Warnex Inc.
TSX : WNX

Warnex Inc.

February 27, 2008 15:05 ET

Warnex to Restate Financial Statements for Prior Years

LAVAL, QUEBEC--(Marketwire - Feb. 27, 2008) - Warnex Inc. (TSX:WNX) today announced that it will be restating its financial statements for prior years due to a non cash accounting error in the presentation of the debt component of the 2002 and 2004 debentures. In accordance with CICA Handbook Section 3861, "Financial Instruments - Disclosure and Presentation", the value of the liability component of the convertible debentures has been properly determined, at the time of their issuance, but the difference between the liability component carrying amount at inception and the principal amount of the debentures should have been treated as a debt discount and therefore accreted over the life of the instrument through periodic charges to income using the effective interest rate method of amortization. Accordingly, the liability component of the debentures was understated by $615,255 as at December 31, 2006, and the 2006 net loss was understated by $311,597 or $0.01 per share.

Warnex's Board of Directors, on the recommendation of management, has concluded that the Company will restate its 2006 comparative numbers when disclosing its year-end 2007 results and will not file amended interim financial statements for the year 2007 but will restate the 2007 comparative numbers when disclosing its 2008 interim financial statements.

"We take our obligation to provide accurate financial information very seriously and this error in the interpretation of an accounting principle does not impact our internal controls which remain strong overall," said Denis Pellerin, Vice President and Chief Financial Officer of Warnex. "On the other hand, the principal value of the debentures as well as their respective terms and conditions have been fully and accurately described in the notes to the financial statements."

For his part, Mark Busgang, President and Chief Executive Officer of Warnex, stated: "Although regrettable, this specific and isolated situation, which does not impact the cash flow of the Company, is being rapidly corrected and does not impact the future outlook of the Company."

The results set forth in this document, including expected restatement impacts, are preliminary and unaudited and reflect all known restatements as of the time of the issuance of this press release. These results are subject to the completion of the audit of the financial statements by the Company's independent auditors.

About Warnex

Warnex (www.warnex.ca) is a life sciences company devoted to protecting public health by providing laboratory services to the pharmaceutical and healthcare sectors. Warnex's analytical services division provides pharmaceutical and biotechnology companies with a variety of quality control services, including traditional chemistry, chromatography, microbiology, method development and validation, and stability studies. Warnex's bioanalytical services division specializes in bioequivalence and bioavailability studies for clinical trials. Warnex's medical laboratories division focuses on genetic and biochemical testing for the healthcare industry and has extensive expertise in genetic testing for human identification, molecular diagnostics, and pharmacogenetics.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this news release are forward-looking and are subject to numerous risks and uncertainties, known and unknown. For information identifying known risks and uncertainties, relating to strategic options for the Company, financial resources and credit risk, laboratory facilities, suppliers, government regulations, key employees, key customers and business partners, foreign currency risk, volatility of share price, and other important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the heading Risks and Uncertainties in the Management's Discussion and Analysis for the third quarter ended September 30, 2007, which can be found at www.sedar.com. Consequently, actual results may differ materially from the anticipated results expressed in these forward-looking statements.

Contact Information

  • Warnex Inc.
    Mark J. Busgang
    President & CEO
    450-663-6724 x 310
    mbusgang@warnex.ca
    or
    Warnex Inc.
    Denis Pellerin, CA
    Vice President and Chief Financial Officer
    450-663-6724 x 315
    dpellerin@warnex.ca