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Adherex Technologies Inc. (ADH): Restatement of June 30, 2010 Interim Unaudited Consolidated Financial Statements


11/2/2010 9:06:41 AM

CHAPEL HILL, NORTH CAROLINA--(Marketwire - November 01, 2010) - Adherex Technologies Inc. (TSX: AHX)(PINK SHEETS: ADHXF), a biopharmaceutical company dedicated to providing innovative therapies that improve the life of cancer patients, announces the restatement of its interim unaudited condensed consolidated financial statements for the period ending June 30, 2010 and Interim MD&A to accurately reflect (1) the stock-based compensation for 67,692,821 stock options with service inception in June 2010 vesting immediately upon option grant; (2) the classification of the Company's 240,066,664 warrants as derivative financial instruments and recorded at their fair value as a long term liability on the Company's balance sheet; and (3) an accrual for professional services to be rendered to the Company. The stock-based compensation has been adjusted to a recorded expense for the period ending June 30, 2010 as a result of a service inception date of June 24, 2010 for employment and independent board agreements with option grants subject to shareholder approval received on June 24, 2010. Under FASB ASC 815-40, the warrants issued as part of the Company's first closing of the private placement on April 30, 2010 have been treated as derivative financial instruments and recorded at their fair value as a liability. The restatement increases the Company's net loss and comprehensive loss for the three and six months ended June 30, 2010 by $2,135,000. The Company's cash and cash equivalents reported at June 30, 2010 remains the same at $7,152,000.

This restatement of the financial results reflects the determination made by the Audit Committee and the Board of Directors of the Company on November 1, 2010, after consultation with management and in consultation with the Company's auditors in connection with the review by the Company's auditors of the financial statements for the three and six month periods ended June 30, 2010.

The following table presents the impact of the restatement on the Company's previously reported financial statements for the three and six months ended June 30, 2010:

(U.S. Dollars and shares in thousands, except per share amounts)


--------------------------------------------------------------------------
                                             As                           
                                     previously                           
                                       reported   Adjustment     Restated 
--------------------------------------------------------------------------
                                              $            $            $ 
Consolidated Balance Sheet as at                                          
 June 30, 2010                                                            
Current liabilities                         359           11          370 
Derivative liabilities                        0        7,262        7,262 
Common stock                             72,119       (7,190)      64,929 
Additional paid in capital               35,225        2,053       37,278 
Deficit                                (101,791)      (2,135)    (103,926)
Total stockholders' equity                6,796       (7,272)        (476)

Consolidated Statements of Loss,                                          
 Comprehensive Loss and Deficit                                           

Three months ended June 30, 2010                                          
General and administrative expense          296        2,063        2,359 
Unrealized gain (loss) on                                                 
 derivative                                   0          (72)         (72)
Net loss and comprehensive loss            (433)      (2,135)      (2,569)
Net loss per share                        (0.00)       (0.01)       (0.01)

Six months ended June 30, 2010                                            
General and administrative expense          499        2,063        2,563 
Unrealized gain (loss) on                                                 
 derivative                                   0          (72)         (72)
Net loss and comprehensive loss            (800)      (2,135)      (2,935)
Net loss per share                        (0.00)       (0.01)       (0.01)
--------------------------------------------------------------------------
--------------------------------------------------------------------------

About Adherex Technologies

Adherex Technologies Inc. is a biopharmaceutical company focused on the development of eniluracil and 5-fluorouaricil.

This press release contains forward-looking statements that involve significant risks and uncertainties. The actual results, performance or achievements of the Company might differ materially from the results, performance or achievements of the Company expressed or implied by such forward-looking statements. Such forward-looking statements include, without limitation, those regarding our development plans and the expected funding, timing and results of our development as well as our efforts to pursue strategic alternatives. We can provide no assurance that development will proceed as currently anticipated, that previous results will be predictive of future outcomes, that the expected funding, timing or results of our development will be realized, or that we will be able to form strategic collaborations or partnerships with other companies. We are subject to various risks, including our near term need for additional capital to fund our operations, current and anticipated conditions in the economy and financial markets, our history of losses, our ability to continue to meet the listing requirements of the TSX, the uncertainties of clinical trials, drug development and regulatory review, the early stage of our product candidates, our reliance on collaborative partners, and other risks inherent to the biopharmaceutical industry. For a more detailed discussion of related risk factors, please refer to our public filings available at www.sec.gov and www.sedar.com.


Contacts:
Adherex Technologies Inc.
Rosty Raykov
Chief Executive Officer
919-636-5144
www.adherex.com



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