BURNABY, BC, Aug. 28 /PRNewswire-FirstCall/ - Chromos Molecular Systems Inc. today provided an update on its on-going restructuring efforts.
“Since filing for creditor protection in April 2007, Chromos has made significant progress in its efforts to restructure and re-position the Company for success going forward,” said Alistair Duncan, President and Chief Executive Officer. “Management and the Board of Directors are committed to this process and are confident that it will lead to an outcome to the benefit of all shareholders.”
Some of the key items of note in the on-going restructuring process include:
- On April 11, 2007 Chromos filed a Notice of Intention to Make a Proposal (the “Proposal”) under the Bankruptcy and Insolvency Act (Canada) and named Campbell, Saunders Ltd., as Trustee under the intended Proposal and to assist Chromos in developing a Proposal to creditors; - On July 19, 2007 Chromos sold its two monoclonal antibody drug candidates, CHR-1103 and CHR-1201, to Glenmark Pharmaceuticals, S.A. The upfront proceeds from this sale transaction, together with a small amount of existing funds on hand, were used to fully repay Chromos’ secured creditors; - In late July Chromos filed a Proposal to its unsecured creditors to settle all of its financial obligations that had arisen prior to April 11, 2007. At a meeting of unsecured creditors held on August 14, 2007, the unsecured creditors overwhelmingly endorsed the Proposal and on August 23, 2007 the Supreme Court of British Columbia in Bankruptcy approved the Proposal. Under the terms of the Proposal, Chromos must on or before October 23, 2007 pay to the Trustee $1.1 million, to then be dealt with in accordance with the Proposal terms, to settle Chromos’ financial obligations incurred prior to April 11, 2007. Under the Proposal, Chromos will also assign to the Trustee $1.5 million from a milestone payment payable by Glenmark on the commencement of a Phase I clinical trial for CHR-1103, if and when such payment is made; - Chromos continues to maintain scaled-back operations, while maintaining the integrity of its assets, during the restructuring period and has reached an agreement in principle with its landlord to significantly reduce the amount of leased premises in its current location effective September 1, 2007; and
Chromos has also continued to negotiate and execute on a number of ACE System licensing transactions which has provided on-going operating funds and is in the process of completing the sale of surplus equipment to raise additional capital.
Chromos is in discussions and negotiations with respect to several strategic transactions, including investment proposals and assets dispositions, which if completed would yield funds sufficient to pay the $1.1 million to be paid to the Trustee for the Proposal and to provide some capital to fund future operations. In parallel, there are also preliminary discussions regarding potential business combinations.
In late May, 2007 and before significant steps had been made in the restructuring process, certain shareholders who held secured notes delivered a requisition to hold a shareholder meeting. Chromos originally resolved to hold this meeting on September 26, 2007, a date by which Chromos expected the restructuring process to be substantially complete. At this time, though the Company has now received creditor and court approval for the Proposal, the Company continues to work on near term strategic transactions, some of which may require shareholder approval, to not only satisfy the Company’s Proposal obligations but to also define the future operations of Chromos. Therefore, Chromos has re-considered the timing of this meeting given that separate shareholder meetings would be required in the next short while for the approval of the pending strategic transactions and that additional time is required to complete the audit of Chromos’ December 31, 2006 financial statements to be presented to shareholders.
“The Board of Directors believes that if the shareholder meeting took place on September 26, 2007 the Company would not have sufficient information to present to shareholders regarding the various transactions for which shareholder approval may ultimately be required,” said Darrell Elliott, Chairman of the Board. “Therefore, we concluded that it was not in the best interests of the Company to incur the considerable expense involved to hold more than one shareholder meeting in view of the Company’s current financial position and in considering that shareholders should have the benefit of considering all matters at once to make an informed decision.” Accordingly, the Board has decided to cancel the September 26th shareholder meeting and schedule a new shareholder meeting to be held on December 11, 2007.
About Chromos
Chromos is a biopharmaceutical company focused on the development and commercialization of its proprietary ACE System technology that is used to engineer production quality cell lines to manufacture biopharmaceutical products including monoclonal antibodies and the development of human therapeutic products. For more information visit our website at www.chromos.com.
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, (iii) the ability to successfully obtain proof of the effectiveness of Chromos’ technology (iv) the ability to complete and maintain corporate alliances relating to the development and commercialization of Chromos’ technology; (v) the ability to obtain and enforce patent and other intellectual property protection for Chromos’ technology; (vi) market acceptance of Chromos’ technology; (vii) the competitive environment and impact of technological change; (viii) Chromos’ ability to attract and retain employees and consultants to carry out its business plans; (ix) the timely development and commercialization of any technology or products that are contingent on the completion and maintenance of corporate alliances with third parties (x) the demand for repayment of currently outstanding secured, promissory notes; (xi) re-emergence from its reorganization proceedings. Further details on Chromos’ operating risks can be found in its most recently filed Annual Information Form and in its Quarterly and Annual Reports to Shareholders.
CONTACT: Jeff Charpentier, CA, Vice President Finance and CFO, (604) 415-7132, email: jcharpentier@chromos.com
Chromos Molecular Systems Inc.
CONTACT: Jeff Charpentier, CA, Vice President Finance and CFO, (604)415-7132, email: jcharpentier@chromos.com
