SemBioSys Announces First Quarter Results and Provides Update on Activities

CALGARY, May 15, 2012 /CNW/ - SemBioSys Genetics Inc. ("SemBioSys" or the "Company") today announced its operational and financial results for the first quarter ended March 31, 2012, and an update on the Company's activities and status.

As noted in the Company's press release dated April 30, 2012, the Company ceased trading on the TSX effective May 1, 2012. The Company's lack of funds did not allow it to remain listed on the TSX or to relist on another stock exchange.

Notwithstanding significant efforts, no strategic options or funding commitments have arisen that would allow the company to continue as a going concern.

Subsequent to the April 30, 2012, press release, security holders have begun to take action to secure the assets over which they have liens or security positions, which constitute the bulk of the Company's intellectual and tangible property. In addition, the licensor of our key intellectual property has provided notification that they have cancelled the Company's license.  Further, our landlord has terminated the lease of our facilities and we no longer have access to these facilities. It should be noted that no stakeholder has as yet appointed a receiver or trustee.

As a result of the current state of affairs, SemBioSys is in the process of an orderly winding down of the Company. It is very unlikely that there will be any return or value to shareholders. In the wind down of operations, the Company is working towards the settlement of its obligations where appropriate, however, there is no assurance that this effort will extinguish the full amount of the Company's liabilities.  Once all security holders have acted upon their security, the Company is unlikely to have any assets remaining. The only opportunity for the Company to realize any value from these assets would be if the security holders monetize the assets at a value greater than they are owed.  The Company has no ability to influence the realized value of the assets.

Financials

Until December 31, 2011, the financial statements of the company were prepared on a going concern basis. As a result of management's intention to wind-down the business subsequent to the period end, effective from January 1, 2012, the Company changed the basis of preparing its financial statements from going concern to liquidation by using the information that is currently available and relevant assumptions at the time of preparation thereof.  The impact of this change and the critical accounting estimations and judgements used have been fully disclosed in Note 2 and Note 3 of our unaudited condensed interim consolidated statements as at and for the three  months ended March 31, 2012. The consolidated financial statements as at March 31, 2012, and for the three month period then ended do not include costs to liquidate the assets of the Company, settle any contingent liabilities or future administrative costs and professional fees to wind-up the activities of the Company, except to the extent that such costs were committed at the end of the reporting period. These costs may be material and the amounts disclosed as net liabilities in liquidation in total or on a per share basis will change. The actual amounts available for distribution to creditors and shareholders will change and such changes may be material.

During the first quarter of 2012, the activities of the company were similar on an overall basis to that of 2011.

Net cash used in operating activities for the three months ended March 31, 2012, was $496,100 compared to $973,598 for the same period last year. The decrease of net cash used in operating activities is primarily due to the collection of a scientific research & experimental development tax credit refund of $223,902 and an increase in the payable balance.

Net loss for the  three months ended March 31, 2012, was $1,352,301 or $0.03 per share compared to $4,633,771or $0.09 per share for the same period last year.

Revenue for the three months ended March 31, 2012, was $207 compared to $50,000 for the same period last year.

Expenditures for the three months ended March 31, 2012 compared to the same period last year:

  • $769,145 research & development costs compared to $814,429;
  • $400,980 operating costs compared to $382,082; and
  • $84,149 depreciation expense compared to $305,274.

Total finance expenditure for the three months ended March 31, 2012, was $100,539 compared to finance expenditure of $618,633 for the same period last year as a result of the adoption liquidation basis of accounting which does not require the non-cash adjustments for changes in fair value of financial liabilities.

At March 31, 2012, the Company had cash and cash equivalents of $206,780 as compared to $264,108 at December 31, 2011. The decrease of cash is mainly due to $496,100 cash burn and $63,584 of debt and royalty repayments, offset by $500,000 short-term debt financing.

Total short-term debt, current portion of long-term debt, bonds payable and convertible debentures were $8,395,347 at March 31, 2012, compared to $6,868,774 at December 31, 2011.

Upon adoption of the liquidation basis, all of our fixed assets, long term bonds, convertible debentures and long-term debt are recorded as current and resulted in a net liability in liquidation of $8,202,949 as at March 31, 2012. The Company is working towards the settlement of its obligations where appropriate. However, there is no assurance that this effort will extinguish any of, or the full amount of, the Company's liabilities given that the Company is currently in a net liability position.

About SemBioSys

SemBioSys had employed its patented, renewable, plant seed oilbody and protein expression technology platforms to develop and commercialize high-value proteins and oils, including health and wellness products and drug candidates. SemBioSys was previously listed on the Toronto Stock Exchange under the ticker SBS until May 1, 2012. Further information on the Company can be found on www.sedar.com

This press release contains certain forward-looking statements, including, without limitation, statements containing the words "believe", "may", "plan", "will", "estimate", "continue", "anticipate", "intend", "expect" and other similar expressions which constitute "forward-looking information" within the meaning of applicable securities laws. Forward-looking statements reflect the Company's current expectation and assumptions, and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. As noted above, the Company is no longer able to continue as a going concern and these financial statements are prepared on a liquidation basis, however, the net realizable value of the net assets and the ability to settle any or all of its financial and other obligations remain uncertain and the assumptions made at the time of preparation of these financial statements reflect the information that is currently available.

Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements either as a result of new information, future events or otherwise, except as required by applicable Canadian securities laws.

SemBioSys Genetics Inc.  
CONSOLIDATED STATEMENT OF FINANCIAL POSITION  
(unaudited)  
(expressed in Canadian dollars)  
  December 31,
   2011
ASSETS  
   
Current assets  
Cash and cash equivalents 264,108
Scientific research & experimental development tax credits receivable 223,902
Accounts receivable 41,907
GST receivable 34,615
Prepaid expenses, deposits and other 328,467
  892,999
   
Property and equipment 1,326,019
   
  2,219,018
   
LIABILITIES  
   
Current liabilities  
Accounts payable and accrued liabilities 1,307,956
Short-term debt 18,065
Current portion of long-term debt  2,253,499
  3,579,520
   
Royalty liabilities 4,273,738
Long-term bonds 3,287,295
Warrants liabilities 2,764,138
Convertible debentures 809,915
Long-term debt 500,000
   
  15,214,606
   
SHAREHOLDERS' DEFICIENCY  
   
Capital stock 76,257,621
Warrants 1,332,500
Contributed surplus  16,149,732
Deficit (106,735,441)
  (12,995,588)
   
  2,219,018
   
Effective January 1, 2012, the Company changed the basis of presenting its financial statements from going
concern to liquidation; accordingly, a Consolidated Statement of Net Liabilities in Liquidation as at March 31,
2012 has been presented rather than a Consolidated Statement of Financial Position on a going concern
basis.

 

SemBioSys Genetics Inc.  
CONSOLIDATED STATEMENT OF CHANGES IN NET LIABILITIES IN LIQUIDATION
(unaudited)  
(expressed in Canadian dollars, except shares)  
  Three months ended
  March 31, 2012
   $ 
Shareholders' Deficiency at December 31, 2011 on a Going Concern Basis  (12,995,588)
   
Net effect of adopting a liquidation basis of presentation 6,232,111
   
Net liabilities in liquidation as at January 1, 2012 (6,763,477)
   
REVENUE  
   
Royalty revenue 207
  207
   
EXPENSES  
   
Research and development 769,145
Operating 400,980
Depreciation 84,149
  1,254,274
   
Operating loss (1,254,067)
   
Interest income 2,305
Finance expenditures (100,539)
   
  (98,234)
   
Net loss and comprehensive loss for the period (1,352,301)
   
Net shareholders' deficiency transactions excluding net loss (87,172)
   
Net liabilities in liquidation at March 31, 2012 (8,202,950)
   
Loss per share  
Basic and diluted (0.03)
   
Weighted average shares outstanding 51,829,818
   
   
Effective January 1, 2012, the Company changed the basis of presenting its financial statements from going concern to
liquidation.  The Consolidated Statement of Changes in Net Liabilities in Liquidation includes the results of operations and
other shareholders' deficiency transactions.

 

SemBioSys Genetics Inc.  
CONSOLIDATED STATEMENT OF LOSS AND COMPREHENSIVE LOSS  
(unaudited)  
(expressed in Canadian dollars, except shares)  
  Three months ended
  March 31, 2011
   $ 
   
REVENUE  
   
Contract research 50,000
  50,000
   
EXPENSES  
   
Research and development 814,429
Operating 382,082
Depreciation 305,274
  1,501,785
   
Operating loss (1,451,785)
   
Interest income -
Finance expenditures (618,633)
Unidentified consideration in compound instruments issuance (2,563,353)
   
  (3,181,986)
   
Net loss and comprehensive loss (4,633,771)
   
Loss per share  
Basic and diluted (0.09)
   
Weighted average shares outstanding 51,374,536
   
   
   
Effective January 1, 2012, the Company changed the basis of presenting its financial statements from
going concern to liquidation. The Consolidated Statements of Loss and Comprehensive Loss for the
three months ended March 31, 2011 was prepared using a going concern basis.

SemBioSys Genetics Inc.              
CONSOLIDATED STATEMENTS OF CHANGES IN DEFICIENCY            
(unaudited)          
(expressed in Canadian dollars, except shares and warrants)              
           
  Capital Stock Contributed
Surplus
  Warrants   Deficit   Total
Deficiency
   Number     $     $     Number     $     $     $ 
Balance - January 1, 2011 51,374,536   76,137,709   14,459,827    12,655,341   2,849,406   (98,608,023)   (5,161,081)
Net loss for the period  -   -   -   -   -   (4,633,771)   (4,633,771)
Stock-based compensation -   -   91,434   -   -   -   91,434
Balance - March 31, 2011 51,374,536   76,137,709   14,551,261   12,655,341   2,849,406   (103,241,794)   (9,703,418)
                           
Balance - January 1, 2012 on a going concern basis 51,829,818   76,257,621   16,149,732    12,105,341   1,332,500   (106,735,441)   (12,995,588)
Net effect of adopting liquidation basis of presentation  -   -   -   -   -   6,232,111   6,232,111
Balance - January 1, 2012 on a liqudation basis 51,829,818   76,257,621   16,149,732    12,105,341   1,332,500   (100,503,330)   (6,763,477)
Net loss for the period -   -   -   -   -   (1,352,301)   (1,352,301)
Stock-based compensation -   -   (87,171)   -   -   -   (87,171)
Expiration of warrants -   -   79,583   (240,000)   (79,583)   -   -
Balance - March 31, 2012 51,829,818   76,257,621   16,142,144    11,865,341   1,252,917   (101,855,631)   (8,202,949)
                           
                           
Effective January 1, 2012, the Company changed the basis of presenting its financial statements from going concern to liquidation.
The Consolidated Statements of Changes in Net Liabilities in Shareholders' Deficiency for the three months ended March 31, 2011
and March 31, 2012 were prepared on a going concern basis and liquidation basis, respectively.

 

SemBioSys Genetics Inc.    
CONSOLIDATED STATEMENTS OF CASH FLOWS    
(unaudited)    
(expressed in Canadian dollars, except shares)  
  Three months ended
  March 31, 2012   March 31, 2011
   $     $ 
Cash provided by (used in)      
       
Operating activities      
Net loss for the period (1,352,301)   (4,633,771)
Add items not affecting cash:      
  Depreciation 84,149   305,274
  Stock-based compensation (87,171)   91,434
  Finance expenditures 100,539   618,633
  Unidentified consideration in compound instruments issuance -   2,563,353
       
Changes in items of working capital:      
  Scientific research & experimental development      
    tax credits receivable 223,902   -
  Accounts receivable 6,462   (46,380)
  GST receivable 8,861   8,634
  Prepaid expenses, deposits and other 213,442   27,928
  Account payable and accrued liabilities 306,018   91,297
       
Net cash used in operating activities (496,100)   (973,598)
       
Financing activities      
Issuance of long-term bonds and warrants -   3,999,577
Increase/(decrease) in royalty liabilities (29,584)   250,000
Increase in short-term debt 500,000   -
Repayment of short-term debt (23,501)   -
Repayment of long-term debt and interest (10,498)   (27,012)
       
       
Cash provided by financing activities 436,416   4,222,565
       
Investing activities      
Proceeds on disposition of property and equipment 2,355   100,000
       
       
Cash provided by investing activities 2,355   100,000
       
Increase/(decrease) in cash and cash equivalents (57,328)   3,348,967
       
Cash and cash equivalents - Beginning of period 264,108   267,436
       
Cash and cash equivalents - End of period 206,780   3,616,403
       
       
Effective January 1, 2012, the Company changed the basis of presenting its financial statements from going concern to
liquidation.The Consolidated Statements of Cash Flows for the three months ended March 31, 2011 and March 31, 2012
were prepared on a going concern basis and liquidation basis, respectively.

 

For further information:

Ross Marshall
The Equicom Group
T: (416) 815-0700 x238
E: rmarshall@equicomgroup.com