Surge Global's Canadian Tax Reserves May Not Be Adequate
Surge Global Energy has discovered in its year-end review that its reserves for Canadian taxes from the Peace Oil transactions may not be adequate. We are in the process of engaging appropriate tax professionals to advise with respect to our tax reserves, which appear to be materially understated.
The Company will determine whether further tax reserves should be established for all Canadian transactions. Once definitive amounts can be determined it may become necessary to restate the Company's June 30, 2007 and September 30, 2007 financial statements. U.S. taxes are also under review related to the Canadian transactions.
Management and the Board of Directors are determined to quantify the appropriate tax reserves as soon as possible and to take appropriate steps to effect a qualified transaction or transactions outlined by Canadian tax law to attempt to minimize the final taxes due and also provide the optimal economic return to the Company and its shareholders.