OTTAWA, Dec. 29 /CNW/ - Seprotech Systems Incorporated (TSX-V: SET; "Seprotech" or the "Company") announces that preliminary investigations by management and the audit committee of the Company indicate that the Company's revenues as reported in its financial statements for the quarters ended November 30, 2009, February 28, 2010 and May 31, 2010, and for the year ended August 31, 2009, have been overstated, by an as yet undetermined, material amount. The Company believes that its overstatement of revenue has resulted from over-billing to a significant customer of the Company. The Company's audit committee is currently working with management and the Company's auditors to confirm the extent of such overstatement, and the impact of such overstatement on the Company's balance sheet, statements of operations and deficit and comprehensive loss, and statements of cash flows for the three-month periods ended November 30, 2009, February 28, 2010, May 31, 2010 and possibly for the year ended August 31, 2009.
The Company announced on December 17, 2010 that it will not be able to file its audited financial statements for the year ended August 31, 2010 and related MD&A and CEO and CFO certificates by December 29, 2010 as required under securities laws. Due to the potential for restatement, the Company cautions that its previously filed financial statements should not be relied upon until the Company can confirm their accuracy or restated financials are filed. As additional information becomes available, updated press releases will be issued.
As has been previously reported, the Company has a significant working capital deficit and, accordingly, is considering sources of additional financing which may be available to it. The Company is not currently in compliance with financial covenant ratios in its secured loan agreement, and depending upon the extent of final determination of the revenue discrepancy, could be in a materially more adverse financial condition with respect to the non-compliance.
Seprotech is a provider of pre-engineered water and wastewater treatment plants to the land development, resource sector and military market place, including CrystalBlue™ membrane-based water recycling systems and the ROTORDISK® wastewater treatment systems.
Neither 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. The TSX Venture Exchange has neither approved nor disapproved of the information contained herein. Some of the statements in this press release, including those relating to the Company's strategies and other statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as "expects", "anticipates", "intends", "plans", "believes", "estimates" or similar expressions, are forward-looking statements within the meaning of securities laws. Forward-looking statements include, without limitation, the information concerning possible or assumed future results of operations of the Company. These statements are not historical facts but instead represent only the Company's expectations, estimates and projections regarding future events. The Company does not undertake any obligation to update or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this presentation or to reflect the occurrence of unanticipated events, except as required by law.
For further information: For further information:
Mr. Matthew Anderson Investor Relations
Tel: (613) 523-1641
Fax: (613) 731-0851