Avila Energy Corporation files the Amended and Restated Annual Financial Statements for the Year Ended December 31, 2022, 1st Quarter 2023 and Provides an Update on the Status of The BCA with Insight Acquisition Corp.

CALGARY, AB / ACCESSWIRE / August 9, 2023 / Avila Energy Corporation ("Avila" or the "Company" or "Avila Energy"), trading symbol "CSE:VIK", "OTCM:PTRVF", FRA:6HG0, files the Amended and Restated Annual Financial Statements for the Year Ended December 31, 2022 (the "2022 Audited Financial Statements"), 1st Quarter 2023 and provides an update on the status of the BCA with Insight Acquisition Corp.

Following ongoing discussions with the Alberta Securities Commission ("ASC") regarding continuous disclosure and the 2022 Audited Financial Statements, Avila has determined that a restatement is required. In addition, the first Quarter 2023 financials have also been updated, amended, and refiled to reflect the yearend changes accordingly.

The Company determined following discussions with the ASC and its auditors that the approach employed to ascertain the fair value of property, plant, and equipment ("PP&E") related to the West Central Alberta ("WCA") and Donalda property acquisitions for the 2022 Audited Financial Statement required adjustments, as a result of in inaccuracies in calculating the deferred tax asset, deferred tax liability, goodwill, gain on acquisition, goodwill impairment expense and impairment expense for PP&E form the approach initially used. As a result of those adjustments at year end, the presence of impairment indicators required the recognition of additional impairment for PP&E. The effects of the restatement of the 2022 Audited Financial Statements are as follows:

a) For the Donalda property acquisition, this the gain on acquisition was reduced to $13,942,757 from $ 14,698,701 and the deferred tax liability was reduced to $3,677,668 from $3,903,469.

For the WCA property acquisition, the goodwill increased to $11,516,303 from $9,836,173, the deferred tax asset increased to $5,640,021 from $5,138,074 and the goodwill impairment expense increased to $11,516,303 from $9,836,173.

b) An impairment expense for PP&E of $18,444,338 was recorded to adjust the recorded amounts to their recoverable amount.

The effect of the restatement decreased the non-current assets by $20,880,411, resulting in a reduction in retained earnings, and the recognition of an increased loss of $20,403,076. All adjustments did not change the statements of cashflow for the 2022 year or the Company's cash position at yearend 2022.