Calgary, Alberta--(Newsfile Corp. - July 10, 2024) - DIVERGENT Energy Services Corp. (TSXV: DVG) ("Divergent", the "Company", or "DVG") provides the following Corporate Update.
As previously disclosed, a customer of the Company, which previously had accounted for approximately 80% of the Company's past sales, continues to undergo a court mandated restructuring and sales process and continues to prioritize payments to certain critical infrastructure vendors such as power, compression, and pipeline companies over Divergent. As such, Divergent has not received any payments from this customer during 2024 and has unpaid invoices dating back to July 2023.
On June 28, 2024, Divergent's U.S. operating subsidiary, Extreme Pump Solutions, LLC ("Extreme") sold $102,500 of non-core assets which were used primarily for oil field pump services, along with oil specific product inventory. The Company continues to pursue other inventory product sales to generate cashflow while it waits on its key customer to re-engage its services, and while the Company continues to review all other strategic alternatives that may be available.
The Company continues its evaluation of strategic alternatives which could result in a sale of the Company, a sale of a material portion of the Company's assets, a merger, business combination or a corporate reorganization, among other alternatives. The Company may also seek to obtain value for its tax losses and/or outstanding receivables.
The Company does not intend to disclose developments with respect to the strategic review process unless and until the Board of Directors has approved a definitive transaction or strategic option, unless otherwise required by law or disclosure of which is deemed appropriate. The Company cautions that there are no guarantees that the strategic review will result in a transaction or if a transaction is undertaken, as to its terms or timing.
The Company also announces that it did not make the June 30, 2024 interest payment on its debentures ("Debentures") (the "Interest Obligation") by the due date of July 5, 2024. As a result of the ongoing cease trade orders ("CTOs") issued by the Alberta and British Columbia Securities Commissions, the Corporation is also currently unable to issue shares in lieu of cash for the Debenture interest due for the period ending June 30, 2024. The Company intends to engage its Debenture holders to obtain a waiver for the Interest Obligation or otherwise resolve the issue under the terms of the Debenture indenture governing the Debentures.
For Further Information:
Ken Berg, President and Chief Executive Officer, kberg@divergentenergyservices.com
Ken Olson, Chief Financial Officer, ken.olson@divergentenergyservices.com
ABOUT DIVERGENT ENERGY SERVICES CORP.
Headquartered in Calgary, Alberta, Divergent provides fluids management products and services for the water, gas and oil industries through its wholly owned subsidiary Extreme Pump Solutions LLC.
DIVERGENT Energy Services Corp., 2020, 715 - 5th Ave SW, Calgary, AB T2P 2X6, (403) 543-0060, (403) 543-0069 (fax), www.divergentenergyservices.com
FORWARD LOOKING STATEMENTS
This press release contains forward-looking statements, including, without limitation, statements pertaining to interest payments on the Company's debentures. All statements included herein, other than statements of historical fact, are forward-looking information and such information involves various risks and uncertainties, including the risk that the suspension of trading of the Company's common shares by the TSXV and the related cease trade orders cannot be lifted in a timely manner or at all, and the risk that the Company cannot remedy the outstanding interest payments under the terms of its debenture indenture in a timely manner or at all. There can be no assurance that such information will prove to be accurate, and actual results and future events could differ materially from those anticipated in such information. A description of assumptions used to develop such forward-looking information and a description of risk factors that may cause actual results to differ materially from forward-looking information can be found in the Company's disclosure documents on the SEDAR+ website at www.sedarplus.ca. Forward-looking statements are based on estimates and opinions of management of the Company at the time the information is presented, including expectations provided to Divergent by its customers. The Company may, as considered necessary in the circumstances, update or revise such forward-looking statements, whether as a result of new information, future events or otherwise, but the Company undertakes no obligation to update or revise any forward-looking statements, except as required by applicable securities laws.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
(Not for dissemination in the United States of America)
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SOURCE: Divergent Energy Services Corp.