Rooster Energy Ltd. previously reported, in late November 2016, that the Company received a notice of default for non-compliance with two covenants of the Second Amendment and Waiver to Amended Note Purchase Agreement (Waiver) that it was operating under and which was due to expire on December 31, 2016. While the holders of the Senior Secured Notes did not accelerate payment, they did reserve all legal rights and remedies. Additionally, the Company was obligated to further reduce the outstanding principal balance of the Senior Secured Notes by $4.5 million prior to year-end. To date, the Company has failed to negotiate an extension of the Waiver and it has not made the scheduled $4.5 million principal payment. Notwithstanding those facts, the holders of the Senior Secured Notes still have not accelerated payment and the Company continues to engage in discussions with the holders to restructure the terms of its senior secured obligations. However, no assurances can be given that the Company will be able to reach agreement with the holders of the Senior Secured Notes on the consequences of the default. The holders of the Senior Secured Notes may exercise their legal remedies against the Company at any time. In that event, the Company will in all likelihood seek relief under applicable bankruptcy or reorganization laws to preserve the going concern value of the Company.