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.
Until the 2012 Annual Disclosure Documents have been filed, the Company intends to continue to satisfy the provisions of the alternative information guidelines specified by Policy Statement 12-203 by issuing bi-weekly default status reports in the form of further press releases, which will also be filed on SEDAR. The Company would file, to the extent applicable, its next default status report on or about May 10, 2013.
ProSep is a technology-focused process solutions provider to the upstream oil and gas industry. ProSep designs, develops, manufactures and commercializes technologies to separate oil, water and gas generated by oil and gas production. For more information, please visit www.prosep.com.
Caution concerning forward-looking statements
This press release may contain forward-looking statements within the meaning of Canadian securities laws. Forward-looking statements can generally be identified by the use of the conditional tense, the words "may", "should", "would", "believe", "plan", "expect", "intend", "anticipate", "estimate", "foresee", "objective" or "continue" or the negative of these terms or variations of them or words and expressions of similar nature. In particular, forward-looking statements regarding ProSep's plans for its business development strategy, anticipated customer orders, sales and revenues, financial and operational projections and anticipated results, anticipated results of field testing with potential customers and expected benefits of ProSep's proprietary technologies; and anticipated impact on ProSep of the factors discussed under the heading Selected Risks in the latest management discussion and analysis document ("MD&A"). These forward-looking statements are based on, among other things, management's assumptions, expectations, estimates, objectives, plans and intentions as of the date hereof pertaining to, but not limited to demand for ProSep's solutions, projected revenues and expenses, the economic and industry environments in which the Company operates or which could affect its activities, the Company's ability to attract new customers, projected operating costs and cost of raw materials and energy supply, expected timing and amount of capital expenditures program of ProSep's potential customers, target market acceptance of ProSep's solutions, current and future solutions performance, evolving market conditions for oil & gas producers; and success of commercialization approach and strategic partnership initiatives. Although ProSep believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because ProSep can give no assurance that they will prove to be correct. Because forward-looking statements address future events and conditions, by their very nature they involve numerous inherent risks and uncertainties that contribute to the possibility that the forward-looking statements may prove to be incorrect. ProSep cannot assure investors that any of these forward-looking statements will prove to be accurate. Further, if any of these statements are inaccurate, the inaccuracy may be material.
Actual performance and results could differ materially from those currently anticipated in the forward-looking statements due to a number of factors and risks. Some of the factors that could cause such differences include, but are not limited to uncertainty as to market acceptance of new solutions and possible technological change, competition, economic environment and especially conditions in the oil & gas industry, legislative or regulatory developments, ProSep's ability to penetrate core markets, expand into new markets and manage future growth, the need for additional financing and uncertainties as to access to sufficient capital financing on acceptable terms, uncertainty as to achievement of profitability and ability to meet cash requirements, availability and retention of management and key personnel, the long sales and implementation cycles for ProSep's solutions, reliance on major customers, manufacturing, project execution, product defect and product liability risks, dependence on third party suppliers, exchange rate and currency fluctuations, protection of ProSep's intellectual property rights; and risks related to ProSep's foreign operations and compliance with anti-corruption and anti-bribery laws. Assumptions, expectations and estimates made in the preparation of forward-looking statements and risks that could cause actual results to differ materially from current expectations are further discussed under "Selected Risks" in the latest MD&A. In light of the significant risks and uncertainties in these forward-looking statements, investors should not place undue reliance on or regard these statements as a representation or warranty by the Company or any other person that the Company will achieve its objectives, strategies and plans in any specified time frame, if at all. The forward-looking statements contained or incorporated by reference in this management discussion and analysis relate only to events as of the date on which the statements are made. Except as required under applicable securities legislation, the Company does not undertake to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.
Investor Relations and Media:
VP Marketing & Corporate Development
(514) 522-5550 ext. 238
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