Compliance Energy posts record losses

Compliance Energy Corp. posted its 2013 financial statements on April 23, 2014, reporting record losses and a dire financial situation for the company.

Its working capital going into 2014 is a deficit of $633,000, made up primarily from a cash position of $207,000 and liabilities of $875,000.

Compliance finished the year with a net loss of more than $2 million, compared to a net profit of nearly $4.9 million at the end of 2012. That profit in 2012, however, was mainly attributable to the sale of all of the company's remaining shares of Copper Mountain Mining.

During the year, Compliance paid its executives $275,000.

During this same period, the company achieved a record deficit of over $9 million, up from $6.9 million in 2012.

The statements note that "On March 31, 2014, I-Comox Coal Inc. officially withdrew from the Comox Joint Venture [owners of the proposed Raven Underground Coal Project]. The Company and LG International Investments (Canada) ltd. (LGI) will continue to progress the joint venture project forward."

In the context of liquidity, and the need for working capital, the company also notes that it is "in the process of securing a loan from its partner LG ... to fund the activities on the Comox Joint Venture. These activities include the continuation of the environmental assessment process, bankable feasibility study and other project development activities."

For the second year in a row, Deloitte, the auditors, included an "Emphasis of Matter" statement with its letter to shareholders: "The Company has an accumulated deficit of $9.0 million ... and incurred an operating loss of $0.6 million.... These conditions, along with other matters as set forth in Note 1 indicate the existence of a material uncertainty that may cast significant doubt about Compliance Energy Corporation's ability to continue as a going concern."

Click here to download the December 31, 2013 financial statements and management's discussion and analysis. Both are also available on SEDAR.