OTTAWA, Jan. 12 /CNW/ - Seprotech Systems Incorporated (TSX-V: SET;
"Seprotech" or the "Company") is issuing this press release as a
default status report and filing its related material change report in
accordance with National Policy 12-203.
In its press release on December 17, 2010, (the "Default Notice"), the
Company announced that it would not be able to file its audited
financial statements for the year ended August 31, 2010 (the "Annual
Financial Statements") and its related MD&A and CEO and CFO
certificates (collectively, the "Annual Required Filings") by December
29, 2010 as required under securities laws.
By its further press release and related material change report issued
and filed on December 29, 2010 (the "First Default Status Report"), the
Company reported a material change relating to an overstatement of
revenues as reported in its financial statements for the quarters ended
November 30, 2009, February 28, 2010, May 31, 2010 and for the year
ended August 31, 2009, in an undetermined material amount.
The Company applied for, and on January 4, 2011 received from its
principal regulator, the Ontario Securities Commission, a temporary
Management Cease Trade Order (the "MCTO") under Part 4 of National
Policy 12-203. By virtue of the MCTO, and until the required filings
are complete, neither the CEO nor the CFO is permitted, directly or
indirectly, to trade in or acquire securities of the Company for a
period of 15 days from the date of MCTO or any extension of the MCTO.
The following is an update of material changes to the information set
out in the Default Notice and the First Default Status Report.
As previously reported, on December 17, 2010, the Company notified a
significant customer (the "Significant Customer") of material billing
discrepancies under its contract with the Company, and, at the request
of the Significant Customer, on December 23, 2010 the Company provided
detailed information to the Significant Customer identifying where the
billing discrepancies were believed to have taken place. While the
Company is continuing discussions with the Significant Customer with a
view to confirming the amount of the overbilling, it has now been
agreed in principle that the over-billing will be corrected through
applying a credit on future work under the contract and it is
anticipated that the credit will be fully utilized by applying it to
work currently committed. In this regard an extension of the contract
until April 14, 2011 has today been signed by the Company and the
Significant Customer. Until the amount of the overbilling is confirmed
by the Significant Customer, and accepted by the Company's auditors,
the Company is not in a position to quantify or allocate the
overbilling to the appropriate historical fiscal quarters thereby
enabling completion of the audit of its Annual Financial Statements and
subsequent filing of its Annual Required Filings. This process is
expected to further delay the filing of the Annual Required Filings
until February 28, 2011.
In addition, the Company reports that it will not now be able to file
its interim financial statements for the quarter ended November 30,
2010 and related MD&A and CEO and CFO certificates before the
prescribed date of January 31, 2011.
The Company confirms that:
there has been no failure by the Company in fulfilling its stated
intentions with respect to satisfying the provisions of the alternative
information guidelines set out in NP 12-203;
there has not been any other anticipated or specified default by the
Company under NP 12-203;
there is no other material information concerning the affairs of the
Company that has not been generally disclosed; and
The Company will continue to satisfy the provisions of the alternative
information guidelines under NP 12-203 by issuing bi-weekly default
status reports in the form of news releases so long as it remains in
default of the filing requirements set out above.
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.
SOURCE Seprotech Systems Incorporated
For further information:
Mr. Matthew Anderson, Investor Relations
Tel: (613) 523-1641
Fax: (613) 731-0851