SOURCE: Sionix Corporation

Sionix Corporation

January 10, 2011 09:30 ET

Sionix Corporation Reports Record Fiscal 2010 Results

SANTA MONICA, CA--(Marketwire - January 10, 2011) - Sionix Corporation (OTCBB: SINX), designer of innovative and patented advanced mobile water treatment systems, reported financial results for its fiscal year ended September 30, 2010.

Fiscal 2010 Highlights

  • Completed successful pilot of the advanced Sionix Mobile Water Treatment System (MWTS), a unique self-contained water treatment system or pre-treatment process using ordinary air with minimal chemical flocculent aids 
  • Emerged from development stage with first commercial MWTS sale
  • First-ever annual revenue of $1.6 million
  • Debt reduction of nearly $15 million
  • Raised nearly $1 million in private equity offerings
  • Two new highly-experienced directors appointed to board
  • Awarded continuation U.S. patent on the company's Self Contained Dissolved Air Flotation System, creating greater competitive barriers to entry

Fiscal 2010 Results
Revenues totaled $1.6 million in fiscal 2010, representing the company's first year of revenues, which were derived from the first contracted installation of a Sionix MWTS.

During fiscal 2010, the company received an MWTS order and deposit from a new customer. However, revenue from this order was not recognized in fiscal 2010 because the installation was not yet completed.

Loss from operations was $1.8 million in fiscal 2010, compared to $2.5 million in fiscal 2009. The loss from operations was primarily due to $1.1 million in costs associated with the installation of the aforementioned first contracted MWTS unit, which were extraordinarily high due to one-time costs associated with a first installation.

Net income totaled $3.4 million or $0.02 per basic and diluted share in fiscal 2010, as compared to net income of $5.0 million or $0.04 per basic and diluted share in fiscal 2009. Net income in fiscal 2010 included a gain on the change in fair value of warrant/option liability and beneficial conversion liability of $5.3 million, as compared to a gain of $7.8 million in the previous fiscal year. The company also realized a $748,000 gain due to debt settlement in fiscal 2010, as compared to $3,600 in 2009.

Cash and cash equivalents totaled $23,000 at September 30, 2010, essentially unchanged from September 30, 2009.

Management Commentary
Fiscal 2010 was a transformative year for Sionix, both internally and externally. This year Sionix emerged from a development stage Company to a production company with its first commercial sales and installations resulting in its first-ever revenues. Our corporate governance was also substantially enhanced with two new directors: Rear Admiral William A. Retz (USN-Ret.) who brings us many years of naval command experience, with several subsequent senior management and board level engagements, and Johan A. Perslow, the chairman of Pacific Advanced Civil Engineering, Inc. and PERC Water Corporation, brings us more than 40 years' experience in the water treatment industry.

The near-bankrupt entity of late 2009 is now viable. We have dramatically reduced and restructured our debt and liabilities, taking nearly $15 million off our balance sheet while raising nearly $1 million in cash through the private sale of equity to support our operations. We extensively restructured our operations to be more cost efficient, using only $1.5 million in cash during the year. We completed necessary governance items including the restatement of nearly 3 years' financial statements and the increase of our Authorized shares.

We received our first-ever commercial MWTS order from Wenning Poultry, an egg production operation in the Midwest, and we expect to report revenues from this sale in our second fiscal quarter of 2011. Finally, we expect that improvements in certain aspects of our intellectual properties will result in a number of additional patent applications during the course of 2011. Given these notable achievements and the opportunities in our sales pipeline, we believe Sionix has crossed an important threshold in peer recognition, engineering excellence, and stakeholder commitment. Management is proud of these accomplishments and looks forward to reporting continued progress in the forthcoming periods.

About Sionix Corporation
Based in Santa Monica, CA, Sionix designs innovative and advanced water treatment systems intended for use in defense, government facilities, healthcare facilities, emergency water supplies during natural disasters, housing development projects, and various industrial processes including subterranean fracturing used in oil and gas drilling. These systems are located adjacent to contaminated water sites thus reducing cost and toxic exposure and can be used to remove organic materials including oil, waste and other infectious bacteria from contaminated resources. They can be also used as pre-treatment for reverse osmosis and other membrane applications. Industries involved in dairy, agribusiness, meat processing, mining, poultry operations, and many others can benefit from Sionix's cost-effective, easily maintained, portable water treatment systems. For more information about the company, go to www.sionix.com.

About Sionix Technology
Using a patented dissolved air flotation (DAF) technology packaged in a mobile shipping container, air bubbles between the size of 1 and 2 microns are injected and float organic contaminants to the surface where 99.95% are skimmed off. This compares to standard DAF units which historically have been limited to using bubble sizes of 50 microns or larger. The size of these bubbles are important because the smaller the bubble, the greater the surface tension and the greater the electrical charge. They can then hold together longer and elevate more organic contaminants to the surface for removal.

Safe Harbor Statement
This press release contains statements that may constitute "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. Those statements include statements regarding the intent, belief or current expectations of the Company, and members of their management as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. Important factors currently known to management that could cause actual results to differ materially from those in forward-statements include fluctuation of operating results, the ability to compete successfully and the ability to complete before-mentioned transactions. The Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results. Sionix' recent financial results, risks and uncertainties are discussed in its Annual Report on Form 10-K for the fiscal year ended September 30, 2010 and in current reports filed since that date with the Securities and Exchange Commission, all of which are available for review at www.sec.gov.

Sionix Corporation       
Balance Sheets       
September 30, 2010 and 2009       
               
               
      2010     2009  
ASSETS              
               
Current assets:              
  Cash and cash equivalents   $ 23,084     $ 22,982  
  Other receivable     1,500       155,000  
  Inventory     579,160       1,069,460  
  Other current assets     11,750       40,698  
    Total current assets     615,494       1,288,140  
Non-current assets:                
  Property and equipment, net     38,599       64,203  
  Deposits     -       28,495  
                 
    Total assets   $ 654,093     $ 1,380,838  
                 
LIABILITIES AND STOCKHOLDERS' DEFICIT                
                 
Current liabilities:                
  Accounts payable   $ 215,842     $ 611,693  
  Accrued expenses     943,485       3,066,106  
  Deferred revenue     300,000       1,620,000  
  Liquidated damages liability     -       78,750  
  Notes payable - related parties     27,000       107,000  
  Short-term promissory notes payable     -       390,000  
  Convertible notes     1,470,776       1,738,194  
  10% subordinated convertible notes     56,615       482,492  
  Derivative liability     137,053       -  
  Warrant and option liability     -       7,937,620  
  Beneficial conversion liability     -       2,001,143  
    Total current liabilities     3,150,771       18,032,998  
                 
Stockholders' deficit:                
  Preferred stock, $0.001 par value, 10,000,000 shares authorized at September 30, 2010     -       -  
  Common stock, $0.001 par value (600,000,000 and 150,000,000 shares authorized at September 30, 2010 and 2009, respectively; 217,154,741 shares issued and outstanding at September 30, 2010; 148,795,946 shares issued and 148,314,046 shares outstanding at September 30, 2009)     217,155       148,313  
  Shares to be issued     -       400  
  Additional paid-in capital     22,885,234       12,089,664  
  Accumulated deficit     (25,599,067 )     (28,890,537 )
    Total stockholders' deficit     (2,496,678 )     (16,652,160 )
                   
    Total liabilities and stockholders' deficit   $ 654,093     $ 1,380,838  
                   
  The accompanying notes are an integral part of these financial statements.
                   
                   
             
Sionix Corporation  
Income Statements  
Years Ending September 30, 2010 and 2009  
       
    2010     2009  
             
Net revenues   $ 1,620,000     $ -  
                 
Cost of sales     1,093,748       -  
                 
Gross profit     526,252       -  
                 
Operating expenses                
  General and administrative     1,680,436       1,736,359  
  Sales and marketing     247,042        -  
  Research and development     360,982       761,440  
  Depreciation and amortization     18,285       28,444  
    Total operating expenses     2,306,745       2,526,243  
                 
Loss from operations     (1,780,493 )     (2,526,243 )
                 
Other income (expense)                
  Interest income     -       3,962  
  Interest expense and financing costs     (902,209 )     (292,694 )
  Gain (loss) on change in fair value of:                
    Derivative liability     (5,188 )     -  
    Warrant and option liability     4,359,957       (631,781 )
    Beneficial conversion liability     959,985       8,471,003  
  Legal settlements     (25,000 )     1,135  
  Gain on settlement of debt     731,137       3,616  
  Loss on asset disposition     (45,919 )     -  
    Total other income (expense)     5,072,763       7,555,241  
                 
Income before income taxes     3,292,270       5,028,998  
Income taxes     (800 )     (4,800 )
Net income available to common shareholders   $ 3,291,470     $ 5,024,198  
                 
Basic income per share   $ 0.02     $ 0.04  
Diluted income per share   $ 0.02     $ 0.04  
                 
Basic weighted average number of shares of common stock outstanding     156,785,125       140,156,647  
Diluted weighted average number of shares of common stock outstanding     187,290,446       140,156,647  
                 
The accompanying notes are an integral part of these financial statements.  
                 
                 

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