Calgary, Alberta, Canada
May 15, 2012
SemBioSys Genetics Inc. ("SemBioSys" or the "Company") today announced its operational and financial results for the first quarter ended March 31, 2012, and an update on the Company's activities and status.
As noted in the Company's press release dated April 30, 2012, the Company ceased trading on the TSX effective May 1, 2012. The Company's lack of funds did not allow it to remain listed on the TSX or to relist on another stock exchange.
Notwithstanding significant efforts, no strategic options or funding commitments have arisen that would allow the company to continue as a going concern.
Subsequent to the April 30, 2012, press release, security holders have begun to take action to secure the assets over which they have liens or security positions, which constitute the bulk of the Company's intellectual and tangible property. In addition, the licensor of our key intellectual property has provided notification that they have cancelled the Company's license. Further, our landlord has terminated the lease of our facilities and we no longer have access to these facilities. It should be noted that no stakeholder has as yet appointed a receiver or trustee.
As a result of the current state of affairs, SemBioSys is in the process of an orderly winding down of the Company. It is very unlikely that there will be any return or value to shareholders. In the wind down of operations, the Company is working towards the settlement of its obligations where appropriate, however, there is no assurance that this effort will extinguish the full amount of the Company's liabilities. Once all security holders have acted upon their security, the Company is unlikely to have any assets remaining. The only opportunity for the Company to realize any value from these assets would be if the security holders monetize the assets at a value greater than they are owed. The Company has no ability to influence the realized value of the assets.
Financials
Until December 31, 2011, the financial statements of the company were prepared on a going concern basis. As a result of management's intention to wind-down the business subsequent to the period end, effective from January 1, 2012, the Company changed the basis of preparing its financial statements from going concern to liquidation by using the information that is currently available and relevant assumptions at the time of preparation thereof. The impact of this change and the critical accounting estimations and judgements used have been fully disclosed in Note 2 and Note 3 of our unaudited condensed interim consolidated statements as at and for the three months ended March 31, 2012. The consolidated financial statements as at March 31, 2012, and for the three month period then ended do not include costs to liquidate the assets of the Company, settle any contingent liabilities or future administrative costs and professional fees to wind-up the activities of the Company, except to the extent that such costs were committed at the end of the reporting period. These costs may be material and the amounts disclosed as net liabilities in liquidation in total or on a per share basis will change. The actual amounts available for distribution to creditors and shareholders will change and such changes may be material.
During the first quarter of 2012, the activities of the company were similar on an overall basis to that of 2011.
Net cash used in operating activities for the three months ended March 31, 2012, was $496,100 compared to $973,598 for the same period last year. The decrease of net cash used in operating activities is primarily due to the collection of a scientific research & experimental development tax credit refund of $223,902 and an increase in the payable balance.
Net loss for the three months ended March 31, 2012, was $1,352,301 or $0.03 per share compared to $4,633,771or $0.09 per share for the same period last year.
Revenue for the three months ended March 31, 2012, was $207 compared to $50,000 for the same period last year.
Expenditures for the three months ended March 31, 2012 compared to the same period last year:
• $769,145 research & development costs compared to $814,429;
• $400,980 operating costs compared to $382,082; and
• $84,149 depreciation expense compared to $305,274.
Total finance expenditure for the three months ended March 31, 2012, was $100,539 compared to finance expenditure of $618,633 for the same period last year as a result of the adoption liquidation basis of accounting which does not require the non-cash adjustments for changes in fair value of financial liabilities.
At March 31, 2012, the Company had cash and cash equivalents of $206,780 as compared to $264,108 at December 31, 2011. The decrease of cash is mainly due to $496,100 cash burn and $63,584 of debt and royalty repayments, offset by $500,000 short-term debt financing.
Total short-term debt, current portion of long-term debt, bonds payable and convertible debentures were $8,395,347 at March 31, 2012, compared to $6,868,774 at December 31, 2011.
Upon adoption of the liquidation basis, all of our fixed assets, long term bonds, convertible debentures and long-term debt are recorded as current and resulted in a net liability in liquidation of $8,202,949 as at March 31, 2012. The Company is working towards the settlement of its obligations where appropriate. However, there is no assurance that this effort will extinguish any of, or the full amount of, the Company's liabilities given that the Company is currently in a net liability position.
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