Schneider Power Inc.

Schneider Power Inc.

April 14, 2009 08:00 ET

Schneider Power to Restate Financial Statements

Announces anticipated shortfall in eligible CRCE expenditures

TORONTO, ONTARIO--(Marketwire - April 14, 2009) - Schneider Power Inc. (TSX VENTURE:SNE) (“Schneider Power” or the “Company”) today announced that it will be restating its audited consolidated financial statements for the years ended December 31, 2005, 2006, and 2007.

The Company will restate its financial statements to reflect the following amendments:

  • Recognition of additional liabilities related to penalties and interest for the shortfall in the qualified Canadian Renewable and Conservation Expenditures (“CRCE”) for the 2005 to 2007 fiscal years totaling approximately $160,000, which is based on a current CRA audit that is in progress.
  • Recognition of a non-financial derivative asset related to its power purchase agreements in 2007 of approximately $300,000.
  • Reclassification of future income tax expenses related to expenditures renounced to flow-through shareholders to shareholders' equity for the 2005 to 2007 fiscal years.
  • $265,191 increase in the value of warrants issued in August 2008, in connection with the Company's Qualifying Transaction.

The effect on net earnings for the 2005 to 2007 fiscal years is anticipated to be the following:

    Net earnings impact      Basic EPS impact  
2005   ($198,137)        ($.01)  
2006   $60,083      Nil  
2007   $417,348      $   .01  

The Company will refile its financial statements and MD&A for the Q3 2008 interim period to reflect changes primarily relating to these restatements. The Company's financial statements, as previously published and filed in respect to the periods noted above, should no longer be relied upon. The above financial information represents management's best estimates of the effects of the restatement. The Company expects to file the restated financial statements, and any other required documents, prior to the issuance of the Company's year end results.

Shortfall in Qualified CRCE

Based on the ongoing CRA audit that is in progress, the Company also announced that it will be taking an additional $350,000 provision in the fourth quarter ended December 31, 2008 in respect of potential penalties, interest and indemnification costs related to an anticipated shortfall in qualified CRCE in 2008. After making this provision, as at December 31, 2008, the Company will have provided for approximately $750,000 in potential liabilities related to CRCE shortfalls in 2004-2008. The potential liability was assessed by management following a detailed review of its eligible CRCE expenditures in 2004, 2005, 2006, 2007 and 2008. The Company will be working with the Canada Revenue Agency and its tax advisors to mitigate these costs, but there is no certainty that it will be successful in doing so. Shareholders who purchased CRCE shares in 2004, 2006, and 2007 are advised that they may not be entitled to their full CRCE deduction for those years as originally contemplated. The Company has included the costs of indemnifying affected shareholders in its provision.

About Schneider Power

Schneider Power Inc. is one of Canada's premier renewable energy companies, with a large portfolio of clean electricity generation development projects and advanced exploration projects located across two continents, and large land positions on the most promising and prospective wind and solar power areas in North America.

Schneider Power is listed on the TSX Venture Exchange under the symbol SNE.

Certain statements included in this news release constitute "forward-looking information" within the meaning of applicable securities legislation. Such forward-looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Schneider Power to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.

Contact Information