Shoal Point CEO Letter to Shareholders

Rhea-AI Summary

Shoal Point Energy (CSE: SHP) CEO has issued a letter addressing critical financial and operational challenges. The company has defaulted on filing annual audited statements due to insufficient funds, leading to potential delisting from CSE. The CEO has personally provided revolving loans to cover essential costs, including expenses related to ongoing litigation against the Government of Newfoundland. Annual listing costs exceed $100,000, with rising audit fees becoming unsustainable given current resources. Two directors, Brian Usher Jones and Eric Schneider, are retiring, while CEO and Robert Millar will remain to focus on the Newfoundland litigation regarding alleged constructive taking of oil and gas rights. The company plans to distribute any potential litigation proceeds to shareholders through a future arrangement and will continue providing updates through their website and unaudited financial statements.

Positive

• CEO personally provided loans to maintain essential operations
• Company maintains active litigation against Newfoundland Government for potential compensation
• Robert Millar, a commercial litigator, continues as director to support litigation efforts
• Company plans to distribute potential litigation proceeds to shareholders

Negative

• Company defaulted on filing annual audited statements
• Facing potential delisting from CSE due to financial statement non-compliance
• Failed fundraising efforts leading to severe financial constraints
• Annual listing costs of over $100,000 are unsustainable with current resources
• Two directors retiring from the board
• Public trading of company stock likely to cease

Vancouver, British Columbia--(Newsfile Corp. - June 5, 2025) - As Chief Executive Officer of Shoal Point Energy Ltd. (CSE: SHP) (the "Company") I want to address the shareholders of the Company in relation to a letter received from the British Columbia Securities Commission noting the Company is in default by reason of the failure to file annual audited statements.

As you may be aware, recent efforts at fund raising for the Company proved less than successful and as a result the Company became highly constrained in its ability to engage professionals to carry out necessary functions including the performance of audited financial statements for the period ended January 31, 2025.

To assist the Company, I personally loaned the Company on a revolving basis, certain amounts that were necessary to pay essential costs and certain costs and expenses associated with the litigation against the Government of Newfoundland.

Total expenses to maintain our CSE listing amount to over $100,000 per year. Audit fees are significant, and audit requirements increase year after year giving rise to ever increasing costs which are not sustainable given our current financial resources. In the absence of the ability to successfully raise money, the Company will have to re-organize its status and affairs.

The failure to file audited financial statements will likely result in the delisting of the Company and as such there will be no public market for the trading of the Company's stock. Should this happen, our capital structure will remain the same and your rights and interests as shareholders will remain the same.

In addition, two of our directors, Brian Usher Jones and Eric Schneider have indicated that they wish to retire as directors as they are nearing the end of their professional careers.

I intend to remain as a director and Chief Executive Officer of the Company and Mr. Robert Millar has indicated that he will continue to stand as a director with a focus on providing support to the Company in the prosecution of the litigation against the Government of Newfoundland. Mr. Millar was a commercial litigator at a national law firm and originally agreed to join the board of directors of the Company in anticipation of providing such non salaried assistance to the Company relating to the alleged "constructive taking" of the Company's oil and gas rights in Newfoundland.

There can be no guarantee of success in relation to any lawsuit, but we remain committed to seeking justice for the Company in relation to the substantial economic loss that has been claimed.

As currently conceived, the Company intends to distribute the net proceeds of the Newfoundland litigation, if any, among the shareholders pursuant to a plan of arrangement or similar structure that has yet to be initiated or formulated.

We plan to maintain our website at www.shoalpointenergy.com to keep shareholders informed and will periodically update shareholders who have subscribed to our email list. We will continue to file unaudited financial statements on our website.

We think we have a strong case and are confident that arrangements are in place to see the litigation through to the end. We will continue to press our efforts to bring the matter to a successful conclusion through settlement or a trial of the action.

About Shoal Point Energy Ltd.

Shoal Point Energy Ltd. is a public company listed on the CSE exchange under the symbol "SHP". The company is suing the government of Newfoundland and Labrador for at least $483,000,000 for "de facto expropriation" or "constructive taking" of its rights to develop its oil and gas interests in western Newfoundland.

For further information, please contact:
Mr. Mark Jarvis,
Chief Executive Officer
Tel - 604 681 2300

The Canadian Securities Exchange (CSE) has neither approved nor disapproved the contents of this letter to shareholders.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/254681

FAQ

Why is Shoal Point Energy (SHPNF) facing potential delisting from CSE?

The company is facing potential delisting due to defaulting on filing annual audited statements, caused by insufficient funds to engage necessary professional services.

What is the current financial situation of Shoal Point Energy (SHPNF)?

The company is experiencing severe financial constraints, with failed fundraising efforts and unsustainable annual listing costs exceeding $100,000, requiring personal loans from the CEO to maintain essential operations.

What is Shoal Point Energy's (SHPNF) litigation against the Government of Newfoundland about?

The litigation concerns an alleged constructive taking of the company's oil and gas rights in Newfoundland, with the company seeking compensation for substantial economic losses.

How will Shoal Point Energy (SHPNF) handle potential proceeds from the Newfoundland litigation?

The company plans to distribute any net proceeds from the litigation among shareholders through a plan of arrangement or similar structure that is yet to be formulated.

What changes are occurring in Shoal Point Energy's (SHPNF) board of directors?

Directors Brian Usher Jones and Eric Schneider are retiring, while the CEO and Robert Millar will remain, with Millar focusing on supporting the Newfoundland litigation.