BURNABY, BC, Nov. 14 /PRNewswire-FirstCall/ - Chromos Molecular SystemsInc. ("Chromos"; TSX: CHR) today provided an update on its on-goingrestructuring efforts.
Chromos announces that it has completed the sale of its ACE Systemtechnology to Glaxo Group Limited ("GlaxoSmithKline" or "GSK"). A portion ofthe proceeds from this sale transaction was used to fund the $1.1 millionrequired to be paid under the terms of the creditor proposal announced in theCompany's August 28, 2007 press release. The remaining proceeds provide someadditional 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 announcedsale of CHR-1103 and CHR-1201; (c) satisfied all of its obligations to securedcreditors; and (d) satisfied all of the conditions of the court approvedproposal to unsecured creditors. Chromos currently has some cash, certainbusiness assets and minimal liabilities. The Company does not believe that itsremaining business assets are sufficient to pursue continued operations forthe longer term or to support a listing on the TSX. Accordingly, managementand the Board of Directors are reviewing Chromos' strategic options and willmake further announcements in due course.
With the resolution of the creditor proposal, the Company is taking thenecessary steps in order to be able to make applications to have the ceasetrade orders imposed by securities regulatory authorities revoked. In orderfor the Company to make such applications, the Company must first bring itsregulatory filings up to date. These filings include the audited December 31,2006 financial statements, interim unaudited financial statements for thefirst 3 quarters of fiscal 2007 and other required corporate filings. TheCompany's auditors have commenced the audit of the 2006 financials and theCompany expects the statements to be completed in early January 2008. Shortlythereafter, the Company expects to complete the remaining regulatory filingsand make applications to have the cease trade orders revoked. Depending on thestrategic option selected as the path forward, Chromos at that time may or maynot apply to be re-listed for trading on the TSX or TSX Venture.
Chromos has re-considered the timing of its previously scheduled December11, 2007 shareholder meeting. Financial statements will not be available untilearly January 2008 and some of the strategic options under consideration mayrequire shareholder approval.
"With the obligations under the creditor proposal just satisfied, theBoard of Directors believes that if the shareholder meeting took place onDecember 11th the Company would not have sufficient information to present toshareholders regarding the various options for which shareholder approval mayultimately be required," said Darrell Elliott, Chairman of the Board."Therefore, we concluded that it is not in the best interests of the Companyto incur the considerable expense involved to hold more than one shareholdermeeting and that shareholders should have the benefit of considering allmatters at once to make an informed decision."
Accordingly, the Board has decided to postpone the December 11, 2007shareholder meeting. The new date for the postponed shareholder meeting willbe set closer to the time when the audited 2006 financial statements are readyfor filing but it is anticipated that, based on current timelines, theshareholder 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 liketo thank Dr. Zendegui for all his contributions over the past number of years.
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