’s having to set up an entirely new system to do so: new accounts, a new bank, and a completely new way of accounting.
“Due to the complexity of this work, it has taken longer than expected,” it said.
The US-focused oil explorer today said it had looked at all of the capital raises conducted in 2018 and was doing a full review of all past acquisitions.
In August last year, American Patriot raised $3m, placing 18 per cent of the share with investors and the remaining 82 per cent with underwriter Capital Investment Partners.
In November, it did a $1.25m placement with new investor Vertua to pay down debt and spend on oil fields. This did not require an underwriter.
The company also raised about $5m via raisings that didn’t require a prospectus earlier in 2018.
On March 22, American Patriot said it was having trouble with the underwriter of its rights issues but did not name them in the statement.
However, the only rights issue in 2018 was the $3m underwritten by Capital Investment Partners.
“The directors are currently engaged in dialogue with the underwriter of its recent rights issue in relation to a potentially litigious dispute,” the company said.
“As part of the board’s financial accounts review, the board is investigating the accounting treatment of AOW’s recent acquisitions and rights issue, including reviewing its dealings with the underwriter.”
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