BURNABY, BC, Nov. 14 /PRNewswire-FirstCall/ - Chromos Molecular Systems Inc. today provided an update on its on-going restructuring efforts.
Chromos announces that it has completed the sale of its ACE System technology to Glaxo Group Limited ("GlaxoSmithKline" or "GSK"). A portion of the proceeds from this sale transaction was used to fund the $1.1 million required to be paid under the terms of the creditor proposal announced in the Company's August 28, 2007 press release. The remaining proceeds provide some additional working capital to fund ongoing operations.
Since filing for creditor protection in April 2007, the Company has: (a) completed the sale of its ACE System; (b) completed its previously announced sale of CHR-1103 and CHR-1201; (c) satisfied all of its obligations to secured creditors; and (d) satisfied all of the conditions of the court approved proposal to unsecured creditors. Chromos currently has some cash, certain business assets and minimal liabilities. The Company does not believe that its remaining business assets are sufficient to pursue continued operations for the longer term or to support a listing on the TSX. Accordingly, management and the Board of Directors are reviewing Chromos' strategic options and will make further announcements in due course.
With the resolution of the creditor proposal, the Company is taking the necessary steps in order to be able to make applications to have the cease trade orders imposed by securities regulatory authorities revoked. In order for the Company to make such applications, the Company must first bring its regulatory filings up to date. These filings include the audited December 31, 2006 financial statements, interim unaudited financial statements for the first 3 quarters of fiscal 2007 and other required corporate filings. The Company's auditors have commenced the audit of the 2006 financials and the Company expects the statements to be completed in early January 2008. Shortly thereafter, the Company expects to complete the remaining regulatory filings and make applications to have the cease trade orders revoked. Depending on the strategic option selected as the path forward, Chromos at that time may or may not apply to be re-listed for trading on the TSX or TSX Venture.
Chromos has re-considered the timing of its previously scheduled December 11, 2007 shareholder meeting. Financial statements will not be available until early January 2008 and some of the strategic options under consideration may require shareholder approval.
"With the obligations under the creditor proposal just satisfied, the Board of Directors believes that if the shareholder meeting took place on December 11th the Company would not have sufficient information to present to shareholders regarding the various options for which shareholder approval may ultimately be required," said Darrell Elliott, Chairman of the Board. "Therefore, we concluded that it is not in the best interests of the Company to incur the considerable expense involved to hold more than one shareholder meeting and that shareholders should have the benefit of considering all matters at once to make an informed decision."
Accordingly, the Board has decided to postpone the December 11, 2007 shareholder meeting. The new date for the postponed shareholder meeting will be set closer to the time when the audited 2006 financial statements are ready for filing but it is anticipated that, based on current timelines, the shareholder meeting would take place in early February 2008.
With the completion of the ACE System sale to GSK, Dr. Joseph Zendegui, Vice President of Corporate Development, has resigned effective October 31, 2007 to pursue other career opportunities. The Board and management would like to thank Dr. Zendegui for all his contributions over the past number of years.
Risks and Uncertainties
Certain of the statements contained in this press release are forward-looking statements which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Chromos, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.
To the extent possible, management implements strategies to reduce or mitigate the risks and uncertainties associated with Chromos' operations. Operating risks include (i) the continued availability of capital to finance Chromos' activities; (ii) Chromos' limited cash position, and (iii) Chromos' limited operations.
CONTACT: Jeff Charpentier, CA, Vice President Finance and CFO, (604) 415-7132, email: email@example.com
CONTACT: Jeff Charpentier, CA, Vice President Finance and CFO, (604)
415-7132, email: firstname.lastname@example.org