SOURCE: Sionix Corporation

Sionix Corporation

May 18, 2011 16:00 ET

Sionix Corporation Reports Second Quarter Fiscal 2011 Financial Results

LOS ANGELES, CA--(Marketwire - May 18, 2011) - Sionix Corporation (OTCBB: SINX), designer of innovative and patented advanced mobile water treatment systems, today reported financial results for the second quarter of fiscal 2011 ended March 31, 2011.

"The Sionix unit initially sold to Wenning Poultry is in the process of being repurposed for another customer opportunity," said James R. Currier, chairman and chief executive officer of Sionix. "This contract taught us valuable lessons as we establish the commercial benefit of our mobile water treatment systems (MWTS) for the need to conduct more extensive testing and evaluation of customer needs and water characteristics."

"Our patent protected product is designed to fill the need for a mobile, cost effective water filtering process for very small particle contaminants. We believe our solution has wide application across many industries and we are focusing initially on oil and gas, agriculture, and disaster relief. We are in the process of building a pipeline of sales opportunities in all these areas," added Mr. Currier.

"In oil and gas we are in discussions with several companies where we believe our product fills the continuous need for treated water required in the drilling process, typically in remote locations. In agriculture, we believe that our process can help improve the profitability of farmers and food producers who can resell the by-products of the water treatment process. And in disaster relief our product can provide the solutions for many types of water issues. For example, the recent events in Japan have created a need for water treatment of water contaminated with radioactive particles, as well as sewage and potable water needs at refugee centers. We are pleased to be able to provide assistance with the many needs for treated water in Japan."

Operating expenses were $1,043,830 in the second quarter of fiscal 2011 ended March 31, 2011 compared to $511,995 in the quarter ended March 31, 2010. The increase was due primarily to a non-cash charge for stock compensation related to new management personnel in the amount of $378,345, as well as initial sales and marketing expenses. Other income in the second quarter of fiscal 2011 was $354,250 which included the recognition of the net value of the Wenning Poultry deposit of $470,132. The net loss for the quarter ended March 31, 2011 was $(689,580), or $0.00 per share, compared to a net loss of $(400,364), or $0.00 per share, for the comparable period in fiscal 2010. The per share number was based on diluted weighted average common shares outstanding of 242,087,740 in the second quarter of fiscal 2011 compared to 149,055,621 diluted weighted average common shares outstanding in the second quarter of fiscal 2010.

For the six month period ended March 31, there was no revenue recorded in the first six months of fiscal 2011 compared to revenue of $1,620,000 for the six months ended March 31, 2010. Operating expenses were $1,861,141 in the first six months of fiscal 2011 ended March 31, 2011 compared to $882,562 in the six months ended March 31, 2010. The increase was due to non-cash charges for stock compensation related to new management personnel in the amount of $533,193, and initial spending for sales and marketing. The net loss for the six months ended March 31, 2011 was $(1,920,171), or a loss of $(0.01) per share, compared to net income of $4,337,611, or $0.03 per share, for the comparable period in fiscal 2010. Net income in the six months of fiscal 2010 included a gain on the change in the fair value of warrant/option liability and beneficial conversion liability of $5,319,942. The per share numbers were based on diluted weighted average common shares outstanding of 234,246,823 in the six months of fiscal 2011 compared to 177,006,938 diluted weighted average common shares outstanding in the six months of fiscal 2010.

About Sionix Corporation

Based in Los Angeles, CA, Sionix designs innovative and advanced water treatment systems intended for use in energy, 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 designed to be 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, and a majority of inorganic contaminants are also captured and removed. 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.

                            Sionix Corporation
                              Balance Sheets
                                (Unaudited)


                                                   As of         As of
                                                  March 31,   September 30,
                                                    2011          2010
                                                ------------  ------------
                               ASSETS

Current assets:
    Cash and cash equivalents                   $      3,757  $     23,084
    Other receivable                                       -         1,500
    Inventory                                        638,865       579,160
    Other current assets                              54,343        11,750
                                                ------------  ------------
        Total current assets                         696,965       615,494
Non-current assets:
    Property and equipment, net                       36,492        38,599
                                                ------------  ------------

        Total assets                            $    733,457  $    654,093
                                                ============  ============




             LIABILITIES AND STOCKHOLDERS'  DEFICIT

Current liabilities:
    Accounts payable                            $    308,084  $    215,842
    Accrued expenses                                 968,153       943,485
    Deferred revenue                                       -       300,000
    Notes payable - related parties                   37,000        27,000
    Convertible notes, net of debt discount        1,459,527     1,470,776
    10% subordinated convertible notes                56,615        56,615
    Shares to be issued                                4,800             -
    Derivative liability                             125,233       137,053
                                                ------------  ------------
        Total current liabilities                  2,959,412     3,150,771
                                                ------------  ------------

Stockholders' deficit:
    Preferred stock, $0.001 par value,
     10,000,000 shares authorized at December
     31, 2010                                              -             -
    Common stock, $0.001 par value (600,000,000
     shares authorized; 244,088,755 and
     217,154,741 shares issued and outstanding
     at March 31, 2011 and September 30, 2010,
     respectively)                                   244,089       217,155
    Additional paid-in capital                    25,049,194    22,885,234
    Accumulated deficit                          (27,519,238)  (25,599,067)
                                                ------------  ------------
        Total stockholders' deficit               (2,225,955)   (2,496,678)
                                                ------------  ------------

        Total liabilities and stockholders'
         deficit                                $    733,457  $    654,093
                                                ============  ============






                            Sionix Corporation
                         Statements of Operations
                                (Unaudited)

                         Three Months Ended        Six Months Ended
                             March 31,                  March 31,
                    --------------------------  --------------------------
                        2011          2010          2011          2010
                    ------------  ------------  ------------  ------------
Net revenues        $          -  $          -  $          -  $  1,620,000

Cost of sales                  -             -             -     1,091,500
                    ------------  ------------  ------------  ------------

Gross profit                   -             -             -       528,500
                    ------------  ------------  ------------  ------------

Operating expenses
  General and
   administrative        827,584       498,965     1,477,194       751,720
  Sales and
   marketing             120,237             -       204,507             -
  Research and
   development            92,579         7,323       174,206       118,266
  Depreciation and
   amortization            3,430         5,707         5,234        12,576
                    ------------  ------------  ------------  ------------
      Total operating
       expenses        1,043,830       511,995     1,861,141       882,562
                    ------------  ------------  ------------  ------------

(Loss) income from
 operations           (1,043,830)     (511,995)   (1,861,141)     (354,062)
                    ------------  ------------  ------------  ------------

Other income
 (expense)
  Interest expense
   and financing
   costs                 (90,421)     (365,587)     (195,613)     (449,597)
  Gain (loss) on
   change in fair
   value of:
      Derivative
       liability         (16,900)            -       (22,457)            -
      Warrant and
       option
       liability               -       353,353             -     4,359,957
      Beneficial
       conversion
       liability               -        93,595             -       959,985
  Other income           470,132             -       470,132             -
  Legal settlements            -             -      (236,821)            -
  Gain (loss) on
   settlement of
   debt                   (8,561)       30,000       (74,271)       30,000
  Loss on lease
   termination                 -             -             -      (197,455)
  Loss on asset
   disposition                 -             -             -       (11,217)
                    ------------  ------------  ------------  ------------
      Total other
       income
       (expense)         354,250       111,361       (59,030)    4,691,673
                    ------------  ------------  ------------  ------------

(Loss) income
 before income
 taxes                  (689,580)     (400,634)   (1,920,171)    4,337,611
Income taxes                   -             -             -             -
                    ------------  ------------  ------------  ------------
Net (loss) income
 attributable to
 common
 shareholders       $   (689,580) $   (400,634) $ (1,920,171) $  4,337,611
                    ============  ============  ============  ============

Basic (loss) income
 per share          $      (0.00) $      (0.00) $      (0.01) $       0.03
                    ============  ============  ============  ============
Diluted (loss)
 income per share   $      (0.00) $      (0.00) $      (0.01) $       0.03
                    ============  ============  ============  ============

Basic weighted
 average number of
 shares of common
 stock outstanding   242,087,740   149,055,621   234,246,823   148,682,785
                    ============  ============  ============  ============
Diluted weighted
 average number of
 shares of common
 stock outstanding   242,087,740   149,055,621   234,246,823   177,006,938
                    ============  ============  ============  ============

Contact Information

  • Company Contact:
    David R. Wells
    President & Chief Financial Officer
    T:704-971-8403
    drwells@sionix.com

    Investor Relations Contact:
    Stephanie Prince/Jody Burfening
    Lippert/Heilshorn & Associates
    T: 212-838-3777
    sprince@lhai.com