MONTREAL, QUEBEC -- (Marketwired) -- 04/26/13 -- ProSep Inc. (TSX: PRP) ("ProSep" or the "Company"), dedicated to providing process solutions to the oil and gas industry, today wishes to provide this bi-weekly default status report (the "Default Status Report") in accordance with Policy Statement 12-203 respecting Cease Trade Orders for Continuous Disclosure Defaults ("Policy Statement 12-203"). On April 1st, 2013, the Company announced (the "Default Announcement") that, for the reasons disclosed in the Default Announcement, the filing of its annual audited financial statements (and related CEO and CFO certifications as required by National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings), the accompanying management's discussion and analysis as well as its annual information form for the year ended December 31, 2012 (collectively, the "2012 Annual Disclosure Documents") would not be completed within the period prescribed for the filing of such documents under Parts 4, 5 and 6 of National Instrument 51-102 respecting Continuous Disclosure Obligations, namely within 90 days from its year end date.
As a result of this delay in filing the 2012 Annual Disclosure Documents, the Company's principal regulator, the Autorite des marches financiers, issued on April 12, 2013 a management cease trade order (the "MCTO") which restricts all trading in securities of the Corporation, whether direct or indirect, by management and insiders of the Company. The issuance of a MCTO does not affect the ability of persons who are not insiders of the Company to trade in the Company's securities.
ProSep's board of directors and its management confirm once again that they are working expeditiously to meet the Company's obligations relating to the filing of the 2012 Annual Disclosure Documents. More specifically, the Company is working towards evaluating the effects of the new conditions proposed by one of the Company's subsidiary's lender pursuant to a breach of covenant under its credit facility and clarifying the work assumptions in relation with the audit of the 2012 Annual Disclosure Documents with its auditors. The Company continues to expect to file the 2012 Annual Disclosure Documents on or about May 15, 2013.
Since the Default Announcement, and as announced on April 23, 2013, the Company successfully completed the previously announced sale of its 51% investment in ProSep Kolon Company Ltd, a South Korean joint venture with Kolon Group, for total consideration of $5 million. After reimbursement of a related $1 million debenture, this transaction provided net proceeds of approximately $4 million to be used as working capital.
Pursuant to the provisions of the alternative information guidelines specified by Policy Statement 12-203, the Company reports that since the Default Announcement, except as stated in this Default Status Report, there have not been any material changes to the information contained therein; nor any failure by the Company to fulfill its intentions as stated therein with respect to satisfying the provisions of the alternative information guidelines; nor any additional defaults or anticipated defaults subsequent to the disclosure therein. Furthermore, there is no additional material information respecting the Company and its affairs that has not been generally disclosed.
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