Seprotech updates status of previously reported delay in filing of 2010 annual financial statements and first quarter 2011 inter
10 February 2011 - 6:52AM
PR Newswire (Canada)
OTTAWA, Feb. 9 /CNW/ -- OTTAWA, Feb. 9 /CNW/ - Seprotech Systems
Incorporated (TSX-V: SET; "Seprotech" or the "Company") is issuing
this press release as a default status 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 possibly 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 (the "OSC") a
temporary Management Cease Trade Order (the "MCTO") under Part 4 of
National Policy 12-203. On January 17, 2011 the OSC issued a
permanent MCTO by virtue of which neither the former CEO nor the
CFO is permitted, directly or indirectly, to trade in or acquire
securities of the Company until two full business days following
the receipt by the OSC of all the outstanding filings. In its
default status report of January 26th, 2011 (the "Third Default
Status report") the Company also reported that it would
not 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 following is an update of material changes to the
information set out in the Default Notice and the First, Second and
Third Default Status Reports. As previously reported, on December
17, 2010 the Company notified its customer, the Department of
National Defence, Canada (the "DND") of material billing
discrepancies under its contract with the Company. It was further
reported that DND had agreed in principle that the over-billing
would be corrected through applying a credit on future work under
the contract and that it was anticipated that the credit will be
fully utilized by applying it to work currently committed. On
January 20, 2011 the Company provided a further detailed response
to specific questions from DND to confirm the Company's estimate of
the amount of the over-billing. A further exchange of
correspondence and information has taken place, and substantial
agreement has now been reached with respect to the amount of the
over-billing, the final amount of which is not expected to exceed
$300,000. One minor aspect of the materials provided to DND
remains under review with a response expected within the next week.
However, until the precise amount of the overbilling is confirmed
by DND, and accepted by the Company's auditors, the Company is not
in a position to finalize quantification and/or allocation of the
over-billing 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 as well as its
first quarter 2011 filings. However, we have been able to determine
that no material amounts related to the over-billing will be
attributable to other than the fiscal year ended August 31, 2010.
Finalization of this process is expected to further delay the
filing of the Annual Required Filings until March 31, 2011, and the
first quarter 2011 filings to April 30, 2011. The Company confirms
that: (i) 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; (ii) there has not been any other anticipated or
specified default by the Company under NP 12- 203; and
(iii) there is no other material information concerning the
affairs of the Company that has not been generally disclosed. 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 CrystalBlueâ„¢ 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. To view this news release in HTML formatting,
please use the following URL:
http://www.newswire.ca/en/releases/archive/February2011/09/c9329.html
pMr. Matthew Anderson, Investor Relationsbr/ Tel: (613) 523-1641br/
Fax: (613) 731-0851/p
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